updated 9/27/2006 11:24:39 AM ET 2006-09-27T15:24:39

Guests: Ed Gillespie, Joan Walsh, Al Franken, Mike Barnicle, Tony Blankley

CHRIS MATTHEWS, MSNBC HOST:  A top George Allen adviser and former chairman of the Republican Party says the Virginia senator made up the word macaca, and that all the ethnic slurring charges against him are false.  Let‘s play HARDBALL. 

Good evening, I‘m Chris Matthews, and welcome to HARDBALL.

Just six weeks before Election Day, all political eyes are on the Virginia Senate race and George Allen the incumbent.  His macaca comment turned a battle over the Iraq war into a fight about Allen himself.  The latest charges now center on whether Allen regularly used racial slurs when he was a young man during the 1970s. 

In a moment, I‘ll talk with former Republican Party Chairman Ed Gillespie, who serves right now as the treasurer of Allen‘s political action committee. 

And later, Major General John Batiste, the former commander of the Army‘s 1st Infantry Division in Iraq, will talk about President Bush‘s handling of that war.  Did the Iraq war make the United States more or less safe?  We‘ll talk about it with HARDBALLERs Mike Barnicle, Tony Blankley and Al Franken. 

First, HARDBALL‘s David Shuster has this report on the charges, the new ones, against Senator Allen. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  In the hottest Senate race in the country, Republican incumbent George Allen is now facing a political death by a thousand cuts.  The latest came today in the “New York Times” and “Washington Post.” 

On the heels of a story first written by Salon.com, the papers reported that three former classmates of Allen at the University of Virginia say he used the N-word to refer to blacks in the early 1970s.  Allen denies the charge, saying ... 

SEN. GEORGE ALLEN ®, VIRGINIA:  My response to this article is that it is completely false in its allegations.  I do not remember ever using that word. 

SHUSTER:  But last night on HARDBALL, Virginia‘s most noted political scientist, Larry Sabato, who went to college with Allen, said Allen‘s accusers are telling the truth. 

LARRY SABATO, UNIV. OF VIRGINIA CTR. FOR POLITICS:  I‘m going to stay with what I know is the case.  And the fact is that he did use the N-word, whether he‘s denying it now or not.  He did use it.

SHUSTER:  Questions about racial insensitivity have dogged George Allen for years.  In his law practice, he used to display a confederate flag and other items considered controversial. 

MATTHEWS:  What about the noose in your law office?  Why would you display a noose? 

ALLEN:  Oh, somebody brought a noose in.  I had a western motif in my office.  I buckarooed on ranches out west, primarily in Nevada and also in Idaho, and I had wagon wheels and lassos and chaps and all that and somebody brought in a little, old noose. 

SHUSTER:  But the issue of race exploded in this campaign last month when Allen spoke to a crowd about S.R. Sidarth, a man trailing Allen for the Webb campaign. 

ALLEN:  Let‘s give a welcome to macaca here.  Welcome to America and the real world of Virginia.

(APPLAUSE)

SHUSTER:  Macaca is a term that can refer to monkeys.  Allen apologized two weeks later.  Two weeks after that, he told Tim Russert he had no idea what the word meant. 

TIM RUSSERT, “MEET THE PRESS”:  Well, where did it come from.  It must have been in your consciousness.

ALLEN:  It‘s just made up.  Made up word. 

RUSSERT:  You had never heard it before?

ALLEN:  Never heard of it before. 

SHUSTER:  But critics note that macaca is a racial slur among French-speaking people from North African countries like Tunisia.  Allen‘s mother grew up in Tunisia.

Allen‘s mother was also born Jewish, and when Allen was asked about his family‘s heritage ...

ALLEN:  My mother is French-Italian with a little Spanish blood in her. 

SHUSTER:  The next day in a written statement, Allen acknowledged his mother‘s religious background for the first time, and added it is something in which he takes great pride.  But in a subsequent interview, Allen said:

“I still had a ham sandwich for lunch and my mother made great pork chops.” 

Conservative supporters of Allen said his handling of the issue was clumsy and insensitive.  William Kristol said the incident, quote, “struck a nerve with Jewish Republicans.”  And this week, Kristol‘s magazine, “The Weekly Standard,” has this cover: “George Allen Monkeys Around.”

ROGER SIMON, BLOOMBERG NEWS:  At the very least, it has sucked all the oxygen out of the room.  There aren‘t any issues left in this campaign except George Allen‘s past, and that‘s not what his campaign wants to be talking about. 

SHUSTER:  Meanwhile, the campaign of Democratic challenger Jim Webb is surging, raising more than $1 million last month alone.  Webb has had his own challenges but he seems to be handling them far better than Allen.  When Webb was asked about an article he wrote 27 years ago calling for women to be kept out of the service academies, Webb took responsibility immediately and apologized. 

RUSSERT:  When you say “being in the Naval Academy is a horny woman‘s dream,” you regret that? 

JIM WEBB (D), VIRGINIA SENATE CANDIDATE:  Well, I do regret that.  And I‘ve said there‘s many pieces in this article that if I were a more mature individual, I wouldn‘t have written. 

SHUSTER:  All of this has kept the focus on George Allen, a former rising star in the GOP whose campaign now faces charges of racism and seems in danger of imploding. 

(on camera):  The irony is that George Allen was supposed to an 2008 GOP presidential frontrunner.  Now some Republicans are openly wondering whether Allen can win a Senate seat and help Republicans in the battle for control of Congress. 

I‘m David Schuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster. 

Ed Gillespie is a former chairman of the Republican National Party.  He is currently the treasurer for Senator Allen‘s political action committee.  He‘s also the author of a great new book, “Winning right.”  There‘s your book.  Let me show you another front cover.  That book is going to do great, thanks to coming on this show, Ed Gillespie. 

