updated 12/27/2005 10:41:10 AM ET 2005-12-27T15:41:10

Guest: Jon Meacham

CHRIS MATTHEWS, MSNBC ANCHOR:  You voted, we listened.  Tonight the biggest HARDBALL political plays of the year from our online poll and some of the most notable moments from 2005.  Let's play HARDBALL.

Good evening.  I'm Chris Matthews and welcome to HARDBALL. 

The CIA leak case, the Katrina disaster, the fight between Republicans and Democrats, these are just a few of the stories you voted as the top political plays of the year in our HARDBALL online poll.  Tonight we cover the big issues and hear once again from the newsmakers who played HARDBALL in 2005.  And later a replay of some of our favorite HARDBALL MOMENTS. 

But first you voted the war in Iraq is the most important story of the year.  How this war plays out will ultimately define, we known, the presidency of George W. Bush.  As 2005 comes to a close he's countering the growing anti-war movement with a series of recent victory speeches that have slightly bumped up his sagging approval rating. 

To begin our look at the war in Iraq we're joined by “Newsweek” Managing Editor Jon Meacham and NBC's chief foreign affairs correspondent Andrea Mitchell. 

Let's begin with the president, who is attempting to regain support for the war with a series of speeches around the country. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  By fighting these terrorists in Iraq, Americans in uniform are defeating a direct threat to the American people.  Against this adversary there is only one effective response.  We will never back down.  We will never give in, and we will never accept anything less than complete victory. 

Americans should have a clear understanding of this strategy.  So today, we're releasing a document called the national strategy for victory in Iraq. 

On September 11, 2001, our nation awoke to another sudden attack.  Like generations before us, we were taken to fight to those who attacked us and those who share their murderous vision for future attacks.  Like generations before us, we face setbacks on the path to victory.  Yet, we will fight this war without wavering. 

If terrorists in Iraq share the ideology of the terrorists who struck the United States on September 11th.  By fighting the terrorists in Iraq, we're confronting a direct threat to the American people.  And we will accept nothing less than complete victory. 

The terrorists have ambitions.  They have goals.  They want to stop the advance of freedom in Iraq.  This is an enemy without conscious and against such enemy there is only one effective response.  We will never back down.  We will never give in.  And we will never accept anything less than complete victory. 

(END VIDEO CLIP)             

MATTHEWS:  We're joined right now by Andrea Mitchell, chief foreign affairs correspondent, and Jon Meacham, managing editor of “Newsweek.”

Andrea, people like to see their president.  Is that why his poll numbers are going up? 

ANDREA MITCHELL, NBC NEWS CHIEF FOREIGN AFFAIRS CORRESPONDENT:  I

think so.  I think that the president was far too defensive, too cloistered and that people want to see him responding.  In fact, the fact that he did take questions at the World Affairs Council in Philadelphia, not necessarily a positive audience, was a good thing.  He needs to do that more often.

And also, of course, he's getting a little bit of a bump in the polls because gas prices have gone down, and that's affecting overall people's attitudes toward this administration.

MATTHEWS:  Jon, your view.  Why is he going up in the polls a bit here now?

JON MEACHAM, NEWSWEEK MANAGING EDITOR:  Well, he's got this combination of Churchill meets MacArthur rhetoric, but he's actually getting out, and he's talking about both the Intel failures that led to the war.  And then he's making a fairly common sense case that we're there.  We have to win.  We are up to 160,000 troops in Iraq, as the election goes forward.  And I think it's a kind of reality check for him. 

And, you know, presidents always get in trouble when they underestimate the basic common sense of the people.  The people know it's not going particularly well.  He's acknowledging that and yet pointing the way forward.  And I think that's good leadership. 

MATTHEWS:  Andrea, what's going wrong with the Democrats?  They heard the clarion call from Jack Murtha, this working-class fellow from Pennsylvania who had been a Vietnam combat veteran, decorated.  He came out and really seemed to shake the Republicans in the White House and in Congress.  And then something quite hasn't clicked. 

What's wrong with the Democratic response here? 

MITCHELL:  They don't have a unified response, because they are trapped between those like Jack Murtha, who want to get some sort of a stage withdrawal, and, of course, Feingold and other more liberals, who have been calling for that sometime, Howard Dean, the chairman of the party. 

Hillary Clinton though wanting to run for president one presumes, seeking the center, not wanting to get too far out there.  And others of her elk who are trying to position themselves, perhaps some might call it, critics might call it, a straddle. 

So you have got people on all sides.  Joe Biden, in fact, and because of that they can't come up with one coherent Democratic message. 

MATTHEWS:  And you have Joe Lieberman of Connecticut who has been as hawkish as the president. 

MITCHELL:  Exactly.  Joe Lieberman has gotten in some trouble, in fact, among fellow Democrats and at home in Connecticut for being the poster child of the Bush administration's favorite Democrat right now. 

MATTHEWS:  Well, Jon, how do you see the Democrats' problem?  Because clearly they don't have the bully pulpit the president enjoys.  They don't have the ability to send one—well, they do.  Why don't they do it?  Why don't they send Murtha out there to be the Democratic spokesperson? 

