updated 1/24/2006 12:24:28 PM ET 2006-01-24T17:24:28

Guests: Carole Keeton Strayhorn; Sheila Jackson Lee; Michael Burgess, Paul Burka, Adam Zagorin, Michael Isikoff, Robert Stein

CHRIS MATTHEWS, MSNBC ANCHOR:  Good evening.  I‘m Chris Matthews reporting tonight from Houston, Texas.  Our decision 2006 election coverage will officially kick off next Monday, the night before the president‘s State of the Union address. 

But HARDBALL‘s already hit the road, and tonight we‘re on the ground here in Houston talking to the politicians, the press, the pollsters.  We‘re deep in the heart of the president‘s home region where some of the hottest political races in the country are being run in 2006. 

In a moment, we‘ll introduce you to an independent woman who wants to be the next governor of Texas. 

And does every picture tell a story?  “Time Magazine” reports that it‘s seen five photographs of President Bush with the disgraced lobbyist Jack Abramoff.  The White House denies President Bush has a relationship with Abramoff, while acknowledging the lobbyist attended two holiday receptions and staff level meetings. 

The big question is will the tentacles of the Abramoff scandal reach right into the Oval Office?  More on this growing story later. 

But first, after 20 years as a Republican, Texas Comptroller Carole Keeton Strayhorn has abandoned the party to run for governor of Texas as an Independent, challenging Republican Governor Rick Perry.  The race is not only interesting because of her defection, but because one of her sons, Scott McClellan, is President Bush‘s press secretary. 

Here‘s what Scott McClellan said when asked if he was going to campaign against his mother because of his job at the White House. 

(BEGIN VIDEO CLIP)     

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY:  She has my full support.  She is someone...

UNIDENTIFIED MALE:  She has your full support? 

MCCLELLAN:  She is someone who cares deeply about the state of Texas. 

I‘ve made that very clear. 

UNIDENTIFIED MALE:  But the president—but what about him?  He‘s not giving your mother...

MCCLELLAN:  I already stated the president‘s view on the election, and that he would be supporting the Republican nominee.  Thanks for trying to stir this one up, but... 

(END VIDEO CLIP)     

MATTHEWS:  Carole Keeton Strayhorn, Carole Strayhorn thank you very much, state comptroller for joining us tonight.  

You have put your son in the hot seat.  Well, it‘s great to have you.  And great to be down in Houston.  Let me ask you, is your son on the hot seat?  Is he the cat on the hot tin roof because of his job and his mother? 

CAROLE KEETON STRAYHORN, (I) TX CANDIDATE FOR GOVERNOR:  Listen.  All four of my sons grew up in the hot seat.  So they‘ve gone from literally diapers to shaving while I‘ve been in the public arena.  So they‘re used to that, and I‘m pleased and proud to be running as a Texas independent for governor in 2006.  I‘m going to be a governor for all Texans, Chris. 

MATTHEWS:  Well, you know, in the big cities like I grew up, if you ran for office against the wrong person, you lost your job.  Your family lost all their jobs.  Is President Bush that clean a politician that he‘s willing to let his press secretary‘s mother run against his governor? 

STRAYHORN:  Listen.  All of my sons are great in their own right.  I‘ve got four grown sons, five young granddaughters.  The good Lord has a sense of humor.  I have got a sixth on the way.  That may be another girl too.  But they all are doing a great job, and I‘m proud of all of my sons, Chris. 

MATTHEWS:  Well, let‘s watch your baby Scott, the baby of the family I should say, trying to fend off inquiries into Abramoff‘s connection to George W. Bush. 

(BEGIN VIDEO CLIP)     

UNIDENTIFIED MALE:  Would you qualify it as senior staff that he met with here? 

MCCLELLAN:  I‘m saying staff level meetings is the way I would describe it, and if you have anything specific I would be a glad to take a look into it. 

Well, I‘d like—if there‘s any reason for me to check into, please bring it to my attention. 

UNIDENTIFIED MALE:  He pled guilty to some serious charges. 

MCCLELLAN:  And so are you insinuating something? 

UNIDENTIFIED MALE:  We‘re just trying to find out the facts.

MCCLELLAN:  Well, if you have got something to bring to my attention, do so and I‘ll be glad to look into it. 

UNIDENTIFIED MALE:  I mean, this guy is radioactive in Washington, and he knows guy like Karl Rove.  So did he meet with him or not?  Don‘t put it on us to bring up something specific. 

(END VIDEO CLIP)     

MATTHEWS:  Well, Carole, I thought my dinner table was tough.  You must have a tough training table in the way you raise your boys. 

STRAYHORN:  Let me tell you what, Chris, my focus is right here in Texas.  And we have a governor whose administration has been mean spirited and for a special few.  He‘s had nine sessions of the legislature to fix our public schools and hasn‘t done that. 

We‘ve got to cut property taxes.  We‘ve got to fix our public schools, and we need to get something done.  And Rick Perry has so politically fractured this state that‘s why I‘m running as an independent.  We have got to set partisan politician aside, and I‘m setting partisan politics aside not only for this race, Chris, I‘m setting partisan politics aside during the Strayhorn administration. 

MATTHEWS:  Are you a conservative? 

STRAYHORN:  Absolutely.  I am a common sense fiscal conservative.  You know, I would rather pay $98 a month and insure a kid with prescription drugs and get that 72 percent match from the feds, rather than pay $6,700 for one hospital stay picked up by the property taxes going right through the roof.  I am a common sense conservative.  I would rather educate our kids than incarcerate our kids. 

