updated 4/26/2006 11:37:02 AM ET 2006-04-26T15:37:02

Guests: Maria Cantwell, Ed Rendell, Jodi Rell, Tyler Drumheller, Joe Klein, Kate O’Beirne

DAVID GREGORY, MSNBC CHIEF WHITE HOUSE CORRESPONDENT AND “HARDBALL” GUEST HOST:  Tonight, high-octane politics.  With his polls tanking, President Bush warns price gouging is being investigated.  But is his mission impossible for the former oil man president George W. Bush?  Let’s play HARDBALL.

Good evening, I’m David Gregory in tonight for Chris Matthews.  Welcome to HARDBALL.  Under political pressure building over high gas prices at the pump, President Bush said a federal investigation was underway into possible price gauging and ordered a temporary haul to deposits to the nation’s strategic petroleum reserve, saying, quote, “Every little bit helps.”

The president also announced a four-point energy plan which calls for an easing of environmental standards and increased conservation in a speech today.  More on all of this in just a moment.

And later, the war between the White House and the CIA.  Did faulty intelligence make the case for war or did the Bush administration cherry pick?  In his first cable appearance, an exclusive interview with the former CIA operations chief Tyler Drumheller.

But first, David Shuster has this report on the president’s energy speech.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Under intense pressure to get gas prices down and get his poll numbers up, President Bush today ordered a temporary halt and deposit for the nation’s strategic oil reserve. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  By deferring deposits until the fall, we’ll leave a little more oil on the market.  Every little bit helps.

SHUSTER:  But the amount of oil that is purchased and set aside each day is relatively small.  And for days, analysts have been saying such a move would have little impact on prices already over $3 a gallon.  So President Bush today also announced steps easing fuel environmental standards.

BUSH:  So I’m directing EPA administrator Johnson to use all his available authority to grant waivers that would relieve critical fuel supply shortages.

SHUSTER:  This spring, oil refineries have been facing a deadline to use certain clean-air additives such as ethanol.  In some cases, this was causing a slowdown in getting the new fuel mixes to the gas trucks and onto the gas stations. 

But the laws of supply and demand have been of little concern to consumers, who note the oil companies are making a fortune.

UNIDENTIFIED FEMALE:  It makes me angry that the prices keep going up for no apparent reason other than the profit of the gas companies.

SHUSTER:  And since January, when President Bush declared in his State of the Union...

BUSH:  America is addicted to oil.

SHUSTER:   ... a gallon of gas has gone up from an average of $2.36 a gallon to now at least $0.56 higher.

UNIDENTIFIED FEMALE:  It’s frustrating.  It’s just amazing how much it costs even to fill my gas tank.

SHUSTER:  The president’s political gas tank has been running on fumes for weeks.  The violence in Iraq continues, the despair and frustration with the government has been increasing for many Americans displaced by Hurricane Katrina.  There were the new disclosures that the president himself authorized leaks of intelligence to select reporters for political gain.  And the latest poll shows the president’s approval rating has now dropped to just 32 percent.

In the midst of it all, the White House has argued the U.S. economy is getting stronger.  But record high prices at the pump are overshadowing any good news about the economy.  So a week after Democrats urged the government to investigate possible gasoline price gouging, and a day after congressional Republicans joined the band wagon, President Bush today made the idea his own.

BUSH:  Americans understand by in large that the price of crude oil is going up and that the prices are going up.  But what they don’t want and will not accept is manipulation of the market.  And neither will I.

(END VIDEOTAPE)

SHUSTER:  Whether or not the president is responsible for the high price of gasoline, he is still harmed by the perception that he’s an oil man and that his vice president is an energy guy.  Together they’ve brought their people in to oversee the industry.  Still, the president’s speech is at least helping him in the short term because today, oil prices dropped.  I’m David Shuster for HARDBALL in Washington.

GREGORY:  Thanks very much David Shuster.  I’m joined now by Democratic Senator Maria Cantwell of Washington state.  Senator, welcome.

SEN. MARIA CANTWELL (D), WASHINGTON:  Welcome David, thank you.

GREGORY:  Is this what you wanted to hear from President Bush today?

CANTWELL:  Well at least it’s a start.  But I think if you look at where the American public is right now, they don’t want to hear just talk.  They want to see results.  And when gas prices are this high, they want something done immediately.  And that’s why we need a federal bill to make price gouging illegal.

GREGORY:  Where is there evidence to your mind of price gouging?  Do you see it in your state?

CANTWELL:  Well the interesting thing, we’ve heard these reports about how ethanol and the switch over from MTBE is causing these increases.  Washington state isn’t using MTBE, we never had that problem in this crossover.  And yet we have some of the highest gasoline prices.  So that’s not what’s causing the prices in the western states.

