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All In With Chris Hayes, Friday, September 26th, 2014

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Show: ALL IN with CHRIS HAYES
Date: September 26, 2014

Guest: Alan Grayson, Alderman Antonio French, Trymaine Lee

ARI MELBER, ALL IN WITH CHRIS HAYES SUBSTITUTE HOST: Good evening from New
York, I`m Ari Melber in for Chris Hayes. And we begin with major news about
war in the Middle East that you actually may not have heard yet. Today,
lawmakers from across the country return to the capital and held a detailed
debate about how to wage wars against ISIS and they held a vote on the
issue.

(BEGIN VIDEO CLIP)

DAVID CAMERON, PRIME MINISTER, UNITED KINGDOM: The fact that this is about
psychopathic terrorists that are trying to kill us. And we do have to
realize that whether we like it or not, they have already declared war on
us. There isn`t a walk-on-by option. There isn`t an option on just hoping
this will to go away.

(END OF VIDEO CLIP)

MELBER: Yes, the British parliament came back from their recess to
authorize air strikes in Iraq against ISIS, and they held their debate
before any of those actual air strikes began. You know, that`s kind of a
logical order before action is taken. Now, the final vote to authorize
those strikes in Iraq, Syria which we mentioned was not on the table,
wasn`t an overwhelming vote, 524 to 543. There were some objections to more
war and some objections that the strikes weren`t enough.

(BEGIN VIDEO CLIP)

EDWARD LEIGH, BRITISH CONSERVATIVE POLITICIAN: Is this seriously contended
that by air strikes alone, we can actually roll back ISIL or is it just
your politics.

CAROLINE LUCAS, BRITISH GREEN PARTY OF ENGLAND: Killing extremists doesn`t
kill our ideas. Why are we hearing far more from this prime minister about
the political and diplomatic solutions to this?

DAVID WINNICK, BRITISH LABOUR PARTY POLITICIAN: Iraq, Afghanistan, and this
government, Libya, none are success stories. Are we going to impart
production that could last for years?

PAUL FLYNN, BRITISH LABOUR PARTY POLITICIAN: This motion is the thinning of
a bloody and ugly wake that will grow and expand and mission creep into a
prolonged war with unforeseeable consequences.

(END OF VIDEO CLIP)

MELBER: Those were good questions and good criticism. But, meanwhile, as
you well know back at home here, congress has zero plans to directly vote
on those new strikes in Iraq or Syria. House Speaker John Boehner said,
"That just yesterday the house won`t vote." He thinks until next year at if
it all. Senate leadership has similar shown very little desire to bring
their members back for a real vote, and while both democrats and
republicans have made noise about wanting some kind of vote, most seem to
content to stay off the record. Now, today, we heard from Senator Rand
Paul. He made an argument you will hear from many republicans, congress
should actually vote, but now it`s up to the president to ask them to do
it.

(BEGIN VIDEO CLIP)

RAND PAUL, UNITED STATES SENATOR: Had I been president, I would have called
for a joint session of congress. I would have laid out the threat.

(APPLAUSE)

PAUL: And I would have requested congressional authority to respond as the
constitution dictates.

(END VIDEO CLIP)

MELBER: That`s right, so at this point, much of the GOP leadership critic
boils down to republican saying, "If they were president, they`d make
themselves actually do their jobs." Joining me now is Congressman Alan
Grayson, a democrat from Florida. Let`s start right there, congressman.
What do you make of what I think is bizarre even in our gridlock bizarre
politics that claim if the republicans were in the White House, they would
get this congress to not act the way it has in the senate side, under
republican leadership.

REP. ALAN GRAYSON, D-FLORIDA: Well, for a republic is in the White House,
he`s probably were in the engagement (ph) eight or 12 or what is right now.
But we`re talking about war and peace, not after you, (inaudible) no after
you guess on, I don`t think that`s the way these decisions should be made.

MELBER: And so what should happen?

GRAYSON: What should happen is that congress should be making a difficult
decision that actually confronts America. The president is the commander in
chief, but it`s up to congress to declare war. Secretary Kerry says, "They
we`re already at war and therefore, this is something that the congress
should undertake."

MELBER: And when you looked at -- what a little bit we showed from across
the pond, why did you think of the debate that they had? Because, one thing
that was clear even in the short excerpt we showed was a real reckoning
with the down sides here, and it seems that in contrast, that vote that you
guys did hold on a Syrian rebel piece was sort of a distraction because, we
all know that this was much bigger than 5,000 rebel trainings.

GRAYSON: Well, that debate end up throwing interesting lines. First of all,
the British Parliament voted in favor of air attacks, but not ground
troops, and to a clear distinctions are now regard. Secondly, the British
Parliament voted in favor of attacks, only in Iraq against ISIS, not in
Syria. Another interesting distinction, that in a so far alluded our
government and I think that when you debate this way, then you end up
flushing out the real issues. But, I don`t expect that`s going happen in
congress. Look how many people attended the debate, in British Parliament.
Virtually, all the members of the parliament were actually there.