MATTHEWS:  Let me ask you about the Republican Party.  Do you have a problem with the Republican Party today?  That‘s why you‘re leaving it or are you leaving it because you don‘t like Rick Perry? 

STRAYHORN:  Chris, I have set aside partisan politics, as I said, because this governor, Rick Perry, has so politically fractured this state, that we can‘t get anything done.  This governor has absolutely forgotten our children.  He has ignored education.  The taxes have gone up. 

You know, the budget under Rick Perry has gone up $40 billion and 41 percent in just five years.  Skyrocketing pocket costs, everything from utility bills to homeowners insurance rates, and then he has absolutely abandoned our border. 

MATTHEWS:  Well, I was just checking the history books or rather one of my producers did, and they said the last independent to be elected governor of the lone star state was Sam Houston. 

STRAYHORN:  That‘s right.  And I love Sam Houston. 

MATTHEWS:  Can you do what Sam Houston did?

STRAYHORN:  By the way, that was 1859.  Absolutely.  Every speech I give by the way for decades, I‘ve been quoting Sam Houston, and over the last couple years, I‘ve always quoted Sam Houston right before the battle of San Jesana (ph).  He said we‘re nerved for the contest, and we must conquer or we will perish. 

Well, Chris, I too am nerved for the contest.  And together with people from all walks of life across this state, Republicans, Democrats, Independents and those who I have no idea what their political affiliation is, we‘re going to change this state, change the leadership at the top. 

Under Rick Perry, we have had misplaced priorities and failed leadership.  And it‘s time to get something done.  Texans want to fix our schools.  Our most precious resource are our kids.  And let me tell you, as a mama and a grandma, you know, Rick Perry wants his legacy to be that he sat in the governor‘s chair for more years than anyone else. 

Well, I don‘t sit, I do.  And, Chris, I want Carole Keeton Strayhorn‘s legacy to be that with every breath of air in her lungs, she fought passionately for education, passionately for paychecks and jobs for all Texans and passionately for our most precious resource, our kids. 

MATTHEWS:  OK.  Carole, you‘re a record vote getter in Texas, as a candidate for comptroller.  You‘ve won it a couple of times. 

But let me ask you about the big issues.  Do you think the Republican Party has departed from its fiscally conservative roots?  They‘re running— the U.S. Congress right now, the United States government is running almost a $400 billion deficit, we‘re heading toward.  Do you think that represents a waywardness from fiscal orthodoxy? 

STRAYHORN:  Chris, on January 2nd when I announced as an Independent and that‘s a Texas Independent for governor, I said I‘m putting aside partisan politics.  I have put aside partisan politics.  I‘m not going to sit here and discuss partisan politics with you.  I am going to discuss what we‘re going to do in the state of Texas. 

MATTHEWS:  Well, what are you going to do about illegal immigration? 

STRAYHORN:  Oh, yes, let‘s talk about that.  Yes, let‘s talk about that. 

MATTHEWS:  Let me take an issue that coincides nationally and in terms of the state of Texas.

STRAYHORN:  Right.

MATTHEWS:  Not so much Texas, but other southwestern states.  Illegal immigration.  Everybody talks about it.  Pat Buchanan talks about a big fence, and all the liberals talk about different things.  Nobody talks about getting rid of illegal hiring.  Would you do that?  Would you stop a company or a business or a hotel or golf course from hiring somebody in the country illegally?  Would you actually do that? 

STRAYHORN:  Chris, I am adamantly opposed to illegal immigration, and let me tell you the difference in myself and our current government. 

MATTHEWS:  Well, everybody is.  Everybody says they are. 

STRAYHORN:  Well, let me tell you what Rick Perry did.  Rick Perry signed legislation so that an illegal immigrant can enter higher education in the state of Texas paying in-state tuition.  Now he did that for illegal immigrants. 

Let me tell you what happens if you‘re Carl Basherman (ph) and you came back from the Iraq war to Austin, Texas.  that happens to be my hometown city.  He was in Iraq for two years.  He comes backs to Austin, Texas, to enter Austin Community College, and he is told he has to pay out of state tuition because he hasn‘t been here the last two years. 

Well he went to war for us, and I went to war for him.  And now we‘ve got him admitted on in-state tuition.  But, you know, Rick Perry...

MATTHEWS:  So you‘re tougher on—you‘re saying that you‘re tougher on illegal immigration than Rick Perry is?  And that‘s an issue? 

STRAYHORN:  Absolutely.  Rick Perry has so abandoned the border that ordinary citizens instead of our law enforcement officials are having to enforce illegal immigration. 

MATTHEWS:  Does Rick Perry, the governor of the state, have a corruption problem?  Or is he immune from the problems—DeLay has had a problem with being indicted.  The Congress in Washington has a problem with Abramoff.  Maybe DeLay might have that problem too soon.  We don‘t know. 

Do you think the governor you‘re running against, a Republican, you say you don‘t want to be partisan, but does the Republican establishment have a problem here? 

STRAYHORN:  The governor I‘m running against certainly has problems. 

He has misplaced priorities, failed leadership. 

Let me take the state office of federal relations in Washington, D.C., as an example.  That office has been there since the 1960‘s, and this is the first time, the first time ever that a governor has contracted for over a million dollars with two lobbyist groups. 