GREGORY:  But as you know, the oil industry says rather strongly this is a supply and demand issue.  There are market forces at work, you know them well.  It’s heavy demand issues from India and China, all of which playing a big role here.

CANTWELL:  I think you’re right.  There is supply issues.  And what needs to be investigated is whether supply is being artificially manipulated, whether it’s being suppressed or shipped overseas for lower profits, only to have higher profits at home because there’s less supply.  And until we have good transparency in these oil markets, we’re not going to be able to give consumers the confidence that prices aren’t being manipulated.

GREGORY:  As you know, an investigation has been underway by the Federal Trade Commission really since last year.  The energy bill was passed calling for that.  The president said that is being extended now to look at whatever may be causing this short term run-up.  But again, any evidence that you have seen over the past year that points to you and says, “Ah ha, the oil companies are doing something wrong.”

CANTWELL:  Well first of all, time is of the essence.  The American economy is being impacted today.  If you look at what’s happened to airlines and their bankruptcies.  We’re talking about a 295 percent increase in fuel costs over five years.  So urgency is important.

Just as in the Enron cases, and we’re hearing about Enron every day in these Texas courts, that somehow they said, “Well, no, no, no, it’s about supply.  And we just don’t have enough supply.”  When we got to the bottom of it, we found out that they were manipulating supply, that they were creating schemes to artificially decrease the amount of availability at their own will, as opposed to what they could really produce at capacity.

So what we want to do, and we’ve had 57 senators agree to legislation to make price gouging a federal crime.  So if the president wants to get serious about this, he should help us pass this legislation, demand that it be on his desk, and give the consumers confidence that there really is a strong federal statute and he’s going to take every step in his power to make sure they’re protected.

GREGORY:  As you well know, Democrats have called on the president before to tap the nation’s oil reserve.  He’s been reluctant to do so.  The administration did it after Hurricane Katrina.  Now the president is saying, “Look, we’ve got enough in the reserves.  We won’t make anymore deposits this summer.  That’s going to put some more oil into the market.”  Will that have an impact?

CANTWELL:  Well as the previous story said, that’s going to have very little impact in the short term.  What you really want to do is to give consumers confidence that the Department of Justice and the FTC are going to do their jobs.  We’ve had the FTC chairman say that she didn’t believe in price gouging legislation.  And it’s clear, David, as A.G.’s across the country have tried to address this problem, they have found that they have to use the current law, which is about collusion of prices.

So no one is making a claim that somehow Shell and Exxon and everybody is getting together and setting a price.  The issue, as attorney generals across America have found out, is that somehow these inventories of supply may be being manipulated.  That is that this new system of just-in-time inventory, which took 30 days of supply that used to be there, and put it down now to five days of paper trading, has given a lot more flexibility for people to maybe shadow what they’re doing as far as supply.

GREGORY:  Is it your charge, Senator Cantwell, that the FTC has deliberately overlooked information that would point to wrongdoing by the oil companies of some kind of manipulation in this investigation that’s gone on for a year?

CANTWELL:  Two things.  The FTC is not being aggressive enough and secondly, I think that they need more tools to prove this.  And if you pass a federal law that says two things: one, in an emergency situation that the president can declare, then you can look at excessively unconscionable pricing as a violation of law.

This is what 23 states already have on the books.  And some of them used it post Katrina.  So in my mind, there’s no reason why the federal government shouldn’t have that same ability.

GREGORY:  Senator, are you for a series of measures that would mandate changes for consumers in terms of how they power their automobiles, not just suggestions or encouraging conservation or alternative fuel services but actual mandates?

CANTWELL:  You are going to hear from many of my colleagues, including myself, on a proposal that says, let’s accelerate the flex fuel market with mandates this year.  Now whether we are going to get that passed through the Senate...

GREGORY:  ... What would that mean?  Just spell out quickly what that would mean.

CANTWELL:  Well I think the Brazil experience shows us that a country can make a transition to flex fuel cars.  They went from about three percent of their marketplace to about 70 percent of their marketplace.

GREGORY:  You’re talking about hybrids, in other words?

CANTWELL:  A car that can run either on fossil fuel or on alternative biofuel.  And they made that shift in a very, very short period of time.  And they did it—most Americans found surprising by having a lot of American cars down there.  G.M., being the principle.

So if the United States would be aggressive about setting a time frame for flex fuel cars and then be aggressive about the alternative fuel market, we might actually have some competitive pricing for fossil fuel.  And that’s what we need to get to.

GREGORY:  Senator Maria Cantwell, we’re going to have to leave it there.  A lot more discussion ahead obviously as gas prices continue to go up over the summer, as the president warned.  Thank you for being with us.

