updated 8/29/2006 11:48:26 AM ET 2006-08-29T15:48:26

Guests: Chris Shays, Michael Isikoff, Tony Blankley, Eugene Robinson, Mike Brown

NORAH O‘DONNELL, MSNBC ANCHOR:  Ten weeks before election day and a Republican breaks from the White House and calls for a timetable to bring home the troops.  Was the turn around based on the battle ground in Iraq or the political battle ground at home?  Let‘s play HARDBALL.

Good evening.  I‘m Norah O‘Donnell, in for Chris Matthews.  Welcome to HARDBALL.  President Bush made his 13th visit to the Gulf Coast today on the eve of the first anniversary of Hurricane Katrina.  Bush‘s presidency was badly damaged by his administration‘s dismal response to the disaster, visited Mississippi and Louisiana today. 

All the while tropical storm Ernesto looms over his shoulder, threatening the region.  Can President Bush repair Katrina‘s political damage in time for the Fall elections?  We‘ll talk to the controversial former FEMA director Michael Brown. 

Meanwhile the bloody politics of the war in Iraq, at least 20 Iraqi soldiers were killed in street fighting with Shiite militia men.  Eight American soldiers were killed in Iraq this weekend.  Back at home, Iraq is triggering a civil war inside the Republican party.  Congressman Chris Shays, once a staunch supporter of the war, is now calling for a timetable to start withdrawing troops.  We‘ll talk to Congressman Shays in a moment. 

And an interview with “Newsweek” investigative reporter Michael Isikoff, who insists he knows who was the primary source in the CIA leak case.  Did the White House know and if so, why didn‘t they blow the whistle? 

But first the latest from Iraq from NBC‘s Mike Boettcher in Baghdad. 

MIKE BOETTCHER, NBC NEWS CORRESPONDENT:  After a period of relative calm in this country, well things have exploded again.  Over the weekend nine U.S. soldiers died in action in Baghdad.  Four were killed in northern Baghdad by a roadside bomb, another were killed by four separate bombs in the south of Baghdad and one other U.S. soldier died by gunfire from insurgents in the east part of this country. 

Now, this comes as Operation Together Forward, launched by the U.S., in cooperation with the Iraqi army to try to get control of this country, it comes as they try to get control of Baghdad itself.  Some people call it the Battle of Baghdad.  But today at least 50 people died around the capital, 60 died around the country yesterday.  So this is a very uphill battle.  Mike Boettcher NBC News, Baghdad. 

O‘DONNELL:  Thank you Mike Boettcher in Baghdad.  Joining me now is Congressman Chris Shays, Republican from Connecticut, who has just returned from his 14th trip to Iraq.  Congressman what did you learn in your latest visit? 

REP. CHRIS SHAYS ®, CONNECTICUT:  Well I learned what I suspected and that is that this new government really doesn‘t have the will to do all the successful things that happened last year and part of the year before. 

O‘DONNELL:  You are a Republican and you are now breaking with the president and calling for a timetable for withdrawal of U.S. troops.  Why the change in your position? 

SHAYS:  Well, first, I‘m not breaking with the president in supporting the mission in Iraq.  I am a strong believer that we need to be fully engaged militarily, economically and politically and I believe that if we leave now or leave prematurely, you will see clearly a higher oil prices but what‘s more fearsome is you will see an Iraq that‘s dominated by Iran. 

O‘DONNELL:  But you are calling for a timetable, right. 

SHAYS:  Yes, but one more thing you will see the terrorists win and we can‘t allow them to win.  I‘m calling for a timetable on three things.  One, that they set provisional elections, that they have reconciliation and a timeline to do it, a timeline for finishing the constitution and give them the timeline on how long our troops will be there, doing the police work that ultimately we want them to do. 

O‘DONNELL:  Congressman, with all due respect, while you say that you are not breaking with the president, you are calling for a timetable for withdrawal of U.S. troops and the president has said that that would be emboldening the terrorists.  Republicans in your party have called people that are espousing your position now of being cut and runners, of wanting to throw in the towel.  Why are your doing that now?  Some may look at what you‘re doing and saying it‘s political expediency because you are facing a very tough re-election in Connecticut? 

SHAYS:  Well first off, taking this position doesn‘t help me politically, but more importantly I want to make sure that you see the distinction.  I agree with the president in our mission, I agree that we have got to succeed.  The only difference and it‘s a big difference, but it‘s the one difference, and that is I think the way to get the Iraqis to wake up, to do the heavy lifting, is to let them know that we are not there indefinitely, that there‘s not an open checkbook, that we‘re not going take sustained losses indefinitely.  The Iraqis need to know that they are going to do the heavy lifting and if they know that I think they will start setting the timelines for a constitution, for reconciliation and for provisional elections.  That‘s what I‘ve learned.

O‘DONNELL:  Congressman let‘s be clear because you have made your 14th trip to Iraq.  You have fully supported everything that the president and the Secretary of Defense Donald Rumsfeld have done in Iraq up until now.  And yet even before you got back on the ground in the United States you were calling up reporters and you called the White House, did you now, to tell them that you were now changing your position or modifying your position on the Iraq war.  To be clear, what was it that the generals told you on the ground that has caused to you make this change in position? 