MEACHAM:  Well, because as Andrea just said, there's not a unified position, because you can't really talk about staged withdrawal at this point.  Because I think the president is right when he says if you announce a timetable, you're signaling your hand to the enemy in a way that you just don't want to do. 

I think the practical matter is that this is not a partisan issue.  We have—we now have a geopolitical very tactical real problem in Iraq, which is how to rebuild it, get it back on its feet, try to create it, you know, give it a new life after its first 80 years or so from the British, and that doesn't really lend itself to a Republican or a Democratic solution. 

You can argue about the road to war and whether the president is right in saying that we confronted a direct threat beforehand.  But in a way that's all retrospective.  Right now we have to go forward and hopefully learn when we do look at the road to war about the next time. 

MATTHEWS:  Well, let's go to Andrea. 

The big thing, you know, you and I have watched politics for a long time, and it seems to me there's a hell of a proposition on the table right now so clear, so grand. 

The president of the United States has staked up, you know, thousands of lives already, now maybe more, thousands more perhaps, before we get what we want, half a trillion dollars in National Treasury, the hostility of the world, including Europeans and third worlders and especially in Islamic World, all on this big bet that we can create a civil democracy not a phony one, a civil democracy right there in the Arab world. 

How good does that bet look right now? 

MITCHELL:  Well, it looks a little bit better after the successful election if this proves to be a successful election.  It is going to take a long time to count the votes and figure out how much the participation was, but if that works, and we begin to see some sort of coherence in Iraq, then the bet looks a little bit better. 

But you have got terrible problems in Syria, in Lebanon and other places that had been hopeful before, and Iran.  Iran is a major challenge now to the rest of the world and particularly to the United States and to Israel. 

So there is a lot of trouble ahead.  And the United States has to figure out what it wants to do regarding Iran.  Do we negotiate with these people, these holocaust deniers?  What do we do about this new leader?  What do we do about Syria?  There are some still calling for, quote, “regime change.” 

And no denial from this administration that we have U.S. special forces already on the ground inside Syria.  It wouldn't be hard to overthrow Asad, but what do you do if the Muslim brotherhood takes over and establishes an Islamic, you know, not only terrorist supporting but a Islamic fundamentalist state in Syria? 

There are a lot of challenges still.  I don't think it's easy right now to predict whether this bet will work out for the president. 

MATTHEWS:  Jon Meacham, if you were doing a sports book out in Vegas right now, where would the odds be moving in term of the president's big bet on a democratic Iraq? 

MEACHAM:  Well, I don't think they would be fabulous.  Because we are playing a defensive game basically.  We can't let it break into three.  As Andrea was just talking about, Iran would have—create a Shia-stan.  If Kurdistan broke off, Turkey would be almost completely unable, I would imagine, to keep itself from going in, and then you have Syria and other spheres of influence. 

I think the president has made a bet that we're going to know about in 20 years, 15 years maybe.  And it's an enormous one.  And one of the models in his head, which I'm not sure is the precise one, but I know it's in his head, is President Reagan and communism. 

He thinks that if you say the same thing, if you stick to your guns, that all of the chattering classes and the reporters and the conventional wisdom will all be proven wrong.  And there's some - there's something to that.  I think what you said in the beginning is exactly right. 

This is the most momentous thing we've done, it seems to me, since the rebuilding of Europe, since the dark days of the Cold War under President Kennedy and the very interesting negotiations that happened exactly 20 years ago with Gorbachev and Reagan. 

MATTHEWS:  It's like Gallipoli.  It's like market garden.  It's one of those grand strategic moves.

Anyway coming up, Andrea and Jon will be back with me for a look at the political battle back home here in America.  The fight between Republicans and Democrats, between hawks and doves.  And a preview of all the national scandals that are already brewing.

And later Arnold, Hillary, Clint, that's Eastwood and others back for an encore performance of some of our best HARDBALL moments.  You're watching a special edition of HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Tom DeLay's legal troubles and the fight over Terri Schiavo's life—our look back at the year's top political plays of the year when HARDBALL returns. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.

“Newsweek”'s Jon Meacham is with us from New York and NBC's Andrea Mitchell is in our Washington bureau, as we continue our look at some of the biggest HARDBALL stories of the year, from the filibuster fight over Supreme Court nominees, to political sleaze, to the sad, slow tragedy of Terri Schiavo. 

Let's begin with the Schiavo case. 

She was the woman in a vegetative state whose feeding tube was removed after a 12-year court battle to end her life.  On Palm Sunday of this year, Republican leaders in Congress got involved, passing a last-minute bill especially for Schiavo that the president signed quickly into law. 

Republican Congressman Patrick McHenry was on HARDBALL defending this action to keep her alive. 

(BEGIN VIDEO CLIP)

MATTHEWS:  I'm stunned the fact that two-thirds of the people who identify themselves as evangelicals and conservatives in this country say they think Congress should have butted out of this thing.  I'm amazed.  These are conservatives talking.

