updated 1/26/2007 11:13:45 AM ET 2007-01-26T16:13:45

Guests: Harry Reid, Jon Ralston, Harold Ford, Harold Schaitberger, Michelle Laxalt

CHRIS MATTHEWS, HOST:  From Las Vegas, Nevada, scene of an early high-stakes battle in the 2008 presidential campaign, let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews reporting tonight from Las Vegas, Nevada, where Democrats are planning to hold an early caucus in 2008 to decide their pick for president.  Will the next White House winner be decided by states out here in the West?  In a moment we will talk with Nevada‘s own, Harry Reid, the senate majority leader about why his state will matter more in 2008.  We will also talk about the continuing fight over Iraq back on Capitol Hill. 

Plus, Harold Ford Jr. has a new job, chairman of the Democratic Leadership Council.  We will ask him what message his party needs to win in 2008. 

But first, more news out of that criminal trial of Vice President Dick Cheney‘s confidant and former chief of staff, Scooter Libby.  HARDBALL‘s David Shuster was at the courthouse all day.

David, I guess our show was mentioned there today? 

DAVID SHUSTER, HARDBALL CORRESPONDENT:  Chris, absolutely.  And we will back track and talk about, of course, the big picture of course here is when did the vice president‘s confidant, Scooter Libby learn that Valerie Wilson, the wife of an administration critic, worked a the CIA?  How did he learn about it?  And did Libby then lie and perjure himself when he said he learned about it from reporters? 

What prosecutors are doing is they are putting witness after witness on the stand showing that Scooter Libby was told Valerie Wilson worked at the CIA before Scooter Libby had conversations with reporters. 

Today the blockbuster testimony came from Cathie Martin, Vice President Cheney‘s own press secretary during the relevant time period.  She described in dramatic fashion the very first press report that came out in May, a call by The New York Times that made an oblique reference to an ambassador going to Niger and concluding that in fact, Iraq, had not in fact been seeking uranium from Africa. 

Martin testified that the vice president‘s office wanted more information on this trip.  And she testified in dramatic fashion about talking to Bill Harlow, the spokesman of the CIA, and asking him about this trip.  And Harlow telling her, Ambassador Joe Wilson, he used to be ambassador in the Middle East, he was the ambassador who went on this trip. 

And here is what he concluded, and, oh by way, his wife, Valerie Wilson, works at the CIA.  Martin testified on the stand she immediately went into the Office of the Vice President and told Vice President Cheney and Scooter Libby, this is what we know.  The CIA says that Ambassador Joseph Wilson was the ambassador on this trip and his wife works at the CIA. 

Martin then describes the period in July of 2003 when Ambassador Wilson himself goes public.  He writes a column in The New York Times.  He goes on NBC‘s “MEET THE PRESS.” And Martin says at that point the vice president‘s office was focused even more.  They were tracking media strategy.  They were tracking which reporters were writing about this.  They were also tracking HARDBALL with Chris Matthews. 

Martin said she was directed by the vice president to pay particular attention to HARDBALL because, Chris, you were the one who was focusing so heavily on the questions about, what did this mean?  How did this claim get in the State of Union about Niger?  Did the vice president get told about?  Did the vice president know, in fact, Wilson‘s conclusion before that got in the State of Union. 

Martin said that the vice president‘s office was so focused on this and so obsessed with the reporting on HARDBALL that she in fact had her staff essentially make clips of HARDBALL and transcripts and would deliver those transcripts to the vice president and to Scooter Libby. 

In the midst of all of this, the vice president himself was writing out talking points for Ari Fleischer, the White House press secretary, who was then getting bombarded with questions in the White House press briefings about Joe Wilson‘s column and what he found in Africa. 

In addition, Martin then testified about a second conversation with Scooter Libby that involved Vice President Cheney.  This was a conversation a little bit later in July with Matt Cooper.  Matt Cooper was also working on a story for time magazine about the Wilsons. 

And Cathie Martin testified they were trying to figure out how to respond.  She talked about talking with Libby on Air Force Two on return from a trip.  Scooter Libby, going and talking to Vice President Cheney, Scooter Libby coming to the back of the plane with a card describing how Scooter Libby should deal with Matt Cooper and that Scooter Libby himself should be the one talking to the press.

There was also testimony about another episode where the vice president decided that Scooter Libby himself, the vice president‘s right-hand man, should be dealing directly with the press, not Cathie Martin, when Andrea Mitchell was working on a story, and when David Martin of CBS was working on a story. 

Chris, there were also developments regarding Stephen Hadley.  At one point, Stephen Hadley seeing this play out, saw a story criticizing the CIA and at a staff meeting with Scooter Libby and Cathie martin present, glared and said, we should not be blaming anybody right now for the 16 words. 

That was a—that article was prompted by a conversation that Scooter Libby had had, but Cathie Martin in this meeting was made to take the fall for Scooter Libby.  And Scooter Libby never piped up and said, that was my responsible. 

In addition, Chris, there were also some notes that were introduced as evidence dealing with the vice president and the Office of the Vice President‘s strategy in all of this.  In Cathie Martin‘s own notes, in her own handwriting said, “leak.”

It was a dramatic day of testimony.  On defense cross-examination, the defense was trying to show that the Office of the Vice President had reason to be angry at the press reporting at the time.  They are also trying to show that there may have been internal battles with the CIA and that they are also trying to show that perhaps part of Martin‘s own recollections about what transpired during this crucial should—might be suspect or might have some problems—Chris. 

Cm well, of course, it all goes back to the question raised by Ambassador Joe Wilson, who came back from a trip to Niger apparently with that information that there was no deal apparently between Saddam Hussein and that African government to buy uranium products or uranium elements. 

