updated 12/2/2005 10:35:43 AM ET 2005-12-02T15:35:43

Guest: Jim Bamford, Ed Rendell, Amy Goodman, Byron York

CHRIS MATTHEWS, HOST:  Should the United States be buying the Iraqi press?  Should American soldiers be writing articles backing the U.S.  occupation in Iraq?  Articles that are then secretly translated into Arabic and run in Iraqi newspapers on Iraqi radio and TV stations.  Are we operating on Iraqi opinion the way Tokyo Rose tried to influence us in World War II?  To shift opinion in Iraq, have we created a “Baghdad Betsy?”  Let's play HARDBALL.

Good evening, I'm Chris Matthews.  In a speech Wednesday, President Bush vowed to stay in Iraq until it becomes a Democratic government.  But one of the strongest pillars of democracy is freedom of the press.  And reports that the Pentagon has a multi-million dollar covert operation that pays to plant propaganda in newspapers in Iraq, might make friends and enemies alike, wonder what kind of democracy the Bush administration believes in. 

We'll have some exclusive information on this story from NBC's Andrea Mitchell and Jim Miklaszewski in just a moment.  And later on the show, we'll talk about how the president's speech on Iraq is playing out in the country, with Pennsylvania governor Ed Rendell.  But first, HARDBALL's David Shuster with more on the Pentagon's covert plan to peddle propaganda to newspapers in Iraq. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, MSNBC CORRESPONDENT (voice-over):  It's an issue that raises questions on the ground in Iraq about whether U.S. forces are sacrificing credibility in exchange for possible security.  “The Los Angeles Times” was the first to report the Bush administration has spent tens of millions of dollars pushing covert propaganda through supposedly independent Iraqi news organizations.  Their independence is something Secretary of Defense Donald Rumsfeld publicly praised as recently as Tuesday.

DONALD RUMSFELD, SECRETARY OF DEFENSE:  The country has a free media and it's a relief valve.  There's 100 plus papers, there's 72 radio stations, there's 44 television stations, and they're debating things and talking and arguing and discussing.

SHUSTER:  This year, however, as the violence in Iraq intensified, the Pentagon's effort to plant positive stories about the U.S. occupation intensified, as well.  Pentagon documents indicate the Lincoln Group, a Washington-based P.R. firm received $100 million contract to help produce favorable articles, translate the articles into Arabic, get them placed in Iraqi newspapers, and not reveal the Pentagon's role. 

A year ago, “The Chicago Tribune” reported that Lincoln's P.R. workers in Iraq included three Republican operatives who helped run the Bush campaign in Illinois, and had no apparent experience in Iraq. 

NBC News has learned the Lincoln Group, on top of paying Iraqi newspapers to print U.S. military propaganda, paid a dozen Iraqi journalists several hundreds dollars a month, each. 

There is nothing illegal about using propaganda during wartime.  In Afghanistan, U.S. aircraft jammed Afghan radio stations and dropped thousands of leaflets repeating the friendly messages about U.S. forces.  Decades ago in southeast Asia, the CIA planted stories with Vietnamese reporters.  And during the Cold War, the U.S. Information Agency created Voice of America and Radio Free Europe, to be an American-friendly broadcast behind the Iron Curtain.

The problem in Iraq, critics say, is that the Pentagon's secret effort to buy favorable coverage undermines the independence at the heart of Western journalism and undercuts pledges like this one of a sovereign Iraq. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  We will help Iraqi people lay the foundations of a strong democracy that can govern itself, sustain itself, and defend itself.

SHUSTER:  The revelations about U.S.-sponsored media prompted Republican Senator John Warner, chairman of the Armed Services Committee to promise an investigation.

SEN. JOHN WARNER, ®, VIRGINIA:  I'm concerned that our credibility abroad is very important.

(END VIDEOTAPE)

SHUSTER:  White House officials said today they are also concerned about the reports and have asked the Pentagon for more information.  In the meantime, the story has been picked up by television channels broadcasting throughout the Middle East, raising the possibility that the effort to help U.S. troops in Iraq will in the end, cause those troops more harm than good.  I'm David Shuster for HARDBALL in Washington.

MATTHEWS:  Thank you, David.  For more on this story let's go to the NBC's Jim Miklaszewski at the Pentagon and NBC News chief foreign affairs correspondent Andrea Mitchell.  First to you, Mik.  I just got a report here, it's a press release from the chairman of the Armed Services Committee, John Warner, who was here last night. 

He's jacking it up.  He says a free and independent press is critical to the functioning of a democracy.  That's dead on.  He's saying what the Pentagon is doing is adversarial to what we say we're doing in Iraqi.

JIM MIKLASZEWSKI, NBC NEWS CORRESPONDENT:  And the reaction here from many in the Pentagon, both military and civilian is, I told you so.  There's been a very strong psychological and heated debate between the psychological ops and information ops portion of the military, and the public affairs portion. 

The commanders on the ground in Iraq have been very frustrated that they can't get enough positive news about the military operations in progress under way in Iraq.  And they have been trying for some time to use this kind of information operation campaign, to get that information into the media mainstream. 

Now, according to officials here at the Pentagon, they're still not sure exactly what was put into these newspapers: who was paid, how much.  And the frustration here over that particular situation has grown even further.  Now the question is: is this illegal?  Now apparently there are guidelines which say that information ops can buy advertising on broadcast or in the print media, if it's labeled as such.  Public service announcements and the like.  But they cannot use the mainstream media—reporters, newspapers—to put out that information.

