Monday, December 20, 2010

'Countdown with Keith Olbermann' for Monday, December 20th, 2010
video podcast

Video via MSNBC: Oddball

Guest: Howard Fineman, David Corn, Marvin Ammori, Mike German, Terry Goddard



CHRIS HAYES, GUEST HOST (voice-over): Which of these stories will you be talking about tomorrow?

An historic vote, the repeal of "don't ask, don't tell" - which wouldn't be complete without one last dig from its most vocal opponent.


SEN. JOHN MCCAIN (R), ARIZONA: There'll be high fives all over the liberal bastions of America.


HAYES: Now, it's on to START - - which might get stopped because everyone's just so tired.


SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: It's been a week from hell. I've had some time to think about START, but not a lot, and it's really wearing on the body.


HAYES: What you can watch online, how much you can be charged for it, and who makes those decisions? Net neutrality goes to a vote at the FCC. What gets regulated and what doesn't.

Big brother on your corner. As state and local law enforcement expand their reach into terrorism protection. Their tools: the same techniques used by the military and the FBI. Their targets: Anyone they see as suspicious.

Roll up the carpets and get ready to celebrate treason. It's secession ball time. South Carolina tries to rewrite Civil War history. And Haley Barbour finds the kinder, gentler side of segregation.

And allegations of widespread fraud, of misleading consumers, of selling a home out from under an owner one day after she was told not to worry. What may be the first of many - Arizona and Nevada sue Bank of America over home foreclosures.

All the news and commentary - now on COUTDOWN.



HAYES: Good evening from New York. I'm Chris Hayes, in for Keith Olbermann. This is Monday, December 20th, 687 days until the 2012 presidential election.

And after a weekend in which the U.S. Senate sent the president legislation repealing "don't ask, don't tell," or in more historic terms, integrating the U.S. military for gay and lesbian members to serve openly.

In our fifth story tonight: this Congress still has a few more tricks up its sleeve, proving, in a painfully mixed metaphor, that some lame ducks still know how to fly.

By a vote of 65 to 31 Saturday, the U.S. Senate passed a bill, already passed by the House, to be signed into law by the president Wednesday, repealing "don't ask, don't tell," allowing gay and lesbian Americans to serve in the armed services openly.

"The National Journal" reporting that the vote culminates what was, in effect, a long-term White House strategy to ensure that repeal would pass with support from the Pentagon. And, therefore, members of Congress making it less vulnerable to subsequent restoration than if a court repeals it.

Unnamed Republicans, "The National Journal" reports, told the White House after the House passed repeal that they could not support repeal until after the November elections. In just a moment, we'll play John McCain whining about the repeal of DADT, but as far from alone on the Senate agenda. The Senate finally passed the Food Safety Act. The DREAM Act providing a path to citizenship for undocumented immigrant kids going to college or joining the military was shut down yet again.

And then there's the new START Treaty, which would end more than a year during which America has been unable to monitor Russia's nuclear arsenal. The nuclear material of which, various and sundry unsavory characters would like to get their hands on.

The Senate Republican leader Mitch McConnell added his name this weekend to a growing list of Republican senators who said they would block Senate ratification of the treaty. But apparently, McConnell is not quite the leader of as many Republican senators as he'd hoped. "The Hill" reported tonight that unnamed GOP senators say enough of them will defect to let the treaty pass easily.

And, oh, yes, if the Senate does not authorize new funding for the government by midnight tomorrow, the government will shut down. A deal for a new spending through March bill reportedly in the works.

Let's bring in MSNBC political analyst, Howard Fineman, also senior political editor at "The Huffington Post."

Howard, thank you very much for joining us on a packed Monday evening.


HAYES: Let's start with "don't ask, don't tell" repeal. It's a major civil rights accomplishment for both the departing Congress and the president, who spent the last two years fielding a lot of skepticism about his commitment to this.

How do you think the White House is feeling about this?

FINEMAN: Well, I think they're very happy about it and I think they're very relieved, in part because they got criticized (ph) with their progressive base over the tax bill for example. But here's a social issue where they really could be at one with the people who got them elected. And I would say, beyond that, that long after a lot of the details of other bills that were enacted this year and signed into law by the president are forgotten or sort of just become part of the general statutes of the United States.

This historic vote will be remembered as a very important one in the social history of the United States and this is a president who likes to make social history, as you know. And I think that's one of the reasons why he and his supporters are just so proud of it.

HAYES: You know, I'm looking at what's happened in this lame-duck Congress, particularly if START does pass, which it's now looking like it will. We'll get to that in a second. And I'm trying to get my head around, how have they gotten so much done when there's been so much foot dragging, so much obstruction for such a long period of time, for the last two years.

