updated 6/25/2014 2:28:01 PM ET 2014-06-25T18:28:01

THE LAST WORD WITH LAWRENCE O`DONNELL
June 24, 2014

Guest: Adrian Karatnycky, Tim Schaefer, Frank Schaefer

LAWRENCE O`DONNELL, MSNBC HOST: Rachel, I love watching you on these
election nights. It`s just the most exciting "RACHEL MADDOW SHOW" we can
get.

RACHEL MADDOW, TRMS HOST: Who needs meth? I`m too excited.

O`DONNELL: Exactly.

I just got to tell you something, I`m going to talk about something later
in the show that I think is the best new thing in the world. But I promise
you I will not call it that, because, you know --

MADDOW: If you need it, I will loan you my franchise, I`ll loan you the
goofy little animation. You can use it.

O`DONNELL: It would be wrong. It would be stealing. I can`t do that.

Thank you, Rachel, very much.

MADDOW: Thanks, Lawrence.

O`DONNELL: We have breaking news tonight: another chance for Republican
voters to choose a Republican versus the Tea Party.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Ugly.

UNIDENTIFIED MALE: Nasty.

UNIDENTIFIED FEMALE: Twisted.

UNIDENTIFIED FEMALE: The Mississippi mud was expected to fly today.

UNIDENTIFIED MALE: Senator Thad Cochran in a runoff against Chris
McDaniel.

UNIDENTIFIED FEMALE: Less than 1,000 votes separated the candidates after
the June 3rd primary.

UNIDENTIFIED MALE: It has been a grueling thee weeks of campaigning since
then.

UNIDENTIFIED FEMALE: It`s been nasty. It`s been hard fought.

UNIDENTIFIED MALE: The most nasty, negative campaign I`ve ever seen.

UNIDENTIFIED MALE: They want people who have been in Washington for five
or six terms to get out.

UNIDENTIFIED MALE: Six-term Republican Senator Thad Cochran.

UNIDENTIFIED MALE: Had served in Congress almost 13,000 days.

UNIDENTIFIED MALE: They want new people.

UNIDENTIFIED FEMALE: McDaniel as a state legislator has less experience.

UNIDENTIFIED FEMALE: Both are fighting for their political lives.

CHRIS MCDANIEL (R), MISSISSIPPI SENATORIAL CANDIDATE: Senator Cochran is
going to court liberal Democrats to save his seat.

UNIDENTIFIED FEMALE: Criticism from Chris McDaniel for reaching out to
Democrats.

UNIDENTIFIED MALE: Cochran is looking for anything he can get.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: I think it`s not unusual for
candidates who are running for office to be seeking votes.

UNIDENTIFIED MALE: Tea Party activists are out there countering with a so-
called voter integrity project.

UNIDENTIFIED MALE: There`s nothing subtle about this.

UNIDENTIFIED MALE: Vote watchers or poll watchers coming to the polls.

UNIDENTIFIED MALE: It`s about keeping black voters from potentially for
voting Senator Cochran.

UNIDENTIFIED MALE: Is McDaniel walking a fine line here?

UNIDENTIFIED FEMALE: The national Tea Party really has a lot riding on how
well he does.

UNIDENTIFIED MALE: The Tea Party feels a surge.

UNIDENTIFIED FEMALE: Cruz, Lee, Paul, and maybe McDaniel.

(END VIDEOTAPE)

O`DONNELL: We are going live now to Chris McDaniel`s headquarters in
Hattiesburg, Mississippi.

NBC News Kasie Hunt joins us.

Kasie, what is the latest there?

KASIE HUNT, NBC NEWS POLITICAL REPORTER: Hey, Lawrence.

So, the mood here is at turns excited, but at turns nervous. They`re
watching the spread sheet with these returns coming in, county by county.
And this is just as tight as it was three weeks ago. Although at this
point, it`s looking like Senator Cochran is keeping something of a lead
there. And that is something that a lot of people here didn`t expect.

The Cochran campaign has very much shifted its tone over the course of the
last three weeks from when I was here back when they had the original
primary. At that point, they probably expected Senator Cochran to lose.
Over the last three weeks, they`ve poured million of dollars into the
ground game here. They`ve made an effort as we talked about it some
length, to appeal to Democratic voters, but also to bring out those
Republican voters who didn`t show up last time. And Republican sources
have been telling me that they think there are a lot of Republicans who are
out there who didn`t think it was possible for Senator Cochran to lose, and
those voters may have showed up here.

So, voters here have been watching in particular Jones County, which was a
stronghold for McDaniel. He won that by quite a large margin, during the
primary. And it was identified as a problem area for Cochran supporters.

