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updated 11/15/2012 10:18:49 AM ET 2012-11-15T15:18:49

THE LAST WORD WITH LAWRENCE O`DONNELL
November 14, 2012

Guests: Ashley Parker, Nia-Malika Henderson, Rana Foroohar, Jim Frederick, Karen Finney, Penn Jillette


LAWRENCE O`DONNELL, HOST: Mitt Romney got caught once again saying
what he really thinks today, and in a LAST WORD exclusive, we have "The New
York Times" reporter who heard him say it.

(BEGIN VIDEOTAPE)

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: I care about a
hundred percent of the American people.

CHRIS MATTHEWS, MSNBC HOST: Mitt Romney`s press conference called.

UNIDENTIFIED FEMALE: It`s not their fault, it`s somebody else`s
fault.

MATTHEWS: Obama, Romney argued, had been very generous with black,
Hispanics and young voters.

UNIDENTIFIED FEMALE: I`m still waiting for my gift.

UNIDENTIFIED FEMALE: It`s not their fault, it`s somebody else`s
fault.

REP. PAUL RYAN (R), WISCONSIN: I think the surprise was some of the
turnout, especially in the urban areas --

MATTHEWS: The urban vote.

RYAN: -- gave President Obama the big margin.

UNIDENTIFIED FEMALE: Paul Ryan lost his hometown.

MARTIN BASHIR, MSNBC HOST: He lost his hometown of Janesville.

JOAN WALSH, SALON: Which is not a particularly urban place.

BASHIR: They voted against him twice.

ALEX WAGNER, MSNBC ANCHOR: Losing never feels good. President Obama
will hold his first press conference --

THOMAS ROBERTS, MSNBC ANCHOR: To discuss the looming fiscal cliff.

TAMRON HALL, MSNBC ANCHOR: Will the fiscal cliff be the number one
conversation piece?

UNIDENTIFIED FEMALE: There`s only so much we can say --

WAGNER: The so-called fiscal cliff.

UNIDENTIFIED FEMAE: -- about this fiscal cliff/slope.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I argued for a balanced
and responsible approach. And the majority of the voters agreed with me.

RYAN: These ideas that we talked about, I think they`re popular
ideas.

OBAMA: The majority of voters agreed with me.

SEN. MITCH MCCONNELL (R), KENTUCKY: Voters also reelected a
Republican-controlled House.

OBAMA: The majority of voters agreed with me.

UNIDENTIFIED MALE: Clearly President Obama won.

RYAN: Well, you know --

WAGNER: Losing never feels good.

UNIDENTIFIED MALE: No more Mr. Nice Guy.

HALL: The president responds to questions about Susan Rice --

BASHIR: How about the Benghazi attacks?

OBAMA: If Senator McCain --

SEN. JOHN MCCAIN (R), ARIZONA: The United Nations ambassador --

OBAMA: -- and Senator Graham --

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: The role she played.

OBAMA: -- want to go after somebody --

GRAHAM: She`s the point person.

OBAMA: -- they should go after me.

CHRIS JANSING, MSNBC ANCHOR: Former CIA Director David Petraeus --

ROBERTS: General David Petraeus --

JANSING: -- will testify before the Senate Intelligence Committee.

CONAN O`BRIEN, COMEDIAN: General Petraeus had an affair with his
biographer.

WAGNER: E-mail teams and musical chairs.

O`BRIEN: People are snapping up copies of the book.

JONATHAN ALTER, BLOOMBERG VIEW: It`s so pathetic.

O`BRIEN: The book is available in hard cover and extremely hard
cover.

(END VIDEOTAPE)

O`DONNELL: Today, on an "I`m sorry I lost" conference call with top
campaign donors, Mitt Romney said the president won reelection because he
gave African-American, Latino, women, and young voters, quote, "gifts".

A "New York Times" reporter who was on the call joins us in a moment.

ABC News has this audio.

(BEGIN AUDIO CLIP)

ROMNEY: What the president`s campaign did was focus on certain
members of his base coalition, give them extraordinary financial gifts from
the government, and then work very aggressively to turn them out to vote.

(END AUDIO CLIP)

O`DONNELL: Romney also said that the president`s campaign focused on
giving targeted groups a big gift so he made a big effort on small things.
Those small things, by the way, add up to trillions of dollars. He said
the president followed the old play book of wooing specific interest
groups, especially the African-American community, the Hispanic community
and young people.

Mr. Romney explained with targeted gifts and initiatives, in each
case, they were very generous in what they gave those groups.

He also said, "Our strategy worked well with many people but for those
who were given a specific gift, if you will, our strategy did not work
terribly well."

Mitt Romney`s specifically cited the president`s health care plan.
"You can imagine for somebody making $25,000 or $30,000 or $35,000 a year
being told you`re now going to get free health care, particularly if you
don`t have it, getting free health care worth, what, $10,000 per
perpetuity, I mean, this is huge," he said.

