'Countdown with Keith Olbermann' for Tuesday, August 25, 2009
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Video via MSNBC: Oddball, Worst Persons

Guests: John Sifton, Jonathan Turley, Chris Hayes, Max Brooks

(BEGIN VIDEOTAPE)

KEITH OLBERMANN, HOST (voice-over): Which of these stories will you be talking about tomorrow?

Cheney doesn't know diddly. "The individuals subjected to enhanced interrogation techniques provided the bulk of intelligence we gained about al Qaeda." But that bit of sophistry only proves that our Spanish Inquisition, people who talked were tortured, not that people who were tortured talked or talked the truth.

Health care: The Republican logic elevator no longer goes all the way up.

(BEGIN VIDEO CLIP)

SEN. CHUCK GRASSLEY (R), IOWA: I oppose the public option because our

one of the principles that we follow is we want people to have choice.

(END VIDEO CLIP)

OLBERMANN: Option, choice - never mind.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Senator Coburn, we need help. My husband has traumatic brain injury. His health insurance will not cover him to eat and drink.

SEN. TOM COBURN (R), OKLAHOMA: The idea that the government is a solution it our problems is inaccurate - a very inaccurate statement.

(END VIDEO CLIP)

OLBERMANN: And he is a doctor.

And they nominally are a health group - United Health Group, the insurance giant literally instructing its employees to go to town halls and spit talking points. How they have rigged the system to lower how much insurance pays of your bills. How they bought the independent agencies designed to protect you from that. How they have colluded with elected officials to fatten their profits at your expense. How their CEO has made $750 million so far, and will make more if the public option does not pass.

The Countdown special report: United Health Group.

"Worsts": Congressman Herger still won't acknowledge you can't shout terrorists in a crowded town hall.

And after death panels, the death books, and the dreaded Youth in Asia, what's left for Republicans to accuse the Democrats of? Of course - zombies!

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UNIDENTIFIED MALE: An experience and shock more shattering than your strangest nightmare.

(END VIDEO CLIP)

OLBERMANN: Health care reform will create zombies - how to defend yourself, your family and your grandma.

All that and more - now on Countdown.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: It is vital that you stay in your home.

(END AUDIO CLIP)

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OLBERMANN: Good evening from New York.

After having played fast and loose with the Constitution of the United States, in our fifth story on the Countdown: Dick Cheney now wants to play a word game to support his now officially discredited claim that torture produced actionable intelligence.

And while Cheney attacks President Obama again, another news report tonight says the redacted portions of that CIA report include details of the deaths of some tortured detainees, the near death of Khalid Sheikh Mohammed and the agency's inability to locate some of the detainees.

The former vice president responding to Attorney General Eric Holder's decision to allow a criminal review of some CIA interrogation abuses in a statement which reads in part, "The documents released Monday clearly demonstrate that the individuals subjected to enhanced interrogation techniques provided the bulk of intelligence we gained about al Qaeda. This intelligence saved lives and prevented terrorist attacks."

But parsed carefully, Cheney says that the individuals provided the bulk of the intelligence, the enhanced interrogation just happened to be part of it. It is pure sophistry - tantamount to saying our bloodletting cure drew no complaints from any patient since all the patients died. Cheney is saying all of the people who gave us intel we tortured, that they - especially Khalid Sheikh Mohammed - gave up the intel before torture was used, not addressed by the former vice president.

Mr. Cheney also pretends to be the champion of the rank-and-file. "The people involved deserve our gratitude." He's obviously referring to himself. "They do not deserve to be the targets of political investigations or prosecutions."

But the policies so ardently endorsed by Cheney actually caused great concern to those very agents. From the inspector general's report, quote, "During the course of this review, a number of agency officers expressed unsolicited concern about the possibility of recrimination or legal action resulting from their participation."

Mr. Cheney also attacks, once again, President Obama and his national security policies. Yet tonight, ABC News reported that an official who saw the unedited versions of the report indicates it also details how some two tortured detainees in Iraq and one more in Afghanistan died, how other detainees, quote, "just got loss and the CIA does not know what happened to them." How Khalid Sheikh Mohammed was nearly killed during one of or more than one of the 183 times he was waterboarded.

Our NBC News sources say the deaths were previously publicly reported that the report of the near death of Khalid Sheikh Mohammed is not in the unclassified version of the inspector general's report.

And then there is the criticism from the opposite direction. How the Justice Department could investigate and possibly prosecute certain wayward agents and yet ignore the makers of a policy which may have been illegal on its face - criticism coming from the chairs of the House and Senate judiciary committees, Congressmen John Conyers and Senators Patrick Leahy. They applauded Mr. Holder's appointment of a special prosecutor but said an independent truth commission is still necessary.

Meantime, the Obama administration's decision to - or continued renditions, little notice amid yesterday's other news has drawn heavy criticism from human rights groups.

Let's turn now to an attorney who has conducted extensive investigations into the CIA interrogation and detention program, also a contributor to "The Daily Beast," John Sifton.

Thank you for your time tonight, sir.