Now, I don‘t care whether you‘re lobbying from the governor‘s office or governing from the lobby‘s office, it‘s wrong.  And under a Strayhorn administration, that will come to a screeching halt. 

MATTHEWS:  Is the governor of Texas behaving corruptly?

STRAYHORN:  I‘m telling you that what is going on has been mean spirited and for a special few.

MATTHEWS:  OK.  Thank you very much Carole Keeton Strayhorn.  The mother of the president‘s press secretary running for governor of Texas as an Independent. 

We‘re going to be joined on the set, by the way, in just a minute by the dean of the school of social sciences at Rice University.  He‘s going to tell us about some of the trends down here in Texas.  That‘s part of HARDBALL‘s Decision 2006 coverage, and our run up to the president‘s State of the Union next week. 

We want to know what issues you care about.  What do you want to see the president talk about next Tuesday night.  Call HARDBALL—e-mail hardball.msnbc.com and register your vote right now.  You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Some of the hottest races in the country this year are going to be in the south.  Robert Stein is a pollster in Houston.  He‘s also, more importantly, the dean of the school of social sciences at Rice University.  Thank you, Bob, for joining us, professor. 

ROBERT STEIN, RICE UNIVERSITY PROFESSOR:  Thank you for having me. 

MATTHEWS:  You know, it‘s—I didn‘t realize it until I got down here the other day, how many races are hot down here.  Let‘s talk about the Tom DeLay race, until recently majority leader.  Does he any real problem beating a Democrat in the general election? 

STEIN:  I think so.  I think that there are two reasons why he does.  One is that his base from 2004 has defected.  About half of that base from 2004 tells us now they‘ll vote for he another candidate, Democrat or Republican.  Another half of that group is undecided.

But more importantly, he not only has a Democratic opponent who is himself a former Congressman, Nick Lampson, but he‘s running against another Republican, former Republican Congressman.  Steve Stockman has said that he‘ll run as an independent.  It remains to be seen whether they‘ll stay in there, but at this point, I‘d say his reelection is at least ambiguous, if not a toss up. 

MATTHEWS:  But Lampson‘s ran in another district, got defeated in another district, moved into this district for this election.  Is that going to hurt him? 

STEIN:  Well, that‘s very true, and it‘s always the case that when you move into a new district, you are new.  But keep in mind, 20 to 25 percent of the vote in this district he used to represent ...

MATTHEWS:  Yes, but he lost that 20, 25 percent. 

STEIN:  No question he lost it, but he‘s familiar and before people can vote for you, they have to know who you are the.  I think the real issue here is that Nick Lampson could win this race, but only against Tom DeLay.  Any other Republican probably holds on to this seat. 

MATTHEWS:  Why would a Republican district elect a Democratic Congressman? 

STEIN:  Simply because that choice will be between incumbent Tom DeLay, possibly Steve Stockman, a former Congressman, and Nick Lampson.  Nick Lampson is probably good for 40, 45 percent. 

In a two person race, it takes 50 percent plus one, but in a three way race, could you end up with a candidate with 45 percent of the vote and that would be a plurality victory.  And, I think, clearly, someone like Stockman, if he should stay in the race, can bleed 10, 15 points away from Congressman DeLay. 

MATTHEWS:  So he‘s like a Ross Perot.

STEIN:  Absolutely.

MATTHEWS:  Conservative third party.  If you had to put 100 bucks on this, where would you put it? 

STEIN:  I wouldn‘t.  I‘m not that kind of betting person.

MATTHEWS:  OK, let me ask you about Tennessee.  We‘ve got Harold Ford, a longtime Congressman, son of a Congressman, very well known in national media circles, very attractive, right, running in Tennessee.  Can he win the general? 

STEIN:  That‘s a tough one.  That‘s an African-American running against—well, we don‘t know who that—the first seat is an open seat if he should run for the presidency as said so. 

It‘s not clear that that‘s an easy seat, but nonetheless, that‘s a border state, that‘s Al Gore‘s state.  It‘s a state that should have stayed in the Democratic column.  I‘d say that is clearly a toss up.  Charlie Cook lists it as a toss up.  I‘d say a lot depends on who the Republican nominee is. 

MATTHEWS:  If they pick somebody far right, it will help Ford. 

STEIN:  Absolutely.  You have got some big cities, you have a big African-American vote, and most importantly, you‘ve got an east and a west divide.  And the Democrat can sneak in there but, again, it‘s going to be the right Democrat and Ford clearly could be the right Democrat, depending on who he‘s running against. 

MATTHEWS:  Do you trust white people when they mark down in a poll of how they‘re going to vote where there‘s a black person in the race?  Do they tell honest—I‘ve seen in states like California where Tom Bradley ran twice, supposedly going to win for governor twice. 

White people lie.  They tell a pollster they‘re going to vote for Bradley, because they‘re Democrats, then they don‘t do it.  Doug Wilder was supposed to win by 13 points for governor of Virginia, he won by one.  Again, 12 percent of the vote were white people who lied.

STEIN:  It‘s very hard for pollsters to get Anglo voters to tell us how they‘re going to vote when there‘s a contested race with an African-American.  Furthermore ...

MATTHEWS:  Why don‘t they tell the truth to pollsters?  Why do they care?  They‘re embarrassed?

STEIN:  I think to some extend it‘s socially acceptable answers.  People feel as if there‘s an expectation that they should say a certain type of answer.  I think there‘s a tendency also with polling to get people who feel as if they‘re being tested rather than being asked their opinion.

