updated 3/2/2006 10:51:55 AM ET 2006-03-02T15:51:55

Guest: Barbara Boxer; Kate O'Bierne; Bob Shrum

CHRIS MATTHEWS, MSNBC ANCHOR:  President Bush jets to India but he can't get away from the problems that plague his presidency.  Will his own party let him sink in the Dubai port deal?  Let's play HARDBALL.

Good evening.  I'm Chris Matthews.  Welcome to HARDBALL.

Tonight from NBC News headquarters in New York, President Bush paid a surprise visit to Afghanistan today, then flew to India, where he'll meet with the prime minister. 

Back home, the president's problems aren't going away.  With new indications that the president is losing Republican support on his key issue of national security, just months from the midterm elections. 

With the president's poll numbers being crushed by the war in Iraq, Katrina, and now the noise surrounding the Dubai ports deal, a lot of people in Washington are wondering how the president's second term has become so second rate. 

Tonight an exclusive interview with an executive from the port company at the center of the controversy, but first HARDBALL's David Shuster has this report. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Two weeks after the port transaction story first broke, the basic issues of contention are not going away.  Critics of the port deal point to several concerns.  Two of the 9/11 hijackers came from the United Arab Emirates.  And after 9/11, according to U.S. Treasury Department, the U.A.E. initially failed to cooperate in tracking down Osama bin Laden's bank account. 

DENNIS TAYLOR, TEAMSTER:  As far as we're concerned, this is unconscionable decision by our government to sell our ports and put us at risk. 

SHUSTER:  Since the 9/11 terror attacks, the United Arab Emirates has been helpful to U.S. military operations.  U.S. naval ships have docked in Dubai more than 700 times, and President Bush argues the U.A.E.'s market economy and cooperation with the United States could serve as a model for the Muslim world. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  This is a company that has played by the rules, that has been cooperative with the United States.  A country that is an ally in the war on terror and will send a terrible signal to friends and allies not to let this transaction go through. 

SHUSTER:  The transaction however has exposed the quiet truth about U.S. ports.  That is 24 of the top 25 U.S. port facilities are owned by foreign-based companies.  The massive port of Long Beach, California is run by the China Ocean Shipping Company, a company state owned by the Chinese government. 

Furthermore, nearly 26,000 shipping containers arrive in U.S. ports every day.  Very few of which are actually inspected. 

REP. NANCY PELOSI, (D-CA) MAJORITY LEADER:  America can do better, we know that.  For example, 100 percent of the containers going into the terminals in Hong Kong are inspected.  Five percent of containers in the U.S.

SHUSTER:  Some inspections are made overseas.  U.S. Custom Border Protection officials work at 42 ports around the world, looking not at the containers themselves, but at the paperwork instead. 

JAY AHERN, CUSTOMS AND BORDER PROTECTION ASST. CMDR.:  It's based on information and intelligence in a risk-based algorithm set.  We screen them for risk at our national targeting center here in the D.C. area and make a determination and that's how we focus our resources and our technology. 

SHUSTER:  That technology includes hand-held monitors that check for radiation, but according to government auditors cited by “U.S. News and World Report,” the devices have an error rate above 40 percent.  Furthermore, one program to place U.S. Customs Inspectors at foreign ports including Dubai was so understaffed, according to government auditors, that only three out of four containers deemed risky enough for inspection were actually checked. 

When a container arrives in the United States, the company that runs the port is responsible for rechecking the paperwork of every shipment, then U.S. Customs and Coast Guard officials are supposed to verify the paperwork, and lead inspections of any cargo considered questionable. 

The Department of Homeland Security does not force shipping companies to put tamper sensors on their containers. 

PETER PEYTON, INT'L LONGSHORE & WAREHOUSE UNION:  Most of the cases, the incidents where something was found was found by a longshoreman who had experience on the docks that recognized something is wrong in this situation. 

SHUSTER:  As far as security is concerned, U.S. ports have received

$629 million in government grants since 9/11.  But the Coast Guard has said

the ports will need eight times as much for the next 10 years, just for

basics, like lighting, fences and guard shacks,

(on camera):  But the big cost right now is the political cost.  The Dubai ports transaction is dragging down the president's poll numbers and the fear is growing among Republicans facing midterm elections that the G.O.P.'s political edge on national security is evaporating. 

I'm David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster.  Let's go now to NBC News Chief Foreign Affairs Correspondent Andrea Mitchell.  Andrea, what is the big story here behind the politics, the substantive question for the United States in terms of our security? 

ANDREA MITCHELL, NBC NEWS FOREIGN AFFAIRS CORRESPONDENT:  Well, this country has been a real ally since 9/11, especially since the end of 2003 according to U.S. officials.  But still, there's a lot of smuggling, it's in a tough neighborhood, they have committed money laundering in the past, so your question is whether they can patrol their own ports, no less ours. 

That said, our ports are now going to be owned by foreign countries.     We are no longer in the port management business.  And so the reality is, is it going to be China, is it going to be Dubai, and should we treat Dubai, an Arab country, differently from other countries. 