JOHN SIFTON, CONTRIBUTOR, THE DAILY BEAST: Thank you.

OLBERMANN: We'll get to Mr. Cheney in a moment. But about 36 pages out of 109 in this inspector general's report, totally redacted, 30 or more partially so - and we have this ABC report, deaths of three detainees, near death of Khalid Sheikh Mohammed, detainees who can't be found. Does - - translate that. Does that mean we tortured people to death?

SIFTON: Essentially, yes. It's been known for some time that a number of CIA detainees died in custody. They were not detainees in the high valued detention program. They were detainees in Afghanistan and Iraq. But ABC News is breaking tonight that Khalid Sheikh Mohammed was almost killed during his interrogation.

We've known for some time that one of the detainees almost died. That's pretty clear from some earlier memos that came out in April. But now, ABC News is confirming that it's Khalid Sheikh Mohammed.

But, listen, this is just the tip of the iceberg. There are cases of some of the detainees now not being competent to stand trial because they have such serious mental illness.

OLBERMANN: Yes, noted particularly in the so-called radiation bomber, Jose Padilla. Is the truth as simple as it seems about that statement from Dick Cheney that he is now slid into this word play because the memos that were released supposedly in his defense, supposedly in tortures' defense, do not in fact come anywhere close to showing torture worked?

SIFTON: Yes, there are a few problems with that statement. I mean, one is that the plots that he's talking about are pretty farfetched. I mean, they talk about the breakup of a plot in 2002 that they broke up using interrogation from 2003. So, unless the CIA also has a time machine that allows them to travel back in time, I don't see how that's possible.

And then you have the logic of it. I mean, just because you get information, it doesn't mean the torture led to the information. What they really need to show if they want to make their case is that they couldn't have gotten the information otherwise. And that's just not the case. The FBI has made clear that they could have used FBI - traditional FBI techniques and gotten the bulk of this intelligence anyway.

OLBERMANN: We could go on all night about why Mr. Cheney would have thought something like this worked for him, thing that's were in these memos. This one quote, agency - from 104, page 104. "Agency officers report that reliance on analytical assessments that were unsupported by credible intelligence may have resulted in the application of EIT, enhanced interrogation techniques, without justification."

Again, to translate that - that is, we tortured people who did not under even the Bush administration definition of who should be tortured, we tortured those people.

SIFTON: Yes. Well, one of the biggest things coming out of these documents is we now know that although interrogations were approved for the first CIA detainee, Abu Zubaydah, they were flying blind afterwards. They did have not authorization for Khalid Sheikh Mohammed or al-Nashiri. They essentially used the observation for Abu Zubaydah and then tortured everybody else, and then, after the fact obtained reauthorizations for those subsequent tortures.

They're in a lot of hot water now because of that. And you have to read carefully, you have to read those memos carefully to see that. But in this - yes, you see that, essentially, the CIA was flying blind, they were fishing using torture, and they didn't really have adequate reasons to torture.

OLBERMANN: Well, that certainly does throw what Mr. Durham can and cannot investigate into a cocked hat, doesn't it? Because if there wasn't clear policy from point minus X rather from point X, he's got a lot more latitude than people think he does.

SIFTON: That's correct. Once you knock out the legal authorization, you can really broaden the investigation quite a lot.

The fact of the matter is, if you wanted a real investigation, you wouldn't go after interrogators. That's something that Dick Cheney and human rights activist agree on. You want to go after the architects. The architects are the lawyers in the CIA who set this program up and the OLC lawyers in the White House who helped them do it.

OLBERMANN: "Daily Beast" contributor John Sifton, who's been looking through these documents - great thanks for your time tonight.

Let's turn to professor of constitutional law at George Washington University, our old friend, Jonathan Turley.

Jon, good evening.

JONATHAN TURLEY, GEORGE WASHINGTON UNIVERSITY: Hi, Keith.

OLBERMANN: Well, look, even if this ABC report is incorrect, we tortured people and we killed some of them. I mean, if guidance from the Bush Justice Department was deliberately vague, if officials created an environment for abuse, might that get this prosecutor, Mr. Durham, back to those officials despite what seems to be a narrow mandate at the start?

TURLEY: Well, it's a very curious mandate. I don't see how he can possibly do what Holder's asking him to do, because essentially, what Holder is saying is that he wants them to do a preliminary investigation to look at whether anyone went beyond the legal advice, but the legal advice said that you can commit torture.

So, basically, Holder is saying, I want you to look at the degree of torture, that is, we want to see if it goes beyond what is described as authorized. Well, the Bush Justice Department and the Bush administration said they could do acts of torture.

So, it's a bizarre thing for a professional prosecutor to do. I mean, to go in and say, I'm going to look at a program that's based on what is a well-defined war crime and I'm going to see if any of these people went beyond what was authorized by people who were talking about a war crime.

OLBERMANN: Right.

TURLEY: So, it's a very odd thing. But the question here is, whether Durham will have the leeway, and frankly, the courage, to recognize the obvious. I mean, he literally has to step over bodies when he goes into these investigations. According to ABC and other news programs, he's got what are all of the elements of a crime, including dead bodies, by reports.