MELBER: Right.

GRAYSON: Compare that with the six hours of debate that we had a week ago,
in the house of the representatives, on the president`s request for half a
billion dollars to train so-called moderate Syrian rebels, nobody was in
the room, nobody was in the room. So at this point, we`re paying as much
attention to each other in U.S. congress as roman senators do to the Nero`s
horse.

(LAUGHTER)

MELBER: And on -- you mentioned that half billion, then you have, just out
today, Secretary Defense Chuck Hagel and General Martin Dempsey saying,
they need more money. Take a listen to that.

(BEGIN VIDEO CLIP)

CHUCK HAGEL, SECRETARY OF DEFENSE: We`re generally spending roughly since
this after started $7 million to $10 million a day, that`s being funded out
of OCO, Overseas Contingency Operations. And we`re going to require
additional funding from congress as we go forward.

MARTIN DEMPSEY, CHAIRMAN JOINT CHIEF OF STAFF: But, if you`re asking me do
I assess right now is we`re going to the far review for 16 that we`re going
to have budget problems, yes.

(END OF VIDEO CLIP)

MELBER: My view there is everyone remembers a little something called, the
sequester, which was largely a product of the tee party hostage taking and
part of what it does is as you know is automatically slowed defense
spending. How do you square that with the pentagon now saying they need all
of this extra money?

GRAYSON: Well, I think they can drop a few bombs for only $500 billion a
year. I don`t think that they going to have to run a bake sale any time
soon. But what about the indirect costs, why aren`t we talking about that?
The price of oil went up $3 a barrel this week, that means that drivers all
cross the United States, in fact around the world, are paying 10 cents a
gallon more this week than they did last week. That`s cause us around $20
million a day. Why is there no discussion of that?

MELBER: I hear you. And then the last thing I did want to ask you here,
congressman. In the lame-duck session, do you see an explicit vote on any
authorization here?

GRYASON: No, I don`t. But, just to finish what I`m saying a moment ago.

MELBER: Sure.

GRAYSON: Those attacks on those refineries in Syria, in the ISIL territory
led directly to that increase in oil prices. Why isn`t anybody thinking
that through? No, we`re not going to address this lame-duck session, we
primary want to address of this year. I think what`s going to happen is the
futility of this idea that we can defeat ISIS through air attacks, as long
as it become more and more parent people overtime and this war, like the
war in Iraq for so many years, will just fade from the news and be largely
forgotten.

MELBER: You might be right. We can all hope that you`re wrong, Congressman
Grayson, Thanks for spending some time with us tonight.

GRYASON: You`re welcome. Thanks for having me.

MELBER: Appreciated. Now, I want to also tell you about the conservative
values voters summit, you may have heard about it, going on in Washington
today. There was some discussion of the war on ISIS, but the marquee
republican speakers also spend a lot of time focus on the domestic politics
with some of their greatest hits, and as they pitch the conservative base
here on how they are going to get back in the power.

(BEGIN VIDEO TAPE)

RAND PAUL, UNITED STATES SENATOR: The president acts like he`s a king.

TED CRUZ, UNITED STATES SENATOR: Right now, this week, the government of
Iran is sitting down with the United States government, (inaudible) in New
York City.

MICHELE BACHMANN, UNITED STATES REPRESENTATIVE: We want our 1980`s foreign
policy back. Peace and strength.

(APPLAUSE)

BRENT BOZEL, MEDIA RESEARCH CENTER: It`s time to go on offense.

(APPLAUSE)

PAUL: This country remains a center right country.

BOZEL: He said, "Run Ted, run."

PAUL: We abolish the IRS.

(APPLAUSE)

PAUL: We repeal common corps.


(APPLAUSE)

PAUL: We are going to sign legislation repealing every word of Obamacare.

(APPLAUSE)

BACHMANN: I introduced the very first repeal bill the next morning. The
bill passes at midnight and at 9:00 A.M. I`m in there, introducing the
repeal bill.

(APPLAUSE)

(END VIDEO TAPE)

MELBER: Joining me now, Robert Costa, national political reporter for the
Washington post. Good Evening.

ROBERT COSTA, NATIONAL POLITICAL REPORTER OF THE WASHINGTON POST: Good
Evening. I want to tell you, as a New Yorker, I`ve got the chardonnay,
right here, we swirl it every time the U.N. is in town. I get it, they
going to make their jokes, they got to hit their punch lines. But, Robert,
walk us through the politics here at a time when the nation is not in the
mood to hear from any incumbent member of congress really politic.

COSTA: Well, I spend much of the day at the values voters summit, and I can
tell that the basement of the Amnisure (ph) hotel here in Washington. And
you have the sense that the conservative, there were in the basement
politically, they`re trying to get out and get their message out to a
country that is maybe not receptive to at this moment. And a lot of new
stars, to see that reception today, first Senator, Ted Cruz, you see this
is someone who could run in 2016 for president and could be a real
contender.