MATTHEWS:  Do you think if we didn‘t have squeaky-clean pollsters calling up, hello, sir, I wonder who you‘re voting for, in almost an English accent—if we had a sort of a country, tough guy call, you know, an Archie Bunker voice, who are you going to vote for in this race, would you get a different reaction from a regular voice than a sophisticated voice? 

STEIN:  Let me say this.  Respondents, particularly African-American respondents—we know this from research—know who‘s interviewing them.  African-Americans ...

MATTHEWS:  If they figure it‘s a black voice on the phone they‘ll give a different answer. 

(CROSSTALK)

STEIN:  ... pay a lot of attention to when we‘re interviewing, whether we‘re interviewing in large Hispanic or African-American areas, and we will use the appropriate interviewers.   

MATTHEWS:  Sure a lot of people don‘t have accents though.  They don‘t give it away.

STEIN:  Well, in the south here, some of us think that I have an accent. 

MATTHEWS:  Well, OK.  Let me ask you about Katherine Harris.  Everybody knows her as St. Janid (ph), she‘s parodied on “Saturday Night Live,” like other people are.  Is she too volatile to—she‘s running for Senate against Bill Nelson. 

STEIN:  Well, again, I don‘t follow Florida politics that closely.  I think there are two things to remember about that Florida race.  Nelson is the incumbent, and incumbency has the big advantage.  He has no negatives in the state.  Democratic registration now outnumbers Republican registration, has since about 2002, 2003.  That‘s a turnout vote.  If you get the turnout I think ...

MATTHEWS:  Well, wait a minute.  How come everybody down there is a Republican, the governor, the senators? 

STEIN:  That‘s an interesting question and look at the turnout rates. 

MATTHEWS:  Well, they say they‘re Democrats but vote Republican. 

STEIN:  Well, of course, when you‘re turning out voters and you have a core Democratic vote that doesn‘t turn out, that‘s one of the problems.  If you win elections, really very simply ...

MATTHEWS:  I love it.

STEIN:  ... you get more votes than somebody else. 

MATTHEWS:  One of the people that‘s on HARDBALL an awful lot is Trent Lott.  He got knocked off the leadership by Frist, but he‘s apparently pretty popular in the Senate.  He‘s a win for the Republicans in Mississippi. 

STEIN:  Oh, absolutely.  The greatest news for the Republicans in Mississippi was Trent Lott was running.  That could have been a toss up state.  His decision to stay in, at some personal expense—he lost his home.  That‘ll help the Republicans.

MATTHEWS:  Hot question—a lot of African-Americans went out of Louisiana, New Orleans, after the flood, after Katrina.  Are they coming back to vote and, if not, is that going to hurt the Democratic governor? 

STEIN:  No question.  You had almost 300,000 voters in just New Orleans leave.  Many of them are here in Texas, Arkansas and other places.  Some are still in Baton Rouge and other places.  If they don‘t come back and they don‘t turn out, you could easily see the governor, lieutenant governor, a Senate race—that could become more than just a nominal Republican state.  Democrats could lose big time. 

MATTHEWS:  Wow, thank you very much, Professor Robert Stein of Rice University. 

Up next, the senior Texas political press, senior executive editor of the “Texas Monthly,” Paul Burka.  What an important magazine that one is.  And don‘t miss HARDBALL‘s Decision 2006 election coverage will officially kick off next Monday, the night before the president‘s State of the Union address with an exclusive big interview with former majority leader, Texas Congressman Tom DeLay. 

(BEGIN VIDEO CLIP)

MATTHEWS:  Look, I‘ve got to ask you a (INAUDIBLE) question.  Tom DeLay, you‘re not in this business for the money.  You live modestly.  You commute back and forth from Washington to Houston, Texas.  Why.  What drives you everyday?

DELAY:  What I believe in, and the Constitution of the United States, Ronald Reagan got me involved in this.  It‘s—I fight every day for what I believe in.  Strong national security, protecting the American family, values.  I just—I want to see this country led in a different direction than when I got into politics 20 some years ago. 

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to hardball.  Texas politics is something else.  Paul Burka has covered it for 32 years at the Texas Monthly magazine where he is now senior executive producer.  Paul, it‘s great to have you on the show. 

There is something magical about down here.  There‘s Molly Ivins and you‘ve got the right and left, you have Ronnie Earle the prosecutor, you got Tom DeLay defending himself.  Is anything on the level down here? 

PAUL BURKA, SR. EXECUTIVE EDITOR, TEXAS MONTHLY:  Oh, we‘ve had characters all the way through.  I mean, we had a woman run for governor after her husband was impeached and she won.  It‘s wild, and it‘s hardball, too. 

MATTHEWS:  Let me ask you about George W. Bush down here.  His father was sort of a Connecticut Yankee and he came down here to drill for oil in the late 1940‘s and 1950‘s.  He was always sort of an out-of-towner in a way.  Is George W. clear-cut Texan?  Is it for real. 

BURKA:  Absolutely.  George W. always said the difference between him and his father was his father went to Greenwich Country Day and he went to Midland Sam Houston. 

MATTHEWS:  But they both went to Phillips Exeter didn‘t they.  I hate to keep credit but they both ended up going to prep school. 

BURKA:  But Bush has never really identified with the upper class here.  His best friends are people from Midland go way back.  Their oil men with money.  This is not the social register crowd. 

