updated 6/15/2006 11:29:52 AM ET 2006-06-15T15:29:52

Guests: Brian Bilbray, Nicolle Wallace, Dick Wadhams, Dave “Mudcat” Saunders, Kate O‘Bierne, Mike Allen, Richard Wolffe

CHRIS MATTHEWS, MSNBC HOST:  Tonight, reality bites.  Iraq suffers from corruption, human rights violations, and slippery dealings in the oil business.  The President says it‘s up to the Iraqis themselves to make it work, so where do we fit in and when do we come home? 

Let‘s play HARDBALL.

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

The Bush team is pushing a P.R. offensive on the war in Iraq.  The president got a boost from a run of good news, especially the killing of terror mastermind Zarqawi in Iraq, and kept the ball rolling with his morning news conference today.  We‘re seeing some signs life in the president‘s polls, but can the Bush administration bring back support for its still unpopular war?  More on this in a moment.

And later, decision 2006.  Virginia Democratic voters picked former Republican Jim Webb to run against Senator George Allen.  We‘ll hear from both camps in this HARDBALL hot race.

But first, HARDBALL‘s David Shuster has this report on the president‘s victory lap this week. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Coming off a string of successes, today President Bush tried to keep his momentum going. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  We will support this Iraqi government.  This is what I went to tell them.

SHUSTER:  The president‘s Rose Garden news conference came just six hours after his return from Iraq, and it capped a week that saw a Republican victory in a closely watched special congressional election, notice that presidential adviser Karl Rove will not be indicted, and the death of terrorist Abu Musab al-Zarqawi. 

As President Bush spoke of the efforts by the new Iraqi government to tamp down continued violence, the president was both optimistic and realistic. 

BUSH:  And so it‘s a tough task, no question about it, but I‘m confident that this government will succeed in meeting that task. 

SHUSTER:  On Karl Rove, the president was asked about what came out of the CIA leak investigation.  Early on, the president‘s spokesman denied Rove was involved. 

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY:  Well, I made it very clear that it was a ridiculous suggestion in the first place.  I‘ve said that it‘s not true, and I have spoken with Karl Rove. 

SHUSTER:  And the next day, not talking about criminality, the president declared ...

BUSH:  I don‘t know of anybody in my administration who leaked classified information.  If somebody did leak classified information, I‘d like to know it, and we‘ll take the appropriate action. 

SHUSTER:  Today, in the Rose Garden ...

UNIDENTIFIED MALE:  Even if Karl Rove did nothing illegal, I wonder whether you could say now whether you approve of his conduct in the CIA leak episode and do you believe he owes Scott McClellan or anyone else an apology for misleading them? 

BUSH:  I appreciate the job that the prosecutor did.  I thought he conducted himself well in this investigation.  I trust Karl Rove, and he‘s an integral part of my team. 

SHUSTER:  The president referred to the ongoing perjury case against Vice President Cheney‘s chief of staff Scooter Libby and added ...

BUSH:  I‘ve made the comments I‘m going to make about this incident. 

SHUSTER:  The president offered plenty of statements though that will be seized upon by both critics and supporters alike.  President Bush spoke confidentially as he placed Iraq in the broader war on terror. 

BUSH:  I will remind the American people, if we pull out before we achieve our objective, the world will be a lot more dangerous.  And America will be more at risk. 

SHUSTER:  But he stated that his trip was exciting, because ...

BUSH:  I was up there in the cockpit of that airplane coming into Baghdad, watching Colonel Tillman steer us in.  It was unbelievable.  An unbelievable feeling.

SHUSTER:  Against all of this, the White House is starting to focus on the midterm congressional elections.  The president spoke today about the Democrats‘ economic plan. 

BUSH:  But really what they‘re saying is we‘re going to raise your taxes. 

SHUSTER:  Secretary of State Condoleezza Rice today tried to energize evangelicals by focusing on the death of Zarqawi. 

CONDOLEEZZA RICE, SECRETARY OF STATE:  And now he will never harm, he will never murder, he will never terrorize innocent people again.  That is what America stands for. 

SHUSTER:  And earlier this week, right after Karl Rove learned he was cleared, he offered a blistering attack on Iraq war critics John Kerry and John Murtha. 

KARL ROVE, BUSH POLITICAL ADVISER:  But when it gets tough, and when it gets difficult, they fall back on that party‘s old pattern of cutting and running.  They may be with you at the first shots, but they are not going to be there for the last tough battles. 

SHUSTER:  Both Murtha and Kerry are combat veterans and in a statement Kerry spokesman hit back saying, quote, “The closest Karl Rove ever came to combat was these last months spent worrying his cellmates might rough him up in prison.”

David Wade called John Kerry “a porcine political operative,” and added, “when it came to Iraq, this administration chose to cut and run from sound intelligence and good diplomacy.”

(on camera):  The political environment, of course, is only going to get nastier as the congressional midterm elections approach.  The question is, can President Bush build on his latest string good news to attack Democrats, fire up conservatives, and turn the fall elections into something Republicans can look forward to? 

I‘m David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster.  Let‘s go right now to the White House where NBC News chief White House correspondent David Gregory is standing by. 

David, I noticed a new reality bite to the president‘s speech today, recognition of corruption in that new government we‘ve set up, recognition that there‘s something slippery going on with regard to what‘s happening to all that oil over there and, of course, talking about repression of civil rights or human rights, rather.  He seems like he‘s talking about—in kind of a streetwise fashion, rather than the way he was before. 

