updated 2/7/2007 10:48:04 AM ET 2007-02-07T15:48:04

Guests: Ken Salazar, Kit Bond, Rajiv Chandrasekaran, Howard Fineman, Bob Shrum, Kate O‘Beirne, Sam Waterston

CHRIS MATTHEWS, MSNBC HOST:  Tonight, big questions.  Why can‘t the Senate vote on the No. 1 issue in the country?  Everyone else has.  And what happened to the $8.8 billion in U.S. money that‘s unaccounted for in Iraq?  And why was Scooter Libby so obsessed with HARDBALL?  Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews, welcome to HARDBALL.  The long awaited showdown in the Senate over the war in Iraq was shut down yesterday when almost every Republican voted to stop the Senate from considering a bipartisan resolution opposing the president‘s plan to escalate the war.  Is this political gamesmanship for 2008? 

Public pressure on Congress to take action on the war couldn‘t be higher.  But where was the courage of senators‘ convictions?  In a moment, we will talk to senators from both sides of the aisle and see what‘s going on up there.

Plus, the jury in the Scooter Libby trial is listening to tapes of Scooter‘s grand jury testimony today.  HARDBALL‘s David Shuster will have a full report from the courthouse.  And Rudy Giuliani said last night he‘s in it to win.  Our HARDBALLers will be here to talk about picking the next president. 

But first, Republican Senator Kit Bond and Democratic Senator Ken Salazar.  Thank you gentlemen.  I‘ve got here in front of me the two headlines from the major East Coast papers, the “New York Times” right here, “In Senate, GOP Blocks A Debate Over Iraq Policy.”  In the “Washington Post,” “GOP Stalls Debate on Troop Increase.”

Is this a fair account of what happened yesterday?  Senator Bond from Missouri?

SEN. KIT BOND ®, MISSOURI:  Of course not.  The editorials are influencing their news leads.  We have tried to debate the issue, and we believe that, to be fair, as the Senate always does, that we ought not to be shut out from offering our resolutions, either the Lieberman-McCain or the Gregg amendment.  But right now, they intend to shut us out. 

We want to debate it.  Right now, the floor, when I left, was being tied up by senators Reid and Durbin talking to each other.  I have a lot I want to say about that.  I want to debate it.  Let them have a vote on their amendment.  We want a vote on ours. 

MATTHEWS:  Is that the way you see it, Senator Salazar? 

SEN. KEN SALAZAR (D), COLORADO:  Not at all, Chris.  The fact of the matter is that we should have a vote on whether or not there is a support for the president‘s plan to escalate the war by sending in 21,500 additional troops. 

Senator Reid has been imminently fair with the Republican Party by allowing two Republican resolutions to go forward, the McCain resolution as well as the Warner resolution. 

And so at the end of the day, this is simply whether or not the Republican majority wants to block a vote on the most basic question facing America, and that is whether or not we should escalate the military effort in Iraq by 21,500 troops, in reality almost 48,000 troops, over the next year as the president is doing right now.

MATTHEWS:  Why don‘t you let them bring up the Gregg resolution, that alternative which says you can basically—you‘re not going to cut the money going to the troops over there.  What‘s wrong with bringing up that resolution?

SALAZAR:  There was a proposal to actually have them bring up that resolution.  The fact of the matter is that it‘s already included within the body of the Warner resolution.  I don‘t see what could be fairer, Chris, than what has been proposed here to essentially allow two Republican resolutions to come forward, to be debated on the floor.

One is the Warner resolution, which has significant bipartisan support that I support.  The other one is the McCain resolution, which also should be brought forth and voted upon. 

I think that‘s a fair process.  And I think we ought to move forward and have the debate on Iraq and whether or not this plan that the president has proposed is a way that we ought to proceed.  There are many of us who believe that the president‘s actions here have in fact been a failure in Iraq and that we are just seeing more of the same with the planned surge that the president has on the table.

MATTHEWS:  Senator Bond?

BOND:  I think it‘s important when we‘re sending our troops into war, that we have an opportunity to get people on the record.  Do we support the troops?  Now some believe that we ought to cut and run.  And that‘s a legitimate point.  If they want to cut it off, but they need to defend that. 

Are you willing to say that we support the troops, we support what the president is doing as recommended by the Iraqi survey group.  We support what seems to be the best chance, according to the public testimony of the leadership of the intelligence community, for getting a resolution to stabilize Iraq.

MATTHEWS:  Do you think it‘s possible to be a person in the United States who agrees that our troops, who have all been volunteers, they‘re risking their lives every day over there, should be supported but they don‘t agree it‘s time to escalate the war?  Is it possible to hold that view?  You say it‘s not.

BOND:  Well, it is possible that you can support the troops, but this says we don‘t support the mission. 

Now, the people who are arguing for these resolutions say we need a new way.  Well, this is a new way.  It is bringing in the Iraqi government,  Iraqi Shia, Sunni and Kurds are taking over.  Everybody said support the Iraqi Study Group.  This is what they recommended, and what I believe is that we need to show by voting that we do support the troops.

Even if you vote to say we don‘t like the surge, at least give people an opportunity to go on the record and say should we cut off funding completely?  Should we pull our troops out or do we support the troops?  I want to see us have an opportunity to get on the record that we support the troops.

MATTHEWS:  Isn‘t it true, Senator Salazar, that the Democratic leaders do not want to face the choice of a resolution, the Gregg resolution, which would say basically, would force the Democrat to choose where they want to cut off the money or not, when some do and some don‘t.  And that would cut the Democrats in half the same way your preferred resolution will cut the Republicans in half?

SALAZAR:  Not at all, Chris.  I think it‘s a red herring question.  The reality of it is that I think 100 senators support our troops and they will make that statement and there‘s nothing that we have said that in any way, shape or form should impugn at all the patriotism and the loyalty that people here in the U.S. Senate feels to our American troops. 

