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'The Last Word with Lawrence O'Donnell' for Wednesday, January 18

Read the transcript to the Wednesday, January 18

Guests: John Heilemann, Michael Scherer, Michael Kranish, Scott Helman, Federico Rampini, Andrew Blankstein


LAWRENCE O`DONNELL, MSNBC HOST: Tonight, who is the real Mitt Romney
and where does he keep his money?

And we`ll bring you the gruesome Hollywood murder mystery that has
Los Angeles transfixed.

(BEGIN VIDEOTAPE)

(MUSIC)

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Conservatives come
together. We beat Romney decisively.

CHUCK TODD: All that Newt-mentum.

CHRIS MATTHEWS, MSNBC HOST: Can Newt beat Romney?

GINGRICH: I don`t want to bloody his nose. I want to knock him out.

I need your help to beat Romney.

MATTHEWS: Today, Newt did what Newt does. He got nasty.

TAMRON HALL, MSNBC ANCHOR: Newt Gingrich is ceasing the opportunity
to hit him.

GINGRICH: And I think they will do anything.

MATTHEWS: Dirty, dishonest, and desperate.

GINGRICH: I fully expect the Romney campaign to be unendingly dirty
and dishonest.

UNIDENTIFIED MALE: It`s not what you see. It`s what you hear.

ANDREA MITCHELL, NBC NEWS: Romney so uncertain about how to handle
this tax issue.

UNIDENTIFIED MALE: Mitt Romney is now admitting that he`s paying 15
percent tax rate.

UNIDENTIFIED MALE: It looks like he`s hiding something.

MITCHELL: It was obvious that he was going to come up.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: What I would say to Governor
Romney is, let`s get all the facts out there. If you have tax returns to
put out, you know, you should put them out and put them out sooner rather
than later.

GINGRICH: This is one of the bigger acts of baloney in modern times.

CHRISTIE: I think everybody will know that the story is really
probably much to do about nothing.

GINGRICH: 2010 tomorrow.

HALL: Sarah Palin, now, Michael, rearing her head in all this.

MARTIN BASHIR, MSNBC HOST: Gingrich last night got the backing of
none other than Sarah Palin.

SARAH PALIN (R), FORMER ALASKA GOVERNOR: If I had to vote in South
Carolina, I`d vote for Newt.

UNIDENTIFIED MALE: I think she has lost a lot of the pull she had.

PALIN: We know the mistake made in our country four years ago.

SEN. JOHN MCCAIN (R), ARIZONA: I am very pleased, very privileged to
introduce to you, Sarah Palin of the great state of Alaska.

PALIN: That vetting did not take place. I want to see that.

ANN COULTER: If you don`t run Chris Christie, Romney will be the
nominee and we`ll lose.

(APPLAUSE)

(END VIDEOTAPE)

O`DONNELL: The battle for South Carolina between Mitt Romney and
Newt Gingrich intensified today as new revelations threatened to damage
both campaigns. ABC News has conducted a recent interview with Newt`s
second wife, Marianne Gingrich, that has yet to air. There are indications
that it may run tomorrow.

In the 1990s, Marianne Gingrich told a reporter that she could end
her then-husband`s career with a single interview. We should know soon
whether she can still end her former husband`s career with a single
interview.

Today, ABC News confirmed what David Cay Johnston theorized her last
night about Mitt Romney`s tax returns.

(BEGIN VIDEO CLIP)

DAVID CAY JOHNSTON, REUTERS: I think we have a reasonable issue here
in saying, well, where is your money? Is it parked offshore? And how much
of it have you not paid taxes on?

(END VIDEO CLIP)

O`DONNELL: ABC News now reports Romney has as much as $8 million
invested in at least 12 funds listed on Cayman Islands registry. Another
investment which Romney reports as being worth between $5 million and $25
million shows up on security records as having been domicile in the
Cayman`s.

Official documents reviewed by ABC News show that Bain Capital, the
private capital partnership that Romney once ran, has set up some 138
secretive offshore funds in the Caymans.

A "Time" poll out today shows a Gingrich surge taking hold in South
Carolina. Two weeks ago, Romney led Gingrich by 19 points. That lead has
been cut to 10 points. Rick Santorum`s support has dropped three points to
16 percent. Ron Paul is fourth with 13 percent. Rick Perry holds last
with only 6 percent.

Today, "Red State" founder Erick Erickson called on Rick Perry to end
his campaign. "If Rick Perry stays in the race, conservatives opposed to
Mitt Romney will be legitimately able to blame Rick Perry for dragging down
either Newt or Santorum. With Newt Gingrich surging, according to the
latest Rasmussen poll and Sarah Palin saying she`d support him, Perry`s
withdrawal and endorsement before Saturday could ensure a Gingrich win."