SHAYS:  Well, let me first be clear.  I don‘t support Rumsfeld.  I was someone who said he needed to step down.  When he made the decisions to disband the army, the police and the border patrol, when he allowed the looting, in my judgment he needed to step down.  So I have been a strong critic along the way on things that I don‘t like and I have been a strong supporter of the war because I believe the Iraqis need to succeed. 

O‘DONNELL:  Well the Democrats on the other side of the aisle and the House of the Representatives are now making clear, according to First Read, which is our political document of MSNBC, that they are going to call for a no confidence vote on Secretary Rumsfeld when Congress returns.  So will you vote with the Democrats? 

SHAYS:  Well, if we have a vote, I have no confidence in Secretary Rumsfeld and I haven‘t had confidence for a long time.  But let me just be clear with you.  I believe that we need to do something to motivate the Iraqis to do the things they did last year and the year before.  Since January they spent five months creating a government, five months.  And during that time you did not see progress.  Then—

O‘DONNELL:  But you are arguing that a timetable would help motivate the Iraqis... 

SHAYS:  No, let me finish, let me finish. 

O‘DONNELL:  That‘s your position.  That‘s fine.  But the president, OK and the leader of your party says that such a thing actually would embolden the terrorists. 

SHAYS:  Well I think he‘s wrong and I think what is important to recognize is we now have three months where this government has not shown the political will to do the things that the previous government did.  It made tough decisions last year.  This government, in fact, Sistani, the cleric, pointed out that everybody in the government needs to come back home.  They are away.  It‘s almost like they are on vacation, not recognizing that heavy lifting has to start now.  They don‘t have years, they have months.  I believe our setting this kind of timeline of when we get our troops not doing police work will help them understand that reconciliation may be a better alternative. 

O‘DONNELL:  You had been to Iraq 14 times and this is the first time that you are calling for a timeline for withdrawal of U.S. troops and this comes ...

SHAYS:  Exactly. 

O‘DONNELL:  ... After in Connecticut there was a very divisive primary where Senator Joe Lieberman, who has been a hawk on the Iraq war, lost to an anti-war supporter Ned Lamont.  So don‘t you think many people can look at your change in position and see this as a reflection that you have changed because of the political battle ground in Connecticut not because of the battle ground in Iraq but because you feel politically endangered. 

SHAYS:  I think people say that but now can I give you the answer?  Why would I have set timelines last year when what they did is they had an election to create a constitution, had a timeline, then created the constitution.  I gave them a pat on the back.  They then had a timeline for the election to adopt the constitution.  That was progress.  Then they created a new government, elected under the constitution. 

Why would I have ever thought to do a timeline then when they were making so much progress?  It seems to me they created their government, we needed to give them a chance to create the government.  Now they have the government.  This government has been placed for three months and now it‘s very different than the past.  Progress was made in the past.  Progress is not being made now.  And when you have government official tell me, and when I ask the Iraqis, why aren‘t you moving forward they say, we will but we don‘t want timelines.  I say they need to have timelines. 

O‘DONNELL:  You called the White House and gave them a heads up that you were going make this change in position? 

SHAYS:  No, I called the White House to say, you know what, you‘re going hear all the press say that my position says that I don‘t support the war in Iraq and the press is dead wrong. 

O‘DONNELL:  No, but let me just ask you. 

SHAYS:  No, no, that‘s why I called them. 

O‘DONNELL:  You said to NPR in an interview that a timetable would be foolish and now you are calling for a timeline.  So which is it?

SHAYS:  Well because their timeline, the Democratic timeline, was not based on specific fact.  Their timeline was just get out, whether or not we can do it.  My timeline is based on this important fact, we tell the Iraqis when they replace our, our troops leave.  It‘s based sound data and we‘re going to have a hearing, we‘re having a hearing in March, excuse me, in the 15th of September to talk about our security needs.  Then we‘re going to have another hearing the same week on reconciliation and then we‘re going have a hearing talking about the consequence of leaving prematurely which I oppose.

O‘DONNELL:  All right, Republican Congressman Chris Shays of Connecticut announcing that he‘s going to now hold hearings in Congress on Iraq after returning from his 14th trip.  Congressman, thank you for your time.

And coming up, a blockbuster story in “Newsweek” tells us who was Bob Novak‘s primary source on Valerie Plame‘s identity as a CIA officer.  Investigative reporter Michael Isikoff will be here.  And later one year after Hurricane Katrina devastated the Gulf Coast, former FEMA Director Mike Brown plays HARDBALL.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back to HARDBALL.  One of the mysteries that has haunted the Bush administration over the past few years has centered around who blew the cover of Joe Wilson‘s wife, a covert CIA operative.  And now that mystery may be solved. 