MELBER: And yet, don`t you think at a certain point there`s a thinnest to
some of his claims. Let`s take a listen to his -- one of his prescriptions
for winning, Ted Cruz.

(BEGIN VIDEO CLIP)

TED CRUZ, TEXAS SENATOR: How do we win, we defend the values that are
American values. We stand for life. We stand for marriage. We stand for
Israel.

(END VIDEO CLIP)

MELBER: Now, I just want to be clear. Israel is a long standing ally, you
can see that from both administrations. It`s a little though, though, to
say that your American value is a foreign country.

COSTA: Right. And I think we see Cruz during -- he`s throwing out red meat
to the conservative base. And I think he reflects what are lot of
conservatives are at this moment. They don`t really have a hero ahead of
the 2016 elections. They`re not really sure about the 2014 mid-term. Where
are the conservatives, (inaudible) within a Republican Party. And so,
they`re coming together. They`re rallying around each other but -- and
they`re trying to find a message, and they`re trying to find some leaders.

MELBER: How much did you hear today in your reporting about our wars right
now and about ISIS?

COSTA: It`s surprising to me where I talk to activist today, to hear how
hawkish they sound, that, years after their frustration with George W.
Bush, and after cheering the rise of Senator Rand Paul and his non
interventionism. Right now, as ISIS continues to grow, and in Syria and in
Iraq, they`re really moving back to Bush mono. And that`s surprising to me
even at the base level of the Republican Party, you hear that sentiment.

MELBER: Yeah. That`s an interesting point. And let`s play, we have Michele
Bachmann talking about how simple it is to win some of these wars, let`s
play that.

(BEGIN VIDEO CLIP)

MICHELE BACHMANN, MINNESOTA CONGRESSWOMAN: And I believe that if you have
an evil, the order of this magnitude, you take it seriously. You declare
war on it. You don`t dance around it, just like the Islamic State has
declared war on the United States of America. You kill their leader. You
kill their counsel. You kill their army until they wave the white flag of
surrender. That`s how you win a war.

(END VIDEO CLIP)

MELBER: Now, is it asking too much to say what is she talking about? We`ve
been reporting and this applies somewhat the both parties. But congress
left town without declaring any wars or weighing in, in any specific way on
the new air strikes.

COSTA: Because congress and the special republican in the house and in
senate, even the conservatives, they`re reluctant to have that for war
debate, especially before the elections. And it was interesting today to
sit there and listen to conservatives -- half of the conservatives.
Question the president`s leadership and say that, you know, more needs to
be done to combat ISIS. Yet, when it comes to the question of boots on the
ground, republicans and conservatives are reluctant to endorse that idea.
They know that`s -- it`s politically unpopular. So, you just hear rhetoric
about leadership, but when it comes to a specifics about soldiers there,
they pulled back.

MELBER: All right. Robert Costa, thanks for joining us and for your
reporting today.

COSTA: Thank you.

MELBER: Now, we also have some developments from Ferguson to report and
share with you tonight, including Ferguson police chief who`s now making a
public apology directly to the family of Michael Brown, something you`d --
to do previously. And we`re going to show you Chris Hayes` exclusive
interview with Wendy Davis. Stay with us.

(COMMERCIAL BREAK)

MELBER: There are some secret tapes the New York Federal Reserve would
probably rather you didn`t hear. We`ll play them for you. That`s ahead.

(COMMERCIAL BREAK)

MELBER: We have several developments we want to tell you about in the
Ferguson story this evening. New information first, a group of protesters
camp near the site of Mike Brown`s death, according to reports, now have
been arrested. Huffington Post Ryan Grim posting on Twitter tonight,
Ferguson Police arrested protesters again tonight, because Ferguson
employed massive show of force, end quote. Now, tension between police and
protesters sparked up again last night. Also, that was hours after
something pretty interesting. A new public apology from the Ferguson Police
Chief Thom Jackson.

(BEGIN VIDEO CLIP)

THOMAS JACKSON, FERGUSON POLICE CHIEF: I want to say this to the Brown
family. No one who has not experienced the loss of a child can understand
what you`re feeling. I`m truly sorry for the lost of your son. I`m also
sorry that it took so long to remove Michael from the street. I`m also
aware of the pain and the feeling of mistrust felt in some of the African
American community towards the police department.

(END VIDEO CLIP)

MELBER: Now, that, after that, Chief Jackson step outside and he tried
assured protesters that further changes will be made here. In fact, he
tried to briefly march with those protesters.

