updated 1/9/2006 10:41:48 AM ET 2006-01-09T15:41:48

Guest: John Podesta, Ed Rogers, George Casey, DeMaurice Smith, Kenneth

Gross, Michael Isikoff, Tim Burger, John Harris

CHRIS MATTHEWS, HOST:  Full speed ahead without DeLay—Republicans in Congress circulate a petition to elect a new majority leader to permanently replace Tom DeLay of Texas.  The man who made Republicans walk in fear now has them running away in fear. 

Let's play HARDBALL.

Good evening.  I'm Chris Matthews. 

The political drumbeat is deafening.

Tonight, House Republicans are scrambling to permanently replace Tom DeLay as their majority leader.  This on the evening of the day that the “Wall Street Journal”'s op-ed page called for Republicans to clean house, adding, “they seem clueless about the meeting of Abramoff, and if GOP leaders are too insulated to realize this, then Republicans need new leaders right away.”  That's the “Wall Street Journal”'s editorial page.

Well, it's clear Republicans read the papers this morning, because this is—at this very moment an effort is under way in the House to force a vote for new leadership in an effort to block Tom DeLay from ever reclaiming his post as majority leader. 

NBC's Capitol Hill correspondent Mike Viqueira has the latest on the brewing GOP mutiny. 

MIKE VIQUEIRA, NBC NEWS CAPITOL HILL CORRESPONDENT:  That's right, Chris.

The dam appears to be breaking around Tom DeLay's tenure as majority leader and perhaps his time here in Congress. 

Two House conservatives—I'm sorry, two House Republicans, one conservative and one moderate—Jeff Flake, the conservative from Arizona, Charlie Bass, a moderate from New Hampshire—have begun circulating a petition that if they achieve 50 signatures out of the 232 House Republicans would force an election when the House comes back into session on January 31st.  They want to force an election, have an election for a majority leader.  They say that this tenure right now, it is untenable, they cannot have someone acting as majority leader; things need to get settled. 

Of course, the clouds have been darkening over Tom DeLay consistently over the last several months.  First, of course, forced to resign as majority leader when he was indicted in that separate case down in Texas.  Now many of his closest former associates implicated in the court papers charging Abramoff just this last Tuesday.

The clouds darkening around DeLay.  Many feel that it is time for him to go. 

Perhaps an indication of how deeply this is going to start running in the House, two people known as staunch conservatives are backing away from DeLay tonight. 

One is John Kline, a former Marine officer.  He is a second term member from Minnesota.  He says tonight that he will sign the petition to try to force new elections. 

Another is Jo Ann Davis, a very conservative member from the Tidewater area of Virginia.  She says that she's going to give back as many as—as much as $10,000 of DeLay PAC money that was given four and five years ago, a startling move from someone like Davis.  This is Tom DeLay's leadership PAC she's giving money back to that has so far not been implicated in any wrongdoing.

So things could be coming to a head in the next couple of weeks.  That petition that I'm talking about so far only has about two dozen signatures.  But when you keep in mind that one of the moderates leading this, Charlie Bass, is the leader of the moderate caucus—they call themselves the Tuesday Group in the House, that group has as many as 50 members. 

Plus, Jeff Flake is reaching out to Republicans, conservative Republicans within the conference.  They could get to 50 in relatively short order, Chris. 

MATTHEWS:  Well, Charlie Bass is out there and Flake is out there and you've got the member from Virginia and also Kline from Minnesota. 

What's Tom DeLay doing right now to take it?  Is he just going to lay down and get beaten here? 

VIQUEIRA:  I don't think so. 

You know, I think that they are huddling right now trying to figure out their strategy might be. 

As of right now, his spokesman Kevin Madden has put out a statement saying that though Tom DeLay appreciates the support of the majority of those in his conference, here he's making an allusion to the fact that still there are only two dozen signatories to this petition. 

He says that he is grateful that they want him to continue to fulfill his responsibilities of majority leader.  That's putting the best face on things for the time being.

But it appears from all indications that this election is going to be forced when the House comes back on January 31st

Remember, January 31st is the latest that the House will have returned since 1933, and the expectation or the implication of that late arrival was they wanted to give Tom DeLay all the time in the world they could to get clear of those Texas charges.  That's what he wanted to do. 

He said, “Just give me some time.  I'm going to file these motions.  I'm going to be exonerated down there.”  Then the other shoe dropped on Tuesday with the Abramoff indictment. 

Things are not looking good for DeLay at the moment, Chris. 

MATTHEWS:  OK. 

Thank you very much, Mike Viqueira, up on the Hill. 

And check out the bottom of your screen because again tonight we're running the list of lawmakers who received contributions from Jack Abramoff and are giving them back or donating them, those who plan on returning or donating money from Abramoff's clients, and finally, the politicians who refuse to return any donations.  It's almost like the school closing announcements this fall—this winter. 

Now HARDBALL's David Shuster has this report on how today's events unfolded and why the move against DeLay, which is going on right as we speak, is such a significant development in the Abramoff corruption scandal. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  He is known as “The Hammer” because of the ruthless way he acquires power and smashes his opponents. 

U.S. REP. TOM DELAY (R-TX), FORMER HOUSE MAJORITY LEADER:  No ideas, no leadership, no agenda, and in just the last week we can now add to that list, no class. 

SHUSTER:  And last fall, after he was indicted in Texas, House Majority Leader Tom DeLay said on HARDBALL the money laundering charges were part of a Democratic Party conspiracy. 

(BEGIN VIDEO CLIP)

MATTHEWS:  And you believe that this is a political vendetta? 