And when we return, two hot issues: soaring gas prices and illegal immigration NOW being debated on Capitol Hill.  We’ll talk to the governors of Pennsylvania and Connecticut.  And later, the former head of covert operations in Europe for the CIA.  He says that before the war in Iraq, an Iraqi source told the CIA Saddam did not have weapons of mass destruction.  He claims the White House ignored that information.  He’ll be here to defend that charge.  You’re watching HARDBALL only on MSNBC. 

(COMMERCIAL BREAK)

GREGORY:  Welcome back to HARDBALL.  With skyrocketing gas prices, are Americans being treated fairly at the pumps?  Today President Bush says he’s going to find out.  An investigation continues.  He’s asked the Justice Department to look into price gouging by the oil companies and he’s temporarily suspended environmental rules so that more fuel finds its way to gas stations sooner.  For a look at the impact of the president’s fuel policy on the state level, we turn to Governor Ed Rendell, governor of Pennsylvania, and Republican Governor Jodi Rell of Connecticut. 

Governor Rendell, how high is gas now in Pennsylvania? 

GOV. ED RENDELL (D), PENNSYLVANIA:  Well, we are about three dollars a gallon across the state.  That’s in a very few short months since the beginning of the year, up 70 cents.  And believe me, not all of that is accounted for by what the increase has been per barrel. 

GREGORY:   And the president talked about—so what’s going on then, if it’s not just market forces, specifically what’s happening? 

RENDELL:  It’s price gouging.  There’s no doubt in my mind.  If all this was being driven by the increase in price of the barrel, oil company profits would be relatively flat, and as you know they’re off the board, they’re incredible.  We have to stop those profits and give some of the money back to the American driver. 

GREGORY:  Governor Rell, what do you think, what are you seeing in your state? 

GOV. JODI RELL ®, CONNECTICUT:  Well, actually our prices are about $3.01 a gallon.  They were this morning when I went by.  And about $3.26 for mid grade gasoline.  I will tell you that’s 34 cents higher than a year ago.  And a month ago the price was about $2.58, $2.60 on average.  So we are seeing the same thing. 

And I just want to comment on Governor Rendell, he’s absolutely right.  These oil profits, if you will, the oil company profits right now are simply obscene.  I heard your two guests earlier in talking about this.  But I will tell you that when you are looking at an ExxonMobil at a $36 profit, if we can guarantee that money will go back to the consumers, then we need to do everything possible to make sure that happens. 

GREGORY:  So what would you like to see now?  Governor Rendell, the president talked today of having governors work with the Justice Department in a way that they haven’t before to investigate this.  What steps should be taken? 

RENDELL:  Well, we’re happy to do that, and the president’s right in that limited area.  But let’s pass an excess profit tax bill, let’s put that money into a fund, let’s, by the way, repeal the subsidies.  Can you imagine giving these oil companies over $2 billion worth of subsidies when al of this is going on?  Let’s put this in a fund and next year at tax time let the American driver get it back in a cash refund, number one. 

Number two, this is time for the president to show real leadership.  He’s talked about it, now we’ve got to do it.  Let’s go full boar on the production of U.S. alternative energy, whether it’s clean coal gas, weather it’s bio-fuels, weather it’s hybrid cars.  The president should order 50 percent of the federal fleet in two years to be hybrid cars.  We’ve done close to that in Pennsylvania. 

GREGORY:  How has that worked out?  How have people responded to the government telling them what to do about how to drive and what to drive? 

RENDELL:  Well, for example, we give a $500 cash grant as you buy a hybrid car in Pennsylvania.  It’s very popular. 

GREGORY:  Governor Rell, that’s what the president has talked about on a federal level but with no mandate.  Is it time to put some teeth into some of these incentives? 

RELL:  You talked about the $2 billion, and I think, again, the president had made that a key component of his remarks today.  The other thing I would also point out, and Governor Rendell alluded to in his state, we are doing something similar.  We are also taking the lead right here in Connecticut. 

We just put 575 hybrid cars in our state vehicle fleet.  I think that’s important because they get 60 miles to the gallon, which is very impressive for us, but it also sends a very clear message.  We are concerned about conservation, and we’re doing everything in our power to make sure that people do that. 

In addition to some of the things that’s already been talked about, I have asked our Congressmen and women to look at and encourage the elimination of the 54 cent tariff on ethanol.  I mean, right now should we be protecting domestic products when in fact we could get it cheaper if we eliminated that 54 cent tariff?  I frankly think the American people would say, do anything you can to reduce prices of gasoline. 

GREGORY:  Governor Rendell? 

RENDELL:  I think temporarily that’s a good idea.  Remember, the long-term solution here is to produce in America, American sources of energy.  We can do it.  We’ve got coal to beat the band, we have farm products, agriculture waste, cellulosic wood chip, ethanol, we can be done.  We can do what Brazil did.  If the country of Brazil in 25 years can achieve energy independence, import no more foreign oil, we can do the same thing. 

