updated 2/22/2006 11:58:50 AM ET 2006-02-22T16:58:50

Guests: Robert Menendez, Ileana Ros-Lehtinen, Martin O‘Malley, Michael Smerconish, Hilary Rosen, Tom Ridge, John Timoney, Bruce Bartlett

CHRIS MATTHEWS, HOST:  President Bush bucks Republicans and Democrats alike.  He sounds full speed ahead on Arab control of American ports.  Is the ship of state in treacherous waters?  Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews, and welcome to HARDBALL.  The big question tonight: Was the Bush administration right to allow an Arab state-owned company to manage our ports?  Today, President Bush stood by his decision to let Dubai Ports World of the United Arab Emirates buy control of six major American ports. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  The transaction should go forward, in my judgment.  If there was any chance that this transaction would jeopardize the security of the United States, it would not go forward. 

(END VIDEO CLIP)

MATTHEWS:  Democrats and Republicans in Congress are hitting the president hard, and now the Republican governors of New York and Maryland are threatening legal action to stop the deal. 

Should foreign countries manage ports in the U.S.?  How about foreign countries where some terrorists come from?  In a moment, I‘ll put those hot questions to Tom Ridge, the former secretary of homeland security.  And later, Miami Police Chief John Timoney.  But first, HARDBALL‘s David Shuster has this report. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  On board Air Force One today, President Bush said the deal to put U.S. port facilities under the ownership of a company run by an Arab government is legitimate and should go forward.

The president added that if Congress tries to block the transaction, quote, “I‘ll deal with it with a veto.”  That veto would be the president‘s first since taking office.

Every day nearly 26,000 shipping containers arrive in U.S. ports, and with the U.S. government inspecting only one out of 20 containers, the responsibility for screening the rest belongs to the company that owns and runs the port‘s terminal operation. 

Robert Menendez is the new senator from New Jersey. 

SEN. ROBERT MENENDEZ, (D) NEW JERSEY:  These are critical assets of the United States, both for its security and its economy, and it should not be run by foreign government. 

SHUSTER:  The fear is that a terror organization will slip in a nuclear weapon and destroy an American city.  So how did the sale of the ports get approved and who approved it?  The U.S. government reviews these purchases through what is known as the Committee on Foreign Investment in the United States. 

The committee is chaired by Treasury Department Secretary John Snow, and it includes senior officials from the departments of Defense, Justice, Commerce, State, and Homeland Security.  The $6.8 billion deal approved by the panel covers the ports of New York, Newark, Philadelphia, Baltimore, New Orleans and Miami.  The operations in these ports are already being run by a British company, Peninsular and Oriental Steam Navigation Company, known as P & O. 

P & O was bought last week by Dubai Ports World, a business owned and operated by the government of United Arab Emirates.  The Bush administration considers the U.A.E. an ally in the war on terror, but the 9/11 Commission found that some of the money for the terror attacks went through banks located in the Arab Emirates and two of the hijackers were, for what it‘s worth, from the U.A.E. 

Peter Gadiel lost a son on 9/11. 

PETER GADIEL, SON DIED IN 9/11 ATTACK:  It‘s simply beyond belief that the president would tolerate this kind of insanity. 

SHUSTER:  And on top of the issue of terrorism, a State Department report declares, quote, “The United Arab Emirates is believes to be a transshipment point for traffickers moving illegal drugs from the major drug producing countries, especially Afghanistan, westward. Frequent reports of seizures of illegal drugs in the UAE during the past year underscore this conclusion.”

President Bush‘s spokesman is defending the port deal, noting the number of government agencies involved in reviewing it. 

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY:  Department of Homeland Security, the Department of Defense, the Justice, among others, and there is a rigorous review that goes on for proposed foreign investments of national security concerns. 

SHUSTER:  And Michael Chertoff, Homeland Security Secretary, is assuring Americans there are safeguards in place.  Though he won‘t reveal what they are, because they‘re secret. 

MICHAEL CHERTOFF, SECRETARY OF HOMELAND SECURITY:  Without getting into classified information, what we typically do if there are concerns is we build in certain conditions or requirements that the company has to agree to make sure we address the national security concerns. 

SHUSTER:  But lawmakers are asking the Bush administration to spell out those conditions and concerns and explain why the deal is not a security risk.  Two members of the Bush administration have dealt before with the U.A.E. company Dubai Ports World.  Treasury Secretary John Snow was formerly the chairman of the CSX rail firm.  After Snow left CSX, Dubai Ports World bought the rail firm‘s international port operations for more than a billion dollars. 

David Sanborn was picked last month by the president to head the U.S.  Maritime Administration, before that, Sanborn worked for Dubai Ports World, running their operations in Europe and Latin America. 

(on camera):  The ports that are part of this deal are responsible for 40 percent of the U.S. Army‘s equipment being shipped overseas, including to places like Iraq.  It‘s another reason members of Congress, including Republicans, are drafting legislation to block this deal and stop all foreign ownership of U.S. ports.

Even longtime supporters of President Bush are publicly pleading with him to change course before his formal approval of this transaction goes into effect next week. 

I‘m David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster.

I‘m joined right now by Baltimore Mayor Marty O‘Malley, who governs a major port, and also Republican Congresswoman Ileana Ros-Lehtinen of Florida, whose district contains the Port of Miami.  Congresswoman, thank you for joining us.  It‘s been a while. 

