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All In With Chris Hayes, Tuesday, December 30th, 2014

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Show: ALL IN with CHRIS HAYES
Date: December 30, 2014
Guest: Molly Ball, Blake Zeff, Harry Siegel, Noah Shachtman, Aisha Harris,
Mike Pesca, Erin Gloria Ryan, Pamela Paul



(BEGIN VIDEOTAPE)

CHRIS HAYES, MSNBC HOST (voice-over): Tonight on ALL IN.

REP. STEVE SCALISE (R), LOUISIANA: I`m looking forward to bringing a
fresh, new voice to our leadership table.

HAYES: Republicans standby their man. Steve Scalise admits and
apologizes for speaking at a white supremacist conference. Tonight, just
exactly how big a mess is on John Boehner`s plate?

Then, "The New York Times" puts the NYPD on blast, as Mayor de Blasio
meets face-to-face with the police unions that are trying to take him down.
A full report ahead.

Plus, the latest and best evidence yet that North Korea might not have
been involved at all in the Sony hack.

And for fond farewells --

STEPHEN COLBERT, TV HOST/COMEDIAN: Thank you, nation.

HAYES: -- to fallen icons --

BILL COSBY, COMEDIAN: There`s no response.

HAYES: -- tonight, an ALL IN round up. The epic year in pop culture.

UNIDENTIFIED FEMALE: Mail -- kimp?

HAYES: ALL IN starts right now.

(END VIDEOTAPE)

HAYES: Good evening, from New York. I`m Chris Hayes.

The 114th Congress in which Republicans will control both the House
and the Senate doesn`t convene for another week. But, the GOP tonight is
already grappling with its first, full blown scandal of the new term. The
House GOP leadership rallied around Representative Steve Scalise, the
number three Republican in the House who serves as majority whip after
Scalise indicated he had indeed spoken to a conference of neo-Nazis, white
supremacists and white nationalists in 2002 when he was a Louisiana state
legislator.

(BEGIN VIDEO CLIP)

SCALISE: Basically, some group called me and asked me to go speak. I
would go and talk to them about my plans to oppose the Stelly plan and also
working on eliminating slush funds. So I`ve spoke to groups. I`m not
familiar with who that group was, but, you know, from what I see about
them, they don`t represent the values that I represent. I detest hate
groups of any kind.

(END VIDEO CLIP)

HAYES: Group in question was founded by a former Louisiana politician
and Ku Klux Klan grand wizard David Duke, and went by the name the
European-American Unity and Rights Organization or EURO, using the web
address, whitecivilrights.com.

Scalise has been in full damage control mode since the story broke,
working the phones to assure support from colleagues. House speaker John
Boehner and the number 2 of the House, Kevin McCarthy both expressed
support for Scalise today. Boehner saying that while "Representative
Scalise made an error in judgment, he has my full confidence as our whip."

But while Republican leaders are closing ranks, Scalise and his allies
are facing an avalanche of criticism and it`s not just from Democrats.
Conservative radio host Mark Levin and Sean Hannity are calling for Boehner
to be replaced as speaker of the House after the scandal. And influential
conservative commentator Erick Erickson is expressing bafflement at
Scalise`s claim not to have known what he was getting into, writing, quote,
"How the hell does someone show up at a David Duke-organized event in 2002
and claim ignorance?"

It`s a pretty good question. David Duke`s views were very well-known
at the time and point that the hotel publicly distanced itself from Duke`s
group before the conference began. And a minor league baseball team said
it did not want its players stay there.

It does appear at least for now, Scalise`s job is safe. The same
cannot be said for another member of the House Republican caucus,
Republican Representative Michael Grimm of Staten Island, New York, one of
the most colorful members, no doubt, of the 113th Congress, who announced
late last night he will resign from Congress after pleading guilty to
felony tax evasion. Grimm who was re-elected by a wide margin last month,
despite a 20-count indictment against him initially said he would not step
down, but reportedly changed his mind after a phone call yesterday from
Boehner.

While Grimm`s decision to leave Congress solves one problem for
Boehner, it may have created another. The man seen as a frontrunner to
replace Grimm is this guy, Republican Staten Island District Attorney
Daniel Donovan. If that name rings a bell, probably because you remember
him for having overseen the grand jury that declined to indict a police
officer in the choking death of Eric Garner, a decision roundly criticized
from people across the political spectrum.

Joining me now, Molly Ball, national political writer for "The
Atlantic".

Molly, what is the deal with, first, the House leadership running
around Scalise and then these calls from conservatives to go after House
leadership and clear them out?

MOLLY BALL, THE ATLANTIC: Well, a lot of these conservatives have
never liked the House leadership, have never liked John Boehner. And so,
you have an inversion, I think, of the normal political dynamic where its
leadership is seen as wanting to push out anyone who`s politically
inconvenient and the conservative base that`s sort of rallying to the
defense of people`s right to be politically incorrect and maybe, you know,
do something like speak to a David Duke organization. It`s the opposite
that`s happening here.

HAYES: Right.

BALL: And I think it comes down to the base`s distrust of Boehner and
McCarthy, and the Republican leadership in general. And I think it`s also
pre-figuring what`s going to be a theme of this next Congress. You know,
we`ve all been talking about the new Senate majority and that`s the new
thing and that`s going to be such big news in the coming year. But it`s
the house majority in the bigger, potentially more unruly majority that
Boehner is going to have to manage that may still be the source of a lot of
drama on the Capitol Hill.