DAVID GREGORY, NBC NEWS CHIEF WHITE HOUSE CORRESPONDENT:  I think there‘s no question about that.  I mean, but there‘s different sides of this.  The president still wants to talk up this event of his trip and all of this enthusiasm that he wants Americans to share, but he‘s also resisting this temptation to do, frankly, what he‘s done in the past, and that is oversell events in Iraq. 

He‘s talked repeatedly in the past about turning points and watershed events, even chided himself for saying last week when the Maliki government was completed that it was going to turn the tide for events in Iraq.  He‘s a lot more cautious about things now, saying that the violence is going to continue. 

There‘s going to be no snap changes here, so a lot of that bravado is gone and the president is trying to level with the public and say look, the progress is going to be, he hopes, steady, but it‘s going to be measured in different ways than just whether you see death on the screen.  But he‘s got an uphill battle here in terms of making this argument that people will actually believe. 

MATTHEWS:  Well, make me believe, in a sense.  You know what they‘re saying there, trying to transmit to the people watching the program right now, HARDBALL.  What it is that the president knows that would suggest to him reasonably that three years from now—that‘s probably as long as we can stay there—that things will be better for us to leave?

GREGORY:  Well, that‘s really the reality.  I mean, he can‘t know that.  He doesn‘t know that.  Nobody knows that.  So much of this is beyond his control.  The best he can do really, at this stage, is to come back and say, you know, I looked at this guy in the eye and he looks like he‘s serious.  The cabinet appears to be serious.

But, look, even the administration knows that it‘s up to the Iraqi government to make it or break it here and they don‘t have a blank check here, they have got what Khalilzad said, our ambassador, maybe a six month window here to get to done.  And that‘s what the president is up against. 

Look, he has the difficult position of ticking off various goals today, securing Baghdad—an operation underway within Iraq under the Maliki government—fighting corruption, as you mentioned, inspiring basic trust in a central government, in Iraq, among Iraqis. 

Isn‘t that really an indication of how much has gone wrong for the U.S. in Iraq to date, not how much has been accomplished?  So I think that everybody recognizes that reality.  I think what this is about is some kind of confidence game to keep the American people with him. 

The polls show us that the American people are not with this president, not with this administration, and that‘s what‘s so difficult for him to keep the country engaged and not respond to the Democratic argument, which is, we don‘t really have a different, you know, trajectory here on Iraq policy, but we should just get out. 

MATTHEWS:  OK, thank you very much, David Gregory, chief White House correspondent for NBC News. 

Richard Wolffe is “Newsweek‘s” senior White House correspondent.  He traveled with the president on his surprise trip over to Iraq.  And Mike Allen is “Time” magazine‘s White House correspondent.  Gentlemen, thank you.

Richard, when did you get the word to jump on that plane? 

RICHARD WOLFFE, “NEWSWEEK”:  About 24 hours before we left, a face-to-face meeting, not secure enough to talk about on the phone and we were told not to even tell our spouses about it, so a lot of secrecy there.  And most people found out about then.  One guy I heard found out two hours before, so it was very short. 

MATTHEWS:  No leaks. 

WOLFFE:  No leaks. 

MATTHEWS:  So the press kept its secrets for 24 hours. 

WOLFFE:  That says a lot of good things about the White House press corps.  We take a lot of heat for our jobs but, you know—and the president acknowledged that.  We kept it secret, we were true to our jobs, answered the whole security of the mission.  It didn‘t leak until we got into the Green Zone. 

MATTHEWS:  What are your ethics as a reporter about not letting your bosses know that you‘re going to Iraq and the president is going to make a stunning trip to Iraq?  Secret trip, what are your rules?  Does your editor say afterwards, good job, you kept it secret from me? 

WOLFFE:  Not exactly.  I mean, they‘re excited about being there, they‘re excited about the news but, you know, the ethics about doing the job in an honorable way and, you know, there‘s operational security in anything you do around the White House. 

MATTHEWS:  Right.

WOLFFE:  You‘ve got to respect that, especially in a situation like this.  I mean, the president‘s life was in danger, and so was ours. 

MATTHEWS:  Did you feel that when you went into Baghdad, flying in at night, right ...

WOLFFE:  No, we flew in in the daytime. 

MATTHEWS:  You hit it at daytime?

WOLFFE:  A big, gutsy move.  He took Air Force One into Baghdad Airport.  I have got to say, none of us thought we wouldn‘t be spotted.  I mean, there was a lot of danger, a lot moments there where we could have been noticed. 

MATTHEWS:  A SAM attack could have been—you had a big target up there, Air Force One.  It‘s a huge plane. 

WOLFFE:  Sure, and we took flak jackets off Air Force One, hustled into the helos and, you know, we were told, listen, the helicopter ride is the most dangerous piece of this.  We thought we would be up in the air in no time, not least because it was hot in there.  But I have to say, we stood on the ground for maybe 10 minutes or so, waiting for the helicopters taking off and we just wondered, well, listen, have they heard something here, has the news got out there?  I mean, Air Force One is the most noticeable plane in the whole world. 

MATTHEWS:  The reason I ask, the president said it‘s his goal to secure Baghdad.  Baghdad itself isn‘t safe for you guys, reporters over there on the ground, to walk 20 feet out in front of the green zone.  He‘s saying he‘s going to make it secure for whom? 