U.S. REPRESENTATIVE PATRICK MCHENRY ®, N. CAROLINA:  Look, let's—let's look at the votes.  Let's look at the votes in Congress, though:  80 percent of my colleagues agree with my position, that we should step in and protect the life of Terri Schiavo.

MATTHEWS:  Why does the public disagree with you?

MCHENRY:  Eighty percent of my colleagues, including a diverse number of Democrats.

(CROSSTALK)

MATTHEWS:  I know.  But why is the conservative base opposed to this?

MCHENRY:  I don't know.  I can't speak to that.

All I've got to tell you is that, on this matter, it's a matter of conscience for our Congress.  And that's why we acted in this way. 

(END VIDEO CLIP)

MATTHEWS:  Jon Meacham, the public verdict on this was negative, as was the medical verdict, which found that this poor woman was, in fact, brain dead, literally, and that it was wrong to intervene in the case. 

Why did they get it wrong and how's it hurt them? 

MEACHAM:  Well, I think this is the low moment of the year for the Congress in many ways. 

The reason the broad base of evangelical Christians were against this is there is a deep-seated cultural belief among evangelicals, goes all the way back to the founding of the country with the Baptist tradition of a separation of church and state, not of religion from politics, but of church from state.

And you can't get any clearer a case where the state was interfering with a private matter, which was a matter for this woman, her custodians, her guardians, her—and their church and their faith.

And I think the evangelicals looked on this and saw it for what it was, which was by and large an attempt to pander to them that didn't work. 

MATTHEWS:  Andrea, you used to report from Philadelphia, and I grew up there.  I have a sense that this has really hurt one of the Republicans running for election this coming year, re-election.  That's Rick Santorum.  He was right out in front on this and it looks like it's hurt him. 

MITCHELL:  It has hurt him.  And it's hurt him because people did see it as pandering, and people have a real sense of privacy and of—a real pain over the way this family was suffering. 

Every American family has in one way or another dealt with these issues of life and death.  And as the baby boomer generation gets older and this large generation faces these problem with our own parents, we all know what lies ahead, and nobody wants the interference—nobody wants to see politicians interfering in the way this thing was handled. 

That's the way the polling read, that's why it's hurt Rick Santorum, and I think that, that has led to historically low popularity for both parties in Congress. 

MATTHEWS:  Let me ask you about a real success story, a real home run for the president this year.  That's the selection of John Roberts for chief justice, ultimately.  That was a hell of a pick. 

Who gets credit for that one?  Because that was a home run for the president. 

MITCHELL:  I think the president of the United States has to get credit for that.

Clearly, his advisers did well by him, and you've got to credit Harriet Miers, in fact, among the others, who helped present John Roberts to him.  He obviously didn't know John Roberts personally, but they had been planning for this for a long time. 

They have these books, these preparations for the possibility of a change at the Supreme Court and they clearly had him high on their list.  They clicked in the personal interview.

But you've got to give all of them credit, Karl Rove, all the other advisers, Gonzales, who helped the president make this choice. 

MATTHEWS:  OK.

From the sublime to the ridiculous, when White House majority leader Tom DeLay was indicted by a Texas prosecutor, this September, he came to HARDBALL to state his case. 

(BEGIN VIDEO CLIP)

U.S. REPRESENTATIVE TOM DELAY (R-TX), HOUSE MAJORITY LEADER:  ...

forever and ever and ever. 

MATTHEWS:  Could this be a partisan prosecutor who has found a law and found a way to read it that has not been read before?

DELAY:  Oh, definitely.  He's trying to rewrite the law.

He's criminalizing the election code.  That's what he's doing.  But he's done this over and over again.  He did it against his Democrat enemies early on.  He did it against Senator Kay Bailey Hutchison.  He's—and, by the way, he's had his head handed to him every time.  But that's not his modus operandi.

He did to me what he did to them.  You drag this out as long as you can do it so that the press make you seem like you're indicted.  I have actually been indicted for two years, if you read the press on this investigation.

MATTHEWS:  But in this case...

(CROSSTALK)

MATTHEWS:  ... forced you to relinquish your leadership.

DELAY:  Never talking to me.  Never talking to me.

MATTHEWS:  Right.

DELAY:  Never asking me to testify, never doing anything for two years.

And then on the last day of his fourth or sixth grand jury, he indicts me.  Why?  Because his goal was to make me step down as majority leader.

(END VIDEO CLIP)

MATTHEWS:  Jon Meacham, is Texas justice blind or partisan? 

MEACHAM:  Well, sometimes it's both, or at least it seems to be that way. 

I think that DeLay in a way is paying a price for being the way he is in Congress and the way he has been. 

The case is obviously ongoing.  It was interesting to see the president recently say that he believed DeLay to be innocent, which is an unusual departure, I think an unfortunate departure for a president to comment on an ongoing criminal investigation. 

MATTHEWS:  Which reminds us, by the way, Jon and Andrea, of Richard Nixon saying that Manson, Charles Manson was guilty.  I guess this is a little better to say a guy is innocent, since we're all presumed innocent. 

MEACHAM:  Yes.

And I think we should watch DeLay and Manson in the same paragraph, perhaps.