Today, the Romney campaign released two web ads featuring Newt`s
former congressional colleagues.

(BEGIN VIDEO CLIP)

JIM TALENT, FORMER CONGRESSMAN AND SENATOR: I served in the House
with Newt Gingrich. He would make outrageous comments that would blindside
us and undermine our conservative agenda. It`s a problem when your own
leader is the biggest political problem that you`re dealing with, which is
why we removed him as the speaker.

SUSAN MOLINARI, FORMER CONGRESSWOMAN: I served with Newt Gingrich in
Congress. Newt Gingrich had a leadership style that can only be described
as leadership by chaos. The last time Newt Gingrich was head of the
Republican Party as speaker, he became so controversial, he helped re-elect
a Democratic president.

(END VIDEO CLIP)

O`DONNELL: Newt Gingrich shot back at Romney as soon as he heard
about those ads.

(BEGIN VIDEO CLIP)

GINGRICH: Wait. Wait. Wait. Hold on. You`re saying I helped
reelect a Democrat?

REPORTER: That`s in the ad. Yes.

GINGRICH: That`s just stupid. My only question is, so what did Mitt
Romney do? Show us how many Republicans you helped elect in the `80s when
you worked for Reagan/Bush. Show us how many Republicans you helped elect
in `92 when you were voting as a Democrat for Paul Tsongas. I mean, where
do they get the gall to run this kind of an ad?

(END VIDEO CLIP)

O`DONNELL: Gingrich sent this early Valentine to Sarah Palin today
after she said that if she was voting in South Carolina, she would vote for
Newt.

(BEGIN VIDEO CLIP)

GINGRICH: Governor Palin is somebody who I think was a very good
reformed governor. I would ask her to consider taking a major role in the
next administration if I`m president. But nothing has been discussed of
any kind and it wouldn`t be appropriate to discuss it at this time.

(END VIDEO CLIP)

O`DONNELL: In Warrenville, South Carolina, Gingrich offered this
prediction of what will happen between now and when the votes are countered
Saturday night in South Carolina.

(BEGIN VIDEO CLIP)

GINGRICH: I fully expect the Romney campaign to be unendingly dirty
and dishonest for the next four days because they are desperate they
thought they should buy this. They`re discovering they can`t buy this. I
think they`re now going to have -- I think they have internal polls that
show them losing and I think they will do anything at any level and I need
your help. People power will beat money power and I need your help to beat
Romney.

(END VIDEO CLIP)

O`DONNELL: Joining me now from Charleston, South Carolina, is
national affairs editor for New York magazine and MSNBC political analyst,
John Heilemann. And from Washington, White House correspondent for "Time"
magazine, Michael Scherer.

Thank you both for joining me tonight.

John, here`s Newt Gingrich saying that the Romney campaign will be
unendingly -- what was that? Unendingly dirty and dishonest. That`s a
nice little pull quote for the Obama campaign to use in the general
election if they have to.

JOHN HEILEMANN, MSNBC POLITICAL ANALYST: It certainly is, Lawrence,
and, you know, there have been a lot of them on both sides in the last
couple of weeks. You knew that it was going to get like this. It`s the
nature of South Carolina primaries.

I was a little surprised by how quiet the weekend was. But ever
since Myrtle Beach, the fur has been flying out here between these two
campaigns, and I think Newt Gingrich is right in the sense that it`s only
going to intensify over the last 72 hours. He has to close what is still a
reasonably large gap. And so, he is going to be fighting pretty hard and
Mitt Romney is clearly on the defensive and clearly things that Gingrich is
gaining, and they are bringing out big guns.

O`DONNELL: Michael, what is the White House and the Obama re-
election campaign hoping for in South Carolina?

MICHAEL SCHERER, TIME: They want a Gingrich win. They want to drag
this out as long as they can and they want to weaken Romney as much as
possible. I think it`s still widely assumed within the White House and in
Chicago that Romney has this wrapped up.

So for them, the issue is to trying to bloody Romney, not just among
conservatives will end up coming back to him in the general election, but
among independents raising these issues about Bain, his record, he`s not
being who he seems to be.

I mean, Gingrich really has been -- Romney is right about this -- New
Gingrich really has been toeing the line that the Obama campaign will be
using assuming Romney gets the nomination. And so, the more that can
happen, if they can bring this to Florida with, you know, Gingrich maybe
getting another $5 million or $10 million from his wealthy benefactors to
go up on the air, it would be a great situation for the Obama folks.