GREGORY:  Governor Rendell, if you want to take those steps then why not also hear the president out on finding more domestic sources of oil, like drilling in ANWR? 

RENDELL:  Everyone knows that eventually oil is not a dependable source of fuel because it will cost more and more to dig deeper.  I’m willing to look at every possible form of energy, but let’s start producing alternatives and renewables.  Let’s use what we have. 

GREGORY:  Governor Rell, you are sitting there in Connecticut.  When you look at Washington and you look at the debate as we’re seeing now, which is domestic exploration versus price gouging, it becomes so partisan and Americans sit back and hear all of this, do you start to wonder where all this went so wrong? 

RELL:  You know, you talk about price gouging and I hear the comments out there and people are sort of—you know, I get the impression that they shrug their shoulders and they say, big deal, I can report it and nobody cares.  Nobody is paying attention. 

Here in Connecticut, we had 68 phone calls when we set up the hotline on price gouging.  That happened over a two-week period.  Those 68 phone calls where followed up, every single one of them.  And people really now believe, hey, people are listening to what we say out here.  I drive by a gas station, and instead of going up two cents, it went up 20 cents.  Something wrong with this picture. 

If we can do something about it on a state level, and believe me when I tell you, every statehouse is trying to address this issue, so is the White House.

RENDELL:  And the key thing is, you’ve heard Governor Rell, a Republican, and me, a Democrat—we agree on what needs to be done.  Washington has got to get its act together and respond to this in a bipartisan fashion, and the president has to take the lead. 

GREGORY:  All right.  We are going to take a quick break here.  When we come back, we’ll come back with Governor Ed Rendell of Pennsylvania, and Governor Jodi Rell of Connecticut. 

And later, the former head of the CIA cover operations in Europe.  He claims an Iraqi source told the CIA that Iraq had no WMDs before the war.  He says the White House ignored the information.  You’re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

GREGORY:  Welcome back to HARDBALL as we continue our conversation on skyrocketing—skyrocketing I should say, gas prices with Governor Jodi Rell of Connecticut and Governor Ed Rendell of Pennsylvania.  I actually want to go on to talk about another hot button issue here, governors, that is not just a border state issue anymore, and that is, of course, immigration reform.  It’s touching all states in the country.

Governor Rell, you heard the president yesterday, again, making the pitch for a guest worker program, and saying something very specific, very pointed against members of his own party, which is that it’s simply unrealistic to try to deport 11 or 12 million illegal workers here in the United States.  Do you agree or disagree with that?

RELL:  Well, you know, I do agree.  And I have to tell you that I actually had this conversation early today.  I was at a Chamber of Commerce meeting, and the question came up.  What do we do?  And I still believe that every time we document legal aliens, we need to get them into a program where we would be able to help them work out the right paperwork, get on the right track, if you will, for becoming a citizen of the United states. 

Too often, we simply throw up our hands and say, well, what can you do about it?  But once they’re documented as illegal, I think that we can—there are plenty of places where we’d be able to literally get them the assistance that they need to make sure that they are here in this country legally, and the sooner we start that process, the better we will all be served for it.

GREGORY:  Governor Rendell, the president also talked about treating illegal workers differently based on how long they’ve been in the country.  Is that fair, if you’ve been here longer than five years, you have more of an opportunity to get in the back of the line sooner for citizenship, less than two years, you go right back to your country of origin?  Does that sound fair? 

RENDELL:  It’s probably not fair, but there has to be some dividing line in doing this.  This is one area where I do support the president.  I think his instincts are very good.  I think we have to have a guest worker statute.  That’s the fair and the right thing to do. 

And in many areas of the country—not so much Pennsylvania, but in many areas of the country, the immigrant workers are the only ones who will fill some of the low-wage jobs that are very difficult and arduous jobs.  So I think the guest worker statute is fair to the immigrants who come in.  It’s also fair to the American business people who need this type of resource. 

But in the broader sense, we’ve got to look at the whole question.  We’ve got to—I agree with Jodi.  These people should be put on some track, but maybe the guest worker statute is that you don’t become a citizen, you are not on the line to become a citizen. 

You are a guest worker for two or three years and then you have to go back to your country.  I think we should work out something that’s fair to everyone and doesn’t penalize the American businesses who have become to depend on these. 

But I also think if we’re really going to get somewhere in this country economically, we’ve got to look at raising the minimum wage.  I mean, that’s something that’s been out of this debate and it shouldn’t be out of this debate.  We should raise the federal minimum wage.  It hasn’t been done in almost a decade. 

GREGORY:  Governor Rell, a lot of Republicans, a lot of conservatives, argue that you cannot begin to deal with illegal workers who are here without first dealing with border security issues.  Porous borders allow more illegal immigrants to come into the country and it’s a short-term fix if you don’t deal with that root cause. 

