All In With Chris Hayes, Thursday, December 18th, 2014

Show: ALL IN with CHRIS HAYES
Date: December 18, 2014

Guest: Noah Shachtman, Bruce Klingner, Bruce Schneier, Anthony Gray, Josh
Fox, Tico Almeida


(BEGIN VIDEOTAPE)

ARI MELBER, MSNBC GUEST HOST (voice-over): Tonight on ALL IN --

JEH JOHNSON, DHS SECRETARY: We do regard the attack on Sony as very
serious.

MELBER: The U.S. government addresses the crimes against Sony and
debates whether they`re an act of war. And the self censorship mounts as
Paramount tells leaders not to run "Team America: World Police".

Then, Sean Hannity`s favorite witness in Ferguson speaks out for the
first time. Witness 40 says prosecutors knew about her racial slurs.

And in the wake of President Obama`s historic action on Cuba, a look
at why his so-called lame duck term is defying expectations.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Today, we are making
these changes because it is the right thing to do.

MELBER: ALL IN starts right now.

(END VIDEOTAPE)

MELBER: Good evening from New York. I am Ari Melber, in for Chris
Hayes.

And here is what self censorship looks like. In Hollywood today,
workers removing those ads for "The Interview" after Sony pictures
basically unprecedented decision to pull the movie in the wake of that
criminal attack and those threats of terrorism against American theaters.
"The Interview", of course, depicts a plot to kill the real life leader of
North Korea, Kim Jong-un.

And yesterday, U.S. officials told NBC News they found a, quote,
"linkage" between the hack and the North Korean government.

But that case is not closed. The White House is currently declining
to officially blame North Korea, let alone release evidence.

(BEGIN VIDEO CLIP)

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: This is a matter that is
still under investigation both by the FBI and the National Security
Division of the Department of Justice. This is something that`s being
treated as a serious national security matter. There is evidence to
indicate that we have seen destructive activity with malicious intent that
was initiated by a sophisticated actor.

(END VIDEO CLIP)

MELBER: Today, Senator John McCain did blame North Korea, advocated
an update to our cybersecurity laws, and he said that pulling the movie to
appease criminal hackers "sets troubling precedence that will only empower
and embolden bad actors to use cyber as an offensive weapon, even more
aggressively, in the future."

That view also has been expressed by a range of security experts and
foreign policy analyst and artists in the wake of Sony`s decision to
protest the decision, and (INAUDIBLE) North Korea. In fact, some theaters
had planned to screen another movie slamming the North Korean government.
The 2004 satire "Team America: World Police", you might remember, it also
happens to depict the death of North Korea`s previous dictator, albeit, in
puppet form.

But that relatively basic sign of solidarity, screening an old, widely
available movie, was also squashed. Today, several theaters said they were
canceling those plans after receiving orders from movie studio Paramount
Pictures.

Meanwhile, stock in Sony Pictures parent company Sony Corporation is
rebounding. It had fallen nearly 3 percentage points in the first half of
December as the damage about and from this hack was exposed, but it`s now
risen as a "Hollywood Reporter" is noting after the announcement that "The
Interview" was being pulled.

Let`s get right to it because we have a lot going on. And for an
update on the latest, here is Noah Shachtman, executive editor of "The
Daily Beast", who covers intelligence and crime.

Good evening to you. Let`s start with the whodunit here, which was
both leaked by U.S. officials last night as a link to North Korea, but not
confirmed today. What can you tell us?

NOAH SHACHTMAN, THE DAILY BEAST: Well, I don`t think we know yet who
really did it. U.S. officials, as you`ve noted, are increasingly blaming
North Korea. But they`re not supplying a lot of evidence for why they
blame North Korea.

On the other hand, there`s a lot of evidence pointing the other way.
For example, the hack, when it was first initiated on Sony, didn`t mention
anything about the North Koreans or about "The Interview". So, there`s
still some widespread disagreement even within the broader intelligence and
technical communities about who`s to blame.

MELBER: What do you make of the argument here that this was still an
incredibly incendiary type of plot? That we wouldn`t respond well to it if
Iran or the ISIS movie company came out with something about assassinating
or taking out, so to speak, our leader? What do you make of that in the
way that plays into both what`s happened and the view of Hollywood where
you hear people now behind closed doors say, "Hey, this was dumb"?

SHACHTMAN: Right. It is an incendiary plot and we`ll have some
exclusive reporting at "The Daily Beast" later on tonight about how that
plot came to be.

But, you know, this is America. We have a First Amendment. We have a
right to free expression. And I think letting a dictator kind of dictate
that freedom of expression sets a terrible precedent.

MELBER: Noah, in your reporting, I know you to talk to a lot of
counter and intelligence officials, current and former. What can you tell
us about how they`re viewing all of this and this juncture right now where
the White House has big decisions to make?

SHACHTMAN: Yes. I mean, there is, like I said, at the top of
widespread disagreement. Some are sure it`s North Korea and can point to
the ways in which Sony was infiltrated and the long campaign against them.
Others are saying it`s far from case closed.