O`DONNELL: John, there`s always this theory in primaries that this
is good stuff, this helps toughen up your nominee. But we`ve also seen
things emerged in primaries that then come back to haunt the nominee, the
Willy Horton issue against Michael Dukakis was first raised by Al Gore`s
desperate campaign against Michael Dukakis and then it really came back to
do damage in the general election campaign.

Are Republicans starting to get the feeling that actually this
process is doing more damage than good?

HEILEMANN: Well, I think, Lawrence, that there`s no question that it
can cut both ways. I mean, the problem for Romney is that -- as Michael is
indicating -- the image that`s forming of him -- and some of it is being
brought on him by Newt Gingrich and his other rivals, and some of it has
been conflicted. He`s made some significant unforced errors that have
contributed to the picture of him as a combination of Gordon Gekko, meaning
like a predatory capitalist at Bain, and Richie Rich, you know, the guy
with the top hat on who is making or not paying taxes at the rate that
average Americans are paying taxes, who regards $375,000 a year in speaking
fees as not very much money -- those are things that having nothing to do
with things being prosecuted by his rivals. Those are problems that Mitt
Romney is bringing on himself.

And I think that those images that are arising now, they are being
burned into the retinas, so to speak, the collective electoral retina of a
lot of voters who are watching this stuff play out in television. And I
think it doesn`t do Mitt Romney any good to have months of this litigated
out and give the Obama campaign a lot of things that he himself has said
that can be run against him in his ads, not just things that Newt Gingrich
said, but things Mitt Romney has done himself. He`s creating a greatest
hit (ph) for David Axelrod.

O`DONNELL: The Obama for America today released its first television
ad. It`s entitled "Unprecedented." It`s going to run in Iowa, Michigan,
North Carolina, Ohio, Virginia and Wisconsin. Let`s watch this.

(BEGIN VIDEO CLIP)

NARRATOR: Secretive oil billionaires attacking President Obama with
ads fact checkers says are not tethered to the facts. While independent
watchdogs call this president`s record on ethics unprecedented and
America`s clean energy 2.7 million jobs and expanding rapidly. For the
first time in 13 years, our dependence on foreign oil is below 50 percent.

President Obama kept his promise to toughen ethics rules and
strengthen America`s energy economy.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I`m Barack Obama and I
approve this message.

(END VIDEO CLIP)

O`DONNELL: Michael, why did the Obama campaign begin with ethics?

SCHERER: I think what`s striking about that ad is it really is a
defensive ad. Here is Obama defending his record against attacks that are
not really there yet. I mean, if he thinks he`s being attacked now, wait a
few months when the ads really start coming in Ohio and Wisconsin and the
states you mentioned.

What Obama is trying to do is first establish a wrongful victim
narrative which stirs up the liberal base, which is what he needs to happen
in these states.

And second, to convince independents that there are good things that
have actually happened during the Obama administration and this is a real
problem Obama has right now, especially in these swing states. People
aren`t that happy with the economy. Maybe it`s getting better. Maybe it`s
not.

And they are concerned and they don`t believe that Obama has
delivered. And there`s sort of twofer the Obama campaign is going to have
to do. It`s going to have to disqualify the Republican nominee, probably
Mitt Romney, and it`s going to have to convince Americans that they
actually have gotten stuff from this president, which is just not something
that people have really been feeling over the last, you know, six to 10
months.

O`DONNELL: John, Newt Gingrich may have trouble sleeping tonight.
The word is that one of his former wives has given an interview. She in
the past has said she could end his career with just one interview. And
then there`s the Gingrich ploy tomorrow of releasing his own tax returns,
which may have the affect of giving us an awful lot to study in Newt`s tax
returns and actually could conceivably take some pressure off the Romney
tax returns for 24 hours.

HEILEMANN: Well, I think it keeps -- on the second point, Lawrence,
I do think it keeps the story alive. And this story has been so far kind
of a bleeding wound for Mitt Romney. I think if it`s true, as Newt
Gingrich has indicated, that he paid an effective tax rate that`s almost
double what Mitt Romney has been paying, that`s going to be good for him in
terms of advancing the story.

On the front -- on the Marianne Gingrich thing, I mean, I`m sort of
curious. She`s -- it`s not that she`s never given interviews before and
it`s not that she`s never given interviews that have contained kind of
unseemingly allegations against him. I think "Esquire" ran a story where
she was interviewed about a year ago. A lot of that stuff came out then
and people said, well, this is bad but it`s not that bad.

Now, maybe there`s new things that she`s going to say on television.
But if it`s only a rehash of some of the things that she`s previously said
to the press, I`m not sure that`s going to have as negative an impact as
some people might suggest or could be the case.