What is it about this lame duck? Is it - is it the deadline they're up against that sort of forced a kind of action on this body that has been so sporadic?

FINEMAN: Well, I think the deadline - you know, we're reporters, we know how deadlines concentrate the mind like a hanging.

HAYES: Yes, exactly.

FINEMAN: So, that's part of it. I think you also alluded to it in the opening, Chris, which is that post-election, some Republicans and in some cases, some Democrats are freed up from the strictures of the campaign season and from allegiance from their party. There are opportunities for people to vote their conscience. I think that happened on the "don't ask, don't tell" vote in terms of some Republican votes there. I think Joe Lieberman - credit where credit is due to Joe Lieberman, who takes a lot of gaff on this network among others -

HAYES: Sure.

FINEMAN: - he really worked hard on "don't ask, don't tell."

And I think, also, sort of the accident, if you will, or the president's decision to play on Republican turf on the tax bill, which is, after all, what he did. That created, however temporarily, sort of a spirit of bipartisanship that will probably be gone next year, but sort of existed in the bubble of the lame duck.

HAYES: I want to focus for a moment on the one big disappointment of this lame-duck session, which is the DREAM Act, which I remember being a reporter in 2003 and pitching a magazine feature on this thing, which has been around forever. States have passed it. It's one of these things - the moral logic of it seems fairly impeccable.

Why did this not pass again?

FINEMAN: Well, this is a case, I think, where some Democrats who were looking toward the next election made it - made it difficult. Jon Tester from out west being one of them. He's a guy who the people who supported the DREAM Act are really furious with right now, for example, from Montana.


FINEMAN: I think some people who are up on the Democratic side in 2012, who are very skittish about the immigration question, decided not to take a risk. I think they may be taking the wrong lesson or maybe not paying attention to what happened in Nevada. The Republicans went pedal to the metal on the fear strategy, on immigration. It ended up sinking whatever the chances the Republicans had of winning that seat.

Harry Reid won going away, but other Democrats out west, especially, and in the southwest, didn't want to take that chance. I think that's a big reason why.

HAYES: I think that's a good point, about what the lesson is there.


HAYES: And I think long-term, you know, the political and policy interests align here. so, hopefully, we're going to see something better next.

Final question here, I want you to tell me about what is the status quo on this spending and continuing resolution. And how sort of - much of a doomsday scenario are we setting up for ourselves come March when this continuing resolution expires?

FINEMAN: Well, here's - the dynamic of the next two years, as this Congress winds down, the dynamic of the next two years is going to be to relitigate and reargue all the legislation that Obama and the Democrats for the most part passed in the first two years. That means efforts to defund, to delegitimize, to get rid of, you know, all the historic legislation that was passed these first two years, and spending is going to be the way to do it.

I think there'll be crisis after crisis after crisis on extending spending bills, on the continuing resolution, which will probably only go until February, maybe March, only until February, you know, at least. But we're going to see that over and over and over again.

And so, it's not that Obama's going to be running against the do-nothing Congress. The president is going to be running against the sort of tear-down Congress -

HAYES: Right.

FINEMAN: - because that's going to be the mode of the next two years.

HAYES: MSNBC political analyst, Howard Fineman, thanks a lot for your time tonight. Appreciate it.

FINEMAN: Thank you, Chris.

HAYES: Of course, as you might imagine, after two years of dragging out everything they could, blocking passage of literally hundreds of House bills, stonewalling uncontroversial nominees, denying straight up or down votes to build with majority support, you can imagine what impact bipartisan Senate passage of bills supported by the American people has had on some of the most seasoned Republican Senate veterans.

That's right, it hurt their fefes (ph). Republicans are angry that Harry Reid has packed the Senate's final days of legislation, making them actually work on stuff instead of getting their holiday shopping done.

Senator John McCain, for one, reacted to Reid's plan of passing this stuff now before a new, more Republican Senate comes to town by announcing that he will never love again.


MCCAIN: The American people are spoken, and you are acting in direct repudiation of the message of the American people. That's why they're jamming through this - and my friends, there's a lot of talk about compromise, there's a lot of talk about working together. You think what this bizarro world, that the majority leader has been carrying us in, of cloture votes on this, votes on various issues that are on the political agenda of the other side, you somehow think that beginning next January 5th, we will all love one another and kumbayah? I don't think so!


HAYES: No kumbayah

That was after Friday night when Senator Lindsey Graham contemplated the possibility of considering the new START Treaty this week and replied, 'Calgon, take me away."


GRAHAM: It's been a week from hell. It's been a week where you're dealing with a lot of big issues from taxes to funding the government to special interest politics. And I've had some time to think about START, but not a lot. And it's really wearing on the body.


