updated 1/30/2007 10:56:52 AM ET 2007-01-30T15:56:52

Guests: Lynn Sweet, David Yepsen, Paul Cellucci, George Maloof, Sam Haskell

CHRIS MATTHEWS, HOST:  The joke‘s on who?  Was Hillary telling that joke about evil and bad men about Bill?  If not, who was she talking about?  Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews, reporting from Las Vegas, where I‘ll be judging the Miss America contest later tonight.

Lots of news, by the way, from here and abroad.  Iraqi officials tell NBC News today about a battle in Najaf Sunday against 600 Shiites.  Iraqi officials say they killed 250 of them, backed by U.S. air support.

And more news here at home in the Scooter Libby trial, which at its heart, looks at how we got into this war.  Today, former White House press secretary Ari Fleischer testified that on July 7 of 2003, Scooter Libby told him that Joe Wilson was sent to Niger by his wife, who worked at the CIA.  Fleischer said, The information about Wilson‘s wife was news to me.  It was the first time I had ever heard it.  We‘ll get the latest from HARDBALL‘s David Shuster, who‘s at the courthouse.

Plus, picking the next president.  Hillary was in Iowa this weekend, where she raised questions about whether she was poking fun at her husband.  And Rudy Giuliani, who continues to do well in the polls, campaigned in New Hampshire.  The latest “Newsweek” poll, by the way, shows both Hillary Clinton and Barack Obama narrowly beating both John McCain and Rudy Giuliani in the general election.  That‘s if they‘re all in the election together.

But after this weekend, everyone‘s talking about a joke that Hillary told about her—and her explanations of later about who she was joking about.  Let‘s try to figure this out.  But first, let‘s look at what she said.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D), NEW YORK:  And what in my background equips me to deal with evil and bad men?

(LAUGHTER)

I thought I was funny!  You keep telling me, Lighten up, be funny.  I get a little funny, and now I‘m being psychoanalyzed!

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS:  Well, what was she joking about?  We begin tonight with “The Chicago Sun-Times‘s” Lynn Sweet, who was there in Iowa this week when Hillary told her joke, CNBC chief Washington correspondent John Harwood, and David Yepsen, who‘s political columnist for “The Des Moines Register,” who has met with Hillary Clinton over the weekend.  I think they had a hamburger and a cheeseburger.

But let‘s go to Lynn Sweet, who was there for the action.  What was that audience chuckling about for over 30 seconds when Hillary said—when asked, rather, if she could handle somebody like Osama bin Laden and she said, Well, what in my background equips me to handle bad and evil men?  And then she told—she had a big, wide laugh.  The whole crowd chuckled with her for 30 seconds -- 32 seconds I believe is the county.  What were they laughing at?

LYNN SWEET, “CHICAGO SUN-TIMES”:  Well, what I think they were laughing at is the thought that cropped into my mind, Chris, and that is Bill Clinton‘s name did come into my mind.  There are some people who I interviewed, and that‘s what they said.  It‘s a Rorschach.  And what is interesting here—I don‘t think it matters so much what she was thinking.  I think what was instructive for all of us is what people who were out there were thinking.  That‘s what‘s the key here.

MATTHEWS:  Do you think—let‘s not—we don‘t have to get into—by the way, I can never tell what‘s on a person‘s mind, and nobody here knows how to do that, either.  We never will.  Maybe some day, we‘ll know how to read minds.  We can‘t do it right now.  So we don‘t know what she was thinking.

That audience, though, was keyed to laugh, thinking she was kidding about her husband‘s philandering, Monica Lewinsky and all that.  What I‘m asking is, is she that unaware of that 800-pound gorilla stalking behind her, the baggage of her husband?

SWEET:  Well, if you want me to be Dr. Sweet, the political psychoanalyst, I‘d say, for the moment, yes.  I think she...

MATTHEWS:  No, no.  I‘m not asking that.

(CROSSTALK)

MATTHEWS:  I‘m not asking that.

SWEET:  Yes.

MATTHEWS:  Does she, does she not know that when she tells a joke that seems to insinuate some guy in her past, that people think of Bill?

SWEET:  Well, I think...

MATTHEWS:  And she doesn‘t know that.

SWEET:  ... at that moment, she did not think that.  But now she does.  And here‘s why I think—the other thing that‘s interesting to note here at the press clip, you played the clip from where she said it—you know, just trying to be funny.  Before that, two other times...

MATTHEWS:  Right.  Oh, I think she was trying to be funny.

SWEET:  ... she first said it was...

MATTHEWS:  I think we all agree on that.

SWEET:  No, no, but...

MATTHEWS:  We can stipulate that.

SWEET:  No, but the answers that she gave before, because there were a few questions until she got to that funny point—first she said, Well—when asked, What were you thinking, you, Hillary Rodham Clinton, she said, Well, people were of course thinking I was talking about Osama bin Laden, and then she said, Oh, of course, people were thinking about the problems of the last six years of the administration.  Finally she said, Oh, I‘m just trying to be funny.

That‘s where we have another little insight.  Why didn‘t she just say she was just trying to be funny?  That‘s—you know, why wasn‘t that just the first answer?  That also, I thought, was pretty interesting, too.

MATTHEWS:  Well, why—in other words, she‘s never said she was thinking about all the “vast right-wing” conspirators out to get her, people like Newt Gingrich and all the others who went after her, and Trent Lott.  She‘s never said that she was joking about them.  She‘s just said she wasn‘t—and she hasn‘t actually said yet, has she, that she wasn‘t joking about Bill, has she?  Has she said that?

SWEET:  No.  She said, Oh, come on, because somebody said, specifically—well, somebody in the audience—you know, when we—in the interview said, Is this the bad Bill that she was talking about?  And she then gave a big, chill look—and boy, that is icy!  When you see that coming, that‘s—oh!  And she says, Oh, come on.  No one, she said, was thinking that.  But people were, Chris.

MATTHEWS:  Yes.  Let me got to—let me go to John Harwood.  John, it seems to me that when I watched that thing, my reaction was the same as the audience, what she‘s kidding about, which is an odd thing to kid about, comparing your husband to Osama bin Laden—he‘s messing around with an intern, Osama bin Laden kills 3,000 Americans in the worst terrorist attack in history, and they‘re comparing each—I thought Hillary is so smart, why would she compare the two?  Was this just a flub on her part, trying to be a comedian, making a reference to her husband but then later trying to get out of it?