O`DONNELL: MSNBC political analyst John Heilemann and "Time"
magazine`s White House correspondent Michael Scherer -- thank you both for
joining me tonight.

SCHERER: Thanks, Lawrence.

HEILEMANN: Thanks, Lawrence.

O`DONNELL: Who is the real Willard M. Romney? Two "Boston Globe"
investigative reporters say they think that they have the answer. The
authors of the new book "The Real Romney" join me.

And later, the increasingly bizarre excuses made by the cruise ship
captain. More developments in that accident are coming up.

And a real Hollywood murder-mystery that began yesterday here in Los
Angeles with a severed head found in the Hollywood hills.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, COMEDIAN: So I called a buddy of mine at the IRS
and I said, hey, what`s going on with Mitt Romney? And so, he shot me up a
quick fax. Or something and said, you`re not going to believe what we
found in Mitt Romney`s tax return. Take a look, he said. Watch.

NARRATOR: Last year Mitt Romney earned $5,000 in residuals from a
1984 photo shoot he did for a JCPenney circular. This has been surprises
in Mitt Romney`s tax return.

LETTERMAN: Yes, talk about a surprise in his pants.

(END VIDEO CLIPS)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I came into Massachusetts.
We had a $2 billion shortfall, $3 billion shortfall in our budget. People
wonder, can we turn it around?

I had that experience. That`s what I know how to do. If there`s
ever been a time the nation needs a real leader who turns things around,
it`s now.

(END VIDEO CLIP)

O`DONNELL: That was turnaround artist Mitt Romney today in
Spartanburg, South Carolina. As the Saturday South Carolina primary
approaches, voters are trying to decide who is the real Mitt Romney. Is he
the candidate for Senate in Massachusetts who fully supported women`s
reproductive rights as protective under Roe vs. Wade, or is he the
presidential candidate who now presents the standard Republican opposition
to abortion?

With a list of Romney flip-flops too long to recite here, the most
important question of the Republican primary season has become, who is the
real Romney?

Joining me now are "Boston Globe" investigative reporters and co-
authors of "The Real Romney," Michael Kranish and Scott Helman.

Thank you both for joining me tonight.

MICHAEL KRANISH, BOSTON GLOBE: Thanks for having us.

SCOTT HELMAN, BOSTON GLOBE: Good to be here, Lawrence.

O`DONNELL: I want to read this passage where you talk about his 1994
loss to Ted Kennedy. You say in the book, "It wasn`t just the attacks that
did Romney in. And he knew it. He had failed to make a compelling enough
case for himself, failed in crafting a narrative of his character and
convictions that could move voters."

That seems to be where we are right now in this Republican campaign.

HELMAN: Well, I think that`s right. Remember, he`s still got a
number of months left. I think the assumption, of course, is that he`s the
nominee. I know that Gingrich is supposedly surging somewhat in South
Carolina.

But, you know, I would say give him time, don`t count him out yet
because -- I mean, one thing you did learn during that campaign, he
admitted it afterwards, he said, look, the one thing that kills me here is
that I could never really tell people what I was about, what my message
was. And I think you are seeing shades of that.

But, remember, this campaign -- you know, he does have a message.
It`s all about the economy. That`s where his background is. That`s where
his expertise is.

And I do think it makes him a strong contender the presidency than he
was four years ago.

O`DONNELL: But when it comes to running for president, the voter
does want at some level to have a very clear feel for the person. It gets
beyond issues. You can win campaigns at a state level just based on your
issues against the other candidate`s issues.

Is he going to be able to deliver a strong and clear impression of
who he is himself?

KRANISH: Well, you know, Lawrence, that could depend on how people
perceive this issue of his time at Bain Capital and it`s been talked about
in the campaign. But frankly you have Romney presenting in the most
positive possible way, his opponents obviously extremely negative.

But it`s a long story. It`s a 15-year tenure while he was at Bain
Capital. And what we really have to understand is that he was a venture
capitalist, putting money into startups, and then he switched over to the
leveraged buyout business. This is a much more complicated business for
most people to understand because they are not startups, they are existing
businesses. Obviously some jobs created, some jobs lost, but it`s not the
same kind of story as, for example, he portrays the Staples story.

So people really take away from that complicated story. Yes, you
know, he would be great at creating jobs in the country, transferring the
skills of private equity management into the White House, then he could
have a strong case to make. People look at that and say, well, is that the
same qualities we want in commander in chief, someone needs foreign policy
experience, someone who would be looked at to move the country forward
through his vision.

And then he faces more questions in connecting the kind of person he
is and his experience to what the average American is feeling.

