All In With Chris Hayes, Monday, November 10th, 2014

ALL IN with CHRIS HAYES
November 10, 2014


Guest: John Manley, Susan Crawford, Robert McDowell, Bill Curry, Alayne
Fleischmann, Matt Taibbi

(BEGIN VIDEOTAPE)

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

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I`m going to do what I
can do through executive action.

HAYES: The president doubles down on immigration.

REP. JOE BARTON (R), TEXAS: Impeachment would be a consideration.

HAYES: And House Republicans put impeachment on the table.

Plus --

OBAMA: I`m urging the Federal Communications Commission to do
everything they can to protect net neutrality for everyone.

HAYES: The president`s net neutrality bombshell provokes a Ted Cruz
response for the ages. Tonight, Republicans not sure what to do about the
Obama lame duck offensive.

Then, protesters in Mexico set fire to the presidential palace
following the disappearance of 43 college students. Jose Diaz-Balart joins
me live from Mexico.

The latest turn in Minnesota`s pointer-gate, and Matt Taibbi of
"Rolling Stone" on his latest big bank takedown.

ALL IN starts right now.

(END VIDEOTAPE)

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

If there was any in question how President Obama would respond to the
drubbing the Democrats took in the midterms, it`s growing clearer by the
day he has no intention on giving ground on the central political fight he
stake out for the last two year of his term. Burned his Republican
obstruction by his own past attempts to come to the negotiating table,
President Obama seems to be signaling the time to make concessions has long
since passed.

Case in point: his call to action today for the strongest possible
protection to keep the Internet open and free, an issue that`s been a
rallying point for progressives.

(BEGIN VIDEO CLIP)

OBAMA: I`m urging the Federal Communications Commission to do
everything they can to protect net neutrality for everyone. They should
make it clear that whether you use a computer, phone or tablet, Internet
providers have a legal obligation not to block or limit your access to a
web site.

(END VIDEO CLIP)

HAYES: Now, that announcement comes right after the president
reiterated what is probably the most politically explosive proposal in
Washington right now -- executive action on immigration.

In an interview with CBS over the weekend, he laid out the case he`s
making to House Speaker John Boehner.

(BEGIN VIDEO CLIP)

OBAMA: I prefer and still prefer to see it done through Congress, but
every day that I wait, we`re misallocating resources. We`re deporting
people that shouldn`t be deported. We`re not deporting people that are
dangerous and need to be deported.

So, John, I`m going to give you some time, but if you can`t get it
done before the end of the year, I`m going to have to take the steps that I
can to improve the system.

(END VIDEO CLIP)

HAYES: President Obama`s position is forcing the Republican
leadership, fresh off their midterm victory, so to confirm the same problem
that has vexed this White House for years, until the administration
accepted it and moved on. It appears the GOP`s right wing wants
confrontation with the president. It wants to defeat him politically and
said so, and it has no desire to collaborate or compromise.

Certain lawmakers are already threatening open revolt over the
proposed action on immigration. Government funding expires only a month
from now, on December 11th, and while Mitch McConnell says he`s hoping to
pass am omnibus spending bill that will give budget issues out of the way
for the next congress when he assumes control, Ted Cruz and five other
conservative senators are threatening to derail the negotiations in order
to block the president`s possible executive action. They wrote a letter to
Harry Reid warning him of their intention to use, quote, "all procedural
means necessary to return the Senate`s focus during the lame duck session
to resolving the constitutional crisis created by President Obama`s lawless
amnesty."

Cruz and Senator Mike Lee also threatening to make immigration an
issue in the confirmation process for Loretta Lynch, President Obama`s
nominee to replace Attorney General Eric Holder.

Reactions like these explain why Mitch McConnell and John Boehner have
been pleading with the president both in public and reportedly behind
closed doors to hold off on unilateral moves on immigration. And if it
threatens to filibuster a budget bill or hold up a nominee for attorney
general seem like overkill, just until you hear what is being floated on
the House side as a response to the president`s anticipated executive
action.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Andrew McCarthy in "National Review" says the only
way to stop this guy if he moves forward is impeachment. Is that likely on
the table? Fifteen seconds.

BARTON: Well, impeachment is indicting in the House, and that`s a
possibility, but you still have to convict in the Senate, and that takes a
two-thirds vote. But impeachment would be a consideration, yes, sir.

(END VIDEO CLIP)

HAYES: Joining me now, a man who`s seen it all in Capitol Hill, Jim
Manley, 21-year veteran of the Senate, where he`s an aide to Senator Ted
Kennedy and spokesperson for majority leader, Senator Harry Reid, now
senior director at QGA Public Affairs.

All right. Jim, I want you -- you know Mitch McConnell well. You
know his staff well. Put yourself in Mitch McConnell`s brain trust for a
moment. How are you trying to game this out right now? Because it seems
to me that the best day in Mitch McConnell`s tenure as majority leader was
probably election night, and everything after that is now going to be
downhill as he tries to essentially outplay and outmaneuver folks like Ted
Cruz.

JOHN MANLEY, FORMER SENATE AIDE: Absolutely. So, interested to see
"The New York Times" yesterday where a McConnell spokesman Dan Stewart, I
believe, for the first time called out Senator Cruz and said on the record
that Cruz was nothing more than a one-man army.

So, they`re smart enough to recognize they have a problem on their
hand, and they`re smart enough to start to try to isolate him. But the
fact of the matter is, all of the energy and the enthusiasm comes from the
far right of that caucus, and so, that`s something he has to try to manage
as he tries to deal with people a whole bunch of them to that matter, that
are up in 2016. Who are going to want to put legislative points on the
scoreboard?