WOLFFE:  Well, remember, it‘s not even safe enough for him to tell his cabinet, his own cabinet that he was going. 

MATTHEWS:  Ok, I mean secure to walk the streets of Baghdad.  That‘s his new goal, isn‘t it? 

WOLFFE:  Sure it is, the only way they can deliver that is by getting the Maliki government to deliver on its promises of establishing security.  That‘s why, your know, all this took about troop withdrawal and poll numbers, I‘ll tell you, something you get from flying close to the palm tops in Baghdad is this feeling that poll numbers really don‘t matter.  This is much bigger than that. 

MATTHEWS:  Ok, let me ask you Mike now, the president has come back here to deal with the poll numbers.  My hunch is he‘s trying to get he from the low 30‘s up to the low 40‘s, trying to bring a chunk of his base back.  He‘s not going for a home run here.

MIKE ALLEN, TIME MAGAZINE:  No, you‘re right Chris.  You saw today in the press conference, where we saw some clips in the David Shuster thing, this was the least defensive you‘ve seen the president since maybe December first of 2004.  Now one of the basic rules of life is the confident guy gets the girl and you saw the president out there very confident.  At one point, he said he was fighting fatigue and somebody was joking to me today that if that‘s true, the staff should maybe put the president on a sleep deprivation regimen, you know, sir you‘ve been going to bed far too early, because he really seemed to have eaten his Chereos this morning, and if you‘re a red-blooded, red-stated American, in Gainesville, Utah, this is the guy you‘ve been waiting for. 

And, you saw the president out there.  You talked about the base.  He had a very specific message for Republicans today.  To Democrats, he said, he was clear, you know, bring it on, even though he doesn‘t say that anymore, but to Republicans, who as you know, Republicans on the hill, very anxious for a troop draw down, afraid the president is going to be stubborn enough about this, that it might cost them a chamber, but he‘s basically saying to them, don‘t even start with me. 

This was the most substantive the president has been about the midterm elections.  He made it clear that troops are going to be there for a good long time in the basic strength that they are now, partly a matter of necessity, because someone explained to me that if you‘re going to draw down troops, you can‘t do it in the fall, because it looks too political.  So if he was going to do it, he needs to do it about now and you can‘t now. 

MATTHEWS:  I thought it was interesting, Richard, we‘ve always had this fight here and everywhere else, is the war in Iraq the war on terrorism or simply the war on Saddam Hussein.  Did the people in the White House want to go fight no matter what was going on.  If there hadn‘t been a 9-11, they would still be going over and fighting Iraq.  He said it‘s not exactly, it‘s part of the war on terror, he seemed to say, because if that government falls over there, then Iraq, since we‘ve been in there, would become a haven for terrorists. 

So we‘re really fighting to save a government, because if it goes down it becomes a haven for terrorists.  We‘re not fighting a terrorist crowd, we‘re fighting insurgents, we‘re fighting Sunnis, as a way of protecting a land space from becoming a basing ground for terrorism.  It‘s complicated. 

WOLFFE:  No, it is, and it‘s a new rationale for the war.  We‘ve heard it for some time, but they‘re basically saying this would be Afghanistan on steroids, and that‘s something that Blair has been very clear about, it‘s signals to the Jihadie movement, you know, this is a different rationale.  And the message here is very forceful and very strong.  The question is whether the messenger has the credibility to pull off another reason to stick with. 

MATTHEWS:  We come from W.M.D. to Democratization, now to this, don‘t let them have this base. 

We‘ll be right back with Richard Wolffe and Mike Allen.  And later, decision 2006 keeps rolling on HARDBALL.  Virginia voters pick former Navy Secretary Jim Webb, a former Republican actually, to face current Republican George Allen, as the senator of that state and presidential hopeful George Allen, this November.  Is Allen beatable?  Could a tough Senate campaign make him a better presidential prospect, there‘s a spin, directly from George F. Will. 

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back.  We‘re back with “Newsweek”‘s Richard Wolffe and “Time”‘s Michael Allen.  So the war, my hunch that after we go through all the poll numbers, the next couple, there will be a bump for the president.  And after that bump is over, we‘ll be back to the same slope line we were on line last week, which is this relentless 45-degree decline from 9-11 until whenever, Richard? 

WOLFFE:  Yes, I agree.  Look what happened after Saddam Hussein‘s capture, big news, three months later, it was Abu Ghraib, a spike if violence.  Look, they have a very small window to stand up this government, to show something on the ground for Iraqis and Americans and it‘s fundamentally not in their control, that‘s why they‘re saying now, look, pay attention, something big is going on, because the next few months are not in their hands. 

MATTHEWS:  What did you make of the president doing one of his Putin numbers, saying I looked into his eyes and found him sufficient?  In other words, when we went over there, he didn‘t know whether we had an ally.  I don‘t want to be too tough, but that‘s what he was saying.  I didn‘t know until I got there and saw the guy that he was worth fighting with, this guy‘s going to be ok as an ally. 

ALLEN:  Or he could say, certainly was clearer to him then.  The staff says the president was very inspired, especially by appearing before the troops while he was there, they said that that did a lot for him, and you saw the president coming back.

MATTHEWS:  The president himself didn‘t say that.  He said I met the guy, looked into his eyes and said I‘ve got a good man here, a man of character.  So why is the press secretary coming out with new things he was thinking?  Why can‘t we go with what he said? 