DELAY:  Oh, I know it is. 

MATTHEWS:  A coordinated vendetta by the House Democratic leadership here in Washington? 

DELAY:  And Democrat leadership in Texas and Ronnie Earle. 

(END VIDEO CLIP)

SHUSTER:  But now that DeLay's favorite lobbyist Jack Abramoff has admitted bribing members of Congress and breaking laws against corruption, Tom DeLay is in trouble.

On the crime and punishment front, Abramoff and his partner Michael Scanlon, DeLay's former press secretary, are cooperating with prosecutors and are believed to have information that could implicate DeLay. 

The lobbyist gave DeLay and his family a variety of perks and gifts, including several trips to an exclusive golfing resort in Scotland. 

DeLay's wife Christine was put on Abramoff's payroll and paid over three years $115,000.  What was her job?  Her attorney says it was to contact members of Congress to find out their favorite charity. 

And as House majority leader, Tom DeLay often looked to advance Abramoff's agenda. 

On top of the potential legal problems, this morning on the political front, DeLay woke up to news that his colleagues are now plotting how to get rid of him. 

And the “Wall Street Journal” editorial page, which is influential in the GOP, spoke of cleaning house.

However, the leading replacements, including acting majority leader Roy Blunt and Education Committee Chairman John Boehner, also received money from Abramoff.

And some conservatives are calling for a complete break. 

This week, more than 40 lawmakers have given up money they received from Abramoff, but some of the money he raised for them from questionable sources is being capped. 

Congressman Bob Ney, who has been notified he may be indicted, gave up $6,500 from Abramoff and Scanlon, but that leaves $24,000 Ney received from Abramoff's tribal clients. 

President Bush's election campaign has given up $6,000 that came directly from Abramoff, but that leaves $100,000 Abramoff raised as a Bush-Cheney Pioneer. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  Since he raised the money and you don't know what was involved in raising that money, does that not put a taint or a cloud over it? 

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY:  I think that it's keeping with past practice and they took the appropriate step. 

UNIDENTIFIED FEMALE:  (INAUDIBLE) all of it back?

MCCLELLAN:  Go ahead, John (ph).

(END VIDEO CLIP)

SHUSTER:  This week, the White House said President Bush may have met Jack Abramoff at holiday parties. 

MCCLELLAN:  And the president doesn't recall meeting him.  He certainly doesn't know him. 

SHUSTER:  But the “Texas Observer” reported last fall that Abramoff met President Bush during a meeting three years ago with two of Abramoff's tribal chief clients. 

Furthermore, anti-tax crusader Grover Norquist, an Abramoff friend from their days as college Republicans, acknowledged arranging the Bush meeting in letters to Abramoff's tribes.  Norquist has denied, however, the $25,000 check the tribes gave him was a fee for setting up the White House visit. 

And with all the taint that may now be following Grover Norquist, Tom DeLay and others, the “Washington Post” today accused Jack Abramoff of dressing like a mobster—quote, “Abramoff has had a full-blown aesthetic meltdown.  He has leapt into an abyss of ill-fitting coats, mobster flourishes and Peter Pan headgear.  The once high-flying deal maker is going down, and there is nothing dignified about the descent.” 

(on camera):  Once upon a time, a villain like Jack Abramoff might have ended up wearing tar and feathers.  In this day and age, it will be a prison uniform.

But at the moment, though, Abramoff is busy dining out members of Congress as this city braces for the legal and political impact. 

I'm David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  We've got Ed Rogers and we have John Podesta joining us now, two people of different stripe. 

Podesta, is this cause for exhilaration on the Democratic side, the apparent plight of this man? 

JOHN PODESTA, FMR. CLINTON CHIEF OF STAFF:  Well, I think we're certainly seeing a rapid decline of both Tom DeLay and obviously last week of Jack Abramoff.

But, you know, I think it's more a question of sadness for the American public, that this whole system was built up since 1994 -- you know, it was part of a system of corruption that—a pay for play system that was really designed by Republican leadership led by Tom DeLay, but not only—including Tom DeLay...

(CROSSTALK)

MATTHEWS:  OK.  Explain to me what's new here. 

I mean, everybody knows a lobbyist gets paid by a corporation or a trade association or a series of clients as an agent to basically develop personal relationships with members of the House and the Senate, and to be able to get in the door when he has to, to make a case. 

Where does the law get broken? 

PODESTA:  Well, I think in his case, I think there was clearly quid pro quo going on in some of the transactions, or at least that's what the indictment looks like. 

MATTHEWS:  Name one.

PODESTA:  Well, I think it looks like—I think Mr. Ney from Ohio looks like he's in pretty serious trouble on that question.

MATTHEWS:  You mean running those ads in the Congressional Record.

PODESTA:  Right.  Running ads in the Congressional Record, giving contracts to Mr. Abramoff's clients, taking golf trips to Scotland.  I think he's probably in pretty serious trouble.  You saw last month, not involving Mr. Abramoff, but another.  Duke Cunningham pleading guilty out in California. 

MATTHEWS:  The guy wearing a wire.

(CROSSTALK)

PODESTA:  Just found out he's wearing a wire.  Who knows what he was on the House floor talking to some of his colleagues. 

(CROSSTALK)

PODESTA:  “The San Diego Union” implicates the chairman of the Appropriations Committee, the chairman of the Armed Service Committee, in that investigation.  So I think there's a lot more to be—come out in these related scandals.

But I think the real—I come back to my earlier point.  These guys designed a system.  They call it the Kay Street Project.  Ed knows a lot about this.  To say, you had to go to our preferred lobbyist, you had to pay to play and you got favors in return. 

