updated 11/29/2005 4:47:12 PM ET 2005-11-29T21:47:12

Guests: Mike Wallace; Tim Murphy; Tom DeFrank; John Fund; Beth Wilkinson; DeMaurice Smith

CHRIS MATTHEWS, HOST:  A Republican congressman, Duke Cunningham, pleads guilty to taking over $2 million in bribes.  A house, a condo, a yacht, a Rolls-Royce were part of the booty. 

Meanwhile, the CIA leak probe penetrates deeper, with another “Time” magazine reporter called to testify. 

Let‘s play HARDBALL.

Good evening, I‘m Chris Matthews. 

There‘s new evidence tonight that the CIA leak investigation is still going strong. 

A second reporter from “Time” magazine has been asked to testify under oath in the case.

Viveca Novak, no relation to columnist Bob Novak, has been asked to testify about conversations she had with Karl Rove‘s attorney Robert Luskin starting in May of 2004. 

We‘re going to talk to two former federal prosecutors about what that development might mean in a moment. 

And today, Congressman Randall “Duke” Cunningham pled guilty to conspiring to commit bribery.  Mr. Cunningham admitted that he received at least $2.4 million (AUDIO GAP). 

Plus, stay tuned, because in the next 60 minutes you‘ll see legendary journalist Mike Wallace of CBS‘ “60 Minutes” play hardball tonight. 

But first, David Shuster with the latest on the CIA leak case. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Legal experts say the development means prosecutor Patrick Fitzgerald is still considering obstruction of justice or perjury charges against Karl Rove, President Bush‘s top adviser. 

“Time” magazine reporter Viveca Novak—no relation to Bob Novak—has agreed to testify about a series of discussions with Rove‘s lawyer Bob Luskin that began in May of 2004.  At the time, Rove had already testified at least once to the grand jury; the White House had publicly denied Rove was involved with the leak. 

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY:  I‘ve said that it‘s not true and I have spoken with Karl Rove. 

SHUSTER:  And during that same period, “Time” magazine was fighting in the courts to keep reporter Matt Cooper from revealing his White House source, who would eventually be identified as Karl Rove. 

The involvement now of reporter Viveca Novak has sparked a frenzy of questions about what this development means for Rove and for Fitzgerald‘s investigation. 

Depending on the nature of her conversation with Luskin, legal experts say Viveca Novak could either help or hurt Karl Rove‘s fate at a time when Fitzgerald is still trying to evaluate Rove‘s apparent inconsistencies to the CIA leak grand jury. 

JONATHAN TURLEY, GEORGE WASHINGTON UNIVERSITY:  There is a mountain of questions.  What‘s clear is that this investigation is not nearly over.

SHUSTER:  Rove‘s lawyer (AUDIO GAP) Patrick Fitzgerald has still not indicated whether Rove will be charged. 

In court documents last week, Fitzgerald wrote, “The investigation is continuing and will involve proceedings before a different grand jury than the grand jury which returned the Libby indictment.”

That notation was a surprise to many lawyers in the case who considered the indictment of Vice President Cheney‘s chief of staff in October as a sign the investigation was coming to an end.  But since then there have been new revelations about who leaked information about the wife of administration critic Joe Wilson and new questions about White House actions during the course of the case. 

Two weeks ago, “Washington Post” reporter Bob Woodward disclosed he was actually the first to be told the identity of a CIA operative and that the secret came not from Libby or Rove but from another administration official. 

Lawyers say the unnamed official has now testified in the case and while it‘s not clear whether the official is in legal jeopardy, the late disclosure flies in the face of this pledge two years ago from President Bush. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  I want to know the truth.  That‘s why I‘ve instructed this staff of mine to cooperate fully with the investigators.  Full disclosure and everything we know that the investigators will find out. 

SHUSTER:  The late disclosure has also raised questions inside the “Washington Post” about Bob Woodward, the famous Watergate reporter who publicly criticized the investigation in this case. 

DAVID BRODER, “WASHINGTON POST”:  He left his editor, our editor blind-sided for two years and he went out and talked disparagingly about the significance of the investigation without disclosing his role in it.  Those are hard things to reconcile. 

SHUSTER (on camera):  The hardest issues, however, are over at the White House. 

The CIA leak case has reinforced public perceptions the Bush administration hyped prewar intelligence, and now the legal clouds hanging over Karl Rove and others will not go away. 

I‘m David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  Tough stuff. 

Thank you, David Shuster. 

DeMaurice Smith and Beth Wilkinson were federal prosecutors. 

DeMaurice, what does it mean that the prosecutor, Fitzgerald, is now examining yet another journalist? 

DEMAURICE SMITH, FMR. FEDERAL PROSECUTOR:  What it probably means is you look to what conduct he‘s interested in.  And this is going to be conduct after the substantive conduct that he was empaneled or empowered to look at. 

So he‘s looking at obstruction.  He could be looking at witness tampering.  He could be looking at why they were having those kind of conversations and what came of them. 

MATTHEWS:  Is it possible, Beth, he was trying to send—Luskin, the attorney for Karl Rove was trying to soften up a witness, was trying to get to a witness by talking to Viveca?  What are we talking about here, maybe?

BETH WILKINSON, FMR. FEDERAL PROSECUTOR:  It‘s possible. 

Although you would think that if he wanted to do that, he could have talked directly to Matt Cooper‘s lawyer or to any of the other lawyers involved with the case. 

We really don‘t know what he wants to talk to...