By the way, it was great to see you at the Phillies game. 

ED GILLESPIE, FORMER RNC CHAIRMAN:  It was great to be at the Phillies game. 

MATTHEWS:  About the game, what a great game that was Sunday. 

Let‘s take a look at this cover.  This is a conservative magazine, neoconservative magazine in many ways.  It‘s got a picture of George Allen, the senator from Virginia, with a monkey or a macaca on his shoulder there.  Isn‘t it odd to have a conservative magazine turn on a conservative senator like this? 

GILLESPIE:  Well, they are talking about the presidential race in 2008 and Senator Allen is not talking about that.  He is talking about the Virginia Senate race of 2006, and is focused on that.  And that‘s where his focus should be.  So people are free to speculate and do the handicapping for 2008.  That‘s a parlor game in Washington, but it‘s not the focus of the Allen campaign for the senator. 

MATTHEWS:  Do you believe that the fact that he has been considered,

and put on the great mentioners‘ list, as a possible presidential candidate

and, in fact, he went down to Memphis as part of the Republican Leadership

Southern Leadership meeting down there, that he‘s seen as a presidential candidate and that explains why all this negative publicity has cropped up around him? 

GILLESPIE:  No.  I think he‘s in the Senate race and he was always going to be subject to negative attacks because the fact is he has been a very successful former governor of the Commonwealth of Virginia.  He is a very effect current senator.  He has won every campaign he‘s ever waged and they don‘t want to debate the issues with him and so they are going to attack his character and his personal—wage a personal attack. 

MATTHEWS:  What do you make of this guy, Shelton who has come up, a former teammate of his at UVA, the University of Virginia, saying that he cut off the head of a deer—he went hunting for, caught the deer, cut off its head and said, where is the nearest African-American family around here?  I want to put the deer head in their mailbox and then put it in the mailbox.  What do you make of that charge? 

GILLESPIE:  George Allen says it‘s absurd charge, it never happened.  The family—the other person who was there when they went on this hunting trip has passed away, is deceased.  His family is not happy about it from what I understand, about this Shelton making this charge at all, because I don‘t think they believe it either.  And so Senator Allen—I suspect, that‘s the kind of thing you‘d remember and Senator Allen doesn‘t remember that happening. 

MATTHEWS:  Well, he denies remembering it. 

GILLESPIE:  He says he doesn‘t remember it happening, that‘s right. 

MATTHEWS:  Well, he wouldn‘t, would he? 

GILLESPIE:  If I cut the head off a deer ...

MATTHEWS:  Would a person ever admit to looking around for a black family to stuff a deer head in their mailbox?  Why would anybody admit that?

GILLESPIE:  Well, of course, they wouldn‘t admit it.  But the fact is, he says it not true.  And ...

MATTHEWS:  And you take him at his word. 

GILLESPIE:  I do take him at his word.  I know George Allen.

MATTHEWS:  What about all these charges?  Look, I‘m not—go ahead.

(CROSSTALK)

GILLESPIE:  I want to say something because I do take him at his word because I have the benefit of knowing the man.  And the fact is, this is a man who abhors with every fiber of his being anything that is antithetical to treating people with respect, equal respect regardless of religion, race, background, ethnic background. 

He was raised in a football family where it was made clear to him that all that matters is what you do and your performance, and the color of your skin has no bearing whatsoever.  And I believe that. 

MATTHEWS:  You know, I thought that too and I think that too.  I still find it confounding that a guy who grew up in the world of professional football which is so incredibly integrated, where blacks are so successful as players, that he would have an attitude about that. 

But how do you explain—and I‘m skeptical here of everything.  Why are these people here coming forward saying he used to use the N-word?  I saw him do it.  I heard him do it.  Why are they all saying this now and using their names even? 

GILLESPIE:  Chris, I know that more people have come forward and said that is not the George Allen we knew even back then.  And it is clearly not consistent with his record as governor and with his record as senator. 

This is a man who has fought hard to increase funding for historically black colleges and universities.  He‘s had a great record in terms of diversity hiring when he was governor of Virginia.  He has gone down to civil rights pilgrimages to honor the efforts of those who fought for greater civil rights and who has sponsored, in the United States Senate, an apology for lynching.  This is someone who believes deeply in making sure that all American have equal opportunity.  And so I don‘t know why. 

I believe the people who knew him at the time and say we never heard that, we don‘t believe that, many people have said so.  By the way, Larry Sabato, on your program, said I know that he did.  But then today on another network said no, I never actually heard it myself. 

MATTHEWS:  But he still insists it happened.  He still insists it happened.

GILLESPIE:  And so, you know, you‘ve got to be careful.  But how can you insist it happened ...

MATTHEWS:  Good question.

GILLESPIE:  ...when you don‘t know ...

MATTHEWS:  That‘s a good journalist question.  I ...

GILLESPIE:  ...and when he said it himself, when asked, did you ever hear it?  No, I never heard that.  I never heard it myself.  Now, if you never heard it yourself, how do you know it happened? 

MATTHEWS:  Well, I pushed him on that last night relentlessly and I never got a satisfactory answer.  He never quite said ...

GILLESPIE:  So you can‘t let it stand that he knows it happened.

MATTHEWS:  But he kept saying but—well, he swears—pretty much I said will you swear to this, and then he pulled back and said I know it happened.

Let me ask you this.  The macaca thing, I think that‘s what started all this.  The tape, the young worker for the opponent, took a picture of him saying the word to him, calling him macaca.  We‘re looking at it right now.  We don‘t need to play that again.