HAYES: You know, from a tactical standpoint, I think you have to
admire how the kind of Tea Party caucus of the House has played their hand
in terms of their leverage and the sort of movement conservatives outside
the House. And I was reminded of that today because it isn`t just attack,
attack, attack mode. Maximize leverage. Don`t send any indication that
you`re going to let up or that you`re going to give Boehner a pass starting
on the first day.

It seems to me, these are warning signs to Boehner, remember who`s
going to run this come January.

BALL: I think that`s right. And, you know, if I can plug myself a
little, I just wrote a profile of Erick Erickson for "The Atlantic."

HAYES: I applaud you as well. It`s a very good profile.

BALL: Thank you. But, no, I think that`s right. I think there has
been a lot of chatter about the far right and the Tea Party being weakened
over the past year. They didn`t win primaries. They were seen as being
marginalized by leadership.

And so, they want to prove that they still have sway. They want to
prove that they can still exert power over Boehner who is, so often, in the
past several years, has seemed not to control his caucus. And so, this is
a real test for him of whether he can get his way.

And I think, so far, it looks like he`s doing that. On the one hand,
forcing Grimm out with a phone call, very efficient and clean and quick.
And, on the other hand, rallying behind Scalise, and ensuring that he can
stay where he is as long as there`s not further revelations in that
scandal.

HAYES: Well, and to get to that, to get to the substance here -- I
mean, Scalise is basically pleading ignorance. I go talk to anyone. And
you know, in one interview, he referenced the League of Women Voters. You
know, I talked to League of Women Voters and left, and I got, you know,
white nationalists on the right, you k now, whoever wants to talk to me.

BALL: Not quite an apples to apples comparison there. But OK.

HAYES: I would agree.

But it also starts me, you know, Boehner, you know, we get this
constant talk, Republicans broaden the tent, to the changing demographics
of America, the voting patterns and racial lines, yadda, yadda, yadda, you
know, this means something. I mean, David Duke is a vile figure who
believes vile things. He talked about the Jews and Israelis and the 2001
and 9/11 attacks, this conference.

The guy, Kenny Knight, who is basically his kind of right-hand man, is
pulling this all together. He`s neighbors with Scalise. Scalise, in 1999,
talking about how believes some of the same principles as Duke but Duke`s
not electable.

I mean, this is a problem, substantively but also image-wise, for the
Republican Party.

BALL: Yes, and they know that. And that`s why you have to believe,
first of all, that leadership had good assurances from Scalise and they
trust him when he said this is isolated. There`s not going to be further
information about this that makes us look worse and we can move passed it.

But, look, Republicans know that these racial fault lines are a big
issue for them. And I think in February, when we have the fight over
homeland security funding, over the immigration action by President Obama,
that`s going to be, yet, another one where Republicans are confronting the
same issues about whether they can present an inclusive face and one that
is not just, you know, white men from the South.

And so, they`re going to continue to be tested in this way. And their
leadership knows it and they`re jittery about it.

HAYES: I also note that I`ve noticed that the emphasis of David Duke
vitriol tends to veer much towards the Jews, these days, at least listening
to his radio broadcast today in which he said the Nicki Minaj was a ghoul
(ph) of the Jews. So, you know, it`s not just race, it`s always anti-
Semite.

Molly Ball, thank you very much.

BALL: Thank you, Chris.

HAYES: All right. At least one person greeted the news of
Congressman Michael Grimm`s decision to resign with a little bit of
schadenfreude. "The Cannon Rotunda is about to get a whole lot safer",
tweeted political reporter Michael Scotto. Scotto was referring, of
course, to the infamous run-in he had with Grimm in January after Scotto
had the temerity to ask about a federal campaign finance probe.

(BEGIN VIDEO CLIP)

REP. MICHAEL GRIMM (R), NEW YORK: Let me be clear to you, you ever
do that to me again I`ll throw you off this (EXPLETIVE DELETED) balcony.

MICHAEL SCOTTO, NY1 REPORTER: Why? I just wanted to ask you --

(CROSSTALK)

GRIMM: If you ever do that to me again --

SCOTTO: Why? Why? It`s a valid question.

(CROSSTALK)

GRIMM: No, no, you`re not man enough, you`re not man enough. I`ll
break you in half. Like a boy.

(END VIDEO CLIP)

HAYES: Joining me now, Blake Zeff, politics editor for "Salon", who
wrote about Michael Grimm today.

Well, look, if you`re scoring 2014 in the karma department, Michael
Scotto remains unbroken and intact, while Michael Grimm is -- will be a
felon.

BLAKE ZEFF, SALON POLITICS EDITOR: That is absolutely correct.
Michael Scotto has his liberty.

HAYES: Yes.

ZEFF: We cannot say the same for --

(CROSSTALK)

HAYES: In the Cannon Rotunda.

You wrote this great piece, I want to have you on today. You wrote
this great piece today, where you basically said, look what Michael Grimm
did. He basically pulled the voters of Staten Island. He ran with this
indictment. He said, I`m going to fight it. The charges are untrue.

As soon as he got reelected, he pled and he resigned. And you think -
- your assertion is, he had to know that`s where this was ending.

ZEFF: Well, look, do I think it`s possible that Michael Grimm had
delusions of grandeur and thought he could beat the heavy legal burden he
was facing? Sure.

Do I also think it`s possible that his legal team, and he -- when he
had some sort of clarity when he was thinking about this was also aware,
that having a seat to resign if he was convicted of a crime would be a very
useful way to reduce the jail sentence that he would eventually get? Yes.