MATTHEWS:  Is it illegal or unethical under the—well, illegal, because this guy is only looking for law breaking, Fitzgerald.  He‘s not wasting his time with an ethics violation.

Is it illegal to try to find out what somebody‘s going to say? 

WILKINSON:  Absolutely not. 

MATTHEWS:  So it couldn‘t just be trying to figure what Viveca was going to say. 

Is it illegal to go behind the back of another potential witness, Matt Cooper, and ask somebody else what they‘re going to say? 

SMITH:  This is what prosecutors and investigators do all the time.

You do everything you can to figure out the facts of the case, to find out whether there was a crime and who committed it. 

MATTHEWS:  Let me ask you, you mentioned obstruction, DeMaurice.  What potential area of obstruction—because that seems to be—he doesn‘t seem to be going at the initial crime of who leaked, because that could be all over the place at this point.  It‘s process, it‘s behavior after the fact.

SMITH:  Correct.

It is process and behavior which impacts the investigation that he‘s conducting.  So what he is going to be looking at is whether or not anyone, person or persons, engaged in activity to hinder or thwart or in any way stop his investigation. 

WILKINSON:  It‘s important just to think about how did he get this information. 

If Fitzgerald got it, for example, from the documents “Time” turned over—perhaps Viveca Novak put a note into the system saying, “I spoke to Luskin and he said X or Y,” he‘s—Fitzgerald—now going to Viveca Novak and say, “Is that really what he said?”  Maybe Luskin said something that breaches the attorney-client privilege or talks about what Rove did.

MATTHEWS:  What I don‘t understand is why Karl Rove is not charged yet. 

Karl Rove said he didn‘t remember talking to Matt Cooper under oath.  He did talk to Matt Cooper and only admitted it after they found an e-mail to demonstrate that he had talked to him and went further and told Stephen Hadley about that conversation. 

How come Karl Rove hasn‘t had the ax come down on him yet if the investigation is about turning the truth and who broke the law and who committed perjury and who, you know, violated their oath? 

SMITH:  We‘ll have to wait for one person to answer that question and that‘s Pat Fitzgerald. 

Why?  We don‘t know.  But we do know that he is empaneled another grand jury and he said before the other one expired that “My investigation is continuing.” 

What I read from that is that he continues to look to see not only whether a substantive crime was committed, but whether other people have engaged in conduct to obstruct his investigation. 

MATTHEWS:  Well, that‘s a crime, too. 

SMITH:  Absolutely. 

MATTHEWS:  What do you mean by a substantive crime? 

Are you trying to diminish obstruction of justice and perjury?

SMITH:  Absolutely not.

There‘s many prosecutors who would tell you that the obstruction is even more serious than the substantive offense...

(CROSSTALK)

MATTHEWS:  A leak could be impulsive.  Obstruction could be permanent, should be—could be deliberate. 

SMITH:  And absolutely willful. 

What—the substantive offense that he was empowered to investigate is the one about the leak.

MATTHEWS:  OK.

Let‘s get away from legality for one second and talk about prosecution. 

What I understand about Fitzgerald is he studies the case.  He‘s had two years on this case and he‘s trying to figure out in Manachian (ph) terms, in cowboys and bad guys‘ terms, who are the bad guys here.  Am I up against a bunch of guys who are arrogant, who think they can befuddle a prosecution, who think they‘re too smart by half—and I‘m going to prove they broke a law. 

Is that what Fitzgerald is up to here? 

WILKINSON:  No, I don‘t think that‘s what he‘s up to.

MATTHEWS:  Well, why‘s he persisting for all these months, when if he had a case he would have made it?  What‘s keeping him going? 

WILKINSON:  Because people are obstructing his investigation. 

And once you find out that people are obstructing your investigation, you are going to dig and dig and dig until you find something. 

If you look at today‘s news and yesterday‘s news, the last few days of news, it‘s a bad day for Karl Rove.  Because Pat Fitzgerald is now talking to someone who talked to his lawyer.  The next witness could be Luskin, it could be Karl Rove called back, it could be other people who spoke to Rove—we don‘t know.

But at the end of the day it‘s not a good day for Karl Rove. 

MATTHEWS:  To follow up what I asked DeMaurice, what more do you need to nail Karl? 

If you know he lied under oath, if you know that he did, in fact, leak this story to two people, Bob Novak and to Matt Cooper, you know that is a fact, it‘s on the record now; you know he denied doing that...

(CROSSTALK)

WILKINSON:  Well, you don‘t know that he lied because unfortunately, with obstruction and with perjury, which is what you‘re talking about, lying to the grand jury, you have to prove that he intentionally lied. 

If he went back and said, “I made a mistake,” he presented some information on why he made a mistake, it may be tough for Fitzgerald to prove without more and that‘s why Fitzgerald is back there talking to Viveca Novak. 

MATTHEWS:  Would a D.C. jury or any jury believe that a guy who had sent a memo talking about how he talked to a reporter and how smart he was—he‘s telling Steve how he handled this brilliantly, this interview with Matt Cooper—and then under oath says, oh, we were talking about welfare reform? 

I‘m just guessing that a D.C. jury would be aware of the difference between welfare reform and this international intrigue and would say, “Wait a minute, you‘re just using the issue of welfare reform to cover your butt here.” 

SMITH:  This is a savvy jury town. 

MATTHEWS:  Right.

SMITH:  And what they are going to look at, they‘re going to look at all the evidence and they‘re going to look at the context. 

And these are people who live day in, day out...