WOLFFE:  But this is a president who likes...

MATTHEWS:  ... What‘s wrong Mike, I‘m sorry, did I say something wrong? 

ALLEN:  No, go ahead. 

MATTHEWS:  I thought that was a good point.  I mean, everybody has got ideas.  What he really meant was and what the president meant to say, what the president also felt, also wanted you to know and in fact he was quite clear that his meeting was a one-on-one. 

WOLFFE:  Exactly, he talked to a bunch of us on the plane on the way back and it‘s quite clear, not just from this relationship but from every other one with Schroeder, for instance, in the run up to the war, who he didn‘t like and it was a personal thing.  This is a president who does politics at the gut level and he has a gut feeling about Maliki, you know, is that right, is that wrong?  He doesn‘t really know. 

We said to him, one reporter said, you‘re being remarkably optimistic about this guy and he was really feisty about it and spirited and said what do you mean, remarkably optimistic?  Yes, he‘s optimistic, but it all comes from that gut feeling.  All politics is especially personal for President Bush, whether it‘s domestic or foreign. 

ALLEN:  Well, also, he‘s stuck with him one way or the other, so he wants to make the best of it. 

MATTHEWS:  Yes, he is. So he doesn‘t have much chance, there isn‘t any other game in town.  The question is, I never heard the president so deliberately take the huge burdens of his office, which he has by right of being elected, and he said this war is now on the responsible shoulders of this fellow here, Maliki, and he said it‘s all up to him.  In other words we‘re there to help him.  It reminded me so much in the old days of John F.  Kennedy saying that about the government in Vietnam.  You know, they‘re going to have to win the war, we can help.

ALLEN:  This is why there‘s a little bit of a mixed message, because they‘re setting the table for eventually saying, we give it to the Iraqis, they could do it.  And the way one person explained it to me is they‘re trying to figure out when they can take their hand off the bicycle.  But they don‘t think they can do it yet and are not going to be able to for some time.

MATTHEWS:  But in the end, they have a way to leave which is to say we did the best we could for this fellow and they blew it. 

ALLEN:  They want to always the option of being able to say that.  But at the same time, he‘s not cutting it among himself.

MATTHEWS:  I think it‘s great statesmanship if it works, if he can rely on this guy and we can rely on him, we can leave, and then everybody will be happy.  Richard Wolffe, thank you; Mike Allen, thank you. 

Up next, the Bush administration—is it smart in its effort to win back this base on Iraq?  Can they do it?  “National Review” editor Kate O‘Beirne from the conservative “National Review” will tell us if the president can win back the big chunk of the base he‘s lost in the last year.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH:  By helping this new government succeed, we‘ll be closer to completing our mission.  And the mission is to develop a country that can govern itself, sustain itself and defend itself and a country that is an ally in the war on terror.

CONDOLEEZZA RICE, SECRETARY OF STATE:  If America does not rally support for people everywhere who desire to worship in peace and freedom, then I ask you, who will?

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL.  That was George Bush of course trying to boost support for Iraq this morning at his press conference in Washington and Condoleezza Rice, pumping up the administration before the Southern Baptist Convention.  Here to figure it all out and to talk about conservatives, because that‘s what we want to talk about, is “National Review” Washington bureau editor—Washington editor, Kate O‘Beirne.  Thank you for joining us.  She‘s also a HARDBALL political analyst.  It‘s great to have you here. 

Now let me talk to you—my hunch and I‘ll start with this, you tell me if I‘m wrong—the president is running about 30 some percent in approval, he‘s not going to go right back to 60 percent, but he‘s trying to go back to 40 right now.  He‘s got to get back to 50.  That means he has to get conservatives back, the more likely suspects. 

What‘s he done in the last week that could bring back a base of support so he‘d be back if contention again?

KATE O‘BEIRNE, WASHINGTON EDITOR, NATIONAL REVIEW:  Well, no less than the public at large, he‘s lost support from conservatives, the polls tell us, on the issue of Iraq. 

In fact, Republican strategists will tell you they think about 25 percent of the people who now think going to Iraq was a mistake and are pessimistic about the outcome are former supporters of the war.  I think the White House realizes those people are persuadable.  They don‘t have to persuade Cindy Sheehan and the anti-war crowd.  They have to get their own former hawks back and I think this week was helpful to the president with respect to winning back those former hawks.

MATTHEWS:  What does it take to get a person who has become disillusioned in the last year to find the faith again? 

O‘BEIRNE:  Well, the White House view is and I think they were right, Chris, people were tuning out the president‘s updates.  They sounded awfully pessimistic—optimistic, they didn‘t sound that concrete, especially with the images of car bombs constantly.

I think when the president now - when he used to say let‘s stay the course, people heard him saying, it‘s not what he meant, but people heard him saying “Let‘s keep doing what we‘re doing,” when demonstratively on T.V. it didn‘t look like doing what we were doing was right.

So I think when he talks about the price of failure, we dare not fail, our own national security demands we not fail, and with he talks about changing what we‘re doing based on conditions on the ground, and people demonstrably see those kinds of changes, like this new offensive on Baghdad, to secure Baghdad, the news about al-Zarqawi being killed, I think it—people are now listening and this opportunity with people now tuning in again is an opportunity for George Bush to make his case as you said, his realist case. 