But questioning the president‘s plan and the policy is something that is our duty.  We need to have a policy that is worthy of our troops who are on the ground.  I think the debate that we‘re engaged in or want to have on the floor and want to have some votes on is an attempt for us to try to create a policy that is going to be a successful policy and a policy that is worthy of our troops.  So I think it would be disloyal frankly for us to walk away from this debate and for the Republican minority to simply stop this debate through a filibuster, I think, is the wrong way to go.

MATTHEWS:  Let me go back to these headlines.  “GOP Stalls Debate on Troop Increases.”  Is that what happened or not?

BOND:  That‘s not what happened.  Here‘s another headline.

MATTHEWS:  Well give me another headline. 

BOND:  “Democrats to Launch P.R. Blitz on Iraq Vote.”  This is an effort...

MATTHEWS:  ... What newspaper is that? 

BOND:  This is the “Roll Call,” and this is “The Hill” and they talk to the top Democratic staffers.  They think that setting it up this way, they can gain political advantage.

MATTHEWS:  So it was a P.R. stunt?

BOND:  This is what that headline suggests, it‘s a P.R. stunt.  This is not changing policy.  This is Democrats trying to get enough votes to question the military implementation of a strategy.  I want to debate it in full, but I want to have an opportunity for our colleagues to go on record, because some of them don‘t want to continue funding.  Some on the other side want to cut off funding.  Let‘s see who they are.

MATTHEWS:  So you want to cut them in half?

BOND:  I don‘t think they would be in half. 

MATTHEWS:  No, but you want to show the Democrat division.

BOND:  I think we ought to show that there is overwhelming support, which I assume there will be, 70, 80 votes, Republicans and Democrats telling our troops that we support them, telling the neighbors in the region that we‘re going to stay, telling al Qaeda and the Ba‘athist Sunni insurgents and the Shia militia that we are going to support the effort.

MATTHEWS:  OK, how are you going to get by this need to get 60 votes, Senator Salazar?  If the Republicans in the minority status, with 49 seats, if they can stop this thing, stop you from voting as a Senate, how can you get around that?

SALAZAR:  Look, Chris, they have already stopped it, so the fact of the matter is they don‘t want to have the debate because they don‘t want to rebuff the president and his failed policies.

The fact is, Plan A, which is President Bush‘s plan and program, which now has four years of failure.  You have Plan B, which is those who want to leave Iraq immediately, and you have a Plan C, which is embodied in a Republican-Democratic bipartisan resolution called the Warner resolution. 

That resolution not only says that the president is wrong in his policy, but it also sets forth a plan and a program and a vision for going forward that would be embraced by a significant majority of the United States Senate if it was allowed to come to the floor.

But unfortunately through procedural maneuvering, everything is being clouded over, but the reality of it is that‘s a bipartisan resolution that would give us good, solid direction for how we ought to move forward in Iraq and we ought to take it up and we ought to vote on it tomorrow.

MATTHEWS:  Let me ask you both to vote on something right here on this program at least.

BOND:  Excuse me, let me just say that‘s just flat wrong, what my colleague said.

MATTHEWS:  Go ahead, why so?

BOND:  Well No. 1, we want to have a debate.  We want to move it forward, and there is another bipartisan resolution, the Lieberman-McCain resolution, which does offer some guidelines and some benchmarks that I think would be helpful.

MATTHEWS:  But you‘re afraid of a vote on a...

SALAZAR:  We can vote on both of those, Chris.  If we actually voted on both of those, then you have that opportunity.

MATTHEWS:  ... That‘s what he just said.  What is wrong on voting on both of those?

BOND:  I‘d like to vote on both of those, but I would also do it.

SALAZAR:  Let‘s do it, let‘s do it.

BOND:  Wait a minute, I‘m still talking, thank you. 

We also would like to be able to show that however this comes out that an overwhelming group of senators do support our troops, and don‘t want to cut off funding.  That‘s a simple message to send to our troops, our allies and those who are against us.

MATTHEWS:  Well why don‘t you get smart and relinquish the Lieberman-McCain measure, which everybody knows if you don‘t vote for these other ones, you‘re for that.

And have two simple votes—one under your plan—I mean, one by the plan by Gregg, which makes it tough on the Democrats and one on the Democratic/Republican plan, the Warner plan, that makes it tough on the Republicans.  Why don‘t you vote on one on each?  That would be great.

BOND:  That would be fine with me and, maybe...

MATTHEWS:  What do you think of that, Senator Salazar, one vote on each?

BOND:  Sure, that‘s fine...

MATTHEWS:  One vote on McCain-Lieberman, everybody knows that‘s the current policy.  You don‘t need to endorse that.

SALAZAR:  You know, Chris, there have been discussions about floor resolutions to be brought up on the floor.  Unfortunately, the Republican minority doesn‘t want to take a bullet on any of these resolutions.  The fact of the matter is that the central question before the United States Senate right now is whether or not you support the surge or don‘t you? 

Well, there is the McCain-Lieberman resolution that says, “We support the surge.”  There is the Warner-Levin, et al resolution that says, “We don‘t support the surge and we have an alternative vision, a Plan C for success in Iraq.” 

(CROSSTALK)

MATTHEWS:  OK...

SALAZAR:  It seems to me that those two matters ought to be brought to the floor, they ought to be voted on and we‘d have some clear direction on how to move forward. 

MATTHEWS:  We‘re at war with Iraq right now.  The president decides to declare war, attack Iran.  Does he need the approval of Congress beforehand?  Yes or no.

BOND:  I‘m sure he would.  And I...

MATTHEWS:  No, do you say he needs it? 

BOND:  Yes, yes, no question. 

MATTHEWS:  Because some people on the president‘s side say the president can do what he wants as commander in chief.  You don‘t agree with that? 

BOND:  No.

MATTHEWS:  OK, thank you, Senator.

SALAZAR:  And I agree 100 percent with Kit Bond on that. 

MATTHEWS:  We‘ve reached agreement here. 