RELL:  And they’re absolutely correct.  You do have to deal with the root cause.  Let me just share with you that, in Connecticut, we estimate that about 11 percent of our population are immigrants.  I’m not saying illegal or legal immigrants, just immigrants.  How do you divide that?  How do you go to say, for example, are you here legally? 

Frankly, that’s wrong.  And we know that.  But when it is documented that you have someone in your state illegally, then you need to address that and you need to address it at that time. 

GREGORY:  Governor Rell, I’ve got to cut you off.  I apologize.  We are out of time.  Governor Ed Rendell and Governor Jodi Rell as well, thank you very much for being here. 

RELL:  Thank you very much. 

RENDELL:  Thank you. 

GREGORY:  And up next, retired CIA agent Tyler Drumheller.  He was head of covert operations in Europe before the Iraq war, and he says a high-level Iraqi source told the CIA that Iraq had no WMDs.  The White House, he claims, ignored him. 

You’re watching HARDBALL only on MSNBC. 

(COMMERCIAL BREAK)

(MARKET WRAP)

GREGORY:  Welcome back to HARDBALL.  I’m David Gregory in tonight for Chris.  The Bush administration has acknowledged that the intelligence was wrong about the war in Iraq and Saddam Hussein’s WMD program.  But now a retired top CIA official has come forward and is pointing the finger at the White House. 

Tyler Drumheller headed up the CIA’s convert operations in Europe, until he retired last year.  Before the war he says you knew that Saddam Hussein did not, not have a weapons of mass destruction program, and he tried to tell the White House, but that information, he claims, was ignored.  Mr. Drumheller, welcome. 

TYLER DRUMHELLER, FRMR CIA OFFICER:  Thank you.

GREGORY:  Let me start by asking you exactly what you had to do with pre-war intelligence.

DRUMHELLER:  In the pre-war—in the lead-up to the war, our stations in Europe were collecting intelligence on Iraq, trying to recruit sources that would go back inside of Iraq and report on the inside.  We had had a loss of a lot of Iraqi assets in the late ‘90s when they shifted from—we shifted from Iraq to Iran and terrorism.

GREGORY:  You wanted a bigger picture, a more complete picture, of whatever weapons program he may have had.

DRUMHELLER:  Right.  And since it’s very difficult to recruit inside Iraq, Europe was a good place to do that.

GREGORY:  You actually scored a pretty good coup, here.  You got right inside his inner circle.

DRUMHELLER:  Right.  We had, through the help of a friendly service—which I can’t name—we were able to recruit a very senior official of that circle—

GREGORY:  Who’s been identified—you may not be able to say this—as Naji Sabri, Iraq’s foreign minister.

DRUMHELLER:  Yeah, I can’t say it, but a very senior guy, who was right in Saddam’s inner circle and had direct access.

GREGORY:  Right—what timeframe are we talking about?

DRUMHELLER:  This would have been in September—August/September of 2002.

GREGORY:  So you get this pipeline of information—what did he tell you?

DRUMHELLER:  He gave us a report in the middle of September of 2002 that was—this came to us through an intermediary, but we were able to verify it—that the—that Saddam had no—had wanted nuclear weapons but didn’t have—was at least 18 months to two years away from nuclear weapons if they were able to get the fissile material to produce them.  So they didn’t even have the fissile material at that point, so they were at least 18 months to two years away.

And then—

GREGORY:  So, bottom line, summer of 2002, Saddam does not have a nuclear weapon.  Does he have an arsenal of weapons of mass destruction?

DRUMHELLER:  No.  And the biological weapons that were described to us as basically a chemistry set-type of capability, that was all destroyed after the first Gulf war.

GREGORY:  But nothing that could threaten U.S. troops, nothing that could threaten our allies, nothing that could threaten the United States.

DRUMHELLER:  There was no immediate threat to U.S troops.  There were chemical weapons that he described as gas, but they were distributed through the political leaders around the country.  And so—and the army, the military didn’t have access to them.  And those were not found after the war, so we don’t know what happened.

GREGORY:  You—this is important.  It sets off alarm bells for you, because a high-level source giving you information you didn’t have before.

DRUMHELLER:  That’s right, and up to that point, the only seemingly hard intelligence that they had on it was—came from a source called Curveball, which we had serious doubts about the validity of the reporting that we had raised already with them, and from the uranium yellowcake reporting that everybody knows about that came out of Rome.  And both of those were highly suspect, so here for the first time we had information that really confirmed, in a lot of ways, what the inspectors were saying.

GREGORY:  Which is that Saddam had no WMD program.

DRUMHELLER:  Yes, and if he—obviously, if he—he wanted to build it if he could get it.

GREGORY:  Right.