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT:  I don‘t think it was a flub, Chris.  I think she was trying to be funny.  She was funny.  We don‘t know what was exactly in her mind, but I certainly thought, as Lynn did, and as you did, that she was making a joke about her husband, not really comparing him to Osama bin Laden, but playing off the “bad men.”

MATTHEWS:  Right.  Sure.

HARWOOD:  And I think that‘s something that average people can relate to and was probably, in the long run, a fairly effective tactic on her part.

SWEET:  It was also interesting, Chris...

MATTHEWS:  You know, I thought...

SWEET:  ... she looked...

MATTHEWS:  ... it was disarming, and I thought...

SWEET:  ... she looked a little saucy.

MATTHEWS:  Lynn, I...

SWEET:  Saucy.

MATTHEWS:  Lynn, I thought it was—I‘m watching it on TV.  I wasn‘t in the room.  But I thought she was kidding with some women who‘ve been around, put up with men, maybe not in the same circumstance as her...

HARWOOD:  Exactly!

MATTHEWS:  ... but women do have that in common.

SWEET:  Yes.

MATTHEWS:  We got to live with men.  You know, I‘ve had guys around me who have hurt me, obviously not, as John points out, not to the degree that Osama bin Laden hurt America.

But let me going to another voice.  Let me go to David Yepsen.  David, what is the story in Iowa and how this thing‘s playing?  Just talk about the atmospherics of this kind of joke.  She‘s trying to lighten up.  She tells a funny joke.  Her staff gets to her later and says, You shouldn‘t have said that.  I‘m sure that‘s what happened.  She has to re-spin it two or three times, and still hasn‘t figured out where to stop the spin.

DAVID YEPSEN, “DES MOINES REGISTER”:  I don‘t think the—I think the joke was taken as a joke.  I think it was part of a theme that I noticed over the weekend, where she would talk about, as a woman, she‘s running.  She‘s not running as a woman, but one of the assets she brings to the campaign is that she has had experiences that other candidates have not had, that as a woman candidate, she has to be better than some of the other candidates.  And women—other women have had that experience in their lives and in any occupation.  And you can see the heads nod, the heads of women nod in agreement at that.

HARWOOD:  Oh, yes.

YEPSEN:  So...

MATTHEWS:  OK...

YEPSEN:  ... I think it was all part...

MATTHEWS:  OK...

YEPSEN:  ... of her—of her message.

MATTHEWS:  Well, making fun of her husband‘s philandering, was that part of her joke?

YEPSEN:  I think it was a joke, and I think it was received that way.

SWEET:  No, I don‘t think she knew what...

MATTHEWS:  I think so, too.  Let‘s go back to strategy.

(CROSSTALK)

MATTHEWS:  Let‘s assume Hillary knows what she‘s doing.  Let‘s go back to assume that Hillary knows what she‘s doing, she knows what she‘s saying.  Let‘s take her at her word.  Let‘s take the audience at its word.

HARWOOD:  Safe assumption, Chris.

MATTHEWS:  Is there a strategy, Lynn Sweet, for her to simply say, OK, let‘s do it, play it my way, that she knows what she‘s doing, OK, because she can play it the other way, that she doesn‘t know what she‘s doing.  And I don‘t want to do that because that‘s unfair.  Suppose she says, I‘m going to be in a crowded field with seven or eight men.  I‘m going into a Democratic caucus.  Half the people, at least, are women.  Why not play the gender card right up front and say, I‘m taking my 50 percent away from this table.  Let the other guys divvy up their 50 percent.  What‘s wrong with that as a strategy, Lynn Sweet?

SWEET:  Nothing.  In fact, it‘s not “why not,” she did.  It was a blatant and I thought kind of effective appeal to women, to make them have a little clap in their heart that one of their own is running.  You know, she made references to this.  The questions—and women—here‘s what (INAUDIBLE) relate.  One woman who asked a question even confided in Hillary, and you know, the other tons of people in the audience that she was going through menopause and asking her questions.

Now, I cannot imagine anyone saying that to the any of the other string of candidates and trying to make a point about whatever she was making.  And yes, these Democratic primaries going to be won by organizing not only individuals but constituencies.  And if it works toward Hillary Clinton‘s way, she could—if she could solidify a female base, that gives her a running start.  Everyone‘s looking for a running start.  What really is at here—and Clinton mentioned this in Iowa over the weekend, that what‘s really—really going to fight over the 20 percent undecideds.  But in order to get it just down to 20, you got to solidify what your base is.  That‘s a lot of what‘s going on.  And yes, she‘s making a very big appeal to women voters.

MATTHEWS:  And you got to bring them out.  And Ronald Reagan...

SWEET:  Absolutely.

MATTHEWS:  ... had a great phrase for this, John.  He said, It‘s called working the difference.  If you‘re good on TV, do a lot of TV.  If you know how to connect through the tube, do it.  Reagan always said, Play the difference.  Is that what Hillary‘s doing?  She‘s a woman.

HARWOOD:  Exactly.  Exactly.  And first of all, Chris, let me say my working assumption throughout this campaign is going to be that she knows what she‘s doing.  Hillary Clinton‘s usually the smartest person in whatever room she‘s in, and she‘s also very politically cautious and calculating.

What does she need to accomplish in the campaign?  She needs to humanize herself.  She needs to show that she‘s warm, she‘s not just a cold fish who is very...

MATTHEWS:  Right.

HARWOOD:  ... you know, paint by numbers, making political calculations.  So here you have a moment where she tells a joke off the cuff.  It‘s very funny.  People laugh for 30 seconds.  I don‘t see a negative in the whole thing.

SWEET:  Hey, here‘s another thing...

MATTHEWS:  You know what I think?  I think...

SWEET:  ... that she learned from it...

MATTHEWS:  ... that a lot of people voted for her as senator from New York when she ran because they felt that she was a victim or her husband‘s philandering.  And at the same time, he went in and campaigned for her.  People are able to handle contradictions.