Sure it‘s going to be really hard, sure there are setbacks.  But just because car bombs can make it onto T.V. and the kind of progress he talks about isn‘t as obvious, doesn‘t mean that incremental progress is not being made.  I think his former hawk supporters want to hear that.

MATTHEWS:  Who do you think is responsible for getting the president to have this more real realistic approach?  Is it Tony Snow, is it Josh Bolten?

O‘BEIRNE:  I think it‘s always been a frustration the president himself felt, that he was explaining to us, repeatedly, what was happening in Iraq.  And I think his frustration was that we didn‘t seem to be listening, not enough was listening, because of the images.  And what he‘s telling us now is, just because they can set off car bombs, and this spring has been particularly violent in Iraq, doesn‘t mean they‘re winning.  And just because we don‘t have counter images, showing progress, doesn‘t mean we‘re not.

MATTHEWS:  Did he shift the image today from the notion you and I

probably share which is U.S. G.I‘s over there fighting, walking through the

streets with heavy weapons, automatic weapons, trying to look for bad guys,

to an image of an American ally over there, the new prime minister of Iraq

the Democratic leader like the government, that we‘re now going to be helping?

In other words, the focus in our brains now, thanks to the last couple days is a government over there led by an actual person who looks normal, OK, and we‘re trying to help him.  In other words, the burden is on his back now.

O‘BEIRNE:  Well, they‘ve done a certain amount of that all along, Chris.  Remember the incredible attention paid to those elections in Iraq.

MATTHEWS:  But those are processes.  Now we have a person.  That‘s my argument.

O‘BEIRNE:  Well you have a full complement of the cabinet, and we‘ve always understood, he‘s always made the case that ultimately the fate of Iraq is in the hands of the Iraqis.  He‘s always said that, because in fighting an insurgency, you‘ve got to get the politics right.  And he‘s telling us now, he thinks this new cabinet is capable of doing that. 

They‘re reconciling with the Sunnis, the key part of taking the emphasis, the motivation out of the insurgency, and he‘s cracking down on the militias.

MATTHEWS:  I think he spoke a lot like the best of Churchill today in the beginning of that press conference, facts, bad information, complete information.  Giuliani did his best on 9/11, facts on the ground immediately as it came in. 

I thought he was very effective in briefing us this morning in that press conference, which convinces me again that Giuliani is the guy, with all his problems, who may well be the perfect candidate to replace this guy.  Anyway, thank you Kate O‘Beirne.  I don‘t know where the “National Review” stands on that hot potato.

Last night I said, by the way, that former President Bush had written a letter to Joe Wilson praising him for his service and sympathizing with him for the outing of his wife‘s CIA identity.  In fact, Wilson got his letter from President Bush, the former President Bush eight months before his wife was outed.  The former president‘s condemnation of those who leaked the identities of CIA agents, however, which I also refer to, came even earlier, in his 1999 address at the naming of the new agency headquarters.

Up next, a hot fight in Decision 2006 Virginia Senate race.  Senator George Allen got an opponent Tuesday in former Navy secretary Jim Webb, a former Republican.  Is Iraq front and center now in Virginia as the No. 1 issue in the Senate race?  You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

(MARKET WRAP)

MATTHEWS:  Welcome back to HARDBALL.  On Tuesday, Virginia Democrats picked former Reagan administration Navy secretary Jim Webb as their man to face Republican Senator George Allen this November.  It promises to be a real fight over the Iraq war. 

Dick Wadhams is the campaign manager for Senator Allen.  He is a Republican.  And then we have Mudcat Saunders here, he is the senior advisor or to the Webb campaign.  What is the Iraq war fight about here between these two candidates, the senator and the challenger, Webb? 

DAVE “MUDCAT” SAUNDERS, DEMOCRATIC STRATEGIST:  I think it‘s clear, George Allen has always been a supporter of the war, he‘s not backed off of it at all.  Our guy, six months before the war started, Jim Webb, in “The Washington Post” wrote a piece that pretty much dictated what was going to happen the rest of the way, called “Heading for Trouble: Why Do We Want to Be in Iraq 30 Years From Now.” 

MATTHEWS:  So he had the instincts the war was a mistake? 

SAUNDERS:  Without question Jim Webb did.  Jim Webb‘s military credentials are incredible, his understanding of the Middle East policy is incredible, and he had it pegged. 

MATTHEWS:  Well, Dick, why did senator—I know you to run his campaign, not explain all of his votes, but here you are.  Why is he for the war?  Why does he think the war made sense from the beginning?  We can all argue about it now.  Why did he think it was a good war to go into? 

DICK WADHAMS, SEN. GEORGE ALLEN CAMPAIGN MANAGER:  Senator Allen does support the president‘s efforts to help this fledgling democracy in Iraq. 

MATTHEWS:  Can you answer the first question, why did he support us going to war in Iraq?  Most people think it was a mistake now.  Why is he with the minority?

WADHAMS:  He supported the president‘s decision. 

MATTHEWS:  Wait a minute, was it his decision or the president‘s? 

WADHAMS:  The president‘s. 

MATTHEWS:  But he just went along with it, he didn‘t believe in it?  You‘re hedging.  Stood by, went along with.  Did he think it was the right decision? 

WADHAMS:  The issue now in this campaign is what do we do from here forward and this is where the real difference in this campaign comes. 

MATTHEWS:  I‘ve already found a real difference.  Your guy thought it was a smart thing to go in and your guy didn‘t think it is. 