MATTHEWS:  What do you make of—I don‘t think it‘s anything more than the usual Oedipal fight between father and son, which every father knows about, there‘s always a little strain and that‘s a healthy thing between the kid who wants to be himself and the father who wants him to be him. 

The old man was a deal maker, a compromiser, a moderate, the son is a born again, a tough foreign policy guy, very pro—Israeli.  Not an even-handed kind of guy.  Very different politics. 

BURKA:  Very different.  I think a lot of what informed George W.  From the beginning was, my dad made lots of mistakes so I‘m not going to make them. 

MATTHEWS:  So he learned everything from Dad‘s mistakes.  So his dad raised taxes, he cut taxes. 

BURKA:  His dad abandon the base.  He‘ll never abandon the base. 

MATTHEWS:  He‘s been with the Christian Conservatives.  He went to war to get Saddam Hussein, the old man said no, let him stay in his hole, we got him out of Kuwait. 

BURKA:  Right.  And these guys thinks that they‘ve done better.  At least they did for a while. 

MATTHEWS:  Oh, yes.  He‘s down in the polls now.  What do you make of Cheney down here?  He‘s another oil-patch guy.  Does he seem to have too much power?  I think he does sometimes, but that‘s just looking at him, he looks like the toughest guy I‘ve ever seen if my life, Dick Cheney. 

I wonder if he‘s either advising the president, he‘s overwhelming the president with arguments.  He‘s got the cabinet behind him, he has Secretary of Defense Rumsfeld, he almost put in there, Wolfowitz and all those guys.  Cheney has a lot of troops in the White House, doesn‘t he? 

BURKA:  There‘s a lot of feeling here in Texas that Governor Bush was a great governor, people really liked him, got along with Democrats, and all of a sudden he goes to Washington and where is that guy, you know, what happened to him?  Where is governor bush?  We see President Bush, he‘s a completely different guy.  And I think—

MATTHEWS:  Did 9/11 do that to him or something else? 

BURKA:  I think Cheney did it to him.  For whatever reason it seems that he doesn‘t have the will or the interest in keeping Cheney from sort of taking over the agenda. 

MATTHEWS:  What do you think it is?  What‘s Cheney‘s clout? 

BURKA:  Oh, I suppose knows Washington.  George W. doesn‘t know Washington, doesn‘t like Washington.  A lot has been made of how he never washed the news after the 1992 Presidential race. 

MATTHEWS:  Let me ask you about this war in Iraq, it‘s the biggest decision in the world.  We up north, as far north as almost the Mason-Dixon Line, Washington D.C., think of The South as more hawkish.  Is it? 

BURKA:  Texas certainly is.  San Antonio, for example, that recruiting area provides more soldiers for the war than any other area of the country?  I think Hispanics are intensely patriotic, go into the military, really, and a lot of the deaths, just really sad. 

MATTHEWS:  Let me ask you about Tom DeLay, will he get reelected?  Put some money on the table.  Make a bet.  A gentleman‘s bet. 

BURKA:  If I were betting, I would bet yes, but I want to do two caveats.  There are two potential legal problems.  He‘s got a case here pending. 

MATTHEWS:  With Ronnie Earle?  Does anybody take Ronnie Earle as not being a partisan or is he seen as one of the combatants down here? 

BURKA:  I think in Austin, he is seen as not really a partisan.  But it‘s a Democratic town.  And although the Fort Ben County chair has made light of it, he has prosecuted Democrats and Democratic speaker.  But—

MATTHEWS:  Did the Abramoff thing hurt DeLay down here?  The golf trip to Scotland.

BURKA:  Absolutely.  All of it.  The whole thing.  And of course the story that he hired his wife and all of this stuff. 

MATTHEWS:  Abramoff hired DeLay‘s wife? 

BURKA:  Yes.  And so there‘s that and I do think that those two things could wind up defeating—in other words, what happens between now and November is I think going to decide Tom DeLay‘s fate. 

MATTHEWS:  Do you like Tom DeLay? 

BURKA:  I like his—I enjoy talking to him.  I‘ve had good conversations with him.  His politics are pretty strange. 

MATTHEWS:  Thank you very much, Paul Burka of The Texas Monthly.  Up next, politicians are launching midterm campaigns right now.  Are they getting more careful in the way they raise money?  I‘ll bet they are.

We‘ll talk to two U.S. Congresspeople from Texas.  You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

MATTHEWS:  Welcome back to HARDBALL.  We‘re in Houston, Texas tonight for our first stop on the road for decision 2006.  It‘s Tom DeLay‘s neck of the weeds, where the former House majority leader might have a re-election race on his hands.  We‘re joined now by two members of the Texas delegation to Washington, Democratic Congresswoman Sheila Jackson Lee in Houston, that‘s her district, and Republican Michael Burgess, who‘s in Dallas, his hometown.  Welcome both of you congresspeople.  I want to go to Sheila Jackson Lee.  Congressman Lee, what do you think of Tom DeLay‘s...

REP. MICHAEL BURGESS ®, TEXAS:   Hey, Chris, actually, I‘m in Ft.

Worth.

MATTHEWS:  OK, you‘re in Ft. Worth.  Well, you know what, they got it wrong, but you‘re in Ft. Worth.  You know where you are, at least.

BURGESS:  Beautiful downtown Ft. Worth.