(BEGIN VIDEOTAPE)

O‘DONNELL (voice-over):  It is the most talked about Washington secret in years.  Who disclosed the identity of undercover CIA operative Valerie Plame to columnist Bob Novak?  On July 14, 2003, Novak wrote that Joe Wilson‘s wife, “Valerie Plame is an agency operative on weapons of mass destruction.”  Plame‘s blown cover sparked an investigation that revealed two top White House officials discussed Valerie Plame and her husband with reporters.

Court documents showed that Vice President Cheney‘s then chief in staff Scooter Libby discussed Joe Wilson and his wife with “Time” magazine‘s Matt Cooper and Judy Miller of the “New York Times.”  Libby is now under indictment for perjury, obstruction of justice and false statements.

And Karl Rove discussed Joe Wilson and his CIA operative wife with both Bob Novak and Matt Cooper.  But up until now, the big question remained unanswered.  Who was Novak‘s primary source?  According to a new book, “Hubris: The Inside Story of Spin, Scandal and the Selling of the Iraq War,” by “Newsweek‘s” Michael Isikoff, Novak‘s original source was Richard Armitage, Colin Powell‘s No. 2 at the State Department.

Armitage had a meeting with Novak in his State Department office on July 8, 2003, just six days before Novak‘s column outed Plame.  Isikoff writes that Armitage was shaken after reading a later Novak, October 1st 2003 column, describing his source as a “senior administrative official who was no partisan gunslinger.”

He phoned Powell that morning in deep distress.  Carl Ford Jr., the State Department‘s intelligence chief said that Armitage told him, “I‘m afraid I may be the guy that caused this whole thing.”  Ford said Armitage was basically beside himself that he was the guy that “F-ed up.  My sense from Rich is that it was just chit chat.”

“Newsweek‘s” report describes Armitage as a well-known gossip who loves to dish and receive juicy tidbits about Washington characters.  Novak wasn‘t the only reporter Armitage spoke to about Plame.  Isikoff reports that Armitage discussed Plame with Bob Woodward three weeks prior to meeting with Novak.  Woodward has previously said he learned of Plame‘s identity in a casual and off-hand conversation with an administration official. 

Although special counsel Patrick Fitzgerald investigated Armitage, he found no evidence that the State Department‘s second in command knew Plame‘s CIA status was covert when he spoke to Novak and Woodward.  Armitage has refused to comment on the case.  Sunday on “Meet the Press,” Novak would not confirm “Newsweek‘s” report but he did offer this.

ROBERT NOVAK, COLUMNIST, CHICAGO SUN-TIMES:  I do not identify my sources on any subject if they‘re on a confidential basis until they identify themselves.  I don‘t say somebody was or wasn‘t.  I‘m going to say one thing though I haven‘t said before and that is I believe that time is way past for my source to identify himself.

(END VIDEOTAPE)

O‘DONNELL:  As we‘ve said, “Newsweek‘s” Michael Isikoff broke the story of Richard Armitage being Novak‘s source in his new book with David Corn, “Hubris: The Inside Story of Spin, Scandal and the Selling of the Iraq War.”  Michael, welcome.

MICHAEL ISIKOFF, NEWSWEEK:  Good to be here.

O‘DONNELL:  So Novak is now saying that Armitage—well he didn‘t say it‘s Armitage, he says his source, it‘s time for his source to come forward.  Do you think that we‘ll hear more from Dick Armitage soon?

ISIKOFF:  Very hard to say.  He has consistently refused to answer any questions about this.

O‘DONNELL:  Why?

ISIKOFF:  Well, he had the excuse before of it was an ongoing investigation and, of course, there is still the Scooter Libby trial scheduled for early February.  But one of the things we reveal in the book is that Armitage fessed up pretty early on in the investigation, the day after he makes that call in deep distress to Colin Powell after reading Bob Novak‘s column.  The FBI interviews him in his State Department office October 2, 2003 and he acknowledges he talked to Novak and told—passed along the information about Joe Wilson‘s wife.

O‘DONNELL:  But he thought when he passed on that information that it was quote, “a little bit of gossip?”

ISIKOFF:  Well, that‘s what he has told others and he, of course, is known as we note in the book as a big gossip and loves to chit chat with reporters and colleagues.  What he was thinking at the time he passed along the same information, both to Novak and Woodward a few weeks earlier is hard to say.  We know what Novak has said, we know as Woodward has said, Armitage has not spoken.

O‘DONNELL:  If Dick Armitage was the primary source for Bob Novak, why is Scooter Libby been indicted on five counts and facing jail time and why did Karl Rove have to testify five times before the grand jury?

ISIKOFF:  Very good questions but it is worth pointing out and we certainly go in great detail in the book on this, there were essentially two tracks going on here.  You had Armitage gossiping if that‘s what it was, chit-chatting with reporters, based on information that he had gotten from a classified State Department memo.  And then you had people at the White House who had a very concerted interest in tearing down Joe Wilson and trying to undermine his credibility to suggest that his trip to Niger to check out claims that Saddam Hussein was buying uranium there was a boondoggle or a junket, set up by his wife, who worked at the CIA.  So you had the second track of White House officials passing along the same information.  After Novack talks to Armitage, who doe he call?  Karl Rove.  Rove confirms it.   