And in terms of, you know, who might respond to North Korea, I think
there`s a lot of head-scratching going on right now, because, frankly,
there`s not a lot we can do to retaliate against them.

MELBER: What did you make from what we heard about the State
Department today, basically saying we can do more than mere diplomacy?
There was a reference saying, hey, we`re not just talking about pulling
ambassadors here.

SHACHTMAN: Right. I mean, you know, what are we going to do impose
more sanctions on this country? It`s already cut off from the rest of the
world financial system. You know, what are we going to do? Cyber attack
them? There`s only like four computers in the whole country. It just
seems I`m just not sure what we would do.

MELBER: All right. Noah Shachtman, thank you very much, and thanks
to being here tonight. I appreciate it.

The Sony hack and suggestions that North Korea is involved set up hard
choices for the U.S. White House officials say it has become a national
security matter now discussed daily. And as federal investigators have
been working with Sony, it is becoming evident that this may actually be --
take a look at this -- the costliest cyber attack ever. That means ever in
history.

And some of the very e-mails that were stolen that we were just
talking about, also show the studio was ripe for this kind of breach. For
example, the chief executive was regularly reminded in unsecure e-mails of
his own secret passwords. That`s the kind of security lapse that generally
defeats the point of securing a password on a separate system.

Now, other companies are wondering whether they might be next.

Joining me to break it down is Bruce Klingner, a former CIA deputy
division chief for Korea, and current research fellow at the Heritage
Foundation. And Bruce Schneier, a computer security and privacy specialist
at Harvard Law`s Berkman Center for Internet and Society.

Good evening to both of you.

Bruce, let`s start with the know-how here. The folks who did this
that have some kind of -- you know, I`m saying Bruce, by the way, Bruce
from the CIA, Bruce Klingner, since you`re both Bruce.

The folks who did this have the know-how. Does that go to how we
figure out how tight they were with North Korea based on your background,
your knowledge of the espionage services there?

BRUCE KLINGNER, THE HERITAGE FOUNDATION: Right, we`re still waiting
for official U.S. government confirmation that North Korea is behind it.
Certainly, media reports indicate the government believes it is, but we`re
still waiting for that.

North Korea has, despite the perception of this very technologically
backward nation, actually has a very active cyber warrior unit. Probably
5,000 people in this thing called Unit 121, part of the North Korean
intelligence service. So, it`s actually been cited as -- by U.S. and South
Korean officials as very sophisticated. North Korea is seen as one of the
top five nations in the world for its cyber attack capabilities. So,
despite the impression, it`s very likely that they could have done this
kind of attack.

MELBER: Mr. Schneier, Sony is not a mom-and-pop store. What does
this attack say act the vulnerability about all of the other U.S.
companies?

BRUCE SCHNEIER, BERKMAN CENTER FOR INTERNET AND SOCIETY: Yes. It
really says nothing. What we`re learning about Sony is it had very poor
security. It could have easily been a couple of good hackers.

I would think every company should look at their own cyber security.
You know, it`s not just nation states or this kind of political hacking.
It`s criminals. Remember Target, remember Home Depot. This kind of thing
happens regularly and companies should pay attention to their cyber
security.

MELBER: Mr. Schneier, you`re also speaking to the point which there
is some sort of spectrum here from the criminal type of hacking we`re
talking about, to what might be cyber war and act of war. And those
distinctions matter a lot, as you know.

Let me put up just from one directive from the United States
government about how they think about cyberwar activities that seek to
compromise or impair the confidentiality, integrity or availability of
computers, information or communications systems, and the networks and
physical infrastructure that computers control." And yet, we hear from
experts that cyberwar itself can be hard to define and it`s all new turf.
Can you shed any light on that?

SCHNEIER: It is very new. Even military strategists have trouble
defining what cyberwar is. This seems certainly not to rise to it as an
attack against a private company, a Japanese company. I think it`s very
unlikely this will turn into actual war. But, yes, is there`s a spectrum
of attacks from opportunistic attacks, criminals who just want a pile of
credit card numbers, to whoever these attackers are, who for whatever
reason had it out for Sony. Maybe it was the North Korean government,
maybe it was hackers who are just annoyed at the company for something they
did earlier.

But this was a very targeted attack, meant to do as much damage and
embarrassment to Sony as possible.

MELBER: Mr. Klingner, you hear an idea here that this doesn`t rise to
the level of cyber war. Do you agree? And from your time at the CIA, what
are they thinking about to make that determination?

KLINGNER: Right. Well, actually, what it could do is fulfill the
definition for an act of terror. U.S. law defines an act of terror as
including criminal activity within the jurisdiction of the United States
intended to coerce the population. So, this could define that, which could
lead to the U.S. being able to put North Korea back on the state sponsors
of terror list.

Since we took them off in 2008 as part of a diplomatic quid pro quo in
the nuclear negotiations subsequently collapsed, North Korea has also been
cited in South Korean courts for other acts of terror. So, the U.S. could
put North Korea back on the terrorism list.