MATTHEWS:  Nice plug.  Let‘s go to Congresswoman Sheila Jackson Lee.  Congresswoman, do you think Tom DeLay has a fight on his hands or is he fairly safe?

REP. SHEILA JACKSON LEE (D), TEXAS:  Well my good friend, welcome to one of the great cities of the world, Houston, Texas, and of course, the city with the big heart.

It‘s going to be a very tough election.  There are some great candidates that are in the primary and certainly there‘s an outstanding candidate that‘s running in the Democratic primary and will be the Democratic nominee. 

It really is all up to the people of that district and they are thinking people, they are community-based people, it‘s a very diverse community and I believe they‘re going to ask the hard questions like they ask every one of us when we run for re-election.

MATTHEWS:  Do you think it‘s a problem for a member of Congress who was defeated in another district to move into Stafford just to run the election against Tom DeLay?  He lives in Beaumont, he moved to Stafford to get into this election.  Is that OK with you?

JACKSON LEE:  Not at all.  Nick Lampson‘s going to tell his story and his story is that he really is a native of Fort Bend County, his family has ranching and farm property there.  He lives on one of the farms there, it is partly a farming community.  They like people who understand not only their history, but what their needs are today. 

I think Nick Lampson has a wonderful story.  He is a child of that region and he‘ll be able to tell his story that he will represent that district very, very well if elected.

MATTHEWS:  Congressman Burgess, I want to just ask you the same question then we‘ll move on to your district as well as Congresswoman Sheila Jackson Lee‘s.  Do you think Tom DeLay has a race on his hands from Nick Lampson, who‘s moved into the district to challenge him? 

BURGESS:  You know Chris, I don‘t, but I also know the majority leader is taking this race very seriously.  He‘s focusing on it full time, he‘s working extremely hard and he will be victorious in his primary and he‘ll be victorious in the fall. 

MATTHEWS:  Let me ask you about this Abramoff scandal that seems to be reaching its tentacles all around the Congress and maybe into the White House.  Is it a problem for your party, Congressman?  Jack Abramoff admitting guilt to so many charges and apparently ready to give state‘s evidence.

BURGESS:  Well, I‘ll share with you, Chris, if the Abramoff issue is a little hard for my constituents to understand.  He‘s pleaded guilty to tax evasion.  There‘s probably no likelihood that Tom DeLay helped him with his tax form that year.

He‘s pleaded guilty to conspiracy in the boat dealings in Florida and the bribery issue is a serious one and that‘s what‘s going to affect Congress.  There may be some other members involved.  I personally do not believe that Mr. DeLay is.

If there are members involved, of either party, they need to—we need to get that sorted out and get on about our business.  The nation expects us to take care of our congressional business, and after all, we are a country at war.

MATTHEWS:  Let me ask Congresswoman Sheila Jackson Lee, is your party, the Democratic Party, going to make the issue that the Republicans have a culture of corruption because of this Abramoff scandal?

JACKSON LEE:  Well I believe the Abramoff scandal is very easy for my constituents to understand because it‘s a symptom of—sickness of corruption.  And, as you have said, the color of corruption that is permeating the entire Republican administration in Washington. 

It is the executive, it is the House, it is the Senate, and what frankly has not occurred is a recognition that that is a problem.  It‘s Abramoff, it‘s David Sylvian, it‘s Scooter Libby and of course it is the reform of this Congress.  The Democrats, in a unified statement on January 18th, are said we‘re prepared to reform this Congress. 

There will be no more midnight special interest provisions put in legislation or we‘re prepared to make sure legislation is on the table for 24 hours, so that at least minimally a member of Congress and I know my good friend in Ft. Worth would love to know what‘s in a bill. 

We‘re going to end the K Street Project that trades favors for lobbyists.  We‘re going to make sure that there‘s an end to no bid contracts and not going to allow people to profit on war, because we are fighting a tragic situation and a war in Iraq.

We‘re going to stamp out the kind of cronyism and corruption that has permeated this Congress and Washington for the last four or five years, almost now a decade.  It‘s an important step forward for the American people.  I think they‘re going to make a distinction in ‘06.  This is not a blame game, but this is to move forward and reform this Congress and work on behalf of the American people with no payoffs and no handouts.

MATTHEWS:  Congressman Michael Burgess, do you support—I want to ask you to respond to something that Senator John McCain of Arizona proposed over the weekend.  And he‘s, of course, in the other body, but he says Congress should no longer engage in what are called earmarking of bills, whereby a hospital or a college or another institution is guaranteed because the way the law is written, a certain amount of money.

BURGESS:  Well, Chris...

MATTHEWS:  ... Would you like to get rid of earmarking?

BURGESS:  If it‘s uniform and complete.  Unilateral disarmament on earmarking is not something that I would be in favor of, so I would not proceed along that trajectory by myself.  We had the labor Health and Human Services appropriations bill this year, with no earmarks on it.

It did not pass the first time.  It passed the second time.  I don‘t believe with any Democratic votes, so clearly removing earmarks was not something that was pretty popular with the other side of the aisle.  Still from a fiscal standpoint, it was important to do it and I‘m proud that we did that. 

Earmarks—a congressional representative is supposed to know their district.  They‘re supposed to know their district better than any Washington bureaucrat, and if there are times where I can direct money where it needs to be, on whether it be a road project or university project, I don‘t see that necessarily as a bad thing.