"Likewise with Hispanic voters, free health care was a big plus. But
in addition with regards to Hispanic voters, the amnesty for children of
illegals, the so-called DREAM Act kids, was a huge plus for that voting
group."

And there`s more. There were huge gifts to young people.

"With regards to the young people, for instance, a forgiveness of
college loan interest was a big gift, free contraceptives were very big
with young college aged women and then, finally, Obamacare, also made a
difference for them, because as you know, anybody now 26 years of age and
younger was now going to be part of their parents` plan and that was a big
gift to young people."

Now we know what Mitt Romney is doing for three hours a day after the
election. He`s listening to this guy.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: Small things beat big things
yesterday. Conservatism in my humble opinion did not lose last night.
It`s just very difficult to beat Santa Claus. Now, say what you want but
Romney did offer a vision of traditional America.

(END VIDEO CLIP)

O`DONNELL: And in their postelection slowdown, Mitt and Ann are
obviously having dinners on trays in front of the TV listening to this guy.

(BEGIN VIDEO CLIP)

BILL O`REILLY, FOX NEWS: The demographics are changing. It`s not a
traditional America anymore. And there are 50 percent of the voting public
who want stuff. They want things. And who is going to give them things?
President Obama.

(EDN VIDEO CLIP)

O`DONNELL: Joining me now for THE LAST WORD, "New York Times"
reporter Ashley Parker, who was actually on the Mitt Romney conference call
with his big donors today. Also, MSNBC`s Joy Reid and Ari Melber.

Ashley, was Mitt Romney aware that you and possibly others got on to
the call?

ASHLEY PARKER, NEW YORK TIMES: No, I do not think Governor Romney was
aware. I mean, it`s a big call with a lot of donors, but I think he
thought he was just talking to members of his national finance team.

O`DONNELL: We just heard a pretty good tape of ABC. My suspicion is
there will be more tape of this phone call coming out.

PARKER: Yes, I`m sure there will. I think -- I was on the call. I
think there was an "L.A. Times" reporter, I saw he was on the call. So, I
imagine more audio will definitely get out.

But a lot of that audio was sort of in the stories that have already
been published today.

O`DONNELL: And will there be any more surprises that we learn about
what he said on this call the reports that are out there now, including
your own, pretty well capture it all?

PARKER: I think it hit the highlights, you know, where he was talking
about the gifts President Obama gave African-American voters, Hispanic
voters and young voters.

But another person who spoke on the call, that`s a little interesting,
was Neil Newhouse, the campaign`s pollster. And one of things he said that
I found especially interesting was that he felt that Sandy, the storm that
occurred the week before the election, also probably made a difference, and
he listed three reasons.

One, he said it allowed the president to look presidential. You know,
he was sort of doing presidential duties in handling the storm. The second
thing was that it took up a lot of the airwaves. Neil Newhouse said the
public was rightly focused on the storm but it didn`t allow the Romney
campaign to sort of prosecute their message.

And the third thing that was most interesting to me was that he said
that Governor Romney -- or sorry, President Obama was a able to make use of
his relationship with Governor Chris Christie and sort of behave in an
elevated bipartisan way that Governor Romney had been trying to do.

O`DONNELL: Was there any whiff of bitterness in the references Chris
Christie?

PARKER: No. It wasn`t better. I mean, we`ve seen reports before.
"The Times" and other places have reported that at the time the Romney
campaign was very frustrated, they were sort of groaning as Chris Christie
kept on going what seems to them a bit over the top with the president.

But on the call, Neil Newhouse just mentioned it really as a statement
of fact.

O`DONNELL: And what about responses from any of the big donors on the
call? Were there any complaints? Were there any reactions from them at
the notion that Mitt Romney used all their money in what was a losing
effort?

PARKER: So, the call actually, the donors were not able in this call
to ask questions. You know, I`ve heard gripes from donors privately, but
on this call, it was really someone who was on it described to me as a spin
and grin. So, it was the Romney campaign kind of explaining why they felt
they lost and also thanking the donors for what they said was a very good
job and talking about the donors actually going forward, talking about
maybe an annual meet organize or a monthly newsletter so this group of
people, they said, could shape the Republican Party to come.

O`DONNELL: Joy Reid, I just have a feeling you might have some
reaction to all of this.

JOY REID, THEGRIO.COM: That would be the most expensive newsletter in
the history of newsletter. I gave you $10 million, you give me a
newsletter, are you kidding?

You know, it`s interesting because first of all, you know, I thought
I`d been black a long time. I didn`t get my gifts. So I`m a little miffed
with the Barack Obama White House.

O`DONNELL: It might be under your pillow. It might be under the
Christmas tree this season, who knows?

REID: Yes, I have a feeling that maybe Chris Christie, the BFF of the
president, might have gotten gifts before I did.