O‘DONNELL:  Is there any evidence, information, any of your reporting reveal that Dick Armitage was working in concert with the White House to discredit Joe Wilson? 

ISIKOFF:  There isn‘t.  In fact, one of the great ironies of this whole case and investigation is Armitage was part of the small moderate cell in the administration, along with his good friend and boss Colin Powell, to try to slow down the march to war.  And, as we point out in the book, Armitage at times would express great disdain for Dick Cheney and other war hawks in the White House and administration who had never even served in the military, Armitage is a Vietnam vet, he saw combat and he would sort of shake his head in amazement, saying these guys want to go to war, they never heard a bullet in their lives. 

O‘DONNELL:  Did the White House know that Armitage was the primary source for Bob Novak and perhaps even Woodward. 

ISIKOFF:  Fascinating question.  One of the things we describe in the book is this phone call by Will Taft, the State Department legal adviser, to Alberto Gonzales, the then White House counsel, right after he‘s contacted the Justice Department, to tell them that the State Department and Dick Armitage has information relevant to the investigation.  He tells that to the Justice Department. 

Taft feels obligated to tell the White House something.  This thing is blown up.  It‘s a huge Washington firestorm and the White House is under heat.  Taft calls Gonzalez and says well I think you should know that we at the State Department have some information relative to this investigation.  They are worried at State, Taft, that the White House is going ask for details and if they know it‘s Armitage they will leak it to pass attention away from themselves. 

O‘DONNELL:  So did the White House know it was Armitage. 

ISIKOFF:  Gonzalez never asked any follow up questions.  He just said thank you very much and never asked for the details about Armitage.  Taft and Armitage breath a huge say of relief and the White House, at least at that stage, had no idea the identity of the leaker. 

O‘DONNELL:  Because Karl and Scooter Libby and others in the White House could have said listen it wasn‘t it was Dick Armitage, if they knew. 

ISIKOFF:  They would, presumably, loved to have had this information back then as a push back to the heat they were getting.  Of course they had complicity of their own.  They had, you know, Rove not only confirmed the story to Novak, he then volunteered the information to Matt Cooper a few days later.  So and Scooter Libby, of course, had already talked about it with Judy Miller of the “New York Times.”  So their hands were not clean on this, but it is ironic that the primary guy who set the chain in motion was Dick Armitage, a moderate in the administration. 

O‘DONNELL:  This is fascinating stuff.  Very, very interesting in your book.  Michael Isikoff is staying with us.  We‘ll be back in just a moment. 

(COMMERCIAL BREAK)

O‘DONNELL:  We‘re back with “Newsweek‘s” Michael Isikoff with more on the CIA leak case and that Dick Armitage may have been the primary source in the CIA leak investigation.  So, if Dick Armitage was the one who originally revealed that Valerie Plame was the covert CIA operative, why isn‘t he charged? 

ISIKOFF:  Well, good question and one of the things we discuss in the book is that, and reveal in the book, is that he was aggressively investigated by Patrick Fitzgerald, the special counsel, not once but twice.  First after even making the initial acknowledgement that he had talked to Novak, he testified before the grand jury, his story was checked and rechecked. 

He was foggy on some details about when he learned it and where he learned it and what he knew.  But at the end of the day, to be charged on the Identities Protection Act you have to know that the CIA officer you are outing is, has a covert status.  There was nothing in that classified State Department memo that identified Valerie Plame, or Joe Wilson‘s wife, as a covert agent. 

O‘DONNELL:  Does the fact that Armitage was the primary source absolve either Karl Rove or Scooter Libby? 

ISIKOFF:  No, as I said before they had their own reasons for dishing about this and they did separate and apart from Armitage.  That‘s why they came under such scrutiny by Fitzgerald.  Remember what Libby is charged with is not leaking Valerie Plame‘s identity.  He‘s charged with lying about it to the grand jury and to the FBI and obstruction of justice as a result of that. 

O‘DONNELL:  So, let me just ask this question.  If Dick Armitage just thought it was good gossip that hey Joe Wilson‘s wife, by the way, you know he was sent on this CIA mission.  His wife happens to be a CIA operative, does weapons of mass destruction stuff, kind of interesting and if he‘s not a partisan gunslinger then why wouldn‘t it have been relevant to our reporting as reporters to pass on that? 

ISIKOFF:  Why wouldn‘t it?  I‘m not sure I‘m following the question. 

O‘DONNELL:  That Joe Wilson, who was sent to Niger to check out the relevancy or the accuracy of these reports that Iraq was trying to obtain uranium from Niger, why wouldn‘t it have been relevant that his wife worked at the CIA? 

ISIKOFF:  Well, first of all, it‘s always dicey when you talk about the identity of a CIA officer, particularly one who works in the director of operations, to reveal the identity.  That‘s dicey on its face.  The political charge that was being made here was that his wife sent him on a junket.  That was the line that the White House was pushing. 

O‘DONNELL:  That was the line that Vice President Cheney wrote, scribbled on the top of this evidence. 