MATTHEWS:  But doesn‘t—let me go to Congresswoman Sheila Jackson Lee.  Congresswoman, do you believe it‘s OK for a member of Congress to use their stature or clout on appropriations subcommittees to earmark a bill and say here, I want this hospital to get this 100 K.  I want this college I went to get this 100 K, $100,000.  Do you think that‘s appropriate use of your lawmaking power? 

JACKSON LEE:  Chris, when you say it that way, it sounds real ugly. 

But frankly I think we shouldn‘t throw the baby out with the bath water, and I think it‘s important for the American people to understand I want transparency in earmarks.  There are many vulnerable and poor districts, economically, if you will. 

Districts that are economically unable to provide for many of the constituencies in their community.  Many non-profits that are doing great work, The Boys and Girls Club, The Salvation Army, that receive these earmarks and do great work, the community health clinics.

So frankly I would open the earmark process up to enormous transparency.  Bridges to nowhere, absolutely not, but when you‘re helping a small local health clinic or providing for affordable housing, absolutely. 

But I think the American people have every right to know what we do with their tax dollars, and I think we should open up the process of earmarks and let everyone know where these funds are going.  The need is there, and that there is no handout or kickback because you‘re providing that kind of resource to your constituency. 

MATTHEWS:  Congressman Burgess, just a minute, do you agree with that transparency part of it? 

BURGESS:  Yes, but the transparency has been there for the highway bill, for example, was up on the web.  I read it myself from my office the night before we voted on it.  So the transparency process, if you care to look, it‘s a big bill, and it was a pretty complicated read, but the transparency was there. 

LEE:  That‘s not the transparency that I‘m speaking of. 

BURGESS:  The issue that Sheila brought up is really one of the fundamental difficulties with answering these questions.  I‘ve got an area in my district where I wanted to get an earmark for an infant mortality study.  I have got some of the highest infant mortalities in the state.  I thought it was an appropriate use of the funds, but the labor HHS bill, no earmarks this time. 

So I was willing to go along with that.  I‘m going to try to fight for that money in other areas, but no earmarks in the bill was going to be hard on my district. 

JACKSON LEE:  I think transparency, not the question of reading, but making sure that these are deserving entities, that there‘s a real need, and I don‘t think any member of Congress would in any way disagree with that. 

MATTHEWS:  OK.  Thank you very much congresspeople.  Thank you.  We are out of time.  I‘m sorry both of you.  Congressman Sheila Jackson Lee, Congressman Michael Burgess, thanks for coming to us in Texas. 

Up next, what do the pictures of President Bush with Jack Abramoff tell us about Abramoff‘s connection to the White House?  We will ask “Newsweek‘s” Michael Isikoff and “Time Magazine‘s” Adam Zagorin.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR:  He doesn‘t have a personal relationship with him, but, as you know, presidents attend widely gathered events all the time whether it be fundraisers. 

We acknowledge that he attended some Hanukkah receptions.  I am sure at a Hanukkah reception you would have your children with you.  So I am sure the president took pictures with him at events like that. 

But any suggestion by critics or anybody else to suggest that the president was doing something nefarious with Jack Abramoff is absolutely wrong, and it is absurd.   

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL. 

That was counselor to the president, Dan Bartlett, fending off questions this morning about a connection, if there is one, between embattled lobbyist Jack Abramoff, who has plead guilty to a number of crimes, and the White House. 

“Time Magazine” reports that five different photographs show Jack Abramoff with the president.  Well do they mean anything? 

Here to break it down for us is “Newsweek‘s” Michael Isikoff, an old pal, and “Time Magazine” Adam Zagorin.  Welcome.

Adam, you know more about these pictures.  Do they really show any kind of intimacy or deal making or business being conducted between the president and the disgraced lobbyist? 

ADAM ZAGORIN, TIME MAGAZINE:  Well, pictures are worth a thousand words, but they don‘t actually talk.  And, of course, so you have to look at the pictures. 

Four of the five pictures are what I would call standard meet and greet type photographs.  You know, more or less posed.  They‘re shaking hands.  They are looking at each other. 

A fifth one is Speaker Hastert and the president and Mr. Abramoff‘s children, and then the last one is a small rather private closed meeting in the old executive office building, in which you have the president in a prominent Texas Indian—he‘s called the chairman of the Kickapoo Tribe is his official title, former chairman now, who, by the way, was indicted on 27 counts of attempting to embezzle funds from his tribe, $300,000. 

And this gentleman is conversing with the president and Mr. Abramoff is in the picture.  I interviewed people who were—said they were at that meeting, including the chief, or excuse me, the chairman of the Kickapoo Tribe, who, by the way, expressed a good deal of gratitude to Mr. Abramoff for getting him into this meeting at the White House. 

We actually quoted him thanking Mr. Abramoff in the story.  There was another quote from Grover Norquist, who was present at the meeting, a head of a well-known Republican lower tax group here in Washington, who said—who emailed Mr. Abramoff and said that he would be honored to have Mr.  Abramoff come to this meeting.

And so this was a smaller meeting than these large receptions, Hanukkah or whatever that have been cited by the White House.  President, according to these accounts, spoke for some 15 minutes, thanked those present, including Mr. Abramoff‘s clients, some of them by name, for, you know, supporting his agenda and that kind of thing.

MATTHEWS:  Help out here.  You‘re the reporter.  OK.  Help me out, Adam.  Do you think—just looking at it objectively.  Is this the kind of meeting the president would remember and should account for rather than just having a sort of a grand dismissal of I never knew the guy, I never met with the guy?