But it`s interesting. You know what? I`m not a businessperson,
Lawrence. I`m just a humble commentator. But I would think that if you`re
trying to market a product, the product being the Republican Party,
probably not a good idea to insult the following demographics you`d like to
probably one day pursue -- Latinos, African-Americans, women, young people.

Essentially, Mitt Romney has given the full kit and caboodle. He has
insulted everyone that the Republican Party operatives now want to try to
win over. So I think the gift he might want to give his party is the gift
of silence.

O`DONNELL: Ari, let`s talk about the rank stupidity of team Romney
and the candidate himself. How could they not know that Ashley and others
would be getting tapes, either listening directly or getting tapes of these
calls? I mean, those donors, it was at a big fund-raiser where he got
betrayed in effect by videotape once before. At this point, those donors
have nothing to lose in letting Ashley and others listen to this call.

ARI MELBER, THE NATION: I think arrogance can be a lot stronger than
logic. I think we`ve seen that in several of these stories this week. You
know, when your staff sent me the article, Ashley`s articles, I hadn`t
actually seen the remarks yet.

When I read them, it made me really angry. It made me feel like this
guy who lost and has already had his time in the public eye and had his
platform is coming back out to do what, to be racially divisive, to
denigrate the president. I`m not the White House social secretary, but if
I were, I would say, Mr. Romney, you`re now denigrating the public, you`re
spitting in the president`s face, your invite to the White House is revoked
forever.

And then two more things I want to say. Number one, he has here a
world view that I think has become so synonymous with the Republican Party,
to Joy`s point, that government is just a transaction.

You ask those people who are suffering from hurricane Sandy and
relying on whether it`s Chris Christie or Barack Obama or whatever party,
whether they`re getting gifts. They`re not getting gifts. They`re relying
on our government to do what it does best, which is look out for people.

And then fourth on a narrower point, his electoral analysis is totally
wrong on its own narrow math.

O`DONNELL: It`s a real loser`s analysis.

MELBER: Yes, it`s a loser move. It`s a loser analysis. But, you
know, people over 55 went for Romney. We spend as a federal government
seven times more on them than we do on the young people that he cited. I
don`t think by the way that`s the way to assist everything that we do as a
nation. But even if you do, he`s wrong on that front as well.

O`DONNELL: Ashley, quickly before we go -- did you get the sense
listening to this that he was just completely oblivious to the possibility
that you or others would be listening to this?

PARKER: You know, the sense I got actually was that Governor Romney,
his a data-driven guy. And so, already, it`s just a week after election
and he`s already sort of doing this postmortem and going through the
numbers and trying to figure out what went wrong. Not that he plans to run
again, just because he`s curious for his own sense of self.

So, I got the sense -- I don`t think he was worried about reporters
being on the call so much. I got the sense he was really sort of
struggling to try to explain what happened to him. He actually said, you
know, we expected to win, you expected to us win, what happened is sort of
still so upsetting to us that we can barely look to the future. That`s
what he seemed to be trying to explain on that call.

O`DONNELL: A fitting end to a losing candidacy.

Ashley Parker, thank you for bringing it to us.

PARKER: Thanks for having me.

O`DONNELL: Joy Reid and Ari Melber, thanks for joining me.

REID: Thank you.

MELBER: Thanks.

O`DONNELL: Coming up, what happens in Vegas stays in Vegas, and what
happens in the CIA ends up on every Web site in America? THE LAST WORD`s
intelligent correspondent who just happens to be based in Vegas -- Penn
Jillette will explain it all.

And in the "Rewrite" tonight, the Senate has a new Joe McCarthy, a
Republican senator who used the McCarthy model of character assassination
today in lying about U.N. Ambassador Susan Rice. He wasn`t the only
senator attacking Susan Rice today, but he told a provable lie that is
something even Joe McCarthy would have been reluctant to say. And that`s
in tonight`s "Rewrite".

(CFOMMERCIAL BREAK)

PENN JILLETTE, COMEDIAN: In his press conference today, the president
warned Republicans about faulty math and the fiscal cliff. That`s coming
up next.

And Republicans are doing everything they can to get Scott Brown back
in the Senate, beginning with their attack on U.N. Ambassador Susan Rice.
That`s coming up next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I`ve got one mandate. I`ve got a mandate to help middle class
families and families that are working hard to try to get in the middle
class. That`s my mandate. That`s what the American people said.

They said: work really hard to help us. Don`t worry about the
politics of it. Don`t worry about the party interests. Don`t worry about
the special interests. Just work really hard to see if you can help us get
ahead.

(END VIDEO CLIP)

O`DONNELL: That was President Obama`s answer when asked today at his
presidential news conference if he had a mandate on taxes. And the
president noted he has a decisive majority when it comes to raising taxes
on the highest income earners.

(BEGIN VIDEO CLIP)

OBAMA: If there was one thing that everybody understood was a big
difference between myself and Mr. Romney, it was when it comes to how we
reduce our deficit, I argued for a balanced, responsible approach, and part
of that included making sure that the wealthiest Americans pay a little bit
more. I think every voter out there understood that was an important
debate.

