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The Last Word with Lawrence O'Donnell, Transcript 3/3/2016

Guests: Eric Schneiderman, Mark Everson, David Cay Johnston, Kurt Andersen, Susan Del Percio, Jane Sanders

Show: THE LAST WORD WITH LAWRENCE O`DONNELL Date: March 3, 2016 Guest: Eric Schneiderman, Mark Everson, David Cay Johnston, Kurt Andersen, Susan Del Percio, Jane Sanders

RACHEL MADDOW, MSNBC: We`ll see you again tomorrow, now, it`s time for THE LAST WORD with Lawrence O`Donnell, good evening Lawrence.

LAWRENCE O`DONNELL, HOST, THE LAST WORD: Rachel, the term short-fingered vulgarian was coined right here in New York City about 30 years ago by the team at "Spy Magazine" and one of the co-authors of that phrase will be joining me tonight.

MADDOW: God bless you Lawrence O`Donnell.


Thanks for that --

O`DONNELL: Thank you Rachel. We have two other big exclusives here tonight. First, Trump University is being investigated by the Attorney General of the state of New York, he will be our first guest.

And a former head of the IRS will join us to discuss the issues involving Donald Trump`s tax returns.




ROMNEY: A business genius he is not.

TRUMP: He was begging for my endorsement. I could have said, Mitt, drop to your knees, he would have dropped to his knees.


ROMNEY: He has neither the temperament nor the judgment to be president.

UNIDENTIFIED MALE: If you`re going to beat Donald Trump, you can`t beat him with how bad Donald Trump is. You got to beat him with somebody.

ROMNEY: He`s playing the members of the American public for suckers. He gets a free ride to the White House and all we get is a lousy hat.


REP. PAUL RYAN (R-WI), SPEAKER, UNITED STATES HOUSE OF REPRESENTATIVES: Sometimes reality is stranger than fiction around here these days.

JIMMY FALLON, COMEDIAN & TELEVISION HOST: Chris Christie stood right behind Trump at his victory speech.

Now, a lot of people noticed that Christie didn`t look too happy about it.

GOV. CHRIS CHRISTIE (R), NEW JERSEY: For those who are concerned, I wasn`t being held hostage, I wasn`t upset.

UNIDENTIFIED MALE: He looks like a time traveler who is trying to play it cool until he figures out what year it is.

CHRISTIE: I wasn`t sitting up there thinking, oh my God, what have I done.

TRUMP: And we`re going to make America great again. We`re going to win.

ROMNEY: His promises are as worthless as a degree from Trump University.

TRUMP: So, with University, I knew I could get some bad publicity, but I have to -- I have to do what`s right.

BOB GUILLO, FORMER TRUMP UNIVERSITY STUDENT: I learnt absolutely nothing, I knew right away that I had been scammed.


O`DONNELL: That was Bob Guillo who you just heard, saying he learned absolutely nothing at Trump University and soon realized that he had been scammed.

He appeared on this program Monday night to tell his story. He was here along with Steve Brill who wrote an exhaustive investigative piece of Trump University about Trump University for "Time".

They explained that most students filled out ratings cards, giving the courses rave reviews before they realized that those courses were worthless.


STEVE BRILL, LAWYER: He says 98 percent of the people filled out answer cards that said they loved the course.



GUILLO: First of -- O`DONNELL: A rating that gave it the highest rating.

BRILL: Right, and he did that right at the point he was being told to buy the course, not when he realized it wasn`t worth anything.


O`DONNELL: Today, Donald Trump defended Trump University based entirely on those approval rating cards.


TRUMP: The school had 98 percent approval rating. But yet an attorney that felt -- oh, maybe I can sue Trump and get something.

The school had a 98 percent -- in other words, 98 percent of the people that took the courses, we signed report cards.

That`s why you can`t settle a case like that.


O`DONNELL: Donald Trump is scheduled to testify about Trump University in a federal fraud trial in California this Summer.

He said this on Saturday about the judge in that case.


TRUMP: We have a very hostile judge because to be honest with you, the judge should have thrown the case out on summary judgment.

Tremendous hostility beyond belief. I believe he happens to be Spanish, which is fine.

He`s Hispanic, which is fine, and we haven`t asked for a recusal, which we may do. But we have a judge who is very hostile.


O`DONNELL: The Attorney General of New York is also pursuing an investigation of Trump University.

And that Attorney General Eric Schneiderman joins us now in a LAST WORD exclusive. Thank you very much for joining us tonight.


O`DONNELL: So, that was a New Yorker who we had on here Monday night. And you`re investigating Trump University`s activities in New York.

And we have one of the victims of that university here. What is the scope of your investigation and where is it now?

SCHNEIDERMAN: Well, the investigation is pretty much over. We`re actually in litigation and we had in spite of what Mr. Trump is saying about the case.

We had a huge victory on Tuesday, an appellate court in New York upheld all of our claims ruled against Mr. Trump on everything.

So we have already gotten summary judgment that he is personally liable for running an unlicensed university.

We`re now able to proceed with all of our fraud claims on behalf of victims like that. So, we had a complete victory on Tuesday.