HAYES: OK. Explain this, because I found that fascinating, you quote
in the article, a friend of mine, Jeff Smith, who is a former state senator
from Missouri, he`s been a guest in the show numerous time, he did 10
months I think in federal prison for a campaign finance violation, who
basically said if you can give these prosecutors this tangible win, which
is you resign your seat, maybe you get out of -- you get less jail time out
of it.

ZEFF: Exactly. Put yourself on the shoes of somebody who has in this
case 20 indictments, right? You think there`s a pretty good chance that
they may have something on you. You can talk about the case. There`s a
pretty clear case against them where, you know, prosecutors had two
different payrolls in Michael Grimm`s computer.

One was the fake one, one was the real one. Yes, you`ve got a
problem. So, if you`re facing jail time or you think you might, what do
you want to do? One option might be that you may have information on some
another crime and be able to snitch in order to reduce your sentence. That
doesn`t apply here. Michael Grimm was the only one involved in the crime,
right?

HAYES: Running this (INAUDIBLE) store.

ZEFF: It is (INAUDIBLE) is what it was called, right?

Then the other option is, and this is the first thing Jeff Smith said
to me is the first thing you think is, if I can resign my seat, maybe I
will reduce the sentence I will get. And in Smith`s case, he said, he was
actually hoping to resign the seat, and hopefully get no sentence, and
that`s what he surmised that many people I spoke to surmise, is the play
that Grimm is going to go for now. And, in fact, his lawyers are already
saying that even though the statute could -- that he pled guilty to could
result in three years time. They think he should just get probation.

HAYES: Right. So, what does that mean? I mean, this race, this
congressional race I thought was fascinating, partly because I spent a lot
of time for Michael Grimm for an episode I did for "Years Living
Dangerously" on climate where I appeared to have convinced him on climate
change, he sort of backed away from that afterwards.

ZEFF: When you said living dangerously, it has a whole different
meaning to me.

HAYES: We actually had a quite nice rapport. I find him very
charming and charismatic.

That race, though, I mean, this guy -- remember, Staten Island is home
to law and order voters, Bill de Blasio lost in Staten Island, home to tons
of cops. This guy is running in the home of law end order, law-abiding,
cop land, New York City Staten Island with a 20-count indictment and he
trounces his opponent.

ZEFF: But think of this way, so he, himself, was a former law
enforcement official who worked for the FBI. It`s a big veteran culture
there. It`s a big law enforcement culture there. He was a very good fit
for the district, actually.

HAYES: And he was a charismatic guy.

ZEFF: He works very hard for that, just very, very popular
personally. Good fit ideologically. So, he did fit the profile and he
told his voters I`m innocent. This is a witch hunt against me, and they
believed him because they liked him. And he was running against, we have
to say, a really poor Democratic candidate.

HAYES: One of the most lackluster candidate I`ve seen.

ZEFF: Horrific.

HAYES: Several famous moments, including one in which he couldn`t
name a single he`d read.

ZEFF: Correct. That was quite memorable. So --

HAYES: For politicians who are watching, aspiring politicians, the
Bible. Just say the Bible.

ZEFF: Yes, it`s easy, every single time.

So, I`m trying to remember, what we`ve been talking about.

HAYES: How did he win this race?

ZEFF: Right. So, he won against a very, very lackluster candidate
and also, he was a good profile for the district, assuming he didn`t have
these problems. But again, remember, he told, I`m innocent. This is a
witch hunt. They believe him because they had a loyalty.

A couple weeks later, what does he do? He pleads guilty to it and
resigns his seat because he`s trying to get out of jail. We`ll see if it
happens, but what kind of a confidence does it say about our justice
system, that because he is popular, a popular, skilled politician, he
should get less jail time?

HAYES: Yes. Blake Zeff, always a pleasure. Thank you very much.

ZEFF: Thanks.

HAYES: All right. Well, there are two big institutions that are
seemingly intent on destroying the mayor of New York City. And Bill de
Blasio met with one of them today. That story is ahead.

(COMMERCIAL BREAK)

HAYES: We have an update to bring tonight on AirAsia Fight QZ8501,
which mysteriously disappeared on Sunday over the Java Sea, after departing
from an Indonesian city of Surabaya, en route to Singapore, with 162 people
on board. Today, rescue teams found bodies and debris from the plane off
the coast of southwestern Borneo, about 66 miles from the aircraft`s last-
known location. It`s still unknown what happened when the plane lost
contract with air traffic controllers.

But as we reported yesterday, a request by pilots to change altitude
because of stormy weather was reportedly denied by air traffic control
because six other airliners were crowding the air space and there was no
room.

The plane dropped off radar shortly after making that request. The
CEO of AirAsia apologized to the families of passenger and crew today.

(BEGIN VIDEO CLIP)

TONY FERNANDES, AIRASIA CEO: I apologize profusely for what they`re
going through. I am the leader of this company and I have to take
responsibility. I`m not running away from obligations, even though we
don`t know what`s wrong, passengers were on my aircraft and I have to take
responsibility for that.

(END VIDEO CLIP)

HAYES: The cause of the accident can`t be known definitively until
the flight data recorder is recovered. But AirAsia CEO Fernandes did note
the widely reported bad weather in the region at the time of the crash.

(COMMERCIAL BREAK)

HAYES: New York Mayor Bill de Blasio came face-to-face today with
some of the people must intent on his political destruction, the leadership
of the city`s police unions. Mayor called a meeting this afternoon with
the heads of New York`s five police unions in an effort to ease tensions
that burst into public view after the murders of two officers in Brooklyn
more than a week ago.

