'The Last Word with Lawrence O'Donnell' for Tuesday, February 17th, 2015

Show: THE LAST WORD WITH LAWRENCE O`DONNELL
Date: February 17, 2015
Guest: Michael Weiss, Graeme Wood, Muzaffar Chishti, Brett Williams, Cory
Bennett, Mark Ambinder, Dianna Hunt, Michael Snipes



RACHEL MADDOW, "TRMS" HOST: Two hours later, I just defeated a
filibuster because I needed a drink of water. That removes any opposition
to new child care subsidies.

In the end, Senator Jackson presided over a marathon five-hour, one
lawmaker, totally fake, but very fun-to-watch legislative session. He was
like a guy diving into his backyard snow drifts just because they were
there.

Winter gave Senator Jackson of North Carolina the chance to be a
legislature of one today. And you know what? The guy dove right in --
almost the best new thing in the world today.

It looks like weather has canceled all of North Carolina`s legislative
business tomorrow, as well. Gleeful North Carolina State Senator Jeff
Jackson, get back to work. I`m sure you have more to do.

That does it for us tonight. Now, it`s time for THE LAST WORD WITH
LAWRENCE O`DONNELL.

Good evening, Lawrence.

LAWRENCE O`DONNELL, MSNBC HOST: Good evening, Rachel.

I tried to take a snow day today in solidarity with the lazy members
of the North Carolina legislature, but, you know, the boss is here.

MADDOW: If you ever need a note, just let me know.

O`DONNELL: OK.

MADDOW: Yes, thanks, Lawrence.

O`DONNELL: Thanks, Rachel.

Well, the White House convened a meeting today on violent extremism, a
Texas judge stopped the implementation of President Obama`s executive
orders on immigration, and it`s being called the biggest bank job ever.
How did hackers steal a billion dollars from banks?

(BEGIN VIDEOTAPE)

ERIC HOLDER, U.S. ATTORNEY GENERAL: We spend more time, more time
talking about what do you call it, as opposed to what do you do about it.
Radical Islam, Islamic extremism -- I`m not sure a lot is gained by saying
that. It doesn`t have any impact on our military posture.

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: The topic of
discussion in our meeting was about what to be done in Europe now.

UNIDENTIFIED FEMALE: Leaders are gathered for three days of meetings
on how best to address the threat posed by ISIS and other violent extremist
groups.

BIDEN: I`m not suggesting that I think America has all the answers
here.

UNIDENTIFIED FEMALE: These meetings come just days after terror
attacks in Denmark.

BIDEN: We just have a lot more experience. We are a nation of
immigrants.

UNIDENTIFIED MALE: Late last night, a federal judge halted the
president`s executive action plan.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I disagree with the
Texas judge`s ruling, and the Justice Department will appeal.

UNIDENTIFIED MALE: After five days, the prosecution rested and the
defense began laying out its case.

UNIDENTIFIED MALE: Routh met Chris Kyle and Chad Littlefield the day
he killed them, during what is supposed to be a type of therapy session for
the troubled veteran.

UNIDENTIFIED MALE: The defense picks up their case again tomorrow
morning.

UNIDENTIFIED FEMALE: Snow and ice brought treacherous travel
conditions to states like Kentucky, Tennessee and Virginia.

UNIDENTIFIED MALE: Weather has been proclaimed postponed --

UNIDENTIFIED MALE: This is Mardi Gras.

UNIDENTIFIED MALE: -- until Wednesday.

UNIDENTIFIED MALE: It doesn`t seem like many are staying inside.
Even with temperatures a bit colder than normal.

BIDEN: In Washington, when you hear "snow is coming," everything
shuts down.

UNIDENTIFIED FEMALE: Federal offices are closed. Schools are closed.
It`s a snow day here in Washington, D.C.

UNIDENTIFIED MALE: Oh, boy!

(END VIDEOTAPE)

O`DONNELL: Tonight, a member of the Iraqi parliament tells NBC News
that 45 Iraqi security personnel were kidnapped, locked in the back of a
truck, covered with gas and then burned to death by the Islamic State
militants.

To fight the Islamic State in Syria, a senior defense tells NBC News
tonight that the United States will begin providing equipment and small
arms to Syrian rebels fighting against the Islamic State and against the
Syrian military forces. Only rebels trained and vetted by the U.S.
military will get the assistance according to that official.

Today, representatives from 60 nations met in Washington for a summit
on countering violent extremism.

(BEGIN VIDEO CLIP)

BIDEN: We`re here today because we all understand that in dealing
with violent extremism that we need answers that go beyond a military
answer. We need answers that go beyond force. It`s not enough to take on
these networks of extremists who wish to do us harm. We also have to take
on the ideology that attracts foreign fighters from all around the world to
join them.

(END VIDEO CLIP)

O`DONNELL: Joining me now, Michael Weiss, a columnist for "Foreign
Policy" magazine and author of the new book, "ISIS: Inside the Army of
Terror." Also joining us, Graeme Wood, a lecturer in political science at
Yale University, and a contributing editor for "The Atlantic," whose latest
piece is entitled "What ISIS Really Wants". Also joining us, Richard
Wolffe, executive editor of MSNBC.com.

