updated 4/25/2007 11:36:40 AM ET 2007-04-25T15:36:40

Guests: Michael Isikoff, Paul Rieckhoff, Rajiv Chandrasekaran, David Iglesias, Tony Blankley, Lynn Sweet, Clarence Page

CHRIS MATTHEWS, HOST:  “The Los Angeles Times” reports that the Justice Department‘s Office of Special Counsel is investigating top presidential aide Karl Rove over possibly illegal political influence over federal employees.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL.  Nine U.S.  paratroopers were killed and 20 wounded by a truck bomb in Iraq, making it the single deadliest attack on U.S. forces since a roadside bomb killed 10 Marines back in December of 2005.  Iraq remains the number one issue concerning Americans.  Today President Bush again vowed to veto any bill that sets an exit date for withdrawing troops from Iraq.

(BEGIN VIDEO CLIP)

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES:  They chose to make a political statement.  That‘s their right, but it is wrong for our troops and it‘s wrong for our country.

(END VIDEO CLIP)

MATTHEWS:  Democrats say they won‘t back down from setting up a political showdown between the White House and the Democratic Congress.  More on this in a moment.

Also tonight, “The Los Angeles Times” reports today that the Office of Special Counsel, led by a Bush administration appointee, is investigating Karl Rove over questions of improper political activity.

Plus, the first presidential debate will take place in South Carolina in just two days.  NBC News anchor Brian Williams will moderate the Democratic debate, and MSNBC will have all-day coverage.  I‘ll be hosting a “HARDBALL College Tour” from South Carolina State University at 5:00 PM, and MSNBC‘s Keith Olbermann will join me for pre-and post-game debate coverage.  More on this later.

But first, investigating Karl Rove.  “Newsweek‘s” Michael Isikoff and HARDBALL‘s David Shuster are here.  David, what do we make of this big story in “The Los Angeles Times” today saying this Office of Special Counsel is looking into the political activity of Karl Rove?  I thought Karl Rove‘s job description was political activity.

DAVID SHUSTER, HARDBALL CORRESPONDENT:  Yes, it is, but he can‘t use government resources.  So in other words, if he‘s...

MATTHEWS:  He can‘t use his typewriter?

SHUSTER:  Well, if he‘s taking steps such as firing one of the U.S.  attorneys, like David Iglesias, who made a complaint to the Office of Special Counsel—if Karl Rove is doing this for political purposes or if Karl Rove‘s top aide is talking to the General Services Administration and saying, Hey, here are some steps you guys ought to be taking to help Republicans, that‘s a problem.

What this office usually does—they don‘t usually do criminal referrals.  They simply try to remedy the problem.  So if the U.S. attorney or people at the General Services Administration complain, they try to remedy that, and they usually issue a warning to the offending government employee.  But it‘s not entirely clear what actual criminal prosecution can stem out of this, if they were to find some basis for a crime that Karl Rove might have committed.

MATTHEWS:  What‘s the story on this guy, Scott Bloch, who heads up the Office of Special Counsel.  He‘s a Republican appointee.  Is he a partisan power, or is he a good government guy?

(CROSSTALK)

MICHAEL ISIKOFF, “NEWSWEEK”:  He‘s been actually under fire at that agency.  This is an agency that‘s supposed to protect whistleblowers, and it‘s actually had a few whistleblowers within its own ranks, complaining about Scott Block on a number of grounds, one of which is that he‘s supposedly anti-gay or issued some anti-gay edicts.  So I think there‘s still ongoing complaints filed against him.

But at the same time, he‘s been very aggressive about—actually, since he came under fire, he‘s become more aggressive about enforcing the laws he‘s charged with enforcing, one of which is the Hatch Act.  Another is this law called the Uniformed Services Employment and Reemployment Act, which bars discrimination against members in the military.  Why is that relevant?  Well, because David Iglesias was a member of the Naval Reserve.  One of the reasons that they used after the fact, the Justice Department, to justify the firing of Iglesias is that he was an absentee landlord, he wasn‘t spending enough time in the office.  Why wasn‘t he?  He was doing his Naval Reserve duty.  He was required to spend up to 45 days in the Naval Reserve.  That‘s actually a violation of the law, if you use that against somebody, if you take punitive action against them in the workplace, and the Bush administration...