(BEGIN VIDEO CLIP)

(PROTESTERS MARCHING AND RALLYING)

(PROTESTERS SHOUTING)

(END VIDEO CLIP)

MELBER: You can see that that`s a chaotic scene. But from that video and
other reporting, that video from Disclosure Newszine and MSNBC`s true
mainly also explained that basically what happened was an unidentified
black Ferguson police officer started from the back of that crowd toward
the chief, pushing people, and knocking a woman to the ground. Then things
quickly then turn chaotic, several arrests were made and protesters say
that the pain and frustration here continues to be fueled by Ferguson`s
authorities being unwilling to release even the most basic and public
information, like when it took the Ferguson PD a week just to release the
name of Darren Wilson, the officer who shot and killed Mike Brown, who was
unarmed, or waiting almost two weeks to release the police report about the
shooting.

Now, today, another piece of information in this vain (ph), Yahoo News
reporting that a required police account in the Brown shooting doesn`t even
exists yet. The Ferguson Police Department requires what`s called a use of
force report for all use of force incidents to include the pointing of
weapons or using weaponless, even hand-to-hand control techniques. Now,
base on that definition, you would see the use of force report, should`ve
already been filed in this case. Yahoo News points out that they quote,
requested the report under Missouri`s public records laws and were told
multiple times that document doesn`t exist, end quote. That is the kind of
misstep that will likely be dealt with by the DOJ, which continues
investigating the Ferguson Police Departments. Something Attorney General
Eric Holder said, we`ll continue beyond his time at the department.

(BEGIN VIDEO CLIP)

ERIC HOLDER, FORMER U.S. ATTORNEY GENERAL: The investigation is on going.
It`s thorough, and as I promised the people of Ferguson, it`s going to be
an independent one. And my departure will not have any impact on the
progress with that investigation.

(END VIDEO CLIP)

MELBER: Joining me now, Trymaine Lee, national reporter for MSNBC, even
covering events from Ferguson, and Antonio French Alderman, City of St.
Louis. Aldermen, let me start with you. It would seem that that video,
however it came about and however much authenticity or integrity is
involved in it, would seem to be some kind of small step, however late.

ALDERMAN ANTONIO FRENCH, CITY OF ST. LOUIS: Yeah, I think that the chief
made a sincere effort to try to own up to some sort of his responsibility.
But unfortunately, I think it`s too little too late. Unfortunately, I think
that -- his relationship with the community is, at this point, irreparable.
And that him continuing to be in that position actually becomes an obstacle
for this community to recover from what we`ve gone through.

MELBER: Let`s dig into that. Because if you look at the video, he`s there
in a red polo-shirt, he is there under his own name. He is not necessarily,
of course, speaking under the official color of the office, which can be a
significant distinction. And what is your view, and the community`s view,
if you will, on that distinction and what he`s apologizing for. Because at
a certain point, it`s not just a personal apology the people are asking
for, but official reform and justice.

FRENCH: Yeah, and, again, I think that the chief probably had good
intentions with this. Just as he did last night, he probably had good
intentions when he came to talk to the crowd. But he still remains, what I
would call, tragically tone deaf and not really able to handle this
situation. And unfortunately, some of these actions are actually making the
situation worse, as we saw again last night.

MELBER: Trymaine, could he have done anything differently when he stepped
outside last night.

TRYMAINE LEE, MSNBC NATIONAL REPORTER: At this point, I`m not sure what he
Chief Thom Jackson could do to fill -- to spread some sense of goodwill
from the department to the community. But clearly, the police department
and Chief Thom Jackson, they haven`t helped themselves along the way. Of
course, nerves, have been afraid in there`s a range of emotions. And people
had behaved peacefully and not so peacefully, right? But when you look at
what the police department leaving this big void of information where
people can feel what they want into that, coming out and not be in forth
right the -- the I am Darren Wilson bracelets. Every step along the way,
they seem to be kind of fueling the fire that is burning here for more than
six weeks.
MELBER: Yeah, what are you learning about the bracelets.

LEE: Apparently, the DOJ has sent a letter requesting that Thom Jackson --
Chief Jackson enforce a rule, you know, borrowing those bracelets. When we
first got word of this a couple -- a few days ago last week, and it was
going viral through Twitter, and people just cannot understand because it
seem like, well police are still there even within this heighten situation.
They`re still there to protect and serve the people. And to many, that seem
clear sign that they had already chose a side in this matter.

MELBER: Yeah. And also -- and we should mention their (inaudible) it`s not
clear exactly, you know, how many police were wearing them. But, it would
seem inappropriate, Trymaine, in your official conduct and duties to be
wearing anything that take sides on this kind of issue.

LEE: It would seem. But again, this has, kind of, been -- there`s been a
line drawn in the sand from the very beginning. Again, some of that line
was drawn by people who are fighting for justice for Mike Brown, but the
other side of that line was law enforcement, different agencies. Again,
it`s not even clear which agency`s officers are wearing these bracelets.
But the line have been drawn in the sand, I don`t think there`s any
confusion when you`re down in the street, that there is clearly a line in
the sand.