MATTHEWS:  If you want a Republican Congressman to help you, you have to hire a Republican lobbyist and no Democrat. 

PODESTA:  They tried to get the Democrats out of the system.

MATTHEWS:  They were trying to corner the market on sleaze and you guys are upset, right?  Where's our action here? 

PODESTA:  Chris, you can kid around about it, but you see what was built and you see the corruption that resulted, and I think now they're going to pay a very, very heavy price. 

MATTHEWS:  So you believe that power tends to corrupt and absolute power corrupts absolutely? 

PODESTA:  Oh,  you know, Mr. DeLay is a pretty good example of that.

MATTHEWS:  OK.  Do you think that's the problem here, Ed Rogers?

ED ROGERS, REPUBLICAN STRATEGIST:  What's the problem?

MATTHEWS:  Is the problem that there's been too much power accumulated on Capitol Hill by one party? 

ROGERS:  I don't think...

MATTHEWS:  That's his point. 

ROGERS:  Well, if that's his point...

MATTHEWS:  Well, debate it. 

ROGERS:  I have a lot of respect for what John has to say.  But, no, I don't think the problem is that the American people have voted Republicans into office.  I don't think that's the problem at all.

(CROSSTALK) 

ROGERS:  I know it is hard to make this point, and hyperbole on this Abramoff matter is off the charts and there's no appetite for this, but that guy was an aberration.  That guy had a weird deal...

MATTHEWS:  A bad apple. 

ROGERS:  ...with a bunch of Indian casinos that had more money than sense that sloshed around this town for a B team, C team actor like Jack Abramoff to spread it around. 

MATTHEWS:  Well, look at this guy though.

(CROSSTALK)

MATTHEWS:  Here he is.  Well, I don't want to go by appearances.

ROGERS:  He's a cartoon. 

MATTHEWS:  Yes.

ROGERS:  He's a cartoon.  I don't know the guy.  I've never met the guy.

MATTHEWS:  Yes, he's been running a crawl the last couple of nights of donations that have been given back.  It's running right as we are talking right now on the bottom of this screen.

I mean he did spread a lot of money around.  I mean 200 and some members of Congress all got over $1,000 from this guy and a lot more in some cases.

ROGERS:  Yes.  I've been a lobbyist in this town.  John's been a lobbyist in this town.  I've never heard of a lot of what he has done.  He was an aberration. 

Having said that, some careers are going to end.  Some things need to be corrected that haven't been corrected.  Some people are going to have to pay a price for things that they've done wrong.  You know, I don't want the Republicans to panic.  I don't want anybody to over react, and we've all been in Washington a long time, these things come and go. 

MATTHEWS:  OK.  Let's talk about that.  You get a favor from a lobbyist friend, here's Tom DeLay, a man who is really on the skillet tonight.  A guy who used to work for him. 

A Congressman once said to me the most dangerous people in the world are your former staffers because they'll come to you with a deal.  This guy wants to send you to Scotland for three days.  It's totally clean.  Everything is on the upright.  It's all paid for by this cause that cares about it.  You have a couple meetings and talk about issues, totally legal.

And you find out later it was some Indian tribe that paid for the damn thing or some Russian pipeline paid for it.  That's the problem, isn't it?  The DeLays right now? 

PODESTA:  Well, these guys aren't all just little lambs wandering out, you know.  The members, I think, who are really at the center of this implication...

MATTHEWS:  But why would they blatantly break the law?  Why would a member of Congress, like Tom DeLay, who's got a job for life, why would he break the law? 

PODESTA:  They were skating on the edge.  They were drunk with power. 

DeLay, himself, and I think Rick Santorum over on the Senate side created this whole Kay Street Project that said we can hold on to this power, we can run this place forever, if we just make sure our friends on Kay Street have the inside track that if you need to do business in Washington, you go to our guys.  They pay us back with both campaign contributions and favors. 

And I think they created a corrupt...

MATTHEWS:  Here's two guys you just mentioned.  And this is classic for Washington.  You have one guy, Tom DeLay, who lives in some sort of 20th floor apartment way down on route 95, nothing special at all.  I mean really lives basically like a regular middle class person, OK?  He doesn't live well at all. 

You've got Rick Santorum that raises his kids, lives out about 50 miles from Washington somewhere out in Mclean or further out in Fairfax.  The guy really does commute a long distance so he can do whatever he's doing with his kids, probably home schooling now.

But the fact is neither one of them lives that well, so how do you explain these two guys make no money really and yet they have all this power.  And they're now looking like you are saying they're corrupt. 

(CROSSTALK)

PODESTA:  DeLay has been indicted. 

(CROSSTALK)   

ROGERS:  ...is gratuitous and partisan.  I mean, the fact is Tom DeLay is in a forum now where all the accusations against him can be brought forward, and the notion that it's no secret that most members of Congress don't live any type of lavish lifestyle.  They really don't. 

(CROSSTALK)   

MATTHEWS:  They very often brought the money with them.

ROGERS:  Very often if they bring the money with them that's very different.  But Tom DeLay's lifestyle is certainly not on trial. 

PODESTA:  Tom DeLay's lifestyle is not on trial, but he's going on trial, and...

(CROSSTALK)   

PODESTA:  Is Tom DeLay a crook?  Well, I think that the jury in Texas will...

ROGERS:  Absolutely not.

PODESTA:  ...figure that out.  And I think there is pretty good evidence that he is a crook.

MATTHEWS:  So you think he is a crook?

PODESTA:  Yes, I think that the scheme in Texas, of moving the money to the RNA and then back down to those...