Actually, there are a number of things that the U.S. could do on
sanctions. There is a misperception North Korea is the most heavily
sanctioned country in the world. That`s simply not true. The U.S., U.N.,
E.U. all put sanctions on Iran than North Korea, and the U.S., for example,
has three times as many Zimbabwe entities on its sanctions list as North
Korean entities.

So, there`s a number of things the U.S. can do, even with existing
regulations and legislation.

MELBER: Mr. Klingner, we think in America, we often take it as a
given that companies get to do what they want, the media gets to do what
they want. A lot of other countries don`t quite think of us that way. And
a lot of countries assume that our government has the kind of control over
business or media or entertainment companies in a way that they might.

Again, since you were a deputy there in the CIA Korea division, what
do you think the view is there? And does that affect the way the United
States and President Obama and his team have to think about this if no
response to this, because we determined it was more like a cyber crime
against a company is seen as a total success and a sort of weakness on our
part.

KLINGNER: Right. Well, I think the self censorship by Hollywood is a
bit disturbing. One would have thought Hollywood would be on the forefront
of, you know, fighting for freedom of expression. In addition to this
movie, there`s also supposed to be a North Korean-related movie starring
Steve Carell. That`s also been shelved.

And Hollywood has been remarkably silent when it comes to North Korean
human rights violations. Hollywood stars are protesting against human
right violations that pale in comparison in North Korea which a U.N.
Commission recently assessed as reaching the level of crimes against
humanity.

MELBER: What are you getting at there? Are you saying that`s
hypocritical on your view?

KLINGNER: Well, I think it`s just unfortunate that Hollywood has
stepped back from moving forward on this movie, as self censorship as your
report previously indicated. And, also, on human rights, that there`s been
a silence from Hollywood about these egregious North Korean human rights
violations. But on --

MELBER: I want to get Mr. Schneier back in. Just on the point,
because you`re at Harvard law studying Internet and society, is there any
example in Mr. Klingner`s point, that any other example in the United
States context where is there`s this kind of self censorship online by a
major company?

SCHNEIER: You know, we do see a lot of self censorship, mostly in
other countries, in China, certainly. There`s a very repressive Internet
censorship, which lead people to self-censor. We have seen examples of
companies doing things in advance of potential regulations trying to
forestall them. But this -- what so Sony did really is unprecedented. It
seems like a very, very knee-jerk, almost panic reaction --

MELBER: Right.

SCHNEIER: -- to what should be un-credible threat that they`re just
responding to. I mean, I`ve never seen anything like it.

MELBER: Yes, it is remarkable, as we`ve been saying in covering it.
It`s about a plot of a movie, but it feels like a plot of a movie. And, so
far, a depressing one for free speech, although we understand some of the
pressures they were under.

Bruce Klingner and Bruce Schneier, two Bruces who know a lot about
this area -- thanks for joining me tonight.

KLINGNER: Thanks very much for having us.

SCHNEIER: Thank you.

MELBER: I really appreciate it.

Now, as we`ve covered throughout the story, much of Hollywood was
caught off guard by this attack. It`s a town that prides itself on power
and free expression, and it found both traits lacking here. Now, there is
some backlash and some second-guessing. Did Hollywood forget how to handle
politics? Or was it just too political?

Well, next, I`m going to ask a man who knows both worlds, "THE LAST
WORD`s" Lawrence O`Donnell.

(COMMERCIAL BREAK)

MELBER: All this week, we have been reporting about how witness 40,
the woman who told a Ferguson grand jury that she saw Michael Brown charged
Officer Darren Wilson, but Officer Wilson shot him, hasn`t said a word to
the media. But since, "The Smoking Gun" blasted her and some background
material about her, as basically a racist and a fraud.

Well, Witness 40`s real name, we now know, is Sandra McElroy. And
today, she breaks her silence. We`ll tell you what she said, straight
ahead.

(COMMERCIAL BREAK)

MELBER: When Sony pulled "The Interview", many big actors and power
players in Hollywood spoke out.

Ben Stiller wrote on Twitter, "Really hard to believe this is the
response to a threat to freedom of expression here in America."

Actor Rob Lowe compared Sony paying this ransom to one of the most
despised appeasers in world history, quote, "Saw Seth Rogen at JFK. Both
of us have never seen or hard anything like this. Hollywood has done
Neville Chamberlain proud today", end quote.

Then, Lowe also found common cause with Republican firebrand Newt
Gingrich, retweeting his warning about caving to bullies. Quote, "No one
should kid themselves. With the Sony collapse, America has lost its first
cyber war. This is a very dangerous precedent."

That alignment of at least a portion of so called liberal Hollywood
and a conservative politician even made some international news.

(BEGIN VIDEO CLIP)

TV ANCHOR: America has lost its first cyber war and North Korea has
won. Well, that`s the judgment of one of America`s top Republicans after a
cyber attack on a film studio led to a film about North Korea being pulled
for release.

TV ANCHOR: Today, many in both Washington and Hollywood have been
criticizing the decision to cancel the film.

(END VIDEO CLIP)

MELBER: And influential "Game of Thrones" creator, George R.R. Martin
wrote last night, that he will screen the interview at its small theater in
Santa Fe, though, of course, he`d have to get the movie from Sony first.
He also wrote, quote, "The level of corporate cowardice here astonishes
me."