MELBER: And, Alderman, what did you think of the attorney general speaking
about this? Because, on the one hand, it`s an open inquiry and there`s not
that much he`s going to say in detail. On the other hand, as you know so
well and as many people have emphasized, often, these kinds of issues,
these, kind of, cases don`t get any national attention at all. Meaning they
don`t come up in the press conference, let alone leave to a full force
federal inquiry.

FRENCH: Yeah. I`ve really welcomed the attorney general`s involvement in
this case. I think it is been the federal government, really, alone that
has shown the, kind of, empathetic action that the communities been asking
for when there was inaction or even detrimental action on the local level
and at the state level. It was a federal government that, I think, gave
this the, kind of, attention that needed. I was happy to hear that they
will continue even with his departure, and I hope that it does.

MELBER: Trymaine, your thoughts on that? I should mention that, as we
played, was -- the attorney general when he spoke earlier to MSNBC`s Joy
Reid. Trymaine?

LEE: I think from the moment that Attorney General Holder weighed in
publicly and came down to Ferguson and told -- Ferguson, told a group of
young people that I am the attorney general, but I`m also a black man. That
went a long way in giving people a sense that regardless of the
relationship between the community and law enforcement locally between the
county prosecutor, the county police and Ferguson police that there was a
higher power that was keeping watch over this. And so, it goes a long way,
it is yet to be seem, because, remember, there are a lot of cases -- not
say a lot, but there are cases that`s similar to this that are being
investigated by DOJ and we just never hear what happens. So, it`s a great
sign and people feel good about it. But we won`t know for a long time what
the results of that investigation will be.

MELBER: Right. And there`s a piece of that that goes to this case and a
piece that goes to police conduct written large. Attorney General Holder
having initiated more reviews of police conduct than previous attorney`s
general, as far as I can see. We think about that this week. Alderman,
finally, when we look at the grand jury making a decision here, potentially
as soon as the end of October, highway patrol saying they`re preparing for
the worst if grand jurors do not indict. What are you`ll doing to keep the
peace regardless of that incident, that event.

FRENCH: What we have -- and to that point, even right now is a fragile
peace. And so, everyday is a struggle to keep tempers, where they need to
be intervening violence. Last thing we need is any publication (ph)
especially on the police side. And so, you know, if this grand jury, decide
not to indict, I do worry about our community. It will be hard to hold
people back.

MELBER: But are you asking people to keep the peace?

FRENCH: We are. We`re out there every night. We have stood physically
between police and protesters and sometimes buildings and potential
looters. But it would be very difficult and we will need help and we need
the -- hopefully, we can use this time between now and then to build a
relationships where we can prevent that and keep our community hold.

MELBER: Well, we will stay on this story. Antonio French and Trymaine Lee,
thank you both for joining me tonight. I want to turn to Chris` exclusive
interview with Wendy Davis. That is ahead. You`re going to see it here. And
speaking of Chris, you may be wondering where he is tonight, I`ll tell you
about that as well. That`s next.

(COMMERCIAL BREAK)

MELBER: Now, perhaps you`re wondering where Chris Hayes is tonight? He`s
getting ready for this.

(BEGIN VIDEO CLIP)

(EXCERPT FROM GLOBAL CITIZEN FESTIVAL)

(END VIDEO CLIP)

MELBER: That is the Global Citizen Festival. This weekend, MSNBC`s going to
be airing the first live broadcast of it ever. Chris will be co-hosting the
event along with Alex Wagner, he`s getting ready. The concert is being put
on by the global poverty, a project which begin in 2008 with the goal of
ending all extreme poverty by 2013. Now, it starts at 3:00 P.M. Eastern,
MSNBC`s going to be showing it all day long. So, you can check that out
tomorrow on television, or if you happen to be in New York and you can get
here and want to do it, you can go, it is free, but there is a catch. You
have to earn a ticket, you can`t buy it. And you have to earn it by doing
good. So, you can check out globalitizen -- org, .org for more information
we got that up on the screen, too not into that (ph), or you can head out
to Central Park to rock out tomorrow.

(COMMERCIAL BREAK)

MELBER: If you look at the polling, Texas State Senator Wendy Davis remains
a long shot to be the next governor of Texas. The latest average of
polling, for example, from RealClearPolitics puts down around 10 points.
But Davis believes she has a chance. She`s points to her win in a district
that was drawn specifically for the GOP in 2008. And when Chris Hayes sat
down with Wendy Davis earlier this week, he asked her what she learned from
that victory that makes her think she can pull of another upset.

(BEGIN VIDEO TAPE)

WENDY DAVIS, TEXAS SENATOR: I`ve learned to speak up for the values that I
believe are reflective of the community that I represent. And I think these
are values that aren`t partisan ones, and that`s part of the problem.
People are so conditioned to view things through a partisan land and to
vote that way or to legislate that way if their in elective office. I think
it`s a privilege to serve a district that is fairly balanced one between
people who might tell they were democrats and people who might tell you
they are republicans. But they have shared values. They want us to invest
in the future of this state through education, making sure that we have the
work force of tomorrow. They want the government to stay out of some of
their most private decision-making and their most private moments. They
want to make sure that people are paid equally for equal work. They want us
to do smart things with our tax dollars and bring them back to work for us.