MATTHEWS:  In the private workplace, as well.

ISIKOFF:  In the private workplace.  And in fact, the Justice Department under Alberto Gonzales has brought a class action lawsuit against American Airlines for doing the precisely the same thing, that a couple of people...

MATTHEWS:  Is this an irony or what?

(CROSSTALK)

MATTHEWS:  In other words, the Bush administration, which is hawkish on the war, is now being possibly prosecuted, possibly, down the road, being investigated for hurting a man who‘s...

ISIKOFF:  Who is doing his duty.  Right.  Right.  And the administration has played up its enforcement of this law because of all these people in the National Guard who return to Iraq, coming back...

MATTHEWS:  Sure.  Well, nobody wants to lose a job promotion because of doing their duty.

ISIKOFF:  Exactly.  So it is a bit ironic.

MATTHEWS:  But let‘s get back to the main river here, the main fight here.  Is Karl Rove in any kind of criminal activity trouble?  In other words...

SHUSTER:  No.

MATTHEWS:  ... has he been charged with anything that he might get in trouble for?

SHUSTER:  No.  He‘s not been charged with anything.  There‘s no referral.  What you have is sort of the end of a couple of different investigations.  You have Congress, which has been investigating the firing of the U.S. attorneys.  You have a number of investigators who are trying to figure out what happened to all these e-mails that were supposed to be held by the White House.  Why was the White House using Republican National Committee e-mails as far as possibly conducting official business.

MATTHEWS:  What are we talking about, using their system, their AOL, whatever...

SHUSTER:  Yes, they were—for example, when they were—when you do campaign fundraising, you go over to the RNC and the DNC and you do it there.  You‘re not supposed to do it in your office.  Likewise, the White House thought it could be cute, it would simply use a Blackberry that it had been given by the Republican National Committee, so when Karl Rove wanted to make political actions, he used that one instead of his White House Blackberry.  Well, there‘s a problem with that, and investigators are trying to determine if they played that one too cute.  All of this coming together in addition with the complaint by David Iglesias...

MATTHEWS:  You can‘t raise money on federal property.  That‘s an old law...

SHUSTER:  Right.

MATTHEWS:  ... Title 18.  So can you use a Blackberry on federal property to raise money?

SHUSTER:  Well...

(CROSSTALK)

MATTHEWS:  What is the answer?

SHUSTER:  The answer is no.  But that‘s one of the things that this agency is going to have to determine.  They‘re going to talk to government officials.  They‘re going to talk to Rove and try to figure out...

MATTHEWS:  Putting a GPS on your phone?  How do they find out where you‘re using it?

SHUSTER:  Well, that‘s one of the things (INAUDIBLE).  They‘re going to interview Karl Rove and his deputies and find out, Where were you guys doing this?  Were you doing this in the White House at your desk, using an e-mail account that didn‘t belong to the White House but used—but belonged to the RNC, as a way to justify...

MATTHEWS:  Can I ask you something...

SHUSTER:  ... taking political action.

MATTHEWS:  ... that will ruin the day?  Is this small potatoes?

SHUSTER:  Well, I mean, every investigation starts as small potatoes and then you wait and see what they develop.

ISIKOFF:  I think...

MATTHEWS:  Is this small potatoes?

ISIKOFF:  Actually, this is a relatively...

MATTHEWS:  I mean, everybody on the left, on the Democratic side, wants to get Karl Rove...

(CROSSTALK)

ISIKOFF:  ... relatively obscure federal agency.  Most people in Washington...