(CROSSTALK)   

MATTHEWS:  Now John Podesta, can I get you to say the word?  Is he a crook? 

PODESTA:  Tom DeLay, I believe, is a cook. 

ROGERS: Manipulating campaign finance laws is something John Podesta should know something about. 

MATTHEWS:  Oh God.  Come on.  Now what do you mean by that? 

ROGERS:  What I mean by that is John just spent the last election cycle in the service of one odd billionaire, trying to manipulate the American presidential election. 

PODESTA:  Oh, that's unfair. 

ROGERS:  Is it unfair?

PODESTA:  Yes, it's totally unfair. 

ROGERS:  OK.  Then tell me why it's unfair. 

(CROSSTALK)   

ROGERS:  Yes. 

PODESTA:  I run a think tank.  I wasn't participating in the election in any sense.  Soros is a contributor of mine, but he's not a major contributor of mine.  So I think it's just unfair.  And if you want to take him on...

MATTHEWS:  Do you have any rich clients?

We'll be right back. 

ROGERS:  ...none of them that could manipulate the outcome of the American election.

MATTHEWS:  Well, he didn't do too well, did he?

Anyway thank Ed Rogers, John Podesta.  You're watching HARDBALL on

MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back.  We are talking to Ed Rogers, a Republican strategist and former adviser to President Bush, 41.  That's the first President Bush, and former chief of staffer President Clinton, John Podesta.  We got some heavyweights here.

Now let's not get over this who is bad here.  You guys are not targets of this investigation so let's move out to the bigger question.  Who's going to benefit more from this current basking in sleaze?  Is this going to on?  If we've got four or five Congressman—we've already Duke Cunningham on trial.  We're going to have—it looks like this guy Robert Ney has got problems.  It looks like Tom DeLay is gone as leader. 

A lot of bad things happening in the Republican party, but who's going to pick up the pieces?  Will it be John McCain, Republican maverick, who has always been Mr. Reformer and has great press, or is it going to be somebody on the Democratic side?  Who wants to start here?

ROGERS:  Some of both.  Hey, I don't want to try to whitewash this.  I mean, we're going to have some talking points, to suggest this is a bipartisan problem and we're going to chase around every single Democrat that ever got a penny from Jack Abramoff.  Having said that, we've got the burden on this matter.

MATTHEWS:  So you've got a couple on that list already.  Who have you got?  You've got two guys on that list. 

ROGERS:  We have got the burden on this matter.  There's no question that the Republicans have a higher mountain to climb here and we have the burden of governance.  We have to offer up a reformed and corrected agenda and we shouldn't do that in the short term in a panicked kind of way. 

We ought to wait, let this thing play out.  It's—a couple of shoes have dropped in the last couple of days.  Over the next few weeks, it's going to be raining shoes. 

(CROSSTALK)

MATTHEWS:  The average person out there says you guys on the Hill, you people in the Washington establishment, you pass all these reforms.  Every year there's another reform and then on top of another reform, on top reform. 

And you still have guys sleazing around down there making money off the system.  If the problem is laws have been broken, enforce the laws, kick the people out who broke them.  You don't need new laws, do you?  Do you think you need new laws?

ROGERS:  I think you at least need to do the former and yes, the people are going to expect some more remedial actions. 

MATTHEWS:  What law would you pass?

ROGERS:  I like some of the Gingrich reform initiative.  I think more reporting, I think reforms in the Senate are in order.

MATTHEWS:  But you already have requirements, don't you? 

(CROSSTALK)

ROGERS:  Enforcing all the old laws needs to be number one, no question about that. 

MATTHEWS:  OK.  Let me ask you a question.  Should a senator or a Congressperson who gets offered to go give a speech somewhere—I don't care if it's Davos or if it's the McKinley (ph) Golf Club.  And they get paid—they can't take money anymore, so if they go to give a speech, can they bring their wife and stay two days?  Do you think that's corruption? 

ROGERS:  You know, I certainly hope so, but I think it ...

MATTHEWS:  Corruption?  You think that's corruption?

ROGERS:  No, I—no, I don't think it is.  I think they should be able to do that.  I think it should be reported on a real-time basis and let their voters decide, fully aware of what has transpired, of whether or not it's corruption or not. 

MATTHEWS:  Do you think that's good enough reporting under the laws? 

PODESTA:  No, I think that they need to go further.  First of all, I think the House in particular has created a system now in which legislation is passed at midnight, they've wrapped this thing up with these earmarks, which people—which I think are a particular subject of abuse.  They come in with a lobbyist, they get a contract or an earmark in the Appropriations Committee ...

MATTHEWS:  So that's means like $100,000, two million bucks goes to a particular hospital or ... 

PODESTA:  Goes to a particular hospital or a particular this or that or a particular Indian tribe or whatever, particular company. 

ROGERS:  Yes, but that's people looking out for their constituents. 

That isn't lobbyist-driven.  It's just not.

PODESTA:  But ...

MATTHEWS:  Do you think that's wrong? 

PODESTA:  ... what's ended up happening is that happens during the middle of the night.  People haven't read the legislation.

ROGERS:  That's something new.

PODESTA:  It's exploded and gotten out of control and I think Dave Obey and some of his colleagues have put forward a package that both says former members shouldn't come and lobby on the floor, that legislation should—legislation ...

MATTHEWS:  There's a company in Washington, Cassidy & Associates. 

It's advertisers that does this stuff. 

PODESTA:  Exactly.  But I think that ...

MATTHEWS:  It's publicly known that they earmark and get money for hospitals and universities that way. 