Do you have an objection to letting this Dubai company run your port? 

REP. ILEANA ROS-LEHTINEN ® FLORIDA:  Absolutely.  We‘re very worried about it here in South Florida, because of many reasons.  First of all, Dubai, yes, is now a strong ally of the United States, but there has been strong 9/11 connections with Dubai. 

Secondly, this is not going to be a private company.  This is state run and state operated.  So this would be not just a foreign company being involved, because we have the Brits there now without any trouble, but there‘s a lot of difference between a British company that‘s a strong ally of the United States and Dubai, that‘s been now a Johnny come lately friend of the U.S.

And also, I would be against this whether it were a Venezuelan company or a Russian government entity.  So there‘s a big difference between companies and governments running this, and I‘m not saying that it‘s going to be controlled by a foreign government, no, but they‘re going to have a financial stake at our major seaports, and as we know, as you‘ve pointed out in your report, very few of that cargo now gets inspected, and we‘re going to have a foreign entity get 50 percent of the Port of Miami and a certain terminal today.  What will it be tomorrow?  What will it be five years from now?

And it‘s a secret committee, Chris.  That‘s what worries me the most.  This CFIUS—the negotiations are done in secret with no congressional oversight. 

MATTHEWS:  Let me go to Mayor O‘Malley of Baltimore.  Do you have a concern about this deal that allows the country, the company called Dubai Ports World, from the United Arab Emirates, operating our ports, including Baltimore? 

MAYOR MARTIN O‘MALLEY (D), BALTIMORE:  Yes, Chris.  We sure do.  And there‘s growing opposition in the Baltimore area.  It is bipartisan.  We should not be turning over important critical American assets like our ports or the Port of Baltimore, which all experts agree are already vulnerable due to a lack of investment over these last few years in port security. 

We should not be turning these over to any foreign government.  What we should be doing is investing in the things that allow us to inspect more cargo, to better track cargo and ships.  We should not be turning over any American port to a foreign government.

MATTHEWS:  But we already had it under the control right now of the Brits, what‘s wrong with that? 

O‘MALLEY:  Actually, it‘s not.  It‘s under control of a privately owned company that happens to have headquarters based in Britain.  This is different.  This is a company that is wholly owned by a foreign government. 

MATTHEWS:  OK.

O‘MALLEY:  How sad that we have to depend upon the insurances of a foreign ambassador about security measures that he will take at our ports that President Bush has failed to take for these last three to four years. 

MATTHEWS:  OK.  Let‘s go to Senator Bob Menendez, the new senator.  Congratulations, Senator, on being a United States senator.  It‘s an amazing honor.  You have got the port of Newark in your constituency.  Where are you on this? 

SEN. ROBERT MENENDEZ, (D) NEW JERSEY:  Well, I‘m with Mayor O‘Malley and I even think my colleague Ileana Ros-Lehtinen.  The reality is that I‘ve represented this port first in the House and now in the Senate for the last 14 years.  I know what goes on here.  And we‘re talking about a foreign-owned entity, that is owned by a foreign government, not just a foreign company. 

And in this case, the particular government is one which we should have a real concern, as it relates to security issues.  This is the country where two of the 9/11 hijackers came from, this is a country, one of only three in the world, that recognized the Taliban and that gave Osama bin Laden sanctuary to plot and plan and kill our citizens.  This is the government that the 9/11 Commission says, in fact, was a source in terms of, through not the government itself, but through the country, a source for al Qaeda financing.  And lastly, as we consider port operations, it‘s through this government, the United Arab Emirates, that in fact, critical nuclear components were shipped out by A.Q. Kahn, the Pakistani scientist to Iran, Libya, North Korea.

If they can‘t create a security regime in their own country to prevent that, why should we give them the operations of the ports in our country?

MATTHEWS:  Senator, name an Arab country you would trust to run the Port of Baltimore.

MENENDEZ:  It‘s not an Arab country...

MATTHEWS:  Well, name anyone.

MENENDEZ:  I don‘t believe that foreign governments, this one or any other, should be operating the critical infrastructure of the ports of the United States.  That should be run by either governmental entities or by nongovernmental entities of the United States. 

MATTHEWS:  So you have no problem in principle with an Arab company that‘s independent of a government from running that port? 

MENENDEZ:  If they meet all the other security concerns.  But the reality is—you know, not only is it the port operation in it‘s commercial context.  We put 145 million tons of cargo through here.  But sometimes we also use the commercial ports to use the forward promotion of supplies necessary for our troops abroad.  Imagine if you end up in a dispute with a foreign country that happens to be operating your port and they close down the port on you?  We have to think outside the box on September 11. 

MATTHEWS:  Let me go to Congresswoman Ros-Lehtinen about the president‘s position.  Where do you stand with the president, who supports this deal with the company from the United Arab Emirates to run the Port of Miami? 

ROS-LEHTINEN:  I think the president is wrong on this.  I work with President Bush and I enjoy that positive working relationship.  I hope that it continues.  But on this issue I stand with Speaker Hastert, I stand with Senator Frist, the Majority Leader of the Senate, who say let‘s hold off, what‘s the rush?  If this is all on the up and up, how could a Congressional oversight hearing hurt?  Let‘s have a series of House hearings and Senate hearings and if this is no problem, if this is a no-problem deal, then let‘s bring some sunshine, some transparency and some accountability into the process. 