So the supporters here in McDaniel headquarters have been holding out for
those results to come in, which is part of why you haven`t seen anybody
lose complete hope yet, Lawrence.

O`DONNELL: And, Kasie, does Cochran have some strongholds out there for
him that have not yet reported?

HUNT: At this point, there`s been sort of even reporting across many of
Cochran`s strongholds. So, we haven`t -- there`s no one specific place
that we`re waiting on necessarily.

He`s been improving where his returns were in the delta area. That was
something he needed. He also needed some of the counties around the city
of Jackson. So, on the whole, Cochran supporters at this point are pretty
optimistic. The national Republican sources I`ve been talking to are
definitely optimistic that he`s going to pull this out. I mean, it is just
a marked shift in level of confidence from three weeks ago when everyone
was pretty convinced that McDaniel was going to beat a favorite in this
runoff.

O`DONNELL: Kasie, I heard one Mississippi political analyst today saying
that the attempt by Republicans when desperately necessary, to try to reach
over and pick up the black vote from Democrats has never worked before. Is
there any indication as we sit here at this hour that this has worked for
Cochran today?

HUNT: Well, we`ve had anecdotal reports of counties where there are large
numbers of African-Americans showing turnout levels that are higher from
what happened on June 3rd. But at this point, what we have are basically
anecdotes.

That said, you know, there are a lot of hurdles to pulling voters from the
other party over to your side. Voters who voted in the Democratic primary
thee weeks ago were not eligible to vote in the Republican runoff.
Democrats who didn`t vote in that original primary could have been eligible
and might have shown up today.

But convincing them to ditch their party in favor of an elected official is
usually pretty tricky. That said, Senator Cochran has been in office 40
years and is well-liked here. This is not a case where you have an
incumbent who is disliked, who is very unpopular, which is what we`ve seen
in a lot of other cases where senators have gone down. That`s not the case
with Senator Cochran.

There are a lot of voters are excited about State Senator Chris McDaniel
who want to see new blood, but most of the voters that I talked say, you
know, we like Senator Cochran a lot. We respect him, we just think maybe
we need somebody new. And that`s a much different approach than in a lot
of these other places.

O`DONNELL: Kasie Hunt, thanks for joining us tonight.

HUNT: Thanks.

O`DONNELL: Also with us tonight are MSNBC political analysts Jonathan
Capehart of "Washington Post" and David Corn of "Mother Jones".

Jonathan Capehart, we may see some political history made tonight in
Mississippi if Thad Cochran is able to do something that other Republicans
have once in a while tried to do and failed, and that is attract a black
vote.

JONATHAN CAPEHART, THE WASHINGTON POST: Right. And, you know, Senator
Cochran -- I mean, it speaks to sort of the senator`s desperation here that
he`s going to probably the most reliable voters within the Democratic base
to sort of save his bacon from the fire.

But he`s in the fight. We always talk about politicians being in the fight
of their political lives. And Senator Cochran is not only in a fight for
his own political life, but I also think for the life of the Republican
Party.

Senator Cochran is no liberal. He is no closet progressive. He`s a very
conservative guy. But the idea that State Senator Chris McDaniel has
forced him into a runoff by portraying him as someone not conservative
enough, for Mississippi Republican primary voters, and for Republican
national voters at large, is what`s really frightening.

And I`m speaking for myself on this point. So, if African-American voters
heed Senator Cochran`s call to come save him, yes, that is going to be very
historic indeed, for a party, a Republican Party that put out an autopsy
saying it needed to reach out to African-American voters, in addition to
Latinos and Asian-Americans and gays and lesbians.

But the moment they put that autopsy out, saying they should do those
things, it did everything possible to turn their backs in those
communities.

O`DONNELL: David Corn, for Democrats watching this in Mississippi, hoping
for a restoration of the Democratic control of the Senate seats there, what
would the strategic may be today?

DAVID CORN, MOTHER JONES: Well, you know, you can game this out two
different ways. It`s better for the Democrats to go up against an
extremist like Chris McDaniel who is -- you know, comes from the world of
right wing radio and has insulted and said things that are either silly,
stupid, or just excessive.

He`s hobnobbed with a neo-Confederate group that believes the wrong side
won the civil side. He`s gone on radio shows with the most virulent anti-
gay crusaders. You know?

So, you know, he might in some ways be an easier pickoff if the Democrats
wanted to make a play in Mississippi, which is very hard for them to do to
begin with. But, you know, you can also say that Thad Cochran certainly
doesn`t look like he could survive a strong general election. You know, he
seems out of it in the campaign trail and he may be popular, but he could
also be vulnerable.

But either way, we don`t know yet whether it`s the Democratic constituency,
the African-American vote that`s making the difference. But the wonderful
thing is we`ve had so many narratives this year, the Tea Party was dead.
No, the Tea Party is alive. Now, tonight, the Tea Party is dead.

