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All In With Chris Hayes, Monday, October 26th, 2015

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Show: ALL IN with CHRIS HAYES
Date: October 26, 2015
Guest: McKay Coppins, Zephyr Teachout, Martin O`Malley, Chad Mils, Mark
Baum

(BEGIN VIDEOTAPE)

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

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: So Bush has no money. He`s
cutting. He`s meeting today with mommy and daddy. And they`re working on
their campaign.

HAYES: Whispers of a death spiral for the Bush campaign.

JEB BUSH (R), PRESIDENTIAL CANDIDATE: I`ve got a lot of really cool
things that I could do other than sit around being miserable.

HAYES: Tonight, inside Jeb`s latest troubles and why Ben Carson is
pulling away in Iowa.

DR. BEN CARSON (R), PRESIDENTIAL CANDIDATE: I wasn`t always like
that.

HAYES: Plus, why Donald Trump today declared war on super PACs.
Martin O`Malley on where Democrats stand after the Jefferson Jackson
dinner. And there has been yet another twist in the pharma bro saga.

MARTIN SHKRELI, TURING CEO: After this backlash, I may support a
Republican now.

HAYES: When ALL IN starts right now.

(END VIDEOTAPE)

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

It had been billed months ago as a celebration, a gathering in Houston
of Jeb Bush`s big donors where they would have a chance to mingle and take
pictures with a pair of former presidents who also just happen to be Jeb`s
father and brother. Instead, that closed-door conference which wrapped up
today with remarks by George W. Bush is being cast as something more like a
funeral for Jeb`s foundering campaign.

Now, Bush still has plenty of advantages in his quest for the GOP
presidential nomination, a marquee name, access to a massive donor network,
a well-funded super PAC, and more endorsements than any other Republican
candidate. But if the Bushes and their backers once expected a coronation,
well, what they`ve gotten thus far is closer to a catastrophe, and they
know it.

"The patient is either in intensive care and in need of some good
doctors who can save him or being put into hospice and we`re going to see a
slow death," one K Street lobbyist backing Bush told "Politico". A Bush
fund-raiser told "The Washington Post" that, quote, "It feels very much
like a death spiral."

And while George W. Bush insisted today that his brother is, quote,
"going to win because he`s a fierce competitor," their father, George H.W.
Bush, is reportedly so exasperated at a GOP electorate currently rejecting
his son and embracing Donald Trump, he`s telling friends, quote, "I`m
getting old at just the right time."

On Friday, Jeb Bush ordered major cutbacks to save campaign cash,
including cutting his campaign payroll by 40 percent. And over the
weekend, a candidate who once described himself as, quote, "a joyful
tortoise" in a long race sure didn`t sound very joyful.

(BEGIN VIDEO CLIP)

BUSH: If this election is about how we`re going to fight to get
nothing done, then I don`t want anything -- I don`t want any part of it. I
don`t want to be elected president to sit around and see gridlock just
become so dominant that people are literally going to decline in their
lives. That is not my motivation. I`ve got a lot of really cool things
that I could do other than sit around being miserable listening to people
demonize me and me feeling compelled to demonize them. That is a joke.
Elect Trump if you want that.

(END VIDEO CLIP)

HAYES: As for Trump, he didn`t miss the chance this weekend to once
again ridicule Bush over his poor poll numbers, campaign cutbacks and
decision to hunker down with his family.

(BEGIN VIDEO CLIP)

TRUMP: Bush now has got to cut back because think of this, think of
this, here`s a guy, here`s a guy wants to run our country and he can`t even
run his own campaign. So, Bush has no money. He`s cutting. He`s meeting
today with mommy and daddy. And they`re working on their campaign.

(END VIDEO CLIP)

HAYES: From the beginning of this campaign, Jeb Bush has seen
fundamentally uncomfortable with the task of winning over a GOP base that
is skeptical, bordering on contemptuous, toward the kind of GOP royalty
that he, Jeb Bush, is.

One former Bush supporter who now backs John Kasich offered a
particularly devastating critique of Bush this week telling "The A.P.",
quote, "God gives us our personalities and our looks and we can`t help
that. We are who we are."

Bush`s attempts to drum up enthusiasm can be, well, let`s just say,
less than Trumpesque. As this campaign video of Bush discussing his
fantasy football team illustrates all too well.

(BEGIN VIDEO CLIP)

BUSH: Gronkowski, my number one pick. The guy`s a monster. He`s
incredible. As long as he doesn`t get hurt, he will continue to allow me
to beat up on all my family members. Gronk, we`d love to have you at a
town hall meeting in New Hampshire. You`re welcome anytime.

(END VIDEO CLIP)

HAYES: New poll out of Iowa shows Bush down in fifth place in the
state with just 8 percent support. Bush is losing by 24 points to first
place Ben Carson, who we`re going to discuss shortly.

As for Bush, who is now preparing for Wednesday`s potential make or
break GOP presidential debate, he`s just trying to drown out the noise.

(BEGIN VIDEO CLIP)

REPORTER: Noise-free campaign`s already started. Bush is falling
apart, he may not even --

BUSH: Blah, blah, blah, blah.

REPORTER: You know what they`re saying out there.

BUSH: That`s why it`s blah, blah, blah. Watch it.

(END VIDEO CLIP)

HAYES: Joining me now, MSNBC political analyst Michael Steele, former
chair of the Republican National Committee.