MATTHEWS:  The Office of Special Counsel.

ISIKOFF:  ... haven‘t even heard of it.

MATTHEWS:  I‘d never heard of it.

ISIKOFF:  It‘s not likely to sort of, you know—you know, it‘s not likely to end up with any criminal charges, but...

MATTHEWS:  It can‘t prosecute...

ISIKOFF:  ... they do...

MATTHEWS:  ... a criminal case, either.

ISIKOFF:  No.  But they do have a power that‘s equivalent of subpoena power to get documents...

MATTHEWS:  OK.

ISIKOFF:  ... to force interviews, to take people—depositions under oath.  And so it‘s one more...

MATTHEWS:  Is it possible, Michael...

ISIKOFF:  ... source of trouble for them.

MATTHEWS:  You‘re an expert in investigative reporting.  Is it possible that Karl Rove, the mastermind, the genius behind the throne, could go down on a Hatch Act violation?

ISIKOFF:  Well, I don‘t know that you‘d go down on a Hatch Act violation.  You‘d probably have your wrists slapped for it, and I don‘t think that‘s the sort of you know, coup de grace that, you know, Democrats want to administer to Karl Rove.  They‘d probably like something a little heavier duty than that.

SHUSTER:  And Chris, the other problem is there‘s a momentum to this...

MATTHEWS:  Coup de grace!

SHUSTER:  But Chris...

MATTHEWS:  A tour de force by Michael Isikoff!

SHUSTER:  Chris, even if...

(CROSSTALK)

MATTHEWS:  I agree, they want more than that.

SHUSTER:  Even if it‘s small potatoes, as you suggest, there‘s a certain momentum to this politically that the White House doesn‘t like because any time you have any agency which has subpoena power, which is collecting information, you‘re going to have a drip, drip of drip of stories in the newspaper about what they can find...

MATTHEWS:  Can I ask you a question?

SHUSTER:  ... about stumbling blocks.  That‘s a problem.

MATTHEWS:  David...

SHUSTER:  Go ahead.

MATTHEWS:  ... what part of the newspaper will this appear on “The Washington Post,” “New York Times” tomorrow?  Will this be top of the fold, will this be front page or will this be buried?

SHUSTER:  I think it will be buried.  But again, as you have a live investigation out there, as they‘re collecting information and not getting at information, then the story has the potential to rise, and that‘s a problem.

ISIKOFF:  (INAUDIBLE) be buried because people will realize “Newsweek” reported this three weeks ago, so—might be one reason.

MATTHEWS:  Give this man a raise.  Jon Meacham, are you watching?

The other top story today, Iraq.  This is serious business.  Nine U.S.  paratroopers were killed in a suicide attack (INAUDIBLE) the fight between the White House and Congress over funding the war has gotten hotter.

SHUSTER:  Chris, that‘s right.  I mean, the nine U.S. soldiers killed yesterday in Iraq, another one May 10 (ph), all of this going on in Iraq as the political fight here at home has been intensifying.

(BEGIN VIDEOTAPE)

(voice-over):  As Iraqis in Baghdad today shouted, No, no to America, and celebrated the destruction of a U.S. minesweeper, a key faction in Iraq‘s civil war took credit for yesterday‘s attack in Diyala province that killed nine U.S. soldiers and wounded 20 others.  Sunni militants claimed Republican for a truck bomb that destroyed a building housing U.S. troops there as part of the surge.  The victims were all members of Fort Bragg‘s 82nd Airborne.  The casualties were the highest for the division since the war began.

MAJ. TOM EARNHART, FORT BRAGG SPOKESMAN:  When times get toughest like this, we rally together.  We band together and we rally.  And that‘s sort of how we cope with things like this.

SHUSTER:  The grim notifications at Fort Bragg began just as members of the House and Senate hammered out an Iraq war funding bill that includes a timetable for a U.S. withdrawal.  Under the plan, the money for the war will continue, but some troops must start pulling out by October.  And the plan urges military commanders to set a goal of having most combat troops out of Iraq by next March.