I was just at a social event where the really good, smart, political
reporter who`s been to Mississippi, who I respect a lot, and he said, oh, I
think it`s Chris McDaniel by six points. Well, you don`t know until you
know. And that`s the wonderful thing about election night, Lawrence.

By the way, it`s good to be back with you.

O`DONNELL: Thanks. Thanks, David.

CAPEHART: Indeed, agreed.

O`DONNELL: Thank you.

Jonathan, the pressure on this race, national pressure, but the pressure on
the Republican establishment with Haley Barbour coming in, they`re doing
everything they can to basically revive the Cochran campaign, which got in
much more trouble than it should have for an incumbent senator with the
experience you`re supposed to have with running these re-elections.

But Cochran kept just amazingly, I`m now catching up with some of the
things he has said, just, you know, of his own at the microphone, including
this amazing thing that Rachel played last night he said about his
relationship with animals when he was young. And I just -- it`s hard to
believe that the guy who said, you can do a list of these things, the guy
who said these things is leading a Senate race in America.

(LAUGHTER)

CAPEHART: Yes, it is a rather interesting race there, isn`t it, in
Mississippi, between these two candidates that I would have to say Senator
Cochran saying interesting things about what he did with farm animals
growing up is a far cry from, you know, some of the things that Chris
McDaniel has said throughout his career. And just the way he has
campaigned.

I mean, Robert Costa, my colleague at "The Washington Post," caught up with
McDaniel at an event in Mississippi where there were militias recruiting at
this event, where -- like openly. These are the kinds of voters that Chris
McDaniel was appealing to in Mississippi. "The New York Times" quoted
someone who folks in Mississippi easily recognize as somebody who is a
lawyer for the Klan. These are the kinds of voters who Chris McDaniel is
reaching out to.

So, of course, Haley Barbour and the Republican establishment swooped down
to try to save Senator Cochran, because it`s not just saving an incumbent
senator who is a part of the establishment, primarily because -- not
because he`s conservative, but he`s a statesman.

They`re swooping down because it has larger implications for the party.
We`re just two weeks out from when House Majority Leader Eric Cantor went
down in shocking defeat at the hands of a Tea Party candidate. If Senator
Cochran goes down, as the second person, an incumbent Republican, long-time
conservative goes down in defeat to another person who is not only a Tea
Party darling but has no problem seeking votes from members of militias and
members of the Klan, then the Republican Party establishment is in serious,
serious trouble.

And, you know, we talk a lot about whether the Tea Party is up or the Tea
Party is down, the establishment is back -- look, the Tea Party has taken
over the Republican Party. It`s just a matter of how the establishment is
going to sort of get that Tea Party to learn how to govern. That`s the
only thing the establishment can do right now.

O`DONNELL: Let`s take another look at the latest numbers out of
Mississippi. We just had them up on the board. We saw a little tightening
there. It`s now 50.9 versus 49.1. It is tightening up. McDaniel is
closing in there.

There`s another race with another incumbent in his 80s, that`s in New York
City. That`s Charlie Rangel`s congressional district. David Corn, and the
latest numbers we have there, it`s early reporting. I believe we have
about 6 percent in. But the way it`s running right now is Charlie Rangel
is trailing in the numbers that we have right now, 52 to 40.

So, this could be the end of an era in that congressional district tonight.
It`s too early to tell yet -- but go ahead, David.

CORN: Those numbers obviously mean much, but we have seen, you know,
across the country, a tendency for voters to get tired very quickly with
politicians of all stripes.

Congress has never been held in lower regard than it is now. Charlie
Rangel, of course, had a run-in with several ethics matters and he`s
managed to sort of survived, you know, being tossed out of Congress. But
being having this problems, and also the thing that`s interesting is, you
know, he was, for years, has been the congressman from Harlem.

Well, the demographics of Harlem have been changing and there are less
African-American voters, more Hispanic American voters, and that`s going to
play a big factor in today`s race.

O`DONNELL: Go ahead, Jonathan.

CAPEHART: Well, I was going to say that, yes, the demographics have
changed, but also because of redirecting. The congressman`s district used
to be predominantly African-American. Now, it`s predominantly Latino.

And so, the question is what staying power of Congressman Rangel, who has
been in congress for 22 terms, that`s 44 years, whether he`s going to be
able to get those Latino voters to send him back for a 23rd term, we`ll
find out hater tonight.

O`DONNELL: Jonathan Capehart and David Corn, thank you both for joining me
tonight.

CAPEHART: Thanks, Lawrence. Welcome back.

O`DONNELL: And, Kasie, thank you very much for joining us tonight. We may
be coming back to you if we get some breaking news down there. Thank you
all.