Michael, your assignment, write a memo -- write a memo to both
candidate Jeb Bush and his team about what you`ve got to do. What`s your
advice?

MICHAEL STEELE, MSNBC POLITICAL ANALYST: I start with clearing the
decks and looking at -- bringing in some folks who understand how to run a
campaign in an unconventional time. What you have, and it`s not just the
Jeb Bush campaign, but it`s quite frankly all the others who are
languishing below Donald Trump and Ben Carson, are running conventional
campaigns in an unconventional environment. And they don`t know how to
adapt.

These folks are sitting around hoping against hope, praying to the
political gods that Trump implodes, that Ben Carson goes away, and the
stage will just be miraculously left to them. That`s not how this is going
to play out.

So, you know, just junk the K Street consultant political crowd, get
on the street, some grassroots folks who will get in your ear and tell you
how to do you, boo. That`s what this is about.

HAYES: OK.

STEELE: This is seriously not about trying to do the conventional
thing. Let your inner self -- your inner street come out, if you will, so
people understand exactly what you mean when you say it.

HAYES: OK. Two responses to that. Memo, Michael Steele to Jeb Bush,
do you, boo -- which is a catchy subject line. I would read that memo.

STEELE: That would be the memo.

HAYES: Then there`s two things I would say. One is why shouldn`t it
-- I mean, I think there is a case to be made, and I think I could make it
if I was sitting in some conference room in a Hilton somewhere in Houston
with a PowerPoint.

Look, we saw something similar to this in 2012, but the cycle with
which the GOP base sort of flirted with other candidates was much more
truncated. We`re seeing a longer version of that cycle. We still have a
long way to go until the first ballot is cast.

Trust your fundamental analysis of why this guy is the strongest
candidate in the race. Ride out. Don`t sell into the down market, as they
say, as traders say. And trust your analysis because history shows us that
the party ultimately decides who`s going to get this nominee and you`re
backing the guy the party wants.

STEELE: But this ain`t that. And that`s the problem. This is not
that.

That was true when, you know, after six weeks this candidate at the
top goes away, after three weeks this candidate at the top comes away,
someone else gets in place. That`s not this. Donald Trump has been in the
lead for 100-plus days.

Ben Carson is now working on close to 30 days in second place. Carly
Fiorina jumped in, faded fast. But those two stayed in place.

HAYES: Yes.

STEELE: And that`s the reality that the rest of the campaigns have to
deal with. So, you`re back to the point that I was making. How do you
break that stranglehold that they have? And a lot of it has to do with
understanding what the base is saying. You may be right, but can you
really risk spending all the money you need to spend on the off chance that
there`s going to be some type of implosion that will allow you to rise to
the point where the base, who`s not been with you, by the way, for two,
three, four, five months suddenly going to go oh, yes, I feel that, I can
do that?

HAYES: You know, part of what struck me, I was reading the transcript
today of the event between George W. Bush and Jeb Bush, which is a
fascinating document. There`s one pooled reporter allowed in. So, we
don`t have tape to play you but we can find it, we can post it on our Web
site.

And one of the things that struck me was, you know, for understandable
familial reasons, right? He loves his brother. Jeb Bush loves his brother
George W.

STEELE: Yes.

HAYES: He thinks he was a great president. And I think they`re a
little out of sync with how that presidency and the Bush family and the
entire kind of GOP-aristocracy which they are, right, indisputably, the way
all those folks are viewed not just by Democrats or independent viewers but
even by the GOP base.

STEELE: Yes, I think that that`s an early card that fell flat very
quickly when they tried to play it. The reality of it is, not
understanding where the base was, where activists were, where even donors
in some cases were relative to the rest of the Bush narrative I think was a
fatal flaw out of the gate.

I always thought that Jeb should have made it very clear that he`s not
his father, he`s not his brother, and in so many ways he is his own man,
and to demonstrate up front and early where he distinguished himself, where
he disagreed with his brother on foreign policy, on domestic policy because
that was -- you and I, we`ve talked about this. That was the rap coming
out of the gate, when we did this whole rundown on the race, that was the
rap that was on the table. So --

HAYES: Yes. It may ultimately be the political obituary of this
campaign is the guy couldn`t distance himself from his brother, which, you
know, you could judge that as something sort of loyal and stand out from a
familial standpoint and politically unfortunate.

Michael Steele, thank you.

STEELE: You got it.

HAYES: As I mentioned a short time ago, Ben Carson, the guy who goes
from zero to Hitler faster than anyone else on the trail, is legitimately
surging in Iowa with one new poll showing Carson with a 14-point lead over
Donald Trump in the state. This is the third straight poll showing Carson
with a sizable lead in Iowa. Trump has certainly taken notice and started
mocking Carson as even less energetic than his old nemesis Jeb Bush.

(BEGIN VIDEO CLIP)

TRUMP: We have a breaking story. Donald Trump has fallen to second
place behind Ben Carson. We informed Ben, but he was sleeping.

By the way, Carson is lower energy than Bush. I don`t get it. I saw
him being interviewed. He`s lower energy than Bush.

(END VIDEO CLIP)

HAYES: Appearing on "Meet the Press" Sunday, Carson responded to
Trump`s charge and then told a story of just how energy he used to be.