He lost, which he doesn`t like to say, and we`re just going to -- we were just going to move ahead.

There`s no question that there were thousands of victims who were scammed out of millions of dollars.

He pocketed a lot of it himself and now we can go forward and prove the fraud claims in court.

O`DONNELL: I want you to listen to something, he was on "MORNING JOE" this morning on this network and this came up.

Let`s listen to that.


UNIDENTIFIED MALE: The New York State Attorney General Eric Schneiderman - -

TRUMP: He`s a political hack by the way, just so you know. You know that before he filed the suit and he also was paid a campaign contribution by the law firm in California.

He was paid a big campaign contribution that brought the suit. And this is only a suit of people wanting to see if they can get their money back.

UNIDENTIFIED MALE: Has he offered a settlement? Has Schneiderman offered you a settlement?

TRUMP: Well, I don`t think I`ve given him the opportunity because we --


TRUMP: You know, we`re going to do very well in the case. I mean, how do you lose a case where people suing you have signed letters and affidavits saying that the school is terrific.


O`DONNELL: How do you respond to that?

SCHNEIDERMAN: He just lost. He lost on every argument he made in the appellate court on Tuesday.

It`s -- and the notion that in the Fall of 2010, we looked at this contribution. One lawyer at one of the law firms involved in this gave me $10,000.

In the Fall of 2010, Donald Trump gave my campaign $12,500. So, the notion that this is something that is motivated by that, he can`t buy us, he can`t bully us.

He`s not in a debate where he can say whatever he wants and then people have to check the facts later.

We`re going to court. We`re going to prove this. We bust New York State, a lot of fraudulent enterprises that people hold themselves up to be lawyers, medical practices.

Trump University was not a university. You`re not allowed in New York State just to put up a sign. It`s like saying this is Trump Hospital, and it`s not a hospital.

And the people in it are not doctors and nurses. The teachers were not handpicked experts on real estate, they were neither handpicked by Trump, he didn`t need them nor were they experts.

Some came out of the retail industries, some came out of fast-food. And essentially was a motivational speaker`s playbook that we have the scripts that teachers use.

We have transcripts of the sessions. We have the evidence and we`re going to move ahead aggressively.

O`DONNELL: The marketing of Trump University basically was, you`re going to get the genius of Donald Trump.

He may be on campus from time to time, you might see him, and this was on their campuses around the country, California as well as here.

But Donald Trump is going to hand pick every one of these professors who is going to turn you into a Donald Trump.

This was a very important part of their marketing. Let`s listen to what one of Trump`s lawyers said on "Cnn" about this point.


UNIDENTIFIED MALE: He was very involved from the early stages, he was meeting regularly, every week, every two weeks with the people who were going to run the day-to-day operations of the course.

UNIDENTIFIED MALE: So, the allegation that he had nothing to do with this, that he didn`t pick a single expert as a New York Attorney General has claimed, you say it`s completely false.

UNIDENTIFIED MALE: It`s completely untrue, 100 percent untrue.


O`DONNELL: Now, before you respond, I just want to go to Donald Trump under oath in California on exactly the same subject.

He was asked under oath in the case in California, "did Mr. Sexton(ph) interview instructors?"

That`s the head of Trump University. Trump`s answer was "yes he did". Next question. "Did anybody else? I don`t know, you`d have to ask him."

Now, that is a confession in that answer that Donald Trump himself did not interview any instructors whatsoever.

And in that case they found no evidence that any instructor ever met Donald Trump.

SCHNEIDERMAN: No, in fact, Mr. Sexton(ph) who was the President, he`s also a defendant in our case testified in his own deposition that Donald Trump never met any of the teachers or the instructors at Trump University.

But in his pitch videos, Trump`s role in this was released, the pitch man. He made the videos to lure people in.

He repeatedly said my handpicked experts will teach you my personal secrets. He never had anything to do with the curriculum, so they weren`t his personal secrets.

And he never picked the experts, and we have the president of Trump University testify to that.

So, these are not allegations being made by me or made by anyone else. This is evidence that comes from his own transcripts of this university classes, from the scripts for their teachers, from the testimony of the president of the university.

They were running an illegal college in New York. The New York State Department of Education was chasing him around, saying either, you have to move out, you have to shut down.

They were saying, oh, we`ll move, we`ll shut down. At one point, they had the people from the State of Education physically went down to the offices and had to force their way in because they were claiming they weren`t operating in New York anymore.

We`ve got the evidence, and now with the appellate decision on Tuesday, we`re moving ahead.

We just -- you can get away with saying things at a political campaign that may not be true.

You can`t commit fraud, you can`t take people`s money under false pretenses. And that`s why we`re pursuing this.

O`DONNELL: Let`s look at one of these videos where Donald Trump is trying to sell Trump University.


TRUMP: We`re going to have professors and adjunct professors that are absolutely terrific, terrific people, terrific brains, successful.

We are going to have the best of the best. And honestly, if you don`t learn from them, if you don`t learn from me, if you don`t learn from the people that we`re going to be putting forward.