HAYES: I think it`s fascinating to watch how this is developing. The
president just reiterating time and time again that he is going to do this,
and some ways it`s a very un-Barack Obama-like move.

MANLEY: Yes.

HAYES: It`s kind of unapologetic and also just crystal clear,
basically throwing the gauntlet down. He usually doesn`t do that.
Usually, there`s a softer approach here.

What do you think their gain theory model how this place out in the
White House is?

MANLEY: Oh, in the White House? I think they recognize this is the
only thing they`re going to do, and that they`ve got to move forward. If
not there`s going to be hell to pay. Number one. Number two, I hope they
realize that we`re long past the time where they can try to cut deals with
these congressional leaders, and so, they might as well just go for and it
stand on principle and do the right thing.

You know, Republicans maybe are trying to think that -- well, you
know, the president drew a red line in Syria, maybe he`ll back down.
Again, I think we both agree that`s not going to happen this time around.

HAYES: I thought it was unintentionally revealing when McConnell used
the metaphor that the executive action on immigration would me like waving
a red cape in front of a bull. He was analogizing his own caucus to the
bull, basically pleading with the president, if you do this I won`t be able
to control them.

And I think, you know, it`s one of these things you don`t want to
start throwing around impeachment but, you know, Barton on the House
talking about it. It seems completely plausible to me there would be a
strong push in the House towards impeachment if and when the president does
this. That seems almost a given.

MANLEY: Oh, I`ve been on the record for the last several months
predicting that if, in fact, the president goes forward. There is a strong
group of Republicans within that caucus that do not trust the president, do
not respect the legitimacy of the election, and think that they`ve got a
mandate in 2014, which I disagree with -- when this president was elected
twice by the people of the United States of America.

So, the only reason why we`re in this situation is because they
failed. As you know, Chris, the only two votes the House took this year
were on punitive anti-immigrant amendments supported by both Michele
Bachmann and Steve King. So, yes, Boehner is smart enough to realize that,
and McConnell is smart enough to realize that. But they`re going to have
to try and figure out how to get their caucus in line because, you know,
this is could be could get very, very dicey.

HAYES: So, quickly, what happens? Do we get a spending bill December
11th, everyone gets to go home and come fight again in the new Congress, or
are we going to have confrontation sooner rather than later?

MANLEY: No, I`ve got five bucks that says they`re going to get
together on a omnibus, kick the can down the road and get ready for the New
Year. Remember, there`s all sorts of deadlines coming up next year,
including the debt limit. There`s going to be a controversial fight over
supreme -- I mean, an attorney general nominee, they want to just get out
here as quickly as possible.

You know, I think that`s why Boehner is not going to do any
legislative business until December 1, allegedly. He doesn`t want his
people to be in town. Yes.

HAYES: Right. Jim Manley, I have you down for five bucks on the
omnibus bill. Thank you very much.

MANLEY: Thank you.

HAYES: The president made some big and genuinely surprising news
today, taking a very bold position on an issue that has been somewhat under
the radar in the public`s imagination but maybe the single most
consequential policy fight to the future of the American economy, and that
issue is net neutrality. It`s become the subject of extended backroom
negotiations between lobbyists and politicians and regulators with
literally billions and billions of dollars at stake.

And there are powerful interests on both sides. On one hand,
companies like, well, Comcast, my employer and owner of this network, and
other broadband providers that want the ability to charge different prices
to deliver different levels of broadband service, and on the other hand,
tech giants like Facebook and Google and other companies that mixed up on
the Internet who want all web content to be on equal footing.

The debate comes down to one fundamental question: what exactly is the
Internet circa 2014? Is it a premium service, something people can live
without but are willing to pay for it to access certain functions, some
like cable TV? Or is it more like a public utility that everyone depends
on and everyone gets the same access to regardless of how they use it, more
like, say, electricity.

Today, the president came out squarely in favor of the latter
interpretation. That it`s like electricity, making a strong case, the
Internet is central component of modern citizenship.

(BEGIN VIDEO CLIP)

OBAMA: Cable companies can`t decide which online stores you can shop
at, or which streaming services you can use, and they can`t let any company
pay for priority over its competitors. To put these protections in place,
I`m asking the FCC to reclassify Internet service under Title 2 of a law
known as the Telecommunications Act. In plain English, I`m asking them to
recognize that for most Americans, the Internet has become an essential
part of everyday communication and everyday life.

(END VIDEO CLIP)

HAYES: Now, the president himself doesn`t actually get to decide how
the government treats the Internet. That, as he indicated, that is up to
the Federal Communications Commission, which is an independent government
agency that`s expected to issue new rules sometime in the next year.

In the four months in which the FCC sought public input on this very
question of net neutrality, they received comments from a record-breaking
3.7 million people, more than 99 percent of them in favor of keeping the
net neutrality regulations on a level playing field.

Joining me now, Susan Crawford, former special assistant to President
Obama for science technology and innovation policy. She`s now visiting
professor at Harvard Law, and she`s also author of "Captive Audience".

And Robert McDowell was a former commissioner of the Federal
Communications Commission under Presidents Obama and George W. Bush.

And maybe, Mr. McDowell, I`ll start with you. Were you surprised by
today`s announcement and how big a deal is it?