MATTHEWS:  With the newspapers. 

SMITH:  With the newspapers. 

And they‘re not star struck; they‘re people who can get to the truth.  So what they will see is they will look behind and try to figure out what the real story is.

MATTHEWS:  OK.

Let‘s talk about the possible monkey wrench here.  We discovered a while back, a week or so ago that Bob Woodward apparently had this story—and by the way, Broder has been beating him over the head with it.  Fair enough.  Broder is a nervy guy to be taking on the hero of the “Washington Post.”  But he‘s doing his job, too.

MATTHEWS:  We discovered a while back, a week or so ago, that Bob Woodward apparently had this story—and by the way Broder‘s been beaten over the head with it fair enough.  Broder is a nervy guy to be taking on the hero of “The Washington Post,” but he‘s doing his job too.  He‘s calling the shots. 

What significance is it to the legal question here of who‘s guilty, who might go to the slammer, whether it‘s Scooter Libby or it‘s Karl Rove or someone else, that Bob Wodward, the big investigative sleuth, got this story way ahead of everybody, that he got it from somebody? 

BETH WILKINSON, LATHAM & WATKINS:  Well, it‘s a great addition to the defense.  The defense wants to show that this information was out with other reporters because that‘s what Libby said.  I heard it from other reporters. 

So Bob Woodward is going to say I heard it...               

MATTHEWS:  How does it help Libby prove the case that he heard later on from Tim Russert or someone else that he had gotten it from them?  The fact that somebody told it, Armitage or somebody else told it to Bob Woodward.

WILKINSON:  Because if sources told it to Woodward, why didn‘t he tell other press?  And if other press, other media people knew, why didn‘t they talk to Libby about it? 

MATTHEWS:  But we have seven bits of testimony that this guy, Scooter Libby, knew, before he ever talked to Russert or anybody else that he knew all about Valerie Plame, that he didn‘t need to hear it from Russert. 

Four people he talked about it with and three talked to him about it.  Seven conversations nailing down his knowledge of Valerie Plame before he ever talked to anybody here or at NBC. 

So how does he win this case?  It looks like he‘s dead. 

WILKINSON:  That‘s why he has Bill Jeffers (ph) and Ted Wells.  He has excellent lawyers who are going to do everything they can, including what has come up recently.  They‘re going to take all the classified information and try and make...

MATTHEWS:  I‘m trying to simplify this case, DeMaurice.  I‘m simplifying who told the truth under oath and who didn‘t, and what‘s logical in a progression of time.  That if he talked to seven people before he talked to Tim, he didn‘t hear it from Tim.

Why is this—can you have a short case in a D.C. jury, and say enough said.  Do they have to string these cases out for six months? 

DEMAURICE SMITH, FMR. FEDERAL PROSECUTOR:  The way I tried cases when I was a prosecutor was make every case short, make every case simple.  Put it to them directly. 

And then you‘ve established a paradigm or a prism that the defendant has to get out of right now.  And like you said is it a tough case?  Sure, it‘s a tough case. 

MATTHEWS:  What would you rather be a prosecution here or a defense in these cases?

WILKINSON:  Oh, a defense attorney in this case. 

MATTHEWS:  Why?

Well, the money beats the hell out of the prosecution that‘s one thing, but in terms of right and wrong and easy to win. 

WILKINSON:  Well, I think Pat Fitzgerald is very talented.  He‘s going to try and make it simple, like you said. 

But the defense lawyers are going to make it complicated.  And because of the reporters involved and all the issues it‘s going to be an easy case...

MATTHEWS:  Are they going to do one of these lame things where they say, you know, reasonable doubt, and then reasonable doubt to the point where the jury gets so, you know, so groggy after about three months of reasonable doubt issues that they get confused? 

Is that the plan of a defense attorney to muck it up as much as possible? 

SMITH:  No, no, no.  They‘re going to do have to do more than that.

WILKINSON:  They‘re going to have to do more than reasonable doubt.

MATTHEWS:  Right.

SMITH:  The plan here is what Beth talked about earlier.  Establishing intent or disproving an intent, and that‘s where this game is going to be won or lost. 

MATTHEWS:  Seems clear to me.  Of course I‘m here.  I‘m not in the court. 

Anyway, thank you DeMaurice.  It‘s been great to have you.  And thank you Beth.  Happy holidays to you.  It‘s coming on strong now.

Coming up, by the way, is Karl Rove still calling the shots inside the White House? 

And later, 60 Minutes reporter, Mike Wallace, my hero.  He‘s coming here.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.

Along with the reports of new developments and new people involved in the CIA leak investigation, there are also reports of more discord within the White House. 

Here to talk about that are Tom DeFrank of “The New York Daily News” and John Fund of OpinionJournal.com, which is associated with “The Wall Street Journal.”

Fundy, I‘m going to let you go first.

Is everything calm in paradise? 

JOHN FUND, WWW.OPINIONJOURNAL.COM:  Well, in the White House you have two divisions.  You have the people who say what, me worry?  There is nothing going wrong, and anything that‘s going on is somebody else‘s fault. 

And then there are those who are panicking because they see this administration as rutterless, and they‘re worried that the president at the top isn‘t paying sufficient attention. 

MATTHEWS:  Which—can you give me a couple of names in the everything‘s fine category? 

FUND:  Andy Card, the White House chief of staff. 

MATTHEWS:  How about in the I‘m worried? 