PODESTA:  But you can restrain that, you can make sure that members have a chance to look at the legislation. 

MATTHEWS:  Right, OK.  Let me ask you—very good argument here.  Let me ask you this, John.  Do you think Tom DeLay will be leader of the House this year? 

PODESTA:  No. 

MATTHEWS:  Do you think he'll be leader of the House?

ROGERS:  Probably not. 

MATTHEWS:  Probably not.  You say he's a crook. 

PODESTA:  Yes. 

MATTHEWS:  And you say he's not a crook? 

ROGERS:  I say he is by no means a crook, never been a crook, never been accused of being a crook. 

PODESTA:  Sure he's been accused.  He's indicted, right?

ROGERS:  But I think we're in a bad political environment.  I think we're in a bad political environment.

PODESTA:  And how can a person who's been indicted ...

ROGERS:  Hey, he's been indicted by a well-known ...

MATTHEWS:  But that doesn't mean you're guilty.

ROGERS:  ... by a well-known ...

(CROSSTALK)

MATTHEWS:  Can I remind you that President Clinton was impeached ...

ROGERS:  On your watch.

MATTHEWS:  ... but he wasn't convicted.  There's a difference between impeachment ...

PODESTA:  He was acquitted. 

MATTHEWS:  ... and indictment.  Well, he's acquitted according to the Scottish rule or whatever the hell it was.  Anyway, thank you Ed Rogers.  Thank you John Podesta.

Up next, the commanding general of coalition forces in Iraq says we're winning the war despite the surge in violence over the last couple of days.  We'll find out what that means with our troops.  You're watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back.  The U.S. military announced today the deaths of six more American troops in Iraq, bringing to 13 the number of U.S.  troops killed in the first six days of 2006.  MSNBC's chief Washington correspondent Norah O'Donnell sat down earlier today with the top man over there, the American commander in Iraq, General George Casey—Norah. 

NORAH O'DONNELL, MSNBC CHIEF WASHINGTON CORRESPONDENT:  Well, good evening, Chris.  They called yesterday in Iraq a bloody Thursday for a reason -- 180 people dead, as you mentioned, a number of our men and women who were serving over there.  General Casey said today that the spike in violence is, quote, “clearly not progress,” but he does insist we are winning the war in Iraq. 

(BEGIN VIDEO CLIP)

GEN. GEORGE CASEY JR., COMMANDER, MULTI-NATIONAL FORCE IN IRAQ:  I

don't think that we should allow ourselves to be distracted by this spike in violence, because that's exactly what the terrorists want.  And if you think back to the progress in Iraq that has been made over the last year, we shouldn't let this overshadow it, Norah. 

O'DONNELL:  But when 180 people are killed in two days, how can you describe that as progress? 

CASEY:  That clearly is not progress.  But what I'm telling you, Norah, is that that's exactly the mindset that the insurgents and the terrorists are trying to put in people's minds. 

O'DONNELL:  So this is a scenario under which that you would have to increase troop levels in Iraq? 

CASEY:  Certainly.  That's why—exactly one of the brigades that we kept out of Iraq is a call forward force in Kuwait, and I'm—it's a standard military method to have a force that you can hedge against the uncertainty and there is uncertainty in Iraq. 

O'DONNELL:  The president likes to says when the Iraqis stand up, we will stand down.  When are they going to stand up? 

CASEY:  I think that—by the summer I think almost three-quarters of the Iraqi brigades will be in a position to take the lead. 

O'DONNELL:  When do you make your next recommendation to the president? 

CASEY:  I'm looking at the spring, probably not before the spring. 

O'DONNELL:  And when you have those conversations with the secretary of defense of the president, does he ever say to you—well, what does he say to you? 

CASEY:  I'm not going to talk about what he says to me and what I say to the president and the secretary. 

O'DONNELL:  Does he say when can we bring more troops home? 

CASEY:  I have never been directed by the president or the secretary to bring troops home. 

O'DONNELL:  Congressman Jack Murtha, a former marine, has recently said that if he were to ask to rejoin the military again, he would not.

CASEY:  I haven't seen what he said.  But if he said that, especially at a time of war against an enemy who has threatened our way of life, I think that's very damaging. 

O'DONNELL:  Well, General Casey today, following the lead of Joint Chiefs Chairman Pete Pace who yesterday said Murtha's comments are damaging to recruits, damaging to morale and damaging to the families who, quote, “believe in what they're doing to service this country.” 

Chris? 

MATTHEWS:  Well, that's a tough response on Murtha there. 

Thank you very much, Norah O'Donnell. 

Up next, as scores of senators and congressmen dump campaign cash from Jack Abramoff and his clients, charities are reaping the benefits as members give their money to charity. 

We'll talk about campaign cash and the members of Congress who aren't giving back the money from Abramoff when we return.  You're watching “Hardball” on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to “Hardball.” 

In an attempt to distance themselves from fallen superlobbyist Jack Abramoff, members of Congress are rushing to unload what could be perceived as tainted political contributions by lobbyists.  The loss of the lobbyists' money, of course, is a big gain for the charities as all these guys are giving their money to charities. 

But the question is:  Will these gestures make the politicians look any less guilty? 

Ken Gross is an election law attorney, and DeMaurice Smith is a former federal prosecutor.  DeMaurice, you've been on before.  You're next. 

You get money from a guy three, four years ago in the cycle of 2004-2002, and you see that the guy's thinking, this guy Abramoff, he's talking to the feds, so you write a check for $5,000 to some soup kitchen.  How does that clean you up? 