Coming up, the worst decision Chris Christie has ever made and it`s not
what you think it is. Steve Kornacki will join me.

And in the rewrite tonight, the new genius of Hollywood. Actually, there
are two of them. And you don`t have to care about show business at all to
really love what they`re doing. That`s coming up.

(COMMERCIAL BREAK)

O`DONNELL: Now it`s time for another one of our 60-second updates. It`s a
special summer feature for you people who are just getting back from summer
vacation, haven`t been paying attention to the news like I haven`t been.

And now to MSNBC`s Steve Kornacki to give me a 60-second update on Chris
Christie. Go ahead, Steve.

STEVE KORNACKI, "UP" HOST: All right, Lawrence. Well, put me on the
clock. I`ve got five things on the list here.

Number one, I think the biggest development in the last couple of months
has been this report that came out last week in "Esquire" magazine that
said that Paul Fishman, the U.S. attorney for New Jersey, has empanelled a
second garage to look into bridgegate and that according to this report,
indictments are imminent when it comes to Bill Baroni, David Wildstein,
Bridget Kelly, and also the most significant figure there being -- the
former David Samson, the former chairman of the Port Authority, and the
possibility that he might cough up some information valuable to
prosecutors. That`s number one.

Number two is the legislative committee had a bunch of hearings this
spring. Not much big news came out of them, but the most interesting thing
that happened was at one of the hearings featuring Kevin O`Dowd, Chris
Christie`s chief of staff, in attendance in the room, unannounced,
unexpected, was Bill Stepien. Bill Stepien showed up with his lawyer,
didn`t say anything and just sat there, delivering some kind of a message,
nobody is quite sure what that was.

Number three is Dawn Zimmer, the mayor of Hoboken, who`s accused the Chris
Christie administration of holding up Hurricane Sandy aid, unless she
approved the development project in her town. She wanted flood relief
money and she`s gotten that now from the federal government.

Her city, in conjunction with a couple of other cities, won a contest with
HUD for money, for big money, a big check for the federal government for
flood mitigation.

Number four is that Moody`s bond rating for New Jersey, they downgraded New
Jersey`s credit rating because of revenues not coming in where Chris
Christie and his administration projected them. The third time this year
that the credit rating was downgraded from New Jersey.

And number five, very quickly, Chris Christie going back on the national
campaign trail, trying to put this behind him, last week speaking at Ralph
Reed`s group, the Faith and Freedom Foundation, and he was actually calling
for shifting the focus of drug laws to treatment, instead of prosecution.
So he`s trying to make some noise on that front to get away from all this.

O`DONNELL: Steve, thank you very much. I`m now caught up on the 2 1/2
months of Chris Christie that I missed while I`ve been on the disabled
list. My favorite thing in there was Bill Stepien showing up at the
hearing just to listen. That is such a "Godfather" scene. I love that.

KORNACKI: They got up for the break and all the reporters asked why are
you here? No answer. He was there.

O`DONNELL: That is so great.

Steve, stay with us, because the next thing I want to talk about when we
come back is the biggest mistake Chris Christie ever made, and I knew what
that was even before this year. That`s coming up. Thanks, Steve.

KORNACKI: Sure.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: The ARC Tunnel will cost no less than
$11 billion and could exceed $14 billion. In light of that information,
the executive committee has made a recommendation to me that the project be
terminated, and that the staff begin an expeditious and orderly wind-down
of the project. And today I have accepted that recommendation.

(END VIDEO CLIP)

O`DONNELL: And that was the single worst decision Chris Christie ever made
as governor of New Jersey. He used New Jersey`s veto power to kill a
federally funded project to build a new tunnel between New York and New
Jersey under the Hudson River. New York and New Jersey commuters today
enjoy the foresight of the politicians who built the Holland Tunnel 90
years ago. It took seven years to build.

Those same commuters are enjoying the foresight of the political leaders
who got the Lincoln Tunnel built under the Hudson during the Great
Depression when funding was much more scarce than it is now.

To understand the value of a tunnel like that, you have to be able to see
100 years into the future. Something politicians are rarely able to do.
But when faced with the importance of transportation across the Hudson,
political leaders, not otherwise known to be visionaries, have been able to
see that picture. That`s why we have those tunnels and bridges there now.

When Chris Christie`s turn came, he said we cannot afford the future. That
meant, of course, he was going to have to simply say goodbye to all that
money that was available for the construction of that new tunnel, but
saying goodbye to that money turned out harder to do than saying no to the
tunnel.

And today, "The New York Times" reports that the Securities and Exchange
Commission, along with the Manhattan District attorney`s office, is
investigating exactly what Chris Christie did with that money.