MATTHEWS:  So what we know right now—let me get it straight.  We're writing stories under—Joe Smith writes an article—he's an American G.I.  He writes an article, it's translated and put under the headline of somebody else, Mohammed Habib, or somebody.  Is that giving a phony name?  Is that a totally phony transaction, or do they get a reporter to be the front for this.  How do they do this?

MIKLASZEWSKI:  Well, in the case of the reporters, the reports are—the Pentagon still trying to confirm it.  They can't deny it.  That the military actually went out and sought out friendly reporters in the Iraqi media and paid them up to two, $300 a month to write and then get published, favorable stories in Iraqi newspapers. 

They also apparently directly paid some newspapers to put these articles, that were apparently prepared by Lincoln Group, translated into Arabic, into the newspapers.  Now the problem here is—that would be OK if it was identified as being an advertisement from the U.S. government, military.  But apparently, that part of the information was concealed from the public.  So they thought that they were getting mainstream news from their own Iraqi reporters.

MATTHEWS:  That's one way to get a good press, isn't it, Mik?  Just buy it.  Anyway, thank you.  We're going to—let's go to Andrea Mitchell right now.  Andrea, John Warner, the chairman of the Armed Services Committee says he's going to call these guys in tomorrow from the Pentagon.  Are we going to get the answers? 

ANDREA MITCHELL, NBC NEWS CHIEF FOREIGN AFFAIRS CORRESPONDENT:  I'm not so sure, because Jim Miklaszewski is saying that the Pentagon folks are saying they don't really know about this.  Frankly, a lot of people are a little suspicious about that, because this was a very big contract, indeed.

And it was connected to this Republican operative, and how could Baghdad have been handing out these contracts without someone in Washington knowing about it?  Because all this is so closely connected.

MATTHEWS:  When you do something for the government, and you bring it back and show it to them and say: look what I got done here.  You're always trying to show product.  Are we to presume that this has been going on and nobody's coming back to the Pentagon saying: here's what I got though, look at these great articles.  This guy's saying Mohammed Habib wrote this, but it's all our guys writing it.  It looks good, doesn't it? Isn't somebody bragging over there at the Pentagon?

MITCHELL:  Well, I would be shocked if they were not getting printouts of all of this press, with circles, going all the way up to the top.

MATTHEWS:  What about the Lincoln—tell me about this Lincoln Group, this contracting P.R. firm.

MITCHELL:  Well, the P.R. firm has had so many different changes. 

This fellow, Christian Bailey, he's 30-years-old, as far as we can tell.  We tried to talk to him today and he didn't want to talk to us when we approached him this morning at his office.  But his spokesperson, Laura Adler (ph) says that it's a classified contract and she can't speak to it. 

They referred us to Baghdad.  In Baghdad, they praised this contract.  They said it's the best way to combat what al-Zarqawi is doing, because he lies and according to General Lynch over there in Baghdad, he said: we don't lie.

That said, this fellow Bailey has an interesting career.  He started out as a hedge fund operator in 2002 in New York.  Had four different companies since then.  He was a founder and leader of Lead 21, which is a group of affluent young Republicans.  So he's very well politically connected.  But nothing in his background shows that he would have had the experience to run this kind of operation. 

MATTHEWS:  Would the White House press office oversee this?  I remember from the old days, the White House press office basically oversaw all the press operations in the very agencies, especially the big ones, like defense.  Is this something that was checked off by the White House communications people? 

MITCHELL:  I doubt that very much.  And in fact, the State Department...

MATTHEWS:  ... they're too sharp for that.

MITCHELL:  Officially says—yes, and officially the State Department today is saying the Pentagon is investigating, and until we know the facts we won't speak.  But other officials—not for attribution—and here we are hiding behind the anonymity that they demand.  They're rather disturbed, because they saw that this is exactly in conflict with their efforts, continuous efforts to train Iraqi journalists and teach them about democracy.

MATTHEWS:  Is this going to help the other side? 

MITCHELL:  Well, I think it does.  There is glow-back and we interviewed people in Baghdad today, our bureau there.  Both people on the street buying newspapers and Iraqi—one Iraqi editor was willing to be interviewed.  Others whom we had tried to interview who were involved in accepting these bogus stories initially said they would grant interviews and then one called to say that he had already been threatened for being pro-American. 

MATTHEWS:  Mik, I have to—Andrea, thank you.

MITCHELL:  And the other had to back out.

(CROSSTALK)

MATTHEWS:  Let me get back to Mik.  You know, guy whose join the service like to be PIOs.  Al Gore was one.  I was thinking about it once.  It's a great thing.  You write stories for the “Stars and Stripes,” you wrote of accounts of guys fighting and women fighting for their country back home.  What kind of G.I.s were given this duty?  Do we know?

MIKLASZEWSKI:  Well, you know, we don't know specifically who was involved in this, although we do—we have been told that they have been involved in information operations. 

Now, I'm telling you, there is a classic struggle going on between the information operation and Psy Ops community and the public affairs community and has been going on for some time, Chris.  And in this case, it appears that the public affairs community lost that battle. 

And if I could answer that one question you asked earlier of Andrea about did the White House sign off on this, it's not even clear that the Pentagon signed off on this specific operation, because any information that's released to the media, no matter how it's done, is supposed to be cleared through the Office of Public Affairs here in the Pentagon.  And I am told by a senior Pentagon official that this information was never cleared through this office. 