DRUMHELLER:  But it was nowhere within years of completion, either nuclear or bio.

GREGORY:  Summer of 2002, this is the run-up to the war, to the invasion of Iraq.  You tried to communicate that information to the White House.  How?  And what was their response?

DRUMHELLER:  Well, it was written up as an intelligence report, and then the director, George Tenet, took it to the White House.  It was in—this was late—sort of mid to late September.  Came back—his special assistant came back and told me they were—I said, was it received—well-received?  They said, yes.  They were very excited to have a source inside, because we hadn’t had a good source like this inside.

GREGORY:  Right.

DRUMHELLER:  And so we were to stand by for further requirements, questions to be asked of the source.  And then we waited about three weeks, and we got word that there was not interest in the intel anymore, that what they wanted was now was for him to defect as a propaganda ploy. 

The case officer who was handling the case was one of our top Middle Eastern officers, who happened to be working in Europe at the time, asked one of the senior Iraqi operations people aren’t they interested in this?  And then the guy said, you don’t understand.  This isn’t about intelligence.  It’s about regime change.

GREGORY:  Somebody actually said that?

DRUMHELLER:  Yes. 

GREGORY:  Well, what do you think was going on?  Why would they ignore this kind of information?

DRUMHELLER:  Well, I believe—and it’s not easy to say.  But I believe there were—the administration had preconceptions built on things that they really and truly believed, that they had heard from immigrating reporting, that they had heard—that they had built up over the years.  And a lot of people believed this about the weapons of mass destruction, but also about the need to deal with the strategic problem with Iraq. 

But, in fact, the planning was already well underway, and this report, where it was easy to ignore the inspectors—they were saying the inspectors didn’t know what they were doing or they had no idea—this report was much more tangible, much harder to deal with.

GREGORY:  But your point is, they were looking for the answers that they wanted to support the case for war.

DRUMHELLER:  Yes.

GREGORY:  The White House has said, first of all, related to this, that this was a single source, the foreign minister who they were dealing with.  That’s number one.  Number two, that the intelligence community had made a judgment about Saddam possessing weapons of mass destruction and certainly being interested in pursuing more.  Does this information that you have discount that?

DRUMHELLER:  Yes, is does.  And the fact is, that what they’re talking about first is the single source—that the single source is a very senior guy like this, then that’s something that’s very important.  And also it’s a source that we had—we were in the process of validating and then had come through with his—vetted by another service. 

But they took also single sources on—“Curveball” was a single source, and that was the basis for the entire lead-up to it.  And even with the uranium yellowcake—and in those cases, they didn’t even know the names of the agents or of the sources.

Now, on the NIE, which is what they’re talking about, the National Intelligence Estimate for the community, the NIE is one document done on one day by a group of analysts that represents the best judgment of all the intelligence community on that day.  Intelligence is a fluid thing.  It changes day to day.  And when new intelligence comes in, even if, in this case, it came in shortly after the National Intelligence Estimate was issued, it changes the whole picture.

GREGORY:  It should be pointed out here a couple of things.  While the White House has not specifically commented on your charges, they do point to a commission study indicating that there’s no evidence that analysts were pressured or that intelligence was manipulated in any way, that the president had certainly said that the intelligence for the war was wrong.  Your point is that there was information that was available prior to going to war.

Did you bring this up with George Tenet, then director of the CIA, and did others say, hey, wait a minute, you’ve got to tell the White House to back off here?

DRUMHELLER:  We talked about it.  And I had talked to him about it.  I had talked John McLaughlin about it and others.  But in the end, they had brought it up.  The White House made their judgment, and we were actually, at that point, moving on towards the war.  And this went on through, and what we were also looking at that time was this debate going on about the “Curveball” case, about the validity of that.  So that was ...

GREGORY:  Bottom line, you don’t think George Tenet pushed hard enough against the White House to say you don’t have the facts to back up the case for war?

DRUMHELLER:  On this issue, no.

GREGORY:  All right.

DRUMHELLER:  He did on the uranium yellowcake.  He did the right thing on that.

GREGORY:  All right.  Certainly the debate will continue.  Thank you very much for your views.

DRUMHELLER:  Thank you. 

GREGORY:  And up next, Joe Klein takes on political consultants and the candidates that create in his new book, “Politics Lost:  How American Democracy Was Trivialized By People Who Think You’re Stupid.”  He’ll be with us when we return.

This is HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

GREGORY:  Welcome back to HARDBALL.

While President Bush gets ready to hire a new press secretary, members of Congress are gearing up for re-election and deciding whether to line up with the president or against him or somewhere safely in between in order to keep their jobs. 

Joe Klein has met a lot of candidates and press secretaries over the

years.  He’s a columnist for “Time” magazine, of course, and the author of

a new book called “Politics Lost:  How American Democracy Was Trivialized

By People Who Think You’re Stupid” 

Joe, good to see you. 