And these are all people that are handpicked by me, then you`re just not going to make it in terms of the world of success.

We`re going to teach you better than the business schools are going to teach you, and I went to the best business school.


O`DONNELL: Now, what he`s saying under oath now is the opposite of that. And it may be true that he absolutely had nothing to do with meeting instructors.

And the evidence is, he had nothing to do with meeting instructors. But that`s where the fraud comes in.

Because he`s trying to say to the customer when he`s taking their money, $40 million he took, the $40 million is taken on a different basis.

SCHNEIDERMAN: Yes, you know, it`s -- this is a pretty straightforward case. We deal with much more complicated fraud schemes.

Here is a guy representing any university which he didn`t have, that he had handpicked instructors which he didn`t have.

That they had expertise in real estate which they didn`t have. This is not something that is an allegation anymore.

This is something that is based on his own sworn statements, it is based on the testimony of the president of Trump University.

It is based on our review of the transcripts and the scripts of the teachers. So, it`s not that complicated a case.

He was using legal maneuver and to try and move around. He counter sued me and filed ethics complaints.

And we saw the same level of aggressive counterattack from him in 2013 when I filed the case having no idea the guy would ever run for president.

We saw that same level of sort of vicious counterattack in the way he went after us when we sued him.

And we -- and the most sensitive point appears to be any suggestion that he is not worth what he claims to be worth.

So, he called me a lightweight before he called any of these other guys a lightweight. And it`s not something he can hide from now in a court.

It`s not like being in a debate. We`re taking this to court, we`ve got the evidence and we`re very confident that --


O`DONNELL: Now, the single biggest lie he tells about himself as a litigant to his audience is that he never settles, I never settle, I never settle because then they`ll think you`re a settler.

We had a victim of Donald Trump`s on last night, Donald Trump settled. It was a condo fraud case in a condominium project which they brought into federal court in California over a project in Mexico.

Where everybody who put their money in for those condos got wiped out on a Trump -- what was called a Trump fraud case.

He settled that fraud case against him, and he has settled many times. In that case, he settled when it was coming up to him, having to go under oath.

At what point will Donald Trump have to go under oath in this case?

SCHNEIDERMAN: It`s hard to say. We think we can probably prevail on a lot of our claims without even having to depose him.

But we -- the judge is allowed limited discovery, our case is a special proceeding which gives us an accelerated path.

He -- of course he settles cases. And he --


SCHNEIDERMAN: Negotiated to see if they could settle this case. He is --


SCHNEIDERMAN: Remarkable --

O`DONNELL: Didn`t negotiate to try to settle this one? --

SCHNEIDERMAN: Yes, I mean, always have discussions about a settlement almost always. And --

O`DONNELL: So, what he said on "MORNING JOE" this morning about there`s been no possible discussion of settlement, what about that?

SCHNEIDERMAN: Oh, there was before we filed our complaint.


SCHNEIDERMAN: And this is --

O`DONNELL: And that`s a normal procedure before you file a complaint, you talk to people about how are we going to fix this?

SCHNEIDERMAN: And then frequently, as you get, the case gets more mature, as you say, you`re about to go under oath.

You`re about to go to trial or someone is about to be deposed frequently, the negotiations reopen. He may come back to us about it, but we`re moving ahead.

We`re very pleased by the ruling of the appellate court, we`re going to proceed with all of the --

O`DONNELL: Let me just -- let me just reveal exactly what was said this morning to get your reaction.

This is the final point here. Mike Barnicle(ph) says to Donald Trump, "has Schneiderman offered you a settlement?"

Donald Trump -- "well, I don`t think I`ve given him the opportunity."

SCHNEIDERMAN: Not really an answer. Look, he has counsel. I mean, the counsel was doing what they were supposed to do.

To try and see if they can head this off. It didn`t happen and we sued him. And he could -- and it doesn`t matter how rich he says he is.

It doesn`t matter if he provides support to candidates attacking him for supporting Hillary Clinton. He supported me, he supported a lot of Democrats.

You can`t hide in court. You can`t hide when you`re under oath. You can`t hide when the evidence comes in, and you`ve seen some of these victims.

These are not rich people.


SCHNEIDERMAN: These are people who were looking for a way to file --

O`DONNELL: They brought their hopes and dreams to Donald Trump.

SCHNEIDERMAN: And these people could not afford the 20 or 30 or 35,000 bucks, (INAUDIBLE).

So, we`re doing this on behalf of all of the people that he ripped off and on behalf of the integrity of the state of New York and our educational institutions.

How do you like to be a university that jump through all the hoops and does all the work to follow all of our rules.

And this guy is running around, giving out diplomas that say Trump University -- not acceptable.

O`DONNELL: New York Attorney General Eric Schneiderman, thank you very much for joining us tonight.

Really appreciate it.


O`DONNELL: Coming up, today was Mitt Romney`s turn to try to stop Donald Trump from securing the Republican presidential nomination which might happen just 12 days from now.

And Chris Christie today answered the late night comedians who suspect that Donald Trump has been holding him hostage.