(BEGIN VIDEO CLIP)

CARSON: I have plenty of energy, but, you know, I am soft-spoken. I
do have a tendency to be relaxed. I wasn`t always like that. There was a
time when I was, you know, very volatile, but, you know, I changed.

CHUCK TODD, MEET THE PRESS: When was that?

CARSON: As a teenager. I would go after people with rocks and bricks
and baseball bats and hammers and, of course, many people know the story
when I was 14 and I tried to stab someone. And, you know, fortunately, you
know, my life has been changed and I`m a very different person now.

(END VIDEO CLIP)

HAYES: In that same interview, Carson compared a woman who wants to
have an abortion to a slave owner.

(BEGIN VIDEO CLIP)

TODD: What if somebody has an unwanted pregnancy? Should they have
the right to terminate it?

CARSON: No. Think about this -- during slavery, and I know that`s
one of those words you`re not supposed to say, but I`m saying it. During
slavery, a lot of the slave owners thought that they had the right to do
whatever they wanted to do to that slave, anything that they chose to do.
And, you know, what if the abolitionists had said, you know, I don`t
believe in slavery, I think it`s wrong, but you guys do whatever you want
to do? Where would we be?

(END VIDEO CLIP)

HAYES: Carson`s surge has come despite his decision to effectively
suspend his campaign for a book tour. In a string of provocative
statements like the one we just saw, that seem only to have made him
stronger. Carson has also proven a very successful fund-raiser raising
more than $20 million in the third quarter. But there are increasing
questions about where that money is going. Of the $20.8 million Carson
raised last quarter, $11.2 million was plowed right back into fund-raising
costs.

Joining me now, McKay Coppins, senior political writer for "BuzzFeed
News".

Carson -- so here`s what Carson`s last few weeks have been. He`s out
promoting the book. The book`s about the Constitution. He`s out -- it`s
very hard to get through an interview in which he doesn`t compare something
either to the Third Reich and Hitler or abortion, right, the sort of
touchstones of human evil.

And he`s not even campaigning actively. And he`s just skyrocketing in
Iowa right now.

MCKAY COPPINS, SENIOR POLITICAL WRITER, BUZZFEED NEWS: Well, I`ve
been talking to a lot of sources about this. In the establishment, the
Republican establishment, there`s a mixture of like relief that somebody is
taking over Trump but also like bafflement that it`s Ben Carson. But -- I
mean, some people say, and I think there`s a case to be made, that if you
were to create a candidate in a laboratory designed to take down Donald
Trump in this climate he would look a lot like Ben Carson.

And the reason is that he is also an outsider. He has a lost of the
same bona fides that Trump has, except that he actually genuinely appeals
to the religious base of the Republican Party. He is a man of faith. He`s
very culturally conservative, has been as long as we`ve known. Whereas
Trump is not at all.

HAYES: Yes. He has an organic, intuitive, and long-standing
relationship with and ability to speak to a certain portion of the
Republican base.

COPPINS: Yes, absolutely. He is a religious -- his pep talk that
he`s been giving all through his career before he went into politics was
very laced with religion and his personal faith. There`s also the matter
that, you know, in that interview where he talked about his history, his
personal history of violence and his youth. He -- the obvious subtext
there is that Donald Trump is this wild crazy unhinged person that I used
to be when I was 14 and have since overcome, and that`s why I`m low energy,
right? I`m actually more aligned with you.

HAYES: Here`s one of the most -- I mean, from a policy perspective he
makes Donald Trump look like wonky quarterly journal.

COPPINS: Oh, yes.

HAYES: Donald Trump -- there`s not a lot of policy but there are like
a few position papers. I mean, Ben Carson`s around-e was speculating about
how he could get rid of Medicare and replace it with something else. There
doesn`t seem --

COPPINS: His tax plan is based on the bible, a biblical tax plan.

HAYES: Yes, there`s essentially nothing there from a policy
perspective in -- I`m not saying nothing there in terms of what his ideas
are, but just in terms of like written out policies.

COPPINS: Yes. No, I mean, that is true and --

HAYES: Which has to be driving Jeb Bush and others nuts.

COPPINS: But also, look, Donald Trump has shown over the last three
months that you don`t need to be -- not even a policy wonk. You don`t even
really need to have that many policy positions to succeed. This race so
far has not been about policy.

HAYES: OK. But here`s my question is, what -- when does -- I saw
this comment he made about Medicare, basically saying we could replace
Medicare, we could get rid of Medicare and put something in private. I
mean, you know, I`ve seen -- I`ve been in Iowa and I know who the Iowa
caucus-goers are. OK? Who is going to run an ad -- at some point
someone`s going to have to start picking these fights, right?

COPPINS: Yes.

HAYES: Ben Carson, he`s going to scrap Medicare. I mean --

COPPINS: Well, yes, and this actually comes down to what I think is
going to be the next chapter of this battle between Trump and Carson is
that I think you`re going to see money from both sides going into
bombardments with ads attacking each other in Iowa and maybe South
Carolina.

But I think actually Carson is much more susceptible to an attack
campaign of that nature than Trump is because we already know Trump`s
baggage.

HAYES: That`s right.

COPPINS: It`s been out there for a long time. What people know about
Ben Carson is very small. It`s what -- they like the general idea --

HAYES: They like the bio and -- yes.

COPPINS: And he is on tape, on record, Carson, on TV, on radio,
saying a lot of things that are not -- do not inspire a lot of confidence.
And I think that you could see him very quickly flame out when a campaign
like that starts to go after it.