And the majority of voters agreed with me. By the way, more voters
agreed with me on this issue than voted for me.

(END VIDEO CLIP)

O`DONNELL: President Obama was also clear about what he was open to
discussing with congressional leaders in the negotiations, which will start
on Friday -- the thing the president won`t consider, an extension of the
Bush tax rates for the top 2 percent and Romney/Ryan magical thinking about
taxes.

(BEGIN VIDEO CLIP)

OBAMA: I think we can simplify our tax system. I think we can make
it more efficient. We can eliminate loopholes and deductions, but what I`m
not going to do is to extend Bush tax cuts for the wealthiest 2 percent.

What I will not do is to have a process that is vague, that says we`re
going to sort of, kind of, raise revenue through dynamic score organize
closing loopholes that have not been identified.

(END VIDEO CLIP)

O`DONNELL: Treasury Secretary Tim Geithner put that this way
yesterday:

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, TREASURY SECRETARY: There`s a lot of magical
thinking about how much money can you raise from tax expenditures. A lot
of people who have looked at that question and concluded I think
incorrectly that there`s huge amount of resource there is you can raise. I
think that`s just not true.

(END VIDEO CLIP)

O`DONNELL: Joining me now are: Nia Henderson of "The Washington
Post", and, Rana Foroohar, the assistant manager editor of "Time" magazine.

Rana, the Republicans have been saying, OK, we might able to do
something with deductions, but deductions only, no rate changes. It seems
like Tim Geithner and the president are really double teaming that issue
very strongly.

RANA FOROOHAR, TIME MAGAZINE: I think they`ve drawn a line in the
sand, I think that you can see that from the statements today. And you can
understand why. I mean, this was arguably the biggest issue of the
campaign.

As the president said, most people do agree the rich should pay a
higher percentage of taxes. And I think deductions -- making deductions
work is going to be politically difficult. You have to get into things
like the mortgage interest deductions, which are real political hot bulbs.
So, I think raising taxes on the rich is going to be something the
president will hold the line on.

O`DONNELL: The president again today called on the House of
Representatives to just pass the bill that the Senate has passed already,
with those rates and John Boehner responded.

(BEGIN VIDEO CLIP)

OBAMA: The Senate has already passed a law like this. Democrats in
the House are ready to pass a law like this, and I hope Republicans in the
House come on board, too. We should not hold the middle class hostage
while we debate tax cuts for the wealthy.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: I think instead of
the House moving on the Senate bill, the Senate ought to move on the House
bill.

(END VIDEO CLIP)

O`DONNELL: And, Nia, so the debate has been engaged. It`s going to
be an interesting conversation on Friday to get it started.

NIA-MALIKA HENDERSON, WASHINGTON POST: That`s right. He`ll have the
Senate leaders and House leaders over to talk about this. One of the
things that was so clear from that press conference was that the president
is saying let`s move this forward, let`s move this forward now.

He is certainly realizing that when you look at the four years that he
has ahead of him, really it`s about the next 18 months to two years.
That`s when he has a mandate that, when he has political capital to spend
and that`s what he wants to do.

Quickly, he also wants to forestall some of these tax hikes that could
come as early as January. John Boehner initially said, listen, president,
it`s time for you to lead. That`s what you saw in that press conference --
the president saying, look at the map, look at my victory and guess what, I
won, and, oh, yes, guess what, I won.

O`DONNELL: Rana, we`ve officially renamed the fiscal cliff on this
show the fiscal curb, because it really is just a little step down at
first, and then you actually keep taking the steps, so by the time you get
to March or April, there`s something significant happening, but not right
away.

But there`s a tricky thing here, which is both sides want to call it a
cliff because both sides need drama --

FOROOHAR: Right.

O`DONNELL: -- in order to drive the urgency of their position but I`m
wondering if at some point, the president doesn`t soften this as we get
into late December and start to say to people, well, on the first week of
January, you`re going u just going to see a little step. You`re just going
to feel a little bit. It won`t be too dramatic.

FOROOHAR: Yes.

O`DONNELL: And we will have time to fix it retroactively.

FOROOHAR: Well, I think that`s probably what you will hear. I think
ultimately this is going to be some kind of compromise. I mean, the fiscal
cliff, if we went over it in full, it would be about $600 billion worth of
tax cuts and spending cuts.

I think there`s going to be some kind of a plan for about $200
billion. I think it is going to be softened.

I mean, there are no political points to be gained from getting the
U.S. at the cliff, from going to default as we saw a year and a half ago.

And I think also markets are responding to the fact that, not just
that the number is a big number, and how that could be cut or not, but can
we see political cohesion? Because if the president can`t really move
forward on this issue, the rest of his agenda is going to become more
difficult.