Lynn, did you want to say something?  I‘m sorry.

SWEET:  Yes.  One of the other things, where she did talk about, you know, President Clinton, she said this race in Iowa means a lot to her because it‘s the very first thing she‘s done politically that‘s been on her own, because remember, Chris and John, and as David knows so well, Clinton never campaigned in Iowa in 1992 because he conceded that territory to Senator Harkin, who was then in the race.  And that she brought it up I thought was interesting because she wanted to say, I‘m going to do this on my own and, you know, kind of do it my way.

But you know, the—to watch the Hillary Clinton do the “I am woman, hear me roar,” as we saw demonstrated in the first roll-out this weekend in Iowa, I thought she was able just to strike the right pitch.  And she has, in a sense, months and months now to get it right.

Now, if you think it‘s a flub, if not, whatever—I—you know, I think Harwood and I kind of have the same take on it right now.  She‘s got time to do these self-corrections.  Think of these first encounters out as just trying out your line with a massive focus group, and you can adjust it...

(CROSSTALK)

SWEET:  She might be a little more aware that no matter what she‘s thinking, she now knows what‘s on people‘s minds because that was an electric moment to be in that room, where there is just one communal lightbulb that went off at the same time.

MATTHEWS:  And by the way, we‘re all hoping that Hillary will relax and be herself as she campaigns and not put on a face because then we don‘t really learn anything.

David, you had a chance to have a hamburger and a milkshake with this wonderful candidate.  Did she—did you get any girl talk out of her, any insight in the sense of what she‘s up to in Iowa?

YEPSEN:  No.  She had French fries and a malt, Chris, and she only nibbled at both.  No, I didn‘t get any girl talk out of her.  I‘m not a girl.  We talked politics.  We talked strategy.  We talked about two things, Iraq and how she deals with that, and about being a woman and how she deals with that and try to have a substantive political discussion.

What I saw, though, was as we were sitting there in this diner, was there was a parade of people who came by, mostly women, a lot of younger women, who said things like, It‘s about time, we‘re glad you‘re running.  I think this is a real factor, and I think the whole joke about Bill is part of this.  She is reaching out to a group of voters and saying, It‘s our turn.  It‘s about time.  And if she with bottle and can that, line these people up...

MATTHEWS:  I agree.

YEPSEN:  ... and get them to the precinct caucuses, she‘s going to add new people to the electorate and she could win Iowa.

HARWOOD:  Chris, when we get girl talk...

SWEET:  It also...

MATTHEWS:  I will never forget...

(CROSSTALK)

HARWOOD:  ... expect to see a big headline in “The Des Moines Register.”

SWEET:  Well, you know...

MATTHEWS:  OK.  All I can tell you is this, is I didn‘t know anything about this thing until I saw what happened to Princess Diana, and when she was killed in that car accident, I saw all those flowers and messages out of the British embassy in D.C.  And I realized there are so many single women out there who felt aggrieved or hurt by men over the years, abused, used, whatever, and they felt that in common, that men had been cruel to them, that men had been superior to them, and they felt that in common.  If Hillary can tap into that, God knows how far she can go.  And I don‘t think the men mind it yet, so it‘s fascinating politics.

Anyway, thank you, John Harwood of “The Journal” and CNBC.  Thank you, Lynn Sweet of “The Sun-Times.”  And thank you, David Yepsen of “The Des Moines Register,” the man at ground zero.

Up next, HARDBALL‘s David Shuster will have the latest news from the Scooter Libby trial.  Don‘t you love that name, Scooter Libby!  Former White House spokesman Ari Fleischer was on the stand today.  A brand name speaks!  And later, Senator Chuck Schumer, one of the hotshots, the ramrod of the Senate victory by the Democrats, is coming here.

You‘re watching HARDBALL from The Palms in Las Vegas on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Another week of testimony is under way in the trial of Scooter Libby.  The main witness today was former White House press secretary Ari Fleischer.  HARDBALL‘s David Shuster is standing by right now at the courthouse in Washington.  David, give me the scoop on the Scooter trial.

DAVID SHUSTER, HARDBALL CORRESPONDENT:  Yes, Chris, today the testimony was the most dramatic and compelling that the jury has heard in this entire case.  Ari Fleischer testified that he went to lunch with Scooter Libby and that during this lunch, Scooter Libby told him that Valerie Wilson was the wife of an administration critic and that she worked at the CIA.  This is very significant for the prosecution case because, again, it shows that Scooter Libby knew about Valerie Wilson before a conversation with a reporter, when Libby says he first learned about Valerie Wilson from that  reporter.

During this lunch, Ari Fleischer testified, it was July the 7th, the day after Joe Wilson had published his column.  And Fleischer testified that Scooter Libby had essentially invited him to lunch, the very first time that Fleischer had ever been invited to lunch by Scooter Libby.  Fleischer talked about the uproar that was ensuing that day because of the column the previous day, and he said that Libby told him, Look, Wilson was sent to Niger by his wife, she works at the CIA.  She works at the counterproliferation division.  This is hush-hush.  This is on the QT.

Fleischer said, Christ, that he took that to mean that this was newsy, that this might be information he could pass along.  Then Fleischer, Chris, described going on Air Force One on a trip to Africa and hearing Dan Bartlett, the communications director, also talking about Valerie Wilson.  Then at the end of this week—and again, this is a week when the Joe Wilson criticism is dominating the news, but it‘s before Bob Novak‘s column outing Valerie Wilson.  At the end of that week, Ari Fleischer is asked by two reporters in Africa about how this is playing out in the news, and Ari Fleischer says, If you want to know who sent Ambassador Wilson, it was his wife, who worked at the CIA.

Then the next most compelling testimony, Chris, came when Ari Fleischer learned a couple weeks later that a criminal investigation was beginning.  He testified that he was at home with his parents when he read that the CIA was referring this matter, based on the Novak column, which, again, happened a week after Ari Fleischer‘s lunch—based on the Novak column, the CIA had asked the Justice Department to launch a criminal investigation.

Ari Fleischer was asked, How did you feel?  And he said, I was horrified.  I thought to myself, Oh, my God, did I play a role in somehow outing a CIA operative?