WADHAMS:  This is the deal, that Mr. Webb can talk very eloquently about the decision to go to war, and what he cannot answer is what we do from here.  If you look at all—

MATTHEWS:  Let‘s ask him.  What does your guy say we should do? 

SAUNDERS:  He thinks we ought to develop a two year plan.  The first thing we need to do is this administration nor George Allen have either said we need to get out there.  We need an exit strategy.  There was no exit strategy at the beginning, there‘s no exit strategy now, because I don‘t think anybody wants an exit strategy.  Jim Webb has made it clear that—

MATTHEWS:  But you said you have a two year plan. 

SAUNDERS:  He says he thinks we need to put together a two year plan. 

WADHAMS:  What‘s interesting is John Kerry was wrapping his arms around Jim Webb on Monday night and last night, and of course Kerry wants immediate withdrawal, so we don‘t know really where Webb is.  If you look at all the public statements by Mr. Webb on the war now, we have no idea what his plan is or this is the first I‘ve ever heard of a two-year plan. 

MATTHEWS:  Well, your candidate was for Allen a couple years ago. 

SAUNDERS:  Well, when you ask him a question, hindsight is 20/20 and Jim Webb has said when 9/11 came, Chris, the whole world changed, and you know, he just says it clearly.  I made a mistake, he‘s disappointed, you know, he‘s ashamed, and to the point that he decided to run for the U.S.  Senate and do something about it. 

WADHAMS:  But this is not the only time Jim Webb has switched the position, he was for George Allen six years ago and now he‘s against him.  He was for—he was against the Senate bill on immigration, and now he‘s for it.  He‘s got three or four positions on affirmative action.  The trouble with Mr. Webb, we really don‘t know who he is or what he stands for in this race. 

MATTHEWS:  You‘re saying at first you thought the president was right back in 2003 when we went to war and after watching this for three years has decided it was a mistake, is it worthy of our attention, because that represents the swing voter in this country I‘ve just described.  Because the swing voter was with the—as you say, they backed the president, they didn‘t agree with him, they backed him.  That‘s what you say Allen did.  Not—you say Allen didn‘t agree with him.  You didn‘t say Allen agreed with the president.  You said he backed him.  You‘ve said it three different ways, you went along with him, back him and now you agree with him. 

WADHAMS:  No, that‘s not what I said.  What‘s important here—what‘s important, Chris, is that we need to go forward from here and we still don‘t know exact my where Mr. Webb stands. 

MATTHEWS:  He said two years to get out. 

SAUNDERS:  The first thing we‘ve got to do is say we‘re getting out. 

Nobody has said that yet. 

WADHAMS:  Does your guy say we‘re going to get out eventually? 

SAUNDERS:  I think the president and Senator Allen have said that we need to get out, when the Iraqis can stand up, we stand down. 

MATTHEWS:  How many years are we willing to stay there? 

WADHAMS:  As long as it takes to do the job. 

MATTHEWS:  Really?  Even if it takes 10 or 20 years. 

WADHAMS:  I don‘t know—I don‘t know what the outcome is. 

MATTHEWS:  You said as long as it takes. 

WADHAMS:  Whatever it takes. 

MATTHEWS:  Without limit, there‘s no limit on our commitment. 

WADHAMS:  I don‘t know what the limit is. 

MATTHEWS:  This is a tough one.  Is this going to be an issue when you go out to your candidates and you brief them in the morning and say today‘s message should be, what do you think?  The challenge in your case with the senator, what does he talk about on the stump, Senator Allen?

WADHAMS:  We need to, number one, secure our freedom.  We need to continue to make this the land of opportunity.  We need to secure our foundational values, the last one being federal judgeships essentially, because federal judges have overturned the will of the people in state after state. 

MATTHEWS:  Your guy wants to build a really high fence, right, across the southern border, right? 

WADHAMS:  Secure the borders.  That‘s right.

MATTHEWS:  OK, what‘s your guy want to do about illegal immigration? 

SAUNDERS:  Illegal immigration is—cannot be solved by an omnibus bill. 

MATTHEWS:  What can solve it? 

SAUNDERS:  Well, first off, there are different problems.  The first thing we‘ve got to do is we‘ve got to solve the border problem.  It‘s like, you know, we‘ve got to do that.

MATTHEWS:  I know.  What do you do? 

SAUNDERS:  We‘ve got to stop the flow of illegal aliens into America. 

MATTHEWS:  With a fence, right? 

SAUNDERS:  Whatever it takes to stop them.  It might be more than a fence.

MATTHEWS:  So you both on top of border protection.  How are you different?

WADHAMS:  Yes, but there is a difference here, Chris, because once again, Mr. Webb has been very, very unclear where he is on immigration. 

SAUNDERS:  He has not been unclear. 

MATTHEWS:  OK, what does he do?

WADHAMS:  He has been very unclear on the amnesty question.  He basically came out later in the campaign saying he supported the Senate bill and that bill provides amnesty. 

(CROSSTALK)

MATTHEWS:  It‘s called legalization. 

WADHAMS:  Right, but it‘s amnesty. 

SAUNDERS:  They‘re different problems.  See the Republicans, you know, they‘re trying to take a whole bunch of different issues and dump them into one issue.  The first thing we‘ve got to do, it‘s like you said before, we to get the leaks, you know, stopped in the ship, and then we decide what to do. 