Thank you very much, Senator Kit Bond of Missouri, Senator Ken Salazar of Colorado.

Coming up, how much American money has been squandered in Iraq?  Apparently, they‘re talking about $8.8 billion is unaccounted for in taxpayer money.  We‘re going to talk about whether Bremer‘s responsible for that or somebody he‘s the fall guy for.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

L. PAUL BREMER, FMR. AMERICAN PROCONSUL IN IRAQ:  Millions and millions of Iraqi families depended on civil service salaries and millions more depended on civil service pensions.  It was their only source of income.  They had not been paid since before the war.  It was clear to us that we needed to get this Iraqi money into their hands quickly.  And that was our top objective.  And in a cash economy, it‘s not obvious to me what the alternative was, frankly. 

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL. 

That was Paul Bremer, the American proconsul who ran Baghdad for many years, testifying today in Congress on questions about fraud in our multi-billion dollar reconstruction projects in Iraq. 

With more information on his testimony, I am joined by “Newsweek‘s” Howard Fineman—he‘s also an MSNBC political analyst—and Rajiv Chandrasekaran, former Baghdad bureau chief for the “Washington Post” and the author of “Imperial Life in the Emerald City”.

Rajiv, I have to ask you—well, to start with you on this question.  When you—were you over there during the reign of the Viceroy Paul Bremer? 

RAJIV CHANDRASEKARAN, AUTHOR, “IMPERIAL LIFE IN THE EMERALD CITY”:  I

was for all 15 months of the U.S. occupation and all 11 months of his tenure there.  Yes, I was. 

MATTHEWS:  Who gave the orders—just to get an ideological point here, where did this idea that the smartest thing we could do over there is disband the Iraqi army, disband the civil service and try to remake from the ground up a government and a country?  Who came up with that brilliant idea? 

CHANDRASEKARAN:  Well, a lot of it was Bremer‘s idea.  Now, there was certainly work done on those two proposals back here in Washington in the office of Douglas Feith, who was then the... 

MATTHEWS:  Well, Doug drafted—he drafted the de-Baathification order.  You‘re saying that...

CHANDRASEKARAN:  That‘s right. 

MATTHEWS:  ... he was told to do that by Bremer over in country? 

CHANDRASEKARAN:  No, no, no.  Feith did a lot of work on that beforehand.  His office drafted the first draft of it.  Bremer took it over to Baghdad, made some changes to it.  And he promulgated it.  And it was Bremer largely who issued the order and came up with the order to disband the Iraqi army. 

MATTHEWS:  Well, whose idea, if you had to write this in history, a first draft of history, who was responsible for deciding on behalf of our government and the fighting men and women that took us into that country that we should start from scratch over there, as a policy, as an ideology, because we didn‘t like the Baath ideology?  Who decided that? 

CHANDRASEKARAN:  Well, I think—I think a lot of that responsibility rests with Bremer.  There really wasn‘t a whole lot of thinking and planning for the post-war reconstruction back in Washington.  And Bremer was sent out there with orders to come up with a plan.  And it was Bremer who really took this sort of very ambitious approach of saying, “We‘re going to rebuild this country from the ground up.  We‘re not going to use a lot of existing Iraqi institutions.  We‘re going to try to remake it from scratch in the best American way possible.” 

MATTHEWS:  You know, I got to wonder about this, but let‘s get to the money issue, as they say, follow the money.  All of this -- $8.8 billion that Congressman Henry Waxman, chairman of the House Reform Committee, is looking at squandered over there, unaccounted for.  Now, Bremer says that was just sort of walking around money, “We had to pay people in cash, so the cash disappeared.”

But usually you get receipts, you get some—that‘s a lot of money. 

I think some of the states in this union live on less than $8.8 billion. 

CHANDRASEKARAN:  It‘s a tremendous amount of money and it means a lot to the American people.  One political vulnerability for the Republicans here is the issue of mismanagement and graft and outright corruption is one that everyone can agree on.  It‘s not ideological, it‘s not, “Are you are standing with the president, do you want to fight terrorism?”  It‘s, “No, are you running the war properly?”

And if you go back in history, this was a big issue even in the midst of World War II when the Congress said, “Look, we want this war to be run correctly.”  And even Democrats in FDR‘s own party insisted on. 

It‘s not happening in this case.  And I think it‘s one of the reasons why however they maneuver in these votes on the Hill, Republicans remain on the defensive on this war. 

MATTHEWS:  Let me ask you, Rajiv, about this American viceroy, if you will, the man who went over there with the nice suits, the Brooks Brothers suits and the combat boots.  I always thought that was a strange image.  I‘m not sure what it was meant to suggest.  He dressed to the teeth.  He  walked around looking great and apparently was an empty suit when it came to understanding the culture of that part of the world and what his job really was, which was to stabilize those warring factions over there.  That was our chief job, and he‘s walking around with a suit on passing out apparently 360 tons of U.S. currency, 360 tons of $20 and $100 -- mainly, $100 bills to the masses over there to somehow buy their loyalty.  Did this guy blow it?  Was he a joke?  Was he an arse on a golden horse?  What was Jerry Bremer in history? 

CHANDRASEKARAN:  Well, you know, I think Bremer will go down as the guy who made an awful lot of controversial decisions that perhaps set us on a path towards some of the mess that we find ourselves in today.  I mean, you can argue that, for instance, some of the tension between Sunnis and the Shia arose from decisions that were made by his Coalition Provisional Authority, using a quota system in terms of hiring members for the governing council, sending a powerful message to Iraqis that, you know, your religious affiliation, your ethnicity matters in terms of political representation. 

Now, Bremer‘s argument was...

MATTHEWS:  If you‘re talking Americans there, I heard you had to be pro-life in order to work over there.  They were asking people about their abortion views, they were asking them about—what about all this sort of social standards we‘re setting about our people over there, when the real issue was, “Do you know Arabic?  Do you have any idea who you‘re dealing with over here?”