MATTHEWS:  Well, then you got to wonder what they were paying them for, the $100 million, if they didn't see the product of it.  You've got to wonder, what's going on here?  We paid them money, we didn't know what they did with it? 

MIKLASZEWSKI:  Well, absolutely.  They pay for information and psychological operations.  Now, did they pay specifically to covertly plant stories and pay reporters for this kind of operation?  So far everybody here says that wasn't cleared through this building. 

MATTHEWS:  OK, Andrea, last word? 

MITCHELL:  Chris, last word is how does a young Republican operative get this kind of contract without somebody in Washington knowing about it?  This guy had connections. 

MATTHEWS:  Good thought.  We'll get more on that perhaps in the briefing tomorrow by the Pentagon for the Chairman John Warner.  Anyway, thank you Jim Miklaszewski over at the Pentagon and Andrea Mitchell, chief foreign affairs correspondent. 

Joining me right now is Ron Reagan, host of MSNBC “CONNECTED: COAST TO COAST” and MSNBC's political analyst Pat Buchanan.  Pat, you're sitting here.  You're first.  Is this a tempest in a teapot or is this bad news for us in the PR war over there, the battle for the hearts and minds of Iraqis? 

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  Well, what hurts in the PR war is that it was exposed.  The battle for the hearts and minds of Iraqis is part of this war.  And the Pentagon and our guys over there have got every right to have good news put into the media and get to the people of Iraq, even if it's got to be planted or bought.  I mean, the idea that somehow marines are out there fighting, giving their lives, are now guilty of seducing the Baghdad press corps ... 

MATTHEWS:  They're not accused of being guilty; they're being accused of being to do it as a part of their duty. 

BUCHANAN:  They ought to do it. 

MATTHEWS:  Why should we be, if we're pushing Democracy—well, let me ask Ron.  Ron, what's your reaction? 

RON REAGAN, MSNBC'S “CONNECTED”:  My reaction is that we don't have a right to do that.  On the one hand, the president is talking about democracy and liberty and freedom in Iraq, and on the other hand, we're trying to undermine, as you said earlier, one of the very pillars of democracy, a free and independent press. 

The hearts and minds are very important in Iraq, and imagine what this is doing to out effort to win the hearts and minds for Iraqis now.  If you were part of the insurgency right now, you couldn't have ask for a better story to undercut what the president was saying yesterday, and you couldn't have asked for a better to say to your constituency, as it were, I told you so.  This is disaster. 

BUCHANAN:  Well, this is why the—Ron, the blowup of this thing is the problem.  By way of deception, though shalt make war.  For heaven sakes, you don't think Eisenhower was putting out phony stories to British journalists about Patton come for the Pas-de-Calais? 

I mean, deception, misinformation, disinformation, deceit, propaganda

·         these are all instruments of war.  We sent out guys over there to fight and die and you're telling me we can't put stories that put a good light on what's being done there to try to bring the Iraqi people toward us?  The crime here, Chris, if there is one, is the exposure of this thing and the damage done. 

MATTHEWS:  You mean it should have been kept secret.

BUCHANAN:  If you had done that in World War II and exposed all the guys on our payroll ...

MATTHEWS:  OK, let me ask you this.  These stories—as you know, in newspapers today and blogging and everything, we know that anything that appears in print gets online.  What happens in that starts coming back to the United States and we start believing it?  Then we're being propagandized, we're propagandizing ourselves, aren't we?  Is that OK?

BUCHANAN:  Chris, I mean, there's worst things that happened than us being propagandized. 

MATTHEWS:  I'm not saying it's the end of the world.  I'm saying is it the right thing to be doing.

BUCHANAN:  It is.  It's the necessary to do to try to win the hearts and minds.  Everything you can.  The problem here is it was exposed. 

REAGAN:  It is a foolish thing to do and don't—I wouldn't be surprised if we find out that the Iraqi people are way ahead of us on this on this story.  I wouldn't be surprised if we found out that most Iraqi people assumed that a lot of what is showing up in their papers, these good news stories, are being ginned up by the Americans and they're not buying them to begin with. 

BUCHANAN:  Ron, let me ask you something.  If we can't put 10 million on the table and buy Al-Jazeera to give us good press, would you not do it today?  If you were in this war?

REAGAN:  No, I wouldn't. 

BUCHANAN:  You wouldn't do it?

REAGAN:  No.  We're supposed to be fighting for truth and liberty and freedom and justice.  We're spending money over there in Iraq to train journalists to have an actual free press, and with the other hand we're undermining that very effort.  This is a foolish thing to be doing. 

BUCHANAN:  You know, you don't think we need a propaganda campaign to get out our message as best we can in the region of the world where we're hated, and what people believe and understand and come to know will decide whether we win or lose this war? 

We're to tie our hands and say, look, we want objective journalist who run by the Columbia School of Journalism standards and it's wrong simply to buy a couple of Baghdad journalists and say put this in your paper so we can get it out? 

REAGAN:  If there's so much good news coming out of Iraq, why do we have to pay the Iraqi journalists to report it?  They should be doing that on their own. 

(CROSSTALK)

BUCHANAN:  Because a lot of military say the American journalists are not reporting the good news.  Our own people report that.  Our troops over there are making these statements.  For heaven sake's, we are—maybe we shouldn't have gone to war, but if you go to war, you back up your troops with everything you can, and that includes propaganda. 