And the question is, is he going to go after those sort of low-lying fruit targets who went too far or is he going to go after the people who really set this thing in motion?

OLBERMANN: Yes, he's got embezzlement and counterfeiting and clear evidence of both, and they're looking for spelling errors. Parse for me legally and are there any legal implications or even inferences to be drawn from this piece of sophistry from Mr. Cheney. "The documents released Monday clearly demonstrate that the individuals subjected to enhance interrogation techniques provided the bulk of intelligence we gained about al Qaeda."

That careful construction can't be an accident, can it? I mean, he wants it to mean more. But even he is admitting it means nothing. You might as well say the individuals who were detained provided the bulk of intelligence we gained about al Qaeda. What is the legal meaning of that - - of that ridiculous statement?

TURLEY: Well, it sounds like a Philadelphia lawyer.

OLBERMANN: Yes.

TURLEY: There's no question about it.

But I think that the problem, of course, is that this is part of the whole "torture works" campaign. The idea to convince Americans that the question is whether we got something out of what we are prohibited from doing under international treaties. It's immoral.

But putting that aside, all of the facts contradict the suggestion that he leaves, that is experts - including people who interrogated these detainees - said that torture was not useful and was not necessary. We paid a great price on the soul of this country for something that Cheney and Bush ordered, and they got very little from it and they're desperately trying to tell Americans that this was justified, that embracing a well-defined war crime produced results.

I mean, it's a terrible debate to even begin, because it suggests that if torture works, somehow, torture is permitted.

OLBERMANN: Bingo. Meantime, buried in all of this, renditions will continue but we have new assurances against abuse. Are you scoffing along with the human rights groups and people who were, say, alive between the years 2001 and 2008?

TURLEY: Yes. Well, I think that's the biggest surprise for this White House is the reaction of civil libertarians and human rights groups, which has been universally negative, including the announcement of this investigation under these unbelievable limitations. And I think what they're missing is the central truth. They know to investigate torture and stop trying to gain the system.

OLBERMANN: Well, we now know why they don't want to do that because they want to leave themselves certain parts of that system intact clearly.

TURLEY: That's true. I think that is true.

OLBERMANN: Jonathan Turley of George Washington University - I guess this is something for us to continue to talk about for the years to come. I'm sorry about that, but it's always a pleasure to talk to you, sir.

TURLEY: Thank you, Keith.

OLBERMANN: Mr. Cheney was not alone in his verbal gymnastics. His effort to make it sound like he was saying more than he really said, which boils down to this - that all of those who are subjected to torture were tortured.

We have the latest of the escalating head-scratchers from Senator Grassley tonight about health care reform. Quote, "I oppose the public option because one of the principles that we follow is that we want people to have choice." And there is the nonsensical, self-contradicting slogan to carry onward for these phony Christian soldiers marching as to war. No option, we want choice!

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OLBERMANN: An Oklahoma senator vows to help a woman at the end of her insurance rope, provided she does not seek help from the government, only from her neighbors.

An Iowa senator says something so self-contradictory that he better hope there really aren't death panels, or sanity panels.

And our special report tonight on one of the giant looming dragons in the health care battle. United Health Group, supplying everything from unconscionable profits to ready-made town hall protesters to independent groups designed to make sure the insurance agency does not rip you off - groups which United Health Group conveniently managed to purchase, now owns.

All ahead on Countdown.

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OLBERMANN: Republicans politicians already have government health care plans, which is a good thing because clearly they're sick.

Our fourth story tonight: The GOP takes a break on health care, kind of a psychotic one. Patient number one: Senator Chuck Grassley. Diagnosis: possible dementia - telling a town hall in Iowa he opposes the public option because he wants the public to have options. Doing nothing to rebuke a man also who threatened Grassley's fellow lawmakers, saying, quote, "I'd take a gun to Washington if enough of you would go with me."

Patient two: GOP Chair Michael Steele. Diagnosis: whiplash. Three years ago saying cuts to Medicare had to be on the table. Yesterday, releasing a senior's health care bill of rights promising to protect Medicare, today calling Medicare, quote, "a very good example of what we should not have happen with all of our health care."

And then there's patient three: Senator/Doctor Tom Coburn. Diagnosis:

pronounced cardiac deficiency - or in layman's terms, he's utterly heartless. A constituent told him her husband suffered a traumatic brain injury. He's on a feeding tube. They have insurance. It will not cover trained help nor a nursing home.

You will hear Coburn respond that her neighbors should help out but not, of course, via their government and that his office will help, even though his office is the government.

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UNIDENTIFIED FEMALE: What I need to know is are you going to help me where he can eat and drink? We left the nursing home and they told us we're on our own. And I'm trying to get him to eat and drink. (INAUDIBLE).

COBURN: Well, I think first of all, yes, we'll help. The first thing we'll do is see what we can do individually to help you through our office. But the other thing that's missing in this debate is us as neighbors helping people that need our help. You know, we tend to.