Those questions didn‘t seem to be relevant.  But maybe I‘m reading from your book here, Rajiv.  Sometimes I learn things from our guests and I spit it back at them.  Am I doing that now? 

Don‘t you know this...

CHANDRASEKARAN:  Well, I think you are a little...

MATTHEWS:  ... and that‘s why I know it?

You acted like you didn‘t tell me all of this.  I‘m reading your damn book and you‘re sitting here vetting me. 

Rajiv, tell us what a loser—what a loser Paul Bremer was over there.  Belly up to the plate, tell me what you think based on your reporting? 

CHANDRASEKARAN:  Well, you know, he clearly didn‘t have the best and the brightest with him.  He was sent over a lot of people who were chosen because of their ideological qualifications, as you mentioned.  People were asked about their Republican Party membership, their views on abortion.

But then, you know, it wasn‘t just the staff there.  You know, it was decisions Bremer made.  We were in an environment where we had enormous goodwill right after the liberation of Baghdad.  The Iraqi people were happy, yet it was Bremer‘s initial decisions—disbanding the army, firing lots of Baathists, enshrining a formal occupation.  The way he went about governing Iraq, it really turned Iraqi attitudes against the Americans, squandered an enormous amount of goodwill and set us back—set us back in this enormous effort to reconstruct and govern Iraq. 

MATTHEWS:  Well said, Rajiv. 

What do you think, Howard?  Because he‘s my reporter here.

HOWARD FINEMAN, “NEWSWEEK”:  Well, what I think is that it goes to George Bush‘s judgment ultimately.  George Bush once said, “I don‘t read books.  I read people.”  And he liked to tell us when he was running and in his first term that he was a keen judge of character in managerial ability.  This was a nightmare of mismanagement by all accounts, so it all goes back up the chain from Bremer to Rumsfeld to Cheney to Bush. 

MATTHEWS:  Isn‘t it great that we‘re totally superficial?  Remember how good Westmoreland looked? 

FINEMAN:  Yes. 

MATTHEWS:  He looked like the greatest general in history.  This guy looks great.  He looked like a viceroy.  He looked like Mountbatten.  If that‘s the way American...

FINEMAN:  The American version of Mountbatten.

MATTHEWS:  Well, yes.  And I just wonder whether any thought went into this at all. 

Anyway, thank you, Howard Fineman.

Thank you, Rajiv.

As always, I will salute your work in the Emerald City. 

Up next, HARDBALL‘s David Schuster will have the latest on the Scooter Libby trial.  Don‘t you love that name, Scooter Libby?  He‘s going down in history. 

And later, actor Sam Waterston—you know him from the ads, you know him from “Law & Order”—love that show—will be here to talk up the third option.  He thinks we can put together a ticket of a Democrat and a Republican or a Republican and a Democrat and beat the two parties in 2008.  Interesting.  We‘ll be watching him.  You watch us. 

HARDBALL on MSNBC coming back.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

It was a dramatic day in the trial of Scooter Libby today.  Audiotapes of his grand jury testimony were played in court. 

And HARDBALL‘s David Schuster has all the horror stories from the courthouse. 

David, what‘s the news?  I have to know.  Did HARDBALL come up in the trial today, listening to those tapes from the grand jury? 

DAVID SHUSTER, MSNBC CORRESPONDENT:  Yes, Chris, it did.  And we‘ll get to that in just a second. 

It was five hours of grand jury testimony that the jury finally heard.  This was Scooter Libby‘s own voice.  Prosecutors accuse Libby of lying about actions in the office of vice president just before the outing of CIA operative Valerie Wilson, the wife of administration critic Joe Wilson.

And in a soft and at sometimes hesitant voice, Scooter Libby repeatedly denied discussing Valerie Wilson with a string of White House officials.  Former Vice Presidential Press Secretary Cathie Martin had testified in his trial that she told Libby and Cheney directly about Valerie Wilson.  And when asked about this conversation, Libby said, “I have no recollection.” 

Former Bush Press Secretary Ari Fleischer testified that Libby told him about Valerie Wilson.  Libby remembered talking to Fleischer over lunch, even discussing the Miami Dolphins.  But when asked if he told Fleischer about Valerie Wilson, Libby replied, “I do not recall.” 

Libby was heard on the tapes saying that he first learned in July of 2003 about Valerie Wilson from NBC‘s Tim Russert.  Libby testified that he, Libby, was angry about HARDBALL because of the analysis of Joe Wilson‘s criticisms at the time and the tough questions that you were asking, Chris, during that crucial week about whether or not the office of the vice president may have known Joe Wilson‘s conclusions before the president‘s pre-war State of the Union speech. 

According to Libby‘s testimony, Russert told him that he couldn‘t help Libby with that matter, pointing out that you were separate from Tim Russert and that Libby should take his complaint, if he has one, to the HARDBALL executive producer. 

Libby then testified that Russert suddenly was the one who asked about Valerie Wilson: quote, “When I heard it from Tim Russert, I was surprised by what I heard.  So I don‘t recall any other conversation earlier in the week about it.”

Libby suggested that Tim Russert seemed to Valerie Wilson almost out of the blue, quote, “And then he said, did you know that Ambassador Wilson‘s wife works at the CIA.  And I was taken bit taken aback by that.  I remember being taken aback by it...  because at that point in time, I did not recall that I had ever known, and I thought this was something that he was telling me that I was first learning.  Mr. Russert said to me, did you know that Ambassador Wilson‘s or his wife works at the CIA?  And I said no, I didn‘t know that.  And then he said, yes, yes, all the reporters know it.” 

Tim Russert is expected to testify in this case tomorrow, Chris, and say that he and Scooter Libby never talked about Valerie Wilson.  And on the tapes today, Libby acknowledged that he learned about Valerie Wilson the month before in June 2003 because of a conversation with Vice President Cheney.