CHRIS HAYES, ALL IN HOST: You mentioned tax dollars, and you`ve been
talking a lot in this campaign about education funding. And, obviously,
you`re (inaudible) was just spending a funding system from lawsuit with
allegedly under-funding the schools. Do you have enough revenue in Texas? I
mean, it seems to me that the school funding thing is a subsidiary question
to the fact that the pie is fixed pretty small.

DAVIS: We actually do have the funding. And, in fact, that very same year,
that $5.4 billion in cads (ph) was made to our public school. We have a
comptroller who so severely underestimated our revenue. And I don`t think
it`s a simple math mistake. We wound up when we came back into the next
legislative session with over $8 billion more in revenue for that biennium,
than she told us we were going to have available to us. Had we known that?
Those cuts would be in place.

HAYES: Right, just so people --- because your budgeting process, if you
don`t mind saying, is slightly odd. And you have to budget around these
comptroller objections.

DAVIS: That`s right.

HAYES: And so, you budget around the projection then you came back and it
was like, oh, there`s another $8 billion.

DAVIS: Right.

HAYES: So, how do you -- whose fault is that? Is that Greg Abbott`s fault
or is that the comptroller?

DAVIS: You know, we have to, obviously, elect people who are going to give
us real-time information and accurate information about the revenues that
are going to be available to us. And one of the ideas that I proposed, as a
state senator, was that we do a year-to-year revenue update and allow a
budget --- budgetary process that would capture growth in that next year.
We only convene in the Texas legislature every two years. And what it
causes is a delay for us to actually react to real-time information.

HAYES: I have to say, that is a bizarre system budgeting.

DAVIS: It is. But in terms of, you know, placing culpability, the foot of
my pounding (ph) Greg Abbott, the probability with lies in the fact that he
have send the offending these hats (ph) in court ever since.

HAYES: But isn`t that as --- he`s attorney general of the state?

DAVIS: Attorneys generals all over this country have refused to support
legislation that they believe it`s wrong. And cutting $5.4 billion from our
public schools is wrong. And it doesn`t take a rocket scientist to know
that, absolutely not. And if he truly did stand for the proposition that we
need to be making our schools stronger, that we need to be investing in our
children, that we need to create opportunity for every person in this
state, he would have come to the legislature and said you`re wrong. But he
didn`t do that. And not only did he not do it then, but when we convened
into legislative session, we had already heard once from the judge. The
judge said this is unconstitutionally under-funded. You need to do
something about it. I`m giving you a warning legislature so you can try to
fix this in the next legislative session. As our attorney general, he
should have come to us with his recommendations about what he thought would
get us out of this -- right, this legal problem, this unconstitutional
problem that we have in funding our schools.

HAYES: I was watching a debate on Friday night, there`s a question of the
death penalty.

GREG ABBOTT, 50TH ATTORNEY GENERAL OF TEXAS: I`m in favor f the death
penalty.

HAYES: You and Greg Abbott -- I think, gave in someway similar answers. You
support the death penalty as a matter of policy. You both expressed, I
think, the fairly obvious concern about making sure no ones ever execute is
innocent. Are you 100 percent confident Texas has never executed an
innocent person?

DAVIS: Of course not. No, of course not, but what we have available to us
now is the technology that was not available to us before. And I do think
that as governor, we are called upon to make these decisions and to
determine whether we believe that without a reasonable doubt actually
exists for a person whose death penalty we are about to sign. I am prepared
to carry out the death penalty in Texas. I do support it in cases of
heinous crime. But I also know that it if there is that reasonable doubt,
if there isn`t that DNA evidence that helps us know for sure or some other
evidence that absolutely assures that we`ve got the right person before
meeting out the most ultimate of punishments. We have to be very, very
serious about looking at that.

HAYES: What have you changed your mind on since you entered politics.

DAVIS: Gosh. That`s a really good question. What have changed my mind on. I
guess -- I wouldn`t say it`s a change of mind, but it`s a growing
understanding of what it means to operate in a partisan environment. That
there is give and take that occurs. And that we have to be able to come
together at a table and find that place that works and most reflex of
values of the people that we represent, that many things are absolutely all
or nothing. Funding our schools, for me, there is no compromise there.
Funding the future of our state, there is no compromise there. But I have
learned along the way to find partnerships with people across the aisle and
to get things done in a bipartisan manner, and I think people want to see
more of that. They don`t want to see Texas become gridlock like we see
happening at the federal level.

HAYES: It`s funny because there`s no rule book, right? When you become a
politician to make those judgment calls. You make a series of discreet
judgment calls about when you compromise and you`re getting constantly new
information about this amendment or am I worrying about here and there and
there is no -- you don`t go into it saying well, these are going to be the
things I am. You have to make that call, right?