JOE KLEIN, AUTHOR, “POLITICS LOST”:  Great to be back. 

GREGORY:  Where has politics lost its way? 

KLEIN:  Well, our leaders have become followers.  They follow their polls, they follow their focus groups, and over—you know, in the course of the last 40 years, during the television age, they’ve lost their faith in the public.  They’ve lost their faith in themselves, and we’ve lost the opportunity to witness those moments of spontaneity and humanity when we actually find out who these people are. 

GREGORY:  That’s what matter, yes?  That’s where people really get insights? 

KLEIN:  Oh, absolutely.  I mean, I begin the book in Indianapolis on the night that Martin Luther King was assassinated.  Bobby Kennedy goes into the ghetto there.  Police tell him not to go.  He speaks spontaneously.  He announces to the crowd that King has been assassinated. 

And then, spontaneously, he calms them down, and he winds up quoting Aeschylus, his favorite Greek poet.  And when you listen to this speech—which I recommend everybody to do—the silence and the mutual respect is so profound, but that would never happen now. 

First of all, Aeschylus would never make it past the focus group.  And second of all, Kennedy wouldn’t have the kind of creative innocence that he had.  He’d know everything about that audience.  He’d know, you know, their top three issues, their bottom three issues, what phrases work best with inner city black audiences, and so he wouldn’t have the creative freedom to be himself in the way that he was. 

GREGORY:  One of the things that you taught me about covering politics

is back in 2000, and we were outside Chicago at an event with president and

well, Governor Bush and Dick Cheney, and the governor makes an offhanded remark about Adam Clymer, then with the “New York Times,” called him a “major league” bleep and you said later ...

KLEIN:  We can’t say that word on TV?  Even on HARDBALL?

GREGORY:  But you made the point that this was a story that day because it was an unscripted moment, and you just don’t get any of those anymore. 

KLEIN:  That’s right.  And the folks miss it, and I think—you know, I think we’ve reached a point in this country where people understand what market-tested language sounds like.  If a politician says to you, “rather than a policy of family values, we need policies that value families,” you know it’s baloney.  You know it’s nonsense. 

Regulation human beings do not talk like that.  And I think that as we move forward—and the reason why I wanted to write this book now, “Politics Lost,” is because in 2008, I think there is going to be a new threshold test.  People have come to understand and if a politician tells you only things that you want to hear, they’re not telling you the truth. 

And the new threshold test is going to be to tell us some inconvenient truth, because we’re facing some tough times in this country now.  There are serious problems we’re facing abroad and at home, and it’s time to get real. 

GREGORY:  Do you think the media is partly responsible for all of this, not just the focus groups but the way we cover candidates? 

KLEIN:  Absolutely.  I think that we’re responsible, I think the public is responsible.  We’ve had like a 50, 60 year vacation in this country, the period of unprecedented peace and prosperity.  During that time, we lost the habits of citizenship.  And now, especially since September 11th, we have to regain that a little bit.  

And part of that is being—you know, is having the appropriate leadership.  During World War II, Franklin Roosevelt had everybody go out and get maps to follow our troops through Europe, through Asia. 

George W. Bush had a similar responsibility that he did not meet after September 11th.  His responsibility was to be our educator on Islam and on that region.  And that hasn’t happened, and it needs to.

GREGORY:  In fact, the president has said time and time again, it’s OK to return to your normal life after 9/11.  Let me worry about the threats.  You think that’s an responsibility lost? 

KLEIN:  Yes.  Also—it’s also—if he thinks he’s a wartime president, there are certain things that you do when you’re in wartime.  First of all, you set up a wartime cabinet, hopefully bipartisan.  You know, second of all, you ask—you call for sacrifice from the people in order to involve them.  You know, not just higher taxes, but things like collecting clothing for the children of Iraq.

And then you have a responsibility to teach and to keep people involved.  If this is a war—and I truly do believe that we are in a long-term war against Islamist radicalism, the president has not met his responsibilities in that regard. 

GREGORY:  How do Democrats, and Republicans, break out of a cycle where the Democratic party and all of its complexities and then the simple truths of the Republican party, God, national security and the like? 

KLEIN:  Right.  Well, the Republican since Reagan has been the party of the simple sentence.  Strong military, low taxes, traditional values.  Democrats are the party of the compound sentence, where you have to invest money in the Headstart in order to do this and this and this.  I think right now, because things have changed, the public is going to be very receptive to a politician who comes to them and says, look, you may not want to hear this but—and then goes on to say something interesting. 

GREGORY:  Right.  And the point is it’s also convincing candidates not to be so afraid of the scrutiny that they not be themselves. 