How do you explain that?  Coming up with a word used as an anti-black term in North Africa years ago, maybe by the whites against the black.  How can you accept his explanation?  I just made it up.  I have no idea where it came from.  He just made up a word that we know can be traced back to North Africa where his mother came from?  Do you believe that, that he just made up the word macaca out of nowhere?

GILLESPIE:  Well I know that he calls his finance director Jabba.  I don‘t know why, and I don‘t know where that comes from. 

MATTHEWS:  Jabba the Hut.

GILLESPIE:  I know he calls his press secretary snip dog (ph).  I don‘t know where macaca came from. 

MATTHEWS:  What about the wizard comment?

GILLESPIE:  I know this, I do know this, or I believe this, which is that he had no idea.  And think about it, Chris.  You‘ve been in politics for a long time.  If you knew it were a slur, and would you actually stare into your opponent‘s camera.

(CROSSTALK)

GILLESPIE:  Hang on one second.  Would you stare into your opponent‘s camera and say now here you go, opponent, I‘m going to give you a racial slur to use in your campaign?  It just doesn‘t make any sense at all.

MATTHEWS:  Right, let me ask you this.  Look, I don‘t know whether he didn‘t know the kid knew the nickname from North Africa, from Tunisia or where he came from.  But the fact is, he did do it, why did he do it?  Why did he do it?  I‘ll ask you one last question.  Why‘d he call the kid—he didn‘t say you‘re a macaca, he called him macaca as if it was his name.

GILLESPIE:  He was tweaking the young man and that was wrong and he was right to apologize for it.

MATTHEWS:  Tweaking him how, racially?

GILLESPIE:  No, not racially.

MATTHEWS:  What‘s macaca mean? 

GILLESPIE:  You know, I don‘t know.

MATTHEWS:  It means monkey.

GILLESPIE:  It means monkey.  It means—it is a genus species of monkey in northeast Asia.  And in some parts of the word it a derivative of that word that is used as a racial slur.  I don‘t believe George Allen knew that when he used the word.

MATTHEWS:  Well how did he get it in his head?

GILLESPIE:  He made it up.

MATTHEWS:  A monkey typed merry Christmas.  Out of nowhere, macaca comes into his head and happens to be a term for a monkey.

GILLESPIE:  No, it it doesn‘t happen to be a term for the monkey, not in his mind, as he says.

MATTHEWS:  Even though his mother is from North Africa.

GILLESPIE:  Well you see, so are you suggesting that his mother taught him racial slurs as a child?

MATTHEWS:  That makes sense and the other one doesn‘t, the one that says I completely made it up out of nowhere doesn‘t make any sense at all.  I‘m just trying to lay fault here and I like the guy.  Look, you don‘t know either and I don‘t know.  You don‘t know he doesn‘t know the word macaca, you‘re speculating.

GILLESPIE:  I‘m telling you what I believe.

MATTHEWS:  What does that mean, like Larry Sabato believed?

GILLESPIE:  I believe—Larry Sabato said he knows.  And what I‘m telling you is I do not believe that George Allen‘s mother sat him on her knee and said, now, here is a word that I‘m going to teach you to use.

(CROSSTALK)

MATTHEWS:  We know it comes from North Africa.  We know it comes from North Africa. 

GILLESPIE:  I have no idea.  There‘s debate over where it comes from and whether it means what others say it means.  I have no idea.

MATTHEWS:  Do you think it means mohawk hair cut?  Do you think actually—that‘s what his original explanation was.  He was making fun of him...

GILLESPIE:  ... I think it was in the same category as Jabba and Snip Dog (ph) and all these other things and nicknames.

MATTHEWS:  When you believe what he says—if you say he‘s a man of his word and he said it‘s based upon mohawk, a mohawk haircut, do you believe that?

GILLESPIE:  That‘s not what he said, that‘s what his campaign said, that the young man, has, which he does have, a contemporary haircut and some on the campaign were calling him mohawk.  I don‘t know that Allen was.  Allen says that he made it up on the spot and I take him at his word.

MATTHEWS:  Macaca or whatever your name is.

GILLESPIE:  Macaca or—he didn‘t know the young man‘s name.

MATTHEWS:  OK...

(CROSSTALK)

GILLESPIE:  Let me just be clear.  I wish and he wishes that he just called the young man by his name or frankly didn‘t say anything to him.

MATTHEWS:  Was he being mean to that kid?

GILLESPIE:  I think he was tweaking his opponent and was talking to his opponent, James Webb, for not being in this part of the state and being out in Hollywood.  And in so doing, tweaked the young man and looked and it didn‘t play well on the camera.

MATTHEWS:  Let me ask you this.  How is fundraising going for him?

GILLESPIE:  Fundraising is going well and I think he‘s going to have a strong cash advantage over ...

MATTHEWS:  Will he blow the other guy out with money in the last three, four weeks?

GILLESPIE:  I think we‘ll blow the other guy out with the fact that he doesn‘t have policies that are going to help the people of Virginia and George Allen does.  And that eventually, Chris, eventually this race is going to get back to the issues.  And the fact is that George Allen is strong on winning the war on terror.  He‘s created jobs in the commonwealth of Virginia.  He has policy.

MATTHEWS:  I‘d love to hear about Iraq.  I‘d love it to be about Iraq.

(CROSSTALK)

GILLESPIE:  It will be about Iraq. 

MATTHEWS:  But let me ask you this.

(CROSSTALK)

GILLESPIE:  That‘s what the voters deserve in Virginia, by the way, instead of all this mud.

MATTHEWS:  Is this the campaign that pushed—you call it mud.  Who is pushing the mud?  Where did it come from?  Did he start it with macaca?

GILLESPIE:  It started on a blog, it was a blog posting today.  It turns out that the person who posted the blog, you know, has also posted blogs saying President Bush is doing drugs right now as we speak. 