But he is—I think what's partly just in the political culture, DeLay has been known as “The Hammer.”  He is a hardball operative, would only see lobbyists who had given to Republican causes and seemed in many ways to auction access in a way.  And I think that, that is an ongoing concern on the part of the people, and DeLay is a face for that despite whatever is going on down in Texas. 

MATTHEWS:  We'll come back and talk to Andrea and Jon. 

Up next, another top story as voted by our online poll:  the devastation of Hurricane Katrina and my reports from New Orleans.

You're watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Hurricane Katrina was the worst natural disaster ever to hit the United States.  It did more than kill, injure, and leave homeless hundreds of thousands of victims in New Orleans and the Gulf Coast.  It showed firsthand how the United States Government failed on many levels to respond to this horrific storm and subsequent flooding when the levees failed. 

Once it hit, the pain and anguish of the victims played out on television, daily, often taking the government by surprise.  Here is FEMA Director Michael Brown on HARDBALL explaining how the administration was responding to victims needs. 

(BEGIN VIDEO CLIP)

MICHAEL BROWN, FEMA DIRECTOR:  I mean, just imagine wherever you are watching this program right now, your hometown being literally destroyed.  And you being told that you can't come back into your community for maybe a month in some areas.

And even once you come back, there's not going to be anything there, or whatever is there is going to be so water damaged that it will have to be destroyed and totally replaced. 

So what we have to understand is that the magnitude of this operation is huge, and it's going to take a long time.  It's going to take patience, and it's going to take the absolute intense effort of the federal government working closely with the state governments and down to the local governments to take care of individual by individual by individual. 

(END VIDEO CLIP)

MATTHEWS:  Days later, President Bush touring the damaged Gulf Coast praised Brown for his handling of the disaster. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  And Brownie, you're doing a heck of a job.  The FEMA director is working 24...

(END VIDEO CLIP)

MATTHEWS:  But the pictures were telling a different story.  The Bush administration was under fire for mishandling recovery efforts, and within the week Brown was stripped of his duties and called back to Washington. 

The Gulf Coast was in turmoil.  A major American city was devastated, and survivors from three states were crying for help.  I traveled to New Orleans to get the real story, to see the Katrina's damage and recovery efforts firsthand. 

(BEGIN VIDEO CLIP)

MATTHEWS:  There's a big part of this story you can't pick up on television alone, and when you come here, you get that part of the story. 

The smell, first of all.  I'm trying to remember what this smell is it's something to do with sewage.  A smell I associate with underground sewage and the smell you can imagine. 

And the other thing you notice is the absolute desolation.  We've been driving in here for 20 miles from the outskirts of the city, and there is no one here.  You drive over major interstate, like 10, and there's no one on the highway. 

I guess the best reference is to imagine someone at a viewing when they have died.  And they seem like they are OK because they have been made up by the undertaker, but they are dead.  They are gone. 

(END VIDEO CLIP)

MATTHEWS:  New Orleans has historically been a tourist town.  Conventioneers and travelers from all over the world head to its famous French Quarter for great food, music, and entertainment.  And today while Bourbon Street continues to come back to life after Katrina, I toured it when it was still a ghost town. 

(BEGIN VIDEO CLIP)

MATTHEWS:  You know, you try to figure out what the prospects are for recovery in New Orleans coming from the outside, and what strikes you is how it changes every time you turn a corner.

I mean, here we are in the heart of the French Quarter.  Everybody has heard about the French Quarter.  It's where Mardi Gras is staged.  It's where Louis Armstrong used to play and all the great jazz musicians.  And you can see the clubs around here.  Some of them are pretty good jazz joints.  Some of them are just tourist spots, and some are strip joints.  It's a mixture.

How fast will this place come back?  You know, you can imagine it opening Friday night right here this week.  All they need is electricity and the sewers working.  These places are in great shape.  I mean in really good shape considering all that they have been through. 

FINIS SHELNUTT, RESTAURANT OWNER:  Yes, it looks great.  But the city has hired independent contractors, and the guys are doing a great job.  They are going down one street at a time.  So I think within the next two days, the quarter will be ready to open.  We just need some electricity, Chris. 

MATTHEWS:  And it is, in fact, the cash cow.  You want to get to the economics of New Orleans.  It's not the poor areas that the money is going to come from.  The money is going to come from this area, feeding into the hotel district.  And the hotels get packed with conventioneers, people coming back to see New Orleans and what is has been through.  That may even add to the appeal of this city.

(END VIDEO CLIP)

MATTHEWS:  Coming up, the big story of the year here in Washington, the CIA leak case.  You are watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

MATTHEWS:  Two years ago this month, U.S. attorney Patrick Fitzgerald was named as a special counsel to investigate what is now known as the CIA leak case.  Valerie Wilson, a CIA officer and wife of former diplomat Joe Wilson, was outed by a syndicated columnist after Joe Wilson wrote an op-ed in the “New York Times” critical of claims made by the Bush administration before the invasion of Iraq. 

Today Fitzgerald's investigation into that leak has led to the indictment of Vice President Cheney's chief of staff, Scooter Libby, has caught several prominent journalists in its crosshairs and continues to loom large over the White House. 