O`DONNELL: Is he nervous talking about his family? I was struck
when Rick Santorum gave his speech, his kind of co-victory speech in Iowa
when they tied in the Iowa caucus that night, talking about Rick Santorum,
talking about his grandfather working in the mines and that sort of thing.
It`s a very common thing for candidates to do. Joe Biden has done it a
lot. Barack Obama talked about his family history a lot when he was
running.

And with Romney, I wonder if he`s just nervous about what`s back
there just if you go back too many generations, if you go back to his great
grandfather where he had five wives and you just get the feeling that
there`s some nervousness about looking backwards in that family.

KRANISH: Well, I mean, you`re right. In the book, we do take
extensive look at his family history, to really give you a sense of where
he came from, where the family came from. And very briefly what happened
was Mitt`s great grandfather went to Mexico to create a colony where
polygamy could continue to be done when it was outlawed in the United
States. And that family and the colony continued until Mitt`s father George
who was born there left when he was 5 years old and came to this country
because of the revolution going on in Mexico.

So, it`s not the story of many, many generations back. It`s a story
that affects his own father. But Mitt Romney certainly does talk an awful
lot about his father, George Romney, who was the governor of Michigan, ran
for president, and failed. He talks about how he idolizes his father and
frankly he doesn`t want to repeat some of the mistakes that caused his
father, his chance to the presidency. Most famously, George Romney said
he`d been brainwashed by generals in Vietnam.

And in the book, we quote his sister talking about how this affected
the family, affected Mitt and that it`s made Mitt more careful, more
cautious, more scripted in how he talks. He doesn`t want one line like
that to doom his candidacy.

O`DONNELL: He actually said the last time he was running for
president, and these were his words, I`m quoting, when he ended up talking
about his religion to some extent. He actually said, I can`t imagine
anything more awful that polygamy. Now, we know that is not true. He can
imagine something more awful than polygamy if he just ponders the Holocaust
for a second and countless other things in human history.

But there`s -- in that statement, that`s a very strong over-
defensiveness about what is his family`s history. And is it something that
he is prepared to discuss if he has to? If we actually get into it at some
point, will it be something he`ll be plastered about? Or is it something
you think he`s actually practiced and ready for?

KRANISH: Well, you know, in the last campaign, he was asked about
that and I think it was on "60 Minutes" that he made that statement when he
was asked about it and obviously he`s not, his father wasn`t, his
grandfather wasn`t. It was the great grandfather who was and was one of
the leaders in the Mormon Church for that practice, and as I say went to
Mexico to continue it.

What`s interesting, I went down to Mexico to this place where the
colony existed and still exists, and there`s this extraordinary colony and
there are many Romneys living there who are cousins of Mitt Romney. They
are very proud of their heritage, not because of polygamy, but because they
believe the Romney family has a great place in American history and in the
history of Mexico.

HELMAN: But I think you`re absolutely right, Lawrence. That it`s
fascinating for us to watch him in this campaign because so often
candidates do talk about their past and their history and where they are
from and it`s complicated for Mitt Romney because he`s nervous about how
Mormonism is being perceived. He doesn`t want to turn off evangelical
voters and yet it`s such a big part of him to sort of not talk about it,
takes away a big part of what sort of made him and what brought him to
where he is today.

So, I think he is going to have to really find a way to talk about
that and to open up about it because really you cannot understand Mitt
Romney without understanding where he came from in that Mormon heritage.

O`DONNELL: "Boston Globe" investigative reporters and authors of the
instantly important book, "The Real Romney," Michael Kranish and Scott
Helman -- thank you both very much for joining me tonight.

KRANISH: Thanks, Lawrence.

HELMAN: Thank you, Lawrence.

O`DONNELL: Coming up, the captain of the Italian cruise ship has a
new reason today for why he did not stay on board the Costa Concordia as it
sank.

And in the "Rewrite" tonight, someone on another network in primetime
drops an "F" bomb tonight. Who did it? Who -- what family is so modern
that even the kids can drop "F" bombs? That`s coming up.

(COMMERCIAL BREAK)

O`DONNELL: Please indulge me for a quick word on the KIND Fund, Kids
in Need of Desks, our partnership with MSNBC and UNICEF, that builds desks
in Africa and delivers them to African schools.

As of my last report during the holiday season on December 29th, you
had contributed another 1.5 million dollars to the KIND fund, bringing our
total to 3,883,638 dollars. And without more prompting from me, you have
kept giving.

Already in 2012, you`ve contributed an additional 474,964 dollars,
pushing us well above the found million dollar total I was hoping we might
achieve this year.