Joining me now is Steve Kornacki, host of MSNBC`s "UP WITH STEVE KORNACKI",
the very same Kornacki who just joined me in that previous quick 60-second
update on Chris Christie.

Steve, walk us through what we know about this investigation now and it`s
just stunning to me that that big decision, which may be the biggest
decision he ever made as governor, is the one that`s coming back to haunt
him in this way.

KORNACKI: Yes. It`s really kind of arcane here. We were talking with the
update I gave there was about the U.S. attorney for New Jersey looking into
bridgegate and other things.

O`DONNELL: Bridgegate is kind of simple. The George Washington Bridge is
a much simpler thing to grasp right off the bat, in scandal terms than this
is.

KORNACKI: I mean, because what this gets into, is this gets into
specifically a New York state law. A New York state law called the Martin
Act, which gives prosecutors, New York state prosecutors, incredible
discretion and latitude in pursuing cases, sort of securities fraud cases,
securities cases, past several attorneys general for New York have used
this to go after Wall Street. It`s how Eliot Spitzer made his name.
Andrew Cuomo made his name as attorney general.

Now, the district attorney for Manhattan is looking into this. And
basically, they`re saying that the Christie administration -- not the
Christie administration necessarily, that`s what they`re looking into, but
the Port Authority basically was disingenuous, gave incorrect information
in saying that this money was going to go to improve access to the Lincoln
Tunnel.

If you know where the Pulaski Skyway is and you know where the Lincoln
Tunnel is, they`re nowhere near each other. It would make more sense to
link it to the Holland Tunnel, Holland Tunnel is very close it. But
there`s a very, very arcane legal reason they couldn`t say this money was
going to improve access to the Holland Tunnel. So, they had to say the
Lincoln Tunnel. It actually makes no sense.

And this law, New York state law, gives prosecutors the ability to go after
the Port Authority for this. The question becomes, is the port authority
doing this at the behest of somebody or more than one person in the
administration. And that`s the exposure right here, potentially, for the
Chris Christie administration.

O`DONNELL: And, Steve, according to "The New York Times" report, people in
the administration were going back and forth with the Port Authority for a
long period of time over this. The Port Authority had $3 billion or so of
their money that was going to go into this tunnel. There was going to be
another, say, $3 billion of federal money going into the tunnel, and the
New Jersey share would have been something like $3 billion. Christie said
it was going to be much larger because he was using a much higher inflated
estimate for what the tunnel would cost than anyone else is using.

But leave that aside for a moment. It was the Port Authority money that
the administration was trying to get to and they got a lot of resistance
from their own people in the Port Authority saying things in their memos
like, we can find no authority whatsoever to give you this money.

KORNACKI: Right. At some point it just sort of reverses and the
correspondence is here, in this "New York Times" article, it just sort of
reverses that says, well, no, we`re going to go ahead and do it.

The question here to me, if this sort of progresses, and if this is a some
sort of case that emerges from this, and we don`t know if there is anybody
in particular in the administration who would be linked to this. If it
does go in that direction, there`s a question here of how this would be
received by the public.

I actually don`t know, because I presume that the case and the argument
that Chris Christie would make and the people around him would make is
they`re trying to hang us on a technicality here. What we`re trying to do
is, you know, we`ve got this giant bridge that`s crumbling apart. We`re
just trying to find a way to fix this bridge. We`re just trying to find a
way to do it without raising your taxes.

I wonder if there might be a disconnect in how this is perceived sort of in
the court of public opinion, versus the court of law. I think that`s sort
of the open question. But like I say, this is just one branch of about
five or six different things that are playing out right now.

O`DONNELL: And, Steve, this one is going to be much harder for Chris
Christie to say I knew nothing about it because he was out there saying
this was going to happen before the Port Authority went along with it. At
the time the Port Authority was saying it can`t happen, Chris Christie was
saying I`m going to do it.

KORNACKI: We`ve known all along that was the -- Christie himself raising
the gas tax was out of the question. He was hooking for creative ways to
do things. So, this is what they apparently came up with.

O`DONNELL: Steve Kornacki, thanks for the update on the last couple of
months and thanks for tonight. Thank you very much.

KORNACKI: Sure. Great to see you.

O`DONNELL: OK, here`s the latest on the primary in Mississippi with 92
percent of the vote counted in Mississippi. Senator Cochran is maintaining
a small lead over Chris McDaniel.

We`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JOSH EARNEST, WHITE HOUSE DEPUTY PRESS SECRETARY: The United States
remains concerned about the continued presence of Russian forces along the
border, and prepositioned heavy weaponry that we believe is intended for
separatists.

(END VIDEO CLIP)

O`DONNELL: The Ukrainian military claims pro-Russian rebels shot down one
of its helicopters today, killing all nine people on board.