From the beginning, HARDBALL's David Schuster has been connecting the dots of this unfolding scandal, and he's also reported extensively on how the White House sold a war to the American people based on false claims.  Let's take a look at one of David's reports on the White House claim that Iraq was linked to 9/11. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Just days after the 9/11 attacks, Vice President Cheney on “Meet the Press” said the response should be aimed at Osama bin Laden's al Qaeda terror organization, not Saddam Hussein's Iraq. 

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES:  Saddam Hussein's bottled up at this point, but clearly we continue to have a fairly tough policy where the Iraqis are concerned. 

TIM RUSSERT,  NBC HOST:  Do we have any evidence linking Saddam Hussein or Iraqis to this operation? 

CHENEY:  No. 

SHUSTER:  But during that same time period, according to Bob Woodward's book, “Bush at War,” Secretary of Defense Donald Rumsfeld was pushing for military strikes on Iraq.  And during cabinet meetings, Cheney  quote, “expressed deep concern about Saddam and would not rule out going after Iraq at some point.”

That point started to come 11 months later, just before 9/11's first anniversary.  The president and vice president had decided to redirect their war on terror to Baghdad. 

So, with the help of the newly-formed White House Iraq group, which consisted of top officials and strategists, the selling of a war on Iraq began and the administration's rhetoric about Saddam changed. 

Not only did White House hawks tell “The New York Times” for a front-page Sunday exclusive that Saddam was building a nuclear weapon, and not only did five administration officials that day go on the Sunday television shows to repeat the charge ...

CHENEY:  That he is in fact, actively and aggressively seeking to acquire nuclear weapons. 

SHUSTER:  ... but the White House started claiming that Iraq and the group responsible for 9/11 were one in the same. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  The war on terror—you can't distinguish between al Qaeda and Saddam when you talk about the war on terror. 

We've learned that Iraq has trained a Qaeda members in bomb-making and poisons and deadly gases. 

He's a threat because he is dealing with al Qaeda. 

SHUSTER:  In pushing the Saddam/Iraq/9/11 connection, both the president and the vice president made two crucial claims. 

First, they alleged there had been a 1994 meeting in Sudan between Osama bin Laden and an Iraqi intelligence official. 

BUSH:  We know that Iraq and al Qaeda have had high-level contacts that go back a decade. 

SHUSTER:  After the Iraq war began, however, the 9/11 Commission was formed and reported that while Osama bin Laden may have requested Iraqi help, quote, “Iraq apparently never responded.”

The other crucial pre-war White House claim was that 9/11 hijacker Mohammed Atta met in a senior Iraqi intelligence official in the Czech Republic in April of 2001. 

GLORIA BORGER, CNBC HOST:  You have said in the past that it was quote, “pretty well confirmed.”

CHENEY:  No, I never said that.

BORGER:  OK, I think that is...

CHENEY:  ... I never said that.  That's absolutely not...

It's been pretty well confirmed that he did go to Prague and he did meet with a senior official of the Iraqi Intelligence Service.

SHUSTER:  Confirmed or unconfirmed by Vice President Cheney, the 9/11 Commission stated quote, “we do not believe such a meeting occurred.”  Why?  Because cell phones records from the time show Atta in the United States. 

Nonetheless, the White House strategy worked.  In March of 2003, one poll found 45 percent of Americans believed Saddam Hussein was personally involved in 9/11. 

And on the eve of the Iraq war, the White House sent a letter to Congress telling lawmakers that force was authorized against those who, quote, “aided the 9/11 attacks.” 

Yet the Bush administration continues to say it never claimed Iraq was linked to 9/11. 

(END VIDEOTAPE)

MATTHEWS:  The irony—the brutal irony is that while implications, innuendo or false claims, if you will, about a 9/11 connection helped take us into Iraq, the Iraqi war itself has created a real al Qaeda-Iraq link that may keep us from getting out of that country. 

HARDBALL correspondent David Shuster joins us now.  Let's talk about the CIA leak case itself.  What's the biggest breakthrough this year? 

SHUSTER:  Chris, I'd say the biggest breakthrough is forcing these reporters to testify so some could argue it's the Supreme Court.  Remember back in the spring of 2005, Judy Miller and Matt Cooper had an appeal before the Supreme Court.  The Supreme Court refused to hear the case.

In turn, it went back to the lower courts.  The lower courts said OK, now is the time.  You either testify or we're holding you in contempt and going to jail, and that's what essentially broke loose the testimony, the Matt Cooper testimony, which is crucial as far as Karl Rove's status and possibly putting Karl Rove in legal jeopardy.

And then Judy Miller—it's because of Judy Miller's testimony largely that Scooter Libby was indicted.  Without those two reporters this case doesn't move forward the way it has.

MATTHEWS:  So they are, in fact, the stained blue dress to this case. 

SHUSTER:  Absolutely. 

MATTHEWS:  That was to the Clinton case.

Let me ask you about Fitzgerald himself.  He said during the indictment announcement six weeks ago when he indicted Scooter Libby, the vice president's chief of staff, that he couldn't really finish his mandate, he couldn't really do his job of prosecuting the bad guys here, because Scooter Libby had thrown sand in his face.  What's up now? 