MATTHEWS:  Let me ask you about the question, you know, I keep hearing from the administration side that we trust the U.A.E., the Dubai government, to take care of our shipping, our military shipping, our aircraft.  Do they have a good record of protecting our material, our fighting vessels and aircraft? 

MITCHELL:  First class.  This is the country to which we moved after Yemen became so exposed and after, as you know, Saudi Arabia was no longer tenable.  So this is the main area in which we are basing our ships and planes for fighting in Afghanistan and Iraq, and they've been a model base. 

MATTHEWS:  The issue was raised today by Senator Barbara Boxer about the Arab boycott of Israel which has been going on for decades and from my understanding today has been variously enforced, not enforced.  A game is being played, you take the sticker off that says it's made in Israel and they'll deal with it.  This goes on between Turkey and Greece all those years, in Zimbabwe when it was Rhodesia, we're used to these games. 

Is it a serious hazard to Israel what the Emirates are doing?  Are they hurting Israel by the participation in this boycott? 

MITCHELL: They're hurting Israel, but not as much as they could.  There's a lot of winking and nodding.  Dubai is interested in doing business and if that means doing business behind several middle men with Israel, they do.  They no longer impose the secondary boycott against American firms that deal with Israel.  But they are not as forward leaning as Jordan and other countries that have relationships with Israel.

That said, this is more of a political problem than a real problem.  It can add fuel to the fire in Congress particularly, with the strong support there. 

MATTHEWS:  Well it also it seems to me can add to the international fire if it's known that one of the reasons we dropped this deal is because of concern about the boycott.  Let me ask you this, because this is where you're an expert.  David Brooks, a conservative, a neoconservative, writes for The New York Times, a very smart guy.  He said this would be a kick in the teeth if we kill this deal. 

MITCHELL:  Oh I think that's true.  I think -- --

MATTHEWS:  To the Arab world. 

MITCHELL:  Here you have a country that has been trying to reform itself and that has been an ally where we have our military bases and if we cut off this deal, I think that the—you know, whether we should or should not in terms of security is another issue, but if we do cut off this deal, you're going to see an intense reaction in the Arab world, already have. 

I've spoken to ambassadors from other Arab countries and other diplomats here in Washington who are already offended.  They're sort of gritting their teeth because they want this deal to go through but they are deeply offended.  They think it is nothing short of prejudice. 

MATTHEWS:  Could this be another cartoon issue? 

MITCHELL:  Absolutely. 

MATTHEWS:  Really.  It could get that hot. 

MITCHELL:  I think so.

MATTHEWS:  Great to have you here.  You're an expert. 

Rob Scavone is the executive vice president, general counsel at P&O Ports, North America, which presently runs the ports the Dubai Ports World is seeking to operate.  Mr. Scavone, will remain in his job when Dubai Ports World acquires P&O Ports, North America.  He's here to discuss port security only.

Help me out here.  This is a question we keep asking on the show.  When a container moves from another port to one of the American ports, one of the six American ports, who is responsible for making sure nothing dangerous is carried in those containers? 

ROB SCAVONE, P&O PORTS EXECUTIVE:  That would first be the shipper who owns the cargo, followed by the vessel operator, the container carrier, then the customs or governmental authorities in the port where the vessel is loaded, some of whom allow U.S. customs authorities to screen and inspect cargo there.  And finally, by customs and border protection in the U.S. Coast Guard when the vessel arrives in the United States. 

The information on the contents of the container, the manifest information that the vessel operator has, is sent electronically to customs officials in the United States before the vessel is loaded, but that information, people may be surprised to learn, is not given to us.  Customs knows what's in the boxes.  The vessel operator knows what's in the boxes, but we are not advised what's in the boxes. 

MATTHEWS:  What I'm trying to get at if something were dangerous to come into the country, a container of nerve gas for example, who would the terrorists have to bribe or deal with to get past?  If you wanted to put a container of nerve gas aboard one of these containers, who would you have to get past to get that done or have a good chance of that getting through?

SCAVONE:  You've highlighted the main issue that we do try to address and our government tries to address, which is the point of origin of the container, and that is where our security efforts have primarily been focused.

MATTHEWS:  But whatever the answer is to that question, it doesn't relate to what happens once the container reaches the ground in the United States and certainly has nothing to do with who owns that particular terminal operator. 

MATTHEWS:  Well, the terminal operator, in other words, in this case, Dubai Ports World, and you as one of their assets, your company, P&O, would you check what was in the container, or does it simply go to the address who it's addressed to and they get to open it? 

SCAVONE:  No, we follow the instructions of customs.  They tell us what containers they want to inspect, among those that they haven't inspected before the vessel was loaded.  We give the containers physically to them.  That, by the way, is done by our longshoremen.  Nobody moves, touches or even counts a box unless he's a longshoreman. 

Customs takes it, they do whatever they want to do with it, whether it's non-intrusive inspection with x-rays or radiation detection or whether it's physically opening the box and restuffing it.  Then they give it back to us.  Nothing leaves any one of our terminals until Customs and Border Protection allows us to release it to the cargo owner. 