The group included Patrick Lynch, president of the Patrolmen`s
Benevolent Association, who explicitly blamed de Blasio, at least in part
for the murders of the two officers, saying he had blood on his hands.

But even before the officers were killed, some of the unions had been
sharply critical of Mayor de Blasio, who was, of course, swept into office
on a pledge to end stop and frisk and reform the NYPD. More recently, the
objection of de Blasio`s handling of the protest after the grand jury
decision not to indict the officer involved in the Eric Garner case.
Patrick Lynch saying the mayor had, quote, "thrown police under the bus"
when he spoke about his own concerns about his biracial son Dante.

After the meeting today between de Blasio and union leaders, Lynch
stopped short of calling a reconciliation.

(BEGIN VIDEO CLIP)

PATRICK LYNCH, PRESIDENT, PATROLMEN`S BENEVOLENT ASSN.: There were a
number of discussions, especially about the safety issues that are members
face. There was no resolve and our thought here today is that actions
speak louder than words and time will tell.

(END VIDEO CLIP)

HAYES: The meeting came as a "New York Post" reported today on a,
quote, "virtual work stoppage" by the NYPD since the two officers were
killed. "The Post", of course, owned by Rupert Murdoch, has been a
consistent ally of the police unions in its brutal coverage of de Blasio
with headlines like this one from last week, referring to the, quote-
unquote, "shamed mayor." The paper reporting today the traffic tickets and
summons have, quote, "dropped off by a staggering 94 percent as officers
feel betrayed by the mayor and fear for their safety."

While additional safety measures put in place after the murders may
have slowed things down, a full-on work stoppage if "The Post`s" report is
true, would be illegal under New York law. The day the officers were
killed, a memo purporting to be from the PBA circulated on Twitter saying,
quote, "absolutely no enforcement action in the form of arrests and summons
is to be taken unless absolutely necessary."

Union denied the memo came from them. But two days earlier before the
killings, "Capital New York" reported that it obtained a recording of PBA
President Patrick Lynch telling officers to use what he called extreme
discretion. Quote, "Our friends were courteous to them. Our enemies,
extreme discretion. The rules are made by them to hurt you. Well, now
we`ll use those rules to protect us". A PBA spokesman told "Capital",
Lynch was simply doing the job according to the rules.

Now, as the first year of Bill de Blasio`s mayoralty comes to a close,
we are seeing right now nothing less than a fundamental test of liberalism
as a governing principal staged in the largest city in the country, New
York. Despite its liberal reputation hasn`t had a Democratic mayor in 20
years, and that mayor David Dinkins served only one term, voted out after
coming under criticism from the police unions and "The New York Post", the
same institution leading the charge against the current mayor.

De Blasio now faces his biggest challenge yet and what happens next
will serve as he brought a referendum on whether an unabashedly liberal
leader can govern and survive the backlash he or she will never provoke.

Joining me now, columnist and editorial board member of "New York
Daily News", Harry Siegel.

What do you think about that, as this as sort of this test case of
liberal governance?

HARRY SIEGEL, NEW YORK DAILY NEWS: Here`s the incredible thing: the
police unions are doing what the protesters have asked for. And de Blasio
has held the line on it, basically ended broken windows policing. There
hasn`t been a giant spike in crime, despite what "The Post" is trying to
suggest today so far.

But arrests are down substantially. Summons and tickets have
basically disappeared for a week now. Police are simply not doing many of
the more aggressive and active things they have been. And in a very, very
tight period of time, without most of the city having recognized this has
happened, the effect has been not much.

HAYES: OK. So, you`re saying that there is actually a work slow
down? Or at least slow down is the wrong word. They have changed -- at
the ground level, police have changed the way they`re enforcing the law?

SIEGEL: In a big way. So arrests drop a bunch. Gun arrests, murder
arrests, like big crime arrests, down. But enforcement stuff, tickets,
summons, basically disappeared. In the 7-9 and the 8-4, the precincts
Officers Ramos and Liu worked in and killed in, there was one ticket in the
last week, 626 in the week before that, for reference.

HAYES: Oh, wow. So they are doing something. I mean --

SIEGEL: They stopped doing all police work except for the real
necessary stuff. Is that sustainable? No one knows. We might find out.

And this is truly remarkable because we`ve had protesters in the
streets for weeks demanding exactly this.

HAYES: This is what`s fascinating, right? You got to separate the
substance and then the politics of this. Substantively, there`s a lot of
people I know of the folks who study the misdemeanor system in New York
City, a friend of mine in fact, who does amazing research on this, would
say, yes, this is a net benefit for the city, it`s a net benefit for
particularly poor people and people of color in this city, because that`s a
system that`s unjust and unfair, right?

But then there`s this also idea of wonderful city here. A shame if
something happens to it. The idea of doing this as a means of extracting
the political price would stretch me as a dirty pool to say the least.

SIEGEL: It`s a lousy moment to do it. We`re going to have this year,
you were more likely to be struck by lightning then run over by a car or
murdered in New York. That`s insane.

It`s a very safe city. So, this is a dangerous moment for the police
to say, hey, we`re going to back off and good luck to all of you. A few
really bad things will happen in the course of that. And, it`s finally
what`s happening.

And at the same time, the city, despite "The Post`s" best efforts, is
not going to descend into utter chaos.

HAYES: Right.

SIEGEL: Not any time soon. I think the police unions are badly
overplaying their hand.