HAYES: Senator Graham has actually had more than some time to think about the START treaty. It was signed on April 8th. And Senate debate on it has lasted longer than debate on its last two predecessors combined.

Perhaps the most fascinating twist on Republican opposition to START, the how much of it arose as a threat to the administration, not to repeal "don't ask, don't tell." The Republican Party leadership putting itself in the position of claiming the treaty will make U.S. vulnerable to nuclear missiles from North Korea and Iran, but they would have voted for it, no problem, if only gays had been kept out of the military. Huh?


GRAHAM: If you really want to have a chance at passing START, you better start over and do it the next Congress, because this lame duck has been poisoned.


HAYES: Let's bring in David Corn, Washington bureau chief for "Mother Jones" magazine, a columnist of

David, good evening.

DAVID CORN, MOTHER JONES: Good evening, Chris.

HAYES: All right. Am I wrong that John McCain has just acted in the most petulant, disgraceful manner of any national political figure in a very long time during this lame-duck session?

CORN: I am taking my treaty and I'm going home. I mean, it's like the lame duck has been poisoned. This is a week from hell.

I mean, it's - I have a general theory of social evolution, which is that life doesn't get much beyond high school level in any field. But I tell you, John McCain and Lindsey Graham are really proving it this week. They're acting like spoiled brats.

You know, I'm not going to give you your treaty. I don't care about the real substance of nuclear arms reductions in this world, but I'm not going to give it to you because you're voting on something else.

HAYES: And it's remarkable they've been so, sort of, boldfaced about it. I mean, they've honestly run to the press. I mean, Corker was doing this as well, basically saying, you know, this treaty, which - the substance of which we're OK with, even though they've been trying to kill it in all sorts of ways -

CORN: Yes.

HAYES: - we're really going to hold this hostage because we don't - what? Because of this other vote.

CORN: Because of the - because of the gays! You know?

HAYES: Right.

CORN: But let me - let me give you a pop quiz. Pop quiz: what was John McCain's slogan in the 2008 campaign?

HAYES: Country first.

CORN: Country first.

HAYES: Do I get the prize?

CORN: You get a prize. I'll send it to you in the mail.

But country first. Is that what we're seeing this week? This is the lame ducks and poison, this is all hell. God, we have to work?

Didn't these guys ever see Jimmy Stewart in "Mr. Smith Comes to Washington"? I mean, Lindsey Graham looked like - you know, because he's working 10, 12 hours for a couple of days of the session, he is totally out of whack.

I mean, most Americans and a lot of Americans are working two, three jobs a week. I don't know - I think these guys are really shooting themselves in the foot this week. Forget kumbayah. I think, you know, the American public is looking at them and seeing jokes.

HAYES: Lindsey Graham also, I think - I mean, you know, to the extent that there is this sort of press around Lindsey Graham - Lindsey Graham is sort of McCain 2.0 in terms of the Beltway press' sort of love affair with a Republican who's reasonable and like, you know, doesn't want to torture too much. And he, himself, has been sort of acting in a similar way.

I sort of wonder what it does to the Lindsey Graham brand down the line, and particularly into the next Congress.

CORN: You know, I tend to believe that in politics, having a hissy fit is usually not good for business. And, you know, earlier in the year, there was a wonderful piece by Ryan Lizza in "The New Yorker," in which John McCain got mad at Lindsey Graham for trying to take the maverick mantle away from him.

So, this is really coming across like a lot of high school activity. And Lindsey Graham, who was trying to be a responsible Republican, at some point in the last two years, really seems to have blown it this week. He's just now - he's a McCain wannabe, but only in terms of crankiness.

HAYES: Final question, I want to get your thoughts on this, on the strategy here. Because it occurred to me today that if START does pass, and it is now looking like it's going to pass. You have two different models. With the tax cut deal, basically, the White House blinked and they cut a deal, because the Republicans were saying, we're going to hold these other things hostage unless you deal with it. They said the same thing about START, and the White House and Harry Reid went ahead anyway and called the bluff with the "don't ask, don't tell" repeal vote, and it looks like they're going to get START.

And I wonder what that says about how much Republicans are bluffing when they do this kind of thing.

CORN: Well, I think on the tax cut deal, the president's argument was that he was playing chicken with a bunch of people who were irresponsible. And if they - who were actually willing, at the time, to let the tax cuts extensions not continue for middle class, to let unemployment insurance to just not go on, and that come the next Congress, they wouldn't be so keen on delivering these progressive policy initiatives. And I do believe that most of the senators, Republican senators, would have been happy to say no to unemployment insurance.