FUND:  I would say you would go into Al Hubbard, the vice president‘s shop, various other people.  They‘re people who worry that the good news and the economy—because the economy is doing very well—is not seeping through. 

The administration‘s ratings of the economy are down, even though the economy is up. 

MATTHEWS:  Yes, the market is up almost 11,000, the best market we have had in months.

Let me go to you Tom DeFrank.

Is that the way you see it?  There‘s sort of a split screen between the people in the White House who are scared to death because they do see unfair to get credit for the economy and a continuing erosion, I think, on the war front? 

TOM DEFRANK, NEW YORK DAILY NEWS:  Yes, there definitely are two factions.  And the problem is the president is basically the only faction that counts. 

MATTHEWS:  And he listens to the happy people. 

DEFRANK:  Well, his attitude—well, it‘s a little more complex than that, but you‘re right, that‘s part of it. 

But, he also has his back up.  You know, he really has to stand for a lot of the pillars of the Washington establishment, both the political establishment and the media establishment. 

And when people like that say you need to get rid of this guy or you need to do this or you need to have 12 interviews or you need to bring Karen Hughes back from the state department because there‘s nobody around.  You don‘t have any comfort level with anybody else. 

He just—when outsiders say that, he just—you can just see him wince and get all upset about it so he‘s not taking that kind of advice. 

MATTHEWS:  One former senior staffer is saying, and I guess this is a direct quote to you, somebody talked to you, the president here, he thinks that would be an omission he screwed up, and he can‘t bring himself to do that.

Why not a course correction?  I mean, other presidents have had to make course corrections.  Roosevelt in his second term realized he had gone too far with the court packing and some other things.  And got himself together for World War II. 

Why can‘t this president make some adjustments in personnel, for example? 

DEFRANK:  And he‘s done it before, Chris.  You remember that when he didn‘t like the way economic policy was going, he asked for the resignations of Paul O‘Neill and Larry Lindsey. 

So he has done it before...

MATTHEWS:  In fact, he did it rather brutally. 

DEFRANK:  Clumsily, to put it charitably. 

But I think part of the problem here is the core argument is about Iraq.  And for him to say get rid of Don Rumsfeld, as some of his closest friends and aides have suggested that he do, I think suggests to the president, but to do that I‘m basically saying I‘ve messed up Iraq. 

MATTHEWS:  Well, maybe that‘s a fair self-assessment.  Because, John, if going into Iraq was a happy day scenario that the people in Iraq were going to greet us, there wasn‘t going to be a struggle there between the Sunnis and the Shiah, that was blind-sided. 

But could he blame that, and say, you know, the best people I had in defense and the vice president‘s office, all the people watching the Intel told me that we‘d have a fairly clean operation once we got into Baghdad, and they were wrong. 

Can he do that?  I don‘t think he can actually.  I think it‘s the president‘s job to have the vision, I think.

FUND:  Actually the president, we were told, would never, never, allow Harriet Miers‘ nomination to lapse.  He would never, never allow that to happen.  Finally, the Republicans on Capitol Hill led by Bill Frist did it. 

I think this president can make a course correction.  The important thing is that it has to be sold to him as his course correction, and it can‘t be sold as a pre-package from the Washington-establishment course correction.  Where you put this Washington establishment figure in, in this slot, in order to fill some kind of void.  The president has to see that. 

MATTHEWS:  OK, using your as an example, how did he make that big decision, apparently popular, to go from Harriet Miers to Judge Alito? 

FUND:  Finally people on Capitol Hill summoned the courage to go tell the president the facts of life.  Part of the problem with this president is a lot of the aides around him—because he sometimes has a temper and sometime is dismissive of outside advice, they often hesitate to go to him with the really bad news until it‘s too late. 

This is a fault the president has.  I think he‘s starting to realize it and I think he‘s starting to reach out saying, “tell me what I need to hear, not what I want to hear.”

MATTHEWS:  Well, why didn‘t he learn that—and I like him, everybody sort of likes the president, except for the real whack jobs maybe on the left—I mean, like him personally. 

Why didn‘t he learn that lesson during New Orleans, when they didn‘t come to him and he had to wait for 48 hours to get the word of what was on TV?

FUND:  I think that was the wake-up call. 

MATTHEWS:  Is he awake?

FUND:  He is staring straight ahead, eyes wide open. 

MATTHEWS:  Tom DeFrank, is he in charge right now, or is he still dependent too much, perhaps on the vice president or for Karl Rove?  Are they still calling the shots?

DEFRANK:  Well, as we‘ve talked before, Chris, I think the relationship between the president and the vice president still has a reasonable amount of strain, some would call it tension. 

MATTHEWS:  Does he mistrust the vice president on WMD?  Does he believe that to win the case, to get us into war, that the vice president gave him too simple an argument without all the complexities and caveats that were appropriate and judged in the intel?

DEFRANK:  I‘m told by people I‘ve talked to that that is exactly how the president feels. 

MATTHEWS:  He got too good a deal for the war. 

DEFRANK:  Too rosy, too optimistic a scenario. 

MATTHEWS:  Who does he trust now and how we perceive the rest of his term, in getting out of Iraq and getting the job done before we do?  Who‘s he listening to now and trusting? 

DEFRANK:  It‘s hard to know who, if anybody, at the moment, Chris.  One of the things in the story in the “Daily News” that you‘re talking about here is that he‘s begin calling the paper—reports that he‘s been calling outside friends and advisers saying...

MATTHEWS:  Who to trust?