MATTHEWS:  You don't buy this whole notion of creating democracies, do you Pat?

(CROSSTALK)

BUCHANAN:  Listen, if you're going to put ...

MATTHEWS:  It's not like you don't like this little fly in the ointment.  You don't like the notion? 

BUCHANAN:  Look, I think the United States in World War II probably bought an awful lot of newsmen.  The end of it was democracy in Germany and Japan, but during wartime, you tie your hands?

MATTHEWS:  More with Ron Reagan and Pat Buchanan.  Let's get back to first principles—I like those—when we return.

And later, how does this covert propaganda campaign fit into the Bush administration's $100 million strategy to sell the Iraq war here?  You're watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We're back with Ron Reagan, host of MSNBC's “CONNECTED” and MSNBC's political analyst Pat Buchanan.  We're talking about this expose.  Pat says the expose itself was wrong. 

That the United States is paying tens of millions of dollars to get U.S. G.I.'s over in Iraq to write stories in English, which are translated into Arabic and then printed in Iraqi newspapers, as if they're written by somebody on that side of affairs, and making our troops look like they're doing their jobs.  Your indictment of this again, Ron.  What's wrong with it?

REAGAN:  Well, for one thing, it's just terribly foolish.  How do you think that you can spend $100 million ginning this stuff up and it's not going to be exposed.  And Pat's quite right, it's the expose of this thing that's going to do the damage, not just the stories themselves.

But that exposure was inevitable.  We're supposed to be setting an example for these people.  They've lived under a dictator for years, who tortured people, from whom the news was whatever he said it was.  These people are looking to us for something better, and what do we give them?  We give them Abu Ghraib and this kind of nonsense.

BUCHANAN:  Look, I assume that many of these reports told the truth about what's going on, that we are making progress.  But during the Cold War, I am sure the Central Intelligence Agency, just like the Soviet Union, was over there in Europe and giving money to journalists when they had the confrontations in the late '40s, over whether the communists were going to take power. 

And elections are ours where we were supporting parties, we were doing our level best.  All of the tools of democracy to try to save democracy.  It is not illegitimate.  Chris, we are in a real world.

MATTHEWS:  Let me ask you—if you were handed a pile of clips from the Defense Department and they said: look at the great press we're getting over there in the war.  You guys are too tough on the war, you Americans.  Look at the great press we're getting, here's all these clippings of articles about the great work we're doing.

And you sat and believed them.  And you think this was really Iraqi opinion here.  Wouldn't that bug you later to find out that that was all B.S.?  That somebody had written that at the Pentagon?

BUCHANAN:  I hope I'd have enough sense looking at those papers in writing all this good stuff to say, “who's planting it for us?”

MATTHEWS:  OK, well then you don't believe there is good news over there?  I'm just saying, you don't mind that somebody else being deceived.  Do you mind being deceived? 

BUCHANAN:  Look, during wartime...

MATTHEWS:  Do you mind being deceived?

BUCHANAN:  During wartime, no.  If the president of the United States in wartime says—why do we military censorship to save lives, Chris?  I mean, there's things you have to do in wartime, we may not like it, but they're necessary in the long run.

MATTHEWS:  Does it bother you that they buy people like Armstrong Williams in this—does it bother you this administration is buying journalists here?

BUCHANAN:  They shouldn't do it in domestic politics, no.  And they ought to pay a price for that.  But if you're talking about the president of the United States, when you're putting guys who are dying and landing in Walter Reed, you've got to do your best.

MATTHEWS:  But wouldn't that help the war?  If the bottom line is helping the war, and that sounds like your point of view here.  If that is the bottom line, what's wrong with buying a couple of journalists here to sell the war here?

BUCHANAN:  Well first, it's probably against the law.  Secondly...

MATTHEWS:  ... but morally, you don't have any problem with it, do you?

BUCHANAN:  The damage from backfire—the damage from Armstrong Williams backfire was far better than...

REAGAN:  ... this is backfiring too, though.

MATTHEWS:  It's all about getting caught from this guy.  He's quite honest about that.

BUCHANAN:  It's all about cost-effectiveness.  This is like schoolyard ethics.  You know, if Bobby does it, it's OK that Billy does it?  I've got no problem with the Voice of America.  I've got no problem dropping pamphlets over occupied France in World War II. 

But this is very different.  The Iraqi people are not our enemies.  As I said, we're supposed to be setting an example for them.  Pat, if you were an Iraqi citizen now and you started seeing good news stories in your papers, would you believe a word of it now?  Of course you wouldn't.

BUCHANAN:  Let me tell you, Ron.  If I saw an Iraqi journalist who had the courage to stand up and speak the truth about what was going on there and he was in danger, and I were CIA, I would go to him and I'd say, “look, you need protection.  You need help for your family.  You need to get them out of the country.  You need money, something like that.  We'll provide it, because you're on our side in a war for democracy in Iraq.”

REAGAN:  I'm not convinced that that's what's happening.  These guys are getting $200 and $300 a month and they're saying: here, print this.  It's a good news story because we say so.  Why aren't these people printing these good news stories on their own?   Do you think they don't want good news in their own country?

BUCHANAN:  Who's responsible for safeguarding the ethics of Baghdad journalists, for heavens' sakes.

REAGAN:  What do you know about Baghdad journalists?  You just said that these people are risking their lives.

BUCHANAN:  If a guy will buy a story for $200, give it to him, for heavens' sakes. 