(APPLAUSE)

COBURN: The idea that the government is a solution to our problems is an inaccurate, a very inaccurate statement.

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OLBERMANN: Let's turn to Chris Hayes, Washington editor of "The Nation" magazine.

Chris, good evening.

CHRIS HAYES, THE NATION: Good evening, Keith.

OLBERMANN: Sure, ma'am, ask your neighbors for the 400 grand for the round-the-clock nursing care. What the hell is the matter with these people?

HAYES: Well, look, I mean, the only way to make sense of the tape that you just played and in all three instances is to understand that first and foremost, the objective here is to kill the bill and to issue a political defeat to the president and to the Democratic Party. Everything sort of derives from that. So what you're seeing is there's a complete - like inconsistency internally. I mean, the arguments that are emanating from the right and from the Republicans are a logical mess.

They're self-contradictory. They're for Medicare, they're not for Medicare. They love Medicare and they hate government-run health care. Your neighbors should feed your ill husband.

I mean, there is no consistency because it's not being engaged in, in good faith. It's a bad-faith effort to construct a series of arguments around a political objective, which is to destroy the bill.

OLBERMANN: Senator Coburn seemed to give himself away there. Individual people can help. And his office can help when it gets to decide how it should or can help. But there's no way that people can come together in the form of, you know, a government and decide to change things for themselves.

HAYES: That's right.

OLBERMANN: . for everybody for the better. Is that the heart of this?

HAYES: Look, we - you know, civilization on this planet has had charity-based health care for a long time. I mean, during the bubonic plague, way back in the bad old days before we had, you know, sophisticated welfare states, et cetera. And - you know, sure, fine, I mean, I guess if you're in the - you know, ninth century, then, you know, and you can - you can drag yourself ill to the local church and get some charity care, that's fine.

But that's not the way that you - that a country in the 21st century takes care of this fundamental public issue. I mean, we come together, as you said, through a government, through self-governance to address these things. This is not something that is just to be tossed of as a realm of charity.

OLBERMANN: The government will pay for the - for the paint with which to mark the cross on the door, however, if you're in that situation.

On the issue of violence, the Senate used to be this chamber of grown-ups of comedy and now we have Grassley tolerating, just basically ignoring threats of violence against fellow senators, threats almost of overthrowing the government. This is who the Democrats are counting on for bipartisanship?

HAYES: You know, I have to say, I thought that was really disgusting.

OLBERMANN: Yes.

HAYES: . that Grassley didn't say anything. And I don't use that word lightly. As a politician, it very often happens that you're in environments in which you can't control. And town halls - people are going to say all sorts of things and you can't control what people say and that's part of what makes our, you know, crazy, wonderful democracy what it is.

But you have an obligation when people say things like that to make a point of expressing the fact that you are - you do not think that's an OK thing to say. And I think it just shows where Grassley is at in this. I think he's been captured by the most extreme, crazy elements of the right in this, and yet somehow, he's sitting across from the negotiating table. It makes no sense. He has to pick a side, and he has shown very clearly which side he's on.

OLBERMANN: Yes. And unfortunately, that side has another side to it that transcends politics. We had another gun guy show up at a health care protest, only this one was pro-reform, and he told TalkingPointsMemo, part of the reason he went in armed was in response to the gun-wielders on the anti- side. If we'd just stipulate this is - it's not a good thing for anybody under any circumstances, what does it mean?

HAYES: Well, look, I don't know. I don't know - I don't want to draw any large conclusions. I mean, it's a very big country with a lot of guns - it should be noted. And so far, this country has been in, you know, the last several decades, blessed comparatively with very little political violence. But that's not set in stone, and everybody needs just, you know, take a deep breath and bring it down a notch here.

OLBERMANN: Amen. Chris Hayes of "The Nation" - great thanks.

HAYES: Thank you.

OLBERMANN: Still to come here on "sportscenter" - man, they have really gone downhill since I split. Oh, boy.

And the count is now 36 sponsors bailing out. So "lonesome roads" tries to get his revenge without telling his audience it's revenge. "Worst Persons" is ahead.

You're watching Countdown on MSNBC.

(COMMERCIAL BREAK)

OLBERMANN: "Bests" in a moment. Now, he's going after the Toledo Mud Hens baseball team.

First, on this date a century ago, August 25th, 1909, in Bradford, Yorkshire in England was born Michael Rennie, unsuccessful in business as a manager of a rope factory and as a car salesman who claimed that in his year-long career, he didn't sell one of them. He turned to acting. Much of his work was American TV. As we the captain of the "Titanic" on the Time Tunnel and the straight man in Hitchcock's most terrifying episode of "The Foghorn." But one role immortalized him the movies, as the lowest of low-key aliens, Klaatu, in 1951's "The Day the Earth Stood Still."

Klaatu barada nikto - which, by the way, actually means let's play "Oddball."

The aliens have arrived. We begin in La Rioja, Spain, and there they are. They're snails from outer space. No, they're just the 25th annual snail race. Would you look at that escargot!