And of course, the question is, why would a trip that was triggered by an inquiry by the vice president not yield back that information to the vice president that there was no deal?  And why wouldn‘t that fact get into the State of the Union, rather than the president‘s claim of British intelligence that said there was a deal to buy uranium, which of course became one of the underpinnings of this administration‘s argument that we had to go to war with Iraq because they were threatening us with a nuclear weapon. 

We are going to hear more about that, especially later in the show.  I want to show you something very important that you see.  It came up in trial today, as David pointed out, these are the scenes we believe that may be relevant, who knows, to the trial.

These were portions of our program here on HARDBALL in the early

summer of 2003 where questions were raised, I think quite well raised, by -

to our various guests about what role was played—what role was by the vice president‘s office in terms of allowing the president to make that claim with regard to a nuclear threat from Iraq.  And also, what information did the vice president get back from that trip, and why didn‘t he use it if he got it to break down the story of a nuclear threat?

Here in Nevada, Democrats are planning to move up with their 2008 primary.  They have got a caucus here.  It is between Iowa and New Hampshire.  What will that mean for the Democratic contenders?  What will it mean for Nevada.  Nevada Democrat Harry Reid is with us.  He is, of course, the senate majority leader back in Washington. 

Welcome, Senator.  It is great to be in your state.  The weather is perfect out here.  I have to ask you, who is the weather going to be perfect for come next year at this time when the Democrats hold your caucuses out here?

SEN. HARRY REID (D-NV), MAJORITY LEADER:  Well, I think the person who understands the West.  We have a situation where the population is moving West.  Nevada is a perfect state to test that.  We have the right demographics.  We have—that takes care of—that includes minority representation, labor representation.  It is the state that represents our country.  And I think that the DNC was very wise in choosing Nevada. 

MATTHEWS:  Nevada has a lot of labor people, people that work in service industries.  Obviously, I‘m looking at it right now.  I‘m on the Nevada—on the Las Vegas strip.  They are in the restaurant business, they are in the gambling business, they are croupiers, they are dealers, they are restaurant workers, they are cocktail waitresses.  Do they tend to be Democrats? 

REID:  I believe so.  Working men and women all over America tend to be Democrats and it is no different the state of Nevada.  We are very proud of our union representation, our labor organization in the state of Nevada, especially the Culinary Union which has at least 70,000 members.  They treat them well and people love to be in that union because they are treated so wisely. 

MATTHEWS:  Do you think John Edwards has made a special effort to try to woo the support of these organized labor people? 

REID:  I think it‘s way too early now to determine who is where in the Nevada caucuses.  And that is well it should be.  People are just getting cranked up.  We have had of course a lot of people coming through Nevada already.  We have just had Obama and Clinton.  They have just announced. 

And there—of course Clinton has been to Nevada many times, Obama has been there a few times.  And I‘m sure the road to Nevada will become much more familiar to each one of them in the next year. 

MATTHEWS:  Tim Russert has pointed out, and I‘m sure other political experts have said the same, that the Southwest is a real opportunity for change or for a pivotal role in 2008.  The Midwest, some of it may be a problem for Hillary or any Democrat, but out here in this part of the country, Nevada, New Mexico, Arizona, Colorado, may well be open states.  They could go either way in 2008. 

REID:  We have had great elections.  Take the last cycle.  Even Idaho, the most Republican state in the union, almost went Democratic.  We have tremendous changes taking place in Colorado.  In Nevada, we went from having no constitutional office-holders to having four out of six constitutional officeholders are now Nevadan—are now Democrats. 

So we are doing very well all throughout the Southwest.  And the reason for that is it‘s where the population is moving.  Things are moving West.  And there is great energy in the West.  And that‘s the reason we have great Democratic senators.  Two from California, two from Washington, and on and on with the Democratic senators.  I think they are the best of the lot. 

MATTHEWS:  Is it the fact that people come out here from so many parts of the United States that it isn‘t as traditional as, say, the American South? 

REID:  Well, I think Nevada is an independent state.  We have people coming from all over.  California, from, of course, all over parts of country.  Nevada is independent.  And I say Nevada is independent and that is kind of representative for the whole Western part of the United States. 

MATTHEWS:  What did you think your colleague John Kerry, the Democratic nominee last time around, who you worked hard for, dropping out of 2008 contention so early in the battle? 

REID:  Chris, I spoke on the Senate floor and it was really heartrending to me, to see him say he is not going to run.  He did the right thing, I acknowledge that.  But he came so close and that was such a terribly unfair election.  Here is a man who is a hero, decorated war hero, and with the Swift Boat stuff at the end of the campaign, people wondered if he had even ever been to Vietnam.  John Kerry is a good American.  He has been a great senator.  He will continue to be a great senator. 

MATTHEWS:  Do you think he was treated unfairly in the count or was it just in the campaign?  Do you think he got a good count in Ohio, for example at the end of that election? 

REID:  Well, I think the Ohio count was bad, but he is a good American.  He realized that it was time to end the election and not drag this on.  I think some votes could have been changed in the state of Ohio, but John Kerry did the right thing.  He just pulled the plug. 

Let me just say quickly, Chris, I‘m so glad you are in Nevada, because your temperament is so much better than it normally is. 

(LAUGHTER)

REID:  That is what Nevada does to people. 

MATTHEWS:  Well, one reason, Senator—well, you are nice to host me out here electronically, but also one of the reasons I‘m in a good mood is I have been selected as a judge for the Miss America contest and it has been a tough job, as you might imagine, to sit there and watch these beautiful women try to please me.