O`DONNELL: And, Nia, because of the way this package of cuts and tax
increases is built that hits on January 1st, they can be negotiated at the
same time, which is to say Republicans have interests in what the tax rates
are. But they also have strong interest in what the defense cuts are or
are not. And so, they may end up making decisions, some individual
Republicans, anyway, that I will live with what the president wants on
taxation so I can get what I want on defense cuts.

HENDERSON: That`s right. You heard, for instance, Bill Kristol,
essentially tell Republicans -- the conservative writer Bill Kristol, to
say, listen, that they should accept this deal from Obama, the higher tax
rates on the rich, of course, that was something that was backed up by 60
percent to 70 percent of people who voted, some of whom were Republican,
said yes, let`s take that deal.

So I think you`re right. They`re looking at all of these issues, not
only these defense cuts but also these tax hikes to figure out what they
can live with. So I think there will be something of a meeting of the
minds over the next two months, and then there will probably be a sense
that later on some of these bigger issues around entitlement reform will
also be taken up.

O`DONNELL: Rana Foroohar and Nia Henderson -- thank you both for
joining me tonight.

FOROOHAR: Thank you.

HENDERSON: Thank you.

O`DONNELL: Coming up, Penn Jillette is here, as you may have noticed.
As his new book explains, he has been the subject of a black male scheme,
which provoked an FBI investigation, which makes him the perfect analyst
for the Petraeus affair.

And John McCain and his BFF Lindsey Graham want to keep Scott Brown in
the Senate so badly this they are willing to say anything, tell any lie
about U.N. ambassador Susan Rice. That`s coming up.

(COMMERCIAL BREAK)

JILLETTE: Two senators who had no problem voting for Condoleezza Rice
for secretary of state now say they will oppose U.N. Ambassador Susan Rice
if she`s nominated. That`s next.

And later, what David Petraeus should have known about juggling.
That`s coming up.

O`DONNELL: Not bad.

JILLETTE: Thanks.

O`DONNELL: And you know something about juggling.

JILLETTE: A little bit.

O`DONNELL: Yes.

(LAUGHTER)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. LINDSAY GRAHAM (R), SOUTH CAROLINA: I don`t trust her. And the
reason I don`t trust her is because I think she knew better. I don`t think
deserves to be promoted.

SEN. JOHN MCCAIN (R), ARIZONA: We will do whatever is necessary to
block the nomination that`s within our power, as far as Susan Rice is
concerned.

GRAHAM: I don`t think we`re doing very well in the U.N., quite
frankly.

(END VIDEO CLIP)

O`DONNELL: In the Spotlight tonight, President Obama is not going to
let Republican Senators John McCain and Lindsay Graham stop him from
nominating whoever he thinks is the best candidate to be his next secretary
of state..

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Senator John McCain and Senator Lindsay Graham
both said today that they want to have Watergate style hearings, and said
that if you nominate Susan Rice to be secretary of state, they will do
everything in their power to block her nomination

OBAMA: She made an appearance at the request of the White House in
which she gave her best understanding of the intelligence that had been
provided to her.. If Senator McCain and Senator Graham and others want to
go after somebody, they should go after me.. And I`m happy to have that
discussion with them..

But for them to go after the U.N Ambassador, who had nothing to do
with Benghazi and was simply making a presentation based on intelligence
that she had received, and to besmirch her reputation is outrageous.. When
they go after the U.N ambassador, apparently because they think she`s an
easy target, then they`ve got a problem with me..

And should I choose, if I think that she would be the best person to
serve America in the capacity of the State Department, then I will nominate
her..

(END VIDEO CLIP)

O`DONNELL: After the president`s news conference, Senator Graham
immediately responded with this released statement: "Mr. President, don`t
think for one minute I don`t hold you ultimately responsible for Benghazi.
I think you failed as commander in chief before, during and after the
attack. Given what I know now, I have no intention of promoting anyone who
is up to their eyeballs in the Benghazi debacle."

Joining me now is Jim Frederick, "Time Magazine`s" international
editor, and MSNBC`s Karen Finney, former DNC communications director..
Jim, is the U.N. ambassador up to her eyeballs in the Benghazi debacle, as
Lindsay Graham would put it?.

JIM FREDERICK, "TIME MAGAZINE": No..

O`DONNELL: Is she up to her toe nails?. Is she in it at all?.

FREDERICK: She had nothing to do with this.. If there was any
judgment error involved, there is a question of why was she on the morning
programs talking about something that wasn`t really in her lane. A lot of
the things that she has been described as saying, that this was a
spontaneous uprising, if you go back and look at what she said, she didn`t
actually say that..

What she said was that the spontaneous uprising was used as a cover
for a concerted attack.. So a lot of the things that are being put into
her mouth she didn`t actually say. But it`s interesting that this is being
used as a political scalp by the Republicans who want somebody to blame for
Benghazi..