There has been much criticism in the media and elsewhere about the
president`s use or nonuse of the word "Islamic" in front of the word
terrorism. This is all encapsulated to something Bill O`Reilly said
tonight.

Let`s listen to this.

(BEGIN VIDEO CLIP)

BILL O`REILLY, FOX NEWS: The holy war is here. And, unfortunately,
it seems the president of the United States will be the last one to
acknowledge it.

(END VIDEO CLIP)

O`DONNELL: Michael Weiss, your reaction to that?

MICHAEL WEISS, FOREIGN POLICY MAGAZINE: Look, to deny that there is a
component of Islam to the Islamic State I think is just farcical. It
refuses to take them at their own estimation, at their own propaganda.
They are tapping into well springs of Islamic theology and Islamic history.
However, to only describe ISIS as an Islamic fundamentalist organization I
think is false. They`re also a mafia --

O`DONNELL: Are those the two choices, that it must be entirely a
tribute to its religion or completely eliminate it?

WEISS: No, Lawrence, the upper echelons of this organization, I keep
banging on about this in the media, if you look at who populates the
decision-making elements of this organization, these are ex-Saddamists, in
some cases, literally people who went from wearing military fatigues,
having epaulettes on their shoulders, smoking cigars and drinking wine, to
a year later having long black Salafi beards and, you know, being dressed
in Islamic garb.

Did they become radical Islamists overnight? Well, possibly, but more
likely what they`re trying to do, and this is one of the components of
ISIS` global project, or regional project, this is a Sunni power projection
political phenomena.

They feel that 2003, the United States toppled Saddam. The Sunnis
lost Baghdad. Four years of a brutal war in Syria where the Sunnis are the
majority, and yet, the U.S. failed to intervene.

Sunnis are being ethnically cleansed. They have barrel bombs,
chlorines, sarin gas dropped on their heads. Nobody is doing anything
about it. Iran`s hegemony has now spread from, obviously, Tehran, to
Yemen, to Gaza, to Lebanon, throughout the Middle East.

They are projecting themselves. They are presenting themselves as the
last guarantor and the custodians of Sunni Islam. That`s what they`re
tapping into, the Abbasid Caliphate.

If you listen to what Abut Bakr al Baghdadi is saying, he`s going back
to the second Crusades. The al-Zangi mosques in Mosul. This is redolent
of what Salahuddin preached before he went to fight the crusader armies.

They`re tapping into this history. So, whether you like it or not,
there is an Islamic component to this.

O`DONNELL: Richard Wolffe, is there a case to be made for the
president carefully avoiding that use of the word "Islamic"? And --
because he`s going to need to work with Islamic leaders around the world,
he`s going to need to work with governments who would be sensitive with the
use of that term. And the real question, so what is their intelligence
when the door is closed and they`re making their strategic decisions and
one of those decisions based on?

But it seems to me there is a strong case to be made for the president
avoiding the use of that word "Islamic" the way Bill O`Reilly wants him to.

RICHARD WOLFFE, MSNBC.COM EXECUTIVE DIRECTOR: There is. And it`s not
what we want to hear, or what domestic politics want to hear, right? There
are also some reasons for domestic politics why we might want to say, you
know, where this problem is rooted.

But if you`re trying to dole with a foreign policy question, there are
different strains of Islamist thinking and action and parties and leaders
who you might want to peel off. There are reasonable Islamist leaders,
somebody reasonable compared to ISIS now, and we have a model first and it
was the Cold War.

We didn`t say everyone associated with socialism and communism was
bad. There were socialists we liked. There were even people we thought,
well, you know, if they`re socialists, we prefer the harder socialists who
we can manage and understand. And that`s in a Anglophile Western European
model.

So, we could understand socialism and communism in ways that we don`t
understand. All sorts of strains of Islamist thinking, not least of which
is ISIS.

So, yes, there are very important reasons. One of which we still lack
cultural understanding. We still lack understanding of the ladders of
power, but we need to splinter this movement, if it is indeed movement, and
ISIS is just one piece of it.

So, there`s a reason for a president speaking to the rest of the word
why he would not want to say, this is about Christianity against Muslims,
even if that suits some people on the other side of Sixth Avenue.

O`DONNELL: Graeme Wood, your article, which has caught attention like
no other on this subject, you say, "The reality is the Islamic State is
Islamic, very Islamic."

Is it -- what is your reading of the president`s language on this?
And is it important for him to include or not include that word "Islamic"
when he`s discussing this?

GRAEME WOOD, THE ATLANTIC: There are certainly aspects of
presidential rhetoric that have to be taken into account. The way he`s
quoted is going to be in a very short way, and I totally understand the
impulse to make sure there`s a distinction made between the Islamic State
and the vast majority of Muslims who reject it.

But to understand the appeal of this group really requires a fine
grain to understanding of its roots. And those roots certainly as Michael
said include harkening back to elements of Islamic text and the behavior of
Muslims over a thousand years that Muslims have existed.

So, I would suggest the use of rhetoric could be used a bit more fine
grain precision, even in the short sound bites that the president is likely
to be quoted in.

O`DONNELL: Go ahead.