ROBERT MCDOWELL, FORMER FCC COMMISSIONER: It`s a big deal. You know,
when the president of the United States looks into the camera and tells the
FCC to do something, the FCC is going to lisp. I can`t think of any time
in recent FCC history where we have seen this much White House action to
influence an independent agency, or allegedly independent.

So, it`s a very big deal. Was I little surprised that this came out
today by the president of the United States? You bet.

HAYES: Susan, you feel the same way?

SUSAN CRAWFORD, FORMER SPECIAL ASSISTANT TO PRES. OBAMA: Well, I
definitely feel it`s a big deal. But I`m not all surprised to the end
because the president is a man of deep principle, and he understands that
just as you said, this is electrification for the country, and that
although four companies may be unhappy, 330 million Americans want to make
sure they can speak freely online without having the companies make the
choices for them.

HAYES: OK. So, Robert, walk me through. My sense, I`ve read your
"Wall Street Journal" op-ed, you think this is a bad idea and you actually
were in a position to sit on the commission and study it.

What is the case against it? I have to say, I`m someone who has read
about this and knows people that are working in this space, it seemed
airtight this equality principle, and a lot of people (IANUDIBLE) who are
the early engineers of the Internet, who really favored very strongly, they
think tend to carry a lot of weight with me. What`s the case against it?

MCDOWELL: Well, first of all, it`s great to be on with Susan
Crawford. I respect her very much. We respectfully disagree on this
particular issue.

But, first of all, nothing is broken in this market place that needs
fixing by the government. If something is broken, then let`s do a bona
fide peer review and market study.

Second of all, if something is broken or bound to be broken, there are
already ample laws on the book that could we used to fix it or to act as a
deterrent, and that why we have the open and free enhanced Internet we have
today.

You know, with Title 2, the FCC has a tiger by the tail. There are
over a thousand requirements of Title 2, this common carrier phone monopoly
regulation. And for the FCC to try to forebear from most of them, that is
not apply most of theme while it tries to keep the Internet open and free,
that`s going to be extremely risky on -- the appellate courts -- it`s going
to be tied up for years in litigation and it`s not going to be good.

HAYES: The first argument here which I think is interesting is
basically the status quo was working, right? There`s nothing broken with
the market of broadband provision in the U.S., and I guess, you know, it`s
true when you look at digital penetration, you look at the remarkable tech
startups and apps and stocks that are happening in the American economy.
It seems like that`s a plausible case.

Do you agree with that, Susan?

CRAWFORD: I don`t. We have a marketplace in which we have neither
competition nor oversight. And look at Chairman Tom Wheeler`s speech from
September 4th where he said that for 70 percent or more Americans, their
only choice for a connection over 25 mega bits per second is their local
cable monopoly. Cable has won for wired Internet connections.

So, we`ve got in fact a broken market.

(CROSSTALK)

HAYES: So, for 70 percent of people that want to get high speed
Internet access, it`s their local cable provider.

CRAWFORD: That`s it. That`s the only choice, because what`s happened
over the last ten years, as we have seen enormous consolidation and frankly
division of markets to the point where the only choice is your local cable
guy and they are under no supervision.

So, the president is saying, let`s make sure that the FCC`s legal
authority is secure. So it can create rules. That`s all that`s going on
here. And he has made a very bold and correct move.

MCDOWELL: If I could just interject.

HAYES: Please?

MCDOWELL: When she says there is no supervision, that`s actually not
true. There are a number of laws that could be used against cable
companies or wireless broadband providers if they were to be
anticompetitive. There`s Section 5 of the Federal Trade Commission Act.
There`s certainly the antitrust laws, there are common law, tortious
interference with contract laws. The plaintiffs bar would have a field
day. State attorneys general would have a field day.

There`s a whole arsenal of legal weapons that consumer advocates and
consumers themselves could bring against these ISPs. That`s why we have
not seen systemic market failure. If there is this market failure, then
let`s do bona fide peer reviewed market analysis that can be put out for
public comment so we can diagnosis the illness before we try to cure it.

HAYES: I will say this, Robert, I think if you were -- not that this
should control in this area of policy, but if we were to poll the more
American people about this question, I do feel like the results would come
down more in Susan`s favor, and that doesn`t mean they`re right about that.
But there do -- does seem to be a sort of recurring troupe about people`s
frustration in this particular sector.

Susan, my question to you and the final question here I think is,
there`s a sense in which I think this has been a portrayed by folks such as
yourself as this David versus Goliath. But isn`t it really the case
there`s just big titans on both sides. There`s huge multibillion dollar
corporations who are lined up against the broadband providers because they
don`t want their ox to be gored as well.

CRAWFORD: Actually, every American business is on the other side, and
in that group are a few very large online companies. But every business
that wants to be sure that it can reach its customers, that want to be sure
it has inexpensive access and ubiquitous large middle class to reach. We
all need a cop on the beat and that`s what the president is saying. Make
sure their legal authority is sound. He has done the right thing.

HAYES: Robert, I want you to -- I want you to tell me the validity of
Ted Cruz`s response today who comes down on the same side as you, in which
he describes the proposal as, quote, "Obamacare for the Internet". Is that
true? What does that mean?

MCDOWELL: I don`t know it`s true because I don`t know what it means.
But, nonetheless, he disagrees with the notion. I leave itself at that. I
don`t know what he means by Obamacare for the Internet.

HAYES: Susan Crawford and Robert McDowell, thank you both. I really
enjoyed it.

MCDOWELL: Thanks for having us.