Again, Chris, the headline today goes back to what prosecutors said during their opening arguments.  They argued that Scooter Libby could not have possibly learned something from a reporter on Thursday, when Scooter Libby had already been disseminating that information to other government officials the previous Monday—Chris.

MATTHEWS:  David, I don‘t want to get into prejudging this case, but I do have to ask a question.  Apart from the law questions here, the legal jeopardy of Scooter Libby and anyone else, it looked to me like there was a political coverup here that may or may not be illegal.  Probably is legal.  The vice president‘s office was trying to cover up the fact that it was the vice president‘s inquiry with the CIA that led to that trip to Africa.  And it seems like they‘re doing everything to put the responsibility on Valerie Plame, when, in fact, the initial request for information about uranium from Niger came from the vice president.

SHUSTER:  Yes, Chris, that‘s absolutely right.  And what‘s so telling about that is there‘s been a lot of testimony about the talking points, the talking points in response to Joe Wilson, the talking points in response to HARDBALL.  And every single one of these talking points, the White House at the time was not—they were trying to get away from the idea, get away from the fact that, in fact, it was the vice president who raised an inquiry with the CIA and said, I want you to follow up on this raw intelligence that I‘m hearing that perhaps Iraq had been seeking uranium from Niger.  And then it was based on that, of course, that the CIA decided to send Ambassador Wilson.  And then, of course, Wilson came back with his conclusions.

But the way the White House was handling this at the time, whether it was Secretary Rice briefing reporters on a plane, whether it was talking points that were given to a variety of White House press secretaries, they were trying to get the vice president‘s office as far away from the Wilson trip as possible.  So they were never even acknowledging at the time that, in fact, it was the vice president‘s inquiry to the CIA that prompted all of this.

MATTHEWS:  Well, I just wish in one of those talking points, the vice president had pointed out the role he may have played—maybe he didn‘t play any role in this—in sending that man to—Joe Wilson to Africa to check out his inquiry as to whether there was a deal to buy uranium by Saddam Hussein.

Anyway, thank you.  Great reporting, David Shuster at the federal courthouse.

SHUSTER:  Thanks, Chris.

MATTHEWS:  Up next, the man who led Democrats to power in the U.S.  Senate, New York senator Chuck Schumer.  He‘s not afraid of anybody.  By the way, he‘s already thinking about 2008.  You‘re watching HARDBALL from The Palms in Las Vegas on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  I‘m out in Las Vegas for the Miss America contest.  I‘m one of the judges tonight.

Democrats now control 51 seats in the U.S. Senate.  Will they grab more seats in 2008?  Senator Chuck Schumer of New York is the chairman of the Democratic Senatorial Campaign Committee.  He‘s the ramrod that won the Democrats the majority.  He‘s also a new book author.  The name of the book is “Positively American.”

Well, Senator Schumer, talk to me about what I know you focus on a lot.  Who is that middle, middle, middle voter...

SEN. CHUCK SCHUMER (D), NEW YORK:  Right.

MATTHEWS:  ... middle voter family...

SCHUMER:  Well, that‘s...

MATTHEWS:  that swings every election?

SCHUMER:  Well, that‘s the point about the book, Chris.  The subtitle‘s “Winning Back the Middle Class Majority One Family at a Time.”  And the reason is because those middle class voters in 2004 went overwhelmingly for George Bush.  In 2006, they voted for us, but mainly because they didn‘t like Bush anymore.

And 2008‘s going to be a real seminal election, and whichever party can create a platform that captures the middle class imagination I think will be the party that‘ll be dominant for a generation.  Why do I say that?  Technology‘s changed the world.  We have terrorism.  We have one global labor market.  Our kids compete with kids in Chinese and Indian schools.  We even live longer, and decisions about marriage and child rearing and retirement are changing.

All of that means that the average middle class person—we call them Joe and Eileen Bailey, a fictional couple who travels with me throughout the book—they‘re real in my head.  I‘ve been talking to them for 15 years.  My press secretary once said I had imaginary friends.  But we say that the party that can reach Joe and Eileen Bailey is going to win this election.  This may be an election where the personalities of the candidates mean less and their platforms and the way they talk to the middle class means more because Joe and Eileen were Reagan supporters.  They‘re not anymore.  They don‘t support the Reagan view, “Get government of off my back.”  They, rather, need some help from government in limited but very important ways.

MATTHEWS:  Well, Senator, you sound like—the person in your book, the Baileys, sound like the crowd I came from, middle, middle, middle.

SCHUMER:  You got it.

MATTHEWS:  I don‘t mean poor.  I don‘t mean lower-middle.  I mean middle, middle, middle Catholics in many cases.  They‘re not really tied to any political party.  They grew up as Democrats.  They voted for Reagan.

SCHUMER:  You get it.

MATTHEWS:  Why would they vote for the Democrats when it comes to matters of national security?  What would make them turn against the Republicans on that big issue?

SCHUMER:  Well, you know, Iraq has been such a fiasco, they‘ve given we Democrats an opening.  But we have to stand for a strong foreign policy.  We have to know that terrorism are (ph) danger.  But what we propose in the book—we have something called the 50 percent solution.  We propose 11 goals that we‘re going to promise the middle class we achieve in the next 10 years.  And each one is a number -- 50 percent more of this, 50 percent less of that, 50 percent higher math and reading scores by a voluntary almost nationalization of the schools, 50 percent lower property tax.

On security, we promise to be 50 percent more effective against terrorism by focusing on the terrorists, not on having a war with nations, not on Islamo-fascism, but building up our strike forces, building up our human intelligence, and creating a world system where if a country is harboring terrorists, you go in there, wipe them out and leave.  That‘s what we should have been doing in Iraq.  That‘s what we...

MATTHEWS:  Will the Democrats promise—will you promise to catch Osama bin Laden?

SCHUMER:  Well...

MATTHEWS:  I mean, the guy‘s on dialysis.  He‘s riding on a donkey. 

He‘s 6-foot-4.  He stands out.  He somehow got away from our forces...

SCHUMER:  Hey...

MATTHEWS:  ... at Bora Bora (ph) or wherever it was.

SCHUMER:  If we use—if we use...

MATTHEWS:  Why can‘t we catch him?