MATTHEWS:  OK, let me ask you both.  This is the test question, this is “Double Jeopardy,” OK?  Does your guy—let me go to your guy, because I had a hard time with him he was on last time, as I remember.  Does your guy really believe that we should punish severely people that hire people illegally?  Yes or no? 

WADHAMS:  There should be employer sanctions, yes. 

MATTHEWS:  Severe sanctions, real stuff? 

WADHAMS:  There should be employer sanctions with—to get a handle on this, yes.

MATTHEWS:  Does your guy believe that?  Does Jim Webb believe that? 

SAUNDERS:  My guy is practical.

MATTHEWS:  Severe sanctions on guys or businesspeople, these restaurants, whatever they are, they started hiring people, illegally, because they‘re cheaper and they may be better, but should they be punished severely for doing that, because if they don‘t, then we‘re wasting a lot of time with border protection.  If there‘s a lot of jobs out there, they‘re going to come and get them.

SAUNDERS:  Jim Webb believes in a practical approach to it.  First, you know, big corporations, big employers who do it knowingly, yes.  I mean, you can‘t take a guy that is sitting down in the country somewhere, is too old to mow his grass and somebody comes up and mows his grass and throws him in jail over it.  I mean, obviously, you can‘t do that.

WADHAMS:  We‘re not talking about that.

SAUNDERS:  But, yes, absolutely, without question, that big corporations who hire illegal aliens.

MATTHEWS:  Yes, it sounds like you guys agree on everything but Iraq.  Anyway, thank you.  Iraq‘s a good fight.  We‘re going to be watching this race.  Please come back and fill us in as we get closer to November.  Mudcat Saunders—what a name.  I wish I could come up with a nickname. 

Anyway, Dick Wadhams. 

Up next, the White House communication director Nicolle Wallace is going to talk about the president‘s Iraq trip, Karl Rove‘s relief because he‘s not being indicted, and the White House outlook for the coming elections this November. 

This is hardball only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.

President Bush had a good run of news this past week, highlighted by his surprise trip overnight to Baghdad.  But will these positive signs add up to any real shift for a White House that‘s had a rough second term? 

Nicolle Wallace is communications director for the Bush White House. 

Nicolle, I saw you out there in the crowd at the press conference today.  What struck me—I‘ll say it again—positively, was that the president was very good on briefing us on the good news and the bad news coming out Iraq. 

NICOLLE WALLACE, WHITE HOUSE COMMUNICATIONS DIRECTOR:  That‘s right, and I think that‘s what the American people want to hear, you know.  The war on terror is something that we‘ve been engaged in now for several years, and people, I think, understand why we‘re there and they understand the stakes or at least they should.

But they‘re hungry for, in this case, his firsthand accounts of what this new Iraqi leader was like, the sense that the president had from him, and I think it‘s really important.  What the president said today is that we now have a partner in this process.  We have a partner in Iraq.  We are supporting his priorities and his objectives.

And, you know, for people that are looking at, you know, why is it going to be different, what makes this moment different, I think that everyone can be hopeful and encouraged by the fact that President Maliki has set clear priorities for his country.  He has engaged the coalition and the allies, and we are supporting those objectives.

And there‘s an example of it today where we‘ve got this major offensive going on in Iraq, where 20,000 Iraqi security forces, over 20,000 Iraqi police officers, are being supported by, I think, around 7,000 coalition troops and U.S. troops to secure the country and secure Baghdad. 

MATTHEWS:  The president said that all that our enemy has to do over there—that includes the insurgents who are Iraqis and the jihadists, he called them, that came in from the outside since the war began—all they have to do to get on television is to kill some people over there, and that‘s the news story of the night.  Well, that is a fact, but fairly or not, how do you change it? 

WALLACE:  Well, I think his point was you can‘t change it.  This is an enemy with no regard for human life, and that‘s why, by their definitions, they will be successful, because when you are willing to strap a bomb onto your body and kill innocents, kill women, kill children—and remember, he is by and large killing innocent Iraqis day if and day out—you know, you will have success by that measure.

But he has not been successful in stopping three elections in this country, and now we have a Democratically elected leader of a sovereign Iraq, and I know you were watching, but when the president today in his press conference described the feeling of being in the cockpit as Air Force One landed in Baghdad, that‘s a powerful moment that everyone can stop and, I think, share in. 

This was an American president, landing in a free Iraq, to have a face-to-face meeting with a Democratically-elected president, who has set priorities, that we‘re now going to be able to, you know, help support and, you know, really I think while there will be setbacks, there will be violence, we can start to look at the successes on the political front and mark real progress.

MATTHEWS:  Is this the guy that has to make it over there, Maliki?  In other words, he‘ll be in office for a number of years now.  He‘s been elected, it‘s really up to him, the president said, to make it, but to flip that around, if he fails, we have a real problem, don‘t we? 

WALLACE:  Well, the world and the Iraqi people have a problem and I think that‘s why part of what president Maliki is calling for is an international compact.  And you heard the president talk today about one aspect of that and that is countries that have pledged aid, have pledged financial support, it‘s time to pay up.  We now have this, the full cabinet seated, we have the new leader there, and his success is something certainly that the Iraqis are invested in now, with their participation, with the first unity government that that country has seen.  Obviously we are invested in their success and I think president Maliki is making sure that the world and his neighbors become invested in their success. 