Children bring their pet snails - who has a pet snail? We were so poor, we had pet snails. We had to eat them for dinner. The mollusks have five minutes to get as far as they can. The only catch, they are tied by their tails to frozen dinners. That doesn't seem fair.

The winner (INAUDIBLE) a whopping three inches in five minutes. Kids love it. But the race had its detractors, like Senator Grassley who wants this race slowed down or he'll start putting (ph) the table salt.

In Tokyo, this paper enthusiast who's practicing the ancient art of origami - and we mean really ancient. Thirty people, multiple yards of paper and a Jurassic-size effort to create a giant paper dinosaur. With so many folds, coordination was essential to keep the material from ripping and tearing, and adults have to make sure they got the kiddies out from between the fold before they turned into a paper mache.

The event's participants delighted by the outcome. When asked if they enjoyed helping create the world's largest paper dinosaur, one participant said, "Yes, except now, I have the world's largest paper cut."

There are many villains in the passion play that is health care reform, but few of them match United Health Group. Our Countdown special report on its many hands in the public till.

And they've accused of Democrats of everything else. It's only a matter of time until the Republicans start claiming reform will lead not just to death panels, but to zombies.

These stories ahead.

But first, time for Countdown's "Top Three Best Persons in the World."

Dateline: Lancashire in England. Number three: Best dumb criminal. Simon Holden shoplifted beer from a convenient store on full view of the manager. Three days later, Mr. Holden applied for a job as a shelf stocker at the same store, with the same manager. When the manager confronted him, Mr. Holden bolted from the chair and left the store, stealing two more six-packs on the way out. He's been arrested.

Dateline: Washington. Number two: Best impression of the Bush administration, the Obama administration. "Stars and Stripes" reporting that the Pentagon has hired the Rendon Group to screen journalists who wish to be embedded with US forces, to screen them by deciding whether their coverage of the military has been positive, negative or neutral. The military had barred a "Stars & Stripes" reporter from an embed in Iraq because it claimed he had refused to highlight good military news. This was last month.

It gets worse, this Rendon group, it is the one that bank rolled Ahmed Chalabi, which the Bush administration hired and now the Obama Pentagon has hired them too.

And dateline, New York, number one, best sports blooper, Bill-O the Clown. His nightly round of self-applause last night, designed to drown out the echo of daddy hitting him. When somebody mentioned MSNBC's reaction to something, Bill-O belched, "They have no audience, nobody. What you just said is like saying, all right, the Toledo Mud Hens are going to be mad. OK? It doesn't matter. I'm not insulting the Toledo Mud Hens. But they're a Double A baseball team. What they think about the New York Yankees doesn't matter."

I hate to intrude with the facts, but ours is the highest rated cable news program viewers 35 and younger, and the highest rated cable news program for all viewers not on Fixed News. And since Fixed News has now migrated completely over to serving propaganda to tin foil hatters, conspiracy theorists, paranoids and racist, it's not a news organization, making this show the highest-rated cable news program, period.

But more importantly, "The Toledo Mud Hens are a Double A baseball team." Triple A. Toledo's Triple A. They have been since the classifications system, Triple A, Double A, Single A, went into effect in 1946. Bill-O can't tell his A single his Double A.

This from a baseball expert, O'Reilly, who claimed he got a tryout for a pro contract from the New York Mets in 1970 or 1971, and told author Marvin Kitman that he was warming up on the mound, one of the mounds in the bullpen at Shea Stadium, while next to him another young pitcher, whom O'Reilly insisted nobody had ever heard of, was also warming up, and who he then revealed, with a great flourish, was a rookie named Tom Seaver, who would have been in his fourth season with the New York Mets, including the year he led them to the miracle World Series in 1969, when O'Reilly got his tryout. Unless O'Reilly just dreamt it.

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OLBERMANN: The United Health Group, one of the largest health insurance companies in the country, says it is extremely neutral in the current debate over reform. But last week, it provided Politico.com with the talking points it gives its own employees for attending protests and town halls. Included therein, quote, "a government-run health plan would be a roadblock to meaningful health care reform."

The United Health Group customer told Talking Points Memo and repeated to Countdown that the insurer directed him to right wing sites and events. United Health Group denies this. But in our third story tonight, what kind of company thinks opposing the president's health care plan is extremely neutral? According to OpenSecrets.org, President and CEO Stephen Hemsley has personally given 15,000 dollars to Democrats, 41,000 to Republicans and 36,000 more to United's political action committee, a committee which has given hundreds of thousands to Republicans, but as of the 2008 election cycle, had given 61 percent to Democrats, who now, of course, control the health care debate.

All of that, of course, is legal.

However, after fighting lawsuits filed by New York Attorney General Andrew Cuomo and the American Medical Association, lawsuits which accused United Health Group of a scheme to defraud patients, which United Health Group denied, United Health Group decided to settle those suits one week before President Obama took office.