So, the president was very backed into the corner. I think START is a little bit different, dropping - you know, if it went on to the next Congress, it wouldn't be good for the United States, it wouldn't be good for our national security interests. But, again, it wouldn't take 20 million, 30 million Americans and cut them off from checks. So, I think the president had a little more room to maneuver with START, and that strengthens your negotiating hand when you have more room to maneuver.

HAYES: David Corn, negotiating 101, Washington editor for "Mother Jones" - thanks a lot.

CORN: Thank you, Chris.

HAYES: Another key promise from the candidate Obama, a vote tomorrow on net neutrality rules at the Federal Communications Commission. The question over who controls the series of tubes, who gets to decide what you see, and who picks up the tab - next.


HAYES: What's in the FCC's net neutrality framework and what isn't, on the eve of the vote.

And how the Department of Homeland security is using local and state law enforcement to collect information on activities and on people. Not known criminals, not people who have been accused of any crime, just one who seemed to be suspicious - next.


HAYES: Tonight, citing senior agency officials, "Reuters" is reporting that the Federal Communications Commission has the votes to approve their version of net neutrality.

In our fourth story: the FCC plan has been pilloried on both sides of the aisle since it was announced.

Senator Al Franken Saturday said the plan would do, quote, "more harm than doing nothing at all. Today, a Republican commission member is calling the effort, quote, "jaw-dropping interventionist chutzpah" - phrase of the year.

The final vote should come tomorrow morning. Before that, Internet law expert, Marvin Ammori, will help us sort all this.

If the plan does get the necessary FCC votes tomorrow, the White House will claim it as a realization of a campaign promise made just over three years ago on the Google Campus by then-Senator Barack Obama.


THEN-SENATOR BARACK OBAMA (D), ILLINOIS: I will take a backseat to no one in my commitment to network neutrality. Because once providers start to privilege some applications or Web sites over others, then the smaller voices get squeezed out and we all lose.


HAYES: In other words, big providers like Verizon, AT&T, or Comcast can't use their size and influence to drown out the content of smaller competitors. By the way, Comcast is currently in negotiations to buy this network's parent company, NBC Universal.

Put it another way. As long as your many Internets are neutral, you can watch the trailer for the new "Tron Legacy's" movie just as easily as you can the 2004 Tron guy YouTube video. No slow buffering for the independent Tron guy. He has the same shot to be seen as the big-time Disney flick. Users have the same access and choose which one they like better.

Back to the FCC. On December 1st, Chairman Julius Genachowski issued his draft rules for net neutrality. The managing director of "Free Press" today telling "The New York Times" blog "Media Decoder," quote, "These rules appear to be flush with giant loopholes and the FCC chairman seems far more concerned with winning the endorsement of AT&T and the cable lobbyists than with listening to the millions of Americans who have pleaded with him to fix his proposal.

The commission's two Democratic members, who are said to have been concerned about the possibility for, quote, "paid prioritization," the idea that providers that can afford it can pay for faster transmission. "The National Journal" reports that Chairman Genachowski may be addressing the concerns of his fellow two Democrats. And among his concession is a willingness to put limits on paid prioritization.

Joining me now as promised, is Marvin Ammori, Internet law expert from Lincoln College of Law at the University of Nebraska.

Marvin, welcome. Thanks a lot.

MARVIN AMMORI, INTERNET LAW EXPERT: Thank you. Thank you, Chris.

HAYES: This is confusing for a lot of people. So, maybe we can walk through - I mean, one of the frustrations about what's getting voted on tomorrow, we don't know exactly what's in it. What - from what you've heard, what are the things that sound promising and what are the things that sound not so promising.

AMMORI: So much of the proposal sounds unpromising. As you know, Obama promised net neutrality and this definitely is not fulfilling that campaign promise. And so, one huge loophole, and there are many, is that all of wireless, access to the Internet through wireless is exempted. So, if you think you're getting a half a loaf, if you're the kind of person who gets the Internet through wireless connections, you're getting no loaf at all.

So - and increasing, more people use wireless access to the Internet and even wire line connections.

HAYES: So, there's going to be a distinction in the FCC bill, from my understanding, there were sort of a deal cut that said: we're going to have some version of net neutrality on broadband, but nothing on the wireless side, which is, you know, your smartphone.

AMMORI: Exactly - well, your smartphone, but also your - you can use a video card on your laptop. So if you're using a video card on your laptop, then you get a different Internet connection and experience than you could get on your wire line connection. And it's really the same Internet. So, it's an exemption for AT&T and Verizon to benefit them.

On the wire line side, you have more subtle exceptions. But on the wireless side, it's just a free for all.

HAYES: Let me pursue on the wireless side. You know, this is the argument that the providers make, right, which is that, look, this is expensive, bandwidth is sort of a finite resource, at least as our networks are currently constituted, and, you know, give us a break. We've got, we're already getting our network trashed by everybody's iPhones.