Congress is now expected to pass the legislation this week.  President Bush is promising a veto and is demanding a funding bill with no restrictions.  And today, the president accused Democrats of wasting time.

BUSH:  They know that my veto will be sustained.  But instead of fashioning a bill I could sign, the Democratic leaders chose to further delay funding our troops and they chose to make a political statement.

SHUSTER:  In his statement, rather than commenting on recent developments in Iraq, the president once again pointed to 9/11.

BUSH:  The lesson of 9/11 is that allowing terrorists to find a sanctuary anywhere in the world can have deadly consequences.  Precipitous withdrawal from Iraq is not a plan to bring peace to the region or make our people safer at home.  Instead, it would embolden our enemies and confirm their belief that America is weak.

SHUSTER:  Senate Democrats today, led by presidential candidate Joe Biden, hit back hard.

SEN. JOSEPH BIDEN (D-DE), PRESIDENTIAL CANDIDATE:  This president, divorced from reality, is accusing us of emboldening the enemy and undermining our troops.  Well, Mr. President, I have a message for you.  The only thing that‘s emboldening the enemy is your failed policy.

SHUSTER:  The latest polls show the public is increasingly supportive of a withdrawal and convinced the war in Iraq has been a mistake.  In Iowa, for example, the first presidential caucus state, a poll just of Republicans found that 52 percent now support withdrawing from Iraq within six months.  Only 39 percent of Republicans are opposed.

On Monday, Senate Majority Leader Reid accused the administration of being in denial about Iraq.  Today...

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES:  What‘s most troubling about Senate Reid‘s comments yesterday is his defeatism.

SHUSTER:  Meanwhile, House Democrats today focused on two high-profile episodes where the Bush administration allegedly fabricated stories to hide the harsh realities of war from the public.  Three years ago, Pat Tillman, an NFL star turned Army Ranger, was killed in Afghanistan.  For months, the Pentagon said he was killed by the enemy.  In fact, Tillman‘s death was the result of friendly fire.

KEVIN TILLMAN, PAT‘S BROTHER:  Pat‘s death at the hands of his comrades is a terrible tragedy.  The least this country can do for him in return is to uncover who was responsible for his death, who lied and covered it up, and who instigated those lies and benefited from them.

SHUSTER:  Early during the war in Iraq, the Pentagon said that when U.S. troops rescued Jessica Lynch from an Iraqi hospital, they were rescuing a soldier who had been critically wounded while shooting and trying to fight off Iraqi soldiers.

JESSICA LYNCH, FORMER PRIVATE, U.S. ARMY:  At my parents‘ home in Wirt County, West Virginia, it was under siege by media all repeating the story of the little girl Rambo from the hills of West Virginia who went down fighting.  It was not true.

SHUSTER:  Lynch denied the Pentagon‘s account of her heroism, saying she never fired a shot and was knocked unconscious at the beginning of an ambush.  Democrats accused the White House of producing propaganda as part of an effort to keep the public behind the war.

(END VIDEOTAPE)

SHUSTER:  Now, four years and 3,000 U.S. troop casualties later, a strong majority of the American public has had enough.  And after Congress passes their funding bill with restrictions and president issues his veto and both sides go back to the drawing board, the key question, of course, Chris, is what‘s next?

MATTHEWS:  Thanks, David Shuster.  Thank you, Michael Isikoff.

Rajiv Chandrasekaran is the former Baghdad bureau chief of “The Washington Post.”  He‘s the author of “Imperial Life in the Emerald City,” about the Green Zone over there.  And Paul Rieckhoff served in Iraq with the Army National Guard.  He‘s now the executive director of Iraq and Afghanistan Veterans of American.