Since we started this program a little over a year ago, you have now
contributed 4,358,602 dollars. That is enough to build and deliver desks
that will be used by possibly a million students over the next ten years.
Nothing we have done on this show is more important than having provided
you the place where your kindness can meet the classroom needs of these
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I am in awe of your generosity. And these children look in awe at
every desk you have delivered to them.

Coming up, after five days of searching for survivors, the Italian
Coast Guard has suspended the search, knowing that there are 21 still
missing who are probably trapped on that ship.

And later, how two hikers and their dogs made a gruesome discovery
yesterday on a popular trail near the Hollywood sign that is now the
opening scene of a true Hollywood murder-mystery.

(COMMERCIAL BREAK)

O`DONNELL: The Costa Concordia Cruise Ship that ran aground Friday
night off the Tuscan coast of Italy has become unstable, forcing divers to
suspend search efforts for the more than 20 still missing, who may be
trapped somewhere on that ship.

Special sensors detecting the ships movements determined today the
vessel sank 1.5 meters at the bow and one meter at the stern overnight.
Rescuers fear this could indicate that the ship may break up in the middle,
making their mission even riskier, and creating a possible environmental
disaster, with 500,000 gallons of fuel still aboard the vessel.

The ship`s captain, Francesco Schettino, is rapidly becoming Italy`s
most hated man, while the man who ordered him back on the ship, Italian
Coast Guard Captain Gregoria Defalco, is reaching folk hero status.

T-shirts are being printed with his order, "vada a bordo caso" (ph),
which means "get back on board, damn it."

The ship`s captain offered yet another new account today about how he
found himself on shore while his passengers and crew were still trapped on
the ship. "The passengers were pouring on to the decks, taking the
lifeboats by assault. I didn`t even have a life jacket because I had given
it to one of the passengers. I was trying to get people to get into the
boats in an orderly fashion.

"Suddenly, since the ship was at a 60 to 70-degree angle, I tripped
and I ended up in one of the boats. That`s how I found myself there."

Lloyd`s List revealed today that according to GPS records, the ship
sailed a similar course in August of last year, when it actually came even
closer to the coast and possibly within inches of the rock that destroyed
the ship this time.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Must have become perilously close. I mean,
possibly within touching distance.

(END VIDEO CLIP)

O`DONNELL: Joining me now is Federico Rampini, U.S. bureau chief for
"La Republica," the largest national daily newspaper in Italy.

First of all, I want to begin by apologizing for any of my Italian
pronunciations. But tell us what is happening in Italy now with these two
characters in the story, the captain versus the Coast Guard commander who
ordered him back on to the ship.

FEDERICO RAMPINI, "LA REPUBLICA" NEWSPAPER: Well, it`s as you`ve
said. It`s becoming a national drama. First of all, really Captain
Coward, Captain Schettino, is the most hated man in Italy. He`s a coward,
but also a multiple and serial liar.

He will be -- I trust he will be prosecuted for manslaughter, ship
wrecking, and abandoning ship. He`s not the only one. Others should be
prosecuted, too. There were other top officers of the crew who abandoned
the ship.

And, of course, there is the issue of corporate responsibility. The
Costa Company -- the Costa Cruise Company, they probably knew. It`s an
open secret in Italy that those large cruise ship often sail too close --
way too close to the coast.

Even in Venice, you know, you can see them sailing so close to the
city. It`s very dangerous. But the national drama is due to the fact that
there is an anti-hero. And people probably identify this captain coward
with the worst possible drawbacks and limits in national character:
selfishness, lack of discipline, lack of organization.

But there are heroes, positive heroes, like some members of the crew
who really were able to mutiny. And they tried to organize themselves the
evacuation of the ship. There was one of them, a top officer of the crew,
who was, in the end, rescued himself after he had tried to evacuate as many
passengers as possible.

This happens at a very peculiar moment for the history of Italy. It
happens after nine years of government by Silvio Berlusconi, so possibly
when the self-esteem of Italian people has really attained a minimum. So
that`s why it`s becoming a symbol of something larger, a much larger story
about self-confidence of this nation.

Only two months ago, Berlusconi was ousted from government. We now
have a very respected prime minister. But he has to rebuild self-
confidence for a whole nation.

O`DONNELL: Frederico Rampini of "La Republica," thank you very much
for joining me tonight.

RAMPINI: Thank you.

O`DONNELL: Coming up, we`ll examine the outrage over tonight`s
episode of "Modern Family," after a four-year-old cast member dropped the
"F" bomb repeatedly. That`s next in the Rewrite.

And, later, two hikers and their dogs found a severed human head
yesterday near the Hollywood sign right her in Los Angeles. The mystery
behind that dismembered body, that`s coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, HOST, "THE LATE SHOW": This is Mitt Romney`s
campaign plane. You don`t get to see this often. You see all of the press
opportunities. You see the debates. You see the tours by bus.