MATTHEWS:  Put Pat down—Pat's down for “Baghdad Betsy,” it looks like.  Anyway, thank you Ron Reagan, thank you Pat.  Up next, Jim Bamford of the “Rolling Stone” Magazine, one of Pat's favorite periodicals, takes us further inside the Bush administration's $100 million P.R. campaign to sell the war over there.  You're watching HARDBALL on MSNBC.

MATTHEWS:  Welcome back to HARDBALL.  Reports that the Pentagon pays the Iraqi press to run pro-U.S. stories on covers a facet of the war effort that usually stays in the shadows.  Secretive, private sector P.R.  companies that traffic in propaganda, and are hired by the government, the U.S. government. 

Jim Bamford writes about this is “Rolling Stone.”  What did you break here, Jim?  What's news?  I mean, we're talking about buying reporters in Iraq to write pro-U.S. soldier stories, right?

JIM BAMFORD, ROLLING STONE CONTRIBUTOR:  That's right.  The propaganda war has been going on much longer than that.  The entire leadup to the Iraq war was created by a propaganda company, by a public relations company, the Rendon Group.  It was the Rendon Group, a private public relations company in the U.S. that created the INC, the Iraqi National Congress, that helped put Chalabi in there, that funneled CIA money into the INC.

MATTHEWS:  Was the Rendon—I know Rendon from campaigns past, but he worked with Carter and all.  But let me ask you this.  Is Rendon involved in influencing American media opinion, or is it always domestic—over there, I mean, Iraqi opinion?

BAMFORD:  Well, it's international opinion, but the thing is there's no firewall between international communications and U.S. that connect Europe to the United States or up there in the Internet.

MATTHEWS:  From 10 years, from the end of the first Persian Gulf War, when we was pushed back in his box, until we went to war.  You don't see much activity if you push the Google or check the LexisNexis on what Saddam Hussein was doing.  He didn't stimulate the war, but for 10 years, the drums were beating.  And they beat louder and louder after 9/11. 

Who was beating those drums?  Every time you picked up a newspaper in America on the op/ed page, there's a couple of columnists, Crystal, Kagan, whoever, Krauthammer, day after day after day, we've got to go to war with Iraq.  We've got to go to war with Iraq.  Was that the Rendon Group or is that American opinion?  Is that American writers just writing on their own?

BAMFORD:  No, well, Safire was another person. 

MATTHEWS:  There were hawks, but in other words, is this just a group of Americans who have a point of view or is there a P.R. campaign, a propaganda campaign?

BAMFORD:  No no, I think there is definitely a group of Americans that have that view.  They were the people that wanted to put Chalabi in there.

MATTHEWS:  So what did the Rendon Group and the INC people do?

BAMFORD:  Well, they were the ones who created this opposition for us, for the opposite, Saddam Hussein.  It's sort of like if the Kennedy administration during Bay of Pigs, outsourced the invasion to J. Walter Thompson's public relations company.

MATTHEWS:  Where did the money come from for this propaganda?  Was it Pentagon money or is it Iraqi emigrate money? 

BAMFORD:  Well, for the first half, it was the CIA, for the first half of the '90s.  And last half, it's been the Pentagon.

MATTHEWS:  Why the hell should the United States CIA be pushing the interests of some foreigner like Ahmed Chalabi in Iraq?  Who says we should be on his side?

BAMFORD:  Well, nobody.  The point was that it was a decision of the administration to try to undermine Saddam Hussein and they created this opposition force that didn't exist before, and it was all created by U.S.  money.

MATTHEWS:  This is for an act of Congress.  Does anybody ever vote on this stuff, or do they just spend the money? 

BAMFORD:  No, no, no.  This is just totally within the executive department. 

MATTHEWS:  Are G.I.s told to do this kind of thing?  A G.I. signs up -

·         I was talking earlier about, you know, everybody wanted to be a PIO in the Vietnam War because it was a way to learn something, how to be a reporter.  And everybody writes for “Stars and Stripes” and press like that.  Are these the kind of people that we are told go write something that's going to appear under the name of Mohammed Habib or some name in the Iraqi press? 

BAMFORD:  Well, I think they contracted out.  There's the Rendon Group, for example, during the war in Kuwait.  They—the war against Iraq in the 1990s, they built up a lot of transmission facilities and broadcast stories that were scripted by the Rendon Group and it's been going on for a very long time. 

MATTHEWS:  And the CIA pays or the Defense Department pays? 

BAMFORD:  Well, again, the CIA and the Pentagon paid for a lot for that information. 

MATTHEWS:  What are we getting for it? 

BAMFORD:  You're getting positive press from the—about the war instead of negative press.  I mean, that's basically what you're getting.  You're getting their side, what they want you to know.  And it helps build their case for them. 

MATTHEWS:  It's the old foreign policy, a buck in the pocket and a kick in the ass, right? 

BAMFORD:  I guess you can put it that way, right.  Right. 

MATTHEWS:  That's how we used to describe how we bought Latin America.  I guess that's how we do it now.  Anyway, Jim, thank you very much.  Jim Bamford ...

BAMFORD:  Thank you.

MATTHEWS:  ... from “Rolling Stone.”