So how could Libby forget about Valerie Wilson for a month, until he had this conversation with Tim Russert in July?  Libby said, quote, “By this week, I no longer remembered it, because when it was told to me on July 10, I heard it, but I didn‘t think I knew when I heard it.?

If you think that is confusing, Chris, you can only imagine what the jury may be thinking about Scooter Libby‘s logic.  And that‘s why the defense has some awfully tough decisions they‘ve got to make now in the days ahead when the defense phase of this case takes over.  And Scooter Libby has to decide whether he wants to try to explain all of this from the witness stand and also enlist the help of Vice President Cheney—Chris. 

MATTHEWS:  So what‘s your bet, he‘s going to testify or not, Scooter? 

Will he testify, will the vice president testify or neither? 

SHUSTER:  Well, Chris, what‘s so interesting is they‘ve filed some documents essentially changing the vice president‘s status.  It‘s no longer a sure bet, according to these documents, that the vice president will testify.  And what‘s so politically intriguing about that is a number of legal observers have suggested that Cheney wouldn‘t help Scooter Libby, that if Cheney tells the truth, it simply adds to the prosecution‘s case.  And, of course, if Cheney doesn‘t tell the truth, that may help Libby but that could cause problems for Vice President Cheney.  Then, as far as Libby is concerned, the prosecution witnesses, some of them have been impressive, but prosecutors are simply eager to cross-examine Scooter Libby about his memory problems and his logic in all of this.  And so it‘s not clear, I think, whether Libby‘s going to testify.

MATTHEWS:  Isn‘t it interesting that the vice president never took the oath to tell the truth and nothing but when he was interviewed by the prosecutor before?  So he has yet to be put in the box, so to speak.

SHUSTER:  Yes, it says so much of the deference that prosecutor Fitzgerald gave to Vice President Cheney, a mistake according to a lot of former independent counsels, who have been looking at this. 

They said that, based on all the testimony, perhaps the White House lucked out that it was Patrick Fitzgerald, the fairly conservative prosecutor who was going after this.  Because one independent counsel told me that if he had the same evidence, he would have charged a conspiracy and named Vice President Cheney an unindicted co-conspirator. 

As it stands, the vice president is not accused of any wrongdoing, but as you mentioned, he was not put under oath.  He would be under oath, though, if he testifies in this case. 

MATTHEWS:  Well, maybe Scooter would have been better off to call me and complain to me.  Who knows?

Anyway, thank you very much, David Shuster. 

Up next, Rudy is in.  Can he win?  HARDBALLERS Bob Shrum, Kate O‘Beirne—what a group this is going to be.  I‘ll be here to break it apart.

And later, actor Sam Waterston, Mr. “Law & Order”, is coming right here to sit in that chair. 

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(STOCK REPORT)

(BEGIN VIDEO CLIP)

SEN. BARBARA BOXER (D), CALIFORNIA:  It is absolutely outrageous.  It is immoral that we cannot vote on whether or not we agree with this escalation. 

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL.  Congress is showing courage, or isn‘t it, on the war in Iraq?  Or is it simply hiding from the war issue? 

Here to talk about it are HARDBALLERS—that‘s what they are tonight

HARDBALL political analyst Bob Shrum is up in New York and the “National Review‘s” Kate O‘Beirne is sitting right with me. 

Mr. Shrum, let me ask you this.  The Senate, we showed the headlines earlier, and we‘ll show them again.  We can decide whether this is good press coverage or not.  “In Senate, GOP Blocks a Debate Over Iraq Policy”.  There it is.  And in the “Washington post”, the other big east paper, “GOP Stalls Debate”. 

Is that a fair description of what happened yesterday?  That the Republicans don‘t want to vote on the war?

BOB SHRUM, HARDBALL POLITICAL ANALYST:  It‘s absolutely fair.  No. 1, it is time for the Congress, the Senate and the House to make an up or down vote on the surge.  That‘s an easy vote to take.  Maybe hard to cast it, but it‘s an easy issue to put in front of the Congress. 

No. 2, the Gregg Resolution, which is what the Republicans are fighting about, this whole notion that somehow or another people are in favor of cutting off funds for troops in combat, is to the end of the war what weapons of mass destruction were to the beginning of the war, a big lie.  No one is talking about cutting off funds to the troops while they are in combat. 

MATTHEWS:  Then why not just have the—OK, why not bring it up and let the Democrats vote against it, if that‘s the case?

SHRUM:  Because the way it‘s written, its a phony.  What happens if you cut off funding, is you don‘t cut it off tomorrow; you don‘t cut it off in two weeks.  You say in six months or a year, the funding is over.  The president begins the orderly withdrawal or redeployment of the troops. 

MATTHEWS:  Kate, what do you think of that?  Because those headlines say the Republicans blocked the vote.  I know there‘s more complicated facts there.  What are they?

KATE O‘BEIRNE, “NATIONAL REVIEW”:  I don‘t think the headline was fair, but it was predictable given that it was actually the Democrats who voted in favor of cloture in order to shut off the current debate. 

I think the Republicans have an argument to be made when they say

we‘ll vote on whether or not we approve the surge, but we—which, I think

I think disapproving of the surge probably has a majority vote in the Senate.  But so, too, does not cutting off funds and, as Senator Bond explained, we ought to send both messages to our troops in the field. 

In fact, Ted Kennedy wants to deny funding for the surge that is already underway. 

MATTHEWS:  So he‘s taking it pretty far, yes.  Bob—Bob, let me try to be referee, because this is a tough one.  I think the Democrats would like to break up to 11 Republicans off from the Republican minority to vote for them on—in opposition to the surge. 

On the other hand, the Republicans are not stupid.  People like Mitch McConnell and Trent Lott say, “OK, if you‘re going to do that and try to show that we‘re divided, we‘re going to show you‘re divided.  The issue is cutting off funding.  You may have—some of your caucus will do that, but the rest won‘t.” 

Isn‘t both sides trying to divide the other side?

SHRUM:  Yes, listen, I think what‘s going on...