Here's how the scheme worked: for most Americans, when you go out of network, your insurance pays a preset percentage, not of your actual bill, but of what they think your bill should be. The, quote, "usual and customary bill." So if your insurance company covered 80 percent of out-of-network costs, and the usual and customary rate estimate for a chest X-Ray was 100 bucks, your insurance company paid you 80 bucks, even if your actual X-ray costs 150.

Why?

(BEGIN VIDEO CLIP)

STEPHEN HEMSLEY: : Physician reimbursement based on nothing but the doctor's bill is simply not economically tenable for consumers, nor sustainable for our health care system.

(END VIDEO CLIP)

OLBERMANN: So what would be economically tenable? For decades, insurance companies bought their estimates of usual and customary from two competing databases. Seven months after Mr. Hemsley joined United Health Group, the company purchased one of those databases. Ten months later, it bought the other one.

Just a year and a half later, the AMA sued, claiming United Health Group was now low-balling the usual and customary rates used by the insurance industry, so insurance companies, including United Health Group, could cheat patients and providers on their reimbursements, telling patients the company providing their rate estimates was, quote, "independent."

While United Health Group was telling other insurance companies they would get a 16 to one return on investment if they bought those rate estimates from United Health Group. Cuomo said United Health Group low balled consumers by as much as 30 percent.

United Health Group's own general counsel said "conflicts of interest were inherent." Mr. Hemsley did not.

(BEGIN VIDEO CLIP)

HEMSLEY: We understand that appearance and that appearance of an inherent conflict.

(END VIDEO CLIP)

OLBERMANN: United Health Group agreed to pay 50 million to set up a new actually independent database and to reimburse patients and providers 350 million dollars, although a judge is still deciding whether or not that is enough.

A Senate committee concluded that millions of Americans, including more than one million military families, paid billions more for out-of-network health care than they should have.

Republicans like to quote the Lewin Group's claim that more than 100 million Americans would ditch employer health plans for a public option. House Whip Eric Cantor, Orrin Hatch of Senate Finance, they have called Lewin non-partisan.

But the Lewin Group, too, is owned by United Health Group, which has given thousands to Hatch and Cantor in just the past two years.

Before United Health Group, Hemsley spent 23 years at Arthur Anderson Accounting, serving as chief financial officer from fall of 1995 until when he left in '97. For services overlapping that period, Arthur Anderson Accounting became embroiled in several scandals, sued for fraud over its accounting for Waste Management Incorporated, denied wrongdoing. Settled for 95 million.

Sued over Sunbeam Accounting. Denied wrongdoing. Settled for 180 million. Fined more than seven million.

Sued over the Baptist Foundation of Arizona. These investors, many of who are elderly, trusted the misleading financial statements audited by Anderson. That from then Arizona Attorney General Janet Napolitano. Denied wrong doing. Settled for 217 million.

And Enron, where Arthur Anderson Accounting was both auditor and consultant. By the time both companies came down, Mr. Hemsley was gone.

In 1999, Mr. Hemsley negotiated a new deal as United Health Group president. United Health Group's compensation committee gave him stock options, back dated stock options, meaning they were back dated to when the stock was low. So they were worth more, more money the second he got them. This saved him the trouble of having to wait until the stock price actually rose.

Two years later, after Hemsley hired the chairman of United Health Group compensation committee as a personal money manager, United Health Group investors were still being told the compensation committee was, quote, independent.

Both United Health Group's auditor and consultant to the compensation committee, Arthur Anderson Accounting.

When the "Wall Street Journal" revealed the back dating, investors sued. United Health Group got rid of its CEO at the time. It replaced him with the man who received the second most valuable package of back dated options, Hemsley, who said he knew nothing about the backdating. Investors sued again, claiming Hemsley had signed off on those options.

Why would United Health Group keep Hemsley if that were true? Quote, "the impact of the stock was significantly mitigated with the retention of Hemsley. If both had been forced to leave the company, then investors would have looked at it as a wholesale management change."

Hemsley denied wrong-doing, but agreed to return some of his options, 190 million dollars worth.

According to "Business Week," United Health Group has, quote, "achieved a secondary aim of constraining the new benefit that will become available to tens of millions of people who are currently uninsured."

After Republican Chuck Grassley complained last year, United Health Group stop marketing a plan to seniors that left them thinking they were fully covered when they only had supplemental coverage.

Last year, hospital executives raided big insurance companies in a national survey. Aetna was best. Well Point second worse. United Health Group was worst. Favorable, eight percent, unfavorable, 91 percent.

United Health Group has reportedly hit small businesses and consumers with regular double-digit rate hikes recently, far out-stripping inflation. In 2007, United Health Group denied, but agreed to settle, claims of handling patient claims improperly in at least 37 states.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I tried to explain to them that if I do not have this, I will die. And the only response she gave me was OK.

(END VIDEO CLIP)

OLBERMANN: President Obama is now asking United Health Group for advice on how to reform health care. He met with Hemsley twice this May. On June 1st, lead senators on health care asked Senator Kent Conrad to come up with an alternative to the public option. Three days later, Senator Conrad met with Hemsley, and top United Health Group lobbyists Simon Stevens.