Joining me now is Lawrence O`Donnell, host of MSNBC`s "THE LAST WORD",
a longtime Hollywood writer and producer, and former aide to Senator
Patrick Moynihan.

Good evening.

LAWRENCE O`DONNELL, MSNBC`S "THE LAST WORD" HOST: Ari, how much time
would have taken to throw in Emmy-winning. It`s two words.

MELBER: I will put a memo out. I will put all-points bulletin.

You heard George R.R. Martin there talked about cowardice. Donald
Rumsfeld always said weakness is provocative. Is that part of the problem
here going forward?

O`DONNELL: Well, look, everyone in the creative community is sad
about this. That was -- that`s in Rob Lowe`s tweets, that`s in everyone`s
comments. Everyone is sad about it.

Some people are out raged in saying Sony made the wrong decision. The
artist or the writer in me is outraged. The practical decision-maker has
to think twice.

And you know who made this decision. It wasn`t artists. It wasn`t
even the Sony executives.

MELBER: Was it the lawyers?

O`DONNELL: It was you guys. It was the lawyers. You know how this
works.

Corporate America, the lawyers start with the lawyers for the shopping
malls who are saying to them, your tenant, the movie theater, is growing to
risk a liability for you as the owner of this shopping mall if anything
happens. And, by the way, the threat was to the entire neighborhood of the
movie theater, remember.

Then, you have the lawyers for the movie theater chains. They were
the first ones to say, we aren`t going to do this. So, the movie theater
chains dropped it.

By the time Sony said, we`re not going to release the movie, there
wasn`t a movie chain left in America that seemed as though were going to
actually do this because all of their lawyers said don`t do it.

And then, of course, the Sony lawyers, eventually, in this process,
say don`t do it. Mind you, they`re in real communication with the FBI all
along.

MELBER: Sure.

O`DONNELL: And the FBI, you know, we`ve got this -- earlier in the
week, we got this thing from Homeland Security saying we don`t regard this
as a credible threat, this thing that they said was threatening to movie
theaters and moviegoers.

MELBER: Sure.

O`DONNELL: And then, as then as the week wears on, after the
president said, I advice you go to the movies, the FBI starts warning the
movie theater chains directly. And so, at that point, you know, the
lawyers at Sony listen to all of this and say, we`re not going to take the
chance.

And so, you know, what you`re asking for here, in order for this to
get distributed, is a bunch of corporate lawyers for the first time in
history, just say, ah, let`s just take the chance. I heard some people on
TV saying it`s not a credible threat. Let`s just take a chance.

MELBER: Well, it`s certainly true that the insurance agreements and
all the contracts on those theaters and any of those physical screening
locations have a foreseeability clause, and there was a rising
foreseeability of risk here that they have to weigh.

And yet, when you were covering the story early on, you said it was an
attack on the First Amendment. But you were able to say it was a pure and
simple terrorism case.

O`DONNELL: Yes, this changed this week from -- first of all, it was a
theft case. And it was first -- sadly, in the American media, it was
mostly being treated as a gossip case. That`s what it was mostly treated
as.

But all along, it was a major, serious theft case. And that should
have been the frame for everything.

And then it switched from being a major theft case this week to a
terrorist case on Tuesday night, when these threats started to come out.
And I`ve got to say, the coverage changed accordingly, and I think
everybody has been handling it in a pretty responsible way since then, and
weighing the difficulties of this challenge.

You know, I want to say what Newt Gingrich said, I want to say, you
know, these executives, they should have been tougher.

MELBER: Yes.

O`DONNELL: But I really can`t bring myself to do it, because I -- if
I have to guess, if you put me in that decision-making spot, running a
movie theater chain, or running the Sony Studio, I would have listened to
the lawyers, I would have listened to the FBI, would have asked the FBI if
they can promise me that nothing is going to happen, and if they couldn`t,
and if the lawyers are still pushing me, I would have made the call that
everyone made in the lawyer`s offices and the executive offices, in the
movie theater chains, right through to Sony. And it is a very sad call
that they made.

MELBER: I`d like to offer a rebuttal to the strong closing argument
you just gave.

O`DONNELL: Yes.

MELBER: You are outlining essentially the core of the dilemma of the
commercial artist. And artists like to commercial not only to make money,
but because they reach such bigger audiences and have more cultural impact.
We`re talking about global art here.

And so, everything you said makes sense for that dilemma, for the
artist, within the operation of a multinational corporation, right? This
is not pure. This is not community theater.

But I wonder, is all of that completely undermined by the fact that
they didn`t put it out online in anyway? Because what is the security
problem releasing the material and not having --

O`DONNELL: It`s exactly the same security problem, because if Netflix
will never touch this, because the -- if it`s the North Koreans, they would
spend their entire time taking down Netflix and they would apparently
succeed. Amazon, the same thing.

Online -- everyone thinks, oh, online is somehow different from the
movie theater. It just means there`s no place to place a bomb, you know,
if you were going to bomb the movie theater. But they would absolutely,
and that, by the way, is part of what the FBI has communicated to all the
communities, that you will cyber attack by these people if you handle this
in any commercial form whatsoever, DVD, online.