SHUSTER:  He's talking about the obstruction of justice.  It's essentially an excuse, some might say, for why Patrick Fitzgerald hasn't been able to resolve was there an illegal leak, was there a violation of the Espionage Act.  When they passed along Valerie Wilson's identity, did that break the law?

Fitzgerald is saying look, I couldn't determine that, because these guys wouldn't tell the truth and Scooter Libby wouldn't give me honest testimony in front of the grand jury.  It's questionable, of course, whether others gave honest testimony. 

But because Scooter Libby wouldn't testify truthfully, because Scooter Libby according to the prosecution obstructed the case, the original issue that Fitzgerald was supposed to investigate, he couldn't resolve that.  All he could resolve was that there was some sort of cover up, there was some sort of obstruction, and what the reference is to. 

It's a reference that look, I'm the umpire.  An umpire gets sand in his face, he can't make the call.  That's what I'm saying.  I can't make the call about the original leak, but I can say that based on the actions that some White House officials, including Scooter Libby, took in front of the grand jury, I'm bringing this indictment related to those action. 

MATTHEWS:  So we're going to have a big trial beginning next year.  When do you expect it of Scooter Libby?  That's the big trial, the vice president's chief of staff who has to talk about the vice president.  The vice president will have to be called because he's part of the state's case against him, because he's the one that told his chief of staff who this undercover agent was. 

SHUSTER:  Yes, I mean, Vice President Cheney shows up in two cases of the indictment, two crucial cases.  First, June the 12th, 2004, and then again July the 12th, when he gives Scooter Libby some advice about how to handle media questions.  And later that same day, Scooter Libby talks to Judy Miller and Matt Cooper. 

And so when you have the testimony of Matt Cooper and Judy Miller talking about the conversations with Scooter Libby, it's quite possible the vice president will be called in and asked OK, what advice did you give to Scooter Libby?  And that's a huge question. 

Never mind the vice president legal jeopardy—there's no indication that he's in any sort of legal jeopardy,  but there are questions hanging over the vice president that could easily be an answer at this trial.  What advice did Vice President Cheney give to Scooter Libby and how did Vice President Cheney learn about Valerie Wilson and why did he feel compelled to tell his chief of staff? 

Did he know that his chief of staff was going to pass this along to reporters?  Did he know that passing the information along to reporters might be illegal?  Those are questions that are still hanging over the vice president, and those will be blockbuster headlines if and when they do come out at a Scooter Libby trial. 

MATTHEWS:  Can the U.S. government, the special prosecutor in this case, Fitzgerald, indict the vice president if he wants to? 

SHUSTER:  Constitutionally, he could and if you look at the way this case builds and what you've talked about before, the way prosecutor Fitzgerald likes to build his cases, you go after a number two guy, you throw indictments at him.  You squeeze him.  You hope he'll roll over, and then you go after the guy at the top. 

That's the way this case seems to be building, but the difference here is there's no indication that Scooter Libby either is going to roll over, or if he would, would provide any information.  But clearly, that's the way prosecutors develop their cases, and look, if Scooter Libby were to get convicted and is facing 30 years in prison, Prosecutor Fitzgerald would go back to him and say, OK, you don't have to serve the 30 years, here is the information.  Here are the unanswered questions about others, including the vice president that I want answers to.  Give me those answers and then we can talk about a deal. 

MATTHEWS:  Time to flip.  Anyway, thank you very much David Shuster.

Much more on the CIA leak case coming and where it's headed in the new year. 

NBC's Andrea Mitchell and “Newsweek's” Jon Meacham will once again be with us when we return.  This is HARDBALL only on MSNBC.

(COMMERCIAL BREAK) 

MATTHEWS:  Welcome back to this special edition of HARDBALL, the top political plays of 2005 as voted by you in our online poll. 

One of the top stories of the year is the CIA leak investigation.  So far, it has lead to the indictment of a top White House official, the vice president's chief of staff. 

It has also put some prominent journalists in the crosshairs.  Judy Miller, formerly of “The New York Times,” served 12 weeks in jail for protecting a source, and others were called to testify under oath about their involvement in the case. 

For more on these journalist stories, and, of course, the state of journalism in the country after this CIA leak case, we're joined by Jon Meacham, managing editor of “Newsweek” and NBC's chief foreign affairs correspondent, Andrea Mitchell. 

Andrea, it seems to me that the journalists are getting hit harder than the targets here of this investigation.  You have got Viveca Novak, who is on some kind of leave at “Time.”  You've got Arthur Sulzberger Jr.  under the heat up there at least from press critics.  And you've got already Judy Novak out of a job.  More coming. 

MITCHELL:  It seems like journalism has really been shown in a very unflattering light.  This has not helped anyone.  And, in fact, the relationship between sources and reporters has long been suspect to many people in this country.  And I think a lot more clarity, transparency is required. 

I think that we, journalists, have a responsibility to try to get people to be on the record, to not accept these background briefing conditions.  Often at these off the record or background sessions they don't tell you anything that they shouldn't tell you on the record.