MATTHEWS:  I know, but this is—the macaca thing was what started it.  Do you think it was unfair of people to bring up that once he did that?

GILLESPIE:  No.  I think it‘s fair to ask him about macaca.  I think it was unfairly pounded.  I think that he apologized, he apologized repeatedly.  People saw him do so.  And I think that there was a little bit of overplaying the story by some in the national media, yes.  I think that. 

MATTHEWS:  Maybe we did.  But the fact maybe we overplayed it, it is astounding that people believe that the word just popped into his head when we know his background and his family‘s background and that word had particular—various meanings.

GILLESPIE:  There you go insinuating.  And by the way, his mother now is on the record having been asked about it in the “Washington Post” saying I never heard the word.  I had to go look it up in a dictionary.  Are you accusing his mother of lying?

MATTHEWS:  That‘s what she said.

GILLESPIE:  Is his mother lying to the “Washington Post?”

MATTHEWS:  I believe you believe them, OK, Ed?  That‘s what I believe. 

I believe that you are a loyalist.  And you want to believe them.

GILLESPIE:  I am, and for good reason.

MATTHEWS:  And so there‘s no reason for him to apologize and move on here for all of this stuff.  Would you say, “Look, I have grown up, I used bad words when I was a kid.  I used the “N” word.”

GILLESPIE:  ... He did apologize—no—hang on one second though because he has been very clear.  He gave a very eloquent and moving and personal speech to the Association of Historically Black Colleges where he talked about the confederate flag and his understanding the symbolism to minorities and others and having learned from that. 

And he admitted to that rightly and was personal about it.  He says clearly that these charges are false and that he is not someone that would use that word now or ever.

MATTHEWS:  He never used the “N” word and he never used the word macaca.  He did use the word macaca.

GILLESPIE:   He did use the word macaca but didn‘t know that in some parts of the world, it is taken by some or used by some as a slur.

MATTHEWS:  And he‘s learned that just now—he‘s just learned that now.

GILLESPIE:  He learned it about a month ago.  Still talking about it. 

But yes, he learned it about a month ago.

MATTHEWS:  This is immaculate conception, use a word you never heard of that has a meaning like this, which applies to this kid.

GILLESPIE:  It doesn‘t apply to this—as far as I know it doesn‘t apply.

MATTHEWS:  The kid‘s black and the derivative is black and it was a pure coincidence he used a term used against blacks on a black kid.

GILLESPIE:  Yes.

MATTHEWS:  Pure coincidence out of nowhere.  It‘s just hard to imagine that‘s true.

GILLESPIE:  Chris, you are saying that—again, you are implying here that Mrs. Allen taught her children a slur.

MATTHEWS:  I will just say this.  I‘m not getting into motive.

(CROSSTALK)

MATTHEWS:  Look, I believe in family loyalties.  Do you know what I believe in? 

GILLESPIE:  Even if you believe that, you can‘t believe that he would actually say, OK now, here you go...

MATTHEWS:  I just—remember the Groucho Marx line, you‘re going to believe me or your lying eyes?  My eyes keep seeing him call a dark kid a macaca, which is a term against dark kids.  It‘s impossible for me to believe that he completely...

GILLESPIE:  ... Did you know what macaca was?

MATTHEWS:  Of course not.  I learned it from him.  I never heard it before.

GILLESPIE:  He never heard it before either.  And never use it had in that context.

MATTHEWS:  Well why did he use it? 

GILLESPIE:  He explained why.

MATTHEWS:  Look, you are a great guy.  I like this guy, Allen.  I‘m sad for him.  I wish it hadn‘t happened, but that tape he‘s going to have to live with.  It‘s a weird thing, to use a word you never heard of before in your life, he completely fabricated, and it just happens to be a word used against black people in North Africa where your mother came from.  It just happens to be a word like that.  That‘s hard to believe.

GILLESPIE:  Chris, you are free to your opinion.

MATTHEWS:  I think it‘s more of an opinion.  Look, the viewers are watching this show, they‘re going to have to decide whether we are being fair-minded here or we‘re making the judgment or not.  I think it‘s a fair-minded assessment of what we‘ve been watching here and all the other criticisms I keep getting on the phone, other people are getting, we‘ve got to live with this.

GILLESPIE:  I understand and let me just say, the voters are going to make a determination.

MATTHEWS:  I think he‘s going to win, by the way.

GILLESPIE:  The voters of Virginia know George Allen.

MATTHEWS:  I think he‘s going to win, but not because of this.

GILLESPIE:  Hang on.  But they know George Allen.  They know his heart.  They know what kind of man he is.  And they know he‘s someone who believes deeply in the equal rights of all Americans and protecting those rights and helping to foster equal opportunity regardless of race, or religion or ethnic background and that‘s why he will win.  You can dwell on this all you want and I‘m sure that the other opponents will, too.  But the fact is, they know him.

MATTHEWS:  This has come up because people are coming forward with

accounts, just like his mother‘s account, just like his account.  All these

accounts, I hold them in equal stead.  I‘m not sure everyone is telling the

truth here.  That‘s my simple statement.  Thank you very much, Ed Gillespie

you always are.

Coming up, Salon.com was the first to report the latest accusation against Senator Allen.  We‘ll talk about the editor of that organization, Salon.com‘s Joan Walsh.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, can George Allen stop the feeding frenzy surrounding his campaign in Virginia?  Does Jim Webb have a better chance of winning if he lays low? 

HARDBALL returns after this.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

Salon.com was the first publication this week to report on charges of racism by former college football teammates against Senator George Allen of Virginia. 

Joan Walsh is the editor of salon.com.  Joan, thank you.

Are you a liberal organization, a liberal publication? 