Even if we can‘t stop this deal from going through, I hope we can open up the CIFIUS program so that we can have accountability and Congressional oversight.  These secret deals without the public light of day are not good for the American public. 

MATTHEWS:  Are you against any Arab company doing this, any government-controlled company that‘s an Arab country?  What‘s your standard here?

ROS-LEHTINEN:   I am against any foreign government having anything to do with the ports.  I‘m not against foreign companies being involved.  We already have this operation in the Port of Miami right next to me with a British company.  That‘s not a problem.  Once we go through all the safeguards.  But I‘m against the secret deals and I‘m against foreign governments.  That has nothing to do with Arab or racial profiling. 

MATTHEWS:  You have no problem with an Arab company doing business and running the Port of Miami? 

ROS-LEHTINEN:  As long as there is oversight, transparency and accountability, and we have all the national security safeguards. 

MATTHEWS:   Thank you Congresswoman Ileana Ros-Lehtinen, Senator Bob Menendez and Mayor Martin O‘Malley of Baltimore.   Up next, inside the politics of the fight.  How can the president supporters trust him to protect our security overseas and not here at home? 

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. Today President Bush stood his ground saying his decision to let a company from United Arab Emirates buy control of six major American ports was right.  Republicans and Democrats are hammering the president on this issue.  What are the political stakes here? 

Michael Smerconish is a well known talk radio host in Philadelphia and author of the forthcoming book “Muzzled.”  Hilary Rosen‘s a Democratic strategist.

Michael, you‘re on the radio all day.  My friends up there tell me this is a very hot issue in Philadelphia which has one of these six ports. 

MICHAEL SMERCONISH, RADIO TALK SHOW HOST:  Not only is it a hot issue, but Chris, try as I may for several hours this morning, I couldn‘t draw a single call in support of the administration.  You know the talk radio audience.  Predominantly the callers tend to be right of center.  That ought to tell you about the erosion of the base for the president on this issue. 

Let me say one other thing, because you‘ve been waiting so far into the program for someone to say we should not empower Arabs to control our ports.  Well, I‘m your man.  We shouldn‘t do that. 

MATTHEWS:  What about the fact that the Arab world is being stirred up against the West by people who want the division to be clear, East against West, West against East? 

Doesn‘t this feverish argument play into that?  You can‘t do business with the West, join us in the jihad? 

SMERCONISH:  Anything and everything fires these people up into a lather.  For God‘s sakes, they were all fired up about a cartoon just a week ago.  I don‘t think we can have them dictate our actions by the way in which they‘re going to respond. 

We‘re talking about a government here that would recognize the Taliban but wouldn‘t recognize Israel, period, end of story. 

MATTHEWS:  Let me bring in Hilary.  I want to quote as sort of a buffer between thought on this, though it may not need a buffer.  This is John McCain, late this afternoon put out this statement.  Let‘s make a judgment here when we possess all the pertinent facts.  Until then all we can offer is heat and little light to this discussion.  He‘s saying wait and see.  Do we know all we need to know?

HILARY ROSEN, DEMOCRATIC STRATEGIST:  For him to say wait and see when John McCain is usually so quick to judgment makes me think he doesn‘t want to take a position.  The president I think is making a huge mistake and it looks like he‘s starting to favor his family connections to the Saudis the money guys—

MATTHEWS: Wait a minute.  What connections does President Bush have with the Emirates, with Dubai? 

ROSEN:  The Dubai money men are the same folks that are connected on

the Saudi side.  We just don‘t know enough about where that money is

MATTHEWS: You don‘t either.

ROSEN:  I don‘t either, but I‘ll make the charge.

MATTHEWS:  But you assume the president has got a money deal.  That he is personally going to benefit from it? 

ROSEN:  No, no, no.  I think he‘d rather say no and make this be Democrats being afraid than to say no to other folks.  Look.  There‘s a lot of money going on in the Middle East that hasn‘t been traced.  We haven‘t spent any money here supporting the Coast Guard and the ports and the like. 

What‘s driving me crazy is all these Republicans are saying how wrong the president is to do this but nobody is really challenging the president on the rest of his national security agenda.

MATTHEWS:  Let me challenge Michael Smerconish.  Jim Zogby is head of the Arab-American Institute said this today.  “I find some of the rhetoric being used against this deal shameful and irresponsible.  There is bigotry coming out here.”  That‘s what Zogby said about the way you talk, I guess.  Do you accept that, you‘re a bigot against Arabs?

SMERCONISH:  Absolutely not.  I think that Mr. Zogby needs to be reminded of the appearance, the race, the gender, and the ethnicity of the 19 on September 11th.  Hey, Chris, I‘m probably the least surprised of your guests about the administration getting weak-kneed.

MATTHEWS:  So you‘re making this an ethnic thing.  Michael, you‘re actually making this an ethnic thing.

SMERCONISH:  Chris, it is an ethnic thing.  For goodness sakes, go back and look at the mug shots of those 19 guys.  Why do we have to be embarrassed to say we‘re at war with radical Islam and there are common denominators?  Race, gender, religion, ethnicity and guess what, they are the last people we‘re going to put in charge of our ports. 