HAYES: Final note is there are a lot of consultants making a lot of
money --

COPPINS: Yes.

HAYES: -- off the people that are writing their checks on direct mail
to Ben Carson, something we want to take a look at more when this campaign
unfolds because it`s a sort of open secret right now.

McKay Coppins, thank you.

COPPINS: Thank you.

HAYES: Still to come, the video getting a lot of attention of an
incident in a South Carolina high school between a student and a resource
officer.

Plus, the pharmaceuticals company with the 5,000 percent price
increase. Now, a competitor is selling a similar pill for just one dollar,
and I will talk to their CEO.

And later, the Iowa event that ignited Barack Obama`s 2008 campaign.
Did any of this year`s Democratic candidates fare as well?

Presidential candidate Martin O`Malley joins me to talk about the
field and more, ahead.

(COMMERCIAL BREAK)

HAYES: Temperature levels that are intolerable to humans. That
statement is not describing the environment on another planet. It`s what
scientists say could happen to some densely populated areas of Earth by the
end of this century. Study published today finds that by the year 2100,
heat and humidity in some population centers in the Middle East are likely
to, and I`m quoting here, "exceed a threshold for human adaptability due to
the business as usual scenario of future greenhouse gas concentrations."

According to one of the authors of the study, that threshold roughly
translates to a heat index reading of 165 degrees Fahrenheit. The study
specifically cites major cities in the United Arab Emirates, Qatar, and the
coastal region in Iran as seeing the most dramatic heat increases.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: But they have now super PACs. These are super dupers. They
call them super duper PACs. And those PACs control the candidates. OK?
They totally control.

Carson is controlled by his PAC. Bush is controlled by his PAC.
Rubio is controlled by his PAC. And he needs a lot of water on top of
everything else.

Did you ever see a guy -- did you ever see a guy sweat like Rubio?
I`d never seen anything like it.

But they`re controlled by their PACs.

(END VIDEO CLIP)

HAYES: Donald Trump has found a new cause, which basically undoing
what Citizens United has wrought in the form of super PACs -- political
committees that allow unlimited donations as long as they maintain their,
quote, "independence from the candidate at issue."

Now, Trump has been boasting for a while he`s the only Republican
candidate that doesn`t have a super PAC. Then last week, "The Washington
Post" reported there were repeated connections between Trump and the Make
America Great Again super PAC which was backing his presidential bid.

A few days after that report, "The Post" reported, quote, "A super PAC
with ties to Donald Trump`s presidential campaign is shutting down in an
effort to put an end to building questions about the closeness of the two
operations."

Now with the super PAC associated with Donald Trump shut down, Trump
has returned to his role of campaign finance reformer. He fired off a
series of tweets today in which he basically called super PACs a con game
and called for all candidates to denounce them.

Trump wrote, quote, "This whole super PAC scam is very unfair to a
person like me who`s disavowed all PACs and is self-funding. What the
other candidates are doing is a disgrace. All presidential candidates
should immediately disavow their super PACs. They`re not only breaking the
spirit of the law but the law itself."

To give you an idea of just how physically thin the division is
between campaigns and super PACs, this weekend when Jeb Bush`s campaign
huddled with his donors in a hotel in Houston, "Politico" points out that
in a hotel ballroom adjacent to one rented by the Bush campaign, Mike
Murphy, the strategist guiding Bush`s Right to Rise super PAC, gave
attendees a sneak peek of his next round of feel good television spots
meant to inspire confidence in the candidate and the power and money of the
super PAC. This is a floor plan of the area where both the Bush campaign
and the super PAC supporting his campaign held their events yesterday.

Joining me now is Zephyr Teachout. She`s a professor at Fordham Law,
head of the campaign reform group Mayday PAC, has a recent piece in "The
Guardian" called "Even corporate America wants to start crony capitalism."

OK. Here`s something that doesn`t get talked about enough. Donald
Trump`s point, which is that this coordination between super PACs and
candidates might be illegal even under the incredibly broad reading of
Citizens United.

ZEPHYR TEACHOT, FORDHAM UNIVERSITY SCHOOL OF LAW: Yes. Now, Citizens
United itself if you look at it assumes that these are independent
expenditures. I mean, it`s a very naive opinion in a whole bunch of ways,
but it also assumes there`s an agency that would enforce the law.

HAYES: Right.

TEACHOUT: And the FEC -- God, I want to paraphrase McCain. Basically
was born broken and then it`s blown itself up.

HAYES: Right.

TEACHOUT: It has three Republicans, three Democrats, and those three
Republicans have no interest either in enforcing existing law -- so we
basically have a state of lawlessness in a whole bunch of areas.

HAYES: It`s bananas. I mean, we`re running a campaign that`s going
to see a billion dollars plus more than that spent with essentially no
enforcement mechanism for what is OK and what`s not, right? Am I right
about that?

TEACHOUT: You`re right about that. The Campaign Legal Center put out
a real call to legality, basically, a few months ago, detailing all these
different violations that are currently happening. But there`s another
kind of lawlessness, which is what we expect agencies to do is pass
regulations, enforce those regulations.

HAYES: Right.

TEACHOUT: It`s not enforcing but it`s also not promulgating new ones.

HAYES: Right.

TEACHOUT: So, for instance, we should be having regulations governing
single candidate super PACs, which the FEC if it were like the EPA or any
other --

HAYES: Right. Clearly this violates the spirit of independence,
right?