REID:  Chris, Chris, I know that.

MATTHEWS:  . for a while there.  And it‘s not a tough job. 

REID:  I know that‘s why you are there but it gives me hope, people that look like you and me could be judges for the Miss America contest. 

MATTHEWS:  Aren‘t you great, thank you for that welcome out here to this wonderful state.  Thank you, Senator Harry Reid, the senate majority leader.

Coming up, what are the 2008 contenders going to do to win out here in Nevada and other states in the West?  And later, more on today‘s news from the Scooter Libby trial which features HARDBALL. 

We are going to show you the pieces of HARDBALL that may have been talked about extensively in the vice president‘s office.  You are watching HARDBALL on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Iowa and New Hampshire have long dominated the early 2008 race for the White House, crowning winners and losers for the rest of the election.  But now Nevada, right out here where I am at right now, could become the number two contest in the country.  And that could change the game as we know it. 

And other Western states are poised to be the key battlegrounds of the 2008 presidential election.  Everything is in flux right now.  NBC‘s George Lewis joins us now from L.A.—George.

GEORGE LEWIS, NBC CORRESPONDENT:  Chris, a number of factors are in play to focus more attention on the Western states.  The Democratic Convention in Denver.  That new Democratic caucus in Nevada.  The possibility of an early presidential primary in California. 

(BEGIN VIDEOTAPE)

LEWIS (voice-over):  As they say in Vegas, “the West is on a roll,” politically speaking, being thrust in prominence as 2008 approaches. 

SHERRY BEBITCH JEFFE, USC POLITICAL SCIENCE PROFESSOR:  I think the West could shape up as the new swing region in presidential politics. 

LEWIS:  While all eight states of the Intermountain West went for George Bush in 2004, his margin of victory in some states was narrow.  A swing of just 70,000 votes in Colorado, Nevada, and New Mexico could have thrown the election to John Kerry. 

The importance of the West was underscored earlier this month when Denver won the right to host the 2008 Democratic National Convention. 

GOV. BILL RITTER (D), COLORADO:  And now we are on, I would argue, the national stage and really the world stage. 

BOB MARTINEZ, COLORADO REPUBLICAN CHAIRMAN:  They believe that the West is an important population base to go after.  That‘s all it means.  And we agree.  And we are going to go toe-to-toe with them. 

LEWIS:  The most populous state in the West, California, is talking about moving its presidential primary to February of next year. 

JEFFE:  So the West is going to be front and center in this campaign. 

UNIDENTIFIED MALE:  Democrats are ready, right? 

LEWIS:  Front and center starting January 19th of next year, when Nevada holds its early Democratic Party Caucus, right after Iowa and just before the New Hampshire Primary. 

Some Democrats believe that because Nevada is a strong union labor state, candidates who make a play for the union vote will boost their chances here. 

REID:  Every presidential candidate that I know of has been here.  Biden has been here,  Dodd has been here.  Edwards has been here.  Clinton has been here.  Barack Obama has been here.  They are all coming back again. 

LEWIS:  University of Nevada at Reno political science professor Eric Herzik has a bit of advise for the candidates when they do come back.  Learn from the 2004 mistake of someone who isn‘t running this time, John Kerry. 

SEN. JOHN KERRY (D-MA), 2004 PRESIDENTIAL CANDIDATE:  Ne-vah-da is not going to have a broken promise. 

ERIC HERZIK, UNIV. OF NEVADA AT RENO POLITICAL SCIENCE PROFESSOR:  The first thing you have to do is get the pronunciation of the state‘s name correct.  It is “Ne-va-da,” not “Ne-va-der” or “Ne-vah-da.” 

LEWIS:  The second thing to learn is to talk about the issues that concern people in Nevada. 

HERZIK:  The big issue out here is water.  And it is really the lack of water.  And so going to be far more concerned about the availability of water or clean water. 

LEWIS:  The rapid growth that is fueling the state‘s economy also means not only potential water shortages, but also pollution and traffic snarls. 

(on camera):  Once desolate areas of the Nevada desert are now becoming part of suburbia, case in point, Pahrump, Nevada, about 60 miles northwest of Las Vegas. 

(voice-over):  And local political activists say it is going to be very important for the candidates to get out to places like this and shake a lot of hands. 

LOYAL WATKINS, NYE COUNTY, NV DEMOCRATIC CHAIRMAN:  Retail politics. 

They are going to have to come and talk to the people. 

UNIDENTIFIED FEMALE:  I‘m adding on to this ticket. 

LEWIS:  If they go to Mom‘s Diner in Pahrump, they will probably find quite a few transplanted Californians who are helping make this red state bluer.  Among them, Ira Carter (ph) from the San Francisco Bay Area, and Jack Wood from Southern California. 

UNIDENTIFIED MALE:  I want to hear what they have to say.  I hope it‘s not all this fanfare and I hope they really talk about what is really important to us out here. 

LEWIS:  Ira says he wants to hear the candidates talk about how the country gets out of the mess in Iraq. 

UNIDENTIFIED MALE:  A lot of things aren‘t being done because we are spending too much money on the war. 

LEWIS:  So, which candidates are helped and which ones are hurt by this emphasis on the West? 

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  I‘m not just starting a campaign, though.

LEWIS:  Hillary Clinton, with her well-funded campaign will be able to buy plenty of TV time in California.  But coming from New York, she might have trouble connecting with voters in the smaller Western states. 

JEFFE:  I‘m wondering whether she is, at this point in her career, too New York, too elitist, too cold, if you will, to really talk the language of these Intermountain West. 