HAYES: OK. That`s the question to me. You`re coming to the end of
this year. And it`s -- and here, I think it`s interesting to compare Bill
de Blasio and Barack Obama, because they both come in with a lot of
progress, de Blasio won 73 percent of the vote, he ran a very explicitly
liberal agenda, progressive vision, tale of two cities, tax the rich,
universal pre-K, reform of policing, and he has by and large delivered on a
lot of that, right?

He doesn`t have a Republican opposition to face in the same way that
Barack Obama replaces implacable Republican, but he does have opposition.
We`re seeing it in "The New York Post" and the police unions are kinds of
the heads of that opposition, and they are going hard at him, as hard as
they possibly can.

SIEGEL: Well, look, he basically went to a Democratic primary with
the entire field to himself. The other guy down there, John Liu, sort of
disqualified himself.

This is a fluke. It`s a complete fluke. And he feels that he has
this tremendous, progressive --

HAYES: Mandate.

SIEGEL: Mandate, thank you. And he has had an incredible first year
with that. Universal pre-k, police reforms, keeping crime down, living
wage stuff, it`s very, very impressive.

However, he has no credit in Albany. He tried very hard to kill the
Republican State Senate.

(CROSSTALK)

HAYES: They`re now going to come with guns blazing.

SIEGEL: They don`t have to have their guns blazing --

(CROSSTALK)

SIEGEL: And they`re going to do that continuously. The police are
furious. And you`re starting to realize, it`s actually a bigger city. And
everything he said about having this wide dialogue, the groups that were
not his constituency, hasn`t that interested in, are suddenly, they`re
going after him with a vengeance.

HAYES: Yes. And it`s going to be an interesting year. Really
fascinating political test playing out here.

Harry Siegel, always a pleasure. Thank you.

SIEGEL: Thank you, man.

HAYES: All right. The Sony hacking mystery just got even more
gripping as the computer security firm says they figured out who`s
responsible. And it`s not North Korea. That`s next.

(COMMERCIAL BREAK)

HAYES: The mystery of the massive and devastating Sony pictures hack
just took a fascinating turn. With the U.S. government apparently weighing
in on a whodunit debate tonight dismissing research from a high profile
security firm and defending the FBI`s exertion that it was North Korean
government that was responsible for the hack.

This as computer firm Norse has been publicly making the case and not
only was North Korea not responsible for the hack, but their own
investigation has uncovered who probably was behind it. A Norse official
told the security ledge the company identified six suspects, including one
former Sony employee, ten-year veteran of the company who was laid off in
May as part of a company-wide restructuring.

In other words, researchers at Norse think the Sony hack was an inside
job, an inside job carried out by a group of people who were then able to
con the FBI and the president of the United States into pointing the finger
at the wrong culprit, thereby precipitating an international incident.

This wee, the North team made their case to federal authorities in a
briefing to the FBI yesterday.

As we`ve reported on this show before, there have been a lot of very
smart, extremely sophisticated people from the tech and cyber security
realm saying all along they were not persuaded North Korea was behind the
Sony hack and that there were lots of clues that pointed elsewhere.

A senior VP at Norse Kurt Stammberger explained the skepticism like
this, quote, "when the FBI made this announcement just a few days after the
attack was made public, it raised eyebrows in the community, because it`s
hard to do that kind of an attribution that quickly. It`s almost unheard
of. All the leads that we did turn up that had a Korean connection turned
out to be dead ends."

Norse team zeroed in on their suspects by cross referencing HR data
leaked in the hack with information called from hacker chat rooms and their
own investigative tools.

Meanwhile, Reuters is now reporting the U.S. officials still believe
North Korea was responsible for the hack, but that they had help. Citing
an unnamed official close to the investigation, Reuters reports that U.S.
investigators believe that North Korea probably hired hackers from outside
the country to help them execute the cyber attack on Sony Pictures.

Officially, and, on the record, both the FBI and State Department, say
they stand behind their assessment the North Korean government was behind
the hack. the State Department spokesperson saying, quote, "it`s possible
some assets outside of North Korea might have been involved. But that
doesn`t change the conclusion about North Korea`s responsibility."

And upping the ante tonight, Politico is citing an unnamed U.S.
official familiar with the matter reporting the FBI has rejected the inside
job theory brought to them by the Norse investigators.

Yesterday`s briefing, according to Politico`s source did, quote, "not
improve the knowledge of the investigation," adding that Norse`s evidence
was narrow, not an accurate analysis of the information.

Joining me now is Noah Shachtman, the executive editor of the Daily
Best where he covers intelligence and crime. He`s been reporting on this
story.

I`m kind of throwing up my hands at this point, because on one side,
it`s a very big deal. The president of the United States to go and say,
without really
any hedging, this was North Korea.

NOAH SHACHTMAN, DAILY BEAST: Yeah, absolutely.

HAYES: On the other side, a lot of people who seem to know what
they`re talking about and have no reason to be, you know, making this up,
are just looking at the evidence at least that`s been presented, the
evidence that they`ve sort of -- it just doesn`t add up to North Korea?

SHACHTMAN: Yeah that`s right.

There`s kind of a Silicon Valley/Washington divide here where the
Silicon Valley types are like, guys, give us some real evidence that this
was really North Korea. And the Washington types, the cyber security firms
that are more connected to the government are saying well, trust us. We`ve
got some super-secret stuff that will point right to North Korea.

HAYES: I thought this quote from Stammberger, who is the Norse guy
today, was really interesting in highlighting why they think it was an
inside job ir what led them. He says this: "a lot of malware is kind of
like a Roomba. It shuffles around the computer network, bumps into
furniture and goes in spirals, looks for things kind of randomly. This was
much more like a cruise missile. This malware had specific server
addresses, user IDs, passwords and credentials. It has certificates. This
stuff was incredibly targeted. This is a very strong signal an insider was
involved.