TEACHOUT: Absolutely, yes.

HAYES: Like clearly this is just an adjunct to a campaign. I mean,
my favorite example of this, of the way in which the law has become a joke,
which is always a very dangerous thing. It`s like you see in decaying
republics or the old Soviet Union where the law becomes like -- this is
Carly Fiorina`s super PAC, right? They had no -- they had no visible
advance team.

And the super PAC, they basically said we want to call the super PAC
Carly for America, and the FEC in a rare moment of enforcement was like you
can`t do that. So, then they renamed it Conservative Authentic Responsible
Leadership for You and for America, better known as Carly for America.
It`s just basically telling the FEC like --

TEACHOUT: And the super PAC, by the way, is at Fiorina events taking
names to do its own organizing. So, it`s really taking over the
traditional campaign roles.

But I want to be clear about where the buck stops because, you know,
we can talk about the FEC and we should talk about the FEC but that means
Congress should act. That means the president should be really pushing for
-- I happen to be in favor of a single head agency model. And so, we need
Congress to act on public financing, on the FEC, on all of these things
together.

HAYES: So, the FEC has, because they have this deadlock, this wild --
I mean, the thing that Donald Trump, Donald Trump is talking about, which
is basically this is preposterous, these aren`t independent, is true and no
one`s enforcing it.

TEACHOUT: Yes. I mean, Donald Trump is not a credible --

(LAUGHTER)

TEACHOUT: -- messenger, but he`s absolutely right. And I actually
think we should see, as we saw in Net Neutrality more protests, you know,
around the FEC, so the commissioners can really feel the heat.

HAYES: But even if he`s not credible -- I mean, he is going -- he is
clearly going to make an issue of this. Wednesday night at the debate,
he`s going to turn around and say to people what you`re doing is probably
illegal, you should renounce your super PAC.

TEACHOUT: OK, I`ll tell you why he`s not credible. There`s basically
three models of America we have in front of us. One is the current model
which everybody knows isn`t working. And it`s the one he`s talking about,
which is you basically have candidates who are sycophants, courtiers,
beggars (ph) --

HAYES: Right.

TEACHOUT: This model is oh, let`s get rid of that and replace it with
billionaires.

HAYES: Yes, cut out the middle man, just have the billionaires run
themselves so they don`t have to beg anyone because they have all the
money.

TEACHOUT: But that`s not democracy either.

HAYES: Right.

TEACHOUT: The third model, the one we really have to push for, is
public financing of elections, where you actually could have free
candidates who are neither, you know, beholden to donors nor billionaires
themselves.

HAYES: Before we even get there, in some ways my point in this sort
of low-hang fruit is if someone brought an enforcement action against one
of these super PACs saying you can`t rent the same ballroom, yes, you can`t
name it this, you can`t -- there would at least in the immediate -- there
would be some clarity about the rules right now, which are totally lacking.

TEACHOUT: Yes, one of my students was trying to figure out how to sue
the FEC --

HAYES: To make them enforce the law.

TEACHOUT: Yes, exactly.

HAYES: Zephyr Teachout, thanks for joining us.

TEACHOUT: Thank you.

HAYES: All right. Coming up next, a look at a shocking video of an
incident involving a school resource police office and a student at a South
Carolina high school.

(COMMERCIAL BREAK)

HAYES: An incident captured on smartphone video at Spring Valley
High School in Columbia, South Carolina is getting a great deal of
attention, showing a scene between a female student and the school`s
resource officer. We will show you the incident in a moment.

School officials confirm the incident happened on Monday, but stopped
short of releasing further details.

According to Sheriff Leon Lott, the school resource officer was acting
in response to a student who was refusing to leave class.

Here is one view of the incident.

(BEGIN VIDEO CLIP)

BEN FEILDS, SCHOOL RESOURCE OFFICER: Hands behind your back. Give me
your hands. Give me your hands.

(END VIDEO CLIP)

HAYES: NBC News has not confirmed what precipitated that violent
encounter.

The Richland County sheriff`s department, as well as the internal
affairs division, are now investigating this, we are told. The school has
also started
investigation and is working in cooperation with the sheriff`s office.

A spokesman for Richland County says the SRO at Spring Valley High, is
now on
administrative duty, that`s the school resource officer, until
investigation of the incident is complete.

His name is Ben Fields. He`s one of two resource officers at the
school.

No injuries reported according to the spokesperson.

The sheriff is currently out of town at a conference. He was shown the
video and quote, "he was very disturbed by what he saw."

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The sheriff is also asking for everyone to
exercise
patience at this time as this is being fully investigated. He`s not going
to leave any stone unturned checking out exactly what took place and what
happened.

As well as, the sheriff and the school district, they`re going to come
together and they will take appropriate action necessary once this
investigation is
totally completed.

(END VIDEO CLIP)

HAYES: Joining me now by phone from Columbia, South Carolina,
reporter Chad Mills, who`s with our affiliate WIS TV.

Chad, what is the latest?

CHAD MILS, WIS TV: Well, Chris, as you heard there, the sheriff is
out of town on, I believe it`s some kind of conference for sheriffs across
the country.

But, his spokesperson here in Richland County is urging people not to
rush to judgment. So many people have shared this video. Obviously, many
people say it`s
disturbing. Many people say it`s even worse than disturbing. They say
they`re at a loss for words when they see that video.