CRAWFORD: Thanks so much. Nice to be here.

HAYES: All right. A top Republican strategist spills the beans on
why he thinks the Democrats lost so badly on Tuesday. And it turns he
thinks I`m right. I`ll tell you what he said, ahead.

(COMMERCIAL BREAK)

HAYES: A blockbuster new piece that alleges one of the biggest banks
of this country was ripping off investors while the government looked the
other way. I talk to the whistleblower who saw this up close and personal
and the journalist who broke the story, both of them will be here as my
guest, ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: When you start governing, there is a tendency sometimes for me
to start thinking, as long is a get the policy right, then that`s what
should matter. And I think there are times, there`s no doubt about it,
where, you know, I think we have not been successful in going out there and
letting people know what it is that we`re trying to do and why this is the
right direction. So, there is a failure of politics there that we`ve got
to improve on.

(END VIDEO CLIP)

HAYES: President Obama`s owning up to what I think is pretty obvious
to everyone at this point, which is the midterm victory for Republicans
demonstrated some kind of failure of Democratic Party politics. Whose
failure exactly is still an outstanding question and an important one to
resolve as the president gears up for his last two years and as the
Democratic Party tries to regroup and figure out its approach will be
moving forward.

Some, such as myself, render the decision of many Democrats to
distance themselves from President Obama ended up being disastrous. Even
if it was grounded on polling about the president`s popularity and seemed
perfectly rational at the time.

And a new endorsement of the theory comes from an unlikely source, the
head of the National Republican Senatorial Committee. "They sidelined the
president," Rob Collins, the executive director of the NRSC told reporters.
"We felt the economy was their best message and sidelined their best
messenger."

Former White House counsel to Bill Clinton, Bill Curry, wrote a piece
on "Salon" that caught my eye. And you can guess why it caught my eye. It
argues the president and the Democratic Party as a whole has become far too
alienated from its base and candidates` decisions to distance themselves
from the president were just a symptom of that rather than cause.

Joining me now is Bill Curry, Democratic strategist who wrote that
piece on Salon.com. He was on the Clinton White House.

Nice to have you here.

BILL CURRY, DEMOCRATIC STRATEGIST: Great to be here, Chris. Thank
you.

HAYES: So, you think it goes deeper than the decision to sort of
separate themselves from Barack Obama, which I think did alienate the base
because Barack Obama remains very popular among the base. You think
there`s something deeper than that and how Democrats relate to so-called
their base.

CURRY: I think part of the problem for Alison Lundergan Grimes and
others was how robotic and calculated their desertions appeared to voters,
and I think it goes back to some other problems of the Democratic Party.

This is the president`s explanation to many of his problems, that he
didn`t get his story out. Almost every time he has been asked in the last
few years what gone wrong, he says, well, we had the right policy but
couldn`t get the story out.

And Tim Geithner in his recent book about the treasury said that he
hadn`t gotten his story out. And you want to say, no, Tim, it`s not
because you give bad speeches. It`s because everybody is mortgages are
still underwater six years later.

And when you go back and trace this from the beginning, think there
are set of choices that have been made that created the right-wing populism
and that a lot of --

HAYES: How --

CURRY: -- the abandonment of the populism traditional to the party
itself.

HAYES: OK. But I feel like that -- I am tempted to believe that
because I think we share similar politics, right? But when you look at
Clinton, right? I mean, Clinton precipitated this sort of huge right wing
populist backlash and he had very different policies than Barack Obama,
right? So, there`s certain amount of it that just seems baked into the
cake, right?

A liberal president, a Democratic president, is going face right wing
populist backlash because this country has a lot of conservatives who
aren`t going to like a Democratic president no matter what he does.

CURRY: I think there`s truth in what you said. I also think that the
backlash that we`re suffering right now is something far deeper and far
broader. I think the truth is it`s even worse than it seems. That it`s
the very legacy of liberalism that is at stake here.

Bill Clinton, the model centrist of his time, billed as such
certainly, and in many ways he was, in that administration which I
participated, when you had these kind of fights over policy, Bob Reich was
in the room, secretary of labor, Joe Stiglitz was in the room for the
National Security Council, I was in the room once in a while. Bob Rubin
got his way more often. But there was a genuine debate.

In this administration, this is the most conservative Democratic
president on economic policies since Grover Cleveland. It`s not just a
punch line.

HAYES: I don`t think that`s true. I don`t think you can say, you
can`t look at Obamacare and say that.

CURRY: Well --

HAYES: Let me say this also. Even if -- let`s take aside Tim
Geithner, which I agree with you, right, that the problem with Tim Geithner
is the underlying policy and not the speeches.

But on Obamacare, right? I think, look, is it the perfect healthcare
law? No. But it`s doing good stuff for people. It`s making people`s
lives better. It`s fundamentally redistributive. It`s fundamentally
legacy that is going to endure for I think a long time and it`s also
fundamentally not popular.

Now, part of that appeal didn`t go far enough but you can`t look at
that and say -- to me, my big feeling is maybe this is the way the
country`s politics are. You get the stuff done and they punish you for it.

CURRY: Let me just, first of all, in a sense -- that`s the core
defense of the president`s most loyal supporters, that the democracy is so
broken, the opposition is so rabid, the public is to listless and
inattentive, that from now, this is as good as it gets.

HAYES: Right.

CURRY: So, you better all lower your expectations.

And my response is you can only run so long on the slogan, die slow or
vote Democratic, that at some point, we have to begin solving these
problems.