Today`s violence comes just one day after President Obama spoke on the
phone with Russian president, Vladimir Putin, which President Obama urged
Vladimir Putin to support a temporary Ukraine government cease-fire peace
plan. And President Obama seems to have had some success on that
diplomatic front today, when Vladimir Putin submitted a proposal to the
federation council to repeal its March 1st resolution, allowing the use of
Russian armed forces on the territory of Ukraine.

(BEGIN VIDEO CLIP)

EARNEST: Moving these forces away from the border, ceasing support for
separatists and calling on separatists to continue to abide by the
ceasefire and disarm would send a clear signal that Russia is interested in
a diplomatic settlement resulting instability in Eastern Ukraine.

The constructive role that they can pay involves more than just words. It
involves tangible actions. There`s an opportunity for President Putin to
take these actions and support the de-escalation of the crisis.

(END VIDEO CLIP)

O`DONNELL: Joining me now is Adrian Karatnycky, senior fellow at the
"Atlantic Council" and MSNBC`s Richard Wolffe.

Adrian, it seems like good news/bad news day. It seemed like the president
got Vladimir Putin for whatever reason, Vladimir Putin seemed to take a
step backward. But then that helicopter gets shot down.

ADRIAN KARATNYCKY, SENIOR FELLOW, ATLANTIC COUNCIL: Well, it`s very clear
that Mr. Putin has set in motion the dogs of war and many of the people
he`s empowered are not fully under his control. There are, you know,
extreme Russian nationalists, there are Russian fascists operating, there
are kind of true believers who will not necessarily listen to the Kremlin.

But fundamentally, if Russia wants to stop this conflict, it can stop, I
would say, 90 percent of the military activity in eastern Ukraine. And I
think that one of the reasons Mr. Putin is preparing his population, is
preparing his population for the fact that Russia will not directly
intervene is because this proxy war is not working.

Ukraine`s forces are now showing a lot more cohesion. They control about
70 percent of that territory in eastern Ukraine that was formerly primarily
under the hands of the rebels. Of course, the rebels do control of the two
major cities, (INAUDIBLE) region. But nevertheless, a lot of progress has
made despite this, you know, the death of nine member today in that attack
on a helicopter.

O`DONNELL: Richard Wolffe, it seems President Obama has more danger spots
to manage man Vladimir Putin does from Ukraine to Iraq. And of course,
Iraq becoming -- I don`t think you can use the word manage when it comes to
the American presidency and Iraq.

RICHARD WOLFFE, EXECUTIVE EDITOR, MSNBC.COM: Right. And actually these
two stories and the two pieces of diplomacy are connected. Where there`s a
standoff with Russia over Ukraine, there`s an alignment of in trust with
Russia when it comes to these forces, the Sunni forces pulling out of
Syria. Those are the people who are challenging Russia`s allies in Syria.

Now, they are America`s enemy by extension in terms of prompting up the
Shiite government in Baghdad. This is a very complex territory as we well
know from the sad history of America in Iraq over the last several years.
But it does open up in Putin`s mind a different kind of shifting alliance
he might need American support for, even as he`s frustrating America
elsewhere.

O`DONNELL: Adrian, what do you think Vladimir Putin is watching in the
Middle East and in the Iraq region?

KARATNYCKY: Well, I think that in the long-term, what Mr. Putin wants is a
continued state of instability. But not the kind of instability that will
be completely uncontrollable. In other words, I think he`s sort of aiming
for the same kind of situation that you will want in Ukraine, a low level
insurgency empowering Iran. And basically making Russia the main -- the
main channel through which energy passes on an east-west quadrant. So as
long as Iraq is unstable, so long as Iran is in the hands of
fundamentalists, countries like (INAUDIBLE), countries like Kazakhstan,
have to export all their energy through Russia. And Russia then has an
even greater influence on the western (ph) slow of energy resources that in
otherwise would.

O`DONNELL: Richard, you have studied this White House and staff in both --
and the way the president operates in this White House. How do you imagine
it`s working when they have all of these different hot spots that they`ve
to the to keep an eye on and they`ve got to have meetings on every day? It
seems splitting that attention is a very difficult exercise.

WOLFFE: There`s no question that it`s a challenge. But remember, you have
a president who has always loved international relations. The three
dimensional chess game that you`re playing here, I know that`s a sort of
trivial way to look at a situation where people are dying, it really quite
vertical fashion in Iraq-kind and Syria.

But your seconds on president, your domestic agenda is extremely
frustrating. And here`s a situation where the biggest issue of all for
this president, which actually has always come down to nuclear
proliferation, is also at the heart of these problems, because he`s got to
deal with Russia when it comes to Iran`s nuclear program. These are
interlocking puzzles that were all split apart by the Bush years and by the
Arab spring that followed from there.