Why is that not an argument that's compelling to you?

AMMORI: Well, I mean, in any network, you have capacity problems. So, imagine the electricity network. If the electrical companies said, we want to be able to choose which TVs you can plug in, or choose which irons you use, or which computers you plug in, you'd say, there's got to be another way to manage capacity than choosing winners and losers.

HAYES: Right.

AMMORI: And when you're talking about the Internet, you're talking about, you know, not only the electricity grid, but really, it's like our speech medium. It's what we use for democracy. It's what we use for economic intervention in the 21st century. And we're letting a few companies choose the winners and losers on those infrastructures - on the 21st century infrastructure.

HAYES: I seems like, as drafted, at least as I understand it, and my understanding is for a worse than yours, so correct me if I'm wrong, that they've kind of cleaved off the commercial question from the speech one, right? So, in the draft - am I right that the draft is that you can't squash speech, you can't stop lawful content, but there might be some tiered pricing?

AMMORI: Yes. Definitely, you can't block content, from what I hear. But - I mean, the effect of this decision will be similar to the affect of, say, Citizens United. Right? When you have Citizens United, that case, as I said, corporations can spend as much money as they want, you know, eliminating politicians they don't agree with. And once you have two tiers on the Internet, where there's one, you know, slow dirt road Internet for everyone else, and this fast, you know, super highway of privileged content for the, you know, very powerful and wealthy, then people will have to spend, you know, campaigns will have to spend a lot of money to reach audiences in an effective way.

And so, people - so even if you have, you know, tiered pricing, you end up privileging the powerful, those with more money, versus the upstarts and, you know, the Tron guy on YouTube.

HAYES: You're saying you can't distinguish the commercial issue and the speech issue, because they're so entwined.

AMMORI: They are, indeed. If you think a lot of the economic innovations, like Twitter, Facebook, Google, those are speech innovations the same way they are economic innovations. And the same way that, you know, maybe the Franken campaign or can't pay for the special access, or - that other companies could pay for, they're at a disadvantage. And on the wireless side, could be blocked altogether.

HAYES: Finally, there's been a lot of challenges to just the legal authority of the FCC to regulate that. What is your sense of what's going to happen after - if the commission passes this, as expected tomorrow, what are we going to see after that?

AMMORI: We'll probably see a lawsuit and this rule will probably be struck down. The FCC based their jurisdiction on what's called Title I. It's the title of the act. But the courts have already said, it's not a good basis of jurisdiction for net neutrality. And so, I expect - fully expect it to be struck down after litigation. And the question is: what happens then?

If the Republicans have more power at the time, more seats, then I can imagine not much and we'll let net neutrality die and the future of the Internet will be closed, not open. And - or the public can stay as persistent as AT&T and Comcast and Verizon will be and fight another day. I expect there to be litigation and this fight not to end tomorrow.

HAYES: Marvin Ammori of the University of Nebraska, Lincoln College of Law - thank you for a supremely deliciously wonky segment of television.

AMMORI: Thank you, Chris. Anytime.

HAYES: Putting local law enforcement to work on fighting terror.

What's wrong with this picture? Next.


HAYES: Department of Homeland Security is using techniques from Afghanistan to spy on American citizens like you and me, next.

But first, time for the sanity break. Today is the birthday of one of the most influential men in television drama. Responsible for a show that only needs two notes as an introduction: Happy birthday to - Dick Wolfe. Let's play Oddball.

We begin on the Internets, with our continuing coverage of the dangers of snow. Hills are tough enough, but add a nice thin layer of snow and they are best avoided. Unfortunately, these cars were unable to go around and are now stuck. Another victory for that blasted old man winter.

Oh, good, here comes a plow to save the stranded motorist. Or maybe not. In his defense, he was technically still plowing, just not snow.

We fly over to Japan, where Morgan Freeman be darned, this is the real march of the penguins. Every winter, the Hokkaido (ph) Zoo takes the penguins out of the enclosure for a walk around. Seventeen penguins, clearly remembering their elementary school training, form a single-file line and follow the teacher. I mean, attendant.

Of course, as with any class, there are a few lollygaggers. But overall, it was a lovely walk in the snow. This is all done to give the birds a little extra exercise. No truth to the rumor that it is also an attempt to make the birds feel better about not being able to fly.

To the wild world of sports, we focus on the runner in lane six, showing how much heart and determination go into running hurdles. After failing to leap over the first two, he gives up on the whole hurdling idea, choosing, instead the run and punch method. But karma catches up to him and he takes a tumble.

He does finish the race, albeit in the wrong lane, but still fourth place without making it over a hurdle is solid. He did not do nearly as well in the steeple chase.