So, that`s -- I mean, the really painful thing is we may never get to
see this movie, as long as this regime is in power in North Korea. I mean,
maybe 20 years from now, you know, this thing can`t go on forever there.
At some point, you know, 20, 30 years from now, somewhere down the road, it
might be in their terms, safe to show this thing.

MELBER: Isn`t that --

O`DONNELL: There`s no vehicle, there`s no way you can see this movie.
Now, you can`t even get a DVD from Sony to -- I mean, look, there are a lot
of people who want this DVD really badly to invite people to their homes
and show it, and invite a lot of people to their homes and tell people that
they`re doing it and openly be defiant. They can`t get it. You know, a
lot of us had plan on opening day to buy a lot of tickets to this movie, a
lot of writers who are planning to just buy online a lot of tickets to this
movie to defy this threat in every way we possibly could. And now, we`re
not even going to get that chance.

MELBER: So, Lawrence, isn`t that depressing? That we originally
talked about the Internet and the virtual space as a place for more
activity, for a wider types of expression?

And if you`re right, if everything you just said is right, and,
obviously, what you said, a lot of people agree with, because it seems to
be where we`re going, than this use of the Internet, this use of cyber
power and infrastructure is not only cabining our free expression in
American theaters, but on the entire Internet itself.

O`DONNELL: Well, there`s that duality to it. It is the ultimate
distribution system for thought in the world. And then it turns out it is
also the ultimate way to threat and inhibit expression. We`ve just
discovered that.

I don`t think we realized the power of the threat that can be conveyed
in cyberspace to mute us this way. I mean, it`s been a real learning curve
for everyone involved. But remember, I mean, any version of this online,
Sony has to do it. If it was if Netflix said, you know what, we`re brave,
we think our security is better than North Koreans, we will put it up, just
give us -- Sony, please, just give us the movie -- Sony under their policy
cannot give them that movie because that will expose them to more threats
from --

MELBER: Yes, that is one other -- a big, tactical challenge. Is
there a place online or Bitorit, or Reddit, or wherever that people
actually want to band together and try to take that risk. But as you
articulated --

O`DONNELL: My house. Let`s band together at my house.

MELBER: Everyone, you got the invite?

O`DONNELL: Sony, the DVD, please? I won`t let it go out of my hands.

MELBER: MSNBC`s Lawrence O`Donnell, an expert on this. Thank you so
much. You can catch "THE LAST WORD" with Lawrence, always, weeknights at
10:00 p.m. Eastern.

And tonight, we also have a special update on a story that Chris did
for this show`s "All in America" series about smart guns. That is next.

(COMMERCIAL BREAK)

MELBER: This summer, All In brought you an extensive investigative
report about a new digital smart gun that can only be fired by authorized
users, a gun that has the potential to reduce accidents and prevent use by
criminals, but it has faced fierce opposition from the gun rights
establishment.

(BEGIN VIDEOTAPE)

CHRIS HAYES, MSNBC ANCHOR: What if there was a gun that a child
couldn`t shoot, a gun with the technology to ensure it could only be fired
by its owner. Well, that gun exists. It`s real. I held it. I fired it.

UNIDENTIFIED FEMALE: How does that feel?

HAYES: Amazing.

UNIDENTIFIED FEMALE: Yeah?

HAYES: It feels like a massive step forward, like the iPhone of
firearms, a smart gun. There`s just one problem, you can`t buy it anywhere
in America. That`s not because it`s illegal, and it`s not because it`s
manufacturer isn`t trying to sell it.

Now the question is can you sell it?

BELINDA PADILLA, GUN SHOPT OWNER: The demand is there. I receive e-
mails constantly from people wondering where they can buy the handguns.

Red means you are not the authorized user or you have not activated
the watch.

HAYES: So when you grip that, it`s telling you right now you cannot
fire this gun.

PADILLA: Correct.

HAYES: The Armitex IP1 smartgun only functions if the owner is
wearing a special watch.

PADILLA: My code is entered. It says it`s good. I hit enter. Now I
pick up the handgun and it`s green. Green means I`m the authorized user,
now I`m ready to fire.

HAYES: If the watch and gun are separated by more than 10 inches,
after, say, a suspect wrestles it away from a police officer, the gun stops
working.

HAYES: Putting the ammunition in. I can fire.

I now take the wristwatch away, it is more than ten inches, the grip
tells me I cannot fire. I pull the trigger, I get
nothing. I return it here, within ten inches, pull the trigger.

(END VIDEOTAPE)

MELBER: Tonight, we have an update on that story with key
developments out of New Jersey which has a law, staunchly opposed by the
NRA, that would mandate that once a smart gun is sold anywhere in America,
gun sellers in the state must eventually sell only smart guns, that is
tonight. And it is on a brand new special that you`re probably going to
want to see, All In America at 11:00 p.m. on MSNBC.

(COMMERCIAL BREAK)

MELBER: Brand new revelations tonight about one of the most
disturbing details from that Ferguson grand jury.