LEWIS:  Conversely, being from the West could help an underdog like New Mexico Governor Bill Richardson. 

GOV. BILL RICHARDSON (D-NM), PRESIDENTIAL CANDIDATE:  I‘m a Westerner, I‘m a governor, I‘ve gotten things done. 

LEWIS:  On the Republican side, Arizona Senator John McCain will also be helped by his Western roots,. as this region stands poised to shift the dynamics of the 2008 presidential campaign. 

(END VIDEOTAPE)

LEWIS:  And getting back to the possibility of a February presidential primary in California, there are a couple of reasons it‘s almost a done deal.  By the time California‘s previous primary was held in June, the presidential nominees were locked in so the election was irrelevant. 

Second, leading Democrats in the state legislature want to liberalize term limits so they can run again in November.  But they have to get a measure to do that on the ballot early next year.  A February primary would give them that chance—Chris. 

MATTHEWS:  Is Hillary Clinton and her forces secretly pulling the levers to try to get an early California primary so she can spend that zillion dollars she has on the TV market in L.A.? 

LEWIS:  Well, there has been some speculation about that, that because she is well-heeled and because California is a big media state, she would stand the best chance, and a February primary would certainly perhaps lock in her nomination. 

Some have suggested that maybe she ought to park Bill out here between now and the February primary to make all of that happen. 

MATTHEWS:  I know just the place to put him, Santa Monica.  I think they think he is the messiah.  I have been there with him in Santa Monica.  Anyway, thank you very much.  George Lewis, for NBC.

LEWIS:  OK. 

MATTHEWS:  Be sure to watch Friday‘s HARDBALL for a report on the 2008 fundraising battle out in California.  So who is going to win the left coast money fight?  That‘s where a lot of the money comes from.  It is liberal, but it is L.A.  It is the movie business.  Who are the big names going to throw their money to?  Barack is in that fight. 

Coming up, we go back to the courthouse and the Scooter Libby trial. 

And later, Harold Ford Jr. talks about his new job as the chairman of the influential and centrist Democratic Leadership Council. 

You are watching HARDBALL from the Pure Nightclub.  Isn‘t that a great name?  We are out on the patio at Caesar‘s Palace Las Vegas on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  We are here at the Pure Nightclub, I love that name.  We are out on the patio at Caesar‘s Palace in Las Vegas.  We are joined now by the top political observer in this town, in fact, in the State of Nevada, Jon Ralston of the Las Vegas Sun.

Let‘s talk politics, let‘s talk 2008.  I have been thinking that John Edwards has a shot at taking on the two big guys, Obama and Hillary, but he has got to win in Iowa and he has got to win here.  What are his chances? 

JON RALSTON, LAS VEGAS SUN:  I think they are pretty good here because the link of the textile union back East and their merger with the Culinary Union.  He was here late last year, he came on my program.  He did a campaign of tour of the state right before he announced that he was officially in. 

There is a lot of speculation that the Culinary, which, as Harry Reid told you, is the union here, is going to go with him.  The Culinary, thought, Chris, is keeping their powder dry.  They have not said much.  They have said they are not committing to anybody.  But a lot of people think that is the way Edwards wins.

MATTHEWS:  I‘m thinking about, having been out to Vegas a few times, a lot of working people out here.  Sure, there are high rollers, but most of the people out here you meet late at night, busing table, waiting tables, working the—rather I think 4:00 in the morning shift with the craps tables and everything else, they are working people. 

They work hard, they work by the hour, they get some tips, but they work by the hour.  Are they mad as hell and want a change in Washington or are they more, oh, he is black, I‘ll vote for him, I‘m black?  Or she is a woman, I‘m a woman?  Is there a real ideological rage against the Bush crowd that would drive people to a guy like Edwards? 

RALSTON:  I think there is inside the minority population and in the working population.  You know, the Hispanic population has exploded here.  A lot of that membership is the Culinary Union.  They have, the last two cycles, Chris.

MATTHEWS:  And they are voters, most of the people are voters?

RALSTON:  Well, that‘s the problem.  That‘s the problem.  They have tried to register a lot of them and they have had some problems doing that.  They‘ve had a couple of cycles of outreach now.  They think they are doing better.

MATTHEWS:  Well, are they legal?  Are most of them are legal?  They must.

RALSTON:  Most of them are legal.  There has been .

MATTHEWS:  SO they are citizens and they should be able to vote, but they don‘t want to vote for what reason? 

RALSTON:  Well, they are just—it is a transient population.  They are not that engaged.  But the Culinary, to its credit, has done a lot of outreach to its members to get them educated.  And I think they are hoping that is going to pay off in the caucus. 

MATTHEWS:  Unions have been beaten up all around the country ever since the 1950s.  They have lost their big labor power.  Why is labor still a big power here in Vegas? 

RALSTON:  They are tremendously politically influential here.  They may be the most influential Democratic group.  They have been able to elect a lot of people statewide and locally.  And they just assert their influence. 

MATTHEWS:  Let me ask you about the Western culture.  You have been out here how many years? 

RALSTON:  Twenty-two.

MATTHEWS:  Since you left—came out of Buffalo, right?  So what‘s the difference between living in the East and living out here mentally? 

RALSTON:  Well, I barely remember living back East.  But I remember.

MATTHEWS:  Well, it is colder. 

RALSTON:  It is colder.  I remember the snow in Buffalo.  I remember coming out here and saying, I was going to be here two years on my career path back there.  But there is so much opportunity.  That‘s what you hear from everybody, it doesn‘t matter whether it‘s journalism, it‘s in the casinos, it‘s in business, it‘s in almost—there is such opportunity.  This is the fastest-growing state, fastest-growing city in the country. 