ZAGORIN:  You know, I think that if the president says he doesn‘t remember anything, we have to take him at his word.  The thing is that we could clear all this up, much more easily and quickly, if the White House would simply release the data that they say they have.  They have various photos, nobody disputes that the president was photographed with Mr.  Abramoff. 

MATTHEWS:  Let me here from Gimbells here, let me go to Mike Isikoff. 

What does your magazine think of this story?  Is there something here? 

MICHAEL ISIKOFF, NEWSWEEK:  I don‘t know.  I haven‘t seen the pictures, but as a general rule, if you‘re the president and you don‘t like pictures out there of you with convicted felons. 

It sounds like, listening to Adam, there‘s at least one picture of him with at least one convicted felon and another indicted, so it‘s probably not a picture the White House is eager to have out there. 

The other interesting aspect of this is, while the White House hasn‘t put these out, Jack Abramoff has clearly shown them to people.  I don‘t know anything about “Time” sources, but I do know that he showed them to “Washingtonian” magazine, which suggests, he may be playing a little bit of a game here. 

He has of course pled guilty to the Justice Department, but it does raise a question in my mind at least as to whether Abramoff is maybe sending some sort of signal out here, hey, I‘ve got this stuff, you know, maybe he wants something from somebody in the White House or he wants somebody in the White House not to do something and just sort of subtly, you know, playing with people here. 

MATTHEWS:  It sounds like proof of death pictures.  We‘ll be right back with Michael Isikoff and Adam Zagorin.  This is HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with Michael Isikoff of “Newsweek” magazine and Washington correspondent for “Time” magazine, Adam Zagorin.  We‘re down here at The Houstonian Hotel in Houston, Texas.  In fact, the beginning of our 2006 election coverage. 

We‘re covering the Tom DeLay race, which on election night, coming up this November, just to be clear on this, at least we are, if he were to lose this election down here, which is probably not going to happen right now, but he‘s in big trouble in terms of all kinds of things coming his way.  If he would lose it, that would be if biggest news story of the night come this November.  We‘re covering it in that regard. 

Let go right back down to Mike Isikoff.  Mike, I want to ask you about this big scoop you have in “Newsweek” this week.  This issue that the Defense Department has a counter-intelligence operation which has been spying on American political groups. 

ISIKOFF:  Yes. 

MATTHEWS:  Tell us about it. 

ISIKOFF:  Oh, OK.  This is the Counter-Intelligence Field Activity, which is a unit set up by Secretary Rumsfeld in the wake of September 11.  And its mission is force protection, to track terrorist threats or potential threats against military installations in the United States and military personnel. 

That can be expanded quite broadly as I discovered in reporting this piece.  One place that the military was tracking potential threats against was Halliburton, a military contractor.  So force protection can extend quite broadly. 

What sort of threats are we talking about?  Unquestionably, some of them would have been legitimate terrorist plots.  We also found by looking at the, CIFA, or a portion of the CIFA database, that there were legitimate political protests, or what seemed to be legitimate protests, reports on them filed by military intelligence and stored in the CIFA database. 

The example I started with in the piece is this protest outside of Halliburton which is like 10 peace activists who are protesting Halliburton‘s alleged overcharging on government contracts by giving out free peanut butter and jelly sandwiches to any Halliburton employees who will take it.  Now, how that got construed by somebody as a potential terrorist threat and entered into the CIFA database is a good question.  But there are a number of examples of this. 

MATTHEWS:  On HARDBALL, we‘ve been raising the question about no bid contracts and how Halliburton has gotten some contracts out of that.  Maybe we were right or wrong, but we were raising that issue.  Certainly people like Michael Moore raise that question of profiteering. 

How extensive is this spookiness going on where they‘re going around tracking people who are giving out peanut butter sandwiches as a demonstration and seeing that as some sort of national security threat. 

ISIKOFF:  This is part and parcel of this broader question of domestic intelligence, counter-intelligence, in the war on terror.  And how far it has gone.  Certainly, the—

MATTHEWS:  Is this Nixon stuff?  How would you describe it? 

ISIKOFF:  I think at this point, we don‘t know enough about what this unit has been doing.  We just, we‘re seeing hints and glimpses.  One question I had is how they would have learned about this particular Halliburton protest in the first place.  And there you have to, as people in the counter-intelligence community often say, connect the dots. 

We do know from a Power Point presentation that CIFA has that one of the sources, one of the thing they‘re doing is surfing the net.  They‘ve got CIFA analysts who are looking at the Internet, looking at Web sites.  This Halliburton protest was posted on a left wing Web site in Houston. 

Apparently somebody at the Pentagon sees that and that leads to this kind of report. 

MATTHEWS:  Adam, do you have anything on this over at “Time”? 

ZAGORIN:  I would, I obviously read Mike‘s piece and I thought what‘s described in it struck me as quite creepy and reminiscent of all sorts of things.

MATTHEWS:  Exactly.

ZAGORIN:  But is there anything illegal going on here?

MATTHEWS:  We got to go Adam.  I‘m sorry.  Michael Isikoff, Adam Zagorin.  I‘m sorry, we‘re just short of time tonight.

Join us again tomorrow night at 7:00 and 5:00 eastern for more HARDBALL.  Right now it‘s time for THE ABRAMS REPORT with Dan.

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