So there`s a lot of cleanup there. It`s a huge challenge. Can you build a
coalition? Can you find a solution? I bet as demanding and draining as
this is to look at so many different fronts in such a complex part of the
world we barely understand, this president in some way finds it a
satisfying challenge because it`s intellectually rigorous.

O`DONNELL: Richard Wolffe and Adrian Karatnycky, thank you both for
joining me tonight.

WOLFFE: Thank you.

O`DONNELL: Coming up, Rachel said I could use the best new thing in the
world, but it would just be wrong. But it is coming up. That`s what I
think it is. I`ll have to call it something else. We`ll be back.

(COMMERCIAL BREAK)

O`DONNELL: The House appropriations committee has included language in the
state budget to rename the Washington street where the Chinese embassy is
located. The Chinese embassy`s current Washington address is 3505
international place, northwest. If renaming of that street is signed into
law by President Obama, the Chinese embassy`s new address would be number
one Lee Yushobow Plaza (ph). Lee Yushobow (ph) is a Nobel piece-prize
winning Chinese dissident currently imprisoned in China on charges of
submersion.

Virginia Republican frank Wolf says, he proposed the name change to
highlight Lee Yushobow (ph) unjust imprisonment.

Now I`m sure Congressman Wolf has thought this through and is ready to
address his letters to the American embassy in Beijing with what will
surely become their new address on Edward Snowden avenue.

Up next, in the "rewrite," the current reigning geniuses of Hollywood who
have rewritten something ugly into something very, very important.

(COMMERCIAL BREAK)

O`DONNELL: And now for the good news.

I would love to call this the best new thing in the world, but if the best
new thing in the world were not already a copyrighted feature of my
favorite cable news show. So let`s just say, it`s an incredible great
thing.

It is a Hollywood creation, and by Hollywood, I don`t mean a geographic
location, I mean show business, of course. It`s not a new movie, it is not
a new TV show, but it just might be the most important piece of writing to
come out of Hollywood this year, even though this was actually done in New
York City, just like a lot of other Hollywood writing is. But this writing
won`t be nominated for any awards because it wasn`t written for the screen.
It was actually written on napkins by two movie stars, the first draft was
any way.

Here`s a look at the second draft. That`s Emma Stone and Andrew Garfield
leaving a restaurant where they had breakfast in New York City last week.
They spotted their paparazzi stalkers outside before they left the
restaurant, and so they were ready. So that was the best shot that the
paparazzi were able to get of the couple.

The card Emma Stone is holding says good morning. We were eating and saw a
group of guys with cameras, and so we thought let`s try this again. We
don`t need the attention but these wonderful organizations do. And then an
arrow on Emma Stone`s card points to Andrew Garfield`s card which lists the
organizations, youthmentoring.org, autisimspeaks.org, and don`t forget
wwwo.org and gilda`sclubnyc.org. Here`s to the stuff that matters, have a
great way.

Wwwo.org is worldwide orphans which provides healthcare and education for
orphans. Andrew Garfield and an ambassador for the worldwide orphans.

Gilda`sclubnyc.org supports people living with cancer. Emma Stone`s
mother, Christa, is a breast cancer survivor. Emma Stone is an ambassador
for Gilda`s club. And of course, Gilda`s club is named for the great Gilda
Radner, the brilliant original cast member of "Saturday Night Live" who
succumbed to ovarian cancer in 1989 at the age of 42.

And so Emma stone and Andrew Garfield have brilliantly re-written the
biggest curse of celebrity life paparazzi attacks into something
beautifully positive, not for themselves but for other people. Autistic
children, orphans, cancer patients. This, this is a flash of genius.

Now, I know genius is the most overused word in show business, but it
belongs here. It really does. The paparazzi have been with us for as long
as Hollywood existed. And it took this long to figure out how to turn
their stalking and their often reckless invasive behavior into something
not just good, but wonderful.

Emma Stone and Andrew Garfield did that, they did that. Their first draft
version of this was actually two years ago when they wrote their messages
on napkins that they found in the restaurant they were in.

It looks like a pretty simple idea. But many spurts of genius turn on
simple ideas. If it was an easy idea to come up with, why did it take a
century of celebrity stalk for someone to figure this out?

Emma Stone and Andrew Garfield have many standing ovations coming to them
in the long careers ahead of them, but none will be more deserved than the
standing ovation they should be getting for this, which I would be giving
them right now if I could actually stand.

Now, I know there are some constantly stalks celebrities out there don`t
have a strong personal attack and do any particular altruistic cause. For
them, I would like to offer an unlimited supply of paparazzi blockers
written by me. It says hi. I don`t need the attention, but this wonderful
organization does, Kids In Need of Desks, LastWord`sDesk.MSNBC.com.