Rarely do you get to see the campaign plane in flight. Take a look.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

O`DONNELL: Well, "Modern Family" went looking for trouble and they
found it. In the episode that aired just an hour ago, a four-year-old
actress dropped the "F" bomb.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Daddy, can I have some ice cream?

UNIDENTIFIED MALE: No, honey, if you`re hungry, you can have some
fruit.

UNIDENTIFIED FEMALE: Fruit (EXPLETIVE DELETED).

UNIDENTIFIED MALE: I have two children.

UNIDENTIFIED MALE: We need to talk about something. It`s about that
word that you said this morning.

UNIDENTIFIED FEMALE: What word?

UNIDENTIFIED MALE: You know the word that starts with "F".

UNIDENTIFIED FEMALE: Flower?

UNIDENTIFIED MALE: No.

UNIDENTIFIED FEMALE: Fruit?

UNIDENTIFIED MALE: No.

UNIDENTIFIED MALE: If she doesn`t remember it, we shouldn`t remind
her.

UNIDENTIFIED MALE: She said it three times.

UNIDENTIFIED FEMALE: Oh, you mean (EXPLETIVE DELETED)

UNIDENTIFIED MALE: Leave the room.

(END VIDEO CLIP)

O`DONNELL: Many viewers were not surprised because "Modern Family`s"
co-creator and executive producer, Steve Levitan (ph), jokingly told a
group of television reporters and critics last week, "I`m particularly
proud and excited that next week Lilly says F -- K."

According to the "Hollywood Reporter," the news that the child actor
was going to say the "F" word was greeted with laughter and applause by the
television press, which is yet another reason why I miss show business.

If I said the "F" word now in a meeting with the television press,
MSNBC would probably have to suspend me for probably the rest of my life
because there TV news world lives in a puritanical bubble that is always at
least 20 years behind the culture it is supposed to cover.

After Levitan`s remark got the delighted approval of the media elites
gathered in Hollywood, it then provoked the predictable firestorm from the
Parents Television Council, the people who keep a finger in the dike,
holding back profanity`s take over of the English language, and the rest of
their fingers in children`s ears, trying to prevent them from hearing the
words that all those children will be using by the time they get to high
school.

Headlines like this popped up on FoxNews.com: "Toddler Lilly will Drop
F-Bomb on Upcoming Episode of `Modern Family.`"

Apparently reading from the same index card they`ve been using years,
the people from the Parents Television Council supplied their standard
quote. "It is certainly in poor taste. The more we see and hear this kind
of language on television, the more acceptable and common it will become in
the real world."

That is, of course, not true. Profanity has already become as
acceptable and as common as it possibly can. Profanity can`t get any more
acceptable. American profanity has found its natural limit in the culture.
You`re not going to hear profanity from me here, because I`m not allowed to
use it.

You`re not going to hear it from President Obama at the State of the
Union Address next week. You are going to hear in Pulitzer Prize winning
plays and virtually every Oscar-nominated movie. You`re going to read it
in great literature. You`re going to hear it on subways, on buses, in
elevators, on airplanes and Starbucks lines.

But you`re not going to hear profanity in all sorts of places where it
is considered unacceptable. And profane people like me know exactly when
it is acceptable and unacceptable. The profanity that Bill Maher sprinkles
throughout his show is pitch perfect for HBO. But when he`s a guest on
this show, he never uses it.

We all have an on/off switch for profanity. That`s what realists
teach their children. Realists do not try to put their children in a
bubble where they will not hear the common language of their culture. The
real parenting responsibility in America is not to try to hide your child
from this country`s real language, but to prepare your children to hear it.

And if you so choose, to guide your children away from using it, to
give them a rationale for not using profanity. "Modern Family" no doubt
got the rating spike it hoped tonight by announcing last week that the "F"
bomb would go off on the hugely successful show.

And don`t be surprised if "Modern Family" wins yet another writing
Emmy for tonight`s episode. Those of us who vote on show business writing
awards tend to reward boldness, even fake boldness, which is what we
actually have here.

ABC is still prudish enough a network that it has to bleep the "F"
word. But this time, they really didn`t have to bleep it at all. The
bleep is actually the trick that makes the scene work.

Eric Stonestreat (ph), who plays one of Lilly`s two fathers. -- yes,
Lilly has two fathers. It`s that kind of show. Eric Stonestreet tweeted
this: "Lilly didn`t actually say F-U. She said fudge. How about see the
episode, then form an opinion, for fudge sake, people. Chill the "F" out."

What the fudge is the Parents Television Council going to say now?