It is unfortunate that Susan Rice, who has a long and distinguished
career and is a qualified secretary of state candidate, would be held out
to be pilloried in this way. I think it`s worth noting the Republicans
probably don`t have enough votes to get in the way of a nomination. And I
think it`s also interesting that Obama, you know, he really is happy that
this election is over. Because I`ve never seen him quite so forceful or
genuinely outraged in quite some time..

O`DONNELL: Have we ever -- has any senator ever used a standard like
this on a possible secretary of state nomination before, that that nominee
may have at some point said something on TV that they disagree with and
cannot prove one way or the other?.

FREDERICK: Yeah.. She might have had a bad day. But this does not
disqualify her from being secretary of state.. And there were intelligence
failures after intelligence failures after intelligence failures when
Condoleezza Rice was up for similar positions. And Democrats made some
noises about getting in the way of her nomination. But they ultimately
voted her in.

So to answer your question, no, not that I`m aware of, any nomination
actually been blocked based on something like this..

O`DONNELL: Karen Finney, my theory of the case is they really want
Scott Brown back in the Senate.. What they`re trying to do is block Susan
Rice so that the president will then go to John Kerry, which may be his
first choice anyway, but that he will go to Senator Kerry, opening up that
Senate seat in Massachusetts to an election about 150 days after that
opening occurs..

KAREN FINNEY, MSNBC POLITICAL ANALYST: If that`s true, then attacking
Susan Rice is quite disgusting behavior. I just want to clarify a couple
of points, because I`ve actually known Susan since the Clinton
administration. And this is quite offensive, what they`re doing here.

There was intelligence available. Somebody had to go out. She went
out based on the intelligence -- and as Jim said, when you go back and you
look at what she said, she did caveat that based on what was known at the
time.

And it was, you know, these two men, as you point out, who supported
another. Dr. Rice for secretary of state who had basically gone around
misleading us about weapons of mass destruction. They certainly didn`t
seem to have a problem with that.

And in this case, Susan was actually giving the intelligence that even
Condi Rice herself has said it is complicated and hard to know as things
are unfolding where things are going to shake out.

The last point I want to make, though, if we are going to talk about
anybody`s behavior in this -- I`m so infuriated by this -- is Jason
Chaffetz and Darrell Issa, who both, with their incompetence, have not only
outed a CIA operation that was a covert operation. Perhaps they don`t
really care about that. But they`ve also endangered the lives of Libyans
who were working with us..

So if we`re going to go that way, then let`s look at their behavior..

O`DONNELL: Karen, just on the politics of it, if these guys are
trying to steer the nomination to Massachusetts Senator John Kerry, so that
the seat opens up, so that they can get Scott Brown back in the Senate, it
seems like the technique they`re using, as of today, is almost forcing the
president`s hand on Ambassador Rice.

It`s almost the kind of thing that makes him say, well, OK, that tips
it. I`m definitely going with Ambassador Rice..

FINNEY: That`s right. That certainly was my read of his tone. I got
to tell you something. I think the president is fully aware that if those
men want to have that fight attacking this woman, let`s do it. Let`s go
there.. That is a good fight for him to have.

It also outs them right off the block that they have no intention of
working with this president to get anything done..

O`DONNELL: Jim Frederick of "Time" and Karen Finney, thank you both
for joining me tonight..

Coming up, more on John McCain and Lindsay Graham, Susan Rice,
Condoleezza Rice and Sarah Palin. They`re all in the Rewrite.

And later, America`s most famous juggler, Penn Jillette, will teach
David Petraeus what he should have known about juggling.

(COMMERCIAL BREAK)

O`DONNELL: Two United States senators are rewriting their standards
for voting for a nominee for secretary of state. BFFs John McCain and
Lindsay Graham have decided that they can`t vote for any nominee for
secretary of state who has said anything on TV the truth of which cannot be
proven beyond their standards of reasonable doubt.

The shorter way of explaining their new standard is they can`t vote
for anyone named Susan Rice..

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Susan Rice appears to be the front-runner now
for secretary of state.. You told CBS last night that you will do
everything to stop her confirmation. Why?.

MCCAIN: She`s not qualified. Anyone who goes on television, in
defiance of the facts, five days later -- we`re all responsible for what we
say and what we do. I`m responsible to my voters. She is responsible to
the Senate of the United States. We have our responsibilities for advise
and consent..

GRAHAM: This is about the role she played around four dead Americans,
when it seems to be that the story coming out of the administration -- and
she`s the point person -- is so disconnected to reality, I don`t trust
her.. And the reason I don`t trust is because I think she knew better.
And if she didn`t know better, she shouldn`t be the voice of America.

I don`t think she deserves to be promoted.. There are a lot of
qualified people in this country the president could pick. But I am dead
set on making sure we don`t promote anybody that was an essential player in
the Benghazi debacle..