MATTHEWS:  OK, let me put it this way.  If something dangerous comes into the United States and explodes on Broadway or somewhere else, and we find it came in, in one of the containers, who would we got to find out how it happened? 

SCAVONE:  You would start with customs, because they would have all the information about vessel loading and contents and whatnot, and then you would trace back through the vessel carrier to the point of origin and their customers.  Highly unlikely the terminal operator in the United States would have anything to add to that equation. 

MATTHEWS:  So he wouldn't—your company would not feel a duty to start sniffing around these containers and opening them up because why?  Why wouldn't you do that? 

SCAVONE:  It's not our property.  The containers are sealed before they are dispatched from the foreign country, and one of the whole principles of containerization is that that seal remains on until it's received by the cargo owner in the United States. 

MATTHEWS:  So if you picked up the newspaper, the “Daily News” or the “New York Times” and picked up a newspaper that said bin Laden to attack the United States, to use cargo shipment as his means this time, how would you change your management of the ports once you read that report? 

SCAVONE:  We wouldn't change it one wick.  We are doing everything that we can do for our little piece of the security. 

MATTHEWS:  But you wouldn't go and try to open up these containers and see what was in them, if there was a “New York Times” story that said cargo could contain dangerous weaponry of nerve gas or whatever? 

SCAVONE:  We have thousands of containers.  As I say, we are not advised to what the contents are.  The vessel operator working with customs and no doubt with the U.S. Coast Guard would decide what to do.  Any containers that they wanted to inspect, we would make available to them using our longshore harbor workers. 

MATTHEWS:  OK, we'll be right back with Rob Scavone with P&O. 

And later, California Democrat Barbara Boxer on the Dubai ports deal. 

You're watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.   We're back Rob Scavone, the executive vice president for P&O Ports, the company being acquired by Dubai Ports World.  Just to make it clear, sir, this is hard to fathom exactly as a civilian trying to figure this out.  Who decides which containers to inspect? 

SCAVONE:  That would be Customs and Border Protection. 

MATTHEWS:  And how do they do it, do you know?  How they choose—is it country of origin?  Is it materials that are being—are on the manifest or what?  How do they decide? 

SCAVONE:  They have actually a complicated way of deciding which to physically inspect.  They do, of course, screen every box with the information that is given to them electronically by the vessel operator before it's loaded in the foreign country. 

Of those, they have rather sophisticated ways of determining which boxes are the highest risk and they inspect 100 percent of the boxes that they consider to be risk.  But they might do that in a foreign port, they might do it here. 

They might do it as I said physically by emptying the box and inspecting it with their own people, not with ours, or they might do it with electronic equipment such as gamma rays or radiation detection devices, again with their own people. 

MATTHEWS:  Do they target countries of origin that have been involved with terrorism?

SCAVONE:  The criteria that customs uses is not generally made publicly available. 

MATTHEWS:   Well, common sense tells you that you'd look at a country, something coming from Dubai or something coming from—God—somewhere in Saudi Arabia or somewhere certainly in Syria or Libya, or certainly Iran.  Wouldn't those countries get the high priority for an inspection? 

SCAVONE:  I imagine that those types of criteria are taken into account but, again, those decisions are made by customs, they're advised to us.  It doesn't change anything about the way we manage the terminal in the U.S. and it certainly doesn't have anything to do with who happens to own us several layers up the corporate chain. 

MATTHEWS:  Right.  Is it your position that it really doesn't matter who your holding company is, who is your overall, I could—who owns the asset of P&O? 

SCAVONE:  Yes, I understand the concern about security, I live in New Jersey myself.  I lost my share of friends in 9/11.  The concern is absolutely one that needs to be addressed.  I'm absolutely confident that for people who are interested to know the facts, those questions can be answered. 

And the answer is, the security of our U.S. terminals are well in hand, and that is not going to change no matter who happens to own us several layers up the chain.  We don't take direction from our London office right now.  They do not get involved in how we manage security.

MATTHEWS:  Right.  Do you expect that you could spend the next five or 10 years with that company as the counsel and never meet somebody from the Emirates? 

SCAVONE:  Well, myself personally, probably will.  But it's high highly unlikely that anybody who does work on the terminal will meet our new shareholders, and they never met our old shareholders. 

MATTHEWS:  So it's possible that none of the people from that Arab country will ever walk onto that pier, never walk into any of those terminals?

SCAVONE:  Well, it's possible that our owners may come to visit, but they're not looking for employment here.  Dubai is a smaller company than ours. 

MATTHEWS:  Right.  I see.  So it's basically a financial situation, rather than a management situation? 

SCAVONE:  They have undertaken to keep the U.S. management in place, and to keep P&O ports as a U.S. company if place, without changing the way the company is managed or operated.

MATTHEWS:  So no micromanagement?

SCAVONE:  No management from abroad in matters of security.

MATTHEWS:  OK, great.  Thank you.  Great for coming on.  I know it's a tough time for you.  Thank you, Mr. Scavone, for coming on.  From P & O, the company that now operates these terminals in these six American ports which are now of course going to pass into the hands of the Dubai Ports World, a new company, if everything goes as planned.  Of course everything is now subject to Congressional and presidential action. 