DAVIS: Yes, you do. And you have to make it again through your own values
and through what you hope are the reflective values of the people we
represent and are you doing things that are advancing their interest and
moving, let`s say forward in a positive direction and if you can answer the
question, yes, then yes, you can work toward compromise that achieves that.

HAYES: Wendy Davis, thank you very much. We appreciate it.

DAVIS: Thank you. Great to be with you.

(END VIDEO TAPE)

MELBER: Wendy Davis talking to Chris Hays there. Now, up next, secret
recordings from inside the New York Federal Reserve recorded by someone who
was working there that seemed to show the Fed is too cozy with a very
special big bank. That`s next.

(COMMERCIAL BREAK)

MELBER: Maybe the biggest question to come out of the 2008 financial
meltdown was pretty simple. Why was this allowed to happen? Shouldn`t some
regulator kept Wall Street from bringing our economy to the brink of
disaster? The organization that suppose to identify and address the sort of
systemic problems that led to the crisis, is generally considered to New
York Federal Reserve, which oversees Wall street and it turns out, they
commissioned a confidential report to figure out what went wrong. That
report has now been made public. It criticizes the New York Fed for
unwillingness to take action when it did identify problems for being too
deferential to the banks for basically surrendering to those it was
supposed to monitor. That concept is known in the industry as regulatory
capture, and the report, isn`t even the most interesting part of this new
story. We now learning about secret recordings, made about one of the
attempts to regulate -- one of the biggest players on Wall Street, Goldman
Sachs. A former Fed employee, used a tiny recorder attached to her key
chain to record conversations among regulators and bankers at Goldman. And
today, this American life to show and ProPublica brought us the story of
that employee, Carmen Segarra, as she was fired by the Fed and she is suing
for wrongful determination. The case, she lost, and is reportedly planning
to appeal. Segarra casts her firing as the result of an aggressive stands
towards yes, regulating Goldman. She claims that Fed was way too
deferential to the bank it was suppose to regulate, and she secretly
recorded about 46 hours of meetings and conversations with their
colleagues. She said she was worried about what she was witnessing and she
wanted her own record in case those event were later dispute it. Now, let`s
be clear right here about, if you think the New York Fed claims that her
firing was based entirely on her performance and it notes she now is
seeking money in a lawsuit. The New York Fed said in the statement respond
to that story, that it categorically rejects the allegations being made
about the integrity of its superstition -- supervision I should say, of
financial institutions. Also, we here at MSNBC don`t have access yet to the
46 hours of recording. So we can`t characterize an entire picture of what
they contained, that said. Seggar paints a picture of a regulator that she
says was basically afraid to do its job. Now, we`re going to play a clip of
the story as it aired today on this American life, from a secret recording
of one of her colleagues after a meeting with Goldman when she says
reflected a fear among regulators even in just asking the company to comply
with the Fed`s basic requests.


(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think we don`t want to disclose Goldman from
disclosing these types of things in the future, and therefore, maybe, you
know, some comment that says don`t make mistake, our inquisitiveness, and
our desire to understand more about the marketplace in general, as a
criticism of you as a firm necessarily, like I don`t want to, I don`t want
to hit them on the bat with the head, and say, they say, screw I, we`re
going to disclose it again, we don`t need to.

(END VIDEO CLIP)

MELBER: You don`t want them thinking here, criticizing them. Now, late this
afternoon, Senator Elizabeth Warren, called for a congressional
investigation into the Federal Serve Back at New York in response, saying
these reports raise disturbing issues that come to question whether these
regulators are doing their jobs. Now, when we come back, Matt Taibbi and
Alexis Goldstein are here to discussion this very important story and
whether the New York Fed, Wall Street`s regulator is getting any better
since the big meltdown.

(COMMERCIAL BREAK)

MELBER: Joining me now, Matt Taibbi, Editor in Chief of Racket, the forth
online magazine launching next month, he is also the author of The Divide,
coming on paper back, October 21st and Alexis Goldstein, Communications
Director for The Other 98% and a contributor to the bull market of
collection media.com. Matt, you look at these secret tapes now that have
been revealed, we haven`t heard all of them but what we have heard and what
this American life reports, shows a regulator that sees Goldman Sachs as
more of a client than an entity oversea.

MATT TAIBBI, RACKET EDITOR IN CHIEF: Right, yes. First of all, just to back
up. This American Life (inaudible) profitable guide, it`s a fantastic piece
of journalism that should definitely be commended for it. But it`s
incredibly sad when it`s a breaking national news story that one of our
regulators turns out to be dishonest and that`s really the headline news
story here. Well, we have the supervisor here, one of the people who is
embedded working in one of these banks, who turns out to be honest and
can`t -- and as review...

MELBER: You`re saying the whistle blower, who released the tapes is honest
and the larger, New York Fed is what.