(END VIDEO CLIP)

O`DONNELL: In order to sound like they actually have a reason to
oppose Susan Rice for secretary of state, they have to lie about her. You
just heard little Lindsay Graham lying, Joe McCarthy style, about Susan
Rice, calling her, quote, "an essential player in the Benghazi debacle.".

The United States ambassador to the United Nations had absolutely
nothing to do with the response to the attack in Benghazi. Lindsay Graham
actually has the sleazy audacity to call her an essential player in those
events. She was no more an essential player in what happened in Libya than
Lindsay Graham and John McCain were.

At 11:51 this morning when Lindsay Graham told that lie about
Ambassador Susan Rice, little Lindsay Graham -- and I speak not of his
physical stature. I speak of the size of this tiny man`s character.
Little Lindsay Graham became the Senate`s new Joe McCarthy.

The word liar belongs before his name now instead of Senator, until
Lindsay Graham retracts that lie, until he says I was wrong to call
Ambassador Rice, quote, "an essential player in the Benghazi debacle."

That lie cannot stand. The media cannot allow it to stand. But we
know better. We can be assured that the media will, for the most part,
actually allow it to stand. Liar Lindsey Graham will continue to be
invited on TV shows where that statement will not be called a lie.

It may be challenged, but it will not be called a lie. Liar Lindsay
Graham, of course, has an open invitation to come on this program and
retract his lie or try to get away with it again and see how that works out
for him here..

Liar Lindsey Graham and John McCain are the same guys who had no
problem voting for another woman named Rice to be secretary of state. And
they cast those votes after Condoleezza failed miserably as George W.
Bush`s national security adviser, after she and everyone else in the Bush
administration misread the intelligence on Iraq`s weapons of mass
destruction, as it turned out nonexistent weapons of mass destruction
programs.

They had no problem voting for her after she went on national
television and raised the specter of a mushroom cloud -- her words --
mushroom cloud over the United States of America from of an attack launched
by Iraq. No more demented thing has ever been publicly said by a national
security adviser, save for every word ever spoken by Henry Kissinger about
Vietnam.

When they voted for Condoleezza Rice for secretary of state, they knew
that everything Condoleezza Rice said about Iraq on television before the
Iraq war was wrong. They did not exact an apology from her in exchange for
their votes for secretary of state.

Today Liar Lindsay graham said this about the comparison between Susan
Rice and Condoleezza Rice..

(BEGIN VIDEO CLIP)

GRAHAM: When it comes to Condoleezza Rice, we`re not the only country
that thought he was trying to get weapons of mass destruction..

(END VIDEO CLIP)

O`DONNELL: So the Graham rule is it`s OK for highly placed foreign
policy players in an administration to be wrong about something they say on
TV involving intelligence, as long as other people are wrong, too,
especially people in other countries. In his nakedly political and
entirely dishonorable prosecution of Susan Rice today, John McCain actually
said this --

(BEGIN VIDEO CLIP)

MCCAIN: We`re all responsible for what we say and what we do..

(END VIDEO CLIP)

O`DONNELL: He obviously meant to add, except Condoleezza Rice and
anyone in any Republican administration.. We`re all responsible for what
we say and what we do.. Really? From the guy who said this --

(BEGIN VIDEO CLIP)

MCCAIN: That old Beach Boys song, Bomb Iran. Bomb, bomb, bomb --
anyway..

(END VIDEO CLIP)

O`DONNELL: Yeah, anyway.. We`re all responsible for what we say and
what we do. John McCain responsible for what we say and what we do? The
guy who was trying to get Sarah Palin sworn is in as vice president of the
United States, a heart beat away from the presidency? John McCain did
that.

It was the greatest act of sheer irresponsibility I have ever seen in
a presidential candidate. Here is something that John McCain has never
once said about Sarah Palin..

(BEGIN VIDEO CLIP)

MCCAIN: We`re all responsible for what we say and what we do..

(END VIDEO CLIP)

O`DONNELL: He has never said that, never once said that Sarah Palin
has ever, ever said anything that perhaps she shouldn`t have said. He
defended every word Sarah Palin said as his choice to be vice president of
the United States, including this --

(BEGIN VIDEO CLIP)

SARAH PALIN FORMER GOVERNOR OF ALASKA: Alaska has a very narrow
maritime border between a foreign country, Russia, and on our other side
the land boundary that we have with Canada. It`s funny that a comment like
that was kind of made to -- I don`t know.

You know, as Putin rears his head and comes into the airspace of the
United States of America, where do they go? It`s Alaska. It just right
over the border..

(END VIDEO CLIP)

O`DONNELL: John McCain and his fellow traveler, the little liar
Lindsay Graham, stopped being responsible for what they say and what they
do a long, long time ago.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I have no evidence at this point, from what I`ve seen, that
classified information was disclosed that in any would have had a negative
impact on our national security. We are safer because of the work that
Dave Petraeus has done. And my main hope right now is that he and his
family are able to move on, and that this ends up being a single side note
on what has otherwise been an extraordinary career..