Conrad has since that meeting led an effort to create non-profit medical cooperatives, "Business Week" reported. "With less heft than a proposed national plan, the state medical cooperatives would pose a far weaker competitive threat to private insurers."

Conrad said the idea of co-ops came out of conversations in my office. Senator Conrad's office told Countdown, quote, "you're barking up the wrong tree. Co-ops were not discussed. The senator met with him for 15 minutes to discuss care coordination, and how that could lead to both cost savings and better health care outcomes."

"Investment News" reports a public option would benefit insurers who could handle the cost of care coordination. "Only the largest insurers, such as Aetna, Well Point and United Health Group could do that."

Late this Spring on the Finance Committee, which Conrad sits, it was reportedly planning to have you pick up 24 percent of your medical bills on top of your premiums. But then, quote, "Stevens and his united health care colleagues urged a more industry friendly ratio."

The Finance Committee decided that now that you will pay 35 percent of your medical bills on top of your premiums.

Last year United Health Group made a profit of five billion dollars. Thus, in a dozen years in United Health Group's employ, Mr. Hemsley total compensation has been valued at three quarters of a billion dollars.

So far.

United Health Group and the Republicans are throwing everything they have at reform, except for one last weapon, the threat of zombies. Death panel zombies. They can always try Congressman Wally Herger of California. His staff is now defending a self proclaimed, quote, proud right wing terrorist.

And coming at the top of the hour on "THE RACHEL MADDOW SHOW," Senator Ben Cardin of Maryland on the growing evidence about a link between lucrative oil contracts and the decision to release the Lockerbie bomber.

(COMMERCIAL BREAK)

OLBERMANN: After death panels and death books, there's only one thing left for the Republicans to throw at health care reform. Yes, Democratic zombie attacks. We'll prepare for that next.

But first time for Countdown's number two story, tonight's worst person in the world.

The bronze to Lonesome Roads Beck of Fox Noise. He used his program yesterday to attack Van Jones, White House environmental adviser on green issues, co-founder of a group called Color of Change. Beck asked, "why is it that such a committed revolutionary has made it so high in the Obama administration, is one of his chief advisers?"

Beck pretended he was just criticizing an Obama appointee, never mentioning he has a personal vendetta against Jones, because it is the group Jones co-founded, but has not been affiliated with for two years, which has led the protest against Beck for calling the president a racist, a boycott that has now cost Beck 36 advertisers.

Beck didn't mention that. Beck is crack.

Runner-up, the ever-hilarious beauty pageant contestant from Fixed News, Gretchen Carlson. Talking about the Obama White House, "there still are a lot of positions available there. A lot of the top players are still anonymous because they haven't been named yet to certain posts. Now we're talking about the assistant treasury secretary for financial markets, the inspector general, the Army secretary."

Obama named his Army secretary on June 2nd, Congressman John McHugh, Republican Congressman John McHugh. Even Fox covered it. Gretchen missed it. And she missed that the confirmation of Army Secretary John McHugh has been held up by Republicans. Gretchen isn't good with the, you know, facts.

But our winner tonight, Matt Lavoi (ph), the spokesman for yesterday's worst, Congressman Wally Herger of Chico, California. After a constituent now identified as Bert Stead (ph) of Redding, California, stood up at a Herger town hall and identified himself as a, quote, proud right wing terrorist, Congressman Herger responded not with any rebuke but with by saying, "Amen. God bless you. There is a great American."

His spokesman, Mr. Lavoi, now says the Congressman has no intention of apologizing for praising a self-described terrorist. He says, quote, "the comment was in jest. The man was using satire to make his point," which does not have a damn thing to do with it. As I said last night, even if he was being allegorical or hyperbolic, this is not language to bandy about, not when people on both sides are showing up with submachine guns or guns at town halls. Not when members of right wing militias are showing up at town halls.

When faced with this crap on the eve of last year's election, even Senator McCain's conscience got the better of him and he reprimanded a woman spouting hate speech against McCain's rival. Congressman Herger and his spokesman need to do the same. Until they do, they're contributing to this climate of paranoia and violence enveloping our political system.

Until they say something, Congressman Herger and this spokesman are not defending the Constitution, they are threatening it. Matt Lavoi, the spokesman for Congressman Wally Herger, second district of California, today's worst person in the world.

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OLBERMANN: First it was the death panels, and then it was the death book, or, as it's also known, the Grim Reader. So it can only be a matter of time before Republicans bring us a new talking point on health care reform; Democrats will turn you and your loved ones into zombies. Our number one story, forget living wills, the GOP instead wants you to be scared of the living dead.

A new mathematical study could pave the way for future Republican scare tactics on health care, drawing parallel between zombie plagues and infectious diseases. Researchers in Canada have determined, quote, "if zombies actually existed, an attack by them would lead to the collapse of civilization, unless dealt with quickly and aggressively." Humanity's only hope, Dick Cheney.

Hit them, the undead, hard, and hit them often.