And later, Bernie Sanders` wife Jane will be here. Jane Sanders gets tonight`s last word.



UNIDENTIFIED MALE: Christie has fallen so far that he had to stand silently by last night as Donald Trump burned New Jersey.

TRUMP: You see so many other companies constantly, now they`re leaving. They used to move from New York to Florida.

Or they`d move from New Jersey to someplace else, Chris, but now they`re moving --


UNIDENTIFIED MALE: He shook his head and whispered no.


O`DONNELL: Chris Christie is now the most desperate governor in the history of polling in New Jersey.

He has the lowest approval rating ever at 27 percent. He had a press conference today in Trenton apparently just to prove to the people of New Jersey that he does occasionally drop by New Jersey.

He tried to defend his completely, hypocritical, inconsistent and indefensible endorsement of Donald Trump.

And he tried to explain why he looked so weird standing behind the man who he had previously said should not be president.


CHRISTIE: I don`t know what I was supposed to be doing. I was standing there listening to him and, you know, all these -- like, you know, armchair psychiatrists like should give it a break.


O`DONNELL: No, the armchair psychiatrists will not be giving it a break any time soon.

They will be busy trying to figure out whether everything Chris Christie said about Donald Trump when he was campaigning against him was a lie or whether everything he says about Donald Trump now that he`s supporting him is a lie.

Sure, most of them have it pretty much figured out already. Up next, Donald Trump`s tax returns, what is he hiding?



TRUMP: Very little do you learn from taxes. Very little. You know, you look at a tax, you can`t learn very much.

But I did file almost a 100 pages of financial statements with the federal elections. When the audit`s finish, I`ll release my tax returns.

I have nothing -- but I don`t want to do it -- and nobody in this room would say you`re being audited and here is the tax return.

You get audited, you finish up the audit, routine stuff, you finish and then you release the tax returns.


O`DONNELL: Joining us now, former commissioner of the IRS Mark Everson who was appointed by President George W. Bush.

Also with us, David Cay Johnston; Pulitzer Prize-winning journalist who has been reporting on Donald Trump for years and on tax policy for many years.

David is a columnist with "USA Today". Mr. Everson, I have a very simple question about Donald Trump`s audits.

Is there any way for us to actually confirm that he is being audited? Is the IRS prevented from publicly confirming who is and who isn`t being audited?

MARK EVERSON, FORMER COMMISSIONER, INTERNAL REVENUE SERVICE, UNITED STATES: Well, that`s exactly right, Lawrence. Under law there are very strict standards here.

The IRS cannot disclose any tax return information and that would include the mere fact of whether an individual is being audited or not.

So, we`re left here with Mr. Trump`s word for what is happening.

O`DONNELL: Yes, and that`s the thing is that, and he knows that he can get up there and say I am being audited.

And if he`s not being audited, there`s absolutely no way anyone is going to contradict that.

I just wanted to get that on the record because I don`t -- I think most reporters don`t have any idea about that piece of it.

Now, what about a tax return that`s -- a candidate like this, we`ve seen candidates release returns all the time for various offices including the Presidency.

If an audit -- if a -- if a return is under audit, why wouldn`t a candidate just release that return?

EVERSON: Well, you would argue what difference does it make. Two hundred million Americans file returns every year, Lawrence.

And they all say under penalties of perjury that the returns are complete and accurate and truthful.

And so, he either stands by the returns or he does not. Now, he`s sort of muddied the waters a little bit I gather today when he talked about his corporate returns.

That`s not what`s being asked for here. What`s being asked for is the personal returns. And that`s totally consistent with what past candidates have done.

O`DONNELL: Yes, and talk about that for a moment. That there`s -- when it`s someone like Trump, there`s -- he has -- he signs probably dozens of tax returns for a variety of different entities that he is an officer of.

But there`s one tax return -- there`s just one that is Donald Trump`s personal tax return. And that`s --

EVERSON: Right --

O`DONNELL: The one we`re talking about for campaign purposes. And that is probably the least complicated of all the possible returns that he`s involved with.

EVERSON: Well, that`s right. But the IRS, when they would look at matters like this say we`d look at the corporation and it`s totally true that a big corporation would be audited on-and-on going basis.

That wouldn`t necessarily be the case even with a very wealthy individual. But they would look both at the corporation and at the executive if you will.

O`DONNELL: Let`s listen to what Donald Trump said today about getting audited every year all the time.


TRUMP: I get audited every single year. And because the company is so big, they audit, I understand Fortune 500 companies every year.

Because my company is so big, or some other reason which is unfair, but because my company is so big -- let`s leave it at that.

They audit me every year. I think it`s very unfair that they audit me every year. But I`ve been audited every year for many years.


O`DONNELL: David, what`s your reactions about it? Does the IRS have the personnel to audit every Fortune 500 company every year?

I`m not sure they have the personnel to audit even one Fortune 500 company thoroughly.

DAVID CAY JOHNSTON, INVESTIGATIVE JOURNALIST: The trend line on corporate audits is like this --


JOHNSTON: The highest paid auditors make about $150,000 a year and they fine $19 million a year of taxes.