MATTHEWS:  What‘s it going to look like so that we can come home?  I mean, what news will precede the president‘s decision to bring large numbers of troops home.  What will we begin to see?  Give us a sign of what to look for in the newspapers and our own reports here at NBC over the next six months and year, what will be the signs that say, pretty soon the president is going to start bringing troops home, because he‘s accomplished his objective.  Give me the news items which will tell us the good news. 

WALLACE:  Well, we‘ve talked about the political milestones, and a big one, again, not to be understated, is the election of a democratically elected leader of this country, so that‘s the political, I think, sign that we can all look at, and feel hopeful about. 

Now if you go to the security side, I think you look at this operation today, where you‘ve got, as they said, more than 20,000 Iraqi security forces and more than 20,000 Iraqi police, supported by about 7,000 U.S.  forces, and I think it is the goal of our military working with the Iraqis to increase the load that the Iraqis are carrying, the load that the Iraqi security forces and the Iraqi police are carrying in their security and the president has been very clear, success will be defined by an Iraq that can defend itself, sustain itself and protect itself, and that‘s what we will look for, but I think that, and you spent so much time talking about Iraq, I think that people will see this story being told in these small successes and then powerful moments like yesterday. 

MATTHEWS:  Ok, thank you very much, Nicole Wallace, who is the president‘s communications director.  Up next, the newest member of Congress, Republican Brian Bilbray of California.  He won a special election just last week to replace Duke Cunningham.  Can he win again in November?  Can his party hold on to Congress, keep the 218 votes they need to run the place.  You‘re watching HARDBALL now and only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Republican Brian Bilbray is California‘s newest member of congress.  In fact, he is the newest member of Congress in the country.  He recently won a special election to replace former Congressman Duke Cunningham, and now he‘s here to play HARDBALL.  Congressman, how did you get over the fact that you‘re a Republican in a district where Duke Cunningham was the Congressman and he got in all that trouble. 

REP. BRIAN BILBRAY ®, CALIFORNIA:  Really that everybody needed to pull together, Democrats, Republicans, and independents and finally address the illegal immigration issue.  And my work in that for over 20 years, I think, people drew on that.  They felt I was sincere.  I wasn‘t just playing politics with the issue.  It was something I worked on for a long time and I had credibility on.  I think that‘s the big challenge is actually having credibility whenever you talk about an issue that is so important to the voters, such as controlling illegal immigration. 

MATTHEWS:  Would you ever vote for a bill which was a combination of the House and Senate bill which included something on employer sanctions, something on border patrol, something on legalization, and something on guest workers?  Would you agree on a grand plan like that coming that‘s coming out of the Senate or some version of it? 

BILBRAY:  The word legalization is a catch word for the failed 86 bill which was amnesty.  I will not vote for any bill that offers something to somebody who broke our immigration laws that is not offered to the 100 million people waiting to immigrate legally.  The fact is that rewarding somebody for breaking the laws and the rules is not only stupid, it is immoral. 

MATTHEWS:  And that‘s what Congress did back in 1986.  And didn‘t do anything. 

BILBRAY:  Well, I think that the big issue here was that in 1986, there were two components.  One was the amnesty.  The other was the employer enforcement, the sanctions.  The fact is, everyone one knows amnesty was done in 1986 and we saw the greatest influx of illegal immigration in the history of the republic because of it.  But the employer enforcement was never done.  Before we talk about anything else, we need to go finish and do enforcement.  You know, everybody talks about stopping illegal immigrants.  The way we do that is stop illegal employers. 

MATTHEWS:  I am completely with you, sir.  You‘re the first guy I‘ve heard say it so clearly.  If you don‘t do that, all the rest is just amnesty. 

BILBRAY:  You have to stop paying people for being here illegally and you have to stop allowing people to make money off illegal employment.  That‘s the one thing that is missing the whole time. 

MATTHEWS:  Is there anyway put to together an I.D. card or some kind of registry, that makes it so if a guy comes in and says my name is this.  I grew up here.  I‘m legal.  And you don‘t think they are, to be able to check it. 

BILBRAY:  Absolutely.  In fact, David Dreier who is a Republican rules chairman, and Sylvester Reyes, who is the former leader of the Hispanic caucus over on the Democrats, has a bill 98 that says we ought to make our Social Security card that‘s as tamper resistant as the new drivers licenses will be in 2008.  And every employer will only hire someone with a new Social Security card.  And it will be the federal government‘s job to make sure only those who qualify for employment get those cards.  Make it simple enough to where you can really crack down on anybody who breaks the law.  So, you really know who is purposely breaking the law and those who are just making a mistake. 

MATTHEWS:  Is there a dirty deal including the Lu Lac, the Latino group, that represents a lot of Latinos and legitimately so.  Big business, the Chamber of Commerce and the Democrats who don‘t want anything like that to really work. 

BILBRAY:  They don‘t want it to work.  What they want to do is they always want to undercut it and then say, well, it is such a failure that now we have to surrender.  I think that‘s the greatest thing. 

MATTHEWS:  I‘m with you.  I‘m signing up.  You‘re the best.  You‘re the clearest voice I‘ve heard on this issue.  Thank you very much, I see why you won.  Brian Bibray the new congressman from southern California.  Play HARDBALL with us again tomorrow night tat five and seven eastern.  Our guests will include Senate Majority Leader Bill Frist.  Right now it‘s time for THE ABRAMS REPORT. 

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

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