SCHUMER:  If we use the plan in this book, that‘s where our military is going to focus, on going after people like bin Laden rather than nation building, democracy, Islamo-fascism.  We didn‘t bargain to police civil wars.  We didn‘t bargain to change regimes because we don‘t like them.  We bargained to protect America.  And if we‘re efficient in our military, we can be both tougher and save some dough for the domestic needs that we need.

MATTHEWS:  Who do we have in power right now?  I‘ve spent, like you do

I know you‘re the professional politician, but as a journalist, I‘ve been trying to figure it out.  Who is the brain of this administration?  George Bush, the former president‘s son, is president.  Some people say he was trying to get even for Saddam Hussein trying to assassinate his father.

SCHUMER:  Oh, I think, Chris...

MATTHEWS:  Cheney‘s an oil patcher, an oil guy, loves the Saudi money...

SCHUMER:  Dick Cheney...

MATTHEWS:  (INAUDIBLE) the Saudi money, the oil, Dick Cheney.  And the ideologues, the neoconservatives, who basically are very forward-leaning in their aggressiveness, their hawkishness.  What is it that—what‘s the brain wave of this administration?  Is it George Bush?

SCHUMER:  No.

MATTHEWS:  Is it Cheney?

SCHUMER:  Cheney.

MATTHEWS:  Is it the ideologues?  Who is it?

SCHUMER:  It‘s Cheney, who is an ideologue.

MATTHEWS:  Cheney‘s the boss.

SCHUMER:  Cheney‘s the keeper of the flame.  Bush listens to him.  And that‘s why they‘ve lost touch.  They‘ve lost touch.  They‘ve even given us an opening on security.  But on domestic issues, where it‘s harder to pay for college, harder to pay for health care, where pornography is on the Net and people are worried about their children looking at it, where immigration is out of control, they‘ve abandoned the field.

And if we can come up with rational, smart plans where government actually works, we can win over the middle class.  The middle class is up for grabs and open to us for the first time.  I don‘t want to get rid of the old Democratic constituents.  They‘re vital to us.  I want to add the middle class to those constituencies, and that‘s what this book proposes we do.

Right now, Chris, no one is talking about a Democratic vision, a Democratic platform.  Certain people are looking at this piece or that piece.  But this book attempts to do it.

MATTHEWS:  OK, Senator...

SCHUMER:  Now—now, it may not be...

MATTHEWS:  ... can we get a better look at that book?

SCHUMER:  ... all the answers...

MATTHEWS:  I want a better look at that book.  I want a better look at that book of yours.  Show it up real high.

SCHUMER:  I don‘t know if you have one, Chris...

MATTHEWS:  I‘m serious.  Because you‘re...

SCHUMER:  ... but I brought one.

MATTHEWS:  There it is!

(LAUGHTER)

MATTHEWS:  Let me ask you—you got some knee-capping in there.  You said that Harry Reid, your opposite number—the opposite—the leaders of the—Harry Reid is on your side, I should say.  Harry Reid you say is capable of knee-capping the other side.  Tell me about how vicious he can be.

SCHUMER:  Well, Harry Reid, I say in here, is mild-mannered, soft-spoken, devout.  But if you cross him, if you lie to him, he doesn‘t forget it.  And he makes sure you pay the price for it.  He is one strong leader.  And we couldn‘t have taken back the Senate without Harry Reid‘s leadership.  I mean, I helped plan the strategy and raise the money, but Harry was there like a rock.  And people are going to see what a strong leader he is.  He brings unity to the party. 

He‘s the one person I asked to read this book before I sent it to the publisher.  And he didn‘t agree with all of it.  No one will.  But he liked it. 

MATTHEWS:  OK.  We‘re out here in Harry Reid country.  We‘re out here in Nevada.

Senator Chuck Schumer, author of “Positively American: A Prescription for the Democrats to Rule the World”—I mean, “Get Back Power in the United States.”

SCHUMER:  And keep it.

MATTHEWS:  When we return, Rudy Giuliani hits New Hampshire.  We‘re going to talk to former Massachusetts Governor Paul Cellucci, who‘s a top adviser to the Rudy campaign.

And later, the Palms Casino‘s George Maloof of Hollywood.  A Hollywood super agent, by the way, Sam Haskell‘s going to here to talk about what‘s going on out here in terms of 9/11 stuff.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(MARKET REPORT)

MATTHEWS:  Welcome back to HARDBALL from the Palms in Las Vegas. 

Rudy Giuliani spent this past weekend campaigning up in New Hampshire.  Can he convince primary voters that he‘s the one, that he shares their values? 

Here to talk about it is former Massachusetts Governor Paul Cellucci, who has just signed on as a senior adviser to the Giuliani campaign.  And he‘s chosen Giuliani over Mitt Romney, even though Romney hails from the home state of Massachusetts. 

Let me ask you this, Governor Cellucci, why have you chosen Rudy as your guy? 

FMR. GOV. PAUL CELLUCCI, GIULIANI EXPLORATORY CMTE.:  Well, this is very much pro-Rudy.  It‘s not anti-Mitt.  I go back a long way with Rudy Giuliani.  He helped me out in the ‘98 campaign here for governor of Massachusetts. 

And I‘m just impressed with his extraordinary leadership capabilities.  I mean, we all used to travel to New York.  We were worried about the crime.  We saw what a dirty city it was.  He went in there as mayor.  He brought the crime rate down.  He cleaned up the city.  He cut taxes.  He turned a deficit into a surplus.  And then we all saw his leadership when our country was attacked on September 11.  His leadership was extraordinary. 

MATTHEWS:  That‘s all true.  But how do you deal—how do you deal with the fact that his ex-wife was holding dueling press conferences with him and he‘s announcing their separation on one TV show and she‘s out there somewhere else saying, “I‘m going to sue him for divorce,” and he‘s three times married?  He‘s pro-choice.  He‘s pro-gay rights, basically.  And he‘s running in states like, you know, Mississippi and Alabama.  How can a guy go down to the Bible Belt with his rap sheet?  How can he do it?