There is so much going on here and people just love the lifestyle. 

MATTHEWS:  Well, one of your forbearers, I shouldn‘t use that term, back in Buffalo is Tim Russert.  And I heard him say, and I think this is pretty profound, he says that the real battle in 2008 isn‘t going to be the old battle in Florida, it is not going to be the battle in Ohio, it‘s going to be the battle out here. 

Explain, do you think that‘s true? 

RALSTON:  Well, it is clearly why Harry Reid, especially, and others tried to get that caucus out here, got the convention in Denver.  They think this is the new battleground.  You heard George Lewis talk about the 70,000 votes.

MATTHEWS:  You are a journalist, you are a straight reporter, you are not a pundit, but let me ask you this, would observers—I like way we craft these things, would an independent observer believe that Hillary Clinton could knock out a Mitt Romney in Nevada? 

RALSTON:  Well, first of all, I am a pundit, I‘m offended that you said I wasn‘t.

(LAUGHTER)

MATTHEWS:  OK, let me ask you this, can she knock out.

RALSTON:  Yes, she can. 

MATTHEWS:  . an LDS member in Nevada from a Western—a guy who is really rooted in Utah?

RALSTON:  Absolutely.

MATTHEWS:  Can she beat him on—can she beat a John McCain in Nevada? 

RALSTON:  Well, I think Hillary could win anywhere.  But I think the problem in Nevada is that there are so much of the rural vote is still significant here.  They turn out much more.

MATTHEWS:  Traditional wives (ph)? 

RALSTON:  Yes. 

MATTHEWS:  And they don‘t—do they like, what Bill Clinton calls, “uppity women,” like his wife?

RALSTON:  Well, I think that down here in Las Vegas, Hillary Clinton is going to run very, very well.  John Kerry won.

MATTHEWS:  So these waitresses are going to identify with her?

RALSTON:  I think they will.  I think they will.  Now, the problem is, you can‘t just win in Las Vegas to win the general election.  You have got to win in northern and rural Nevada. 

And yes, no presidential nominee has won here, except for Hillary‘s husband since 1964.

MATTHEWS:  So it‘s—to use a term our here—it‘s a crap shoot whether it‘s John Edwards, Hillary or Obama out here? 

RALSTON:  I‘d say it‘s a crap shoot.  But I think Edwards, because of the scenario you painted has a shot out here...

MATTHEWS:  Well, he painted it, I learned it, which is, he wins in Iowa, the caucuses, because they love him out there for some reason, comes down here, wins with the union vote and goes back and takes on Hillary and Bill up in New Hampshire for what could be the showdown.  Then, of course, he faces the bigger problem of California, where her bucks, her deep pockets can buy incredible amounts Los Angeles television. 

RALSTON:  I think, you know, they haven‘t set up the rules for the caucus here yet, but I think he‘s got a really good chance to do well in the caucus here with the union vote. 

MATTHEWS:  Do you love it out here? 

RALSTON:  It‘s the—twenty-two and a half years, absolutely. 

MATTHEWS:  Well, I‘m out here to judge the Ms. America Contest.  This week, I got an easier job than you, Joe.

RALSTON:  I envy you.

MATTHEWS:  OK, thank you.

Anyway, Thank you, Jon Ralston of the “Las Vegas Sun”. 

When we return, we‘ll check back in with HARDBALL‘s David Shuster about that Scooter Libby trial.  I am fascinated by the extent to which this program, HARDBALL, came up as an issue in that trial.

Also, play some examples of HARDBALL‘s coverage back then in the early summer of 2003 and the questions we were raising on the show based upon the public testimony of Joe Wilson and about his trip, about the CIA and the role that might have been played by the vice president‘s office with regard to all of that back in 2003. 

You‘re watching HARDBALL from the Pure Night Club—I love it—

Patio at Caesar‘s Palace in Las Vegas, only MSNBC.

(COMMERCIAL BREAK)

(MARKET REPORT)

MATTHEWS:  Welcome back to HARDBALL from beautiful Las Vegas. 

Let‘s go back to Washington now and rejoin HARDBALL correspondent David Shuster, who has been covering the trial of Scooter Libby. 

David, yesterday there was a big fault line between the vice president‘s office, it seems, and Karl Rove.  They were pointing the fingers—the attorneys for Scooter Libby were pointing the fingers at Karl Rove, saying they were setting up as the fall guy their colleague Scooter Libby.  Where‘s the fault line today in the trial? 

DAVID SHUSTER,MSNBC CORRESPONDENT:  Well, Chris, it‘s two-fold.  There‘s the memory defense.  There‘s the Scooter Libby defense that he could not remember where he learned Valerie Wilson and so—and that he thinks that he learned them from reporters like Tim Russert.  That‘s why he got indicted, because allegedly it was false statements. 

So what prosecutors are doing now is they‘re going back and they‘re essentially telling the story of what happened that summer.  They‘re talking about how they had testimony today that the vice president and Scooter Libby were both told by the vice president‘s own press secretary about Valerie Wilson before any of these conversations with reporters.  Then the narrative goes into July: Ambassador Wilson goes public July 6th and say, “I went to Niger, this is what I found.  I found that there was no basis to the claim that Iraq was seeking uranium from Africa, and yet it ended up in the State of the Union.”

And then HARDBALL, your show, our show, were the ones who jumped on it, started asking questions.  How come, then, it didn‘t land in the State of the Union?  And what this did is—remember, this is before Scooter Libby then has a conversation complaining about our aggressive coverage to Tim Russert.  It‘s a few days after that when Bob Novak publishes the identity of Valerie Wilson.