But again, sheriff`s department, Richland County sheriff`s department
is asking people to let cooler heads prevail for now as they investigate
whatever
happened.

Now, I want to read you the narrative we got from Sheriff Leon Lott a
little while ago.

He said, the SRO, the student resource officer, was acting in response
to a student disrupting the class. The student refused to comply to
directions of the teacher and school administrator to leave the class. When
she refused, the SRO was
requested to take action.

The student was told she was under arrest for disturbing school and
given instructions which she again refused.

The video then shows the student resisting and being arrested by SRO
Ben Fields.

Now, another student arrested as well. We`re told both of the students
arrested were seniors, although the sheriff`s department wasn`t too sure
about that point. But nevertheless, one female and one male. The female is
the student you see in the video. The male who they arrested you cannot
see, but he was taken into
custody as well. Both of them charged with disturbing a school.

Now, the female was apparently released to parents. The male, however,
was taken into custody. It`s unsure at this point whether he was taken to
jail or the department of juvenile justice -- Chris.

HAYES: All right. Chad Mills, thank you.

I`ve got to say, it`s very, very difficult to conceive of the chain of
events prior to that video that would in any way justify what we see there.
But we shall see what develops. We will be staying on it.

Coming up, I`ll ask a 2016 presidential candidate about that video.

We`ll be right back.

(COMMERCIAL BREAK)

HAYES: If there`s any one person who`s come to embody the excesses of
American corporate greed, it`s the man now known as Pharma Bro.

Martin Shkreli, the 32-year-old founder and CEO of Turing
Pharmaceuticals caused an uproar when his company jacked up the price of a
drug used to treat a
deadly infection by 5,000%.

Now, Shkreli blamed the massive increase on market forces, telling
CNBC, it was effectively built into his company`s purchase of the patent.

(BEGIN VIDEO CLIP)

MARTIN SHKRELI, TURING PHARMACEUTICALS: We definitely planned on
raising the price. That`s for sure. We paid a very, very large amount to
buy an unprofitable
medicine. We can`t continue to make -- to lose money on the drug at that
price.

So we took it to a price where we could make a comfortable profit, but
not any kind of ridiculous profit.

(END VIDEO CLIP)

HAYES: After becoming the most hated man on the internet, Shkreli
tried to align himself with one of the most beloved men on the internet,
Democratic
presidential candidate Bernie Sanders.

Shkreli gave Sanders the maximum individual donation of $2700, telling
The Boston Globe he was hoping to get a private meeting to explain why drug
companies set prices the way they do.

But alas, Pharma Bro was rebuffed by the Sanders campaign, which gave
the money away to a clinic for HIV/Aids patients, the main population in
need of
this newly expensive drug. And Shkreli wasn`t too happy about it.

(BEGIN VIDEO CLIP)

SHKRELI: I think he`s a demagogue. He`ll say anything to get a vote.
And you know, for me to be his pinata is unacceptable.

I think he has a lot of great ideas. I gave him $2700, which I
understood to be the legal limit, and he donated it to a charity.

Now, I donate millions of dollars to charity, and most young
entrepreneurs don`t do that.

UNIDENTIFIED FEMALE: Who are you supporting for president?

SHKRELI: I haven`t made a decision yet. I`d be willing to support a
Democrat. In fact, I was going to start a Democratic super PAC with my own
money, but after this backlash and the lack of understanding of our economy
from what I`ve seen from the Democrats, I may support a Republican now.

(END VIDEO CLIP)

HAYES: Now Shkreli will have some different market forces to contend
with.
A compounding pharmacy called Imprimus says it`s selling a different
version of the same drug at just 99 cents per pill. $749 less than what
Shkreli`s company is charging for it.

And joining me now, CEO and founder of Imprimus Pharmaceuticals, Mark
Baum.

Great to have you here.

MARK BAUM, IMPRIMUS PHARMACEUTICALS: Good to be here, Chris.

HAYES: What is a compounding pharmacy and how does this work?

BAUM: So compounding pharmacies buy FDA registered, FDA approved
generic drugs, and they repurpose them or reformat them for new uses.

So if your daughter needed a drug that was only available in a pill
format, she can`t swallow a pill, a compounding pharmacy would take that
drug and put it
into a liquid or a suspension so that she could take it.

HAYES: And the active ingredients are all purchased through this
regulated chain of the FDA, right?

BAUM: They`re FDA registered generic drugs. They`re produced in FDA
inspected facilities. And we buy them and our facilities are inspected by
the FDA as well.

HAYES: Okay, so then explain to me how this is possible from a market
perspective.

A company buys this drug and essentially has a monopoly on that drug
as far as I understand it, right? They purchase the drug. Not a legal
monopoly because
it`s out of patent, right? I think I misspoke before and said patent.

But they have this drug. They`re going to jack up the price. You come
in and say we`ll sell it for a dollar. Like how can you afford to sell it
for a dollar if they`re selling it for $750?

BAUM: Well, first of all, you know, when you talk about the drug, you
talk about Daraprim. Everybody talks about Daraprim. But Daraprim is really
a name in advertising. It`s a brand name.