Up next, how is President Bush's Iraq strategy playing out in this country?  The Governor Ed Rendell, Democratic (INAUDIBLE) talks about that very much.  Bread and butter state of Pennsylvania and what its thinking about what Jack Murtha's been saying.  You're watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Edward Rendell was elected governor of Pennsylvania in 2002 after serving eight years as mayor of Philadelphia.  Al Gore once dubbed him America's Mayor.  He's also a former general chairman of the Democratic National Committee.  Governor, thank you for joining us.

You know, Pennsylvania is, as I know, a very much a middle of the road state.  It's almost a purple state.  And in fact, the last presidential election last November, 8,000 votes divided the state.  It was that close.  Where is it going on the war.  What do you feel when you talk to people about the way they feel about Iraq? 

GOV. ED RENDELL (D), PENNSYLVANIA:  I think Pennsylvania is like a lot of Americans, are confused, but there's no question that they're becoming increasingly disenchanted. 

I've talked to every family who's lost a guardsman—a Pennsylvania National Guardsman—and in the beginning there was a great deal of pride in the families talking about what their sons or daughters have done in the war effort, and now I'm starting to hear bitterness creep into my discussions.  You know, bitterness at the war, asking why we're there and what we're accomplishing, et cetera. 

MATTHEWS:  Well, what do you tell them? 

RENDELL:  Well, obviously, I'm not in a position to debate.  I try to tell them to make them feel better that the returning soldiers—and I try to talk to as many returning guardsmen and reservists as I can—they all believe—it's interesting, individually they believe that what they're doing over there is important, that they're making inroads with the Iraqi people, with the Iraqi children, that the vast majority of Iraqis want us there, they're just afraid.

But they also—the troops are frustrated because they say we're fighting an enemy we can't see.  It's not like real war.  You know, there's nobody to shoot at.  We're driving along and, boom, a bomb blows up.  So there's great frustration, but I sense that people are starting to question the war, whereas they didn't question it a year ago. 

MATTHEWS:  How about you, governor?  I know you were supportive.  Are you still supportive of the effort? 

RENDELL:  My feelings are that, first of all, we're all proud of Jack Murtha and what he did, because I think he refocused America's attention on the war.  And if he did nothing more than that, he deserves a tremendous amount of credit. 

What my feelings are right now, Chris, is that it's almost an impossible decision because if we pull out or even a schedule to pullout, if we pull out and all heck breaks loose and the country dissolves into civil war, we've almost said that the 2,000 plus lives we've lost we lost for nothing, because we accomplished nothing. 

So in respect to the lives that have been lost and the soldiers that have been maimed, you want to say well, it's better because we were there.  But the question people have got to start asking, in my judgment, is if we stay there for two or three years, is it going to be any better than if we left six months from now? 

MATTHEWS:  Yes, that's the question. 

RENDELL:  That's the question.  And I don't know enough information

...

MATTHEWS:  It's interesting.  What do you think of the fact that the president was so strong yesterday where he said I'm not going to look at the calendar anymore.  I'm going to look at the goal, which is a democratic Iraq that can defend itself.  That was a pretty profound statement yesterday. 

RENDELL:  Well, it is, but—and give the credit to the president for saying what he believes.  And I think there's not enough of that in American politics.  But also understand who defines that.  That's the issue.  Who says when the Iraqis can defend themselves?

And if—what if the Iraqis never have the capability to defend themselves without our presence?  What if?  I mean, what do you do?  So my question, if I could talk to the president is, Mr. President, who defines that?  Do the generals define it?  Do our generals define it? 

Who defines that, and what more investment of this country's—not only the lives of our fighting men and fighting women, but the money that's being used over there which, as you know, Chris, could be used for so many challenges here at home.  I mean, who defines when they can defend themselves? 

MATTHEWS:  Imagine what you could do in Pennsylvania with a couple of hundred billion dollars.

RENDELL:  It's incredible.  Today, you know, I ...

MATTHEWS:  We're running electrical systems for Iraq that we're not building—we're not putting in that kind of power plants into Pennsylvania. 

RENDELL:  No question about that.

MATTHEWS:  Let's me ask you about the state of Pennsylvania, because it is—as one of your—in fact, as one of your predecessors, Bob Casey, said, it was a John Wayne state, not a Jane Fonda state.  It's a meat-and-potato state.  The intellectual left is always going to be anti-war most of the time. 

RENDELL:  Sure.

MATTHEWS:  Are the regular people who drive the buses, drive the trains, drive the cabs, work in the plants in Pennsylvania, work in farming, what is their view about this war?  Are they starting to change? 

RENDELL:  They're starting to change.  There's no question.  They're not there yet, but they're going to say...

MATTHEWS:  Well, do they like Murtha?  Do they think he's too far over, or what?

RENDELL:  No, I think people respect Jack Murtha in Pennsylvania and respect him for who he is and what he did militarily.  And they admire people who speak out.  And people are beginning to question it. 

The first year or two, unquestioned support.  And I think that support probably reached its zenith in the January elections.  I think everybody was proud of the Iraqi people voting under the risks that they undertook to vote, so people were proud.  But since January, I've seen a significant diminution in that support.  People question it.  They haven't decided themselves, but I hear people—people say to me, how is it going to end? 

MATTHEWS:  Going to be a partisan question, because you're up for reelection.  The Democratic National Committee, which you chaired at one time, during the big campaign, do you think the Democrats as a leadership should take a position on this war?  Should there be a party position?  Because Pelosi has taken a personal position, Murtha has.  The president's leading his party.  Should the Democratic Party have a voice on this very important issue of war, or should they dodge it or fudge it up? 

RENDELL:  Again...