MATTHEWS:  Isn‘t that right?

SHRUM:  What‘s going on here is a lot of political gamesmanship, the procedural battles while kids are dying in real battles. 

There‘s one simple fundamental issue.  Do you approve of the surge?  The second fundamental issue is at some point should the United States set a deadline and begin to withdraw or redeploy those troops?  Those are the two issues that the Congress ought to vote on. 

This whole notion, and I keep saying it.  I‘ve said it on this show before, it is a lie to say people want to take away body armor, bullets or support for people who are in combat.  If you say to the president six months from now, a year from now that money runs out, then he withdraws the troops over that period of time in an orderly way. 

MATTHEWS:  But what about the argument that‘s made by the hawks, I agree, that if you‘re going to cut off moral support for a mission like cleaning up the streets of Baghdad, which this resolution would do, and say, “We think it‘s a bad idea to escalate troops in Baghdad in door-to-door fighting,” and then send the troops in anyway.  If you had the guts to say, “We think it‘s a bad idea,” then you should cut off the money so the troops don‘t have to go into those dangerous neighborhoods and get killed.

SHRUM:  Well, I agree with that.  I agree with Senator Kennedy.  I think we ought to deny the money for the surge and we ought to make sure that those troops aren‘t sent there, and if they are sent there, we ought to pull them out.

MATTHEWS:  OK, let me give you a chance now.  The Republican Party.  Is the Republican party potentially ready to choose basically between two frontrunners, Rudy Giuliani who‘s announced for president, all but officially yesterday, and John McCain?  Could those two be the frontrunners in a party that‘s generally seen now as culturally conservative?  Could these two men be the real finalists for that fight for the nomination next time?

O‘BEIRNE:  Polls tell us that at the moment they certainly are, but they‘re also, of course, the best known Republicans in the race.  Everybody knows Rudy Giuliani, and...

MATTHEWS:  I like the way you say that.  Giuliani.  It‘s so New York. 

Giuliani.

O‘BEIRNE:  He is a very popular figure.

MATTHEWS:  Right.

O‘BEIRNE:  And of course, the Republican Party well knows John McCain. 

Now, Rudy Giuliani, I think in the most recent polls tops John McCain.

MATTHEWS:  Yes.  All the polls.

O‘BEIRNE:  Some of that might be the suspicion conservatives still have about John McCain, although some do support him. 

The question is whether or not, given that conservatives already know that which they like about Rudy Giuliani, the tough-talking mayor.  He cleaned up New York, a hero on 9/11.  Where does he grow, given that they will now start learning things that they might find less pleasing about Rudy Giuliani?

MATTHEWS:  How does it—who out there watching now—I know that people watch this show tend to know what‘s going on or they wouldn‘t be watching this.  They know he‘s pro-choice.  They know he‘s not negative towards gay rights.  He‘s not for gay marriage, but he‘s not negative towards gay people.  He seems to have a big heart about that—to those people.  I don‘t know anybody that doesn‘t know that yet. 

Let me try something by you.  Wouldn‘t that be a ferocious ticket, if you‘re looking at it from the other side, Bob, of McCain and Giuliani, Giuliani waiting his turn to get his presidency in four years, McCain serving now and Giuliani picking up foreign policy experience, McCain-Giuliani?  A good ticket?

SHRUM:  I think it could be a powerful ticket.  The problem may be that by the time we get to 2008, John McCain‘s foreign policy experience will be as the poster boy for the surge and the escalation in Iraq. 

MATTHEWS:  Maybe.

SHRUM:  And that will hurt him and would hurt even a ticket with Giuliani on it.

O‘BEIRNE:  I don‘t know that Rudy Giuliani is made to play the role of a No. 2. 

MATTHEWS:  What about when the No. 1 is over 70 years old?  How about that?  He is.

O‘BEIRNE:  I think he has such support from New York City, all my New York City conservative friends, and I certainly recognize why.  Look what he did for their city, and he cleaned up Times Square, and to radically cut crime rates.  And he picked good fights with the cultural lefties.  A hero to them. 

I think they‘re underestimating how he plays west of the Hudson.  When it comes to the personal life of politicians, New Yorkers...

MATTHEWS:  Let me tell you something, they love them in every big city suburb.  They love him.

O‘BEIRNE:  They do.  Giving a speech, they do.

MATTHEWS:  Yes.

O‘BEIRNE:  The rank and file.  It doesn‘t mean they‘re going to vote for him. 

When it comes to the personal life of politicians, New York City voters elect the French of American politics.  They think it‘s really amusing, you know, the mistress, and the messy divorce.  You know, that stuff has to play west of the Hudson, and I‘m not so sure it does, not even putting aside for the moment, you know, his support for gun control, wanting to sue gun manufacturers. 

MATTHEWS:  He‘s still got the (UNINTELLIGIBLE) towards gun control, which is you should be allowed to have a gun out on some Kansas farm.  You just can‘t bring your automatic weapon into the city.  I mean, he basically has a split view which makes sense to most Americans. 

O‘BEIRNE:  Well...

MATTHEWS:  Gun control in the city is different than gun control out in the country. 

O‘BEIRNE:  Except the Democrats are no longer talking about gun control, because they have learned that it is an issue that hurts them. 

MATTHEWS:  I know.  I know.

O‘BEIRNE:  And why would the...

MATTHEWS:  I don‘t know.  My brother is in Iraq.  It‘s his birthday.  Happy birthday, Bruce.  Nobody, nobody believes you should be able to walk around the streets of New York with an automatic weapon, or a semiautomatic. 

But there are a lot gun owners in the country who believe you should be able to have a weapon like that for sport reasons out in the country.  Shooting at old car wrecks.  It‘s totally utterly harmless. 

O‘BEIRNE:  These are the debates that Rudy Giuliani‘s candidacy will beget. 

MATTHEWS:  Maybe you‘re right.  I think he‘s in the running.  Do you think he‘s in the running, Bob, or do you think—you go along with the conventional wisdom, he‘s not in the running because of his cultural stance?