CELLUCCI:  Well, I mean, clearly his personal history is something that‘s out there.  People know about it.  Also, his position on some of the social issues is also out there.  But he‘s not just going to be running in Mississippi.  He‘ll be running in California, in Florida.  And if he can win some of these big state primaries—and a lot of them are going to be advanced in the next election cycle—he‘s going to accumulate delegates. 

And he‘s got a record of turning rhetoric into results.  It‘s not just some philosophical absolute.  He‘s actually done the job in New York City.  He‘s gotten those results.  And who would not want a safer country?  Who would not want a deficit turned into a surplus?  Who would not want a president who‘s going to cut taxes and make it more affordable for the families of this country? 

MATTHEWS:  You know what I like about Rudy Giuliani?  He‘s tough.  He‘s a bit of an SOB.  I think we need one as president.  He doesn‘t own a ranch.  That‘s what I like about him.  He‘s not going to be on the ranch when something big hits.  When something bad hits, he‘ll be on the street corner talking to us, instead of hiding on the ranch.  Don‘t you agree, Governor, he won‘t be on his ranch?

CELLUCCI:  I absolutely agree.  That‘s what we saw on September 11.  He reassured the people of his city.  He led them through such a—some very difficult and challenging days.  It‘s extraordinary leadership.  And these times require that kind of leadership. 

MATTHEWS:  What would he have done if Hurricane Katrina had hit Louisiana, New Orleans especially, on his watch?  What would he have done afterwards? 

CELLUCCI:  Well, I think he would have been there within hours.  And I think he would have made sure that all of the federal people who had responsibility to deal with that were there as well.  I think we can pretty much be assured of that. 

MATTHEWS:  You mean he wouldn‘t have been watching on a DVD a week later, catching up with the news he had missed all week while he was on his ranch? 

CELLUCCI:  I think Rudy would have been right there.  I‘m not here to criticize President Bush.  But, clearly, we saw what Rudy...

MATTHEWS:  That‘s what I want you here for, Governor, because every guy who runs for president is running against the incumbent.  You‘re offering something better than we have now, right?  You‘re thinking Rudy will be a better president than George Bush, right?  Isn‘t that your goal, that‘s why you‘re backing him? 

CELLUCCI:  I‘m backing Rudy because I think he‘ll be the president we need when we choose a new president in two years.  We need his kind of leadership.  We need his hands-on approach.  We need someone who doesn‘t just talk and talk but who gets the results.  That‘s been his record in New York.  That‘s what he‘ll do as the president of the United States. 

MATTHEWS:  How can he go into a debate with Hillary Clinton and land a punch against a woman?  Isn‘t that going to be tricky for somebody like Rudy, who knows how to land a punch, to go up a woman—up against a woman? 

CELLUCCI:  I ran against Marjorie Clapprood for lieutenant governor back in 1990.  I had several debates with her.  I didn‘t approach her any differently.  I don‘t think people expect that you approach a woman candidate any differently than a man.  I think you stick to your guns, you make your points, and you challenge the person that you are in the debate with.  I think Rudy will be an effective debater against Hillary Clinton. 

MATTHEWS:  You know where I think you guys could hit and strike hard?  You could carry Pennsylvania against Hillary.  You know, a lot of Catholics, a lot of conservative folks are people that are still going to like Rudy in that part of the country.  The gun owners are going to like him even though he is pro-gun control.  Ohio, you will do great.  In Michigan, you will do great.  I don‘t know how you‘re going to do holding the Bible Belt.  That is going to be tricky.  Then again, where else are they going to go, right? 

CELLUCCI:  Clearly, Rudy is going to do well in the Midwest.  You‘re right, where else are they going to go in the South?  And when you look at Florida, Texas, California, you‘ve still got Republican governors in those states.  They‘ve got an awful lot of electoral votes. 

You know, the challenge for Rudy is to win those primaries so he builds up the delegates so that he can win that nomination.  I think he‘s going to be a very strong general election candidate.  There is no doubt about that.

MATTHEWS:  You know, I know who your running mate will be able to get that far.  Haley Barbour, perfect balance.  You need guys pro-life, deep South, good accent, good old boy.  All the things Rudy isn‘t, but still a great executive like Rudy.  What a great ticket that would be.  Just think of it: Giuliani/Barbour. 

CELLUCCI:  That‘s a great idea, Chris.  I am going to pass that one on. 

MATTHEWS:  I love being in the corner—as a corner man with you, Governor.  Thank you.  It‘s great to have you on.  Please come back.  We want you back if we can‘t get Rudy.  And even if we can get Rudy, we would like to get you back. 

Anyway, up next, Palms Casino Resort owner George Maloof on the recovery of Las Vegas.  Boy, this town got hit during 9/11.  It got hit in the pocketbook. 

And later, Hollywood agent Sam Haskell is going to talk about the 2008 race out on the left coast, although I don‘t think he‘s on the left.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

After the 9/11 attacks, Las Vegas was a ghost town.  Today it is a boom town with 40 million people coming out here to play the casinos just about every year. 

We are coming to you, by the way, from the Palms casino.  I‘m on the 29th floor, overlooking this incredible city. 

I‘m here to judge the Miss America pageant, which I have always wanted to do.  I have never seen such talent and great-looking women. 

Anyway, George Maloof is owner of the Palms Casino Resort.  We‘re on the 29th floor, and right behind me is—we‘re in a room that goes for $25,000 a night. 

GEORGE MALOOF, OWNER, PALMS CASINO RESORT:  Right. 

MATTHEWS:  What sort of person will pay $25,000 to sit in that Jacuzzi out here on the porch?  I shouldn‘t call it a porch on the 29th floor.  It‘s something else.

MALOOF:  Yes, we‘re on the sky villa at the Palms. 

MATTHEWS:  Who are these folks who‘ve got this kind of loot?

MALOOF:  High rollers...

MATTHEWS:  Are they Arabs?  Who is it?   

MALOOF:  Some.  Some.  They‘re high rollers, and people that just want to indulge in Las Vegas. 

MATTHEWS:  What is it about a guy who makes—obviously makes a lot of money that makes—even their life isn‘t exciting enough that this is more exciting?  I mean, even business deals don‘t work for them.  They have got to come here and test their luck? 

MALOOF:  I think a lot of it is ego.  Coming to Las Vegas is part of that whole fantasy, a release.  I have been in Las Vegas 22 years, and there is nothing like it.  It‘s an interesting place. 