WEISS: Look, if you look at the Arab countries that are part of this
coalition fighting ISIS, including Jordan, today, ISIS released an audio
file, an audiotape of al-Maqdisi, this was Abu Musab al-Zarqawi`s mentor in
Jordan, OK? He`s a Salafi jihadi in Jordanian captivity. They let him out
of prison. He`s obviously working for the Jordanian intelligence services.

He was negotiating with ISIS for the release of their hostages,
including Muath Kaseasbeh, the Jordanian pilot. Jordan is using a Salafi
to negotiate with terrorists because he has to appeal to them on some
level. Nobody is under any illusion to what this group represents.

The president calls them ISIL. What does ISIL stand for? The Islamic
State -- you know, it`s absolutely absurd to just deny this core component
of their ideology.

WOLFFE: The White House is trying to deal with what`s terrifying most
people here right now, and that isn`t necessarily just the graphic images
we`re seeing out of the Muslim and Arab world. It`s also about what we`re
seeing in European cities.

And we cannot sit here today and say, you know what, those people are
acting under the orders of some allegiance of ISIS. There are many, many
disaffected European-born Muslims who have a relationship, maybe just by
watching online videos in a connection to ISIS. Is that ISIS-driven? Is
it Islamist-driven? Or is it something bigger and deeper that is really
unsettling Western European capitalists right now?

And I think, you know, to define that as Islamist terrorism, what
we`ve seen in Paris and in Copenhagen, I think is reductionist and falls
into our own judgment about what we think the world is like. Europe and
the Middle East, two very different places that have a connection, but they
are different places with different dynamics.

O`DONNELL: Graeme, you write we are misled by a well-intentioned but
dishonest campaign to deny Islamic State`s medieval religious nature. What
is important about the nature of the Islamic State in figuring out how to
combat the Islamic State?

WOOD: What`s important is understanding what its appeal is to the
potential radicalized people in Copenhagen, in Paris for example and
understanding exactly what the beliefs of the organization are.

If we know what those beliefs are, we have some hint of what`s
important to them, what is it going to do. In some cases, they actually in
a way sort of give away their game plan by suggesting that this is the way
that they believe prophecy will unfold. Understanding exactly what --

O`DONNELL: What is it that you see in their game plan that
strategists should be staring at in order to figure out how to fight ISIS?

WOOD: In large part, it`s the way they frame the fight, which is a
fight between crusaders and Islam. This is what they want. The United
States, NATO to step into, is that exact narrative. And that`s what they
are doing with these videos. They are intentional goading of the West to
create this fulfillment of a narrative of a clash of civilization.

O`DONNELL: Do you send in troops? Is it their mission to get
American boots on the ground?

WOOD: Clearly so.

O`DONNELL: Then what happens in their theory of the case?

WOOD: In their theory of the case, the battles will be fought between
the armies of what they call Rome, which really means the Crusaders, and
the Islamic State. When those battles are fought, Rome will be defeated in
a place called Dabiq, Syria. After that, the Islamic state will expand
possibly as far as Istanbul, but possibly the entire world.

O`DONNELL: Michael, is it an article of religious faith for them that
they will win, that if these American and European troops can come in, they
can actually beat any army that comes in there?

WEISS: It`s not about beating them. It`s about bleeding them white.
They did this with the United States in Iraq.

Remember, ISIS is not a new nemesis. We`ve been at war with them 11
years. You know, we bombed the hell of out of Fallujah --

O`DONNELL: Under other titles.

WEISS: Other titles such as al Qaeda in Iraq. That was Abu Musab al-
Zarqawi`s franchise.

We dropped so much ordnance on the city of Fallujah, we flushed them
out. Within the first week, they were already in Mosul. It was like
playing whack-a-mole.

The way they build that battle, even though they lost it, was a
tactical defeat. But, strategically, they saw this as a victory. Osama
bin Laden came out and said, look what we did, we killed scores of marines,
we forced the United States to commit these war crimes against Muslims in a
major Arab world, this is going to be a global casting call, a global
recruitment drive for mujahidin to pour into Iraq.

They build this as an apocalyptic struggle. But again, look, I want
to emphasize this -- the sort of messianic Islamist components of this, I
would describe more as the marketing. The rank and file, the foot soldiers
that ISIS requires to fight this war, and here, we`re talking about the 14-
year-old boy in Tunisia with bad skin, who, you know, they want to
(INAUDIBLE) that`s the stuff we`ve all read about in the tabloids. These
guys are fired by the radicalization elements. They are fired by Islamist
eschatology. That said.

At the upper echelons, again, this is a political project, first and
foremost. They are looking to restore the lost prestige of Sunni Islam in
both Baghdad and Aleppo.

O`DONNELL: OK. Let`s take a quick break here, because I want to come
back to what would the Islamic State be without the religious component.
What would they -- how would that work with the recruits?

We`ll be right back.

(COMMERCIAL BREAK)

O`DONNELL: We`re back with our guests discussing the Islamic State.

Graeme Wood, as Michael Weiss just said -- he referred to Islam as the
marketing tool basically that gets you recruits into the Islamic State and
adds strongly to their will to fight. If that marketing tool wasn`t
present, what would we have now?

WOOD: We would have a political organization without that ideological
background. And as Michael said --

O`DONNELL: With how many troops or how many, you know, ideological
soldiers among them?