When we return, an outspoken critic of the port deal, Senator Barbara Boxer of California.  You're watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  The president is showing no signs of backing down from his approval of the Dubai Ports World deal for those six ports in America.  Democratic Senator Barbara Boxer of California was at Tuesday's hearing in the Senate and explains why she thinks that overall the deal is wrong for America.  Let's listen. 

(BEGIN VIDEO CLIP)

SEN. BARBARA BOXER, (D) CALIFORNIA:  This particular deal just symbolizes the incompetence, the tin ear, the putting commerce before security after we've used security as a threat every other day. 

(END VIDEO CLIP)

MATTHEWS:  Senator Boxer sits on the Senate Commerce and Transportation Committee, as well as the Foreign Relations Committee, she joins us now from Washington.  Good evening, Senator Boxer. 

Have you made up your mind on this sports deal overall looking at all of its features, do you believe it's something that you could not approve? 

BOXER:  I could not approve it and I think it raises so many questions in a post 9/11 world.  If we want other countries running our ports.  I say no.  It's pretty simple.  Byron Dorgan, my colleague from North Dakota, said at that same hearing, he said we don't need 45 days to look at this or 45 minutes or 45 seconds.  The American people get this.  This is just the wrong thing to do and I'm stunned at the president's sense that he's going to veto whatever we come back with.  It just seems that he does have a tin ear on this one. 

MATTHEWS:  You used the word incompetent.  What's going wrong?  I know you're a Democrat and you look at it from that perspective, but what's going wrong as you see it from this administration over the last couple of months with this issue of Dubai, the ports, the Katrina problem, even the shooting by the vice-president, the Harriet Miers miscue, do you think there's a second rate operation at the White House, just in terms of competence, not ideology? 

BOXER:  That's a good question.  I just think there's a preoccupation with so many other things than the thing that's in front of you.  When you're preoccupied with making everything political and scoring points, when you're preoccupied with a disastrous war in Iraq, that's my view on it, and you're worried about that, when you're trying to please your base all the time, which is pretty radical. 

You're just missing what's in front of you, Chris.  I think all of these things, Katrina, the prescription drug plan, this particular deal here, these are big deals.  These are big issues.  They're important.  And I just don't think there's a concentration. 

You know, in my world of politics, I've always found the best way to deal with an issue is to come to a conclusion after you talk to all sides.  I just don't know—I've never been called by this administration, but that's OK, but there are many people that ought to be called from the Congress and I would say, in my final point on this is, there's also such a desire to seize the power, to not share the power, and Dick Cheney has said this. 

He said since Watergate, Congress has had too much power.  So you're constantly having this battle and it's very sad for the American people.  Good Lord, this is too important for us to be fighting about. 

MATTHEWS:  OK.  It's different to be a senator, certainly is a much lower level to be a journalist like me.  I can make all kinds of comments.  You can criticize policy, but we just had Andrea Mitchell on, who really knows the foreign scene and she is non-partisan obviously and she said if we kill this deal with Dubai, there's going to be ramifications throughout the Arab world, something like the cartoon issue where we have humiliated them.  Are you worried about that consequence? 

BOXER:  I think she's really overstating it.  The point is I don't think there's an individual alive who wouldn't understand why America, post 9/11, would want to run its own ports and we're not doing this against Dubai.  We're saying at least those of us that are on this very important bill by Hillary Clinton and Bob Menendez, we're saying right now, let's just not have another country run our ports.  It's pretty simple and very straightforward. 

MATTHEWS: It's a deal we're breaking, isn't it?  The deal isn't something that has to be made, we've already made a deal to let the Dubai company run this and don't we have to interrupt this process and say no, sorry, we did sign the deal but it doesn't count.  Isn't that a humiliation to the Dubai government? 

BOXER:  Who is we?  This is what happened.  This committee sat around the table and no one knew about it.  Chertoff said he wasn't there, he's the head of Homeland Security.  Rumsfeld said he wasn't there, he's Secretary of Defense.  President Bush said he didn't know anything about it.  So you know, truly, we need to take a broader look at this. 

I think anyone with any common sense would say an important deal like this ought to have greater scrutiny.  And you know, diplomacy, Chris, takes place through the back channels, we all know that and we have a lot to work on with Dubai, but there's another issue here you didn't raise and of course that's the issue of the boycott of Israel. 

Now, recently America has really made great progress with Saudi Arabia and Bahrain, using the back channels, using influence of America, human rights and such, to say please back off and you know what, we're making progress.  What kind of signal does it send to them if we let this deal go through? 

I mean, there's a lot of ramifications here but you know what, at the end of the day, let's do the right thing for our country.  That's what we need to do. 

MATTHEWS:  Here's the question though.  It's all a question of degree.  There's terrible Arab countries an Arab countries we can do business with, Egypt we have a huge foreign aids deal every year with Egypt, we have a good relationship with Jordan, we're trying to develop a better one with Libya, they're getting back in to the international oil business, where would you put Dubai on that. 

I understand your concern about the boycott, a lot of people are concerned about it, but you have countries like Kuwait that we liberated from Saddam Hussein, aren't they partners in this boycott?  Aren't they playing ball with that boycott as well?  Where do we draw the line and say this is not acceptable?