Why local police in Memphis are equipped like spies in Kabul, and why that directly affects you, next.


HAYES: The tools and technology are designed for the battlefields of Afghanistan. However, the latest in intel gathering isn't happening on the streets of Kabul, but in Memphis, Tennessee, and Sioux Falls, South Dakota, and most likely in a neighborhood near you.

Our third story, as the federal government teams up with local authorities to help with counterterror efforts, what will that mean for you and your privacy? A "Washington Post" investigation revealing that the U.S. is assembling a massive database, collecting names and personal information of thousands of its citizens. Many of them have not been accused of any crimes.

It's all part of a post-9/11 counterterrorism strategy here on U.S. soil. Federal officials are enlisting the help of state and local law enforcement agencies to gather data. Secretary of Homeland Security Janet Napolitano recently told a group of police and firefighters, "the old view that if we fight the terrorists abroad we won't have to fight them here is just that, the old view."

But as "the Post" discovered, the system is flawed. The DHS often streaming information to local agencies with little guidance or analysis, often vague or alarmist in nature. Counterterrorism official with the LAPD telling "the Post," "it's like a garage in your house you keep throwing junk into until you can't park your car in it."

Some of these law enforcement agencies have hired self-described experts to be better informed on Islam and terrorism. But many experts have used are at best counterproductive, and at worse just plain nosh noxiously wrong.

Take, for example, a game named Raymond Montijo (ph). He has taught classes on terrorism and Islam to law enforcement agencies all across the country. He believes most Muslims in the U.S. want to impose Sharia Law. "The Islamic flag will fly over the White House. Not on my watch. My job is to wake up the public, and first, the first responders."

The DHS spokeswoman telling "The Post" the department does not keep a list of terrorism experts, but is working on guidelines to help local authorities.

But even if the experts were actually experts and information sharing was better in many areas, there just isn't enough work to go around. At one info center in Colorado, some investigators were following terrorism-related leads. The others, examining illegal postings on Craigslist, and Worlds of Warcraft gamers.

Time now to call in former FBI special agent and current Policy Council for the ACLU, Mike German. Thanks so much for your time tonight.

MIKE GERMAN, ACLU POLICY COUNCIL: Thanks for having me, Chris.

HAYES: I guess me question is this was a real big story in "the Washington Post" this morning. I read it a few times. What was your takeaway from it? What was your impression?

GERMAN: Well, we've been covering this issue for quite some time. And wave website,, that goes into a lot of these cases and talks about a lot of the expanded authorities that - it's not just the FBI and DHS, but state and local law enforcement are now in the intelligence gathering game.

And there aren't a lot of guidelines limiting their behavior, and almost no oversight. So, you know, there is a long history of abuse of these kinds of authorities. And unfortunately, the environment is ripe now for abuse. And we're seeing quite a bit of it.

HAYES: It seems like there's two issues here. One is just the massive data that's being assembled, and the efficacy of assembling that and the sort of legal - and then there's the legal footing they're on. Do we understand now what the legal footing that these local agencies are on? Are they breaking the law? Are they within the confines of the law? Or is that undetermined?

GERMAN: There is a federal regulation - 28 Code of Federal Regulations, Part 23, that says that law enforcement can't collect intelligence information to be put into a shared intelligence system absent reasonable suspicion of criminal activity, which is a very reasonable standard. You know, if you don't suspect somebody's doing something wrong, why in the world would a police officer want to go up and bother them, collect their personal information, and put it in a database that other police agencies are going to look at?

But unfortunately, what they misname "suspicious activity reporting" is actually behavior that is very innocuous and ubiquitous. It is everywhere. It includes - suspicious behaviors under these programs include things like taking photographs and video, taking notes, drawing diagrams, taking measurements, you know, things that all of us do on a daily basis.

And what we think will happen is that opens the door to all kinds of abusive collection practices, where the police officers are interacting with the public not because they actually suspect wrongdoing, but because they have a bias, either because of race or some religious dress or some other reason - they just don't like the person. And they think this program will give them the authority to go up and bother them.

And frankly, what we're seeing is a lot of people, especially photographers, being arrested for doing no more than taking a photograph in a public area. And that, obviously, is inappropriate.

HAYES: One of the things I found most troubling in the article was a quote from a local law enforcement official who said, there are some things we can talk about that we're doing and there are some things we can't talk about that we're doing. As a journalist, if you cover national security in Washington, you run into this a lot. Things are classified, national security. But it really seems like it should not be the case that you can't get information from your local sheriff because of that excuse.

GERMAN: Right. The secrecy is a huge problem. And, you know, also once you have these multiple jurisdictions within, you know, an intelligence fusion center or joint terrorism task force, you know, you have a local police officer who's engaged in some sort of intelligence activity based on information given to him by a state officer, with money provided by the federal government.