So, you would think you`d be hiring more and more auditors to --

O`DONNELL: Right --

JOHNSTON: Capture more money, no. Congress is cutting and cutting and cutting, and the quality of the audits has gone way down.

O`DONNELL: What -- you`ve been writing about what -- Trump`s incentives from his perspectives of not releasing these returns.

JOHNSTON: Well, the things that are likely to show -- first of all, he`s subject to a special rule.

You and I are not allowed to deduct any money if we own -- as landlords, real estate, not a penny by Congress.

But Donald is a full time real estate professional, can take all the money he made from "The Apprentice" and if he has enough depreciation from his buildings pay no taxes, none.

And of course if his tax returns showed that he was paying taxes, then it means he doesn`t own as much property as he says he does, to wipe that out.

Secondly, we find out what did he really get paid for his TV show which is, you know, was at risk for being cancelled when he decided to run for president as opposed to four years ago.

And I think you and I were the only people pointing out he was running for a new contract --

O`DONNELL: Right --



JOHNSTON: Assuming that he made $65 million from the show which Nbc has said ridiculous, all he would need is $65 million of depreciation from buildings and he could live tax free.

O`DONNELL: Sure, right --

JOHNSTON: If you -- if you are not paying taxes, you have no incentive to make charitable gifts.

Donald has not given money to the Donald Trump Foundation since 2006 based on tax return filings.

O`DONNELL: So, that`s the Trump Foundation filings you`re looking at.

JOHNSTON: That`s right.

O`DONNELL: And when you look at the Trump Foundation, nothing coming in from Donald Trump since 2006.

JOHNSTON: That`s right. And --


JOHNSTON: Most of the money comes from the people who do business with him, which you could characterize as a legal kickback.



JOHNSTON: So, you would -- you would tell us -- so, we would learn a number of things from the tax returns, but the policy issue that I hope people understand is America has two tax systems, separate and non-equal.

Those of us who work for a living through jobs are heavily taxed. Those people in certain places, private equity managers -- that`s why Mitt Romney wouldn`t release his returns, real estate developers are literally allowed to live tax free.

And think how rich you would be, Lawrence, if all the money held from your paycheck, all these years for all the things you`ve done --


JOHNSTON: You can invest it.

O`DONNELL: Go ahead, Mark.

EVERSON: Yes, David is entirely right. It`s a very complicated system and it calls for reform. That`s a 100 percent clear.

But what is an issue here is really far more basic. Mr. Trump has taken a job interview with the American people.

And one of the things that American -- the American people insist on each cycle is that, the personal tax returns of the applicant are looked at.

And he is saying, no dice here. And he`s said at the onset that he would release them.

If he`s been under audit every year, then he is well familiar with this problem from the get-go.

What`s changed and why isn`t he coming forth? That`s what`s the concern --

JOHNSTON: He has no reason not to --

O`DONNELL: Yes, that --

JOHNSTON: Release them --

O`DONNELL: At least, that`s a -- that`s a very good --


O`DONNELL: Point what Mr. Everson just said, is that Donald Trump, if he has been under an audit, he knew that back when he was making the promise that he would release these returns.


O`DONNELL: And so now what we have is a changed story. Speaking of changed stories, I just want to give people an example of the difference between a fact and a Trump sort of press release.

Donald Trump issued a press release about a week before he made his FEC filing -- financial filing.

In the press release, he said that from "The Apprentice", the TV show, that he was paid -- said, his press release said Mr. Trump was paid $213,606,575.

Now, that I guarantee you is impossible from that TV show. Now, when he filed his report with the FEC, there was exactly one number in all of those pages that indicated income from "The Apprentice".

That number was -- his income from "The Apprentice" in those forms, the number was $14,222. And that was the amount of income that the real form showed in that last year.

And so Mark Everson, that`s just one kind of example of what`s the kind of detail that lives inside of tax returns.

EVERSON: Well, that`s right. What would really happen here is teams of people, including folks who really know their way around like David, would take a look at the filings and they would have some observations.

He`s not afraid of the audit I would suspect. He`s quite used to audits by his own recounting of the facts.

But the scrutiny of whether he`s been aggressive or not, that would be a different issue, let alone the underlying economics that David mentioned.

O`DONNELL: And David, there`s always been this thing that he knows that trails the most I like is that he wildly exaggerates his wealth, wildly exaggerates his income.

And the last thing he wants guys like you to do is to be sitting there with a tax return where he could even(ph) actually prove it.

JOHNSTON: Oh, you can tell a lot of things about him. Donald has admitted under oath that he makes up these numbers.

"Forbes" has agreed to $4.3 billion, my analysis is, we know he`s worth a billion if the statements with the FEC are true. But --

O`DONNELL: And there`s no penalty for exaggerating your income to the FEC.

JOHNSTON: Not to the FEC --

O`DONNELL: Right --

JOHNSTON: That`s correct --

O`DONNELL: Right --

JOHNSTON: But there are other areas where it is. But without Donald`s returns, we can`t tell how much of the story he`s been telling is true.