And the question is: as the White House and now the office of the vice president was trying to deal with this story, did they unfairly leak Valerie Wilson‘s identity to try to destroy Wilson‘s credibility? 

That‘s what sparked the investigation.  The investigation is then what sparked Scooter Libby to say, “Hey, I didn‘t learn this information from government officials, I learned about it from reporters.” 

But what‘s so interesting, Chris, is that week, sort of the chaos in the office of vice president and their obsession with the few reporters who were actually paying such close attention to what Joe Wilson had said.  So let‘s run a couple of examples of what you were doing on HARDBALL July the 8th, July the 9th.  This was right after Ambassador Wilson goes public. 

(BEGIN VIDEO CLIP)

MATTHEWS:  Why would the vice president‘s office, Scooter Libby, whoever‘s running the office, why would they send a CIA effort (ph) down in Niger to verify something, find out that there wasn‘t a uranium sale and then not follow up by putting that information or correcting that information in the president‘s State of the Union?  If they went to the trouble of sending Joe Wilson all the way to Africa to find out whether that country had ever sold uranium to Saddam Hussein, why won‘t they follow up on that? 

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MATTHEWS:  Well, let‘s talk about a big head.  And former Ambassador

Joe Wilson said that this was cleared by vice president‘s office.  They had 

they‘re the ones who sent him to Africa to find out whether it was true or not, whether there was action, there was traffic in nuclear materials between the country of Niger and the country of Saddam Hussein‘s Iraq.

He came back and said there was nothing going on like that six months before the speech.  Doesn‘t the vice president‘s office hold the greatest culpability here for not acting on that truth?

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

MATTHEWS:  We have a paper trail, thanks to Joe Wilson, the ambassador.  He said he was sent to Niger, the government in Africa that‘s in question here—and we have a picture of him, it was on “Meet the Press”.  He also wrote a letter, an op-ed piece for the “New York Times” this weekend.  He made it very clear he was sent down there at the behest of the vice president‘s office last year. 

Months, almost a year before the president‘s State of the Union Address, he came back with the information that there was in fact no deal. 

Isn‘t the vice president‘s office responsible right now to come out and say why they didn‘t act on that information?  Why the CIA, which also must sign off on presidential speeches—they didn‘t come out with the information and clear the president so that he wouldn‘t have to, in his own words, by the way, to use his words, “revise history”, as he seems to be doing, saying that this was not a mistake? 

UNIDENTFIED MALE:  Chris, it was my understanding that he went to the

to Africa at the request of the CIA, not the vice president‘s office. 

The vice president‘s office...

MATTHEWS:  At the behest of the vice president‘s office, the CIA was tasked by the vice president‘s office to do it.  Senator, isn‘t that right? 

UNIDENTIFIED MALE:  That is correct. 

(END VIDEO CLIP)

SHUSTER:  And, Chris, what you need to...

MATTHEWS:  (INAUDIBLE)

SHUSTER:  You nailed right—you totally got back then which the White House, the vice president‘s office didn‘t want to come out, which was that the vice president had essentially seized on a piece of raw intelligence that had been discredited.  He sent it to the CIA and said, “Look into this.” 

The CIA sends Ambassador Wilson.  Wilson goes and fins out that the claim that Iraq was seeking uranium from Niger is not accurate.

Then the vice president‘s office is confronted with this, and at this time period, at the time that you were pounding and saying, OK, what happened here, how did this end up in the State of the Union, the vice president himself is asking for transcripts of what you were saying.  The vice president himself is dictating press strategy to his top confidant Scooter Libby.  He is violating protocol as far as asking Scooter Libby to deal with, how are they going to try to spin this, how are they going to try to discredit Wilson? 

Eventually, of course, there is the Bob Novak column, and there is the question of, OK, as part of trying to discredit Joe Wilson and underline this idea, this criticism that Wilson was making, did they go too far by leaking Valery Wilson‘s identity?  That‘s where this is all going. 

MATTHEWS:  David, great reporting.  What we have been trying to do on this show back to 2003 is just find out one simple bit of information.  I can‘t get it from the former CIA director, I can‘t get it from him or anybody.  And this is it: George Tenet won‘t tell me, he wouldn‘t answer the question.  I said, how could the vice president ask the CIA about whether there was a deal to buy uranium by Saddam Hussein in the country of Niger?  The CIA sends somebody down there, Joe Wilson, to check out that story.  If they gave any word back to the vice president, how come the president still went on a year later and said there was a deal to buy uranium in Africa? How could that happen?  How could we be taken into a war with the threat of a nuclear mushroom cloud if we had evidence to the contrary?  Why did it happen? 

I keep asking the question, and by the way, when I look at those clips, I say I‘m still trying to find out the answer.  How could we have checked out a story and found out that it was a dead story—there wasn‘t in fact a deal to buy uranium from Niger—and the president still went ahead and threatened the country with that terrible Holocaust situation of us being hit with a mushroom cloud.  And so many people, smart people saying we‘ve got to go to war with Saddam, because that‘s a threat we‘ve got to deal with, the nuclear threat.

They got away with pushing the nuclear button.  I still want to know whether it was justified, or did they know better?  This trial may bring it out, and thanks to the reporting of David Shuster, we are getting it every night. 

Up next, former U.S. Congressman Harold Ford, Jr.  He‘s the new chairman of the centrist group of Democrats who may pick the next president.  Is it going to be Hillary Clinton?  This is HARDBALL from the Pure night club patio at Caesar‘s Palace, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  He lost his Senate race in 2006, but he is still in politics, now as the chairman of the centrist Democratic Leadership Council.  He just got elected to that post, Tennessee‘s Harold Ford.