ISIKOFF:  Or did his wife send him on a junket.  That‘s what they were trying to push.  That‘s how they were trying to use this to discredit Joe Wilson. 

O‘DONNELL:  This is all about the White House‘s effort to make the case for the war in Iraq.  That‘s what your book “Hubris” is all about. 

ISIKOFF:  Exactly. 

O‘DONNELL:  And I understand you are going to give us more juicy tidbits next week, but not today.  So I‘m sure you‘ll be back next week.

ISIKOFF:  Lots more to come when it‘s in bookstores next week. 

O‘DONNELL:  All right, well Michael Isikoff, it‘s always a pleasure.  Great reporting with David Coren (ph) as well.  And up next, HARDBALLers Tony Blankley and Gene Robinson will dig into the politics of the Katrina recovery, Iraq war and more. 

And later former FEMA boss Mike Brown plays HARDBALL.  You‘re watching HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH:  I was here a couple of days after Katrina hit.  Amazing, isn‘t it?  Amazing what the world looked like then and what it looks like now. 

(END VIDEO CLIP)

O‘DONNELL:  Welcome back to HARDBALL.  The slow recovery from Hurricane Katrina is taking center stage again.

The American death toll in Iraq and Afghanistan is on the verge of surpassing the number of lives lost on 9/11.

And the CIA leak case just won‘t go away.

Our HARDBALLers tonight, Tony Blankley, editorial page editor for the “Washington Times,” and Eugene Robinson an editorial page columnist for the “Washington Post.”  And he joins us tonight from New Orleans.  Welcome to both of you. 

Let me begin with the CIA leak case, because we did heard from Michael Isikoff earlier who says that Dick Armitage was the primary source for Bob Novak.  Is it time for Dick Armitage to come forward, Tony? 

TONY BLANKLEY, WASHINGTON TIMES:  Well, sure.  But I think, you know, the two interesting things about this, one, why didn‘t Colin Powell, if he didn‘t call the president and say hey my number two is the guy, the president was out there on a regular basis saying I didn‘t know who did it, we‘re going to try to get to the bottom of it, and the secretary of State knew because Armitage, according to this book which I‘m sure is accurate told him.  So, I mean, that‘s sort of an amazing fact, if in fact that did happen. 

The other piece of it...

O‘DONNELL:  Meaning that Colin Powell should have given the president and the White House a heads up. 

BLANKLEY:  The fact that Taft is, you know, a lawyer at the State Department called Gonzales and said we have got some information you might be interested in, as soon as Powell sees days and weeks later that Bush is still thrashing around saying I don‘t know who did it, wouldn‘t he get on the phone and say hey, boss, it‘s my guy who did it inadvertently?  Apparently there‘s no indication that ever happened.  So that‘s kind of a stunning phenomenon. 

The other piece of it is, is this really does take a large part out of one of the central fantasy narratives of the anti-Bush people that it was the White House that led this charge against Wilson.  In fact, it was Armitage, as you know and everyone knows, who was against the whole war effort, who put this story into play.  And really I think it does deflate one of the three great fantasy narratives. 

O‘DONNELL:  Gene is down there in New Orleans, and of course tomorrow marks the first anniversary of Hurricane Katrina.  Gene, we heard the president say today as he was in Mississippi it‘s amazing to see what it looked like then and what it looks like now.  How much has New Orleans and the surrounding Parishes changed if at all? 

EUGENE ROBINSON, WASHINGTON POST:  I think he will get a really

different picture when he comes here.  You know here at Jackson Square, in

the middle of New Orleans, the French Quarter, everything is just fine,

it‘s beautiful, it‘s a little hot today.  But other than that—I mean

it‘s really hot today to be honest

O‘DONNELL:  Well, you look great, though. 

ROBINSON:  Well other than that—thanks a lot.  They have been doing their best.  If I keel over, just, you know—I‘m sorry.  But if you go a mile from here, you see the same devastation that I saw a year ago when I was here right after Hurricane Katrina, the same devastation that I saw in January when I was here.  It hasn‘t changed that much.  And it is just heartbreaking to drive mile after mile after mile and see nothing but abandoned houses, piles of rubble, sticks, a few FEMA trailers in New Orleans where people are trying to get their lives together.  But by no means has the city bounced back. 

O‘DONNELL:  A year later and less than half of New Orleans residents have moved back.  There have been, according to government watchdog groups, at least $2 billion in fraud and waste, scams, et cetera.  Can Bush claim that there‘s any success in what‘s happened in the Gulf Coast in the past year? 

ROBINSON:  Well, my impression is that things have gone a bit better in Mississippi than in New Orleans and Louisiana, although in a sense what has gone right in Mississippi has kind of been skin deep, it hasn‘t really reached some of the most affected people, the people who really need the most help.  But all in all, I think things have gone better there. 

Here in New Orleans, I don‘t think the president can claim to have made any really substantial or meaningful progress towards doing what he stood in this very square, Jackson Square, while there was water filling the city and promised to do, which was rebuild a great city. 

The great city has not been rebuilt.  And it‘s very difficult to see how it‘s going to be rebuilt. 