The underlying chemical that makes up Daraprim happens to be very
inexpensive. And so what we are able to do is to buy that chemical -- and
let me be clear, we are not legally allowed to copy that drug. The FDA will
prevent us from
doing that, and we will not do that. So we cannot copy it, but we`re able
to take another complementary active drug, marry it with Pyrimethamine,
which is the underlying drug in Daraprim, combine the two, compound them,
and build a new choice for physicians and their patients.

HAYES: Wait -- so, when you say this -- this gets to the sort of key
of how
this market works, right? Because there`s all these patent thickets and
there`s intellectual property and there`s brands and there`s generics.

So, when you say you can`t copy the drug, that`s the FDA`s enforcing
essentially the sort of title that he has on this drug, right?

BAUM: One of the reasons why he got into this issue is first of all,
I financed a lot of businesses over the last 15 years that have
specifically served this community. So I`m personally --

HAYES: HIV/Aids patients.

BAUM: Absolutely. And when I saw what he was doing, I mean, he`s not
engaged
in capitalism. I`m for capitalism. I believe in competition. He was engaged
in a monopoly.

He purchased this because he knew he was the only one that could make
it, I believe. I would imagine that was the case. And that he could control
the price.

And the good news is that with a few small changes in health care
policy at the FDA level and potentially at the congressional level, this
could all be
eliminated.

You don`t need to, for example, bring in drugs from Canada. We could
probably build the drugs cheaper than you could buy them in Canada. Nor do
you need price controls.

HAYES: Can you -- with the facilities you guys have, can you actually
mass produce this drug? Or is this -- it sounds more like kind of a
boutique process for lack of a better word.

BAUM: It is bespoke medicine, and we are not allowed to mass-produce
these formulations.

Quite honestly, we could if the FDA -- if the laws were changed. We
could make a lot more of it.

Congress passed and President Obama signed a law that governs how we
conduct ourselves. And there is a pathway to actually making this
formulation in an FDA registered facility.

Unfortunately, right now the FDA has kind of said that we can`t make
this particular formulation in even an FDA registered facility.

HAYES: I will say, you`re very good at explaining what you do, but I
remain completely confused about how pharmaceutical -- how drug pricing
works in this country. So we`re going to have to revisit this.

BAUM: For sure.

HAYES: Great to have you here, Mark Baum.

BAUM: Thank you kindly, Chris.

HAYES: All right. Still ahead, presidential candidate Martin O`Malley
is
here and he will join me live on set.

Stay with us.

(COMMERCIAL BREAK)

HAYES: Kansas Governor Sam Brownback`s approval rating has dropped to
what might be the lowest level in state history.

As we reported on this show, Governor Brownback and All In America,
Governor Brownback has used Kansas as a kind of laboratory to test right-
wing economic
ideas, drastically cutting income and corporate taxes while slashing the
funding for state programs like education and infrastructure spending.

That resulted in a massive budget shortfall and a credit downgrade
from S&P in 2014.

Despite that, Governor Brownback was re-elected last November. But
now, it appears Kansans are rejecting Brownback and doing so in
overwhelming numbers.

According to a new survey, just 18% of Kansas voters say they are very
or somewhat satisfied with Governor Brownback, while nearly 7 in 10
disapprove of the
job he`s doing.

For comparison President Obama`s approval rating is ten points higher
in red state Kansas than that of Governor Brownback.

Additionally, 61% say Brownback`s tax policy has been a failure or a
tremendous failure, while 7% say it has been a success or tremendous
success.

We should note just .2% said his economic policies have been a
tremendous success.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Please welcome the next President of the United
States,
Barack Obama!

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We can make this
election not
about fear but about the future. And that won`t just be a Democratic
victory, that will be an American victory. And that is a victory that
America needs right now.

(END VIDEO CLIP)

HAYES: Eight years ago, then Senator Barack Obama was an underdog
presidential candidate, seemingly incapable of breaking into then Senator
Hillary
Clinton`s lead, particularly in Iowa.

That is, until the Jefferson Jackson dinner. That`s the big state
party
gathering that attracts presidential candidates every four years, and where
Obama gave a speech that to this day is credited by people in his campaign
and outside of it as the turning point on his trajectory to winning Iowa,
ultimately the nomination, and to become the President of the United
States.

Now, this year`s dinner over the weekend could not match the
rhetorical heights of eight years ago, though Senator Bernie Sanders did
compare himself to
candidate Obama and also began to sharpen the contrast between himself and
Hillary Clinton on issues like the Transpacific Partnership Trade
Agreement.

(BEGIN VIDEO CLIP)

BERNIE SANDERS, (D) PRESIDENTIAL CANDIDATE: I did not support it
yesterday,
I do not support it today, and I will not support it tomorrow.

(END VIDEO CLIP)

HAYES: Secretary Clinton coming off a great week politically was
eager to contrast herself with the Republican party`s presidential
contenders, as well
as suggest she is the true progressive in the race.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: How much longer can we
wait to stand up to the gun lobby and keep our kids and our communities
safe in America?

(END VIDEO CLIP)

HAYES: Presidential candidate Lawrence Lessig was not invited to the
Jefferson Jackson dinner according to the candidate. Former Governor Martin
O`Malley rounded out those who were invited and delivered an passionate
speech to what appeared to be an appreciative crowd.

(BEGIN VIDEO CLIP)

MARTIN O`MALLEY, (D) PRESIDENTIAL CANDIDATE: To that immigrant
bashing, carnival barker, Donald Trump, let us stand together and say that
the enduring symbol of our nation is not the barbed wire fence, it is the
Statue of Liberty.