DEFRANK:  ... who‘s leaking on me?  Who, in your opinion, should I trust on my staff?  Who, in your opinion, should I not trust on my staff?  That is never a good sign.

MATTHEWS:  Does he consider Karl Rove to be dispensable at this point because he may face an indictment? 

DEFRANK:  I think so.  I‘m told that.  But, again, the president is an extremely loyal guy. 

FUND:  Chris...

MATTHEWS:  Finally, one last question to you, John.  Is Karl Rove still the key player in the White House along with the vice president?

FUND:  Yes, but obviously distracted.  I think that this cloud over him has to lift.  I think if you look at what Fitzgerald has, and how much he had to have on Libby, versus what he‘ll have to have on Rove, I don‘t think Rove is going to be indicted.  But as long as the cloud is over there, Rove is distracted.

MATTHEWS:  He‘s not.  By the way, Fitzgerald has not taken away that cloud, it looks like.

Anyway, thank you Tom DeFrank, “New York Daily News,” John Fund of opinion.com.  Up next, we‘re going to talk to one of the three U.S. congressmen involved in a bus accident on the way to Baghdad Airport.  Boy, that was something over the weekend. 

And later, veteran “60 Minutes” reporter, Mike Wallace, is coming here to talk about the parallels between Iraq and Vietnam.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Three U.S. congressmen who spent Thanksgiving with the troops in Iraq were in a harrowing car accident on Saturday, when their vehicle was forced off the road on the way to the Baghdad Airport. 

Republican Congress Tim Murphy of Pennsylvania, had to be flown to a military hospital in Germany, along with wounded soldiers.  He just returned home this afternoon and he joins us now by phone. 

Congressman Murphy, thank you so much for coming on HARDBALL tonight.  What happened?

REP. TIM MURPHY ®, PENNSYLVANIA (on phone):  Well, we were in a vehicle after we just finished visiting with General Casey in Baghdad, headed to the airport, when our vehicle went off the road.  I don‘t know all the details right now. 

But what happened was, it hit something, went up in the air, and landed hard and then—I mean, not up in the air, up in the air just a little bit.  And then landed on its side.  At that point, this is an armored vehicle, like a small armored bus, and we hit the side, and came down and I smashed the side of my head and my neck pretty bad.

MATTHEWS:  You OK?

MURPHY:  I‘m OK.  They took a lot of emergency precautions.  I got to see how incredible the—our medical teams operate to take care of our wounded.  They were just phenomenal and I think made a big difference for me, so I was real pleased. 

MATTHEWS:  What was going through your head as you took that road to the airport?  We‘re looking at stock pictures of it now.  But everybody‘s talked about the fact that it‘s safer now it was.

MURPHY:  Well, actually, I think they took us on a different road.  So it was much narrower, and another vehicle was coming at us.  I think that‘s why we may have been pushed off the road and did these things. 

But all around there, I mean, the military operated as they were supposed to.  They made sure this was not a problem, not an ambush, not a bomb.  But again, the story goes back to how these guys are just phenomenal and how they operated. 

And throughout our trip, whether it was talking directly with the soldiers or the generals or even President Karzai of Afghanistan, they continued to tell the story of their morale is up.  Yes, there was concerns for the families of how the talk has been in Washington lately, and they‘re concerned about boosting the morale of al Qaeda.  But these guys are incredible professional team out there doing the right thing. 

MATTHEWS:  What is your sense?  Are we good for a couple more years over there or are we going to have to come out sooner than that? 

MURPHY:  I think the idea of looking at a time frame on any case is wrong.  I think the right thing is to really use this according to certain criteria or conditions that are met. 

Even when we met with the general, who is the leader of the Iraqi security forces, he was very proud as he was telling us how they‘re controlling sections of Baghdad, how they‘ll continue to do that, how as they do that, they want the Americans and coalition forces to pull back. 

He was just very proud to show how they were taking care of the terrorists themselves.  And they want to continue that pace.  But Iraq also has to elect their own government in a couple of weeks.  They expect an increase in some problems over the next couple of weeks.  But they‘re bound and determined to work hard and win.  And they‘re just proud folks and want to control their own country. 

MATTHEWS:  So you‘re not with Jack Murtha, your fellow Pennsylvanian congressman about a fairly quick, six-month pullout. 

MURPHY:  Well, again, time frame is the wrong frame.  This has to be on facts and not just saying, “let‘s set an artificial timetable.”  To me, that‘s like putting a sign in your front yard saying, “I‘ll be gone, a notice to all burglars, I‘ll be leaving the house at this time.”  We shouldn‘t do that. 

The al Qaeda and the terrorists need to know that we believe that the Iraqi government can take control.  They‘re going to try and undermine that.  When I was in the hospital, a little 7-year-old boy was lying next to Congressman Skelton and I.  His parents had been killed by the terrorists, by al Qaeda.  He was wounded.  That‘s the kind of thing the people of Iraq will face, and we need to understand that they‘re going to be merciless and then killing people, and not letting them have a government, but the Iraqi people are going to be strong. 

MATTHEWS:  Hey, it‘s great.  Thank you for coming on in this circumstance.  We‘d like to have you on when you‘re able-bodied again.  You‘re back in action. 

Thank you very much Congressman Tim Murphy, Republican of Pennsylvania. 

Up next, President Bush has a plan he says will protect America‘s borders, but will his conservative base be happy?

Plus, veteran journalist, Mike Wallace, and why he‘s interviewed every president except one, the one we have now, George W. Bush. 