As many of you know, the KIND fund is the permanent cause of this program
and it provides desks for African schools, where the students and teachers
have never seen desks. And it also provides scholarships for girls to
complete their high school education in Africa where as you know, girls
high school education rates are dramatically lower than boys for a variety
of reasons that the KIND funds helps to address.

So celebrities of America, here they are. Great paparazzi blockers. I
will get them for you in any color you want, as many as you want. I will
hand deliver them. And remember, when you are holding once of these
paparazzi blockers, you do not have to try to run away from the paparazzi.
In fact, if you don`t mind, I would prefer that you slow down and make sure
that they get a real good picture. Just like Emma stone and Andrew
Garfield do.

The best new thing in the world. Sorry, Rachel.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

REVEREND FRANK SCHAEFER, UNITED METHODIST PASTOR: Times are changing, and
we know longer believe in a flat earth. Now we know that homosexuality is
no longer a choice. So why don`t we change our position on that, as well?
We have to.

(END VIDEO CLIP)

O`DONNELL: That was Reverend Frank Schaefer speaking at this program last
December. At the time he had just been defrocked by the United Methodist
church for officiating at his son`s same-sex wedding. But after months of
working on an appeal and a three-hour hearing last Friday, Reverend
Schaefer stood before reporters today and announced this.

(BEGIN VIDEO CLIP)

F. SCHAEFER: I am reinstated as an ordained minister of the United
Methodist church. Yes.

(END VIDEO CLIP)

O`DONNELL: The committee on appeals restored Reverend Schaefer`s
credentials after concluding that his initial punishment was too extreme,
the committee changed it. So what is his new penalty? Reverend Schaefer
has been suspended for 30 days. Thirty days that the committee determined
he has already served.

Welcoming back to the program, Reverend Frank Schaefer and his son, Tim
Schaefer.

Reverend Schaefer, so you have been re-frocked. How does it feel?

F. SCHAEFER: It feels wonderful, Lawrence. In fact, I said it in my press
conference, I felt like dancing, if I only knew how to dance. And somebody
challenged me and I actually danced at that press conference and it was
totally embarrassing. But I feel like dancing, you know? It`s a wonderful
day.

O`DONNELL: Tim, I know this was difficult for you because it was your
wedding that got your father in such trouble. Now that he seems to be back
where he wants to be, this has to complete what is the joy of the wedding.

TIM SCHAEFER, REVEREND FRANK SCHAEFER`S SON: Of course. And I`m ecstatic
that he`s reinstated and really proud of him that all this time he has not
just talked the talk, but also walked the walk. So I`m very proud of dad.

O`DONNELL: Reverend Schaefer, what does this mean within the Methodist
ministry?

F. SCHAEFER: I think this is a huge step in the right direction. I mean,
look, I actually said in front of my trial court, in front of the church,
in front of the whole world really, that I would not refuse ministry to
anybody based on their sexual orientation, and I went on record to say I
would perform another gay marriage.

I was defrocked based on that statement, but the church reconsidered, and
re-frocked me today. I think that is a wonderful message to our LBGT
community within the church and beyond. The church is changing, and that
is beautiful.

And Tim, this seems to be one of those situations as we look at this
institution from the outside that they are moving more inside than they are
letting on. Because they do want to maintain that there is a penalty for
what you father did, but they`re making the penalty so light in relative
terms that it seems like this is the period in which they`re reconsidering
whether there should be a penalty.

T. SCHAEFER: And I think that you`re seeing with a lot of the church
leaders as well that privately they express their support for the LBGT
community, but publicly they`re afraid to speak out and stand up. And, you
know, hopefully there will be a safe environment for them in the future to
come out. You know, there`s strength in numbers.

O`DONNELL: And Reverend Schaefer, the people who reinstated you know that
this is something you might do again.

F. SCHAEFER: Absolutely. I mean, I was very clear on that. I never made
it a secret. I said I will perform another gay marriage if I`m asked to.
So really this is incredible, and eight out of nine members spoke in favor
of reinstating me.

O`DONNELL: Did anyone speak beyond just the case and talk about the issue
involved and indicate that the church should change the policy?

F. SCHAEFER: Yes, I don`t think it was time at the forum for that question
to be answered. But I think the ruling itself is a statement.

O`DONNELL: Reverend Frank Schaefer and Tim Schaefer, thank you both for
joining me tonight and congratulations to you both.

F. SCHAEFER: Thank you so much.

T. SCHAEFER: Thank you, Lawrence.

O`DONNELL: Chris Hayes is up next live with the latest on the results in
Mississippi.


END

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