SHRUM:  Well, you know, when I listen to Kate, Chris, I think we ought to—we ought to pay attention to her.  She‘s kind a keeper of the conservative flame. 

Rudy Giuliani was on television last night.  He said, “Look, I am for civil unions.  I am in favor of a woman‘s right to choose.”  Though he then tried to hedge and say he might appoint conservative judges. 

The problem with that is people go back and look at his two runs for mayor.  They‘re going to find plenty of statements where he says—or his three runs for mayor, they‘re going to find plenty of statements where he said that he supported Roe v. Wade. 

MATTHEWS:  I know.

SHRUM:  I think Kate is warning us that, in the end, the right wing of the Republican Party, the cultural conservatives which have a veto power over this nomination, won‘t give it to Giuliani. 

MATTHEWS:  I know.  Let me tell you, they‘ll do a lot to beat Hillary. 

Anyway, thank you, Kate O‘Beirne.  And thank you, Bob Shrum.

You know that, Bob.  They will—they will I don‘t know what. 

They‘ll go to Australia if Hillary comes. 

Anyway, up next...

SHRUM:  Maybe McCain can jam Giuliani down the throat of the Republican convention as the V.P. 

MATTHEWS:  Up next, you know, it all makes sense in the end, because everybody wants the top. 

Anyway, up next, does a unity ticket, a Democrat and a Republican running together have a chance in 2008?  Actor Sam Waterston thinks it does.  He‘s coming to sit right here and tell us how. 

This is HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, can a unity ticket, a Democrat and a Republican running together, win in 2008?  Actor Sam Waterston wants to see it happen and tells us how when HARDBALL returns.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

For 13 seasons, Sam Waterston has played the top executive assistant district attorney on NBC‘s “Law & Order”, one of the great shows on television.  In his spare time he‘s involved in some humanitarian and political causes, including his endorsement of Unity ‘08, a political group with the goal of creating a non-partisan presidential ticket for next time during an online election process. 

Sam Waterston is here to tell us more about Unity ‘08 this evening. 

Well, we have a new system in this world.  It‘s called digital.  How will we have a new politics?

SAM WATERSTON, ACTOR/ACTIVIST:  We‘ll have a new politics, because as of today, any American citizen can go online, and, at Unity08.com and sign on to be a delegate at a virtual convention that will develop an agenda that will be presented to candidates, and the delegates will vote on those candidates.  And we will wind up with a unity ticket, one Republican and...

MATTHEWS:  You‘ll go with who wins?

WATERSTON:  One Republican, one Democrat.  Well, they must meet the criteria.  They must be a credibly bipartisan ticket.  And then...

MATTHEWS:  Who do you put on the top of the ticket, the “R” or the “D”, a Republican or Democrat?

WATERSTON:  However it works out. 

MATTHEWS:  So if somebody—how do you stop people from packing the vote?

WATERSTON:  You mean...

MATTHEWS:  Stuffing the ballot box.  You know, everybody says let‘s put together a campaign somewhere in Milwaukee somewhere, and you get 100,000 ballots with the same name on it, and it‘s Buster Brown from Milwaukee, somebody nobody ever heard of?

WATERSTON:  You mean how can you tell the difference between a legitimate voter?

MATTHEWS:  Yes.  No, a legitimate candidate.  A bunch of people get together somewhere and they say we like our mayor, why don‘t we run him for president, and he wins?

WATERSTON:  Well, I don‘t think that will happen if the numbers are met, you know, because 100,000 people won‘t be enough.  But again, that argues, only argues for people now to join in and become pioneer delegates to this convention, so that it can‘t be swamped.  If there are millions and millions of Americans of all stripes, moderates, centrists, Americans of both parties, then it won‘t—it won‘t be a problem.

MATTHEWS:  Sam, you do “Law & Order” up in New York, right? 

WATERSTON:  I do. 

MATTHEWS:  Suppose the mayor of that great city, Mike Bloomberg, decides he wants to run for the presidency, even though he has got tons of money, through your process.  He says, no, I‘m not going to seek the Republican nomination—I‘m too liberal.  I‘m not going to the Democratic Party, because I don‘t work with the Democrats, I‘m not one of them.  So I am going to go through the Unity ‘08 group.  And he starts a national campaign and he spends—well, he spent $70 million to be mayor or something like that.  Suppose he spends $200 million or $1 billion and says, I‘m going to run a campaign through your process and win that nomination. 

WATERSTON:  Well, he still has to get the approval of—first of all, he has to answer the questions the—in the order presented, by priority, that the delegates who have decided to sign on, go to Unity ‘08 today and sign on, they will develop an agenda of questions, and...

MATTHEWS:  I started to do that, Sam.  I have to...

(CROSSTALK)

MATTHEWS:  Well, because every time I go to one of these online things, the first thing they want to know is what is your address, your e-mail address, and I‘m a little hesitant at that point to give anything away. 

WATERSTON:  Because you don‘t want to be swamped with questions?

MATTHEWS:  I don‘t—Rush Limbaugh once gave my e-mail address away, and I got one million calls and I had to shift to another number. 

WATERSTON:  Yes.  Well, maybe you should have a special dedicated e-mail address just for Unity ‘08 questions. 

MATTHEWS:  OK.

WATERSTON:  And then you would be safe. 

MATTHEWS:  Well, what do you see wrong?  You‘re a grown-up.  You have grown up through all these things that I have grown up through.  What is wrong with partisan politics?  You have got Reagan, who seemed to be the dream of the Republicans Party, and they got what they wanted.  Bill Clinton was pretty much what the Democrats wanted.  We have had a few miscues, but we have had some pretty good presidents. 

WATERSTON:  Sure.

MATTHEWS:  What‘s wrong with the process? 

WATERSTON:  I think the two-party system is a great system and I think it‘s served the country very, very well. 

MATTHEWS:  Served? 