Here`s what we do know. It`s not going to show anything suggesting $10 billion -

O`DONNELL: Right. Right.

EVERSON: It is an instrument of income, not wealth, but there is depreciation in there and that will tell us a lot about how he really does business.

O`DONNELL: Former IRS Commissioner Mark Everson, thank you very much for joining us. And, David Cay Johnston, thanks for joining us. Once again, I really appreciate it. Thank you.

EVERSON: Thank you, Lawrence.


O`DONNELL: Up next, today`s round of Mitt Romney versus Donald Trump was another episode of the gentleman versus the vulgarian.



O`DONNELL: Today`s episode of the republican civil war was Mitt Romney versus Donald Trump.


FMR. GOV. MITT ROMNEY, (R) MASSACHUSETTS, 2012 GOP PRESIDENTIAL NOMINEE: Think of Donald Trump`s personal qualities, the bullying, the greed, the showing off, the misogyny, the absurd third-grade theatrics. Donald Trump is a phony, a fraud. His promises are as worthless as a degree from Trump University.



O`DONNELL: And, here is Donald Trump`s typical substance-free reply.



DONALD TRUMP, (R) PRESIDENTIAL CANDIDATE: Mitt is a failed candidate. That was a race I have to say, folks, that should have been won. I backed him. Can you see how loyal he is. He was begging for my endorsement. I could have said "Mitt, drop to your knees." He would have dropped to his knees. He was begging.



O`DONNELL: Joining us now, Susan Del Percio, a Republican Strategist, who served the Rudy Giuliani Administration, when he was mayor of New York. Also with us, Kurt Anderson, host of the award winning public radio program "Studio 360."

Susan, you should know that the person who led this campaign into the gutter is sitting beside you, and he did it 30 years ago because he was in the room when the phrase short-fingered vulgarian was coined. Tell us the story, Kurt Andersen. This was "Spy" magazine.

KURT ANDERSEN, HOST, "STUDIO 360" RADIO PROGRAM: I want to put up a cover from of spy magazine from that year. It was a humor magazine using journalistic principles, mandatory reading for comedy writers everywhere. And, that is my cover story on the cover of "Spy" that particular month.



O`DONNELL: And, that was actually my jacket. So, go ahead. How did this phrase come into existence about Donald Trump?

ANDERSEN: My partner and founder and editor at Spy, Graydon Carter, had done a profile of him for "GQ" Magazine, shortly before we started Spy, came back from doing a profile and saying, "God, this guy`s fingers are really short for a tall guy." And, that was funny or an odd thing to have noted.

And, then once we decided that he was going to be a regular subject of our magazine and became arguably an obsessive subject of our magazine and journalism about him, we just decided to refer to him always as a short- fingered Bulgarian.

O`DONNELL: Uh-huh.

ANDERSEN: Because, he is a vulgarian and short finger was this odd kind of random school yard thing that we decided to attached to him, which this week he said he has forgotten, apparently. Nobody has ever said anything about my hands, he said this week. Even though --

O`DONNELL: He said that tonight.

ANDERSEN: He said that tonight. Even though a few months ago as -- as recently as a few months ago, he was sending regular pictures of his hands to my partner, Graydon Carter, showing how long his fingers are.


O`DONNELL: So, now you know. Now you know why the argument has come down to fingers in the party.


O`DONNELL: I just want to give you the latest chapter of it in the debate tonight. This is what Trump said about Rubio. Trump said, "He hit my hands. Nobody has ever hit my hands. I have never heard of this one. Look at those hands." He held up his hands.

"Are they small hands? And, he referred to my hands. If they are small, something else must be small." Trump could not resist the next line. "I guarantee you there is no problem, my guarantee." So, that is to my account, the very first time in televised presidential debates anyway that any presidential candidate has referred to that particular part of his own body.

SUSAN DEL PERCIO, REPUBLICAN STRATEGIST: And, shockingly so. But, kudos to Megyn Kelly, because she kept going with her questions. I do not know how she did it.


DEL PERCIO: But she did not go there. Thank goodness.

O`DONNELL: So, what happens in your party? Where are we tomorrow? Where are we next week?

DEL PERCIO: Well, I think you are right. What is the next chapter of the civil war? Because that is what we are facing. Mitt Romney`s statement today basically said, "Well, there is no way we are going to be for anybody."


DEL PERCIO: "We are only going to be about stopping Donald Trump from getting this nomination." And, that is going to be a very tough proposition to do, but I do think it is actually possible. Donald Trump`s supporters are going to hate it. It could be brokered convention. And, everyone who said, "Oh, that cannot happen. That has not happened in decades."

But, it can happen because we have never seen this kind of candidate before. It is not -- we talk about a civil war within the party. DONALD Trump is not really a republican. He is an opportunist and that is really important to remember. If he thought he could be a president on the democratic ticket, if that was the easier way to go, that is how he would have gone.

O`DONNELL: Yes or an independent.

DEL PERCIO: Or an independent, but this was the mode that he chose to go forward. So, it is not that it is a Republican Party fight. It is a fight against Trump and the Trump fights.