MATTHEWS:  It is.  My driver said embrace the superficiality.  When he let me off at “The Today Show,” embrace the superficiality.  What can you say about that? 

MALOOF:  Well, we‘re the only place that has these incredible sky villas with these pools that hang off the edge of the tower. 

MATTHEWS:  How about the architecture?  I was at a place called the Venetian.  I think I‘m in the galleria in Milan.  I‘m also at the Uffizi gallery in Florence, and then I go to New York, New York, I think I‘m in New York.  And I was at the canals.  You have got everything here, right? 

MALOOF:  Well, there has always been great imagination in Las Vegas and a lot of money.  When you put those two things together, you‘re going to create something very special, so—and it‘s a very competitive environment, too. 

MATTHEWS:  Are you are worried about places like Philadelphia, they‘re going to have two casinos along the Delaware? 

MALOOF:  No. 

MATTHEWS:  Why not?  Why will Vegas always win the fight? 

MALOOF:  Because there is so much creativity here and there‘s great leadership.  And there is a lot to do.  It‘s hard to compete with Las Vegas. 

MATTHEWS:  I went to the Jay Leno show the other night, it was around 11:00 at night.  It was so late at night.  The room was packed.  He was funnier than ever.  He was so much—not that he‘s bluer, he‘s not blue, it‘s that he‘s so funny in front of that crowd.  People come out here for what, besides the gambling? 

MALOOF:  They come out here for release, to have fun.  It‘s always been that way.  I think people come out here now to live.  It‘s a great place to live.  And that‘s kind of been a big change over the last 10 years. 

MATTHEWS:  OK, tell me about 9/11.  It scared people away.  They were afraid to get on airplanes, or what? 

MALOOF:  It was scary.  It was actually 60 days before the Palms opened.  We opened November 15th, 2001.  So it was scary for us.  We had this huge investment.  9/11 comes.  And we ended up laying off about 15,000 employees. 

MATTHEWS:  Why didn‘t people—most of your traffic is by air, right? 

MALOOF:  Air, but a lot drive. 

MATTHEWS:  Well, why did the people not come here?  What were they afraid of?

MALOOF:  I think they were just afraid.  It was a time when everybody was scared, the whole country was. 

MATTHEWS:  What brought them back? 

MALOOF:  I think just the fact that they could have a good time.  It was a shorter distance to travel.  And...

MATTHEWS:  You—let me be really sarcastic, since you‘re one of the richest people I have ever met.  Let me try this on you.  Could it be they‘d rather go to the real Paris, than go to Paris here?  Because you don‘t have to cross the Atlantic. 

MALOOF:  I think so.  That‘s part of it.  And just the experience. 

Shopping, dining.  We have it all here in Las Vegas.  It‘s great.

MATTHEWS:  Is this a Western crowd around here?  I see a lot of cowboy-looking guys around here at the tables.  I got up to do “The Today Show” at 4:00 local time, I looked at the guys at one of the tables—they look sort of like the guys in the porno films.  These are tough-looking guys.  These are tough-looking guys.  Oh, come on.  The crowd around here at 5:00 in the morning is rough.  This is rough trade, OK?  You‘re not looking for a date at 5:00 in the morning. 

MALOOF:  I don‘t know about that. 

MATTHEWS:  Well, you‘re not looking for a wife, I‘ll tell you that.  What do you think of that crowd?  When you walk in that casino and it‘s 5:00 in the morning—and by the way, you have no clocks, no windows and no scales in the rooms because you don‘t want anybody to know they‘re gaining weight out here, right?  Isn‘t that right?

MALOOF:  Sometimes, right.  That‘s true, yes. 

MATTHEWS:  It‘s like Connie Mack in the old days in Philadelphia had no water fountains in the entire baseball stadium because he wanted to sell cokes and beer.  So you guys have no scales so you don‘t know if you‘re gaining weight, you have no clocks to know what time it is...

MALOOF:  Right.

MATTHEWS:  ... and no entrances or exits which are obvious in the casino.  Once you go into one of the—yours is different.  Your guys can see the door.  Most casinos out here I‘ve noticed you have to ask three or four people to find out where they think the door is. 

MALOOF:  Sometimes. 

MATTHEWS:  And you can‘t get to your room unless you go past at least 50 slots. 

MALOOF:  Yes, that has always been the case. 

MATTHEWS:  Why is that? 

MALOOF:  Just...

MATTHEWS:  You‘re working on the addicts?

MALOOF:  No,.  Some of that has changed in the design of some casinos, like at the Palms. 

MATTHEWS:  Yours is pretty clear. 

MALOOF:  Yes, you can go in and out...

MATTHEWS:  Most of these casinos are like mazes.  You get lost in, and all you can see are slot machines and profoundly-looking people.  I wanted to say profoundly-looking something.  But they are still playing. 

MALOOF:  You‘ve got to love Las Vegas.

MATTHEWS:  I like this place. 

MALOOF:  Good luck to you.

MATTHEWS:  Thank you very much. 

MALOOF:  Thank you.

MATTHEWS:  Embrace the superficiality.  George Maloof, thank you. 

Great guy.

Up next, Hollywood agent and Miss America board chairman, Sam Haskell.  What a character this guy is.  He made the speech in the world the other night.  Let‘s see if he can do it here again.  Let‘s see if he can get up and do something great.  This guy is an inspirational person about our country.  You‘re watching HARDBALL from the Palms Casino Resort in Las Vegas on the 29th floor, where all the action is.  $25,000 to sit here every night.  Just one night.  Only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time now to talk Hollywood politics, left coast politics, the Miss America pageant and the Western fight for 2008. 

Let‘s bring in superstar Hollywood agent Sam Haskell.  He‘s represented Bill Cosby, George Clooney, Whoopi Goldberg and all kinds of other big shots.  He‘s also the board chairman of the Miss America contest, which I‘m here to serve as a judge.

Let me ask you about the left coast. 

SAM HASKELL, AGENT:  Yes, sir.

MATTHEWS:  It‘s now going to have its primary moved up to February 5th.  It seems to me brilliantly timed and orchestrated by somebody like Terry McAuliffe behind the scenes to give this thing to Hillary. 