JOAN WALSH, EDITOR, SALON.COM:  You know, Chris, we‘re a news organization first and foremost.  We have some liberal columnists.  But day in and day out, we break news.  We break stories that A.P. has to cover.  We put a lot of emphasis on integrity and on really covering news.  And we approached this story that way. 

I mean, Chris, you‘re in circles where you‘ve probably been hearing these rumors for weeks.  We certainly were hearing them.  And we were able to get a couple of people off the record to say these things.  We held the story because we really didn‘t think we could run with it with people only off the record. 

And then we found Dr. Ken Shelton, and we knew that we had a man of incredible integrity, with no agenda or axe to grind, with a pretty harrowing firsthand account. 

MATTHEWS:  Let‘s take a look at—we have Shelton on tape here. 

Let‘s take a look at it, the witness. 

(BEGIN VIDEO CLIP)

DR. KEN SHELTON, FORMER ALLEN TEAMMATE:  I saw the taped incidents of George, referring to the student with the word macaca.  And when I saw that, I saw the bullying hatred that I had seen previously, and that was the George I‘d known before. 

I thought George would go away, and he didn‘t.  I wish he was a country lawyer somewhere and this never had to come to be.  I began, before this incident, to write down my memories of George and my interaction with George, because I had heard that he was on a presidential short list. 

(END VIDEO CLIP)

MATTHEWS:  Well, Joan, I actually hadn‘t heard anything about this until the macaca thing came.  And then I‘ve seen the charges and they keep coming in.  How did you know to believe Dr. Shelton, and give this credibility to your piece? 

WALSH:  You know, we spent a lot of time investigating Dr. Shelton.  If you are watching, Dr. Shelton, I apologize.  But you know, we felt like we needed to know everything that the Allen campaign would use against him.  And we just felt that he was a person with long—deep roots in his community. 

He was a person—the things that we found that he was politically involved in, he was involved with Friends of the Forest, a local forest preservation group.  He‘s been involved—yesterday people were trying to slur him as an anti-tobacco lobbyist.  In fact, he‘s involved with a tobacco-free project that tries to get kids not to smoke, which even Philip Morris doesn‘t want children smoking. 

We just found him to be a person of great integrity and a person actually carrying a lot of pain and guilt for having not spoken earlier.  I think you are right to focus on macaca because I think that was the moment where a lot of people, who have been talking to one another, maybe over the years, although Dr. Shelton hadn‘t talked to anybody, were beginning to say, wow, I always thought that somebody would come forward and be public with these things.  And people began to decide to do just that. 

MATTHEWS:  When did you decide as a publisher, an editor rather, as to the motive have here?  Is he a guy who does this to show off, to show he‘s a real redneck, if you will, to show he‘s a tough guy, even though he grew up in a privileged background, or he had a mother who came from another country?  Do you think he‘s trying too hard to be a real , you know, soddy buster type, tough customer?  Or do you think he really has a problem with black people?  What do you think it is? 

WALSH:  I think it‘s both, frankly.  I think—look, you know, he wore that conservative flag pen at Pallas Veritas (ph) High School.  He‘s a privileged California kid.  He‘s not wearing it as a sign of the South, as a child of South who maybe had relatives in the conflict way back when. 

MATTHEWS:  No, but that‘s not what I think either.  Is he trying to show he didn‘t grow up like a smack butt?  That he actually grew up a regular, tough hardscrabble way and he wants to identify with what he thinks is the working guy out there?  Is that what he‘s try to do? 

WALSH:  Yes. 

MATTHEWS:  I‘m trying to cut him some slack here.  What‘s all this about.  I mean, I grew up in a big city, ethnic warfare and tribalism was normal in big cities.  I mean you had your neighborhoods, they had their neighborhoods, there‘s a lot of that talk, loose talk.  It was just part of the sort of turf war that never ended. 

WALSH:  Right.  But that‘s now how he grew up.  That is not how he grew up.  And why he adopted this, as opposed to something, you know, more  -- you can be a roughneck in all kinds of ways.  I have roughneck cousins, they don‘t go around wearing the Confederate flag or using the n word.  So why...

MATTHEWS:  Are you sure as a journalist that he used that word regularly, in other words, it was part of who he was?  It wasn‘t a bad day, or he‘s angry at everybody and he said the word, that it was something that‘s distinguishing about him from his generation and his crowd. 

WALSH:  Yes.  I‘m really sure of that.  Both the person that we—we need Dr. Shelton on the record.  We had two other people off the record that I would not run the story alone.  But they also said it was a habitual thing.  And that there was a real, real anger and racism, frankly, is the word against black people.  So... 

MATTHEWS:  Look, here is the question.  Why has this guy had a successful career?  Up until a couple of months ago, I was touting him.  I thought this guy was one of the real possibilities, because he could unite the East Coast, Northeast Republicans, the moderates, with the religious conservatives, the more conservative people and cultures.  He could put them all together and run as the successor to George W. Bush. 

But now he clearly has got a problem in that area.   But I didn‘t know any of this stuff.  And apparently a lot of other people who were talking didn‘t know it either.  You say everybody knew it.  I don‘t—why was everybody saying, here‘s a possible president?

WALSH:  When I said—let me be clear, Chris.  When I said everybody knew it, I would say that‘s in the last few months.  I would say since the “New Republic” pieces came out about the Confederate flag, et cetera, the talk began.  I don‘t remember hearing it before that.  And then came macaca.  And I don‘t think you can overestimate what macaca meant.  It really—I didn‘t know what it meant. 

MATTHEWS:  I didn‘t either. 

WALSH:  I didn‘t even know the speculation about it.  The first time I saw that YouTube video, I was horrified, because all I could see was a man who was bullying the only dark-skinned man in the room. 