DEMAURICE SMITH, FORMER FEDERAL PROSECUTOR:  It doesn't.  The issue is still going to remain:  What did you do if there was anything that you were supposed to do in exchange for this money?  It's not going to clean up.

MATTHEWS:  So during the period of time you had the money...

SMITH:  At the time that you took it, that's the critical thing. 

MATTHEWS:  What's the period of time, five, eight, 10 days? 

SMITH:  Well, it's not.  It's not a limitation. 

The jury is going to be looking at—prosecutors are going to be looking at—was this money given with an idea that you were going to do something in exchange?

MATTHEWS:  That's not bribery, what is it?  It's not bribery unless you say if you do this, I'll do that.

SMITH:  Well, it sure is bribery.  If you say I'm going to take this money in exchange for doing something...

MATTHEWS:  Yes, the exchange part.  Does that have to be verbal? 

SMITH:  No.  Absolutely not. 

Does it make it harder to prove if it's not?  Can it be an e-mail between two people—yes, I will do X for Y?  Absolutely.  It doesn't have to be a conversation. 

MATTHEWS:  OK, let me ask you this:  Suppose a member of Congress is about to vote for some military appropriation and he always intended to because he's a hawk anyway, and his district represents a lot people who would make money on defense contracts.  So somebody from Boeing comes in or Grumman or something and gives him a check for $10,000 or $20,000 for some trip somewhere, some personal money—but he already intended to vote that way, is that criminal? 

KENNETH GROSS, ELECTION LAW ATTORNEY:  If you can show there's a pattern of conduct that he's been voting this way, that's going to be a defense.  You're not going to be able to make a quid pro quo every time a contribution goes to somebody and a favor comes back the other way. 

MATTHEWS:  OK.  Is it libel if you give the money to a person in the form of a campaign contribution—not cash, not for himself?  I mean, let's face it—the National Education Association, the American Federation of Teachers, every labor group, every corporate PAC, every trade association, gives money to politicians with the idea they're going to vote their way.  What's new here?  What's criminal?

SMITH:  Well, it's criminal if that money is given and it is an exchange, a quid pro quo.  That is the law. 

MATTHEWS:  AARP gives you money—the American Association of Retired People—so you'll vote to keep Social Security benefits high.

SMITH:  Well, if that money is given to educate congressmen, to make them understand what the issues are, absolutely not.  That's not criminal.

MATTHEWS:  No, I'm talking about if they paid to vote their way.

SMITH:  If it's a quid pro quo—I'm going to take this money; this is what I'm going to do for you—that's an exchange.  The law is going to find that...

MATTHEWS:  COPE, the Committee on Political Education of all the labor unions, they give—every year they have a rating on whether you voted with them or not.  It's usually up to 90 percent with Democrats, maybe 100 percent, with the idea they're going to get a lot of labor money.

So they give them a lot of labor money, they vote 100 percent for the unions.  Is that a bribery? 

GROSS:  If that's a bribe, we'll solve the traffic problems in Washington, D.C., overnight. 

(LAUGHTER)

MATTHEWS:  Because everyone's going to jail?

GROSS:  Right.

MATTHEWS:  How come I don't get the distinction?  Maybe I do, but you make it sound like if I give you $5,000 -- I max out as a corporate entity or as a PAC and I give you $5,000 on Tuesday and you vote Thursday night my way with the yea vote, you say that could be criminal? 

SMITH:  No.  What I'm saying is the critical issue is the intent.  If the money is just being given and it's part of a different program, but if it is something where I say, Chris, you know what, here is $10,000 and this is what I need for you to do:  I need you to vote this way on this bill and in exchange for that, I'm going to give you another $10,000. 

MATTHEWS:  So it has to be verbal? 

SMITH:  There has to be a clear expression of an intent.  And it doesn't have to be verbal.  If I wrote that down on a note or sent you a nice letter or gave you a card with it. 

MATTHEWS:  So there has to be some evidence of a deal? 

SMITH:  Absolutely. 

MATTHEWS:  So there has to be a deal. 

SMITH:  Absolutely.

MATTHEWS:  Abramoff, what did he do wrong? 

GROSS:  Well, there may have been a deal.  I mean, he did a few things wrong.  There's tax problems that he admitted to. 

MATTHEWS:  No, I'm talking about congressmen who said nice things in the record to discredit somebody who is up against a business employer.  Unfortunately, the congressman is from Ohio, and he normally wouldn't be saying anything in the congressional record about some Sunburst, or whatever the name is of this casino down there, right?

GROSS:  What he did wrong was, with intent, he provided benefits, both contributions and personal benefits—golf trips and otherwise—with the specific intent of getting something in return, a statement in the public record, something that will be helpful to his client.  And that's what he plead guilty to.

MATTHEWS:  Is that how you see it? 

SMITH:  Absolutely.  Absolutely. 

MATTHEWS:  How do you prove what we were just talking about?  Let me introduce another party here, not just a briber or the bribee, but the staff assistant, who might be in the room, how does that person fit in? 

SMITH:  Well, that person could certainly be the government's best witness if the allegation is that something was given in exchange for that vote. 

So the issues here are going to be emails, expense reports, other witnesses.  And according at least to one report recently in “Time,” if somebody was wearing a wire and recorded that conversation...

MATTHEWS:  We're talking about Duke Cunningham. 

SMITH:  ...that could absolutely be drop dead bombshell evidence. 

MATTHEWS:  So he could walk out to another member of Congress, a Republican from California, and say the fix is in, if we do this, we get that? 

SMITH:  Well, there's a lot of issues that are going to be raised. 

MATTHEWS:  Is that what he would say? 