(END VIDEO CLIP)

O`DONNELL: That was President Obama today speaking publicly for the
first time about General David Petraeus` problems with sex, lies and e-
mail. Tonight, we found out the name of Jill Kelley`s shirtless FBI agent
friend who helped get this whole investigation started, the investigation
into Paula Broadwell`s e-mail.

"The New York Times" reports that his name is Frederick Humphries, a
counter-terrorism investigator. Humphries is also the person who told
House Majority Leader Eric Cantor about the investigation. Cantor was
asked about this during his press conference today..

(BEGIN VIDEO CLIP)

REP. ERIC CANTOR (R), VIRGINIA: Look, all I`m going to say is, I
received information from an individual that I had not met before, did not
know. The information that was sent to me sounded to me as if there was a
potential for a national security vulnerability.

I had no way of corroborating the story that I was told and felt that
the best thing to do at the time was not to politicize it, but to put
national security first.

(END VIDEO CLIP)

O`DONNELL: Penn Jillette, now I know you doesn`t follow every twist
and turn in Washington.. I just want to clarify something. That guy you
were just watching, Eric Cantor, he has not yet been caught in a sex
scandal. He`s actually one of the members of the House of Representatives
-- I think there`s about a dozen of them now -- who have not actually yet -
-

PENN JILLETTE, AUTHOR "EVERY DAY IS AN ATHEIST HOLIDAY": Good. OK..

O`DONNELL: Your new book "Every Day is an Atheist Holiday," which I
will -- the promo will be that I just kind of leave it here. I`ll just
lean on it..

JILLETTE: Thank you..

O`DONNELL: It has in it, of all things, a story of Penn Jillette
being blackmailed for what includes a sexual component of the blackmail and
you going straight to the FBI. That was your first impulse.

JILLETTE: Instantly. And I also am a person who is the most
protected against blackmail possible. I am completely honest with my wife
about everything..

O`DONNELL: Here`s a moment I remember on Bill Maher`s show, I think
the original comedy central version, before ABC. There was some sex
scandal out there in Washington. And you on the show said I have done
everything that everyone in every sexual scandal has been accused of. I
have done it. At that moment, I thought, OK, he is impervious to sex
scandal now for the rest of his life.

JILLETTE: But you`re not. You know this. I got this phone call
blackmailing me. Someone had gotten all the information from my hard
drive, had asked me for money..

O`DONNELL: E-mails.

JILLETTE: I`ll tell you, the magic secrets from "The Penn and Teller
Show" never sent any e-mails. Apparently that`s more important than this.

But I knew that my wife wouldn`t be upset. I also knew that it
wouldn`t change my career at all. You know that the first thing I did was
call you and then threw up. The pressure on you when you`re being
blackmailed is amazing.

I called the FBI immediately. They said so, your wife won`t be upset
and this won`t hurt your public image. And I said, yes, but people
shouldn`t be blackmailing other people. What I`m hearing about this, I
should have all these kind of smarmy opinions on it. But all I think about
is what you feel, even when you`re safe, when someone knows personal stuff
about you is horrifying. It`s terrifying..

O`DONNELL: But also one of the points you make in this book and
elsewhere is that the horrible scandal at the center of this story is
really just people not being honest with each other, husbands and wives not
being honest with each other about the way they live their lives..

JILLETTE: And also the rest of us not admitting. I think a big part
of this is technological. I think all of this sex talk in sex happened all
the time throughout history with everybody. We just have an electronic
trail on it now.

We can follow it all. And I think we should all just kind of grow up
a little bit and say we all like having sex and that`s OK..

O`DONNELL: But then here`s the thing that gets me. You`re the CIA
director and you know we aren`t yet in that 22nd century, when we all
become French and we`re all cool with all this stuff. Since we`re not
there, you are crazy enough as CIA director to have all these e-mails out
there, all this --

JILLETTE: On a Gmail account. Don`t they have something? I guess
maybe that stands for G-Man has a Gmail account. But Gmail account? Don`t
they have something encrypted, something better to do? I know they did
that weird little put it in the drafts, so it doesn`t go across. That
doesn`t work.

O`DONNELL: All he actually had to do to have no real record of it was
just use the telephone. That`s all he really had to do. And then there
would be some phone numbers, but who knows what that is. It`s his
biographer. He should be talking to her nonstop.

JILLETTE: Sure.

O`DONNELL: We`re just about out of time. Penn Jillette, author of
"Every Day is an Atheist Holiday." Great blackmail story in there..

O`DONNELL: That you`re part.

JILLETTE: You`re supposed to get THE LAST WORD tonight, but you`re
not. I`m going to have to take the LAST WORD for a friend of mine. A
special good night THE LAST WORD`s best and most devoted follower in
Missouri, Patty Brock, who has been watching every episode every night
we`ve been on. Great to have you every night, Patty. Good night, Patty.

END

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