(END VIDEO CLIP)

HAYES: Presidential candidate Martin O`Malley will join me right here
at this table when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MARTIN O`MALLEY: What have we come to as a country that you can get
pulled
over for having a broken taillight, but if you wreck the nation`s economy
you`re totally untouchable?

Presidential leadership is about the good of the many, not the greed
of the few.

(END VIDEO CLIP)

HAYES: Martin O`Malley joining me now. Former Governor of Maryland,
current 2016 Democratic presidential candidate.

It`s great to have you here.

O`MALLEY: It`s good to be back, Chris.

HAYES: So, let me ask you this. What`s your theory of the case for
how things look in this campaign for, say, the next two months, right?

It`s down to -- well, there`s four people but three who are going to
be included in the debate, three who were included in the Jefferson Jackson
dinner.

Presumably the next debate will be more focused. You will sort of have
a more prominent position.

What`s your theory of the case for the O`Malley candidacy in the next
two months.

O`MALLEY: My theory of the case is that the American people are
looking for
a new leader. We -- in both parties, we can`t be this dissatisfied with our
gridlocked politics, and this dissatisfied with an economy where 70% of us
are
working harder but not getting ahead --

HAYES: But isn`t Bernie Sanders channeling that -- I agree with you,
that`s clearly the case. But Bernie Sanders seems to be channeling the
desire for that.

O`MALLEY: Yeah, for now, Chris. But you`ve followed presidential
campaigns before. The candidate -- the challenger that`s peaking in October
is never the
candidate that`s peaking in February.

And, we`re not going to solve our problems by debating the fine points
and the pros and cons of socialism. We`re not going to solve our problems
by declaring that all Republicans are our enemies.

America`s looking for a healer. They`re look for someone that can
bring us together to address our problems and do it in the new and
entrepreneurial way that
mayors across America are doing it.

And that`s my way of leadership. I`m not part of those old battles of
the past. I`m about the future.

HAYES: But is that really -- first of all, you`re a politician.
You`re Mayor of Baltimore, you were --

O`MALLEY: Please, I`m a performer.

HAYES: You were Governor of Maryland. You know what politics look
like. And one of the things we learned in the Obama era is one cannot
unilaterally declare themselves a healer because, as they say in West
Point, the enemy gets a vote, right?

O`MALLEY: Oh, yeah. Well, hey, look, man, look. There`s a reason why
the President of the United States also has to be an effective leader of
his own party.
I didn`t get things done in Maryland, marriage equality, The Dream Act,
comprehensive gun safety legislation, repealing the death penalty, only
with
Democratic votes. Some of those things only happened with Republican votes.
But we would not have been able to find the consensus and forge a new
consensus for change if we were not strong within our own party.

So, you have to be a strong party leader.

I`m not saying we`re in a post-partisan age, in an age when parties
are done.
But I am saying this -- that there`s a lot more that unites us than divides
us. And the beliefs that we share as Americans are the things that we need
to focus on, not the divided policies of the past, not the worn-out sort of
coddling of Wall Street banks that our party fell into in the past.

There are very clear differences in this election between the
candidacy that I offer and that which Secretary Clinton has to offer. And
those contrasts are going to become very apparent in the debates ahead.

HAYES: One of the things that you have put out a pretty comprehensive
plan on criminal justice reform, that I think there`s essentially an
allusion to Sandra Bland in that speech you gave there, the woman who was
pulled over for not
signaling and -- and ended up dying in a Texas jail.

I want to show you this video because it strikes me that this is part
of what is driving a lot of the Grass Roots in the Democratic party.

This is this incident that happened at a high school in Columbia,
South Carolina. It`s a student who, as far as we know, had refused to get
up. The school resource officer`s called in. Take a look.

(BEGIN VIDEO CLIP)

FEILDS: Hands behind your back. Give me your hands. Give me your
hands.

(END VIDEO CLIP)

HAYES: All right. That happened today. Again, the full context of
that is not known to us. Your reaction seeing that video.

O`MALLEY: Now, as a parent and as a father I would be ripped
ballistic if
somebody did that to my daughter. That is -- that`s pretty outrageous
behavior.
That`s my reaction to that.

HAYES: I had the same reaction as a parent, I`ve got to say.

O`MALLEY: Yeah. I mean, that`s not appropriate behavior for any
adult, to treat a kid. My oldest daughter is a teacher in Baltimore City
public schools. I have visited classroom after classroom. There`s no excuse
for that sort of behavior.

HAYES: When you talk about distinguishing yourself from Senator
Clinton, Secretary of State Clinton, what`s the one area you think is going
to emerge the most in the next two months?

O`MALLEY: I think that one of the most important areas is this. Look,
we have seen Secretary Clinton shift positions on any number of issues
right up until
the eve of the debate. Shifted position on Keystone. Shifted position on
Transpacific Partnership.

I was against Keystone a year ago. I was against Transpacific
Partnership eight months ago. The one thing she has not been -- that
Secretary Clinton
has not been able to shift position on is Glass-Steagall, and the big mega
banks that now still threaten to crash our economy. She cannot change her
position on that, as she said herself. She represented Wall Street. I
think that`s a huge difference.

HAYES: I think we`re going to see a lot more of that in the debate.

Governor Martin O`Malley. It was a pleasure to have you come by.

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

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

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