And as part of the argument, it always comes back to this question
over narrative. Policy precedes message. First, figure out what you
believe and then how to tell people about it.

And the real problem here is not in the electorate or the opposition.
We stopped putting -- progressives I think in particular are first on the
list, who needs to do what. And that is that throughout our history, all
important social reform has from grassroots progressive, independent
progressive movements that didn`t think their first job was to apologize
for being Democrats but rather to hold all politicians accountable.

We have not had an enormous amount of policy progress that we need in
this country because that stopped to being, and those movement became just
a Washington-based lobbyist who begin to see the world through the eye of
their subcommittee chairs and not to the eyes of their --

(CROSSTALK)

HAYES: Here`s one movement that does live up to that, the immigration
movement. It`s a fairly -- in many way certain parts of it are militant.
They`re quite willing to buck Democrats. I mean, just an account in Noam
Schreiber`s article on "New Republic", about a very tense meeting with the
White House, one of them getting an e-mail saying, stop talking out of
turn, saying, I don`t work for you, right?

They`ve been pretty militant. They`ve been pretty active, and what
they are facing there`s a huge -- again, a big part of the right wing part
of the country that doesn`t want to see immigration go forward, right?

CURRY: Yes. First of all, presidential elections are all like
football games. Fought within 40-yard lines you never get more than 60
percent. You never get more than 40 percent, less than 40.

And there is a huge part of the country that feel as you described but
it`s not the majority. A majority of Americans in fact support almost all
--

HAYES: Exit polling in the midterms, people who turned out to vote.

CURRY: And the second thing I`ll say is, as in so many cases, the
president here is very interesting to allied with corporate America and
against the Republicans. Corporate America was with the president on the
government shutdown. They`re with the president on education.

HAYES: They`re with him on comprehensive immigration reform.

CURRY: They`re with him on immigration reform.

And what my problem is that I look at the administration and say, when
they`re not with you, I don`t see -- I don`t see you pushing as hard. And
to go back the health care thing, the best parts about health care is that
it increased Medicaid and subsidies for low income people and brought 9
million people under coverage who weren`t going to get it.

The worst part is it grandfathered the insurance industry in, which
contributes no value for all time --

HAYES: I want to talk to you at some point about Obamacare because I
could go for an hour for what I learned from watching the Obamacare fight.

Bill Curry, thank you very much for coming in.

CURRY: My pleasure. Thank you. Thank you.

HAYES: All right. One of the most ridiculous and embarrassing
corrections I`ve ever seen brought to you by the conservative web site
Breitbart.com. Stick around for that.

(COMMERCIAL BREAK)

HAYES: We are back and we take this moment to look at two stories
from the category of sad, ridiculous media reports. And we begin in
Minneapolis where the fallout continues over the egregiously embarrassing
hit piece one local affiliate KSTP did on the mayor of that city. We first
brought you the news of controversy, now known as pointergate last week.

It all started when KSTP reported that Mayor Betsy Hodges had been
photographed flashing a known gang sign of a convicted felon. The proof
caught on camera.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is a photo of Minneapolis mayor Betsy Hodges
arm-in-arm with a man flashing what law enforcement agencies tell us is a
known gang sign for a Northside gang.

(END VIDEO CLIP)

HAYES: As you can see, taken just moments before the known gang sign
was flashed, something sinister was surely afoot.

At the center of the controversy, a man named Navell Gordon. Gordon
does have a criminal record as he talks about in the video, but has been an
organizer of the group called Neighborhoods Organizing for Change for the
past two years.

As Minnesota public radio reports, the group intentionally hires
people with criminal backgrounds who have served their time.

Mr. Gordon took the now infamous photo with the mayor at a get out of
the vote effort in Minneapolis. Neighbors Organizing for Change had
invited the mayor and the Minneapolis police chief to come canvas neighbors
with Navell Gordon and others and is now demanding KSTP issue an apology to
Mr. Gordon for airing a story that they feel, "devalues Navell as a human,
eliminates any mention of his amazing civic enagement work and reduces him
to an anonymous, scary black man."

For the time being, KSTP stands by its story.

Now, in other bad journalism news, Breitbart.com. Normally, we`d just
end it there. But, tonight, we have a specific example.

Now, over the weekend, the president officially nominated this woman,
U.S. attorney Loretta Lynch, to replace Eric Holder as the country`s next
attorney general. Ms. Lynch is an experienced prosecutor with an
impressive resume and she has been through the confirmation process twice
before, not exactly a controversial nominee.

But thankfully, a crack team at Breitbart got to the bottom of who
Loretta Lynch really is. According to an article posted over the weekend,
she was a member of the Clinton legal team during the Whitewater probe.
The Breitbart article even had a link to a New York Times report from March
1992 naming Lynch as one of two lawyers representing the Clintons.

Just one problem with that. The woman who offered legal council of
the Dlintons during Whitewater is a different Loretta Lynch.

Here is that Loretta Lynch. This Loretta Lynch went onto become
California`s public utilities commissioner and is not the Loretta Lynch who
could become the
first African-American woman to serve as attorney general.

Sometimes, people might share the same name. But, remarkably enough,
that doesn`t mean they are in fact the same person.

Take for example, Chris Hayes, me, and Chris Hayes of KTVI in Saint
Lewis. Same name, two totally different people.