O`DONNELL: Look, does the Republican Party house, do the walls just collapse through this fight?

ANDERSEN: Well, when you have nearly 30 and 40 and nearly 50 percent of republican primary voters voting for Donald Trump, you can --

O`DONNELL: In record numbers.

ANDERSEN: I get your point it is not the Republican Party, but it is because they are voting in republican primaries. So, if you are simultaneously as a republican party exciting these new voters on behalf of a republican candidate and your frontrunner and then are seen to snatch the nomination that he deserved from him, that sounds like -- I mean, you may be destroying the village to save it.

O`DONNELL: All right. We got to take a break here. We got some commercials questioning on us.

Coming up, Donald Trump made the mistake of threatening the speaker of the house. Presidents do not do that and there is very good reason. And, we now know when the speaker of the house heard that threat, he just laughed.




TRUMP: I am going to get along great with congress, OK? Paul Ryan, I do not know him well, but I am sure I am going to get along great with him. And, if I do not, he is going to have to pay a big price, OK?



UNIDENTIFIED MALE SPEAKER: What did you think of Trump announcing the other night that if you do not get along with him, you will pay a big price and what does a comment like that suggest?

PAUL RYAN, (R) WISCONSIN, SPEAKER OF THE HOUSE: I actually watched it live. I was sitting in my office watching it live. I just laughed out loud I think. Sometimes, reality is stranger than fiction around here these days. I do not really think anything of it.


O`DONNELL: Back with us, Susan Del Percio and Kurt Andersen. Susan, when I saw that, I just thought, it is really hard to calculate what is the very stupidest thing Donald Trump has ever said about the way government works. That might be one of them. Speaker House is only in charge of the origination of all tax legislation. And, what is that other thing -- impeachment.



O`DONNELL: That is in the house. That is up to him.

DEL PERCIO: It is just crazy. I mean, that on top of the fact that - to make debates, he has already said he is going to ask military leaders to break law and he is sees fit to torture people and go after terrorist families. So, I think he maybe thinking this is about being King Trump, something like that.

And it goes back to the temperament issue. This is not a fight that he should be picking for no reason. Paul Ryan is one of the few republicans that everyone rallied around when they needed to pick a new speaker. So, to do this for no reason, he gains nothing.

And, I think that is the frustration that you see when a lot of people, who have problems with Donald Trump`s candidacy, is that he just says these things and there is nothing behind it. It means nothing. He cannot go through with it, but he says it in such a way and people are buying into it.

O`DONNELL: Well, you know, the buying -- it is interesting that since Massachusetts just voted, I now have access to a bunch of sane Trump voters; meaning, here is what they believe, Mexico is never going to pay for a wall. He is never going to be able to have unconstitutional ban of Muslims entering the country. They do not believe most of what he says, but they are voting for the show to go on and they are voting against politics as usual and that is really -- there is no real substance in these votes.

ANDERSEN: Well, and they are also voting to plant the flag. The flag that in more reasonable ways, the Republican Party has been planting for many years of no new taxes and Grover Norquist and we will have no, no taxes or Ted Cruz. We are going to abolish the IRS. That is ridiculous. You might change the name, but you are not going to abolish it. So, voters on both extremes want the flag planted whether they really believe the particulars or not.


O`DONNELL: Let me just say this. When I mentioned the Massachusetts voters, what I mean is -- I mean, we know from polling that the vast majority of Trump voters believe that President Obama is Muslim. They believe he is not a citizen, 60 percent believes he is not a citizen. I am talking about people who do not believe that.


O`DONNELL: I am talking about, you know, if he will be left, Trump would be getting maybe 18 percent of the vote, if he was left with only the sane ones. But the sane ones do not expect him to actually do what he says.

DEL PERCIO: Because the sane ones are frustrated because they have been lied to. It has just been a different lie.

O`DONNELL: Yes. That is what they are saying --

DEL PERCIO: So, this is no other like --

O`DONNELL: All politicians lie.

DEL PERCIO: Right. So, this is just a different type of --

ANDERSEN: It is a more entertaining lies that is for media.

DEL PERCIO: And, they do believe and I do see the point of view of maybe he will just be different. Yes, he will lie like all the rest but maybe he will bring a new perspective. Maybe he will bring people in. Maybe he will even lie a little less or do something well.

O`DONNELL: We will see. Susan Del Percio and Kurt Andersen, thank you both for joining us tonight. I appreciate it.

DEL PERCIO: Thank you.

ANDERSEN: Thank you.

O`DONNELL: Up next, the police officer who arrested Sandra Bland has finally been fired.



O`DONNELL: Brian Encinia, Texas State Trooper who arrested Sandra Bland has been fired. Officer Encinia pulled over Sandra Bland accusing her of changing lanes without using a turn signal. Dash cam video showed Brian Encinia using unnecessary force when he arrested Sandra Bland during a routine traffic stop on the outskirts of Houston.