WATERSTON:  Yes, and I think it will serve the country very, very well again.  This is a sort of righting of the ship initiative.  This is an idea to give us a sort of dose of sauce to the party that have been—who have figured out ways to be reelected by fractionalizing the electorate and all of the things that we‘re familiar with. 

MATTHEWS:  OK, if you get elected (inaudible) a Republican and Democrat running together, with the best person winning the nomination for president, do you think this is something that you just want to give it a punch in the mouth, and once that‘s over, you can go back to the two-party system? 

WATERSTON:  Yes, Unity ‘08 does not want to be in business...

MATTHEWS:  For Unity...

WATERSTON:  Unity ‘08 does not want to be Unity ‘12. 

MATTHEWS:  So it‘s a one-shot punch? 

WATERSTON:  Yes, it is. 

MATTHEWS:  Thunder and lightning.  We‘ll be right back with Sam Waterston.  I was thinking more of (inaudible).  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We are back with Sam Waterston, star of NBC‘s “Law & Order,” in support of Unity ‘08, a political group now trying to create a new type of presidential ticket for 2008. 

What kind of people get online?  I mean, isn‘t this going to be age-specific?  I mean, people—I am into computers.  I check Google every three minutes and I send e-mail and I get e-mail all the time... 

WATERSTON:  And you‘re not a teenager, so there is not any reason to think that...

MATTHEWS:  But people who are older than me I think are a little bit...

WATERSTON:  I go online.  I‘m older than you.

MATTHEWS:  Maybe.  But do you think that people—most older people vote, most younger people don‘t.  Will this get younger people to vote?  At least in this form?

WATERSTON:  I hope so.  Well, Doug Bailey is very, very interested in young people.  And Unity ‘08 already has a presence on somewhere 100 and 200 campuses due to efforts that he has made, and I think it‘s having—it is being greeted with enthusiasm.  So, yes, it‘s intended to appeal to the young...

MATTHEWS:  Here‘s the danger.  Suppose somebody is 19 years old, they‘re a real computer type, they‘re in college, and they really care and they get behind somebody and they win this campaign that you‘re running.  And they are the third-party candidate going into November.  Then they get on the ballot, right?  You get them on the ballot.  And then they do not even know how to go vote, because kids can do stuff like this, but walking to a local community center and voting... 

WATERSTON:  No, they can figure it out.  They can figure that out. 

MATTHEWS:  You know what the percentage was last time?  Come on. 

Every time I hear it, it‘s like in the teens.

WATERSTON:  But it‘s not a reason to not do anything. 

(CROSSTALK)

MATTHEWS:  Will this get them off their bench and down to the polling place come November?

WATERSTON:  What we really need to do is recognize that this is a very good idea, whose time has absolutely come, where there is a whole pile of issues that have been sitting around for an unconscionable amount of time without being addressed within the system.  And so something outside the system needs to come in to right it. 

MATTHEWS:  Give me your top three as a citizen.  What issues do you want this...

WATERSTON:  I can tell you easy what my top one is, and that‘s the environmental questions. 

MATTHEWS:  They never get raised.

(CROSSTALK)

WATERSTON:  He couldn‘t.  He couldn‘t, and I think that it‘s worth finding out whether if the influence of money and partisan interests and having to appeal to a very narrow electorate, in their primaries, whether removing those issues would make it easier for a person to (inaudible). 

MATTHEWS:  But you still have to carry West Virginia, in the end, if you‘re a Democrat, and he had the issue with coal.  You know the environmental questions that come up.  Coal, guns.  

WATERSTON:  Well, I mean, ethanol right now is coming up in Iowa. 

MATTHEWS:  Do you believe in ethanol? 

WATERSTON:  Well, you know what the facts are, don‘t you? 

MATTHEWS:  Is it a waste of land?

WATERSTON:  You do know what the facts are.  And they‘re not...

MATTHEWS:  It costs more to grow it than—I know. 

WATERSTON:  And it is carbon—it‘s a minor improvement in carbon reduction in the air.  It might help energy independence, but conservation would be a lot cheaper to do. 

MATTHEWS:  You are saying it causes more carbon problems than it creates. 

WATERSTON:  But really, the thing about Unity ‘08 is that...

(CROSSTALK)

MATTHEWS:  ... automatically thinking like a politician now.  This is going to offend the people in Iowa.  It‘s tricky to talk like this. 

WATERSTON:  Well, no...

(CROSSTALK)

WATERSTON:  ... if you did not have a primary in Iowa, if you had a national primary, then you could talk to national questions in a way that addresses the national interest (ph).

MATTHEWS:  OK, here‘s a great question for you.  Where are we going to put our nuclear waste?  We have got to put it somewhere deep underground.  And Nevada does not want to hear that.  Nevada doesn‘t want to hear that. 

The Yucca flats...

WATERSTON:  I don‘t know where they‘re going to put the nuclear waste, and I don‘t think that this has too much to do with what I am here to talk about. 

MATTHEWS:  Well, just so you know, one of the caucuses states right after Iowa is Nevada, and it‘s a hot-as-hell issue. 

WATERSTON:  Well, then it does fit in, because then you have to speak to the concerns of that particular narrow constituency.  And if you had a national primary online, you would not have to do it. 

MATTHEWS:  You would be able to think big. 

WATERSTON:  You‘d be able to think big and you‘d be able to talk honestly.  And really, as a citizen, that‘s the thing I‘m longing for. 

MATTHEWS:  You‘re (inaudible) -- you are a citizen, what more can I say?  People that don‘t vote—you know what the Greeks called people who did not vote?  The Romans?  Idiots. 

WATERSTON:  Unity08.com.

MATTHEWS:  Idiots.

Unity08.com.  Thank you, Sam Waterston.

(CROSSTALK)

WATERSTON:  Thank you.

MATTHEWS:  Play HARDBALL with us again Wednesday.  Our guests include Virginia Senator Jim Webb.  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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