I`ve seen other cyber security experts saying what they`ve seen leads
them to believe there had to be some kind of inside job part of this.

SHACHTMAN: Yeah, that`s right.

Because there were certain code words that were -- passwords that were
coded right into the malware itself, that`s why they think that it might
have been an inside job, or that`s one of the reasons.

Now, let me just say that these passwords were not exactly hard to
figure out. One of the things about Sony was, Sony had some of the
crappiest cyber security of any major company on the planet. They put
their password file in a file called passwords, OK. So, these were not
exactly geniuses that were being out-witted.

HAYES: OK.

So, what do you think about -- so then there`s this hybrid theory,
right. So it`s North Korea did the hack, it`s some other group of sort of
piracy activists, or anti-anti-piracy activists with hackers and
disgruntled employees. And then the kind of hybrid theory that seems to be
coming from this one story that maybe North Korea is responsible for the
hack, but actually outsourced it.

SHACHTMAN: Yeah, that could be, too.

I think that word is really important. The FBI is not saying saying
North Korea hacked Sony. The FBI is saying North Korea is responsible and
that means they could be paying somebody off.

HAYES: Ah, that`s interesting -- responsible. And that has
consistently been the word.

SHACHTMAN: Correct.

HAYES: Responsible, responsible as opposed to North Korea engaged in.

SHACHTMAN: Kim Jong un himself got into the Sony computers.

HAYES: Or even Asians of the North Korean state got into the Sony
computers.

SHACHTMAN: Correct. They have not been saying that. They`ve been
saying -- using the word responsible.

Also, interestingly, there`s this hacker group called the Lizard Squad
that hacked the Playstation network last Christmas.

HAYES: Last Christmas Eve -- Christmas Day, yeah.

SHACHTMAN: One of their guys said, well, maybe we kind of sort of had
something to do with that Sony hack, too.

So I mean this thing is just unfolding before our eyes. It`s amazing.

HAYES: So, yeah it is -- it`s amazing. It`s a genuine mystery.

It is also this question of -- I mean, if they`re wrong about North
Korea, that`s a huge deal.

I mean the President of the United States said this, the FBI -- like
all these people are now on the record, right?

SHACHTMAN: Yeah. Now look, there have been high-profile hacks that
have been gotten wrong before. They`ve been misattributed, and, you know,
attribution is super super hard...

HAYES: Right.

SCHACHTMAN: Right. And...

HAYES: This is what I`m learning as I`m sort of reading into this.

SHACHTMAN: Yeah, absolutely.

So one of the experts that Sony`s hired has said look, if you wanted
perfect attribution, if you wanted a 100 percent clarity on who did this
thing, you would want an intrusive NSA that none of us actually want to
have around.

And so, you know, this stuff is always going to be hard, it`s always
going to be sort of murky, and it may be that the two sides are looking at
the same intelligence, looking at the same...

HAYES: And just coming to different conclusions.

Will we find out? I mean is this going to be like, the serial podcast?
Am I going to like, just be left...

SCHACHTMAN: And then, afterwards, Kim Jong un will do an interview...

HAYES: Do an interview. That`s right. Speak up for his sullied name.
Noah Schachtman, thank you very much.

SCHACHTMAN: Thanks for having me.

HAYES: Alright, this past year was a pretty amazing year in culture.
Both high and low.

My picks for top moments, along with a special round table. It`s going
to be fun. Stick around.

(COMMERCIAL BREAK)

HAYES: Last night, we presented our best and worst as well as rookie
of the year for 2014. Tonight, we`re looking at the biggest cultural
moments of the year.

Now, this past year has been, I think it`s fair to say, a downer as
far as big headlines go, but in the cultural landmark realm, it was pretty
fascinating and, at times, awesome year. there were also some big losses
and some extremely up setting allegations, which we`ll talk about.

Here with me to discuss is Slate`s cultural blogger Ayesha Harris,
host of the Slate`s the Gist Mike Pesca, managing editor of Jezebel.com
Erin Gloria Ryan and editor of the New York Times Book Review Pamela Paul.
A very august panel. Great to have you all here.

So we asked you guys earlier today to kind of send in like big
cultural moments and there was a bunch of stuff that was sort of consensus
picks. And the first one I think we have to start with is Bill Cosby,
since Bill Cosby has a lot of lawyers and we are on a television show, let
me state at the front we don`t know whether the allegations against Bill
Cosby are true.

At this point, it seems two possibilities. There are a variety --
there is a whole host of people making up stories about Bill Cosby to try
to extract money from him or to destroy him personally, and all of those
stories kind of ape each other in certain key ways; or, the other
possibility we`ve seen on the table is one of the most beloved, famed icons
in American was a serial rapist of the most deranged I villainous possible
string -- right?

PAMELA PAUL, NEW YORK TIMES BOOK REVIEW: One of the two.

HAYTES: One of the two.

And the latter, just again I want to say we`re from the realm of
hypothetical -- were it the case that -- like what do you even -- how does
anyone process that? At the end of this year, that to me is the big
question, like how do we process our culture, the world of Hollywood, the
world of show business, the world of Bill Cosby if the allegations are
true?

MIKE PESCA, THE GIST HOST: Well, I would say that we could think that
he is an evil man, which he certainly is. Do I have to say it`s my
opinion? You`d have to be crazy to think that there is nothing there but
smoke and no fire.