SMITH:  But certainly if there is a conversation that is recorded, each and every time, that is going to be the best evidence the prosecutors could ever have. 

MATTHEWS:  So you are talking about these guys.  Actually this guy, Duke Cunningham, may have worn a wire right into the Republican cloak room. 

GROSS:  He could have.  I mean I think the speech and debate clause might come into play if he is talking to other members of Congress.  But certainly to get the defense contract...

MATTHEWS:  Would they be immune from criminality?

GROSS:  ...there may be conflicts with getting that testimony against him. 

MATTHEWS:  Yes, but good luck if it's overheard by their constituents in the meantime. 

GROSS:  If it finds itself in the 30 second ad, you have got problems. 

MATTHEWS:  They might be defeated in other ways. 

Anyway thank you Ken Gross.  Thanks for joining us, DeMaurice Smith, as always. 

Up next, more on the Abramoff scandal coming up.  Michael Isikoff, one of the toughest investigators in the business and John Harris of “The Washington Post” will be here. 

Plus, “Time Magazine” report tonight.  The disgraced Congressman Duke Cunningham of California, quote, “wore a wire,” we're talking about Donnie Brasco stuff here, to help investigators gather evidence before he copped his own plea, guilty plea, last November. 

He's coming here to tell us, Tim Burger, about the wire that the Congressman wore to nail other Congressmen perhaps.  You're watching HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.

Lawmakers are practically tripping over each other to run away from any association with lobbyist Jack Abramoff.  Now word on the Hill tonight with House members they are putting the wheels are in motion right now to force a vote for a new leader up there to dump Tom DeLay. 

Anyway, we have got John Harris coming here for “The Washington Post.” We have got “Newsweek's” Michael Isikoff sitting in front of me.  And “Time Magazine's” Tim Burger, who reports tonight, and this is the hottest story we've heard tonight.

The disgraced Congressman Duke Cunningham, who is on his way out, a California Congressman, wore a wire, just like in the movies, to help investigators gather evidence just before pleading guilty to taking bribes. 

So we have to go to you, Tim.  What was he wearing a wire for?  Who was in the room when he was wearing it? 

TIM BURGER, TIME:  That's the question of the hour and that's had for a few weeks.  People buzzing on the Hill and in the lobbying community.  Who was he targeting? 

And I think that, you know, when that comes out, it will be pretty interesting.  I don't know if we should necessarily assume that, you know, that he went into the cloak room.  You know, I wouldn't be assuming that at this point. 

MATTHEWS:  How about members of Congress present when he was taping? 

BURGER:  That's what I mean.  You know, I wouldn't assume that he went into the inter council of the House of Representatives. 

MATTHEWS:  So you think he might have been taped talking to lobbyists? 

BURGER:  It's possible. 

MATTHEWS:  How much do you got here, buddy?  Is that all you've got?

He wore a wire but you don't know where he wore it? 

BURGER:  We printed our story and stay tuned. 

MATTHEWS:  No, it is a good lead-in, but do you have anything more on this, who he was wearing the wire for.  Let me ask you one more qualifying question, related question, did he wear the wire as a condition of getting his plea bargain? 

BURGER:  Well, it's clear that it was part of his cooperation.  I mean they will always let you plead.  What they'll tell you with and what they'll tell you you'll get out of the plea is the thing.  So he may well have gotten some more leniency, but he hasn't been sentenced yet, so he has got a long road before he finds out what he gets out of it. 

MATTHEWS:  But when he did his full Jimmy Swaggart on television, the total contrition, the crying and everything, you mean to tell me while he was doing that, he had just come off of basically playing spy against other people involved in his corruption? 

BURGER:  Precisely.  You got it. 

MATTHEWS:  It's interesting how you combine contrition with espionage. 

BURGER:  Well, that may be part of what he was talking about when he said he had a great shame that day. 

MATTHEWS:  Let me go right now to John Harris. 

John, who is going to be the next majority of the House of Representatives now that DeLay is on his way out? 

JOHN HARRIS, THE WASHINGTON POST:  Well, I was going to say that we don't know for sure that it's not going to be DeLay, but I'm not putting any of my money on that. 

I think probably the current temporary leader Blunt has got the leg up, but there's going to be clearly a very intense race for that.  And everybody on the Hill is assuming that DeLay despite his claims that he wants to stay is consigned to the past. 

MATTHEWS:  What is it, Michael, that brought DeLay down?  If you had to explain it in a civics class to high school kids, what did Tom DeLay do wrong that has cost him his tremendous preeminent leadership of Congress? 

MICHAEL ISIKOFF, NEWSWEEK:  I think the perception of excess and

arrogance.  I mean, you had steady accumulation of ethics charges against

him going back for five, six years.  And I mean he would fight them, piece

by piece, but you know, these things take their toll.

And you know, it seems like ages ago now, but it was just a little over a year and a half ago when the House Ethics Committee cited him four infractions on multiple occasions involving legislation before Congress and...

MATTHEWS:  So he was skating back then? 

ISIKOFF: Yes. 

And then on top of that, you have the Jack Abramoff scandal, which, you know, sort of has vividly personified what is widely described as the culture of corruption in Congress. 

And who is Jack Abramoff's best friend in Congress?  It was Tom DeLay.  Who did he have the most access to?  It was Tom DeLay and Tom DeLay's staff.

And then also, you know, you have the indictment in Texas brought by, you know, an admittedly Democratic prosecutor, but still, I mean, these things stay in the headlines, they take their toll as, you know, the drip, drip, drip effect, I think has led us to where Tom DeLay is in the leadership's (INAUDIBLE). 