MATTHEWS:  I don‘t this ethnic thing, because by that nature in this country, you would start basically saying we‘re only going to pick policemen who come from ethnic groups that have no crime, which would eliminate all ethnic groups, first of all.

SMERCONISH:  You know, Chris...

MATTHEWS:  ... Go ahead.

SMERCONISH:  No, that‘s not what I‘m going to say, but I am the guy who‘s going to say that let‘s stop spending all the time with the blue-haired old lady with the aluminum walker when she‘s going to the airport. 

MATTHEWS:  That‘s a different point.

SMERCONISH:  No it‘s not a different point.  It‘s all the related point.  We know who the enemy is, let‘s acknowledge it.

MATTHEWS:  OK, let me go to—Hilary, you want to...

ROSEN:  Well it‘s silly to make this an ethnic thing, but what makes total sense is that we‘re depending on a foreign government‘s ownership to protect the ports and we‘re underfunding the Coast Guard and other things for the basic security of the ports.  That makes no sense.  If Republicans really want to do something with this president, they would call him on that.  They would say, “Fine, let anyone you want operate the ports, but make sure the ports are going to be safe.”

MATTHEWS:  I‘m going to vet Michael Smerconish, my friend, on the following.  And please answer my questions.  You make me do this every year, you do this.  I want yes or no‘s on these questions.  Would you have a problem with a German company running our ports?

SMERCONISH:  No.

MATTHEWS:  Would you have a problem with a Belgian company?

SMERCONISH:  No.

MATTHEWS:  Or a Danish company?

SMERCONISH:  No.

MATTHEWS:  Or a Dutch company?

SMERCONISH:  No. 

MATTHEWS:  Or a British company?

SMERCONISH:  I told you, I‘ve given you what you want, it‘s the Arabs.

MATTHEWS:  OK, let me give you the list.  Let me keep my list going. 

Pakistani company?

SMERCONISH:  Problem.

MATTHEWS:  Iranian company?

SMERCONISH:  Problem.

MATTHEWS:  Egyptian company?

SMERCONISH:  Problem.

MATTHEWS:  Jordanian?

SMERCONISH:  Problem. 

MATTHEWS:  Well you‘ve just eliminated any chance for an Arab that want to do business with the West.  You said, don‘t do business with us.

SMERCONISH:  No, I‘ve eliminated any chance for an Arab to control American ports in the aftermath of September 11.  That‘s my rule.

MATTHEWS:  So your rule is basically don‘t trust Arabs?

SMERCONISH:  Don‘t trust Arabs in the aftermath of September 11th to protect what are the doorways to our country.  Now I‘m sorry if that‘s sounds alarming to some, but this administration has avoided this subject ever since September 11.  They should go profiling at airports.  That means we all get scrutiny, but some more than others.  And it also means we close the porous borders and it also means that we don‘t entrust control of our ports to people that potentially are our enemy. 

MATTHEWS:  Well the problem is I‘m Irish and American and under your standard, no Irish need apply because we‘ve got terrorists.

SMERCONISH:  That‘s not true.  Your terrorists are not fighting the United States.  That‘s a cohesive army.

MATTHEWS:  No, but they‘re fighting the Brits.

SMERCONISH:  You‘ve not declared jihad against us. 

MATTHEWS:  But you said terrorism is the issue.

SMERCONISH:  Terrorism is the issue, but there‘s no IRA doing harm here in the United States, Chris.

MATTHEWS:  They‘re not here, not exactly here, you‘re right.

ROSEN:  It‘s not an Arab.  It‘s a Middle Eastern government.  It‘s a government—a foreign government controlling our ports.  There‘s a big difference.

MATTHEWS:  OK, well I would trust the Irish government to own some of our ports.  I‘m sorry, we‘ll be right back with Michael Smerconish and Hilary Rosen.  You‘re watching HARDBALL.  It‘s back tonight on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with radio talk show‘s Michael Smerconish and Democratic strategist Hilary Rosen.  How many other jobs would you like to classify, Michael, as Arabs need not apply?

SMERCONISH:  Certainly control of the airports and it would be control of the borders and it would be control of the ports.  And its not Arabs, it‘s entrusting an Arab government.

MATTHEWS:  How about U.S. ambassador to Iraq?  Would you trust Khalilzad to his job over there?

SMERCONISH:  Chris, let me just finish.

MATTHEWS:  I‘m asking you if you would trust him, he‘s an immigrant from Afghanistan and he‘s our No. 1 guy in Iraq, trying to bring that country to peace.  Do you trust him?

SMERCONISH:  No, I trust him but that‘s really a false challenge because what I‘m saying is we‘re not going to entrust a government that funds madrassas where they teach their kids to hate our kids and to hate Israeli kids.  I mean, let‘s compare apples and apples.  They harbored two of the 9/11 hijackers, they funded Hamas.  They‘re bad folks, Chris, and we need to say so.

MATTHEWS:  And you would include all the more conservative, more pro-Western governments, including Jordan on your list?

SMERCONISH:  I would rather have Americans control American ports. 

MATTHEWS:  But we haven‘t had that case.  We have the Brits running the ports right now.

SMERCONISH:  I‘ll give you what you‘re looking for.  I don‘t want Arab control of American ports, period.

MATTHEWS:  OK, well if you got on an airplane and realized you had an Arab pilot, would you get off the plane?

SMERCONISH:  That‘s ridiculous.