Now if you`ve been watching All In, you have seen the flawed testimony
that Witness 40 provided in the Ferguson case. As Chris Hayes reported
last Tuesday, Witness 40 claimed that she, quote, witnessed Officer Darren
Wilson shooting Michael Brown saying he was, quote, "running right at the
cop like a football player head down," end quote.

Fox News repeated it constantly, but there were serious issues with
that so-called witness`s credibility. Officials even appeared skeptical of
her story at that time and she had written some racist things in her
journal. Then, two days ago, The Smoking Gun web site identified Witness
40 as a woman with a criminal past making racist remarks.

Today, new details about Witness 40 emerged from St. Louis. Sandra
McElroy gave her first on the record interview to the St. Louis Post
Dispatch. She confirmed that she is this so-called witness in question.
And the headline of the piece was, quote, "Witness 40 in Michael Brown case
raises questions about grand jury proceedings." Indeed.

Speaking out for the first time, Sandra McElroy doesn`t do too much to
answer those questions. She told the paper, "have I ever used the n-word?
Yeah, I have. Would I ever harm a person because of the color of her skin,
no. Am I part of the KKK? No," end quote.

And then she maintained in the same interview that she did witness the
death of Michael Brown, but she said, quote, "if I ever witness anything
again, I will never come forward."

And then to sum it all up, again her words, she told the Post Dispatch
she knew the prosecutors were trying to discredit her saying, quote, "they
were trying to discredit me because of my racial slurs."

Joining me now is Redditt Hudson, a former St. Louis police officer
who is
board chair of the Ethics Project. Good evening to you.

REDDITT HUDSON, FRM. ST. LOUIS POLICE OFFICER: Good evening.

Typically, in these kinds of cases, you bring forward your best
witnesses, you get a general outline of the case and you move on to a trial
where you go through everything. This one was weird, and many people say
unfair because they
brought in so many witnesses.

Based on what we`ve learned here, what do you make of this witness?
And should she have been before the grand jury?

HUDSON: Well, it makes a troubling case even more troubling. This
witness was also a person who insinuated herself into another case prior to
this one as a witness under very suspicious circumstances. And if the
prosecutor in this case
had done his due diligence, or, worse yet, if he has done his due
diligence, and he allowed this person to have weighted testimony in the
grand jury proceeding I think it makes all the more case for those of us
who think that a grand jury should be reconvened and a special prosecutor
appointed.

This case was mishandled from the start and many of us believe
intentionally by a prosecutor who had no intention of indicting Darren
Wilson and gave him every opportunity in the process to be cleared without
charges ever being filed.

MELBER: And with this story drawing more reporting now in St. Louis,
how do you think it affects this prosecutor? You bring him up, Bob
McCulloch. Is it embarrassing for him at this point?

HUDSON: You would think so. If he had a shred of morality and ethics
in his body, you would think he would be embarrassed by this revelation.
But he`s been a strident defender of police officers. He works with them
all of the time. There`s even more information relative to his involvement
in this case that`s come out now in as much as he is a board member of a
charitable organization that supports police officers. He`s had some other
relatives in law enforcement that may or may not have had some connection
to Darren Wilson.

It`s a very troubling case. And it`s a very important case for the
nation as you`ve seen, as it`s raised a number of issues that we need to
address as a country and you would think that integrity in the process
would be mandatory. But I don`t believe we`ve had that.

MELBER: And Mr. Hudson, as a former officer, just give us a sense for
people who don`t know. How difficult is it at any point in these kind of
investigations for someone to figure out whether someone saw what they saw
or seems like a credible witness or seems like someone`s who is drawn in
and trying to talk to you for other reason?

HUDSON: It depends on the witness and it depends on the investigative
resources that you have available to you. Apparently, this witness was
substantively discredited early on by the federal investigators who, from
my understanding, challenged her on her version of events and established
the fact that she probably could not have been physically present to
witness the things that she says she witnessed.

And if you add to the fact of your original story that she was in the
neighborhood randomly so that she could help herself get over using the n-
word and
she happened to be there on that day at that time for that reason, it
borders on the absurd.

MELBER: There was talk about forensic and outside documentation and
materials by the prosecutor in that famous press conference he gave. As
you just said, there was a lot oaf outside evidence that placed her far
from the scene of
the incident.

I want to ask you about race.

HUDSON: Can I make another point, though, because at this point, you
have a
federal investigation that is ongoing. She needs to be looked at. She may
have perjured herself. She may have provided false testimony. The
prosecutor in this case needs to be looked at relative to his role in
allowing her to go before the grand jury if he had some level of knowledge
of these circumstances.

This really is a door that`s open, I believe, for those who want to
see a process that has the characterization of integrity in place. Here`s
an opportunity for us to get it right and see what actually happened there
in front of a jury.

Let`s try the facts. Let`s try the case.

MELBER: And finally, with all the talk about race, one of the
arguments
Prosecutor McCulloch made was that they came at this straight and they
didn`t want to emphasize race in anything that they presented to those
grand jurors. That`s fine.