But it`s really an indictment of the institutions. Did you see that
New York Times story yesterday about how his $850 an hour lawyer and how
they intimidated all of these networks. I know he`s an important person.
And I know we have that mental hurdle of oh he played fatherly parts on
television.

But come on, we`re adults and the news media are supposed to be truth
tellers and they absolutely fell down. As bad as Cosby is from an evil
standpoint, the job that the media didn`t do, that it took Hannibal Buress
and a viral video to put it on our agenda is shameful.

HAYES: Do you agree with that?

ERIC GLORIA RYAN, JEZEBEL.COM: Well, actually if we could step back
for a
second and just talk about -- just remove from the truth of the matter of
whether or not it`s true, I think that this signals the end of the age of
the Teflon celebrity. Nobody is too big to be brought down by alletations
like this.

And you saw this actually in Canada, John Ghomeshi this beloved radio
host, you know, a series of allegations kind of all came together in
October, and, all
of a sudden, you know, he`s gone. He`s gone and he`s ruined.

HAYES: And that guy is facing criminal chrages, we should note, as
well.

RYAN: Yeah, exactly.

PAUL: well, I think also what`s important about Cosby is that he
wasn`t just a father on TV, he also set himself up writing books, making
speeches that were very political in nature...

HAYES: As a great moral emissary. He`s a great, moral scold, as the
father to America. I mean, it`s just -- I still to this moment right now
sitting here at this desk in front of that camera have a hard time making
my brain work around it.

I mean, that -- and it`s just a powerful reminder that you do not know
the people that you think you know, if again -- if again the allegations
are true -- Ayeesha.

AISHA HARRIS, SLATE.COM: Yeah, it`s really sad for me, because like
many people I grew up watching him. And as a black person, like he was one
of those people who you wanted to look up to.

And I think what makes him different from someone like, say, R. Kelly
is that, like, you said he always put himself up as this kind of like
pedestal you should be like me. And now, as opposed to R. Kelly where like
he`s always been singing about really kind of dirty stuff. So it`s like --
so it`s much harder to separate the two -- or it`s much harder to separate
that whole persona from Bill Cosby and Fat Albert and all those things.

PAUL: There`s also in the book world, the big question -- there was
the timing of Mark Whitaker`s definitive biography, which came out. And it
raises questions about biography. You have unauthorized biographies, you
have authorized
biographies, this wasn`t, you know, officially an authorized biography, but
it was done in cooperation with Cosby and he allowed people to talk to Mark
Whitaker and
Whitaker, of course, made the decision not to include the allegations,
because as a former journalist, he said that he couldn`t corroborate --
you know, he didn`t have
corroboration.

PESCA: Really because it hurt his narrative.

HAYES: To me that`s the thing. The book is extremely -- I`ve read
parts of several chapters, and its tone is generally laudatory and
celebratory.

PESCA: Yeah, and you know, on my show The Gist, a month before
Hannibal Buress` routine went viral, I had a discussion with a guy who
wrote a book about John Belushi and a book about Chris Farley and a book
about Michael Jackson, how could the Cosby discussion be so different from
Woody Allen and how could the Cosby biography be such a white wash? And it
really did come down in my guess to in his (inaudible) in his opinion to
the image he had, that`s an indictment of us. We shouldn`t be children.

It doesn`t matter what parts these people play, we have to look at the
evidence and challenge ourselves a little.

RYAN: I also think that it`s really been interesting to listen to
what the women say and the reasons that they didn`t come forward or the
reasons that they
weren`t as emphatic as they could have been, because now we know that Cosby
had this whole team of people that were devoted to destroying those women.

And even, you know, Beverly Johnson writing for I believe Vanity Fair
wrote about how she was drugged by Cosby, too. And I think for me that was
the moment where I like oh my gosh this woman has absolutely nothing to
gain. This woman was terrified for her career, she was terrified to her
future.

And I think that that`s another side to this whole he had so much
power. These women knew that he could destroy them and he threatened to.

PESCA: Could I just quickly say -- I didn`t realize this until now,
you said that Erin, all the gatekeepers who made these decisions not to
publish -- Don Hewitt and -- all men. I mean...

HAYES: And it`s also -- yes, who runs Hollywood and who runs media.

Quickly, I want to just say a few others that you guys have mentioned.
The Interview hack which we continue to deal with the fallout from, which
is fascinating for a million different reasons. Robin Williams` death,
also Joan
Rivers death, sort of a huge loss for comedy. And also this kind of
amazing activism we saw from pop cultural figures, sports figures around
things like
Ferguson like that.

I want to get your sort of deep cuts vote for big culture moment this
year right after we take a break. Stick around.

(COMMERCIAL BREAK)

HAYES: We`re back with the biggest cultural moments of 2014, this
round focusing on some of the other big ones as well as some more off beat
selections.

Aisha Harris, Mike Pesca, Erin Gloria Ryan and Pamela Paul are here.

So tell me yours. You want to talk about hashtag #Amazon, which is a
story we never do on the show that I was just totally fascinated by.

PAUL: Well, you know, it`s interesting, because it was the biggest
story in the book world, but it really ended up extending beyond the book
world. It began in May when it became clear that Hachette was in a
standoff with Amazon, Hachette being one of the big five U.S. publishers.

And Amazon was blocking in certain ways their books. They were
delaying shipments. They were reducing the discounts on their books,
according to Hachette.

HAYES: Right.

So just to be clear, this is a fight over basically it`s a business
negotiation, right, like how much are they going to charge? What cut is
the publisher going to get.