TAIBBI: Is not. I mean clearly, there`s -- Carmen Seggar, is the person who
-- you know, essentially her superiors asked her to take a dive and then
she basically said no, you`ve got to take it somewhere else, buster, and
she, you know, took these tapes and made them public and she`s turn out to
be the only person in this entire organization who is willing to stand on
principle.

MELBER: Alexis, what day you make of that, because she`s basically saying
here, she wanted to simply report internally not public yet that there were
problems with the way Goldman specifically approached its deals and that
she was told to bury that.

ALEXIS GOLDSTEIN, THE OTHER 98%: Well, I think it shows that in this
instance and in many other instances, the New York Fed was acting more like
Goldman Sachs` defense attorney than its regulator. And unfortunately, this
is just the latest saga in the long history the New York Fed and the
Federal Reserve bearing Wall Street`s bodies for them. I can give you two
examples right off the top of my head, the New York Fed knew that the
global interest rate labor (ph) was being manipulated in 2008, they did not
tell the Department of Justice. And they had all these secret bail out
program that they kept secret. They didn`t tell congress who was getting
money and they viciously thought any ability into she light into it. And I
think we would have seen a break up of the banks if congress have known
that these secret lifelines had been going through all this time through
the Fed. So this is just another instance of the Federal Reserve and the
New York Fed bearing the banks bodies through them.

MELBER: Right, and to your point about the (inaudible), the breakup quite
to the contrary, the history has been a real overlap in top management,
William Dudley, a Goldman person, at the Feds. Steven Friedman, Former
Chair of the New York Fed, Goldman Sachs` board member. The list goes on
there, although I want to read from something that Liam Conroy in Politico,
just today respond in all these. He said, look, now a day (ph) is following
the controversy that irrupted during the financial crisis about both Dimon
and Friedman rose on the New York Fed, no Wall Street type serve on the
board. Your thought on that Alexis.

GOLDSTEIN: Well, I think that`s a step in the right direction, but we still
see people like Carmen Segggar being kicked out of places like the New York
Fed. That happened in to 2012. Many years after the financial crisis. I
don`t think we`ve seen a change in the way this institution does business,
and I don`t the Fed that Jamie Dimon is no longer able to regulate himself
as the New York Fed is a sing of progress. I think it is just the sign of
thing that have -- aren`t as bad as they were before.

MELBER: Or, if you really want to be a downer, here, Matt, her on Friday
night, a sign of how optics is more important. So they said, you know what,
fine. We`ll keep doing a lot of this. That would be at least -- this
individuals allegations that what some of they have suggest. We`ll stay
cozy, but we won`t have our own, obvious Goldman folks on the board.

TAIBBI: Well, if they were really concerned about optics, I mean, someone,
somewhere in the entire regulatory structure would have done something
about all the behavior that went on leading up to the financial crisis. I
mean, you mentioned Jamie Dimon, that company (inaudible) gigantic
settlement but not one person did one day in jail, not one had to pay one
single cent out of his or her own pocket. All the money came out of the
shareholder`s pocket, nobody has paid yet for any of those behavior during
this entire period.

MELBER: No, it`s not -- that`s something we hear a lot, there`s an
important legal piece to this, is that because congress hasn`t tightened
the rules for individual Wall Street accountability or is it because of a
lack of purpose on the prosecutor`s part. When you talk to prosecutors in
New York, federal prosecutor, they point to people, they have jailed an
insider trading which they say is the better chance to make and they don`t
have the laws to put other folks in jail.

TAIBBI: No, I mean, it`s absolutely ridiculous. If you to people in the
industry, they were thousands, if not, tens of thousands of cases of fraud
and probably mortgage bank securities and they haven`t made a single one,
not one single criminal case yet and statute of limitations is running out.

GOLDSTEIN: And you`re talking about regulator that have subpoena powers.
You`re talking about people who have people on site at these banks, and the
reality is when ordinary people are looked at by the police, the police see
illegal behavior where none exists, but when wall -- when it comes to the
banks, the regulators see actual illegal behaviors and they cover their
eyes and they help them cover it up.

TAIBBI: And there aren`t small crimes either, we`re talking about crimes,
you know, of fraud where tens, if not, hundreds of millions of dollars were
lost, these are major, massive crime, where nobody is paying the price for
it. And, you know, that -- it`s an indictment of the entire regulatory
structure and not just the New York Fed, but everybody.

MELBER: Right, and the harms cost of death, particularly on the mortgage
side affecting so many millions of Americans lives.

TAIBBI: 1Everybody, retirees, ordinary public workers, everybody.

MELBER: Yeah. Matt Taibbi and Alexis Goldstein, you guys have been
reporting in this area long before the secret tapes broke, so thank you for
joining us tonight, have a good weekend.

TAIBBI: Thank you.

GOLDSTEIN: Thank you.

MELBER: And that is All In for this evening. You can find me on Facebook
@arimelber, Facebook.com/arimelber. Good news for you, The Rachel Maddow
Show starts right now. Good evening, Rachel.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY
BE UPDATED.
END

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