And in this case in particular, I think it's shown—it's shed an unfortunate light, or perhaps a useful light on some of the less admirable practices. 

In particular, as well, I think that there are reporters who have to explain why they didn't tell their bosses when this first took place, and the situation with the “Time Magazine” reporter, whom I don't know, does require some additional explanation. 

I still am also mystified by Bob Novak's reported comments from North Carolina where he says that if people really want to know who his source is, they should ask the president.  I don't know how he would know that the president knows.  That's pretty confusing.  

MATTHEWS:  Yes.  You wonder whether that is punditry or reporting. 

Let me go to Jon Meacham.  It seems to me that in both these cases, Judy Miller and Bob Novak, what looks to this from the outside is that you have got reporters being used by people for political missions. 

MEACHAM:  We're shocked to find gambling in the casino.  It was the best of times.  It was the worst of times this year. 

We were reminded of the absolute centrality of anonymous sources with the outing ultimately of Deep Throat, the self-outing, in the summer, with the man who had helped guide Woodward And Bernstein at “The Washington Post” to uncover the corruption at the heart of Nixon's administration, which created one of journalism's finest hour.

And, on the other hand, we have seen confidential sources, as you say, lead us astray in ways that we should have been more careful about.  We should have been more vigilant about.  And, as Andrea was saying, we must be more descriptive about and up front about. 

I think, if anything, the lesson of 2005, at least for me and for a lot of my colleagues, is we have to be as transparent as we expect the government to be.  We have to tell the truth. 

If you tell the truth, you don't have to pause and think about what the answer is.  You don't have to justify anything.  You just are clear.  You level with the people, and that creates a bond of trust with readers or constituents. 

MATTHEWS:  So if Bob Novak were listening to your instruction, he would say instead of saying too high administration officials told me that Valerie Wilson worked for the CIA and had something to do with her husband going to Niger on that mission, he should have said two White House henchmen, who had it out for Joe Wilson.

MEACHAM:  Well, you would have certainly identified the motives.

Absolutely, absolutely you would have.

MATTHEWS:  Andrea, do you agree with that?  Do you have to basically say somebody has a mission when you use them as a source? 

MITCHELL:  Absolutely.  You do.  And I think we've seen that in both broadcast and print that people are now reporting a former Democratic, you know, official who disagrees with the policy or a former intelligence official who has been fighting against the policy but cannot be disclosed. 

Look, I cover national security and intelligence issues, and in that world, you do have to respect the confidentiality of sources, but we have to be much more descriptive and specific.  It's a consumer issue.  Tell the viewer, tell the reader what are we telling you. 

MATTHEWS:  And don't send them off course by waving them off to a source by saying a former Hill staffer when you are talking about the chief of staff to the vice president. 

MEACHAM:  Right.  That was...

MATTHEWS:  We all agree on that one. 

MEACHAM:  That was a window into the first rough draft of history that was awfully rough. 

MATTHEWS:  OK.  We're learning a lot here. 

When we come back, Eastwood, Redford, Crowe, Rudy and some of the other big guns that played HARDBALL in MSNBC on 2005 on HARDBALL.

(COMMERCIAL BREAK)

MATTHEWS:  From natural disasters to national politics to the brave military men and women, who are fighting our wars around the globe, 2005 has been a year of both sacrifice and celebration. 

Here at HARDBALL we have brought you the public servants, journalists, authors, celebrities and people from all walks of life who have shared their stories and concerns about our country and the world. 

Here to conclude our look at some of the top stories of the year are some of our greatest moments HARDBALL style. 

(BEGIN VIDEOTAPE)

MATTHEWS:  I want you to do something unusual for you.  I want you to talk about the face of the late pope.  We're looking at his body coming in now.  He's in repose.  That's his body.  When he was alive, tell me about how his face taught people and spoke to people? 

MSGR. JOHN STRYNKOWSKI, ST. JAMES CATHEDRAL, BROOKLYN, NY:  Well, he had a marvelous way of using his face.  His facial expressions conveyed warmth, reaching out to people, gentleness, humor, prayer, intense prayer.  He was very much able to show his inner feelings through his face.  I suspect that goes back to his experience as an actor. 

MATTHEWS:  That's called acting.  Jerry Stiller, Ben Stiller's father, once told me that. He says that is technique.  Did the pope have technique?

STRYNKOWSKI:  He had technique, but he also had depth.  I think it's more than just technique.  It's the intensity of spirit, of prayerfulness and of genuine love for people. 

MATTHEWS:  A great actor with depth? 

STRYNKOWSKI:  Exactly. 

MATTHEWS:  Sincerity?

When you look at the Americans and the British going to war in the Middle East again and again, literally, what's the strain of you?  Are you for or against this? 

RUSSELL CROWE, ACTOR:  Well, obviously they're fully entwined with what you're doing because...

MATTHEWS:  Are you for it personally, the war in Iraq? 

CROWE:  No, I'm not.  My hand is up first every time you guys say this is what we need to do, and I know this is all going to sound extremely ironic, but, you know, I'm quite specifically anti-violence. 