BOXER:  That's just one added reason to all the other reasons I talked about before.  You're asking me about Dubai and I think we have to be honest.

They certainly are working with us, at a government to government levels, but if you talk to terrorism experts, every one of them will tell you, it's still a transfer point for al Qaeda money, for personnel, it's still a place that a lot of people worry about.

And when I ask the question, you know, how many years did it take before we stopped Dr. Kahn from Pakistan, from smuggling nuclear components to Iran for goodness sakes, to North Korea, two of the countries the president puts on the axis of evil, those were smuggled through Dubai and the gentleman said—Bilkey—he said, well, we don't look at the containers. 

Now, you want to know the truth?  They're supposed to look at every container to see if there's locks that have been messed with or the container is somehow looking funny.  They're supposed to do that.  That was to me, such a brush off as if it's not important. 

It's important, Chris.  We're dealing with the nuclear ambitions of Iran today and North Korea because of what happened, the smuggling that took place through the Dubai ports.  So the American people, they're not dumb and look, it's about money and commerce versus security.  We have to have some kind of balance here and I put the people's security first.

MATTHEWS:  OK.  Look, I have to ask you about something else because I know you, your record, you're a liberal, you care about human rights and things like that. 

Are you a little bit upset about sitting in the same boat as people like Michael Savage on this, people who raise this really as an ethnic issue, maybe people that think they have a right to raise this as an ethnic issue, people that use terrible terms in describing Arabs, who treat all Arabs the same way, like they're all the enemy? 

You know the radio talk stuff, you hear it and you get reports on it if you don't hear it in the car.  Are you comfortable being in the same boat with them on this issue, because they're just screaming bloody murder about this thing? 

BOXER:  Well look, Chris, of course, I don't want to be associated with that.  The fact of the matter is, I'm on a piece legislation that says no in the future, starting with this deal to any other country running our ports.  That's it.  It doesn't discriminate against anybody.

MATTHEWS:  Even if it's a European country? 

BOXER:  Yes, no foreign country should run our ports.  No foreign country.  I didn't say company, I said country.  And I think ...

MATTHEWS:  OK, so you don't have a problem with the Long Beach situation with the COSCO and the Singapore situation and the mainland Chinese situation having ...

BOXER:  I think it ought to be relooked at.  Absolutely be looked at again, because Senator Feinstein and I had problems with that, that was pre-9/11, but we had problems, we got a letter from Bill Cohen and from Sandy Berger assuring us it was safe but I think that ought to be looked at. 

Sure, I have problems with it.  It ought to be looked at, but right now, I'm just saying, there are strange bedfellows in this business.  You've been in it a long time, you find yourself on the same side with people who you ordinarily don't agree with. 

MATTHEWS:  Well, that is true.

BOXER:  You know, it's life in America today and it makes it interesting and odd, but you know, I am where I am and I have an opinion based on wanting to protect the people and I think it's a fair point of view and I think it's a common sense point of view. 

MATTHEWS:  OK, thank you very much, Senator Barbara Boxer of California. 

Up next, right or wrong, the port deal is hurting President Bush in the polls.  These numbers are terrible.  The “National Review's” Kate O'Beirne and former Democratic strategist Bob Shrum face off on what the president should do now.  You're watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(MARKET REPORT)

MATTHEWS:  Welcome back to HARDBALL.

We're joined now by MSNBC political analyst Bob Shrum, and “National Review's” Washington editor Kate O'Beirne.  By the way, in just minutes, we're expecting to see video obtained by the Associated Press of a briefing for President Bush that warned of Hurricane Katrina and its full dimensions to break down the levees, have the water to come into New Orleans, the whole schlemiel here the whole thing. 

Apparently the evidence is now that the president was briefed, even though several days afterwards he said they never expected the levees to break.  We'll wait and see if that videotape is as good as advertised when we get it in a few minutes. 

Let me go now to Kate O'Beirne.  Kate, it seems to me that Barbara Boxer was just on the show—and she's no non-partisan person.  She's a partisan Democrat, but she said something and I think—maybe I backed her up, that there's a pattern here, now, of the president not quite being on the ball.

You get Katrina, a couple of days later he has to get video to tell

him what's been going on, a couple of weeks late on this thing with the

Dubai ports.  Michael Savage knew more about it than the president appears

to weeks ago.  People like Michael Smerconish—all over the radio, all

the talk jocks are talking about it.  He's just getting informed about it -

·         the shooting incident, the Harriet Miers nomination which was a miscue.

Forget the politics for a second.  Does the president need a team of people, maybe four or five young people in the White House who have the authority to call him up when something is hot and let him know what's going on? 

KATE O'BEIRNE, “NATIONAL REVIEW”:  In that respect, Chris, I think Senator Boxer shares a growing concern on the part of the president's Republican allies in Congress.

They are a little shaken at the sluggishness and the apparent out of touch or tone deafness of the Bush White House in recent months, so I do think that there might be some bipartisan agreement on the White House having had some bad months, that have been a problem for their allies on the Hill. 