O‘DONNELL:  Tony Blankley, your former boss, Newt Gingrich said Katrina made it look like Republicans were not the party of competence and management.  This is a black spot on the president‘s record.  His approval ratings went in the tank and stayed in the tank after Katrina.

BLANKLEY:  Look, I don‘t think there‘s any doubt that the federal government and FEMA have not been functioning well, whether it‘s just because of management, whether it‘s because it put into Homeland Security.

O‘DONNELL:  Yeah, but the way this has affected the president politically.

BLANKLEY:  Well, I understand that.

I mean, to me there are two stories here.  One is clearly is Mississippi has done a much better job and is measurable.  Mississippi didn‘t suffer as much in economic damage as Louisiana did, but even when you account for that, the amount of recovery, the amount of clearance of damaged stuff is dramatically higher even when you account for the disparity in damage in Mississippi.  So you got a government that‘s functioning better in Mississippi. 

Having said that...

O‘DONNELL:  Because there‘s a Republican governor?

BLANKLEY:  Not because there‘s a Republican governor, because it‘s an honest government there and Louisiana is notoriously corrupt and incompetent. 

I think Haley has done a fabulous job—Haley Barbour the governor, but I suspect that it would have gone pretty well even if Haley hadn‘t been on the job, because I think the Mississippi community was galvanized.  Now I think Haley provided a lot of leadership, but they were galvanized, they were a pretty honest government, and they got the job done.

Having said that, I just want to make emphasis, having said that, we have a big problem with how we do disaster response in this country at the federal level and clearly we haven‘t cracked the code on that yet. 

O‘DONNELL:  Gene, this president ran on confident, go ahead. 

ROBINSON:  I was just going clarify one thing about the Mississippi versus New Orleans dichotomy.  One thing about Mississippi is the hurricane just blew everything on the coastal strip away.  It was smashed, it was gone.  So, in a sense a whole step didn‘t have to be taken there.  You didn‘t have to clear a whole lot of stuff out the way you do here in New Orleans.  It was gone.  Just bring in the bull dozers and clear it out and then build something new. 

In New Orleans, a lot of the city, the ruined part of the city, is still here and that‘s part of the problem.  It‘s still here, it‘s still owned by people, some of it is salvageable, some of the houses, some are not salvageable.  There are not enough workers to do all the work.  There‘s not enough place to put all the trash.  so it‘s a very much more complicated set of problems they are dealing here. 

O‘DONNELL:  OK.  All right thank you to Gene Robinson who‘s sweating it for us down in New Orleans and Tony Blankley here in the cool studio with me.  Thank you to both of you.  And up next President Bush told him he was doing a heck of a job, then he got fired.  Former FEMA director Mike Brown will be here.  This is HARDBALL, only MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  I want to thank you all, and Browny, you‘re doing a heck of a job.  You‘re FEMA director is working 24 hours.  They‘re working 24 hours a day.

(END VIDEO CLIP)

O‘DONNELL:  Welcome back to HARDBALL.  Those were the infamous words by President Bush nearly one year ago in the midst of the worst natural disaster in our country‘s history.  Just ten days after that statement by the president, FEMA director Mike Brown was removed as the federal government‘s leader in the recovery effort and he join us now live.  Thank you.

MIKE BROWN, FORMER FEMA DIRECTOR:  Thank you Norah.

O‘DONNELL:  One year later, what have you learned? 

BROWN:  Well I learned that I was right about the things I‘ve been saying within DHS, of the things that needed to be done, most amazingly to me is Secretary Chertoff came out this week and said that catastrophic disaster planning takes years and we‘re going to start doing that, so I was very heartened to see that we‘re now going to do what I asked for back 2003.

O‘DONNELL:  You said you learned that you were right.  But you do admit that you were wrong on several things. 

BROWN:  Oh, absolutely.  I made very clear through my testimony and interviews that I certainly made mistakes too.  We all made mistakes made mistakes at the federal, state and local level. 

O‘DONNELL:  What was the biggest mistake?

BROWN:  Overall, I think the biggest mistake overall is what FEMA Director Paulson said yesterday on one of the news show and that is that there was no communication.  There was not a unified command structure and so without that unified command structure, which we use in all disasters, you can‘t coordinate what‘s going on.

O‘DONNELL:  In fact, the G.A.O., the Government Accountability Office, issued a report this year and said that there was a lack of a clear chain of command.  Is that what was the problem? 

BROWN:  There was because the mayor and the governor were not

communicating well, and then you had the break down between me and the

White House, because all of a sudden Secretary Chertoff decides to insert

himself back into the disaster and so now we have all of these players that

are all kind of jockeying for position

O‘DONNELL:  You have recently given an interview to “Playboy Magazine,” in which you admitted that it was a mistake for you to play along with the White House message during Katrina and you said that that message was a lie.  What was the lie? 

BROWN:  The lie was that we were working as a team and that everything was working smoothly.  And how we could go out, and I beat myself up almost daily for allowing this to have happened, to sit there and go on television and talk about how things are working well, when you know they are not behind the scenes, is just wrong. 