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

(MARKET REPORT)

MATTHEWS:  Welcome back to HARDBALL.

It was another bad day for a Congressman in court today, as Congressman Duke Cunningham, Republican of California, San Diego, pled guilty to taking bribes. 

Cunningham had already said he would retire when his current term ends next year.  But now he could be facing 10 years in prison.  This is just the latest obviously in a string of court entanglements for senior house members. 

How much of it is hurting the party?

We‘re joined right now by MSNBC Chief Washington Correspondent Norah O‘Donnell. 

You know, it‘s typical to keep these guys separate.  I‘m going to refer to this guy as the guy that got the yacht, the Rolls-Royce, the condo and the apartment. 

Then we have what was called representative number one, the guy we think is in Ohio.  We can‘t really mention him, I guess, yet.  And then we‘ve got Tom DeLay, and then we‘ve got Bill Frist.  It‘s a gathering storm here.  It‘s a gathering storm. 

NORAH O‘DONNELL, MSNBC CHIEF WASHINGTON CORRESPONDENT:  Well, first let‘s start with Duke Cunningham, the Republican Congressman.  It stunned a lot of people today when he said I am guilty, and he broke down in tears. 

He did acknowledge, David, that he did in fact accept $2.4 million in bribes.  This is stunning, including a yacht, a Rolls-Royce, rugs, antiques, a help with a million dollar home. 

I mean, this is a stunning fall from grace for Cunningham.  He was an ace flier in Vietnam.  He once served as an instructor at the flight school in Miramar known, you know, for the movie “Top Gun.”  Remember that one?  Well, he was once an instructor there.

He said the truth is I broke the law, and disgraced my office.  I can‘t undo what I‘ve done, but I can atone. 

Now Democrats pounced on Cunninghman today, and said this is just one more sign of a culture of corruption in the Republican Party. 

The Democrats want to use Duke Cunningham along with those other members of Congress that you mentioned to create this culture of corruption that they‘re trying to do, to say you‘ve got to push the Republicans out of Congress in the 2006 elections. 

MATTHEWS:  What‘s different, I think, and maybe I‘m just editorializing here, but what‘s different here in this case, is that, maybe you agree with me, Norah, that a lot of this is fund-raising stuff where people cross the line.  The lines may not always be clear or they jiggle the money around in the interest of political success. 

This is sort of old-time stuff here, isn‘t it, this Duke Cunningham case? 

O‘DONNELL:  Well, this is a bribe.  I mean, he‘s not... 

MATTHEWS:  Yes, it‘s a bribe for a lifestyle. 

O‘DONNELL:  This is a bribe. 

I mean, he—there was a quid pro quo, a very clear one here.  And Cunningham tried to get away with it for nearly a decade.  And what he said several weeks ago he said I‘m innocent. 

And then he realized that the prosecutors had too much dirt on him that he can‘t buy these—sell these big homes, accept a Rolls-Royce and all of these other gifts, and then in return grant bids and contracts to defense contractors.  Couldn‘t be done. 

And so he‘s going to go to jail now.  As he said, I‘m supposed to be at 65 years old reaching the twilight of my life, and instead, he‘s going to jail.

But the point is he admitted today he‘s a crook.  And the question is, politically speaking, how the American people will look at this case certainly in his district, which some may call a swing district and other questions about the Republican Party. 

MATTHEWS:  And then, of course, you‘ve got Michael Scanlon, who‘s already accepted a plea bargain whereby he‘s agreed to plead guilty to having given a bribe to another Congressman in Ohio, I believe it is.

These things keep perking along.

Thank you very much, Norah O‘Donnell, chief correspondent for MSNBC. 

When we return, veteran 60 Minutes reporter, Mike Wallace, and why he hasn‘t had a chance to interview President Bush yet.  I think we can guess why.

And a reminder the political debate is ongoing on “Hard Blogger,” our political blog website.  And now you can download podcasts from HARDBALL just go to our website Hardball.MSNBC.com.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Mike Wallace jokes he‘s interviewed every president since Abraham Lincoln, except one, George W. Bush. 

In his new memoir, “Between You and Me,” that‘s the title of it, Wallace gives us the behind-the-scenes stories of almost four decades with “60 Minutes.”  So why is the man in the Oval Office afraid of the man on “60 Minutes.”  Mike, why is George W., the man in the White House, afraid to interview you? 

MIKE WALLACE, CBS NEWS:  Because he pays attention strictly to Karl Rove, and that‘s why from the very beginning, it‘s been apparent that Karl Rove will not permit him to sit down with me.

MATTHEWS:  Why did you get the sense that it‘s Karl Rove that‘s standing your way with the president?

WALLACE:  I went down to Texas when he was governor to do a piece about tort reform.  And mind you, Texas judges at that time had a certain conflict of interest, because they had to run for office.  And, therefore, if they are raising campaign funds, well, obviously somebody who had given them money for their campaigns would get better treatment. 

In any case, we did the story, but he said, “you‘re not going to talk to the governor.  I don‘t want the governor to talk to you about this.”  OK, not the end of the world. 

When he arrived in Washington, I figured, well, the rules have changed.  I have never—repeat, never—gotten the chance, not only to interview the president, George W. Bush.  I‘ve never even met the man.  I have not shaken hands with the man.  For some reason both Karl Rove and Karen Hughes have said, “uh-huh, forget it.  You‘re not going to talk to this guy.”  Why?  You got me. 