NANCY REAGAN, FORMER FIRST LADY:  Ronald was very competitive.  Once he made up his mind that he was going to do something then he was very competitive.  And that didn't surprise me. 

MATTHEWS:  Was President Reagan more Jimmy Stewart or more Jimmy Cagney? 

REAGAN:  Oh.  Well, Jimmy Stewart, I think. 

MATTHEWS:  So he was really a nice guy? 

REAGAN:  He was really a nice guy. 

MATTHEWS:  You were accused of saying, I'm going to Ireland if Bush wins. 

ROBERT REDFORD, SUNDANCE FILM FESTIVAL FOUNDER:  Yes, I think that came from O'Reilly.  It wasn't true. 

MATTHEWS:  So what did you say?  How did that get, you know.

REDFORD:  I said, you've got to be kidding.  I love Ireland.  I have family heritage in Ireland, but I am an American.  I love it here, and I'm not leaving just because some barking dog on the TV there.  I'm not going to do that. 

MATTHEWS:  So you never said I'm going to Ireland if this guy wins? 

REDFORD:  No. 

MATTHEWS:  But, you know, some Hollywood celebrities do make statements.  I'm going to Australia.  You hear these things from wackier people. 

REDFORD:  Well, those aren't bad places to go.  But I think we are who we are, and we are not going to shy away from something that we need to stand up for. 

MATTHEWS:  Hillary Clinton is moving to the center in a way that it seems to be impressing some people.  She's on armed services.  She authorized the president to go to war as a senator.  She seems to be talking tough.  She seems to be talking openly about some sort of, oh, I don't know, colloquy or national conversation about abortion rights in a way that liberals in the past have not, more pro-life militants have not.

Do you think that she's a credible moderate? 

RUDY GUILIANI:  Well, I mean, I think that's what she's trying to prove, and she has a few years to do it. 

MATTHEWS:  Do you buy the act? 

GUILIANI:  Do I buy the act? 

MATTHEWS:  Yes.

GUILIANI:  Well, I have to see how it all ends up.  If this represents her position, if that is the way she's going to conduct herself in the Senate over the next year, assume she gets reelected, two years, she has an opportunity to do that.  She has an opportunity to define her positions.  Everybody does. 

UNIDENTIFIED MALE:  Arnold, be the action hero that I know you can be.  Be strong.  Stand up and confront the wealthiest one percent of Californians who have benefited $12 million—excuse me, $12 billion each year from just the Bush tax cuts alone. 

MATTHEWS:  What do you say to Warren Beatty?

GOVERNOR ARNOLD SCHWARZENEGGER, CALIFORNIA:  I love that.

All I can say is that if he promises me not to give me advice in politics I promise him not to give him advice in acting. 

MATTHEWS:  You know, Katie, television.  We all learned about this story through television.  Is that what you think inspired people to do this kind of thing? 

KATIE COURIC, NBC NEWS:  Well, I mean, nothing like those stark images we saw of people trying to leave their homes, of the houses almost completely submerged by the waters in New Orleans.  You know, houses torn apart and left like match sticks in Biloxi and other places along the Mississippi coast. 

I think those images really struck people and certainly started a national debate on a variety of issues.  And though, we in the media are often criticized for a lot of things we do or don't do, but I think in this case the immediacy of television and those pictures and the heartache and the emotion and how raw it was, it was hard for even the reporters to pride themselves on being objective, not to get emotionally involved.

MATTHEWS:  Reluctant warrior is a pretty common theme in America about war.  Do you think we've lost some of that reluctance?  I mean, do you think us going into Iraq was a smart move? 

CLINT EASTWOOD, ACTOR:  Well, I was never one of those who was enthusiastic about rushing right in there, but I do believe that probably someday in the future a preventative strikes are going to be the only option, but at this particular time I didn't think that I was for it.

But once the troops got in there I sure as hell wasn't going to be somebody who went around and disturbed things because we were risking lives of our people.  And I don't—and I'm for our people all the way.

SEN. HILLARY CLINTON, (D) NEW YORK:  Number eight, Jay Leno and I both think you're a middle-aged heart throb.  Number seven, you brought dueling back to politics where it belongs.  Number six, no steroids in your version of HARDBALL.  Number five, HARDBALL where the nuclear option is used every night. 

Number four, Bill and I watch you for your calming and soothing effect.  Number three, MSNBC should stand for must see nothing but Chris.  Number two,  desperate house members are always more interesting than Desperate Housewives.  And the number one reason to watch HARDBALL?  HARDBALL has only been on the air for 8 years.  It feels like 100. 

(END VIDEOTAPE)

MATTHEWS:  These were just a few of the notable moments from HARDBALL this year.  As we look forward to 2006, get ready for another year of issues from newsmakers around the world that touch all of our lives.

From the entire staff of HARDBALL, happy holidays.

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

END   

Content and programming copyright 2005 MSNBC.  ALL RIGHTS RESERVED.  Transcription Copyright 2005 Voxant,Inc. ALL RIGHTS  RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon MSNBC and Voxant, Inc.'s copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

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