WOOD: Well, they wouldn`t be that ideological. They would be a group
that arises out of a place of terrible governance, with very little
opportunity and hope for their lives in a very simple, material kind of
way. What they wouldn`t have, though, is the ability to recruit overseas
in particular with the promise of the fulfillment of a caliphate.

And that is a concept within Islam that has a long history and it has
certain requirements, such as the retention of territory where Sharia law
can be implemented. If they can`t claim to be able to offer that, they`ve
lost one of the major recruitment tools they have.

O`DONNELL: Richard Wolffe, it seems our politics are going to
continue to be consumed by who`s going to say the word "Islamic" in what
order in their discussions with this.

WOLFFE: Yes, it`s a pretty reductionist view of the challenge here.

I will say -- I think we have actually seen these same people do this
before without Islam. It was called the Baath Party. The Pan-Arab
unifying idea, anti-capitalist, anti-Western. In those days, they had a
big benefactor, and that was the Soviet Union. And when socialism
collapsed, they then went looking for someone else. That someone else is
radical Islamist theology, funded by Gulf states and other various other
partners, now self-sustaining, but now with the trappings of religion
because that is Pan-Muslim, Pan-Arab, and that`s a much more effective
recruitment tool.

O`DONNELL: Michael, your view of what would be left of the Islamic
State if you didn`t have the Islam as a recruiting tool?

WEISS: When we talk of the Islamic State, we`re not just talking of
the actual fighters and clerics and members who have signed up. We`re
talking about the people they govern or they rule.

O`DONNELL: Yes.

WEISS: Including and most important --

O`DONNELL: Now about 8 million people.

WEISS: The core constituency, Lawrence, are the Sunni tribes of
Eastern Syria and Western Iraq. Why are they signing up with the Islamic
State? It`s very simple. These groups are persisted for hundreds of
years, making deals with any and all comers, including the Baath Party, as
you said, for the simple sake of pragmatism.

They see ISIS as a better guarantor of their safety and sanctity and
prestige than the government of Baghdad, or the government in Damascus, for
the simple fact that both of those governments are led by their enemies.
The Alawites of Bashar al-Assad in one hand, and the Shia, essentially
funded and financed and trained by Iran on the other hand. So, there is a
political component to this, it`s huge.

O`DONNELL: Michael Weiss and Graeme Wood, thank you both very much
for joining me tonight. Richard Wolffe is going to hang around.

Coming up, new revelations about the NSA. They actually might have a
way of spying on virtually every hard drive in the world.

(COMMERCIAL BREAK)

O`DONNELL: A federal judge in Texas today blocked implementation of
President Obama`s executive orders on immigration that would have granted
millions of undocumented immigrants, legal status and work permits. In
last night`s 123-page ruling, federal judge Andrew Hanen said that the
president`s executive orders could not be based on prosecutorial
discretion, as the administration had claimed.

The judge wrote, "Instead of merely refusing to enforce the laws
against an individual, the DHS has enacted a wide-ranging program that
awards legal presence to individuals Congress has deemed deportable or
removable." The judge said, "There is no specific law or statute that
authorizes the new benefits."

Joining us now is Muzaffar Chishti, a lawyer and the director of the
Migration Policy Institute at NYU School of Law.

You were here first to instruct on this subject. When I wasn`t able
to find any legal justification for what the president was doing. And more
interestingly, Richard, I wasn`t able to find a single Democrat who could
come on this show and tell me what the legal basis was of what the
president was doing, but they were all for it.

You found it for us. And it was in the prosecutorial discretion area
of the 1986 laws and regulations.

And does the judge`s ruling and what you`ve read in the judge`s ruling
change your view of what`s possible here?

MUZAFFAR CHISHTI, MIGRATION POLICY INSTITUTE: I don`t think so. I
think the judge basically I think had kind of tipped his hand on this a
while ago. If he has spoken a lot about this administration and his
policies on immigration that he fundamentally disagrees with them. So the
moment he got this case, I think a lot of people thought that a ruling like
this would be coming down.

Look, it`s obviously a setback for the administration and for this new
program. But it`s not the last word on the subject. I mean, that`s why we
have a federal court system, an appeals court, and it will be reviewed.

I think what he was saying today was an extremely narrow technical
basis for his opinion, which is that, look, this is a substantive piece of
a new rule, and a substantive piece of a new rule, you must have
notification and comment period. That`s a very narrow ruling then saying
this is, you know, sort of constitutionally permissible. Oh, this is
against the separation of powers.

O`DONNELL: Yes.

CHISHTI: So I think it will be focused all on this narrow issue.

O`DONNELL: Yes, he based it on the idea that this really is a new
regulation, and when you do a new regulation, you have to allow for public
comment.

CHISHTI: That`s right. When I was on the show last time, I said this
is not a new regulation.

O`DONNELL: Right.

CHISHTI: Because we had a precedent like this at least since the
1960s. The only thing new about this is the number of people that it
impacts. That in the past, we have -- the president and the executive
branch exercised this kind of authority without any challenge, and there`s
challenge (INAUDIBLE). But never for this large number of people. So, the
issue is, does the volume of people that are covered change that or no?
And I think that`s the debate we`re going to have.

O`DONNELL: And, Richard Wolffe, it seems headed for the Supreme
Court.