MATTHEWS:  Let me ask you about this—Bob Woodward, a friend of yours, a friend of mine.  In areas out there, digging into this White House, writing the best war stories there are about the recent battles in Iraq, the two Gulf Wars. 

And yet now he‘s on the skillet for not coming clean with his own newspaper, as to what he knew about this leak, way back two years ago. 

WALLACE:  Right.  So?

MATTHEWS:  Did he break the rules?

WALLACE:  This is—who knows?  He makes up his own rules.  Look, Woodward and Bernstein have done a wonderful job.  Woodward, particularly, has done an extraordinary job over the years. 

But what he has got is some kind of relationship with “The Washington Post” in which he says, “when the time comes—when the time comes, you will get all my material to run a week‘s worth of stories.  However, I‘m holding on to a lot of my stuff for my books.  Books mean more to me.  More money, more prestige, whatever.”

And so he saves stories, keeps it from the Post, apparently with their understanding.  I don‘t know anybody else who has that understanding.  It‘s a great one for Woodward.  And in my estimation, makes “The Washington Post” look a little silly.

MATTHEWS:  Yes, well let‘s talk about conflicts with corporations.  You broke some amazing stories.  I mean, I remember “The Insider.”  I thought the movie was a hell of a movie.  Christopher Plummer played you, sort of a mixed-bag portrait of you. 

What did you make of that—when you look back over your big stories and breaking the tobacco industry, and showing that they had in fact, gone out to try to sell nicotine and that was their business...

WALLACE:  That‘s right. 

MATTHEWS: ... is that one of your big stories, that one? 

WALLACE:  Of course it was.  Look, when an insider, when you get hold of an insider like Jeff Wigand, and Jeff Wigand was the insider of them all, as far as Brown & Williamson tobacco was concerned. 

And what happened was, that we got to talk to him, but CBS would not permit us to broadcast it.  Why?  Well, it depends upon who you listen to.

MATTHEWS:  Yes.

WALLACE:  The Tisch family at that time controlled the company.  The Tisch family controlled CBS.  They obviously did not want somebody who was saying, in effect, “tobacco is a killer.”  They didn‘t want that on the air.  It was against the interest of the Tisch family.

MATTHEWS:  Did you figure that out, or did Larry Tisch ever call you up and say, “My son, Andrew, is an owner of one of these companies, don‘t hurt him?”

WALLACE:  Your son, Andy, your son, Andrew, was one of those who raised his hand in front of that congressional committee and swore under oath that nicotine was not addictive.  Well, come on.

MATTHEWS:  Well, it is.  Let me ask you about the other big story, because I thought that that must have been tough on the inside.  The way you write in your book, you basically took the side of, “let‘s get the story out.”

And it was the other people like Hewitt, the executive producer of “60 Minutes” and the ownership, that was queasy about getting out the facts because they were afraid of big tobacco and they‘re afraid of the corporate interests of the company.

WALLACE:  Well, they were not particularly anxious to get the story out.  Hewitt, as far as I was concerned, caved in to management, management of CBS.  And it surprised me, because he never caved in to anybody.

MATTHEWS:  Were they threatening his job?

WALLACE:  I doubt that.  Who the dickens knows?

MATTHEWS:  Yes.

WALLACE:  But, listen, I have nothing in the world but respect and gratitude to Hewitt, whose—and he got a little miffed at me when I said that I lost respect for him, when he caved into management on that one. 

He is the best.  He is the guy who thought up “60 Minutes.”  Don Hewitt is the guy who made “60 Minutes,” as you‘ve said, one of the best television broadcasts of all-time.

MATTHEWS:  I think it‘s the best.  Let me ask you about going up against General Westmoreland.  The one thing that struck me back then in being draft eligible back then, was that Westmoreland looked every inch the commander.  And boy, central casting.  You had to go up against him in court.

WALLACE:  That‘s correct.  And mind you, Westie and I were friends.  Westie had sent me letters complimenting stuff that I had done in Vietnam. 

But then all of a sudden, we wind up—as a matter of fact, we wound up standing on the first day of the trial point—at points in the urinal.  First day of the trial, here‘s Westie, here‘s Mike, etc.

MATTHEWS:  Swords drawn.  I think you said swords drawn or something like that. 

WALLACE:  Yes.  In any case, in any case, the fact of the matter is that Westie lied to the American people about the fact that there were only 300,00 enemy out there. 

Sam Adams had the documents, had the proof, and he was CIA at the time.  There were 600,000.  It was hardly a popular war.  And what Westie worries about and what Westie worried about was that, if the American people heard that there were twice as many enemy out there as he was telling were out there, then obviously, the country would say, which was anti-war to begin with, that already lost of tens of thousands of men and women ... (AUDIO BREAK) say war, wrong war, wrong time. 

But to get in there in the courtroom, and they presented their case to begin with, and to hear yourself, as a reporter, call chief, cheap liar, fraud, etc., etc., was a very tough thing, which actually put me in a clinical depression. 

MATTHEWS:  You know, I thought—I want to talk about that in a minute.  But I thought that the—your facts were right, though.  Because you said they weren‘t counting the home guard or the local guard there.  The big element in the V.C., the Vietcong, weren‘t getting counted. 

WALLACE:  That‘s exactly right. 

MATTHEWS:  And we had—and the American people had a right to know what we were up against, and we weren‘t told it.  So you guys were on very strong ground there, when you look back on it. 

WALLACE:  Oh, of course we were, and it became quite apparent. 

Look, everybody who knew what was really taking place there knew that he, Westmoreland, was lying to the American people.  And then you had to believe that Lyndon Johnson was also lying to the American people. 