(COMMERCIAL BREAK)

O`DONNELL: Fade in on exterior Hollywood day; the popular hiking
trails of Bronson (ph) Canyon are filled with the usual suspects, out of
work actors walking their dogs, stunning models trying to stay stunning
with their daily hikes in the hills, screen writers in baggy sweats trying
to avoid the horror of the blank page and hoping to meet one of the models,
and the professional dog walkers who walk gangs of dogs owned by Hollywood
celebrities who never have the time to actually wake their dogs themselves.

Close on, two dogs at the end of the professional`s leashes, as they
start to nose around a bag at the side of the trail. As the dogs continue
to play with the bag, something suddenly rolls out into the middle of the
trail. All of the dogs freeze. The dog walker`s eyes pop.

Zoom in on a severed human head, as we hear one of the dog walkers
begins to throw up.

So begins one of the hundreds if not thousands of movie scripts being
written tonight, at this moment, in apartments and homes in the Hollywood
Hills, steps away from where a human head was actually found yesterday.

(BEGIN VIDEO CLIP)

SGT. MITZI FIERRO, LOS ANGELES POLICE DEPARTMENT: Two of the dogs
began to play with the bag and what appeared to be an object. At -- while
the dogs were playing with it, at some point the object came out of the bag
and they discovered that it was a head, a severed head.

(END VIDEO CLIP)

O`DONNELL: Los Angeles has been transfixed by this mystery for over
24 hours. This morning, a hand was found not far from where the head was
found. And later today, another hand and two feet were found.

Police believe each of the finds is from the same body.

Joining me now with the latest on this real Hollywood murder-mystery
is Andrew Blankstein, crime reporter for the "Los Angeles Times."

Andrew, this is just over the hill from us here in a heavily
trafficked area, where people in Los Angeles -- it`s a common exercise
place. This is -- this has the city in shock, awe, and fear.

ANDREW BLANKSTEIN, "THE LOS ANGELES TIMES": Obviously when you have a
case like this, where you first have this human head appearing and then
these other body parts are found by detectives, people are kind of riveted
to the story.

You know, the next thing is what -- who is this? Where did it get
there? Why?

That`s what Los Angeles police detectives have been spending the day
trying to find out.

O`DONNELL: What have they been able to tell you so far? Where do
they think they are going with this?

BLANKSTEIN: They have kind of divided it up into different things.
The first thing is they go out to the neighborhood and they try to find
witnesses. Were there hikers or neighbors that would have heard anything
or seen anybody, looking back.

O`DONNELL: A lot of human traffic in this area. Not at night,
though. It`s not a place where people go in the dark.

BLANKSTEIN: Right. But then the question becomes, did this person,
who would have discarded these body parts -- were they careless and
reckless? And somebody would say that if you were doing that, they didn`t
do a very good job of disposing of the body, given all these parts that are
now appearing.

And that`s key because what is going to happen is the coroner now has
dental records. They have fingerprints, footprints that they are going to
take back and then try to start to find out who is this person? Who are
their relatives? And then the mystery will start to unfold.

O`DONNELL: Is it unlikely that the dismembering happened on the
hiking trails or in that area? Because they would have found big pools of
blood from that, wouldn`t they?

BLANKSTEIN: They are saying at this point there is no kind of -- it
didn`t seem to happen --

O`DONNELL: It could have happened anywhere. We just know that the
body parts were dumped here?

BLANKSTEIN: That`s right. They are saying that it happened likely in
the last 48 hours, but somewhere else. And it was taken there to be
discarded.

O`DONNELL: A lot of coyotes up there, especially at night. This kind
of material would not survive for long up there.

BLANKSTEIN: Right. And it could be moved around. And that`s one of
the things that police said. Just because those items were found, body
parts, they could have been moved by these animals anywhere. So that`s one
of the things that they are trying to figure out, where`s the place where
all of these things might have been collected. Or were they buried
separately?

O`DONNELL: And this is not -- this is a place where all sorts of
people go. On any given day there, you are likely to see a lot of actors
and actresses who you recognize out there with their own dogs, the ones who
aren`t using professional do walkers.



BLANKSTEIN: With the big sunglasses and the cap pulled down over
their head, absolutely.

O`DONNELL: Yeah.

BLANKSTEIN: Yes, and it`s a heavily trafficked place during the day.
You have to think, you know, where would somebody -- somebody might have
noticed something. I think that`s what the cops are banking on right now.

O`DONNELL: Andrew Blankstein, thank you very much for joining us
tonight.

You can have THE LAST WORD online at our blog, TheLastWord.MSNBC.com.
And you can follow my Tweets @Lawrence. "THE ED SHOW" is up next.

END





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