But what do you make of bringing someone forward who both had low
credibility and then had all of these racially incendiary and, in her
words, racist things in
her history. It would seem to me that if someone has low credibility and
they don`t add much, and they have the race and you say you`re trying to
avoid racial problems, you wouldn`t even bother to bring him in.

HUDSON; His attempt was to keep race out of the process then with
this witness he`s apparently failed miserably, because there is no way to
separate her history and her ideology and her thinking from the testimony
that she provided. I think, again, it raises very serious questions that I
hope federal investigators are looking into as we speak, because I think,
like so many others in law enforcement and former law enforcement, that
this process should be revisited.

I think a lot of law enforcement people who have come on in front of
the nation give the country the false impression that there is universal
support for the officer involved in that situation and the process that
followed. There is not.

There are a number of officers around this country who believe in
justice and who believe in fairness and don`t think this process really
provided us with either.

MELBER: Appreciate that. And we`ve been speaking to officers current
and former on the show. And I want to mention, as we have before, since
Chris Hayes
started reporting on this, we`ve reached out to the prosecutor`s officers
for comment and continue to welcome their involvement.

Thank you to Redditt Hudson tonight.

I want to turn to some more good news today about President Obama`s
foreign policy breakthrough with Cuba and success with the increasing
number of Americans
who have health insurance. It is not a problem with the Obamacare website,
it`s what hasn`t gotten as much attention, but it`s actually more important
and we have that story next.

(COMMERCIAL BREAK)

MELBER: If you ever listen to call-in radio, you probably know
callers can make a big difference. Deval Patrick, the governor of
Massachusetts has a radio show called Ask the Governor and today, he got a
call from a former resident with some complaints about service where he
used to live, but it was an important caller.

(BEGIN VIDEO CLIP)

GOV. DEVAL PATRICK, (D) MASSACHUSETTS: Hello, you`re on -- sir, yes,
you`re on with Governor Deval Patrick.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Governor, this is
Barack
Obama formerly of Somerville. I`ve been...

PATRICK: Come on.

OBAMA; I`ve got a few complaints about service around the
neighborhood. But I`ve moved down south since that time.

PATRICK: You`re kidding, Mr. President. Who is this really?

OBAMA: I want to find out how it is that you got Massachusetts so
strong and moving in the right direction?

PATRICK: Mr. President, you know I love you, but you still have
trouble saying Massachusetts, you know that, don`t you?

(END VIDEO CLIP)

OBAMA: The president went on to commend the outgoing governor on his
eight years in office also told him even though he can`t properly pronounce
Massachusetts, he does know how to spell it.

(COMMERCIAL BREAK)

MELBER: You know, among the many weird political terms that get
thrown around a lot in Washington, the term lame duck is constantly
repeated, regardless of what it actually means. It originated in 18th
Century Britain where it was applied to businessmen who had gone bankrupt.
And according to the Library of Congress, the definition says, "they were
considered as lame in the sense that the impairment of their powers
rendered them vulnerable like a game bird injured by buck shot."

By the 1830s, the term had emigrated here and moved into the political
sphere. It was used to describe office holders rendered political
vulnerable because their a term was about to end. A president becomes a
lame duck, for example, when he`s still in office after his successor has
been elected.

But its usage, as you may know, seems to have expanded. After the
mid-terms last month, for example, when Republicans took control of the
Senate, the political press was full of headlines calling President Obama,
oh, no, a lame duck, even
though he had a full half of his entire second term left.

People were writing this president`s political obituary even before
the president`s second term started.

Look at the Washington Times here declaring him, a, "lame duck one day
after his reelection."

But everyone who thought Barack Obama was done should have been
listening to his response the day after the midterms when he was asked
about this lame duck
status.

(BEGIN VIDEO CLIP)

OBAMA; That`s the label that you guys apply. I`m going to squeeze
every last little bit of opportunity to help make this world a better place
over these last two years.

(END VIDEO CLIP)

MELBER: He has been squeezing. In just a month and a half since
then, take a look at this, yesterday`s huge news about normalizing
relations with Cuba.

And you know the initial decision to break ties with Cuba was the
product of another lame duck, Dwight Eisenhower did that just two weeks
before he left office. This was the front page of The New York Times on
that day, a big story. And this was the front page today, another big
story describing that historic deal by President Obama to basically
overturn five decades of Cold War hostility.

And it`s the latest in a series of pretty tangible achievements since
this presidency was declared lame. From his executive action to protect
millions of people from deportation to the stewardship of Obamacare in its
second year, which we can now report has 2.5 million people signed up and a
crashing rate of the uninsured and that game-changing agreement with China
to curb carbon emissions.

So for this second term president, maybe we need to retire the term
lame duck. I am open to suggestions, you guys. Free bird, anyone?

(COMMERCIAL BREAK)

MELBER: We`re back.

Joining me now is Joel Berg who served in the Clinton administration
and is now a senior fellow at the Center for American Progress, and former
governor of Vermont and chairman of the DNC Howard Dean, an MSNBC
contributor. Good evening, gentlemen.

Governor, let me start with you. We were talking about the
president`s second term here. Where do you come down? Lame duck or free
bird?