So, the folks at Breitbart issued a correction. See the word
correction is
tucked into the headline which remained Obama`s attorney general nominee
Loretta Lynch represented Clintons during Whitewater, which was not true.
And the entire article remained with an update at the botton reading
correction, "Loretta Lynch
identified earlier as the Whitewater attorney was, in fact, a different
attorney."

Eventually, the article was taken down altogether.

Is there an internet version of burning a story down and salting the
ashes so that nothing can grow in its place? If not, the folks at
Breitbart should look into developing one.

(COMMERCIAL BREAK)

HAYES: Protests continue to rock Mexico City as many refuse to
believe the worst about 43 missing students.

Over the weekend, a group of protesters managed to light a door at the
president`s ceremonial palace on fire, this as outrage continues over the
alleged massacre of missing the students who were kidnapped a month and a
half ago.

On September 26, police in southwest Mexico reportedly opened fire on
a group of student activists from a teacher`s training college. Six people
were killed, 25 were wounded.

Reportedly, the next day, the body of another student turned up. His
eyes were torn out, the facial skin was ripped way from his skull: the
signature of a Mexican organized-crime assassination.

But 43 students remain unaccounted for after that incident. And
according to Mexico`s own attorney general, those 43 students are believed
to have been rounded up by local police on the orders of the mayor and
turned over to members of a local drug gang who allegedly killed the
students and burned their bodies.

Though attorney general says the bodies were so badly burned, it would
be difficult to extract the DNA needed to properly identify them.

This latest atrocity has sparked a social uprising against the panoply
of evil that is the drug lords of Mexico who are so entwined with the
Mexican state.

After meeting with the president, a relative of one of the students
told the press, quote, "I am the father of a boy who, for me, has not
disappeared. For me, he was kidnapped by men in uniform who are municipal
police. Why does this government act like this? We are not sheep to be
killed whenever they feel like it."

On Friday, Mexico`s attorney general held a press conference
announcing a new arrest in the case. But if he was hoping to bring calm to
the outraged citizenry of the country he did the exact opposite ending the
news conference with an off-the-cuff remark that only made matters worse.

(BEGIN VIDEO CLIP)

JESUS MURILLO KARAM, ATTORNEY GENERAL OF MEXICO (through translator):
We will have jurisdiction the moment we no longer have interference from
organized crime.

Thanks very much. Enough. I`m tired.

(END VIDEO CLIP)

HAYES: That comment right there, "enough. I`m tired," has now become
a
rallying cry by protesters and corruption and violence in Mexico.

And joining me now from Mexico, my colleague Jose Diaz-Balart where he
has been covering the story.

Jose, can you tell us what we know about what happened to these
students? Because when you read American press accounts, it just seems so
implausible the mayor would order the municipal to capture them and hand
them over to drug lords.

JOSE DIAZ-BALART, JOURNALIST: If it weren`t so tragic it would be a
bad joke. And unfortunately it`s not a joke. And what happened is that
these kids were in the state of Guerrero. Acapulco -- I`m actually at the
air port, which closed off for about five hours today -- an international
airport shut down for five hours or so by the protesters.

But let me take you back to the 26th of September. A group of kids
from the small town of Ayotzinapa were preparing on the 26th of September,
a trip to go
to Mexico City on the 2nd of October, which is the anniversary of the 1968
massacre of students by the federal government. And so they had gone to
another town of Iguala to ask for money.

Sell, the town mayor, whose wife was having some public activity that
day was called by the wife and apparently, said you know what, I`m pretty
P.O.ed that these kids are all over the streets asking for money when I
have a public affair.

So apparently, the mayor called his cops and said round them up and
get rid of them. And so they did what the mayor asked, rounded them up and
apparently got rid of them by handing them over to the Guerreros, which is
a narco thug group
that works with the police. And that`s where we are today. No trace of
the students.

But they have found other unmarked mass graves throughout the entire
area which just goes to show if you look for innocent bodies, you`re going
to find
them in Mexico, because until you look for specifics, you`re going to find
generalities.

HAYES: Jose, this -- first of all, the facts here seem so gruesome.
But they`re also against the context in which we -- there have been just
thousands and
thousands of deaths -- the Zetas and these different groups that have done
things that would make ISIS blush. I mean, really, trust true, true evil,
horrendous atrocities. What is it about this case that has seemed to kind
of spark this uprising across the country.

DIAZ-BALART: That`s a great question. I have been thinking a lot
about that myself and I think it`s because it really struck a nerve. Maybe
it`s because it`s one drop over a drop over a drop in a glass of tears,
the tears of uncounted deaths of Mexicans throughout yaers who have put
their quota of blood in this war against the narco cartels.

And the narco cartels exist, Chris, to actually send drugs up north so
that North American drug consumers can consume elicit drugs.

And so the amount of blood that`s being shed here is just
unfathomable. And so maybe, just maybe, this last -- think about this, 43
college kids picked up by a mayor and then disappeared by police.

HAYES: So has the mayor been brought in and charges? Are there
formal state charges against this mayor, against this wife?

DIAZ-BALART: Yeah.

HAYES: There have been?

DIAZ-BALART: Yeah, yeah, the mayor disappeared after the 26th of
September with his wife. And then he was picked up just outside the
capital, which is about 120 miles from here, from Guerrero, the center of
Mexico City who was picked up on the outskirts of town with his wife. And
he is apparently in a maximum security prison.

But the kids, no sign of the kids.

And think about it, think about it, if an American town, kids, came
out to ask for money and a mayor sent over the cops and the cops sent him
over to drug
cartel people who made them disappear.