MATTHEWS:  I‘m asking you.

SMERCONISH:  That‘s absolutely ridiculous.

MATTHEWS:  Would you get off the plane?

SMERCONISH:  I want guys like Matthews and Smerconish looked on when they get on the plane, but you know what?  I want those who resemble the 19 hijackers to be looked at a little longer.  Is that so unreasonable?

MATTHEWS:  It‘s an argument.  Whether it‘s reasonable or not, the viewers will decide.  Hilary?

ROSEN:  This makes—the president‘s making no sense today.  What the president has done every single issue for the last three years is saying, “We‘re at war.  We‘re worried about terrorists, we have to make exception, current rules don‘t apply.”  Every single time, “I‘m going to look at this differently.”

But in this case, he‘s not.  You‘ve got to wonder why and you‘ve got to wonder why his friends are not pushing him to do it.

MATTHEWS:  Why do you think the secretaries of Treasury, Defense,

Commerce, I believe, Transportation—all of them signed on on this deal -

Energy.  Why‘d they all sign?  They‘re all smart people, they‘re all politically accountable.

ROSEN:  Well first of all, the president‘s said that they wanted it at the White House.  So we don‘t know the order.  We don‘t know who signed on first and that would be interesting to know.  But I think the problem is why have all those people gone along on domestic spying?  Why are they defending that?  Why are they defending everything?

MATTHEWS:  You are a political hot ticket.  Michael, too.  Michael, first, in fact.  Michael, do you think the president will buck on this eventually?

SMERCONISH:  Yes. 

MATTHEWS:  How soon?

SMERCONISH:  I think that he‘s going to feel the heat over the course of the next several days and by the end of the week, my hunch, there will be a review process and allow people‘s memories to fade and when the issue comes back, I believe he‘ll buckle.  I cannot see him using the first veto of his administration to support an Arab nation guarding our ports.  I mean, am I dreaming?

MATTHEWS:  Well no, but I think you put down the marker for him.  Do you think you‘ll win this argument?

SMERCONISH:  Do I think who will?

MATTHEWS:  You will.

SMERCONISH:  I think I have won it.  I think I speak for the American people.  I mean, you can try and draw out of me the sound bytes that make me look like the hot head.  I‘m telling you, I speak for middle America.

MATTHEWS:  Michael, we don‘t do that.  But do you know what‘s interesting here, Michael and Hilary—you respond to this.  Do you feel yourself comfortable in the same pew as Michael Savage?  I mean, there‘s like an amazing group of people on this list.

ROSEN:  Yes. 

MATTHEWS:  You have Michael Savage you just had on, Chuck Schumer the other day singing his praises.  You‘ve got Lindsey Graham, who seems like a pretty smart moderate in this kind of a fight. 

You have a lot of people in this—Ros-Lehtinen from Florida, Menendez from New Jersey.  We just had Marty O‘Malley.  There‘s nobody on the other side except John McCain who is holding up the slow down sign.  That‘s all you got.

ROSEN:  For me, this isn‘t about the ethnic attack on Arabs.  For me this is about is the president going to continue this hypocrisy.  And make this ...

(CROSSTALK)

MATTHEWS:  I think was an attack on Arabs, and you know what else?  If this was a Dutch company, there wouldn‘t be a murmur out of anybody.  Thank you Michael Smerconish.  I think Michael‘s honest enough to say what it is.  Good for you, buddy.  At least you are what you are. Hilary Rosen—which I don‘t know what that is, but anyway, thanks for coming on. 

(CROSSTALK)

MATTHEWS:  Former Homeland Security Secretary Tom Ridge says America‘s ports are safe now than they were before September 11th, but says the Bush administration underestimated the political fallout over this Dubai deal.  We‘ll hear from Governor Ridge in just a moment.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(NEWSBREAK)

MATTHEWS:  Welcome back to HARDBALL.  Earlier I spoke about port security with Tom Ridge, who served as the secretary of Homeland Security during President Bush‘s first term. 

(BEGIN VIDEOTAPE)

MATTHEWS:  Governor Ridge, you had the job of Homeland Security secretary.  You know the risks and the choices you have to make.  Is it a smart choice to choose economic advantage over security when giving a contract for port management? 

TOM RIDGE, FMR. HOMELAND SECURITY SECRETARY:  Well, I think it‘s a false choice.  I don‘t think that they‘ve chosen economics over security.  The bottom line, Chris, is there is a perception that is far different from the reality around this contemporary controversy with regard to selling of the operational responsibility for these six ports on the East Coast. 

MATTHEWS:  When you think about Philadelphia, one of the ports involved from the state of Pennsylvania, where you were governor for two terms, do you think about the security there?  When you think about it, do you think it matters which company has title to the port facilities? 

RIDGE:  I think it‘s a very important question because the optics certainly for the average citizen and our colleagues on the Hill, nobody likes the optics, but that‘s perception.  The reality is that the state continues to own the port. 

They‘re not selling the port.  The state, in conjunction with the Coast Guard and the Customs and Border Protection and the law enforcement community, continues to handle all the security matters related to the ports.  So I think there is a difference between the perception of this contract and the reality as to who is ultimately responsible for security. 

MATTHEWS:  OK.  Some fellow in Dubai is making the call on who is senior management at the Philadelphia port.  Does that matter if that person isn‘t as keenly interested in security as an American would be? 