Congressman Ford, you know, back in 1991, I saw Bill Clinton, then governor of Arkansas, speak to your organization, the DLC.  He gave a powerful, somewhat centrist, even conservative speech to those delegates.  Next thing you know, he is the Democratic nominee.  Do you have that power this time around? 

HAROLD FORD, CHAIR, DLC:  My interests and ambitions are less than that right now.  I think the focus for the DLC—and I‘m delighted and honored that Al From and Bruce Reed and Marshall and the thousands of members across the country placed this confidence in me—is to help develop and advance and promote a policy agenda that Democrats in the Congress and even the presidential candidates on our side can look to for ideas on national security and tax policy, pro-business, pro-family policies, and obviously ways to combat terrorism and make ourselves energy independent. 

I‘m looking forward to traveling outside of Washington and listening to those who—those state leaders and local leaders who are really right there where the rubber is meeting the road, and helping our presidential candidates, all of them, have a greater sense of not only where the country is, but the policies needed to help advance families in the country.

MATTHEWS:  The Reverend Jesse Jackson once referred to the DLC as the Southern white boys club.  Has that changed? 

FORD:  Well, at least right now.  I think there is a realization within the DLC—and in fairness to Al From and Bruce, they have reached out to elected officials all across the country.  I was delighted to be on a call earlier with leaders across the Midwest, young leaders who are excited about a new generation of leadership coming into the DLC and coming online. 

I have reached out to Reverend Jackson, reached out to others, Reverend Sharpton and others, to make clear that this is an organization that will be a big tent and will reach out to every faction of our party. 

And when you think about it, Chris, you can think about the real progressive ideas that have come out of the Democratic Party over the last 15 years, they all have a link to the DLC.  The new poverty programs, anti-welfare programs, the cleaning up of the welfare rolls and reducing it.  Anti-crime programs, the new tax policies.  Empowerment zones and creating jobs and lowering tax rates on middle class families.  These were DLC ideas, and they certainly can share some of that credit.  And I want to help introduce a new generation of thinking and leadership to the organization. 

MATTHEWS:  I guess it‘s a quandary for a lot of people who study politics.  How can somebody like Hillary Clinton of New York, who has about a 100 percent ADA rating, a liberal rating, claim to be a centrist? 

FORD:  Very easily.  Remember, Hillary Clinton, back when she was first lady of Arkansas, took on the issue of education and challenged some of the orthodoxy of our party years ago.  Throughout her time in the Senate, she has been a champion, a stalwart for strong national security measures, even measures that take on other orthodoxies in the party that help advance national interest.  Even Senator Obama, who‘s reached out—who I‘ve reached out to, rather, to ask if he‘d be willing to look at part of this agenda and the platform that the DLC has, and he has committed to taking a look and seeing how—what ideas may appeal to him.  Senator Edward, who has been recognized by the group.  Governor Richardson, who has been active in the group.  Governor Vilsack, the former chairman.  Even Senator Dodd—and I don‘t mean to leave anybody out—General Clark and many other candidates all, all can point to the DLC at some point.  Senator Biden, who was recognized by the DLC. 

I mean, all of these candidates have some roots in this organization, and we hope not only to give them a home, but to really give them a platform on which to talk about the important issues of day. 

MATTHEWS:  We are almost out of time, Congressman.  Can you maintain your political viability as a local Tennessean, at the same time you run a national organization like the DLC? 

FORD:  Well, the DLC‘s politics are a lot like mine.  Not only are they modern and centrist, they are more interested in finding answers and solutions.  Our campaign for the Senate and my 10 years in the Congress were about that. 

We will bring a lot of our activity to Nashville.  I‘m teaching at Vanderbilt.  I know some of the students—my students are watching, and I thank them.  And I thank the university for having me. 

But my time in politics hasn‘t ended.  God isn‘t through with me yet.  And I‘m looking forward to another opportunity to run in Tennessee at some point. 

MATTHEWS:  Well, good luck when you do. 

Thank you very much, Harold Ford, Jr., the new chairman of the Democratic Leadership Council. 

Up next, how are Republicans and Democrats working to find support out here in the West.  That‘s where I‘m at right now, Las Vegas, Nevada. 

Will states like Nevada, Colorado, New Mexico and Arizona decide the next election?  That‘s what Tim Russert thinks. 

He could be right.  You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL from the Pure Night Club Patio at Caesar‘s Palace in Las Vegas. 

I happen to be out here because I‘ve been named as a judge in the Miss America Contest.  And I‘ve been able to do the show out here, luckily.

By the way, with Nevada moving up—it‘s the 2008 Democratic caucus, right after Iowa‘s—and California is looking to hold its primary as early as early February.  How will the West reshape the 2008 for the White House?

Harold Schaitberger is the president of the International Association of Firefighters.  And he criss-crossed the country last year on behalf of Democratic congressional candidates.

Harold, let‘s talk the basic geography of American politics.  We grew up in a country, you and I, where it was all New Hampshire.  You know, those people, those flinty New Englanders got to decide who the presidential nominee was in both parties.  Then Iowa got to play, more isolationist, a little more labor, maybe.  And you got some surprises like Jimmy Carter coming out of there and Gary Hart winning that—doing well out there.

By moving the process to California, maybe, but definitely moving it to this state, as the second contest, who‘s that give an opportunity to? 