Officer Encinia pulled her over and the dash cam video shows that the traffic stop quickly became confrontational. Sandra Bland was arrested. At that time, Sandra Bland was found hanging in the jail cell three days later. The County Coroner ruled her death a suicide.

Sandra Bland`s family said she would never take her own life. In December 2015, the grand jury declined to issue any charges in her death. Brian Encinia was indicted on a perjury charge in January for claiming he removed Sandra Bland from her car to conduct a safer traffic investigation.

If convicted, Officer Encinia faces up to a year in jail and a $4,000 fine. The Texas department of public safety began termination proceedings against Encinia hours after he was indicted. He has until March 16th to appeal his termination.


O`DONNELL: A special programming note for tomorrow. NBC`s Matt Lauer has an exclusive interview with Mitt Romney tomorrow on the "Today Show."

Up next, Jane Sanders gets tonight`s "Last Word."



UNIDENTIFIED MALE MODERATOR: Senator Sanders, your wife Jane shares an office in your campaign headquarters in Burlington. We have seen the pictures. The desks right next to each other. Would she have a desk close by in the west wing?

BERNIE SANDERS, (R) PRESIDENTIAL CANDIDATE: Given the fact that she is a lot smarter than me, yes she would.


O`DONNELL: Senator Sanders` wife Jane Sanders served as the President of Goddard College and Burlington College in Vermont. Joining us now Bernie Sanders` most trusted adviser, Jane Sanders. Thank you very much for joining us tonight.

JANE SANDERS, WIFE OF BERNIE SANDERS: Thank you for having me, Lawrence.

O`DONNELL: Why do I get the feeling that a lot of Bernie Sanders` campaign positions on education, and on the affordability of higher education have come in conference with you. As the president of colleges, you have seen what it is out there and what students are facing in terms of taking on debt?

JANE SANDERS: Absolutely. I mean, he has too. I mean, he spends a lot of time going to high schools and colleges and speaking. He always has. He likes to listen to the young people and we have been hearing for too long about student debt. It is an epidemic. It is crazy. We are bankrupting a whole generation`s future and he wants to address that.

O`DONNELL: Let us listen to what Hillary Clinton said about Senator Sanders` proposal on this.



HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: On the affordability side, I do disagree with Senator Sanders with his plan about free college, because I want to have debt-free tuition, but I do not believe that my family or Donald Trump`s family or a lot of families that can afford it, should have the advantage of free college. I think they should be contributing on behalf of their children.



O`DONNELL: What is your response to that?

JANE SANDERS: Well, I do not think she has to worry. Her family and Donald Trump`s family will be paying quite a bit more in taxes in a progressive income tax system. So, do not worry about getting a free ride.

But, what we do not want is a means testing where we have a bureaucratic process, where if you make $20,000 this year, you can get free a college recollection. But, if you make $22,000 you have to fill out a whole bunch more forms.

You know, it does not make sense. Bernie believes very strongly we are not investing enough in our children and that means we are not investing in our country, in the future of our country. It makes sense to say 100 years ago when we said we would have public education from kindergarten through 12th grade, that was good from 100 years ago.

Today, a college education is very similar to a high school education was at that time. Every other industrialized nation in the world does it. We, in fact, used to do it. When I was younger, I mean we paid $300 a semester to go to school. Now, people are paying $20,000 a semester. That is crazy.

O`DONNELL: And, the Sanders` proposal does not apply to the rich universities that Chelsea Clinton went to, that Trump kids go to, or the Donald Trump went to, it has nothing do with those schools.


O`DONNELL: I just wanted to clarify that point, because I think that gets lost all the time.

JANE SANDES: It is just opening up and making college affordable and accessible to all of our kids that have the desire and the ability to learn and without worrying about their parents` financial circumstances. But, the private schools will still do fine. They always did.

O`DONNELL: Let us listen to what Tulsi Gabbard said about your husband who she endorsed this week.


TULSI GABBARD, (D) HAWAII, REPRESENTATIVE: So, I am endorsing Bernie Sanders because he has that sound judgment and that foresight and that commitment to stopping these interventionist wars of regime change. And, there is a very clear difference there between him and Secretary Clinton in that regard.


O`DONNELL: You know, I have been up close to some senators when they are making that decision to vote to authorize troops being used going into -- we no longer call them wars. We never call them wars.

We always call them something else. What was it like for you as Senator Sanders approached that Iraq war vote? How much conversation and consultation did you have with him about that?

JANE SANDERS: Well, we talked about it a lot. I mean we have been to way too many funerals, because of kids really that go off to war on our behalf. What is upsetting is that the drums of war are very hard to ignore and the editorial boards are saying we have do this, we have to do this.

There is no real intelligent debate about what are the other ways and what are the consequences of these actions? What is going to happen down the road? And, that is what he tends to think of. So, I am proud that he voted against the war and he had very good judgment in doing so. He takes that very seriously.

O`DONNELL: Sorry, we are out of time. Jane Sanders gets tonight`s "Last Word." Thank you very much.

JANE SANDERS: Thank you very much, Lawrence.

O`DONNELL: Next, Chris Matthews has live coverage of tonight`s republican debate.