O‘DONNELL:  So let me get this clear.  Someone in the White House was telling you to lie? 

BROWN:  Well, yes.  They give you the talking points.  Whenever you go out to do any interviews they always have the talking points.  Here‘s what the message for today is and here‘s how we are going to spin everything.  That‘s just the way Washington, D.C. works and that‘s just wrong. 

O‘DONNELL:  Do you work for the White House or do you work for the American people?

BROWN:  Exactly I worked for the American people. 

O‘DONNELL:  Then why did you lie?  If you say that they told you to lie, why did you carry that out? 

BROWN:  Norah, that‘s exactly why I think that‘s the biggest mistake that I made, was not leveling with the American people and saying, you know what, this is a catastrophic event and it‘s not working at the state, local or the federal level. 

O‘DONNELL:  That‘s 20/20 hindsight, but many people say that you made many mistakes during Katrina.  For instance on the buses, the governor Blanco asked for 500 buses on Monday.  They didn‘t arrive until Wednesday or Thursday.  Those are simple things that people understand.  Those were failures on your part, on the federal government‘s part, to get the resources to the state that were needed. 

BROWN:  Well, I‘m not going take personal responsibility for the buses because the buses are something that the governor directly asked me for and I said governor I‘ll get you 500 buses.  But that request fell into the black hole of D.H.S.  So the way it used to work is, if I ask you for 500 buses because you are my procurement officer, you go get them, because I know you‘re going to cover your rear end.  But now the way it works with D.H.S. is I go to you, you go to the D.H.S. procurement officer, they go to the secretary, they go the secretary of transportation.  It is a bureaucratic morass, it‘s too big.

O‘DONNELL:  Why do you think, going back to what you‘ve talked about in the “Playboy” interview, why do you think the White House wanted you to lie? 

BROWN:  Because they wanted to put the spin on that everything was working well with the state and locals.  There were too many political considerations going into the disaster.  I had worked hard over 5 ½ years to always keep politics out of disasters and here we were telling the American people that things were going great when indeed they weren‘t. 

O‘DONNELL:  You also told “Playboy” that the White House plotted to make you the fall guy.  How do you know that? 

BROWN:  Well there‘s a great e-mail, I say it‘s great, it really kind of ticks me off, but there‘s this great e-mail that says, from a friend of mine in the White House, a very close friend of the president, that says I heard today in the cabinet meeting the president said he‘s really glad that the press is beating up on Mike Brown instead of him or Secretary Chertoff. 

O‘DONNELL:  So, do you have a copy of this e-mail. 

BROWN:  Oh yes.  We‘ve provided that publicly before. 

O‘DONNELL:  So you‘re accusing the president of saying I‘m glad that Browny is taking the fall on this. 

BROWN:  I‘m not accusing him.  It‘s fact. 

O‘DONNELL:  A fact that someone says that the president said that. 

BROWN:  Yes, one of his very close friends.

O‘DONNELL:  Also let me ask you about something else.  You said that Chertoff was a cheerleader, that the president was a cheerleader and Chertoff had no experience whatsoever in managing a disaster. 

BROWN:  Those are facts, Norah.  The president has a bully pulpit and part of the role of the president of the United States is to rally the troops and rally the American public and make things happen.  And it‘s just a fact Secretary Chertoff had no hands on experience running disasters.  I had run 160 presidential disasters. 

O‘DONNELL:  All right, lots more with Michael Brown in just a moment, when we come back. 

O‘DONNELL:  All right.  Lots more with Michael Brown in just a moment when we come back.

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back to HARDBALL.  We are back to former FEMA director Mike Brown.  It has been a year since some of the most stunning pictures of course outside of the convention center, when there were babies overheating, there were people dying out there without food or with water. 

And it was Tuesday of that week that the first reports from the “Associated Press” said that people were stranded at the convention center.  We on cable were reporting it all day long, and it wasn‘t until Thursday that you said that you realized that that was going on.  How were you so out of touch?

BROWN:  Well, I wasn‘t.  As I testified and said in numerous interviews, we learned about the convention center the same time everybody else did. 

O‘DONNELL:  No, but you were on television many times on Thursday saying we just learned about this, that this was happening.

BROWN:  Right, and if go back and you look at the record, I‘ve said numerous times that the problem there was I had been up for 24, 36 hours straight, and when Koppel and others had asked me, when did you learn about the convention center, I kept saying we just learned about it.  And everybody interpreted that to mean that I just learned about it just 36 hours later, which is simply not the case.  I misspoke during those interviews.  If you go back and you look at the records...

O‘DONNELL:  ... So if you knew about it then, on Tuesday, you say you knew about it for sometime, then how could you leave people stranded like that for 48 hours?

BROWN:  We didn‘t.  I immediately turned again to the military planners that I had on my staff.

O‘DONNELL:  But you were asked about that on television on Thursday, why are they still stranded, and you said you just learned about it.  But it had been 48 hours at that point.

BROWN:  And we had the military folks trying to get in there as quickly as possible.