MATTHEWS:  It looks like they're fudging it up. 

RENDELL:  And I think that that's probably the best way to go.  For example, I wouldn't want a Democratic Party position on the war as I go into my reelection. 

MATTHEWS:  Why not?  There's a Republican Party position.

RENDELL:  No, because I might disagree with it, and I don't want John Jones Voter to say, well, I don't like the Democratic position on the war, so I'm not voting for you.

MATTHEWS:  But what are you getting if you vote for somebody like Bob

Casey for governor of Pennsylvania—or senator from Pennsylvania?  What

are you getting when you vote for somebody in a state like Massachusetts or

·         if you vote for a Democrat, are you voting against this war? 

RENDELL:  Well, I think there are a multitude of issues, and I think we all make a mistake if we think that the sole criteria in November of '06 is going to be the war.  There's a whole vast array of issues.  And I think it's hard for the Democrats, because it's hard...

MATTHEWS:  You want a prediction from me, Governor?

RENDELL:  Sure.

MATTHEWS:  By next November, the war is going to be the issue.  Because we're going to still be there, we'll still be taking casualties, and we'll have been there another year from now.  And just think about how angry people are now, you're talking about Murtha now, imagine how more frustrated and more confused we will be a year from now?  Don't you think? 

RENDELL:  No, I agree, and that's the downside for the president saying what he's saying.  But the question is, let's—again, the question is, when are the Iraqi people going to be ready?  If the president stands up in August and says, my generals tell me now that the Iraqi people—that the Iraqis are ready to defend themselves in another six or eight months, then it all turns around. 

MATTHEWS:  Would you be a better president than George W. Bush?  Come on, you want to be president, don't you?

RENDELL:  No, I don't want to be president.  I want to be governor of Pennsylvania. 

MATTHEWS:  And after that? 

RENDELL:  After that...

MATTHEWS:  You're a young guy?  You're healthy?

RENDELL:  Baseball commissioner.  Baseball commissioner. 

MATTHEWS:  You don't want to run for president anymore?

RENDELL:  No, you know, if I could wake up and find myself president, I would do the job, but American politics has become such an awful business, Chris.  I mean, you've seen a change since you worked (INAUDIBLE).  It's almost...

MATTHEWS:  I know.  But I think you could do it, because you've always had that gusto.

RENDELL:  I could  rock'n'roll a little bit with it, but you know, the question is, do you want to put up with all the stuff you want to put up with?  I'm not sure...

MATTHEWS:  So if he bounces Cheney, you'll take the job, right?  I'm just kidding.  Thank you, Governor Edward Rendell of Pennsylvania.  Thank you for joining us. 

(END VIDEOTAPE)

MATTHEWS:  When we return, will the Pentagon strategy of planting fake news stories hamper the chances of true democracy and U.S. victory in Iraq?  HARDBALL returns after this. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Amy Goodman is the radio talk show host for Democracy Now, and Byron York is the White House correspondent for “The National Review.” 

Byron, we're going to put you in an interesting position here.  Does it offend you, as an American, that we're buying good press in Iraq? 

BYRON YORK, NATIONAL REVIEW:  I think we shouldn't have been doing it.  And I do think that Jim Miklaszewski hinted at this.  There is kind of a war going on inside the Pentagon.  And I personally think if we had found out there was an article that appeared in the Iraqi press that was very positive to the United States, years later we find out it could be traced back to the CIA, some very black operation at the CIA, big deal.  We've done that a lot over the years in many different wars. 

But there is a problem when you blur the distinction between that sort of thing and the public affairs officials of the United States military, who should be telling the truth.  Did we kill this many people?  Have we built this many schools?  They should be telling the truth about that.  So there is a war in part going on inside the Pentagon and the Bush administration, over how to do this kind of thing. 

MATTHEWS:  Who makes the decision, do you know?  Who made the decision to clear this contract and say, all right, go out there and create some of this bogus positive coverage? 

YORK:  Well, first of all, I don't know.  And I'm not sure a lot of people do know, and I'm sure they're scrambling right now to try to find some answers for Senator Warner. 

MATTHEWS:  Well, $100 million is a hell of a lien item.  And somebody had to approve it. 

YORK:  Well, yes, but by the way, if I read the stories correctly, the $100 million is for the next five years.  It's not as if $100 million was spent on doing this particular stuff we're talking about.

MATTHEWS:  Well, at $200 a reporter, $20 million goes a long way this year. 

YORK:  It does.

MATTHEWS:  Anyway, let me go to Amy Goodman.  Your view of this matter.  This is of course the story we're getting the last couple of days.  It's going to be investigated tomorrow by the chairman of the Armed Services Committee, John Warner of Virginia.  Senator Warner said he's going to be holding—getting a briefing from the Pentagon as to what role they played at the top.  What do you make of it, Amy? 

AMY GOODMAN, DEMOCRACY NOW:  Well, Chris, it's an absolute outrage, and there are many levels of it.  One is of course the outrage against the Iraqi people, that they're not getting true operations, that this is a kind of psychological warfare, and you've dealt with it well on the program.

But I want to talk about a few other levels of this.  You also have the blowback effect.  When you have pieces that appear in Iraqi papers and then you have newspapers around the world and in this country as well citing those papers, and the blowback comes to this country.

And then you have the marginalization of a press in Iraq that may well be telling the truth.  You have organizations like Al-Jazeera.  If you have some news outlets telling the truth and others only telling the, quote, “good news.”  In fact, the lies that the Bush administration is putting out, and wants the Iraqi people to believe, that marginalizes those news organizations.