Already baiting a possible right wing feeding frenzy, "New York Times" columnist Paul Krugman; his latest op-ed titled "All of the President's Zombies." Actually, the column had nothing to do with Republicans scaring everyone into thinking that Obama-care would lead to zombies, but why give Sarah Palin another article she could misrepresent on her Facebook page?

Meanwhile, the "National Review" sharing its reaction to the zombie study by passing along these pearls of wisdom, "zombies are cool. It's just a fact."

And "were these jokers European? Almost, they were Canadian."

Leave it to Boss Limbaugh to get everyone in line, a transcript titled, "Democrats set up war rooms, website to instruct their zombies."

Limbaugh weighing in on President Obama's former campaign organization. "It's the night of the living dead in the daytime. Obama zombies" - which is tough to say - "Obama Zombies marching around with little instructions and pamphlets, manuals."

The evidence is all around us, and it's hungry for our brains. Joining me now is Max Brooks, whose latest in a series of must-read exposes of Democratic plans, "The Zombie Survival Guide, Recorded Attacks," is due out in paperback on October sixth. Thank you for your time tonight, sir.

MAX BROOKS, AUTHOR, "ZOMBIE SURVIVAL GUIDE": Thank you, Keith.

OLBERMANN: Is this a real possibility? Could we see the GOP using the zombie defense against Democrats, and will Limbaugh wind up telling his followers, I was talking about Democratic zombies before you were?

BROOKS: If they did, it would be counter-productive, because Republicans would like a zombie outbreak, Keith.

OLBERMANN: And why - why would they like a zombie outbreak, Max?

BROOKS: Because, Keith, as we have said before, during a zombie outbreak, society would collapse, the government would implode. We would all have to retreat to our homes, surrounded by our guns. It sounds pretty right wing to me.

OLBERMANN: Or it sounds like a town hall. This could be a multilayered argument, though, for the Republicans, because it would not just involve the gun issue and get back to your homes, but also health care and, indeed, national security, right?

BROOKS: It could. But I - this is in lockstep with the Republican strategy, because right now zombies are hot. They're hip. They're now, especially among young people. What do Republicans do when something is hot and hip and now among young people? They attack it.

OLBERMANN: Did - did Republicans shoot themselves in the - in the undead foot here by using that death panel argument in advance of the prospect of Democratic zombies enabled by health care reform? Because would you not need death panels to fight zombies? Are the two things not basically mutually exclusive?

BROOKS: No, see with Republicans there's good death and bad death. A death panel is bad. Death penalty, awesome.

OLBERMANN: Will we see the tea bag crowd take up this zombie cause, or are these separate movements?

BROOKS: You know, it really depends on what Limbaugh says. If he's for it, they'll do it.

OLBERMANN: How does somebody, given your expertise on this subject - this is I think your 38th book on the topic. How can somebody prepare his or her family for a zombie attack and particularly a Democratic zombie attack? And will we see members of Congress hosting anti-zombie town halls or, again, is that kind of mutually exclusive with defense against zombies, putting a lot of living people in one place?

BROOK: Well, Keith, you have to do something very unright wing in order to deal with this crisis. You might actually have to be calm, unemotional and look at the facts.

OLBERMANN: Last October - and we're just realizing the significance of this now - Sarah Palin visited Asheville, North Carolina, on World Zombie Day, and the city was hosting its annual zombie walk. I mean, clearly, there's a Palin zombie connection. Is she pro-life, anti-zombie? Or where does she stand on this?

BROOK: Well, Palin just wants to shoot them from airplanes. That's pretty much it.

OLBERMANN: All right. If you shoot them from airplanes, does anything happen? Or do they just keep walking?

BROOK: Well, you shoot them in the head. That's pretty much how it works. So Palin wants to make sure that she's far away from the danger zone.

OLBERMANN: Are there any other tactics here that can be used? I mean, can the RNC recruit the great '60s British rock band the Zombies to get this message out? Or like every other recording artists, will the zombies wind up for suing the RNC for stealing its songs?

BROOKS: That's a good point. There actually are Republicans that could help us in a zombie outbreak. General Colin Powell for one. But I don't think they're talking to him right now.

OLBERMANN: Is there anybody else? Is there anyone to turn to in the event of a zombie attack that must inevitably follow somewhere at least in this health care debate, Max?

BROOKS: Well, I think a lot of moderate, rational Republicans would be great on our team. And they're going to listen to Rush instead.

OLBERMANN: Plus, if the zombies are looking for brains, they'll only eat the Democrats. Max Brooks, the author of "The Zombie Survival Guide." Great thanks and give your father my best.

BROOKS: Thank you, sir.

OLBERMANN: That's Countdown for this, the 2,308th day since the previous president declared mission accomplished in Iraq. I'm Keith Olbermann. And as Clete Roberts used to sign off, we thank you and we bid you good night.

And now on the developing link between the release of the Lockerbie terrorist to lucrative Libyan oil contracts, ladies and gentlemen, sitting in for Rachel Maddow, here's Allison Stewart. Good evening, Allison.

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

END