WOLFFE: Yes. And if it hadn`t been this judge, it would have been
another one. This is a White House probably braced for that. It spent
months and months, if not years looking at how could they withstand a legal
challenge?

It`s not just the number of people it impacts. It`s the kind of
people it impacts. But it`s the politics that was always going to propel
it to the ultimate court in the land.

So, you know, whether it`s the number of days or some other judge
ruling on some other area of the law, this was going to be challenged in
Congress, in the courts. And this is a showdown everyone -- actually I
think everyone wants to have it. The administration wants to discuss these
issues and bring not just the people out of the shadows, but the issue out
of the shadows of nativist conservative talk show radio, which has
influenced very strongly the Republican Party at this point.

CHISHTI: Yes.

O`DONNELL: There`s also the legal point of standing, there`s a very
serious question whether states have the actual legal standing. But
there`s a very serious question as to whether states have the actual legal
standing, because it`s states who have brought this case, and the judge
found that they do have the standing. And that may be a piece of this that
collapses on appeal.

CHISHTI: He at least found one state standing.

O`DONNELL: Exactly right, there were 26 states and he said only one
of them does which is Texas.

CHISHTI: The order of the judge is very brief, but it`s a 123-page
memorandum, which tells a lot about his world view on immigration, which is
basically a combination of political statements and legal. It`s hard to
say where the political statement ends and where the legal argument begins.
But it`s very speculative in that regard.

What he found, he had to go through a lot of gymnastics, that he found
that in the state of Texas, they would be eligible for a driver`s license.
And to actually get you a driver`s license, that you only pay $24 for a
license fee, but it takes the state about $117 to make it. The difference
would be the impact on the state.

O`DONNELL: Yes, economic impact. And other states supplied evidence
that it was positive economic impact for them.

So, Muzaffar Chishti and Richard Wolffe, thank you both very much.

WOLFFE: Thank you.

CHISHTI: Thank you.

O`DONNELL: Coming up, computer hackers reportedly pull off the
biggest bank heist ever, a billion.

(COMMERCIAL BREAK)

O`DONNELL: Kaspersky Lab, a Russian-based security software
maker says it has detected spying programs in hard drives made by the
world`s top manufacturers.

The evidence, so far, indicates it`s part of a previously unknown NSA
project. According to Reuters, --

(BEGIN VIDEO CLIP)

-- the U.S. National Security Agency has figured out how to hide
spying software deep within hard drives made by Western Digital, Seagate,
Toshiba and other top manufacturers, giving the agency the means to
eavesdrop on the majority of the world`s computers, according to
CyberResearch and former operatives.

Kaspersky Lab said it found infected computers in 30 countries,
including Russia, Pakistan, Afghanistan, China, Mali, Syria, Yemen and
Algeria.

Kaspersky said, the targeted computers included government and
military institutions, telecommunications companies, banks, energy
companies, nuclear researchers, media, and Islamic activists.

(END VIDEO CLIP)

A former NSA employee told Reuters that the Kaspersky Lab is correct.
The NSA declined to comment.

Joining me now is the Former Director of Operations for U.S. Cyber
Command, Major General Brett Williams. Also, Cyber Security Reporter for
"The Hill," Cory Bennett, and Editor-At-Large for "The Week" and
Contributing Editor for "The Atlantic," Mark Ambinder.

General Williams, what is your reaction to this report.

MAJ. GEN. BRETT WILLIAMS (RET.), U.S. CYBER COMMAND FORMER DIRECTOR:
Well, Lawrence, unlike some of the unnamed former officials, I can tell you
that if I had any direct knowledge of that, I certainly wouldn`t talk about
it here in this particular venue.

But, I think, the more important point is that what we should really
be concerned with is not these very high-end capabilities that exist out
there.

I think, we should be thinking more about what is the threat that we,
as individuals, what is the threat that we, as businesses, face as a result
of poor cyber security practices like we see that resulted in the theft
from the banks.

And so, the kind of things that you`re hearing discussed, these very
high-end tactics, that`s certainly the Holy Grail of hacking, to be able to
get into the code that actually runs the hard drives, that actually runs
the basic motherboard of the computer, that`s some very sophisticated type
of techniques.

Generally, nation states would be the only ones with that capability.
But, I think, the average person is much more concerned that their bank has
not taken the proper measures to protect their money, to protect their
resources, as opposed to being concerned with the type of activity that
we`re talking about in that particular article.

O`DONNELL: Cory Bennett, the thing that isn`t clear to me is, where
does this intervention on these hard drives occur. Is it something that
it`s occurring at or near the manufacturer, or is it after they are
delivered into these foreign countries.

Iran, apparently, is the number one place where these hard drives have
been found infected this way.

CORY BENNETT, CYBERSECURITY REPORTER, THE HILL: Yes, and that makes
sense with Iran knowing the history there. Obviously, the reason that we
were able to tie these back to the NSA is that it resembled, in large part,
the stocks in that cyber attack, --

(BEGIN VIDEO CLIP)

-- kind of the original major destructive cyber attack in 2010 that
took down roughly 2/5 of their centrifuges, --

(END VIDEO CLIP)

-- their nuclear centrifuges. But, yes, this is from what we know.
And, again, we do not know very much.