So whose law is actually applied to that activity? It gets very confusing. And when a citizen wants to know what's happening, should he apply for a State Freedom of Information Act or open government request or a federal? And if you're the agency receiving it, can you just sort of shift the information over to the federal government side and say, that's not ours, and they can shift it back when the federal FOIA comes in?

So there's a lot of problems with a lack of a governance structure. And there is a long history of abuse of these kinds of authorities. So that's why we're really sort of trying to raise the alarm about this activity, and put some reasonable guidelines on them.

HAYES: Mike German of the ACLU Policy Council, former FBI agent, many thanks. Really appreciate it.

GERMAN: Thanks for having me. >

HAYES: Coming up, the sponsors call it a celebration of history. Others call it a rewrite. The dance that celebrates 150 years since South Carolina tried to secede, and the failure to remember why.

And two states act to defend homeowners caught in the foreclosure mess. They're suing Bank of America for fraud.

And when Rachel joins you at the top of the hour, live from the 92nd Street Y, she'll talk to former and current service members who fought to bring Don't Ask, Don't Tell to an end.


HAYES: One hundred and fifty years ago today, a group of southerners, fed up with northern opposition to slavery, voted to make South Carolina the first state to secede from the United States of America. Tonight, the Confederate Heritage Trust of Charleston, South Carolina will host a 100 dollar per head secession ball, to celebrate the signing of a document that led to the Civil War.

At our number two story tonight, a new chapter in the long and dubious history of Confederate nostalgia. Today, South Carolina kicks off four years - four years - of celebrations to honor a war that killed two percent of the entire U.S. population.

Back in 2007, state's General Assembly set aside 65,000 dollars and appointed a commission to commemorate secession. Festivities began this morning with the unveiling of a monument at the site where in 1860, a group unanimously approved a declaration to secede from the union. In his speech at the event, Charleston Mayor Joe Reilly noted the connection between secession and slavery, which evoked a "you lie" from a crowd member.

Minimizing the connection between secession and slavery has long been a strategy of civil rights opponents and Confederate apologists. Mississippi Governor Haley Barbour said recently that the civil rights struggles in Mississippi during the 1960s were, quote, "not that bad."

According to Sons of Confederate Veterans President Mark Simpson, "tonight's gala has nothing to do with slavery." He insists the point is to, quote, "celebrate the courage and integrity of 170 men who signed their signatures to the Article of Secession, the courage of men to do what they think is right."

So, what principles were these secessionists fighting for? Their God-given right to own slaves. The ordinance of secession says, quote, "a geographical line has been drawn across the union, and all the states north of that line have united in the election of a man to the high office of the president of the United States whose opinions and purposes are hostile to slavery."

As part of their protest tonight, the NAACP will be holding a viewing and discussion of D.W. Griffith's 1915 film "Birth of a Nation," which portrayed the Ku Klux Klan as heroes. At a press conference on Friday, South Carolina NACCP President Lonnie Randolph said, "we are not opposed to observances. We are opposed to disrespect. This is nothing more than a celebration of slavery."

Telling homeowners they're getting a loan modification while foreclosing on them at the same time; Arizona's attorney general says that Bank of America did, and that's why Arizona is taking the bank to court, next.


HAYES: What could be a preview of much more to come, two state attorneys general filed lawsuits today against financial giant Bank of America. The lawsuits filed on behalf of citizens of Arizona and Nevada, two of the states hardest hit by the foreclosure crisis, charge the bank with a host of fraudulent and deceptive practices in its dealing with homeowners seeking loan modification.

Nevada Attorney General Catherine Cortez-Mosto ticked off some of the allegations in a press release today. Among them, "misleading consumers in false assurances their homes would not be foreclosed while their requests for modifications were pending, but sending foreclosure notices, scheduling auction dates, and even selling consumers homes while they waited for decisions. Misrepresenting to consumers that they must be in default on their mortgages to be eligible for modifications, when, in fact, current borrowers are eligible for assistance. Making false promises to consumers that their modifications would be made permanent if they successfully completed trial modifications, but then failing to convert these modifications. And falsely notifying consumers or credit reporting agencies that consumers are in default when they are not."

In one case cited by Arizona Attorney General Terry Goddard, a woman who called the bank to ask about her foreclosure was told she and her husband didn't need to worry, that they would soon be getting information about their loan modification and that there was a stop order on the foreclosure that had been issued. Twenty four hours, she found out her home had already been sold.

Meanwhile, Bank of America's response to "the New York Times" was to express disappointment with the timing of the lawsuits. In addition to Nevada and Arizona lawsuits, Iowa State Attorney General Tom Miller continues to coordinate a 50-state investigation into loan servicers' documentation practices, practices which have led some servicers to attempt foreclosure on people who have already paid their mortgages in full.