MATTHEWS:  You know, Tim, I want to follow up on the Duke Cunningham thing because it's the hottest thing coming tonight. 

Duke Cunningham in big trouble, on his way out of Congress.  He's lost his boat, his Rolls Royce, his house, everything that he got and all of his ill-gotten goods. 

Do you know if he was wearing his wire with regard to his conversations—during his conversations with defense contractors? 

BURGER:  Well, that's what the investigation that has sort of cast him out of Congress, and as you say, seized his goods.  That's what the investigation is looking at.

So we say in our piece that the Bureau is believed to continue its investigation into the defense contracting.  There's a lot of contractors out in California. 

MATTHEWS:  Mike, do you believe—maybe Macy's can't talk to Gimbles (ph) here, but you're “Newsweek” and maybe you have something.

Do you have something you will be reporting or can give to us right now—all the better—about who he was wired to listen to? 

ISIKOFF:  No.  On the Cunningham thing, no. 

I mean, I just—it seems to me that it is, you know, far more likely that he was targeting defense contractors than members of Congress.  That's something the FBI, which has been very aggressive in that field, becoming more aggressive in that field, would be very interested in. 

To wire him up against members of Congress, it's possible, but that seems like a pretty brazen intrusion into another branch of government. 

(CROSSTALK)

MATTHEWS:  It would also alleviate maybe 30 years from his prison sentence. 

ISIKOFF:  Well, he could get—if he could help them on the defense contractor front, that would be helpful, too. 

MATTHEWS:  OK.  We'll be right back with John Harris, Michael Isikoff and Tim Burger. 

And if you can't get enough of the Abramoff scandal, just go to Hardblogger, our political blog Web site.  And now you can download—by the way, we can't get enough of this because it's a big story—podcasts of HARDBALL.  Just go to our Web site, hardblogger.msnbc.com.

(COMMERCIAL BREAK)

MATTHEWS:  We're back on HARDBALL with John Harris of the “Washington Post,” “Newsweek”'s Michael Isikoff, and “Time” magazine's Tim Burger. 

Let's move on to a new topic and that is, of course, the one that's been bounding around all week before the Abramoff scandal broke.  And that's the question of spying on U.S. citizens by the National Security Agency. 

Mike, where is this heading?  Because it seems to me that we got the hearings coming up with Judge Alito, there is going to be a lot of questioning, grilling of him about where he stands on executive authority.

Where do you see this thing developing? 

ISIKOFF:  Well, I think clearly this is going to be front and center, not just in the Alito hearings but before the intelligence committees of both the House and Senate. 

You have Democrats who really feel that they have been snookered here, and to some degree they can only blame themselves.  They attend these hearings, these closed-door briefings in which, you know, they are told something, but they, you know, don't have staff there with them, they can't take notes.  They can't go back and talk about it and consult it.  And then that's called congressional oversight. 

I mean, in what sense is that oversight?  Because—and I think that's really the biggest question that comes out of this, because there wasn't any debate and full understanding or appreciation of what the administration was doing here. 

MATTHEWS:  John, I can imagine sitting in one of those rooms, those soundproof rooms with the lead walls up in the Capitol where you can't—nobody can surveil what you're doing in there and you're getting a briefing. 

It's like being told how an I-Pod works.  And so you sit there for an hour or so and some briefer comes in and tells you the technology of data mining globally and how you can pick up somebody who says the word Lincoln Tunnel in a conversation with somebody in the Emirates and all of a sudden you know you got a bad guy. 

But how do you explain that to members of Congress?  Apparently it didn't work, because they didn't blow the whistle. 

HARRIS:  Well, I mean, the point Michael makes is a good one.

But I would point out that there were members of Congress who were uncomfortable at the time with what they were being told.  You remember Senator Rockefeller went back and wrote a personal note in longhand to Vice President Cheney saying, you know, that he had great misgivings about what he had just learned in the briefing that he had gotten.  So...

MATTHEWS:  I'm sure that ruined Dick Cheney's day. 

HARRIS:  He didn't care. 

(CROSSTALK)

HARRIS:  ... or as Mike points out, it's not really oversight.  It's -

·         in very general terms it's sort of telling them what they're doing but not asking for permission. 

ISIKOFF:  And just, you know, on John's point, I mean, yes, he did write the letter but what did he do with the letter?  He didn't—he puts it in a sealed envelope that stays in a vault in the Senate Intelligence Committee.  So, I mean...

(CROSSTALK)

MATTHEWS:  It was a memo to himself. 

ISIKOFF:  Yes, essentially.  And, I mean, there was no mechanism for a

·         you know, to debate, explain, to really explore what was going on. 

(CROSSTALK)

MATTHEWS:  Jump in here, Tim. 

How do we find out whether the Bush administration did what it said it did, that it limited its surveillance to basically people in communication with the bad guys, with al Qaeda? 

BURGER:  Well, that's what's going to have to happen now, is                 The intelligence committees are going to have to delve deeper. 

Senator Specter wants to do a hearing.  He's not going to be able to do much in public.  It's in the intel committees.  They're going to have to see that it wasn't, you know, some senator's psychiatrist that was being bugged like in the old days and that it really was just the bad guys and any innocent parties, they just threw in the garbage. 

MATTHEWS:  That'll be interesting to try to explain it.

John Harris, thank you for joining us, from the “Washington Post,”  Michael Isikoff of “Newsweek” and Tim Burger of “Time” magazine.

HARDBALL returns Monday at 5:00 and 7:00 Eastern.  And join me on Monday for our live coverage of the Alito confirmation hearings for the Supreme Court, beginning Monday at noon Eastern Time.

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

END   

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