But, from what we know, this is occurring very early on in the process
of these hard drives being created, which means that, from the instance
they are being
shipped out, they do have that ability that you discussed, to spy, to
launch cyber attacks around the world.

You know, the list of countries you have there is quite extensive.
It`s quite a wide net from what we see, from researchers here.

O`DONNELL: So, Mark, a Russian cyber security firm discovers this
while Edward Snowden has been living in Russia for quite a while now and
discovers possible NSA involvement here.

Are we to think that there`s no possible connection between Snowden`s
revelations and this.

MARK AMBINDER, EDITOR-AT-LARGE, THE WEEK: I would love to be able to
connect the dots, because it is an interesting theory. In fact, a lot of
people in the
Intelligence community would almost certainly say, without question, the
answer is yes.

I would say, though, based on Mr. Kaspersky`s own troubles with the
government of Russia, he probably isn`t benefiting from any direct access
to Edward Snowden.

What I find very interesting, though, about this entire story is that
you have a corporate entity, which Kaspersky is, challenging government
power. You don`t have a government leak doing it, you have a corporate
entity.

And, of course, this gets back to your last question, because you
asked, where in the supply chain do these implants get infected -- get
infected and into the computer.

Well, the answer is, there probably is some cooperation, very secret
cooperation between the NSA and U.S. corporations on some level. One of
the ways to police the government, to watch the watchers, is for corporate
entities to fight back.

And this is one way to do it without violating laws.

O`DONNELL: All right, gentlemen, stay with us. We`re going to come
back and talk about this hacking into banks. It`s the biggest bank heist
ever. That`s next.

(COMMERCIAL BREAK)

According to another report from the Russian0-based Kaspersky Lab, an
international hacking ring has stolen up to a billion dollars from a
hundred financial institutions in 30 countries, including the United
States.

Kaspersky says, these unprecedented attacks began in 2013 and are
still ongoing. NBC`s Pete Williams explains exactly how the cyber
criminals did it.

(BEGIN VIDEO CLIP)

PETE WILLIAMS, NBC NEWS CORRESPONDENT: The criminals sent banks they
wanted to rob innocent-looking e-mails like this one. When a bank employee
clicked on the attachment, it secretly launched malware that burrowed into
the bank computer, snooping around for the account of the systems
administrator.

The malware copied the administrator`s keyboard strokes, and sometimes
even turned on bank surveillance cameras to study the administrator`s work
patterns.

The criminals then took a random account, say, one with a thousand
dollars in it, changed the balance to $10,000 then took $9,000 out, doing
it all by remote control, like a scene in a Hollywood movie.

(END VIDEO CLIP)

O`DONNELL: We`re rejoined by Major Brett Williams, Cory Bennett and
Mark Ambinder. General Williams, this is the kind of thing that the NSA is
trying to defend against all the time.

And, it seems to me, there`s got to be more than one major player out
there trying to get into these banks.

I don`t think we have the General`s audio. Cory Bennett, could you
hear me then.

BENNETT: I can hear you, Lawrence.

O`DONNELL: Oh, Cory -- Mark, Mark --

BENNETT: I can -- yes, I mean, it`s -- what`s fascinating is the
technique it --

WILLIAMS: Yes, it`s back on.

O`DONNELL: Go ahead.

BENNETT: The technique is really simple. It`s pure phishing. It`s
the same type of e-mails we all get from trusted confidantes.

But then, the techniques they`ve used, once they`re inside the bank
systems, are reminiscent of what spy agencies are able to do. And yet,
these are done essentially by black market hackers.

That`s, I think, what makes it so scary, the sophisticated technique
once they`re able to break through bank security.

O`DONNELL: And the idea that those just -- you know, one giant entity
out there trying to do this, there`s just -- there`s got to be hundreds and
hundreds of players around the world trying to do this.

BENNETT: And they`ll team up together if they can make money. And,
in this case, they made a billion dollars. That`s enough reason to find a
good teammate, a good hacker.

O`DONNELL: What the report on it stresses is their patience, the way
they get into these computer systems and just kind of sit and watch and
learn exactly how to mimic the moves of the real -- the authorized
operators.

BENNETT: This was, incidentally, very similar to the tactics used by
the hackers who took over Sony`s computer system. They did the exact same
thing.

They sat on the network, they learned the patterns of life and the
ways that systems administrators went about their jobs, figured out how to
exfiltrate the data without it getting caught, and then committed their
deeds.

It`s pretty scary because, again, these techniques were, previously,
techniques that only big governments could do until maybe the past five or
10 years or so.

And, now, they`re becoming increasingly something you can literally
buy off the black market.

O`DONNELL: General Williams, can you give us an idea of how much of
America`s cyber defense is spent trying to protect against these kinds of
attacks.

WILLIAMS: Yes. And, Lawrence, I think that`s exactly the problem is,
that we, as consumers, have to demand more from these financial
institutions. Frankly, they`re spending hundreds of millions of dollars a
year.

And, in many cases, they`re ineffective. In this particular case, the
attack factor was just, as the gentleman mentioned, simple phishing
attacks, unpatched software, those sort of things.

So, I think there`s two things consumers can do. One, we can hold our
financial institutions accountable. We need that consumer grade of how
good the cyber security is from the people that we trust with our money.