O‘DONNELL:  People want to know, one year later, looking forward, what has this government done to change things.  There has been new surveys out, that think a majority of Americans don‘t think the government has learned much from this disaster.  Have we learned anything?  Has FEMA improved?

BROWN:  Well Norah, that‘s why I‘m out doing these interviews, because I certainly hope they have, and if they haven‘t, we need to hold their feet to the fire.  Now what I understand now is that they are beginning to do catastrophic disaster planning.  And if they really do that, then that means we‘re at least on the road now to start to improve things.  If we are not, then we need to hold their feet to the fire, because this country should not go through another catastrophic event like we did in Katrina.  We need to be ready for the next one and I‘m just not convinced yet that we are.

O‘DONNELL:  You blame part of this on a bureaucratic bungling of FEMA, if you will.  It was also a matter of communication and being out of touch.  In part, the president had to be shown a DVD.  His advisers have admitted this publicly, of some of our news reports on television in order to be brought up to date about what was really going on on the ground.  How is it that the president of the United States was not told what you guys were seeing on the ground?

BROWN:  Well, but he was and that‘s what always fascinated me because if you go back and you look at the videotapes the “A.P” put out on that day, I was telling the president and telling everybody how bad this disaster could be and what we needed to do. 

O‘DONNELL:  But I mean the suffering of the people.

BROWN:  Oh, I know.  And that‘s my point, Norah.  I had numerous conversations with the White House chief of staff, the deputy chief of staff, the president himself, everyone explaining what was going on.  So I don‘t know why there was this disconnect.

O‘DONNELL:  Do you think the president was engaged?

BROWN:  He wasn‘t engaged enough at the beginning, but I have said that publicly for 12 months now.

O‘DONNELL:  But in fact on that August 29th videotape that you just referred to that was released by the “Associated Press,” you are heard saying, “the president is asking questions about reports of breaches.  He‘s asking about hospital, he‘s really engaged, asking a lot of really good questions.”  So which one was it?  Was he engaged or was he not engaged?

BROWN:  Well, he did.  I mean, when he would call me, he would ask the questions about what was going on.  But that‘s why I call it a disconnect, as opposed to not being engaged because we had numerous conversations with all of the White House staff about what was going on.  So there was this disconnect between what was being said, and the reaction to what was being said.

O‘DONNELL:  One year later, less than half of the residents of New Orleans have moved back.  Billions of dollars in waste, billions in some of the money that was handed out to people, used on all kinds of weird, disgusting things, if you will.  Fraud, massive fraud, so not only was there a failure to help those in need at the beginning, but now we discover that there has been failure and fraud and scams, et cetera, for the past years in terms of doling out the money.  What is going to be done about this?  I know you are no longer in government, I know you‘re no longer in government, but you‘ve been in there.  What can possibly be done?

BROWN:  Well see FEMA—let‘s talk for a minute about what the problem FEMA goes through.  In 2004, it was funny because FEMA was accused of being too loose with the money and then in 2005, they‘re accused of being too tight with the money and then they‘re accused later after 2005 of being accused of being too loose. 

So there‘s this back and forth and people are always going to try to cheat the system.  Katrina exposed these horrible social economic problems that we have in New Orleans and throughout some of the southern regions and we need, I think as a country, to address those things. 

And we need to address what really is the role of the federal government in helping disaster victims.  Let me tell you something that has always bugged me.  We go in a catastrophic event and help people in something like Katrina, yet if a small tornado wipes out a small town in Wyoming, we do nothing.  Why?  What‘s the difference?  Why do we help some places, not others?  This is a public debate that I think the country needs to have.

O‘DONNELL:  And now, a year later, even though you were scapegoated and many people see you as the symbol of what was a system of patronage that you got a job where you weren‘t qualified for.

BROWN:  No, I take offense—I was qualified.  I had emergency management experience.  I came as the general counsel of FEMA and worked my way up, so don‘t—don‘t gratuitously say that I was not qualified to take the position.

O‘DONNELL:  I think many people see you as a symbol of patronage in the Bush administration.  They see you as the president slapping you on the back, saying Brownie, you are doing a heck of a job, you are my buddy, and yet you were the failures and then you were scapegoated, in your words for this particular—and a year later, you have managed to make a profitable business out of consulting on disaster management.  You‘re even now, I think many people would be surprised to learn, you‘re consulting for St.  Bernard Parish?

BROWN:  Yes.

O‘DONNELL:  On what?

BROWN:  On strategies of how to deal with this bureaucracy that didn‘t work in Katrina.  I mean, think about it.  Who better to go to than someone who has been at the mountain top and seen the best not work and all the way down.

O‘DONNELL:  Are you getting federal contracts?  Are you getting money from FEMA, federal contracts?

BROWN:  No, absolutely not.  No, I do not do any sort of federal work.

O‘DONNELL:  All right, Michael Brown, former FEMA director, thank you very much for joining us.

BROWN:  Thank you, Norah.

O‘DONNELL:  And tomorrow on HARDBALL, Louisiana Senators Mary Landrieu and David Vitter.  Right now, it‘s time for “TUCKER.”

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

END   

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