There weren‘t 300,000.  There were 600,000 enemy out there.  We were getting—you know, you remember the body counts. 

MATTHEWS:  Oh, I remember every night on Cronkite you‘d get this body count.  It sounded like we were massacring these people, and yet you kept getting they needed more troops. 

WALLACE:  That‘s exactly right.

MATTHEWS:  I mean, if Westy was winning, why did he need a quarter million more troops in ‘68?  That‘s what I kept asking, why do you need me? 

WALLACE:  You‘re absolutely right. 

MATTHEWS:  OK.  Thanks Mike. 

We‘ll be back with Mike.  The name of the book, as you can tell it‘s exciting inside stuff, “Between Me and You.”  It‘s now between me and—well, him and us.

We‘ll be right back with more HARDBALL and more Mike Wallace after this. 

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back within CBS News, Mike Wallace.  His new book is called “Between You and Me.”

Well, Mike, I couldn‘t avoid your last comment.  The great stress you were under with General Westmoreland.  The general of the army is coming at you with four stars on his shoulder.  Did you feel that affected you physically? 

WALLACE:  Oh, well, to be called nasty names in a courtroom under oath by all kinds of people, and everybody in the press was focusing on it, I got the impression that I was a lousy reporter, a dishonest reporter, a fraud, a cheat, etc. 

And all of a sudden began to not eat, not sleep and began...

MATTHEWS:  But you were right this time.  And there have been problems with the CBS.  Dan Rather‘s had these problems.  But this is so clearly true that you were right.  And that didn‘t help you sustain yourself, the knowledge that you were absolutely in the clear here, the good guy. 

WALLACE:  You know something when you‘re in a depression you‘re crazy. 

You‘re really—I hate to say it, but you‘re crazy. 

And your reactions are nutty.  You begin to really lose self-esteem.  And it‘s a very tough one to handle.  I‘m sure that it‘s never happened to you because you are—you know better. 

MATTHEWS:  I‘m lucky.  I‘m lucky.  I don‘t have it.  And I read about it in your book, and I just feel so sorry for people that have had it, because it sounds like it‘s worse than just the blues or the black dog at the door.  It‘s something you can‘t shake out of. 

WALLACE:  That‘s right.  That‘s true. 

MATTHEWS:  Let me ask you about—let‘s leave on a lighter moment here.  Johnny Carson, along with you, I‘m a big fan of Carson all those 30 years.  I always wanted to meet him. 

But then I was afraid if I met him he wouldn‘t be as nice as he was to us at 11:30 every night, which he was very nice.  What was he like when you got with him? 

WALLACE:  Well, I beat him at tennis fairly regularly.  So he got a little unpleasant. 

What happened was that he was going to do a profile, then he decided no, he was not going to do a profile on 60 Minutes.  And finally I was on his show and I said, come on.  Why in the world will you not?  Well, all right, I will. 

And he—I‘ll tell you something.  I saw a man for whom I had immense admiration.  He was genuinely funny.  He was—what he said was I‘m comfortable when I am in control. 

MATTHEWS:  Yes.

WALLACE:  And when I‘m making jokes, I‘m in control.  When I‘m out of control, that‘s not where I want to be.  And he began to talk about it in that very candid way. 

The strange thing was that in the middle of it, in looking at it, you see him sneak a cigarette when he thinks the camera is off.  He knew that he was getting lung cancer. 

MATTHEWS:  Yes.

WALLACE:  And he, like Peter Jennings, knew that he was getting lung cancer and could not get over the addiction of cigarettes. 

And that is why I feel that a fellow by the name of Jeff Wiegand, who was the man at Brown and Williamson, who blew the whistle on tobacco, an insider who knew the whole story.  As far as he‘s concerned—as far as I‘m concerned he‘s my hero. 

Because what he has really succeeded in doing is making people aware, kids particularly.  He has a foundation for smoke-free kids, which is—has succeeded in getting people off cigarettes... 

MATTHEWS:  Yes.

WALLACE:  ...not just in this country, in Scotland, in Sweden, in a variety of places. 

MATTHEWS:  Well, how many lectures to we need?  Yule Brenner, William Talman, the guy who played Hamilton Burger, all these guys came on and did tapes before they died, and they said don‘t do it, I‘m dying.  Don‘t do it kids.

WALLACE:  That‘s right.

MATTHEWS:  And they had people smoking out of holes in their necks they‘re so addicted. 

By the way, didn‘t you think—what did you think of Russell Crowe playing that guy in the movie? 

WALLACE:  Oh, Crowe‘s such an actor.  My, Lord.  That was the first time I ever saw him.  He was absolutely perfect. 

MATTHEWS:  And you knew Jeffrey Wiegand so you knew what he was supposed to be, and he was that guy. 

WALLACE:  Crowe was Wiegand, absolutely. 

MATTHEWS:  Well, you‘re the greatest.  Thank you Mike.  Good luck with this book.  It‘s filled with these stories, and it‘s tricky being in your business.  “Between You and Me,” Mike Wallace about the whole business of doing tough interviews. 

Thank you very much, Mike Wallace, for coming on HARDBALL.

WALLACE:  Oh, Chris, thank you a million.

MATTHEWS:  Tomorrow on HARDBALL, “The New Yorker‘s” Seymour Hersh and The West Wing‘s Allan Alder.

Right now it‘s time for “The Abram‘s Report” with Dan.

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

END   

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