MATTHEWS:  Well wait a minutes.  There's been nothing in the reporting on this to say that we're putting out this information, though.  From what I've been reading, we're putting out factual accounts of what we're doing over there in terms of construction.

GOODMAN:  There's no different issues here.  One is wanting to put out, quote, “good news stories,” that the military is putting out and paying reporters to take.  The other part is the covert operation, what they call the—basically, the information, the psychological operations. 

This has been reported in “The Philadelphia Inquirer,” has been reported by Knight Ridder.  And that is actually planting false stories.  Jonathan Landay had a very good piece on this today.  Actually, purposely putting in false stories about what is going on in Iraq.  And of course the tragedy for the Iraqi people is that they see what's happening on the ground, and they look at a press and they say, why isn't it reflecting what is happening here? 

YORK:  The reports I've seen on this is that they were accurate, but one-sided.  Which is, they should include all sides, but that's a tradition we see in many American news reports.

MATTHEWS:  The news around the street, going to both of you.  Dispute here in America now, and we're trying to find this out, the objective fact here.  It's not about propaganda.  We want to know, how well are we doing in training the Iraqi security forces over there, so we can go home.  And let them defend their own government.

And the question now, as we have the chairman of the Joint Chiefs, Peter Pace, putting out a statement today, that people like George Casey, the Army Chief of Staff, has been making it too high a standard for these Iraqis, saying they're not doing as well as they should, when in fact, he says, just get the standard down a little, and they'll look better.  We're having a dispute among the very highest level of our military over whether we've trained anybody over there.

YORK:  Well, not completely over whether we've trained anybody, but...

MATTHEWS:  ... sufficient to defend the country.

YORK:  The president brought that very thing up yesterday in the speech in Annapolis, and he said that we all remember the incidents when the Iraqis just ran away from battle.  But there has been a dispute over how many battalions, battalion being 350-800 people: how many of them are ready to go? I mean, the president yesterday...

MATTHEWS:  ... do they look like soldiers when they march around?  They don't look like people doing something by the hour, they're getting paid to do it?

YORK:  When you see them in a pickup truck in irregular uniform, no, they don't look like American soldiers.

MATTHEWS:  They look like those dazed guys.

YORK:  It's another part of the world.

MATTHEWS:  No, but they look like they're kind of dazed and disinterested.  When you look at these guys, they don't look like crack outfits.  At least, what they're putting on television.

YORK:  Well, they're not crack outfits.  But on the other hand, these are people who could be killed by doing this. 

MATTHEWS:  Oh, I understand that.  But they're getting paid, too.

YORK:  And they know that.  So they made a certain decision.

MATTHEWS:  They're getting three squares out of this, too.  It's isn't completely volunteer work.

YORK:  But it's a dangerous decision to make.

MATTHEWS:  Yes, it is, based upon a lot of factors, like pay.

YORK:  Well, American contractors do the same thing. 

MATTHEWS:  I know, but we'll wait to see.  But this is interesting.  When George Casey is fighting with Peter Pace, the highest levels of our military whether we have any standards at all or not, over this.  It's fascinating.  It's probably a lot more important than this propaganda story.

Amy Goodman, thank you for joining us, Byron York.  When we return, President Bush is about to light the National Christmas Tree in Washington.  We'll take you there when we return.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Ladies and gentlemen, please welcome now the chairman of the board of the Christmas Pageant of Peace, Peter F. Nostrand.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  President Bush is taking part in the Christmas Pageant of Peace at the White House and he's about to light the National Christmas Tree.  Let's listen to the president.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  As an expression of our hope for peace and happiness in this Christmas season, we light the National Christmas Tree.  Jackie , Melissa and Jenna Kantor of Bethesda are with us here.  They started Project Backpack to give children displaced by Hurricane Katrina new backpacks filled with books and toys and school supplies.

These girls are an example of the compassion that is found in the hearts and souls of Americans everywhere.  And they have shown how much good can be done when we reach out to help a neighbor in need.  And so Laura and I now invite them to join us to turn on the lights.  And would you help on these lights as well, by counting down, five, four, three, two, one.

(END VIDEO CLIP)

MATTHEWS:  I'm going to have to drive by there tonight, Byron.  Are you going to by there on the way home?  I'm going by.  You know, what did you make of the fact that the Congress, which has its own Christmas tree, has decided to call it, no longer the holiday tree, which they got into in the '90s, but they call it by its name, the Christmas tree.

YORK:  This has been a big fight.  Sort of amongst the ideological journals and in the bloggers, this diminishment of the word, Christmas.  And thinks that are clearly devoted to Christmas.

MATTHEWS:  I mean, the holiday, by the way on our national calendar, says Christmas Day, 25th of December.  It's not hiding it.

YORK:  It does indeed.  And so Dennis Hastert, just a couple of days ago, decided to overturn this change to the national holiday tree.

MATTHEWS:  To make it a Christmas tree again.

YORK:  Which by the way, has been getting bigger, and bigger, and bigger.  It's 80-feet tall this time.

MATTHEWS:  Well, I think we can each appreciate each others' religious traditions and Christmas is not X-mas, it's Christmas.  Anyway, thank you Byron York.  HARDBALL returns tomorrow at five and seven Eastern.  Right now it's time for “THE ABRAMS 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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