RIDGE:  At every one of these ports, Chris, there is a security committee that‘s headed primarily by the Coast Guard.  The Coast Guard has been given primary responsibility not only by the Department of Homeland Security, but by the Congress of the United States with regard to maritime security. 

And regardless of whether the individual in charge is casually interested, remotely interested, or intimately interested, regardless of his interest, he has to comply with the Coast Guard regulations and the maritime security procedures that not just the Coast Guard wants, but the international maritime community requires of all ports. 

MATTHEWS:  Of every 100 containers that comes into the United States through ports like Philadelphia, Baltimore, New York, whatever, how many are checked for what‘s in there? 

RIDGE:  The last statistic, there were five to six percent of them are checked, but it‘s not a random selection process, Chris.  Because of the information that customs has secured over the years and Coast Guard, we score every container because we require the shipping companies to send the manifest to us 24 hours in advance. 

We match all that information against the database we have, and if we don‘t like the answers, if it doesn‘t score correctly, then we run it through an x-ray machine.  If we don‘t like what we see, then we open the actual container itself.  And that‘s done so that we make our ports the last live of defense.  All that‘s done under the Container Security Initiative in foreign ports overseas.

MATTHEWS:  You know, when 9/11 occurred, a lot of people thought that the box cutters that got on those planes didn‘t go through the metal detectors, they came in through the food supply.  Everybody is trying to figure out you could get the box cutters on, and one possibility was they came in through the food, that—the people that have the concession. 

If an Emirates government, a state-owned enterprise like Dubai Ports, owned that food concession, right, we‘d think wait a minute here.  Why are we letting Arabs decide what kind of knives and forks to get on the plane and whether to put a box cutter on the plane in somebody‘s little food container?  Isn‘t that a concern that somebody might be sloppy, somebody might be gettable, bribable that normally wouldn‘t be bribable if they were Americans? 

RIDGE:  Well, I think that‘s conceivably possible in any port.  But interestingly enough, Chris, one of the first Middle Eastern countries and ports to agree to our Container Security Initiative was in Dubai where they agreed for us to put Customs and Border Protection officials.  They agreed to buy the technology, basically the x-ray machines we have in the ports. 

And I say this.  We‘ve layered in many levels of security and, in

time, I suspect that with the advance of technology in Dubai and all the

ports around the world—and that‘s where you want your first check to be

we‘ll have a much higher percentage of containers that are actually x-rayed before they‘re put on ...

MATTHEWS:  Could you defend this if you were governor of Pennsylvania?  Would you defend the administration in renting out our port facilities, our management of our port facilities to an Arab country?  Could you do it?  Could you defend it politically right now if you were running for re-election? 

RIDGE:  I think you can and I think you should, because there‘s a—I mean, politically, it‘s easy to jump on the perception because the process of the assessment within the administration hasn‘t been very well explained.  I was part of that process, Chris.  It involves the secretary of defense, secretary of commerce, secretary of treasury, secretary of the Department of Homeland Security, the attorney general, and I suspect, on her way over to UAE, Secretary Rice.  And so it‘s not done by a couple low-level folks elsewhere.  It is done by multiple agencies, close scrutiny, look into background, take a look at how this company has operated ports around the world, not just with regard to our six domestic ports, and you make a decision. 

And I can‘t believe anyone would conclude that these six principals in this administration would do anything to compromise the security of this country. 

MATTHEWS:  So you have 100 percent confident in the process? 

RIDGE:  I am absolutely confident of the process. 

MATTHEWS:  And are you...

RIDGE:  Because...

MATTHEWS:  Had you been on that panel, would you have OK‘ed this? 

RIDGE:  Well, I suspect I would.  But again, there is a lot of public discussion about information we don‘t have full grasp of, we don‘t have full control of.  Only the secretaries know that.  And I think one of the concerns that has been expressed by some of our—my former colleagues on the Hill, Republicans and Democrats, House or Senate, they need to know how thorough this committee vetted this transaction.  They don‘t know that yet.  And I think when people like Peter King say, come on, you‘ve got to come up and help me understand why this is not compromising security, I think that‘s a very appropriate request on his part and of Congress. 

MATTHEWS:  There are well over a billion Islamic people in the world.  Do you think if we knock this company out of contention here, if we void this contract, we are saying to those 1.3 billion in the world, whatever business you do, no matter how peaceful you are, no matter how free enterprise you are, pro-American you are, you ain‘t doing business with us because you‘re Arabs? 

RIDGE:  I think...

MATTHEWS:  Is that the message? 

RIDGE:  Well, I think it‘s a slippery slope to conclude that because your country, there may have been a terrorist that went through your country or somehow they accessed a few dollars in your country, that would probably be excluding a significant part of the world, including some of our allies.  Let‘s not forget that some of these hijackers were in Germany.  Let‘s not forget our heavy dependence on Saudi Arabia for oil, and we know most of them were from Saudi Arabia.  So that simple connection should not be enough to disqualify the transaction. 

The answer should be—the question should be, have you compromised security?  Will security be less?  And I don‘t think, as long as the Coast Guard is given the mandate to take care of security, it will not be less.  They will continue to enhance it.  And I would say to my friends in Congress, if you really want to bolster security at our ports, give the Coast Guard a lot more money and let them hire a few more people, let them bring a few more boats to their port security effort, and you‘ll continue to enhance security in our maritime industry. 