And then, number two, we`ve got to get involved as consumers in
demanding that we get the legislation passed, that`s been before Congress
the last three years, that provides the -- both the incentives and the
requirements for information sharing, particularly among financial
institutions, so that we can protect ourselves better.

O`DONNELL: That`s going to have to be the last word on it tonight.
I`m sorry for the audio mix-ups there. Thank you, all, for joining me
tonight.

The mother of the man accused --

(BEGIN VIDEO CLIP)

-- of murdering American Sniper, Chris Kyle, takes the stand today.
The latest on the trial of Eddie Ray Routh is coming up.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

The prosecution rested its case today in the murder trial of Eddie Ray
Routh, the former Marine accused of murdering the real "American Sniper,"
Chris Kyle and
Chad Littlefield.

Prosecutors rested after 4 1/2 days of presenting witnesses and
evidence, including Eddie Ray Routh`s videotaped confession. And, today,
prosecutors showed more video --

(BEGIN VIDEO CLIP)

-- from the moments after Eddie Ray Routh was apprehended and placed
in the back of the police car. Routh can be heard on camera saying, "I`ve
been so paranoid and schizophrenic today, I don`t even know what to think
of the world. I don`t know if I`m insane."

(END VIDEO CLIP)

After the prosecution rested its case, the defense called Eddie Ray
Routh`s mother. Jodie Routh --

(BEGIN VIDEO CLIP)

-- testified that she had begged the Veterans Hospital not to release
her son on January 25th, 2013, the week before Eddie Ray Routh killed Chris
Kyle and Chad Littlefield.

Joining me now is Dianna Hunt, who was inside --

(END VIDEO CLIP)

-- the courtroom today, covering the trial for the "Dallas Morning
News," and Michael Snipes, a former Dallas County judge and current
criminal defense lawyer.

Dianna, what was the reaction in the courtroom today for Eddie Ray
Routh`s mother`s testimony. And how long did she testify.

DIANNA HUNT, DALLAS MORNING NEWS REPORTER: She testified a good 20 to
30 minutes, I would say. I didn`t time it exactly.

(BEGIN VIDEO CLIP)

But she was very stoic. She didn`t -- she looked like as if she were
about to break into tears at one point, but she sort of shook it off and
kept going.

Her son looked at her, looked away. There wasn`t one of those moments
where their eyes really locked in place. But she tried really -- she tried
to humanize her son, talking about him playing little league in football,
being happy-go-lucky.

And then describing how much he had changed after he got back from the
military, after he came home from the Marines. She said he was a different
person.

(END VIDEO CLIP)

O`DONNELL: And Judge Snipes, I would think this was the defense`s
attempt to try to humanize the defendant and connect to those 10 women
jurors.

MICHAEL SNIPES, FORMER DALLAS COUNTY JUDGE: Yes, it definitely was.
And, you know, as you look at this trial, there`s no question that Eddie
Routh was mentally disturbed, mentally ill, however you want to put it.

The question is, was his mental illness or whatever his mental issues
were, --

(BEGIN VIDEO CLIP)

-- did that rise to the level of insanity. And that`s what the jury
is going to have to decide.

O`DONNELL: And, judge, they -- it has to be --

(END VIDEO CLIP)

-- as I understand it in Texas law, the simple test for it is, at the
moment that the crime is committed, do you know the difference between
right and wrong, and do you know that this thing you`re doing is wrong. Is
that basically the test.

SNIPES: That is the test. It`s really not as complicated as you
might think.

The decision-making process is very complicated. It`s interesting,
from Routh`s statements to the police, at first blush, you would think that
--

(BEGIN VIDEO CLIP)

-- his statements, that he didn`t know the difference between right
and wrong would be compelling and inculpatory. But if you think about it,
if you assume or you end though that he was insane at the time of the
offense and at the time that he was being interviewed, how was him saying
that he was sane at the time.

How was that going to make any difference. You can`t ask an insane
person whether he`s sane or not. Perhaps, more telling in the case, as far
as the confession goes, is that he expressed remorse for what he had done.

And that kind of human feeling is consistent with being sane.

(END VIDEO CLIP)

O`DONNELL: Dianna Hunt, do we know if the defense intends to call the
defendant to the witness stand.

HUNT: We don`t know. And, sometimes, that can be a very last-minute
decision, once they listened to like how things have gone over --

(BEGGIN VIDEO CLIP)

-- and weigh what the jury -- how the jury is responding. I would be
surprised if he testified.

He`s now under medication and is not going to be displaying some of
the signs of mental illness that he was displaying earlier. But you can
never -- you can never -- I wouldn`t wager either way on that one.

(END VIDEO CLIP)

O`DONNELL: Judge Snipes, what`s your guess about whether the
defendant will testify.

SNIPES: I would guess that he would not. Of course, that`s up to him
or up to the defense team. But despite what you tell the jury --

(BEGIN VIDEO CLIP)

-- about following the law and so forth, if he gets on the stand and
makes a bad impression, they could be so afraid of him that they might
render a verdict of guilty even though, intellectually, they might think
that he was not guilty by reason of insanity.

O`DONNELL: Yes. And, Dianna, --

(END VIDEO CLIP)

-- they have the psychiatrist`s findings that he had psychosis, was
mentally ill. They`ve already got that in the record of the case. And, as
you say, if the medications are working well when he`s testifying, he may
not appear terribly mentally ill at all.