HASKELL:  Well, I think that it‘s going to give her a much greater opportunity, because it is going to knock out a lot of the smaller guys, if big, big, you know, primaries like that get moved earlier. 

But it is going to be interesting to see what happens on the right side of the picture, as well.  But I think it is going to come down to four people, two on each side, and it probably would be better for the little guy if that didn‘t happen, but it looks like it‘s heading in that direction. 

MATTHEWS:  Can your party nominate somebody who doesn‘t pass the usual muster?  In other words, at a time of terrorism and security concerns, can Rudy Giuliani, who‘s solid on that front, win the nomination? 

HASKELL:  Rudy Giuliani has proven himself to be a great leader, and I think that what he did after September 11th proved his leadership abilities.  I think that he‘s going to need a really great running mate, and I actually liked what you said earlier about my friend, Haley Barbour, jumping in on that ticket. 

MATTHEWS:  Well, I think he‘s got two things going for him.  Let me run them by you.  One, he‘s done something.  It‘s hard to argue that Hillary has done something.  It‘s hard to find that thing she‘s done, except put up with Bill, which she so wonderfully mentioned this weekend as her great selling point.

And the other thing he‘s done is he can give a speech.  You know, for a while there I thought in America white guys not only couldn‘t jump, they couldn‘t speak, that the best speakers in the country were all African-Americans.  And now I think this guy can talk. 

HASKELL:  He can talk. 

MATTHEWS:  This president can‘t talk.

HASKELL:  Well, he definitely—Giuliani can definitely speak.  And I think that John F. Kennedy proved that an election can be won with communicative skills.  And Giuliani has those same skills, and I think he‘ll put them to good use.

MATTHEWS:  He proved that at your convention.  Were you in the hall? 

We were out there covering...

HASKELL:  I was not. 

MATTHEWS:  ... as Zell Miller remembers well.  We were up there...

HASKELL:  I was watching in my living room. 

MATTHEWS:  Well, he gave a stunning speech. 

HASKELL:  Yes, he did. 

MATTHEWS:  And he has the ability, Rudy—and I will—I will build him up, because I think the media underestimates his clout.  He does this thing in public where he can actually stop talking, pause, and have the audience dying to hear your next word. 

HASKELL:  Right.  You can hear a pin drop.  And that‘s the key to communication, when someone has you so vested in what they‘re about to say, they will go anywhere with you. 

MATTHEWS:  So do you think the fact that he seems to have some hesitation in his engine in getting into this race isn‘t going to hurt two or three weeks from now? 

HASKELL:  No, I don‘t.  I think that when he makes that statement, there are a lot of people out there waiting for him to announce. 

MATTHEWS:  We‘ve got the “Newsweek” poll just come in over the weekend.  Astounding news.  The general election looks very close.  If it‘s Hillary against McCain, Hillary against Giuliani, too close to call.  What‘s fascinating is the degree to which Rudy Giuliani wipes out his opponents.  He beats McCain and he kills Mitt Romney.  Yet Romney is raising all this money.  Is that stupid money?  Is that know something we don‘t know money, or what?  Why are people giving money to a guy who can‘t seem to compare mano a mano with Rudy?

HASKELL:  I think the people in this country usually like to have a choice.  And while Romney is raising money, I don‘t think he will be a part of that choice when it comes down to the final two.  I think it‘s going to be a race between McCain and Giuliani.

MATTHEWS:  I was talking to a big Republican out in California, former chairman of the party, really knows his stuff.  Since we weren‘t on the record, I won‘t quote him, but I will just mention how—a big shot he is, he thinks that McCain can beat Hillary in California. 

HASKELL:  Hillary has a huge contingent in Hollywood and has raised a lot of money and has a huge war chest.  And the amount...

MATTHEWS:  In the general election...

HASKELL:  In the general election...

MATTHEWS:  With everybody voting, not just warriors and activists and lefties, but everybody in the country, can McCain, at his age, with his politics, beat that woman, who is a liberal—may be a liberal hero by the election day? 

HASKELL:  If McCain is the Republican nominee, I hope so. 

MATTHEWS:  But you don‘t think any other Republican—can Giuliani beat her in California?  Probably not?

HASKELL:  I don‘t know if he‘s going to be as strong in California. 

Now, that‘s not going to be...

MATTHEWS:  So McCain is your best bet out there?

HASKELL:  ... indicative of the whole race, but...

MATTHEWS:  But McCain is your best bet out West.

HASKELL:  ... for California, McCain is the best bet because of his centrist views and the fact that there are a lot of liberals who are going to vote for McCain because they are not going to vote for Hillary. 

MATTHEWS:  Why not?  Tell me the worst.

HASKELL:  The worst is that I think that there‘s a lot of baggage there, and I think that people are looking for a reason to find someone else.  I think that John McCain‘s centrist views are going to give him an advantage in a race that...

MATTHEWS:  You know, most people don‘t think he‘s a centrist on the war in Iraq now.  They think he‘s on this president‘s side.

HASKELL:  Well, I think that he possibly has changed that position a little bit.  He needs to be truer to his original...

MATTHEWS:  OK.  Tonight, I‘m going to be judging the Miss America contest.  I‘ve been asked to talk especially about the—what‘s called the swimsuit—I always call it the bathing suit part of...

HASKELL:  Well, I think your audience needs to know...

MATTHEWS:  Oh, you tell me, why you think the bathing suit thing is still contemporary today in a modern feminist society? 

HASKELL:  I think that we need to see that these young ladies are in good shape, and I think that the viewing audience wants to see that part of the competition. 

MATTHEWS:  Can‘t you (inaudible) bunch of guys like us...

(CROSSTALK)

HASKELL:  It‘s very entertaining.  I can‘t say that I would ever do it, but it‘s very entertaining.

MATTHEWS:  It‘s something (inaudible).  Thanks, Sam.  Thanks, Sam Haskell, who‘s running this thing tonight, for making us part of the pageant this year and making me a judge.  See you tonight. 

And I want to thank our hosts here, well, the Palms.  The Palms Casino Resorts are home.  Anyway, thank you very much.  Play HARDBALL with us Tuesday.  See you then.

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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