HAYES: Yeah,that would...

DIAZ-BALART: Think about that.

HAYES: Jose Diaz-Balart, in Guerrero Mexico, thank you for being down
there and covering this story. Thank you for making time for that, really
appreciate it, man.

Be sure to catch Jose`s new show "The Daily Rundown" which premiers a
week from today, November 17 at 9:00 a.m. Eastern here on MSNBC.

All right, she has been called JP Morgan Chase`s worst nightmare, the
journalist who broke her story. The woman is blowing the whistle on the
biggest bank in this country and she will be here, along with the
journalist that broke that story ahead.

(COMMERCIAL BREAK)

HAYES: A new bombshell investigative piece, the firsthand, eyewitness
account from a whistleblower at one of the biggest banks in the whole
world, about how that bank knowingly ripped off investors by selling them
securities they knew were worthless garbage and how the government pretty
much let them get away with it.

I`m going to talk to the reporter who broke that story and the
whistleblower
who saw it all firsthand ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ERIC HOLDER, U.S. ATTORNEY GENERAL: This was not simply something
that JP
Morgan simply signed a check and smilingly said this is a good deal for us,
this inflicts pain on that institution.

(END VIDEO CLIP)

HAYES: That was Attorney General Eric Holder crowing over his get
tough efforts with Wall Street after the bank JP Morgan Chase agreed to
what was billed as a $13 billion settlement for having screwed over
investors by selling them securities the bank knew at the time were
basically junk.

Now a new bombshell account from the whistleblower Holder himself
cited in
announcing that very settlement, said the government largely ignored her
evidence and effectively let JP Morgan Chase get away with massive,
criminal fraud.

Joining me now is that whistleblower, Alayne Fleischmann, a former
securities lawyer for JP Morgan Chase as well as Matt Taibi, contributing
editor for Rolling Stone and author of the blockbuster piece in that
magazine about how Fleischmann became JP Morgan Chase`s worst nightmare.

Great to have you both here.

So, Matt, as the journalist who wrote this, just give me the basics of
the story. What did they do wrong and what happened?

MATT TAIBBI, ROLLING STONE: So, back during the boom years, when
everybody was getting a mortgage and lenders like Countrywide were going
into neighborhoods and giving home loans to anybody and everyone whether
they could afford it or not, banks like Chase were in the business of
buying up these loans en masse and basically chopping them up into
securities and reselling them to investors like pension funds, insurance
companies and hedge funds.

And Elaine essentially works as a kind of quality control officer.
And she was in charge of making sure that these loans were good loans that
they were reselling to investors.

HAYES: I like to think of it as the financial version of making a hot
dog, right. It`s like you take all the stuff that people don`t want and
you chop it up and you put it in a casing, you`re like this is good stuff,
like this is premium fillet mignon basically to your investors, right. And
yet you know that it`s not, it`s just chopped up garbage.

TAIBBI: Right. And she was in charge of making sure it wasn`t
rotten, dangerous meat and it turned out to be exactly that.

HAYES: So you were sitting there and you start seeing this stuff
cross your desk. And what does that interaction like? Like someone hands
you a piece of paper and it`s like you look at these and you think, oh,
this doesn`t look good.

ALAYNE FLEISCHMANN, JP MORGAN CHASE WHISTLEBLOWER: Well, basically,
what happened -- even -- there`s one deal in particular when it first came
in without even seeing any of the loans or anything at all, there was the
loans in it were
so old that you immediately knew something was wrong because we always
package and sell these things within about two to three months.

And then soon after that actually started, the diligence managers
starting actually saying, well, we can`t clear these loans. 40 percent of
the loans in this
pool have overstated incomes to the point where we can`t sell these to
investors.

HAYES: What`s the diligence manager?

LEISCHMANN: Diligence managers basically review the files to make
sure the loans are up to the quality that they`re supposed to be before we
sell them to investors.

HAYES: So you`ve got a sales desk that say, hey, we`re going to sell
this stuff. We`re going to make a lot of money on it. It`s going to post
lots of profits. Will you guys just OK these? Will you just go look
through it?

You were on the desk that was supposed to be like, oh, looks good,
looks good, looks good. And you guys started looking through and being
like, no, no, no, this is no good.

FLEISCHMANN: That`s exactly right.

And in fact the whole deal actually stopped for exactly three weeks
while the managers were saying we won`t clear these loans, we can`t clear
these loans. And what happened was basically they just were yelled at and
berated and insulted until they were finally gave in and realized they were
being overruled.

HAYES: So, are these people above in the management structure of JP
Morgan Chase?

FLEISCHMANN: The people who were doing that...

HAYES: The berating, the yelling, the pressuring?

FLEISCHMANN: Yeah, that was the supervisors. That was the supervisor
of these diligence managers and, also, the really strange thing that
happened is the sales managing director started coming in and pushing
things forward. And they get paid based on how many loans we buy. So...

HAYES: He`s like literally looking at a check that`s going to end up
in his bank bank account that`s going to post the next day if you say yes.

FLEISCHMANN: She was, yes

HAYES: She was.

And she`s saying what the heck is wrong with you? And you`re saying
what`s wrong with me is that these loans are garbage and this is fraud.
And they`re saying, well, I don`t care. I mean, is that what...

FLEISCHMANN: Yeah, except more just yelling until they the answer
they want as we kind of realized they clearly just want these pushed
through.

HAYES: OK, so how common is this inside JP Morgan Chase during this
period?