HAROLD SCHAITBERGER, INT‘L. ASSN. OF FIREFIGHTERS:  Well, I‘ll tell you what it‘s going to give an opportunity to is for the West to play such a major role in this election process coming up in 2008.  I mean, look at the recent track record.  We have Democrats that are picking up House seats in Colorado, picking them up right here in Nevada.  They‘re picking them up in Arizona.  We‘ve got Democratic governors in Colorado, Arizona.  This is an area that has started to trend more and more toward Democratic where at one time was strongly Republican.  So I think that this is a unique opportunity to put this part of the country in the decision-making process. 

MATTHEWS:  This is one of the great man made achievements of North America.  This place wasn‘t put here by God.  Men built this.  Labor guys built this town.  Construction site like I‘ve never seen up the street here, next to Aladdin, out my window.  It looks like they‘re building New York out in front of me.  All of these jobs, construction jobs, croupier jobs, waitress jobs, night club, cocktail waitress, all union, right? 

SCHAITBERGER:  Firefighters, all the jobs. 

MATTHEWS:  OK.  All the unions...

SCHAITBERGER:  It‘s a union town.  It‘s one of the highest union density states in the nation.

MATTHEWS:  Will they vote the way their international presidents recommend? 

SCHAITBERGER:  Well, I‘ll tell you, I think they‘re going to vote the way that their unions decide to go. 

MATTHEWS:  How do they decide these things? 

SCHAITBERGER:  Well, I‘ll tell you what.  There‘s a process.  I was in a meeting this morning with the state AFLCIO and all of the unions in this area.  And they were talking about their plans and their process to vet the candidates, to put the labors issues forward, to make sure that the candidates have to speak to their issues, their concerns, and then be part of the making a process...

MATTHEWS:  Will there ever be a chance for union rank and file to pick a candidate?  Is it all going to be done by the leaders, by the bosses? 

SCHAITBERGER:  Well, I think in effect it is going to be selected by the rank and file.  I can tell you about my union.  My union will participate in significant polling.  As you know, Chris, on March 14, we‘re going to have a forum in Washington, D.C.  Every major candidate will be there addressing over 1,000 of our members, our leadership from every congressional district. 

MATTHEWS:  OK.  You guys had to back John Kerry last time.  I saw you up in Iowa.  You were standing next to John Kerry when he won caucus.  You had an early bid, you put your money down, you bet on the guy who won the nomination.  What‘s—he just dropped out of this race, right?

Why do you think he dropped out?  Just not enough money support or what?

SCHAITBERGER:  Well, first of all, let me tell you, the country would

be better off if John Kerry were the president.  The fact of the matter is

and I had an opportunity recently to speak to John—that he recognizes that he has a chance returning to the United States Senate to be a voice, to be able to help frame policy, to be able to speak as a former nominee, to help shape the direction of the party.  And I‘m pleased that he‘s going to return to the United States Senate.  We‘re going to support him very strongly...

MATTHEWS:  He‘s a running again for re-election, right? 

SCHAITBERGER:  He‘s going to run for re-election and we‘re going to work to see that he gets back...

MATTHEWS:  Let‘s bring another Nevada voice in here.  We‘re talking about Republican strategist Michelle Laxalt, who‘s of course the daughter of the favorite senator out here and governor for years, Paul Laxalt, my buddy. 

It‘s great to have you on, Michelle.  Give me a Republican spin, or a look, at this state.  You‘ve got an early caucus out here.  This state‘s going to play a big role—at least, it‘s going to help.  Who‘s it going to help out here? 

MICHELLE LAXALT, REPUBLICAN STRATEGIST:  I think it‘s too early to tell.  The fact is that Senator McCain is probably a little bit better known there in Nevada.  He does live right across the border and he spends a great deal of time in Nevada.

As your other guests indicated, Nevadans tend to be a very individualistic group and they are mavericks by nature.  They are not big on big government.  They are anti-federal government.  And in many respects, Senator McCain matches the state to a great degree.  Remember, this is a state second only to the state of Alaska, with nearly 90 percent of all of the entire state is owned by the federal government.  So if you come in as a candidate running for presidency for either party in the state of Nevada, don‘t open with “I‘m here to tell you that the federal government wants to come in and help you” because they will send you right back out the door. 

Having worked for Senator...

MATTHEWS:  Is John McCain the closest—Michelle, I‘ve got to direct your testimony here a little more to where I want you to go.  Is John McCain the Reagan-type guy out here?  The people out here liked Reagan, and I know your dad did, best buddies with him.

Do the people who like Ronald Reagan historically look to a guy like McCain, war hero, that kind of guy? 

LAXALT:  I think McCain is very, very comfortable in the state of

Nevada, and he matches a lot of the maverick, Reagan, Laxalt,

individualistic, and civil libertarian in many respects, and a man who is -

I think he is viewed to be a true Westerner, and he spend a lot of time in Nevada—and Nevada is still small enough, notwithstanding the fact that it‘s growing exponentially.  They want to see these candidates face-to-face, and they want to look in their eye.  And McCain they‘re very familiar with. 

MATTHEWS:  Well, thank you.  Thank you to your family and for your son‘s service over in Iraq.  It‘s great to have you on, Michelle Laxalt.

Thank you, Harold Schaitberger.  It‘s great having you on.

It‘s great being out here.

And I want to thank our host here at the Pure Night Club at Caesar‘s Palace in Las Vegas.

By the way, I loved judging the Miss America Contest.

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

END   

Copy: Content and programming copyright 2007 MSNBC.  ALL RIGHTS RESERVED.  Transcription Copyright 2007 Voxant, Inc. (www.voxant.com) ALL RIGHTS  RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user‘s personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon MSNBC and Voxant, Inc.‘s copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

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