MATTHEWS:  If you were giving political advice to this president, President George W. Bush, would you argue that he should hang tough with the Dubai Ports deal? 

RIDGE:  I think the president should hang tough.  I suspect he will hang tough.  But if I were called, I would certainly encourage them, not from a commercial or treasury point of view, but from a homeland security and defense point of view, to go describe privately the vetting process so that the anxiety level that‘s certainly been heightened politically because of everything that‘s been said, and some of it misinformed...

MATTHEWS:  I think you‘re an optimist, Governor, because I think a lot of people are involved with this now politically now.  I think people like Schumer, Evan Bayh, all across the board, Democrats and Republican, Lindsey Graham. 

(END VIDEOTAPE)

MATTHEWS:  Thank you, Tom Ridge.  Up next, Miami Police Chief John Timoney on how to keep ports secure. 

And later—has President Bush turned his back on conservative ideals?  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  With hundreds of ships and thousands of containers moving into America‘s ports every day, just how does that affect the security plans of port cities?  John Timoney is the chief of the Miami Police Department.

Chief, thank you for joining us.  You‘ve worked in Philadelphia, you‘ve worked in New York, you‘ve worked in Miami.  You know all the big cities like nobody.  Is this a problem, to have an Arab state-owned company run the ports?

CHIEF JOHN TIMONEY, MIAMI POLICE DEPARTMENT:  I can tell you right off the bat that it kind of hit me as strange, the way it was just announced.  There wasn‘t any—nobody kind of guided the process or the decision through.  It was—it kind of hit us, and I can tell you, the reaction here in Miami, particularly in South Florida, has been nothing short of shocking.  My mayor wrote a protest letter to the president today, kind of demanding an investigation.  It seems like—it seems like to me at least that the thing has been mishandled so far. 

MATTHEWS:  Well, let me ask you.  It seems to me, Chief, that everybody has been saying now since 9/11 that the big open door to terrorism are these containers, because so few of them get checked.  Remember they found a guy living in one of them?  Could come here from somewhere...

TIMONEY:  That‘s right, yes.

MATTHEWS:  ... in Jepip (ph) somewhere, he shows up alive inside one of these containers?  So obviously, we‘re not checking too—doesn‘t this add to the concern?

TIMONEY:  Oh, it does.  And especially here in Miami.  Clearly, right behind me, there are thousands of containers that come in on a daily basis, and upwards of maybe 5 percent actually get inspected.  There are other trip mechanisms meant to prevent some terroristic act.  You also have the cruiseship lines.

But the whole idea—me from a personal perspective of having a foreign government, even though it owns a private company, running something like the port, it just seems strange to me.  I wouldn‘t, for example—you have nuclear plants that are held by private companies, ConEd up in New York, they‘re semi-private.  You wouldn‘t think or a second of ever turning that over, the operations of it—not the security, the operations—to a foreign government, except maybe the Brits.  They are the only ones I would trust at this point.

MATTHEWS:  So we trust the British, but not too many other countries. 

Let me ask you about how you divide up the authority.  You‘ve got control over municipal Miami.  When you have to deal with a terrorist or somebody in the port area, do you have the Coast Guard as an ally, or do  you have these Stevedore companies?  I mean, what‘s the role of the Stevedore company, in this case the Emirates are going to be, and the Coast Guard?  How do they divide authority over keeping danger out of this country? 

TIMONEY:  Right, well, the ultimate authority is the Coast Guard, and the Coast Guard of Miami, we work with them on a daily basis.  Our police boats are right here with them.  We have got a great working relationship with the captain of the port. 

But and so ultimately, he‘s got the responsibility.  He sets up the protocols with the various shipping companies in and around the port.  But it‘s a huge effort.  To give you an example, Chris.  Right around Christmas, a plane went down, 20 people got killed right here behind me, about 100 yards.  They closed down the port—this is a small commuter plane—closed down the port for fully two days, stopped all commerce.  Three fully loaded cruiseship lines couldn‘t leave.  And that was just a small accident.  I—I shudder to think god forbid some terroristic act would happen here, what it could do to the local economy. 

MATTHEWS:  Let me ask you if you had a plan for this.  It looks like the president is going to go ahead with this.  How are you going to operate as a police chief knowing that the port of Miami, your city, its port, are under the control of the United Arab Emirates?  What are you going to do differently? 

TIMONEY:  Obviously, we won‘t do anything differently.  I think the resolution to this is up in Washington and my sense is cooler heads well prevail.  All I can tell you is, Chris, Peter King is a good buddy of mine from New York, I go back 20 years with that guy, and if Peter King has got some concerns, I definitely have concerns. 

MATTHEWS:  What do you make of what John McCain proposal.  He says this—let‘s make a judgment when we possess all the pertinent facts.  Until then all we can offer is head and little light to this discussion? 

Can you say that within your position? 

TIMONEY:  I would think the best thing to do right now, the president have it within his power to postpone this for the time being, 60, 90 days, conduct a thorough review and then come out with the findings and say, listen, all this worry is for naught or whatever it is.  But the way it was just plopped down over the weekend struck people as wrong. 