KLEIN:  And the thing is we’re moving from the television age to the television/Internet age.  And we’re going to have much more interactive politics.  Less oration, more conversation.  And I think politicians who aren’t ready for that kind of give and take are going to pay. 

GREGORY:  The name of the book is “Politics Lost.”  Joe Klein is staying with us.  When we return we’ll be returned by joined by “The National Review”‘s Kate O’Beirne to talk about what’s going on inside the Bush White House right now, the politics of the moment.  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

GREGORY:  Welcome back to HARDBALL.  We are back with Joe Klein, columnist for “Time” and author of “Politics Lost.”  And we are also joined now by Kate O’Beirne, HARDBALL political analyst and Washington editor of “The National Review.”  Good to see you both.

Kate, let me ask you about the politics of the moment.  High octane politics, we’re calling it, the president took a significant step today, saying he’s going to stop making deposits to the oil reserves.  Also taking on the oil companies in terms of tax breaks and ordering an end to the additives or the ethanol additives.  Will any of this work politically? 

KATE O’BEIRNE, NATIONAL REVIEW:  I think—I think it’s a real political problem for Washington.  And given that they are the majority, the Republicans in particular.  Given that there’s virtually nothing on the policy side you can do in the short term and the politics of it are trickier than some members of Congress allow. 

You have Senator Frist and Speaker Hastert carrying on about investigating possible price gouging and excess profits of oil companies, which is foolish, policywise, and I don’t think, given the disenchantment on the part of their base with Republicans in Congress and the White House, I think it’s the kind of demagoguing, the kind of echoing of Democrats and liberals that further demoralizes a conservative base. 

GREGORY:  Joe, what is your take on the president’s speech today? 

KLEIN:  It’s not going to work at all.  In the public mind this president and vice president are associated with the oil business, and these are his friends who are doing this in the public mind.  And Democrats are going to do what Republicans would do if the shoes were on the other feet and exploit it up the wazoo between now and November. 

GREGORY:  But do Democrats really get traction if they go to their constituents running in the fall and say we’re going to get a federal price gouging bill, is that going to make people feel better? 

KLEIN:  No, they don’t have to say all that much about it at all. 

O’BEIRNE:  Blame the other guy. 

KLEIN:  Except to say, we’ve had six years of crony politics in Washington, and look where we’ve gotten. 

GREGORY:  Does it have legs to last by the Fall?  If we go through a long hard summer of high prices but then it calms down by the Fall, people change their driving habits, is it still an issue?

KLEIN:  Do you think that people will change their driving habits between now and the Fall? 

GREGORY:  There was a falloff after Hurricane Katrina when prices went up, people used less and the prices went down. 

O’BEIRNE:  If anything, David, the kind of liberal policy prescriptions are directly at odds with what we have to do.  In fact, they tend to favor, and they have favored in the past, gas taxes, because they want gas to be more expensive and force all of us to use less of it.  They fight any kind of domestic oil exploration.  They have not permitted any new refining capacity.  Their liberal prescriptions are totally at odds with lowering the price of gas.  I don’t think they will be held accountable for those prescriptions, not if the Republicans echo charges about price gouging and excess profits. 

KLEIN:  And those kind of conservative prescriptions are so short term that the folks now understand that as long as we have to depend on Saudis and Iranians for our oil we are going to be in a lot of trouble.  I think that, you know, you could get away with higher gas prices if you give that money back as a tax break on the other side. 

GREGORY:  Here’s an energy-saving idea.  If we switch topics and talk about a new White House press secretary, perhaps Tony Snow, turning off the cameras and lights in the pressroom.  I am not in favor of this.  Kate, do you think this has some traction?  Do you think it would be better for the president if they did that? 

GREGORY:  Well, David, you know, there, as often as you are, better than I do, if things have changed with the daily televised.  Are both sides playing to the cameras too much.  I will say that a new press secretary gives the opportunity for the White House to work with the media to try something different. 

I don’t think a new personality alone is enough, necessarily, and I wouldn’t have that expectation with a new press secretary that overnight will improve.  Maybe there’s room to do something creative with the relationship—given the change in the press secretary. 

GREGORY:  Is this small potatoes here or is this a window into larger problems? 

KLEIN:  Certainly it’s a window into larger problems.  There is real desperation here.  Polls are down in the low 30’s.  But it does offer an opportunity.  If Tony Snow, if it turns out to be him or someone else, is a really comfort cat like Mike McCurry, it could do the administration some short-term good. 

GREGORY: All right.  To be continued.  Thank you very much to Kate O’Beirne and Joe Klein.

Tomorrow night we’ll get the real story of the man known as Deep Throat.  His memoir is out and we’ll talk to the co-author.  Plus, Deep Throat’s grandson.

And on Thursday, Senate Majority Leader Bill Frist will be our guest. 

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

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