And the jury may make their decision based on the way he appears on
the witness stand, as opposed to what he was doing that day.

HUNT: Right. He also has exhibited signs of speaking out, saying
sort of shocking things in the past, even when he was medicated. So, it
would be quite a risk for them to put him on the stand.

I do know they`re going to go extensively through his medical history,
--

(BEGIN VIDEO CLIP)

-- through the treatment he got at the V.A. or the lack of treatment,
as his mother said. And I`m sure we`ll get a number of expert witnesses
testifying to his mental state at the time.

(END VIDEO CLIP)

O`DONNELL: Judge Snipes, if he was found not guilty by reason of
insanity, what kind of action would the judge take, what kind of sentence -
- I mean, do we call it a sentence at that point.

SNIPES: No, it wouldn`t be a sentence. He`d be committed to one of
the mental institutions in Texas, such as Vernon, where he could stay for
the rest of his life.

Although, he could be released if he was found to be sane at some
point.

O`DONNELL: Dianna Hunt and Judge Michael Snipes, thank you both for
joining me tonight.

Coming up, can you imagine what would happen if someone was --

(BEGIN VIDEO CLIP)

-- crazy enough to yell at First Lady Michelle Obama. And I don`t
mean yell at her from a distance across the street, yell at her motorcade
going by. I mean, right in her face, yelling at her. We have the video.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

The Vice President of the United States --

(BEGIN VIDEO CLIP)

once again sparked a Twitter frenzy today. This time, at the swearing
in of new Defense Secretary Ash Carter.

While Secretary Carter was speaking, the Vice President called over
the Secretary`s wife, Stephanie Ann, put his hands on her shoulders and
then he leaned over and then "bidened" her ear.

We don`t know exactly what was whispered there, but lots of Twitter
users took some wild guesses. We`ll let you look those up on your own.

(END VIDEO CLIP)

Coming up next, who would dare yell at First Lady Michelle Obama, and
how would she handle it.

(COMMERCIAL BREAK)

O`DONNELL: Can you imagine what happens if you yell, I mean, yell at
First Lady Michelle Obama. Here is what happens.

(BEGIN VIDEO CLIP)

BILLY EICHNER, ACTOR: Hey, guys. It`s Billy Eichner from "Billy on
the Street."

I`m here in a grocery store in Washington, D.C., ready to play my new
game, "Ariana Grande or Eating a Carrot?" Let`s play.

You and your husband have such busy lives to say the least. Does he
ever come home and you say, "Oh, good, you`re here. I just DVR`ed `Hot in
Cleveland.` Anything like that?

MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: There are some shows
like that. A lot of SportsCenter going on in our house.

EICHNER: Oh, wow, ESPN. Remember that movie, "Hoosiers," with Gene
Hackman.

OBAMA: I sort of.

EICHNER: Come out of retirement. He`s such a good actor.

OBAMA: He`s a great actor. Big Bird, you are huge. I`m not used to
having to look up at people because I`m very tall.

You`re like Jane Lynch. You`re enormous.

BIG BIRD, SESAME STREET CHARACTER: I am a big bird.

EICHNER: So, Mrs. Obama, if you can, tell us, what is "Eat Brighter"
about.

OBAMA: We`ve got the "Sesame Street" friends like Big Bird, teaming
up with the produce industry to try to help making eating fruits and
vegetables fun and exciting for kids and their parents.

EICHNER: I love vegetables.

OBAMA: Me, too.

EICHNER: We`re driving kids to eat fruit. Now, it`s time to
introduce to you our other contestant today.

One of our fan favorites from "Billy on the Street," I once ambushed
her on the streets of New York and, now, we`ve brought her back to the show
a number of times.

But here`s the thing, she has absolutely no idea, I swear, that she is
about to meet the First Lady and Big Bird.

And she`s about to meet the First -- didn`t I just like poke you on
the hand or something.

OBAMA: It`s OK, but watch it. You could get shot.

EICHNER: Oh, OK. Oh, my God.

(LAUGHTER)

This is so much fun. Fruits and vegetables, I could die at any
moment.

OBAMA: I`m Michelle Obama.

ELENA, BILLY ON THE STREET REGULAR: I`m going to faint. I just --

(LAUGHTER)

-- I just can`t believe this is the best day of my life.

EICHNER: Oh, that`s so nice. Please don`t faint. Of course, I do a
segment about healthy eating, Elena dies.

ELENA: No, I have high blood pressure.

EICHNER: OK, perfect. Wonderful. Eat a vegetable.

ELENA: You`re not like an actress that`s being Michelle --

OBAMA: No.

EICHNER: No, this is the actual First Lady. Don`t embarrass me here.

For a dollar, look in the camera and say, "I am Groot." It`s from
"Guardians of the Galaxy."

OBAMA: I am Groot.

EICHNER: I would like to thank the Academy from the bottom of my
heart. I would like to thank our miraculous cast and crew. I would like
to thank Donna Gigliotti (ph) and David Carver (ph)! Stop, stop!

(END VIDEO CLIP)

O`DONNELL: Have you ever noticed that Big Bird and Jane Lynch have
never been seen together? Chris Hayes is up next.

END

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