But what was so fascinating was the shadiness with which Amazon
apparently went about it. It wasn`t like we were announcing to you that we
aren`t going to do this until you meet these demands. It was like, oh,
people just start reporting that it takes a little while, and like the buy
button doesn`t work. It all felt very kind of mobstery.

PAUL: Well, there`s a lot of silence in the publishing world. There
has been, you know, a big lawsuit between Amazon and Apple and the big then
six publishers. So, there`s a lot of nervousness about speaking out about
it. And the -- and there`s competition between the publishers.

And Amazon has always famously very quiet in terms of their -- but
what was interesting here is that the dispute really exploded or
reverberated in Pop Culture, you had Colbert, a Hachette author, who you
know went out and...

HAYES: Because a lot of powerful people, it turned out, are Hachette
authors.

PAUL: Yes. I think the whole thing really reflected a lot of
nervousness just about the story, the fate of the book, sort of who owns
content, who gets to decide what`s publshed.

HAYES: And also the size of Amazon, which increasingly feels like the
biggest kind of business cultural force in people`s lives.

Erin, your sort of pop cultural moment.

RYAN: I thought the Ray Rice tape and the way that that played out in
the news was really fascinating and interesting and depressing and a whole
host of things.

When Ray Rice was only suspended for two games after a video tape
beating his then fiancee unconscious, people were pretty upset. But then,
when the full tape with him actually striking her was released, there was a
whole lot of kind of bickering in the back rooms of the NFL, like, we
didn`t see the tape, no, we did. And he didn`t tell us what happened. No,
he did.

So, it was a lot of kind of misleading lies from the people...

HAYES: How do you feel about that tape as an artifact? Because I
think we wrestled with that tape, because at one level, it was like, it
played all of the time, and another level was like this is what it looks
like when someone strikes one of their intimate partners. And then, third,
it was like we`re showing the worst moment of this woman`s life over and
over and over.

RYAN: Yeah, I mean I think that there`s a real trade-off here.
Because on one-half, yeah, Jenay Rice, that sucks for her to have to see
that over and over and over again and to have that moment of her life --
she has to relive live that
all of the time.

But on the other hand, domestic violence is a real public health
crisis. And it`s something that a lot of women suffer silently. And it`s
something that people that don`t, that aren`t involved in it, maybe don`t
want to -- they want to be -- they want to pretend it doesn`t exist.

HAYES: And this pushed it in a way that I`ve never seen ever.

RYAN: And you can`t turn away from it. And, you know, it`s ugly and
it`s terrible, but I think that there are probably ultimately going to be
good things that come from that.

HAYES: Mike Pesca?

PESCA: Yeah, I agree with that, by the way. I think that was
totemic. And we`ll talk before the Ray Rice tape and after.

I wanted to talk about the ALS Ice Bucket Challenge.

HAYES: Thank you. If you were not I would have forgotten that moment
when that was the only thing that was in anyone`s Facebook feed.

PESCA: Right.

And of all the things we`re talking about, I mean, how many things
tough every American, something like this.

So, it raised a hundred something million dollars for ALS, that`s a
good thing. But I think it also kind of short circuits our brain in
thinking critically about things like this.

I mean, how can you say anything bad about something that raised money
for charity? And, yet, I think it falls into this category of slacktivism,
or
I`ll click on a link and pat myself on the back for doing good. It`s a
little like Kony, did we save our girls? Did we bring back our girls from
Nigeria and Boko Haram?

HAYES: It`s like activism as, like, viral fad that goes out very --
it burns out very quickly.

PESCA: And a large percentage of the people didn`t even know there
was a charity involved. And now does the next charity say to themselves
well, we could tell our story sympathetically, or...

HAYES: Or we could do the challenge.

PESCA: ...have to have this gimmick?

HAYES: Aisha.

HARRIS: I`ve long felt that TV has been ahead of movies in terms of
like getting diversity out there. This year especially has felt like we`re
kind of coming to a tipping point where we`re -- it`s -- we`re getting more
diversity and we`re getting more black women on TV in leading roles.

HAYES: Shonda Rhimes...

HARRIS: Shonda Rhimes and the year of talking about the fact that
diversity is happening. And it`s great, especially that whole kerfuffle
about Shonda Rhimes in the New York Times piece about how she could be
angry...

HAYES: ...black woman.

HARRIS: ...angry black women was just so frustrating, but it was kind
of also gratifying to see the backlash against that.

HAYES: I totally agree. It felt like a turning point year for that.

Aisha Harris, Mike Pesca, Erin Gloria Ryan and Pamela Paul, thank you
all very much. Happy New Year.

Back in a moment.

(COMMERCIAL BREAK)

HAYES: It really has been a busy, fascinating year of news. And
here, at All In, we try to bring as much of it as possible in a way that
makes sense and first does no harm we hope. And we also hope it
illuminates.

But before we wrap 2014, here, and this is very important, here`s what
I mean by we.

HAYES: There are dozens of truly amazing, committed, talented, smart,
righteous, kind, wonderful people who make this thing every night. It is a
team effort. I am so tremendously grateful to each and every one of them.
They`re all really wonderful people. And I`m privileged and honored to
work with them.

I`m also privileged and honored to come before you every night. You,
the viewers, make this show as much as we do, in a certain way.

And finally I just want to say this, this year was a rough year, but
in my life it was an amazing year because I welcomed in this dude, David,
that is my son and that is me and him on vacation and he is just so
adorable with those dimples. It slays me. He`s made our home very happy.

That is All In for this evening. The Rachel Maddow Show starts now.

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

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