TAIBBI: Well, during this period I think what`s important to note is
that it was common to what was all of these companies.

HAYES: It`s why we got the housing bust basically. Let`s be clear.

TAIBBI; Exactly. Exactly. This was going on everywhere. But what`s
interesting about this case is that for years and years and years, the
Justice Department has been telling us these cases are really hard to
prove. We can`t get the evidence, that`s why we`re not pushing any
prosecutions. But now we have clearly proof and evidence. And it`s
obvious that they could make a case, if they want to.

HAYES: Well, that`s not true, though. These are hard cases to make,
right? I mean, you`re going to be put up on the stand. They`re going to
come after you hard. Are you going to have other people corroborate you or
you going to have people say, oh no, Alayne Fleischmann, she was always
kind of a malcontent.

FLEISCHMANN: Well, that`s the key point with these settlements, they
make it look like they`re hard cases, but they`re not. To take the green
point deal I`m talking about, there are...

HAYES: This is the deal in question that we`re talking about here?

FLEISCHMANN: Yeah, and it`s it`s the one that gets discussed in the
piece, it`s not necessarily the only one. There were e-mail, there are
reports that were ignored, there are vendor reports that are ignored. You
know, there are emails from diligence managers, from myself. There`s a
letter that sets out exactly who did what and what`s wrong in our diligence
process and how that`s going to cause problems in the security.

So these are not difficult.

Apart from the fact that there`s myself in there, there`s a Wall
Street Journal article that quotes another person on it saying that we were
blowing past
our internal warnings. So I`m clearly not the only person.

HAYES: There`s a detail in there that stuck out to me so much when
you`re talking about, like, how a place falls into institutional corruption
about like sort of directives not to use e-mail. They like keep everything
out of writing.

FLEISCHMANN: Yeah, that was the first sign that something had gone
very wrong. When this new diligence supervisor came in, he said he
wouldn`t send e-mails and he wouldn`t let us send e-mails. And in fact if
we..

HAYES: let`s keep in mind, this is in a modern workplace.

TAIBBI: In the compliance department.

HAYES: In a compliance department.

FLEISCHMANN: Yes.

And the key point, especially when you`re talking about securities
law, is that you`re supposed to be keeping a record so that if something
goes wrong, you can point to it and say, look, we did everything right. So
if you`re not willing to keep that record and hiding it, that`s a really
bad sign about what your intentions are.

TAIBBI: And I talked to a prosecutor who said if I was doing this
case, that would be the detail that would open and close my opening
statement with.

HAYES: You also talk about how regulators were bullied. There`s one
moment where they come and the regulator doesn`t want to OK it. And he`s
sort of putting his hands up saying like OK, OK, OK. And shaking his head.

FLEISCHMANN: Oh, that was actually in the meeting, that was actually
talked about in a Wall Street Journal article. And that was when they
finally -- even though these guys have been saying no for three weeks, they
were just pushed into doing it.

So, this was s actually in a manicurist loan. It was -- you know, her
income was supposedly $117,000, whereas if you look at the salary
information, in New York City even it`s 23,000. So these guys were being
forced to push through a loan that`s five times larger...

HAYES: And everyone knew it was garbage.

OK, so what is the -- so $13 billon, a, sounds like a lot of money; b,
criminal cases are hard to bring. There`s not a ton of precedent for big,
criminal prosecutions of this huge entities, particularly too big to fail
ones. Why isn`t this a win for the Department of Justice? They`ve got $13
billion, you pour some of it into helping out people that were screwed. It
seems like everyone comes out OK.

TAIBBI: I mean, there`s a lot of things here.

First of all, you have to look at it in the whole context of the post
financial crisis period. Not a single person has been successfully
prosecuted for any of the crimes related to the financial crisis. So we`re
talking about, you know, six years after the crisis not one person.
Whereas after the S&L crisis, they had over 1,000 people were put on trial.

It took the Chase case -- they did it without going to a judge, $7
billion of that $13 billion is tax deductible, which means that the
American taxpayers is picking up about $2.4 billion worth of that check.

HAYES: Wait a second, so that means that when they file their taxes,
that $7 billion would like the same as a household that wrote like had $70
donation, right? You just take it off one side of your balance sheet and
you don`t pay taxes on that $7 billion.

TAIBBI: Right. Can you deduct your speeding tickets? I mean, JP
Morgan Chase is dedicting $7 billion of the biggest regulatory settlement
in history and we are all paying for some of that.

And, you know -- yes, it was a huge settlement. But no individual is
actually paying that settlement, it`s all coming from the shareholders and
there`s no pain for the people who actually did the deed.

HAYES: Has Wall Street changed?

FLEISCHMANN: I highly doubt it. Because why would they? One of the
things that I remember from the time is I couldn`t understand why they were
doing this when they were looking at loans that you know were going to go
bad when you sell them to investors. And I think part of the problem is
they do know they can bring in their lawyers and their PR and their
lobbyist and make it go away. So as long as they know they can do that,
why would they stop?

HAYES: That is the key thing to remember. Alayne Fleischmann, Matt
Taibbi, thank you both for being here.

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

Content and programming copyright 2014 NBC. ALL RIGHTS RESERVED.
Copyright 2014 CQ-Roll Call, Inc. All materials herein are protected by
United States copyright law and may not be reproduced, distributed,
transmitted, displayed, published or broadcast without the prior written
permission of CQ-Roll Call. You may not alter or remove any trademark,
copyright or other notice from copies of the content.