MATTHEWS:  With a reference that is used to bully dark-skinned people. 

WALSH:  And didn‘t know that. 

MATTHEWS:  Neither did I.

WALSH:  And no one knew that at the time.  But what—you missed one of the greatest hits of the shifting explanations of the Allen campaign.  Did you miss when his staff said, he really meant caca.  OK.  So we‘re going to call the brown kid caca.  That makes me feel a lot better. 

I mean, every time they‘ve tried to clarify this, they‘ve made it worse.  And I see this situation getting worse for him.  You saw the piece in the “Times” this morning, in the “Post” this morning.  You broke the news yourself.  You got Larry Sabato to say on camera what he hadn‘t been willing to say to anybody on the record.  This is going to continue.  This is not the end of it. 

MATTHEWS:  I wish we were talking about Iraq. 

Anyway, thank you very much, Joan Walsh, for that piece. 

Breaking news, the National Intelligence Estimate has now just been declassified, and you can read about it on our website, hardball.msnbc.com.  It came out this evening.  Among the key findings that have been now released, the Iraq conflict has been a cause celebre for jihadists.  We‘ll get into when we return tonight. 

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.

The White House has declassified key judgments of the National Intelligence Estimate on global terrorism trends just moments ago, one of the findings reads, quote, “The Iraq conflict has become the cause celebre for jihadists, breeding a deep resentment of U.S. involvement in the Muslim world and cultivating supporters for the global jihadist movement.”

MSNBC‘s Chief Washington correspondent Norah O‘Donnell is with us now

Norah. 

NORAH O‘DONNELL, MSNBC CHIEF WASHINGTON CORRESPONDENT:  That‘s right, Chris. 

The White House, the president, announced earlier today, of course, from the East Room of the White House that he would declassify this National Intelligence Estimate because he was concerned that it was being used for political purposes by his opponents with the election now just 42 days away.  So he said that he had directed his head of intelligence, John Negroponte, to go ahead and declassify this report. 

The headline is this, that “the Iraq war has bred deep resentment in the Muslim world and provided Islamist militants with the cause celebre that has allowed the global movement to cultivate supporters.”  In other words, that the Iraq war is feeding this jihadist movement as you talked about. 

Here it is, essentially, what is available for anyone on the Web site, MSNBC.com.  They can link through to the director of national intelligence Web site, these key findings from which is a formerly classified document that was leaked over the weekend. 

Again, one of the key points here, Chris, the Iraq conflict has become a cause “celebre breeding for jihadists breeding a deep resentment for U.S.  involvement in the Muslim world and cultivating supporters for the global jihadist movement.” 

Also, they say that there are four underlying factors that are fueling this spread of the jihadist movement: one, entrenched grievances such as corruption, injustice; number two, the Iraq jihad; number three, the slow pace of real and sustained economic, social and political reforms in the Muslim majority nations; and then four, pervasive anti-U.S. sentiment among Muslims all of which jihadists exploit. 

This is a key document in the larger context, of course, of we‘re debating the war on terrorism up in Congress.  It‘s their final week up there.  The parties are debating which party will keep America safer.  This particular national intelligence report has raised a question about Iraq.  Has it made America more safe or less safe?  And what this intelligence report tells us today is that the Iraq war is providing a cause celebre for these Islamic militants. 

One other key point, of course, to point out today which is a big news nugget, if you will, Chris, that I think didn‘t get a lot of big headlines is that we did hear from the top Democrat on the House Intelligence Committee, and that is Jane Harman who says today that she says that there is a second NIE report that deals exclusively with Iraq, and that it has been stamped draft in order to keep it from Congress.  So she is demanding that that particular report see the light of day, so Congress can look at that specifically—Chris. 

MATTHEWS:  Well, that‘s good work by Jane Harman, good oversight. 

Anyway, thank you, Norah O‘Donnell, for that quick report. 

Up next, more on the report with our HARDBALLERs, Al Franken, Tony Blankley and Mike Barnicle.  You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

(MARKET REPORT)

MATTHEWS:  Welcome back to HARDBALL. 

The White House has declassified key judgments of the National Intelligence Estimate on global terrorism.  And one of the findings reads, quote, “Iraq jihad is shaping a new generation of terrorist leaders and operatives; perceived jihadist success there would inspire more fighters to continue the struggle elsewhere.”

Al Franken is host of “THE AL FRANKEN SHOW”, the flagship program of Air America Radio, and author of “The Truth (With Jokes)”, now out in paperback with a new afterward.  Tony Blankley, he‘s editorial page editor of “The Washington Times”.  And Mike Barnicle is a radio talk show host and an MSNBC contributor. 

Let me read you another segment, gentlemen.  You can start, Tony. 

Quote, “The Iraq conflict has become the cause celebre for jihadists, breeding a deep resentment of U.S. involvement in the Muslim world, and cultivating supporters for the global jihadist movement.” 

I believe this is what was leaked, and now we‘re getting it in context.  What do you make of it? 

TONY BLANKLEY, THE WASHINGTON TIMES:  Look, I think this is a commonplace.  I‘ve been arguing for years that, of course, the enemy is going to come to the sound of the guns.  You know, whether Iraq or Afghanistan was the right place to go is a matter of separate debate.  But the fact that if we engage them somewhere, they were going to engage back and they were going to rally.  This is to me an obvious point.  That‘s why I defended Howard Dean in 2004 when he said, we‘re not safer.  I don‘t think we‘re going to be safer for a generation. 

MATTHEWS:  Why do you go to war if the cost is casualties and thousands of American lives and you end with more terrorists than you started with? 

BLANKLEY;  Well, because it‘s not at the end of the war yet.  Because at this point, we are engaging the enemy.  They are coming to the sound of our guns.  We‘re fighting, they‘re rallying their side.  We‘re trying to rally ours. 