Meeting with homeowners last week, Miller flatly said, quote, "we will put people in jail." He described the current dysfunctional and exploitative loan modification system as, quote, "insane."

Joining now is Arizona Attorney General Terry Goddard, the man who filed one of those lawsuits. Thank you so much for your time tonight.

TERRY GODDARD, ARIZONA ATTORNEY GENERAL: Thank you. I think "insane" may be the right word.

HAYES: Yeah. Well, it's one of these things where I don't know how many people are paying attention to this, but when you start to pay attention, the facts of the matter just seem like they're not possible. It seems like such an absolute chaotic, duplicitous situation. How did this first come to your attention?

GODDARD: Well, it's an avalanche in Arizona. We've had more - second only to Nevada in terms of the number of foreclosures per capita that we have in our state. So we've been besieged. And Bank of America is our largest servicer. So they stand at the front of the line in terms of responsibility, And at the back of the line in terms of their ability or their willingness to try to modify some of these loans.

So they have the worst record on modification. And you've just got a litany of what we here every day at the Attorney General's Office, which is consumers who are told one thing - oh, yes, we're listening; we're trying to modify your loan. At the same time, they're moving ahead with foreclosure.

And unfortunately, what you just read off is not unusual. I've got here in my hand, and there are hundreds of more back in my office - as soon as we filed this lawsuit, we just overwhelmed with e-mails of people who had similar situations, not just in Arizona. I've got one here from Alaska, one from Maryland, and from other states all across the country, similar problems with Bank of America.

HAYES: Can you walk us through, just for people who are sort of coming to this story now, when we are talking about loan modifications, what do we mean? What are the class of people that we're talking about? And how is the process supposed to work?

GODDARD: Well, there isn't a class. This is all kinds of folks, all kinds of ages. And Bank of America has two portfolios. One was Countrywide, which they purchased. Those are troubled loans. There's no question they were badly made, probably predatory in the inception.

And then there are the B of A loans, which are more generic, are not subprime. They're more 30-year fixed, standard loans. But our complaint talks about both of them, because we have an agreement with Bank of America that says they'll fix the Countrywide loans; they'll work with the consumers to get a modification. We don't have an agreement as to their B of A loans, and there are lots of problems with those.

The standard is somebody calls up - and there's no typical. But they call up often because they're in financial distress, or their loan is underwater. In other words, the loan is more valuable than the house is in the current market. So they'll say, I'm interested in a modification.

Bank of America will answer that question and usually be positive, yes, send in your application, here's the information you need. And two or three weeks or days later, they'll call up and check on it. And they'll find out the information's been lost.

Almost everybody in our process has called in or made applications three, four, five times. Then the materials get lost. That's almost invariable. And so that their process gets strung on indefinitely, and sometimes over a year.

And they've got the dual track. They seem to be processing the modification on one hand and the foreclosure on the other.

HAYES: Yeah. I mean, I've talked to a number of folks who have been in this situation, have been following this. And there has been some great reporting on this by a variety of folks. And it seems like this completely Kafkaesque universe in which you just fall down these layers of bureaucratic know-nothingism on the part of the people processing it.

What are you alleging is illegal infraction, as the basis of your lawsuit, and what's the remedy that you're seeking?

GODDARD: Two legal functions. The first one is we have a consent judgment as to the Bank of America loans. We entered a legal agreement. It was filed in court almost two years ago. And they have systemically violated that agreement. So the first part of our complaint has, I believe, six individual complainants, and the problems they ran into. They should have qualified under the Countrywide agreement and Bank of America has not treated them in a fair manner.

The second part is under consumer fraud. Basically, we say that they have systemically deceived homeowners. They promise one thing, they promise a quick turnaround, they don't provide it. They promise that while you're in modification, you won't get foreclosed. Obviously, that's wrong. They promise that you'll get due deference, you'll get consideration in the process. And we find over and over again that the people that they're talking to are untrained. They come right out of high school. They have no financial background.

The only thing that they're told - or one of the few things they're told is to get people off the call. We found servicers that were telling consumers that they had to fax their application and their materials to a particular fax number that the people at Bank of America knew was not a good number.

HAYES: Mr. Goddard - Terry Goddard is the attorney general of Arizona. I really appreciate you taking the time tonight. And I think we're going to try to follow this story as it develops.

GODDARD: Thank you. Highly deceptive practice, I hope people will come forward.

HAYES: That's December 20th. I'm Chris Hayes, in for Keith Olbermann. You can read more of my work at, or follow me on Twitter, username @ChrisLHayes. Have a good night.