MATTHEWS:  Kate, is this just second-termitis?  And Bill Clinton had his problems, we all knew about them.  They got him impeached.  I mean, problems come with second terms, whether it's Sherman Adams and Ike or it's Watergate.  Is this just the second-rateitis that comes from second terms?

O'BEIRNE:  I think there's something to be said about the sixth year. 

You can understand why, this administration has had very little turnover.  There could be a burnout factor, they're sort of spent.  They have had a really hard six years, a hard fought campaign.  Maybe it's hard to—because they've been so—they've been so on the defense for so many years.  Maybe it becomes more difficult for them to separate the real stuff, the potentially damaging stuff from oh, it's just more incoming, and so their judgment I think has been questionable. 

MATTHEWS:  Bob Shrum, if you could put on your professor's hat from NYU for just a minute, we'll go back to party politics in a minute, if you had to help this president and he  depended on you for dear life and he said, Mr. Shrum, I know you're  from the other party but I need help, this place is going to hell around here, what would you do if you had a couple of days to fix the shop at the White House? 

BOB SHRUM, HARDBALL POLITICAL ANALYST:  I guess I'd do three things.  First of all, I think that you have to be honest with him and you have to say this is second termitis, although people like Reagan got out of it by changing course and doing some things that are different.  I mean, I sat on the show last week, the next shoe was about to drop, there's another mistake coming, that's what's headed down the road here, that's what's going to happen and he has to find some way to break the momentum of that. 

MATTHEWS:  Is it the bubble around him.  Do you think it's because people at the top level, Andy Card, why didn't somebody in this inter agency task force for example, headed by Robert Kimmet, why didn't they call up Karl Rove and say, Karl, we have a hot one here.  This deal is about to go down and I think it's going to have a political consequence right or wrong, we have to get the boss involved? 

SHRUM:  It's beyond me.  I spent a long time criticizing this administration for being excessively political.  It seems to me in the last few months on a whole range of these issues, they haven't been political at all.  It is unbelievable that there is no one there. 

There are people who knew the president got this briefing on Katrina.  It is unbelievable to me that there were not folks who said to him, you can't go out there and say you weren't told, but they don't seem to learn the lesson.  We had the American ambassador in Baghdad the other day saying the worst is over, we've got the violence under control, 26 people killed today.  They need to stop the happy talk, they need to pull back, they need to say how do we get this thing under control and how do we bring some Democrats in by the way, so that maybe we can move down the road. 

O'BIERNE:  Chris, with respect to the port deal, I think the group that got together and looked at it and approved it were actually hindered by their sophisticated understanding of how ports operate That the rest of us don't share. 

I think the administration actually can make a defensible case on the merits, but I fear that we're beyond that now, the politics have taken over and this is now a lose-lose for this White House. 

MATTHEWS:  You know how to do it like most of us hopefully learned how to do it.  You read The New York Times and then try to forget you read it.  You try to understand the issue as it basically is rather than a sophisticate understands it. 

If you live in Newark and you live in Philly or New York or New Orleans or Miami and you drive by the port every day, you smell it, you know it's there, your friends used to work there or relatives, you have an attitude about it.  And the question is do you have an attitude that it's being taken over in terms of its management by an Arab government and wouldn't that jump out and spring at you and say that may not pass muster with the people as spooked as they are today about Islamic terrorism? 

I shouldn't say Islamic terrorism, terrorism that comes from that part of the world? 

O'BIERNE:  It would send off alarm bells unless you knew enough about port operations to recognize that nothing changes with respect to security, that this new firm will not operate any differently than the firm they've acquired from London.  But if you don't know all of those things, your question is, why risk it? 

MATTHEWS:  And there's also people in this country, because of the Holocaust, Bob, who still don't want to buy German cars.  There is a lot of attitude that comes with history.  History isn't forgotten every three hours and we start all over again.  We had 9/11, it's sitting back there, and people react. 

SHRUM:  There was no political sensitivity here.  The people who were supposed to be on this committee weren't there.  Kate is right, there were deputies there, people who may know a lot about the substance of this, but I think most Americans are actually stunned to find out that in the mania of privatization, we've now basically sold our ports to all sorts of foreign companies or countries.  The Port Authority of New York and New Jersey runs the airports, there's no reason they can't run the ports. 

MATTHEWS:  Let's take a look at something Bob, we have something hot here.  The Associated Press has obtained a video from August 29, that's the day before Hurricane Katrina struck New Orleans, and here's President Bush and Homeland Security Secretary Michael Chertoff being warned that the storm could breach levees and risk lives.  Let's watch. 

(BEGIN VIDEO CLIP)

BUSH:  That we are fully prepared to not only help you during the storm, but we will move in whatever resources and assets we have at our disposal after the storm to help you deal with the loss of property and, we pray for no loss of life of course. 

UNIDENTIFIED MALE:  So if the really strong winds clip Lake Pontchartrain, that's going to pile some of the water from Lake Pontchartrain over on the south side of the lake.  I don't think anybody can tell you with any confidence right now whether the levees will be topped or not, but it's obviously a very, very big concern. 