HOWARD DEAN, FRM. DNC CHAIRMAN: No, he`s clearly not a lame duck.
This -- every president faces this, most of them actually make their mark
in foreign policy in the last two years because they have a freer hand.
This president certainly made a major mark today.

But it`s not just here, it`s going to be in Ukraine, now, North Korea.
If he does get a deal with Iran, that`s going to be a huge deal. So I`d
hardly say this president was a lame duck. I think that`s sort of an
inside the beltway kind of construction.

MELBER: And, Joel, you were there through the end of the President
Clinton`s second term. What do you make of this? And I guess it`s a
problem of our, whatever you want to call it, political culture, media,
that there is this obsession with trying to sort of get so far ahead of
this presidency that you want to kneecap him in the middle of the second
term.

JOEL BERG, FRM. MEMBER OF CLINTON ADMINISTRATION: It`s frankly a bit
ridiculous. I`m surprised we`re not calling Chelsea Clinton a lame duck
four decades in advance.

As you know, the constitution gives the president of the United States
exactly the same power on the last day of the presidency as the first day
of the presidency. I know that the Clinton administration used every ounce
of that power every hour they were in office. And I hope that President
Obama continues to use the powers the constitution gives him, to use the
executive branch to improve the world and the country.

MELBER: And Governor Dean, do you think it also goes politically just
to some frustration that other side tends to have -- what he did, for
example historically here in Cuba, while some are receptive to it, Rand
Paul seemingly open to it, a lot of Republicans who want his job wouldn`t
do this and then have a hard time unwinding it.

DEAN: Well, the Republicans are having a tough time because they now
have to switch from being a group of irresponsible people who can say
whatever they want
any time to a group that actually really has power. They actually have to
act
constructively for anybody to take them seriously in the 2016 election.
And they know that. And they`re now trying to make that transition which
is why I see -- I think you see some of this frustration, some people
saying well we should be constructive, others falling back into the mode of
the last four years where they don`t want to do anything.

BERG: Well, the fact of the matter is there`s a big to-do list for
America. On the hunger issue I work on every day, we still have 49 million
Americans that live in homes that can`t afford enough food. I hope the
president in his last two years holds a national summit on hunger.

There hasn`t been one since President Nixon. There`s a lot he can do
to bolster the first lady`s legacy on nutrition, there`s a lot he can do
with the Department of Labor to crack down on wage theft.

MELBER: What would you do executively?

BERG: Well, all of that he can do without congress. Use the
Department of Labor to make sure fewer employers rip off their workers.
Certainly the immigration work is going to reduce hunger and poverty,
removing workers from the
shadows. Certainly, he can continue the work they`ve done in this
administration on school meals and on summer meals, increasing access while
improving nutrition. And those are under attack. And those need constant
executive vigilance. So there`s a lot of work that needs to be done.

MELBER: And Governor Dean, as we were looking over some of the record
here, I mean a lot of people think of politics as theater. The truth is
some of the most
important stuff just isn`t out on the stage.

For example, yesterday, we saw numbers coming out of Senator Reid`s
office for the end of the senate showing that they had confirmed more Obama
judicial
nominees federally than had ever been confirmed in a senate going back 30
years. It`s like because it was a Democratic Senate, it`s the one do
something in the do-nothing congress.

And as you know, that has an incredible impact on shaping a federal
judiciary that had been leaning rightward. That`s a part of the second
term, but we rarely hear about it.

DEAN: yeah, I think Senator Reid gets the credit for that to be
willing to exercise a nuclear option in the face of the most obstructionist
congress since reconstruction after the Civil War.

So I do think there`s plenty of credit to go around for some of these
things. But, look, I think Joel is absolutely right, the president is the
president whether it`s the first two years or the last two years. This
president has really hit his stride. I think he`s going to actually --
it`s too early to tell, you know, what kind of a presidency you have until
about 10 or 15 years afterwards.

But I think his forte is in fact a lot of it is going to be not health
care, but foreign policy. I think there is an Obama doctrine and his
doctrine is really a significant difference between the go-it-alone folks
that were in the White
House before the president. He understands multilateral agreements,
multilateral partnerships. And I think 10 or 15 years from now, he`s going
to be remembered
for having changed American foreign policy for the better.

MELBER: And what do you make of the Republicans who say they will be
less interventionist as something that was a spirit of your presidential
campaign?

DEAN: Well, you know, I wasn`t less interventionist, I`m an
internationalist. I just don`t think you go to war without telling the
truth to the public why we`re going. And that -- I lived through that in
Vietnam and I didn`t want to see it happen again in Iraq, which is why I
took the position I did with the Bush war in Iraq.

But I think -- you know, it`s not so much as being an interventionist,
it`s are you an internationalist or not? The truth is, things like Ebola
really do have an effect on American security. And if you don`t recognize
that, you probably shouldn`t be president.

MELBER: All right, Governor Howard Dean and Joel Berg, thank you so
much for joining me.

That is our show for the evening. You can always email me at
Ari@MSNBC.com.

The Rachel Maddow starts right now.

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

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