MATTHEWS:  Thank you very much, chief.  John Timoney of Miami.  Thank you very much.  When we return, has President Bush subverted traditional conservative ideology?  We‘re going to broaden this discussion with former Reagan adviser Bruce Bartlett.  He‘s going to be here to talk about his new book, “Impostor:  How George W. Bush Bankrupted America and Betrayed the Reagan Legacy.”  Tough stuff.

And on our Web site, Tom Curry has the story on how the Democrats, obviously, are capitalizing on the debate over port security.  They‘re trying to go to Bush‘s right, have you noticed?  Just go to our Web site, MSNBC.com.

(COMMERCIAL BREAK)

MATTHEWS:  welcome back to HARDBALL. President Bush catches criticism from all corners, but it doesn‘t often come from a conservative veteran of the Reagan administration.  Economist Bruce Bartlett worked for President Reagan and both presidents Bush.  He is the author of a new book called “Impostor:  How George W. Bush Bankrupted America and Betrayed the Reagan Legacy.” 

If you had to narrow it down to the biggest offense as you see it that Bush is not conservative, what is it? 

BRUCE BARTLETT, AUTHOR, “IMPOSTOR”:  Spending.  Spending is just totally out of control.  There is a whole chapter in the book about how Bill Clinton, of all people, was actually vastly better on the budget and there simply is no comparison between the two. 

MATTHEWS: President Bush has yet to veto a spending bill. 

BARTLETT:  Not any bill.  You have to go back.  I checked the other day, Thomas Jefferson was the last president to serve as long as this president without vetoing a single bill. 

MATTHEWS:  Have you done any reporting on this from the people like Karl Rove and people inside why this president will not say no to spending? 

BARTLETT:  They always tell me that it‘s because the bills are passed by a Republican Congress.  So he would by definition have to veto Republican bills. 

MATTHEWS:  What about the pork? 

BARTLETT:  I‘m telling you what they tell me. 

MATTHEWS:  It is hard to defend—well, if you are a conservative.  Liberals of course don‘t mind spending money anyway.  But this guy spends more, right? 

BARTLETT:  Of course, there is an awful lot of administration pork in the budget that nobody really even talks about.  And a lot of the tax provisions and things are just pork on the tax side.  They are just give always with no economic effect. 

MATTHEWS:  Has President Bush done anything to cut down on domestic spending to finance the wars overseas? 

BARTLETT:  No.  Nothing.

MATTHEWS:  So it‘s guns and butter? 

BARTLETT:  Yes.

MATTHEWS:  Another hot issue, we just had Michael Smerconish on, radio talk show host, and they are out there buzzing away about immigration all the time.  Why does the president take the position that illegal immigration is basically OK, it‘s an economic reality and a thing we have to live with.  He is not taking a law and order position on this issue at all? 

BARTLETT:  I think a lot of it comes from the fact that he is from Texas and Texas is unique in that it was once part of Mexico and the people of Mexican decent who live in Texas are quite different from the sorts of illegal immigrants that we come in contact with elsewhere. 

A lot of it comes from that.  He sees these people—

MATTHEWS:  California has a different situation.  California has a lot of poor people coming in, heavy welfare bill. 

BARTLETT:  Also Texas has maybe the lowest welfare benefits of any state in the union and California has perhaps the highest. 

MATTHEWS:  People who are poor and desperate and have a lot of relatives to bring across with them, goes to California. 

BARTLETT:  Makes sense economically. 

MATTHEWS:  Do you think—I‘ll ask you, would Ronald Reagan have invaded Iraq? 

BARTLETT:  That‘s very hard to say, because the whole question of what did we know and when did we know it is so very much up in the air.  My own feeling is that if they genuinely believe there were weapons of mass destruction, that‘s justifiable. 

MATTHEWS:  You believe that is the reason we went to war? 

BARTLETT:  I said if you assume that.  I mean, if your hated enemy is holding a gun at your hand, you don‘t have an obligation to make sure the gun is loaded before you take the guy out. 

MATTHEWS:  I‘ll ask you yes or no.  Would Ronald Reagan have invaded Iraq? 

BARTLETT:  He might have if the intelligence justified a belief, a genuine belief there were weapons of mass destruction. 

MATTHEWS:  For chemical and biological? 

BARTLETT:  Yes. 

MATTHEWS:  That would have been enough to invade a country on the other side of the world.  Why don‘t we invade Syria and all those other countries with biological and chemical weapons?  Why don‘t we invade Pakistan? 

BARTLETT:  Their leadership is different.  I‘m not a supporter of the war. 

MATTHEWS:  I‘m baffled by this.  You‘re going to stick to this? 

Reagan would have invaded Iraq? 

BARTLETT:  I keep coming back to the premise that you genuinely believe that someone who hates your guts has weapons of mass destruction.  I think you have to do something about it.  Whether we would have invaded is another matter.  I think something would have been done. 

MATTHEWS:  We disagree.  Fair enough.  Good luck.  I think the book has a lot of great points.  I think you have a great critique from the right rather than the usual critiques from the left.

Bruce Bartlett, used to work for Reagan, used to work for Bush.  Does he like it? 

BARTLETT:  The first one, I don‘t know.  We‘ll find out.

MATTHEWS:  The book‘s called “Impostor.”  It‘s pretty tough stuff. 

Join us again tomorrow night at 7:00 eastern for more HARDBALL.

COUNTDOWN with Keith Olbermann starts right now.

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

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