MICHAEL BROWN, FORMER FEMA DIRECTOR:  My gut tells me, I told you guys my gut was that this was a bad one and a big one and you heard Max's comments.  I still feel that way today. 

(END VIDEO CLIP)

MATTHEWS:  OK.  There we saw it and I want to repeat something that I just read and I want to repeat it to you.  Here's the president four days after Hurricane Katrina, it's four days—actually five days after that briefing. 

I don't think anybody anticipated the breach of the levees, that's the president.  Kate O'BEIRNE:, square those two facts, the briefing we just saw on tape and the president saying he was never briefed as to the possibility of the water coming over Lake Pontchartrain. 

O'BIERNE:  I heard the fellow in front of the weather map saying we can't predict this could happen and then I heard Michael Brown telling us what his gut was telling him.  Unfortunately, when I watched, I guess The National Weather Service fellow at his map, we all bring a lot of skepticism to weather reports, Chris.  We're habituated to thinking weather reports are wrong.

Look, the House Committee I think did a comprehensive job on their report on Katrina, explaining government at every level failed miserably as did the private sector.

MATTHEWS:  Listen to this line.  I like Condi Rice, she's great, but she said this thing, I don't think anybody anticipated using airplanes to bang into buildings.  It was anticipated and there's a record that it was.  Here it is again Bob Shrum.  You try this.

This is the president.  He didn't say I didn't expect the lakes to be

·         to run over the levees.  Here he says I don't think anybody anticipated the breach of the levees.  Why a universal statement like that when it's clear he was briefed as to the prospect that it might well happen? 

SHRUM:  Chris, you're right, this administration has a habit of doing this.  The president does it, Rumsfeld does it, our ambassador in Iraq does it.  J.F.K. said you always had to have two or three people around who were going to tell you things maybe you didn't want to hear, and somebody needed to say to the president before he held that press conference, remember the briefing you got, be careful what you say. 

I think the continuing failure to do that, to speak truth to power to the president who is the most powerful man in the world has left this administration in deep trouble. 

MATTHEWS:  Let me ask you, Kate, getting back to the positive way of looking at this thing.  What strikes me about the polls that came out at CBS the last couple of days, because I'm surprised by it because I usually think that I sort of square with the middle of the road on a lot of these thinking.  The president of the United States is down to 34 percent in job approval, down to 30 percent in terms of waging a very unpopular war in Iraq.  I can understand that one. 

But his personal approval, what people like or don't like about him, is down to 29.  How do you explain that?  Why people like him less than they did when they reelected him by a majority vote in November, 2004? 

O'BIERNE:  A couple of things, Chris.  I do think it has to be said that that poll was—this is the criticism of it, you're hearing from the president's supporters, and I think there's something to it.  It was adults not voters or likely voters.  The sample for Democrats was out of whack, they were over represented, but his supporters and allies would be foolish to dismiss that poll, even though I think it's vulnerable to those criticisms. 

It shows support on the part of Republicans in the past months or so down 10.  The same is true with respect to conservatives.  I think part of that, some of that is the certainly the port deal.  The majority of Republicans oppose it.  And I guess, in the sixth year again, when it comes to his personal qualities, which has always been a long suit for him and I anticipate it will be back up again when this rough patch is over, I think obviously in the sixth year of case of Bush fatigue. 

MATTHEWS:  What about the vice-president?  He's 18 percent in personal approval.  Give him a big margin of error there.  Nobody likes him.  If it's 18 percent, that's less than one in five say they like him.  By the way, I check this poll another way.  I have looked at the independents' response and the independent response is worse than its average overall in almost every category, so when you're just looking at independents, leave Republicans and Democrats aside.  The independent approval is lower than the general overall approval when you include everybody. 

There's a number of ways to check this.  I agree, you always have to check these samples, but in terms of proportionality and weighting.  I know all that.  But look at these independent numbers.  Shrummy, these numbers are down among not Democrats like you, among independents, these guys have bargain basement numbers.  I've never seen a vice president—I think Agnew had an 18. 

SHRUM:  I'm not sure that there was time to poll Agnew between the revelation and the moment that he was forced out.  But look, Cheney is setting a world record here in terms of his personal standing in the country.  One thing Bush could think about was maybe Dick Cheney could go.  Maybe he could resign.  He has health problems.

John McCain could become the vice-president.  I know Bush would never do this, but it would give him a fresh start. 

MATTHEWS:  Would you vote for McCain for president for president? 

SHRUM:  No. 

MATTHEWS:  Then why are you giving advice then. 

SHRUM:  Because you told me at the beginning I was supposed to give advice. 

MATTHEWS:  I wanted one minute of non-partisanship.  Then back in your box.  Kate O'BEIRNE:, is there any chance this president would ask the vice-president to step aside so he can put in a perhaps a more unifying figure like McCain? 

O'BIERNE:  Not a chance in the world.  I'll tell you this.  Among those  -- the president's staunchest supporters, the 36 or pick a number, 40 percent who support George Bush, they like Dick Cheney.  He is very popular on the part of the president's staunchest defenders who have hung in with this president through thick and thin. 