MATTHEWS:  Recruitment. 

BLANKLEY:  Of course, recruitment.  You get more troops as the war progresses.  And at some point you hope that you overwhelm them, in the case the combination of ideas and struggle over a generation.  But you can‘t measure the success of a war by stopping in the first few moments of it, and say, there‘s more of the enemy. 

(CROSSTALK)

MATTHEWS:  If we were fighting the Germans in World War II and every time we killed a German, ten appeared out of nowhere to join the German movement, we would have lost. 

BLANKLEY:  Take that analogy.  When France and Britain declared war on Germany in 1939, there was no Nazis in France.  By 1940 there were a million Nazi soldiers in France.  Of course, the Nazis came to the sound of the gun.  Eventually beat the Nazis. 

MATTHEWS:  But they came from Germany. 

BLANKLEY:  Right. 

MATTHEWS:  But these people are coming from all over the world to join the cause of jihadism.  You‘re treating them like an ethnic group.  It‘s people from all over the Islamic world are joining the jihadist movement. 

BLANKLEY:  They‘re coming from Saudi Arabia, some of them are coming from England...

MATTHEWS:  All right.  Let me go around the room here.  Let me go to Mike. 

Mike Barnicle, what‘s your assessment of this NIE report that just came out. 

MIKE BARNICLE, MSNBC CONTRIBUTOR:  Well, I just read the excerpts, Chris, and I‘m not surprised by the fact that it appears to have been written by people who clearly have read American newspapers.  I mean, there‘s nothing really in here that is of much surprise. 

The things that are wrong in here are horrendously wrong.  I‘d like to read you portions of one paragraph.  “The loss of key leaders, particularly Zarqawi”—and Zarqawi was killed several weeks after this report was prepared—“probably would cause the group to fracture into smaller groups.  We assess that the resulting splinter groups would at least for a time pose a less serious threat to U.S. interests than does al Qaeda.” 

Wrong, with a capital W.  They were wrong on that.  What else are they wrong about? 

MATTHEWS:  Al Franken. 

AL FRANKEN:  I don‘t know what Tony‘s talking about.  We were told that this war would last just a few weeks.  Rumsfeld wouldn‘t plan for after the war.  We were just going to go in there.  Jeffersonian democracy was going to emerge in Iraq.  It was going to be a model for the whole Middle East.  It would put pressure on the mullahs in Iran and the moderates would take over there, which they would defund Hezbollah. 

That‘s what we were told.  And now we‘re being told that, of course, we‘re in the middle of the war now and they respond to the sounds of the guns.  What is that?  Of course, Afghanistan was the right thing to do.  And the world was behind us. 

When we went into Iraq, we did it on false pretenses.  This president misled us into a war.  And it was a huge gamble.  And he has lost.  And the American people have lost.  And the 2,700 men and women who have died there have lost.  And their families have lost.  And the 20,000 that have been wounded have lost.  And how dare you say—this is just, this is just a complete respin of what was said before we went in there.  And I resent it. 

BLANKLEY:  Look, Al, you should have been reading my columns and then you‘d understand things a little bit better.  I wrote a column before the war in September...

FRANKEN:  I think I understand things perfectly well, Tony.  I think it‘s you that doesn‘t understand things.  And don‘t be patronizing like that, OK. 

BLANKLEY:  You told me you didn‘t understand what I was saying, so I was trying to explain it to you, Allen... 

FRANKEN:  No.  OK.  Try to explain it to me because I‘m a little thick here, Tony.  Because didn‘t you say—didn‘t the president say that this is going to be over very soon?  Weren‘t we going to be treated like liberators? Weren‘t we going to be greeted with sweets and flowers? 

BLANKLEY:  Let me talk for a second, Allen.  I wrote a column in September of 2002, entitled “Measureless Peril” and I was quoting Henry Kissinger on why we were going into Iraq next spring, which we did.  And it was to make a larger point.  It wasn‘t exactly the argument Bush was making, because I didn‘t think that was the full argument, and I still don‘t think it was.  We had to go in and make a presence in the Middle East and build from there.  I expected, and I wrote, and I described to my readers that there was going to be all kinds of danger, a lot of very powerful reaction to it, but it was going to be worth it. 

I still believe it‘s worth it, because we have to engage them and defeat this movement.  By the way, this report, the National Estimate here...

FRANKEN:  Intelligence Estimate.  NIE.  Let me explain that to you, Tony.  It‘s called the National Intelligence Estimate. 

BLANKLEY:  ... in Iraq.  They will be dispirited.  Now, that‘s the part of the quote that was not leaked to the “New York Times” because the “New York Times” cherry-picked the quote. 

FRANKEN:  Speaking of cherry-picking, are you accusing the “New York Times” of cherry-picking and not accusing the Bush administration of cherry-picking?  How about Dick Cheney leading into the war, saying that there was no doubt...

BLANKLEY:  Hey, come on...

FRANKEN:  ... saying, let me find something...

MATTHEWS:  I have a (inaudible) problem here.  I‘ll be right back with Al Franken, Tony Blankley, and Mike Barnicle as well. 

This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  We‘re back with the HARDBALLers  Al Franken, Tony Blankley and MSNBC contributor Mike Barnicle.  Here is Bill Clinton in his Chris Wallace interview this Sunday.

(BEGIN VIDEO CLIP)

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES:  And you asked me about terror and al Qaeda with that sort of dismissive thing.  All you have to do is read Richard Clarke‘s book to look at what we did in a comprehensive, systematic way to try to protect the country against terror.  And you‘ve got that little smirk on your face and you think you‘re so clever.  But I had responsibility for trying to protect this country.  I tried and I failed to get bin Laden.  I regret it, but I did try.  And I did everything I thought I responsibly could.