MATTHEWS:  Among the 30 percent or 30 plus, 29 in this poll, who really love the president, they're 100 percent for Cheney.  I think you're probably right.  He is the base.  We'll be right back with Kate O'Bierne and Bob Shrum. 

More on this video by the way, this is one of those videos, you believe me or your lying eyes as Groucho Marx used to say.  This is HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Let's take a look again at this new recording we just got tonight.  It is a video taken the day before Katrina hit New Orleans.  Let's watch.  The president of the United States and Michael Chertoff, the Secretary of Homeland Security, being briefed on what is to come. 

(BEGIN VIDEO CLIP)

BUSH:  Preparing your citizens for this huge storm.  I want to assure the folks at the state level that we are fully prepared to not only help you during the storm, but we will move in whatever resources and assets we have at our disposal after the storm to help you deal with the loss of property and, we pray for no loss of life, of course. 

(END VIDEO CLIP)

MATTHEWS:  That's a bit of it, of course.  And, Kate, you don't think that suggests any failure to communicate fully by the president thereafter when he said four days after Katrina hit, that I don't think anybody anticipated the breach of the levees. 

O'BIERNE:  No.  I heard the expert opinion say that nobody can say with confidence whether or not the levees will hold.  Look, the government responds at every level.  According to the House Committee, even the private sector was bureaucratic and sluggish and unimaginative.  This is not a surprise to we conservatives when it comes to government. 

Now they are doing their lessons learned business.  But certain things like bureaucracy, lack of creativity, risk averse bureaucrats, that comes with government. 

MATTHEWS:  Have you ever heard a president say he was not aware of the situation of a reality somewhere and that the news media, particularly television broadcast television, was ahead of the government?  That's what he said with regard to Katrina.  That the people like Brian Williams and the other networks, people like Anderson Cooper were on top of the story before he was aware of the significance of those people being stranded down there.  He's admitting this. 

O'BIERNE:  I've heard him make the point that because the news was right there, which federal representatives weren't, yes.  He learned as we all did, from the news media. 

MATTHEWS:  Amazing.  Bob Shrum, this is amazing because it gets back to the point where you both admitted in a nonpartisan fashion that there's a disconnect.  When the president is not on top of things.  Usually you hear thing from the president.  Here he hears things from television.  And he doesn't watch television. 

SHRUM:  Speaking of conservatives, Bush is showing that people who hate the government can't run the government.  The water is now pouring over the levee of the Bush presidency.  He did mislead us when he made his comments after Hurricane Katrina.  And I think Kate can make all the arguments you want but you look at that videotape and you know what the president is being told.  And you know what he says later.  It is not consistent with that. 

MATTHEWS:  Do you think he was aware of the Katrina situation before he was unaware of it? 

SHRUM:  He was clearly aware of it. 

MATTHEWS:  I'm reminding everybody of your candidate and how his positions changed. 

SHRUM:  John Kerry never said something I believe that he didn't think was true.  He didn't get up and say, for example, no one anticipated the breach of the levees when we now on tape have bush being told that the levees could very well be breached. 

MATTHEWS:  Wait a minute, Bob!  Didn't he say, John Kerry, that he would have voted for the war to authorize the war, even after he was told there were no W.M.D.? 

SHRUM:  He did not say that.  He never said that.  He said would have voted to give the president to use force to get inspectors in to find out whether there were W.M.D.'s.  I don't think we need to rehash that.  The real problem is the president can't govern this country and deal with the crisis with the kind of base Kate is talking about at 29 percent, even if they also happen to like Cheney. 

MATTHEWS:  Kate, why doesn't the president bring in people like Ed Gillespie, Karen Hughes, bring in the first team that's still available and hasn't gotten a cabinet post yet? 

O'BIERNE:  Because, I think, he has the benefit of the advice and the case of the two people you named, Ed Gillespie, of course, is at the disposal of the White House to help with his communications advice.  As you know, helped very directly with Judge Roberts. 

He calls on these outside assets.  Karen Hughes is back with the administration.  That's not how George Bush himself is diagnosing the problem. 

MATTHEWS:  Do you think Andy Card, his last remaining asset in terms of being a regular staff person, is he going to go off and become Secretary of the Treasury and leave the president even more disconnected?  Kate? 

O'BIERNE:  I don't know about that, Chris.  There might be a lot of pressure to keep people for the last two years. 

MATTHEWS:  Bob Shrum, do you have anybody in mind on the Republican side who would make a great chief of staff?  Seriously.  You know everybody. 

SHRUM:  But look, it has to be someone the president feels comfortable with.  I cited Ronald Reagan earlier. 

MATTHEWS:  How about Fred Thompson? 

SHRUM:  Fine.  Ronald Reagan reached out.  He didn't particularly like him actually at the point he did it.  But he reached out with a lot of people's advice and brought Howard Baker in and took an administration that was in danger of shrinking and saved it.

MATTHEWS:  You'll get back to me with a good Republican appointment. 

Thank you Bob Shrum thank you for coming on Kate O'Bierne.

Right now it's time for “THE ABRAMS REPORT” with Dan.

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

END   

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