(END VIDEO CLIP)

MATTHEWS:  Mike Barnicle, Tony Blankley is not smirking.  Mike Barnicle, who won that exchange between Chris Wallace of “FOX SUNDAY NEWS” and the former president?

BARNICLE:  I think large elements of the activist wing of the Democratic Party won it.  I think they probably, you know, got all charged up hearing President Clinton, former President Clinton went out and vowed to work harder in the fall campaigns that are ongoing now, perhaps contribute money to the fall campaigns that are going on now. 

The president, he was interesting.  I think he‘s still so angry over the ABC movie that was on in which he felt there were serious misrepresentations of what his administration did or tried or didn‘t do during the eight years he was in term towards al Qaeda.

I think he‘s still so angry at that, Chris, that he lost his temper.  He has a right to lose his temper.  Words are weapons and they have been used against him.  Incidentally, as President Bush would have a right to lose his temper over some of the things that have been said about him.  But you know, the guy lost his temper.  But I think activist Democrats are the winners in this.

MATTHEWS:  Tony.

BLANKLEY:  Look, I think...

MATTHEWS:  The verdict, who won?

BLANKLEY:  ... The nation did not win.  Look, this is a stupid argument between who between Bush and Clinton did more of a piss-poor job before September 11th.  Nobody did a good job.  We shouldn‘t be defending them and by the way, the media didn‘t do much of a job.  I didn‘t see the “Washington Post” or the “Washington Times” or NBC warning the nation of the danger.  We all screwed up and having now fight five years into the war over who screwed up more is a pointless and destructive argument.

FRANKEN:  Can I say something?

MATTHEWS:  Al Franken, yes, you can.

FRANKEN:  Yes, let‘s talk about cherry-picking, Tony.  You wrote this, I assume.  This is the “Washington Times” editorial on this piece.  “Mr.  Clinton also attacks the Bush administration for demoting Mr. Clarke.  The man himself—as the man himself has written in the book no less, Mr.  Clarke demoted himself and then in quotes to the apparent surprise of then national security adviser Condi Rice.”

Actually he was demoted immediately.  He didn‘t demote himself until after 9/11, which you don‘t put in here.  He was demoted in that he was taken out of the principles committee.  And you know that and you‘re misleading your readers deliberately.

BLANKLEY:  Al...

FRANKEN:  By saying this Tony.  No, let me explain to you.

BLANKLEY:  I‘m glad you‘re a devoted reader, but you used to have a lighter touch.

FRANKEN:  Let me explain to you Tony—let me explain what you did here, Tony.  He was demoted immediately.  He came to Condi Rice and gave her the plans to put boots on the ground in Afghanistan.  And they didn‘t address that plan.  The Bush administration didn‘t look at al Qaeda until 9/11.  And you know...

BLANKLEY:  ... Al, you are so deep into the roots of these thoughts.  You have the capillary to the capillary and who said what, when.  We‘re quoting him from his own book.

FRANKEN:  You yourself are cherry-picking, Tony, and deliberately misleading.

BLANKLEY:  Don‘t you realize how far away from reality you‘re drifting, Al?

FRANKEN:  I‘m not drifting.  I‘m specifically talking about a piece that you wrote.

(CROSSTALK)

MATTHEWS:  Mike Barnicle, Tony Blankley and Al Franken—you‘re watching HARDBALL on MSNBC.  Sorry, guys.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL with HARDBALLers Al Franken, Tony Blankley and Mike Barnicle.

Mike, thank you.  I want to give you a chance here to join in this discussion a little more adequately.

Let‘s talk about what is fair and unfair in what looks to be the pursuit of George Allen on his past, going back into the ‘70s, and the words he used.  I mean, I grew up in a big city, ethnic comments are they‘re negative and nasty between one group and another were down in the school ground.  They‘re done frequently.  The “N” word was always a bad word to use, a very bad word.  But a lot of other words were used. 

Is it fair to go back to go after a guy back in the ‘70s before he was in public life?

BARNICLE:  Probably not, Chris.  Whether he did or didn‘t, it‘s going to be hard to prove.  But the thing that surprises me about George Allen is that he was taken seriously as a legitimate contender for his party‘s nomination for president based on ideology rather than intellect.  Nice guy, I‘m sure he‘s a nice guy.  Dumb as a door post?  Absolutely.

MATTHEWS:  Al Franken, your view of that comment?

FRANKEN:  Well, I don‘t know if he is as dumb as a door post.  I have a sense that he is racist.  The macaca explanation doesn‘t make any sense.  It‘s demeaning.  Whatever it was it was cruel, because he was...

BARNICLE:  ... Well, the other thing he said about the macaca in the film—what did he mean when he said welcome to America in Virginia?  What did he mean by that?

FRANKEN:  Exactly.  He meant you are of dark skin and looked Indian, which he was of Indian extraction.  He was extracted from an Indian, but he grew up in Virginia.  He was born in Virginia.  And the explanation is ridiculous.  What is—macaca is obvious—if he made it up, he has the word caca in it.  I don‘t call Tony Blankley macuckoo, which means crazy Brit in British.

MATTHEWS:  Did you know that one?

BLANKLEY:  No, I didn‘t know that.

FRANKEN:  No, that‘s Yiddish for crazy Brit.

MATTHEWS:  We‘re all learning bad words.  Thank you.

More time for all you next time.  I wish we had more time.  Al Franken, Mike Barnicle, Tony Blankley.  Play HARDBALL with us again on Wednesday.  Our guests include House Majority Leader John Boehner of Ohio, Florida‘s Senate candidate Katherine Harris and Robert F. Kennedy Jr.  What a group we have tomorrow.  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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