Gentlemen, what do you make—first of all, I want to ask Paul—the president today in his statement at the helicopter, Marine One, on his way to New York, must have said the word Democratic 20 times.  He said this is a partisan, political operation by the Democratic-led Congress and that they‘re really at war with American generals, not with him.  What do you make of that set-up?

PAUL RIECKHOFF, IRAQ AND AFGHANISTAN VETERANS OF AMERICA:  I don‘t think it helps.  I think the president continues to try to reframe the debate instead of talking about how we can more effectively fight in Iraq and how we can come together as Americans to do it.  So I think this type of rhetoric and also the rhetoric from the vice president today only encourages the divisive nature in Washington.  It doesn‘t help our troops on the ground.  It doesn‘t help the war effort.  it doesn‘t help America.  And I think it is very hypocritical for us to tell the Iraqis they have to come together, they have to compromise and work together to overcome their differences, when we can‘t even do it here in the country.  I think it‘s really poor leadership.

MATTHEWS:  Rajiv, you‘ve written the best book about the Green Zone over there.  But the one thing we always thought about the Green Zone and Camp Victory and the other outposts, the posts over there, is they were secured by heavy, strongly defended perimeters.  Now we find out today that a bunch of our paratroopers, nine of them, I believe, were cut down by a suicide bomber who penetrated one of these perimeters.  What‘s going on over there?

RAJIV CHANDRASEKARAN, “WASHINGTON POST”:  Well, the fact of the matter, Chris, is neither the Green Zone nor these outposts are particularly safe these days.  I was just on the phone with an American who works in the Green Zone, and he was saying over the last several days, they‘ve been showered with mortars.  In fact, he‘s been scurrying to a concrete shelter several times a night.

But these outposts, which is a key part of General Petraeus‘s security strategy in Baghdad—these are sort of smaller encampments that don‘t have the same sort of security that the Green Zone or Camp Victory has.  They‘re much less fortified.  They‘re an effort to get American troops out and about, particularly in these dangerous areas.

And what we‘ve seen in this case yesterday, in the death of these nine paratroopers in Diyala province near Baquba, is that these outposts are far more vulnerable to Iraqi insurgent attacks.

MATTHEWS:  What happens when we start posting our troops within Iraqi units?  They‘ll be exposed to being not just killed but possibly picked up and used in that way, right?

CHANDRASEKARAN:  Potentially.  I mean...

MATTHEWS:  I worried about that the day I heard we‘re going to put Americans into Iraqi units.  It‘s scary enough being on duty over there in any due regard, but imagine being stuck out there in an Iraqi unit.  You can‘t speak the language, and the guy next to you, left or right, you don‘t know whether he‘s Sunni, Shia, militia or whatever he is.  And you‘re stuck out there, exposed to being grabbed in the middle of the night and then beheaded or whatever‘s worse, or whatever.  There‘s not much worse than that.

CHANDRASEKARAN:  Yes, I mean, there are a lot of these guys whose loyalty is really in question, potential militiamen, potential insurgents.  And you‘re there with them.  They have loaded weapons and other munitions. 

There are some real security questions in all of this.

MATTHEWS:  (INAUDIBLE) Paul, what do you make of this?  The National Guard people over there, I don‘t know what they‘re thinking, but when they‘re stuck in these outposts, it seems to be pretty dangerous now, more than ever.

RIECKHOFF:  Absolutely.  These downtown security outposts, urban outposts, are among the most dangerous positions you could be in.  My unit was in a very similar situation in the Adhamiya section of Baghdad in ‘03 and ‘04.  We had just over a platoon, so you know, still under 100 guys in a very small area, and you feel like you‘re Custer deep in Indian country.  There are thousands of Iraqis around you.  You can‘t cover all the different points of attack.  And you‘re very concerned.  You spend a ton of your resources just covering your own back, and it really limits the amount you can do to get into the community and actually try to train up the Iraqi police and the Iraq army.

MATTHEWS:  It‘s like being a British soldier in Belfast in the old days.

We‘ll be right back with Paul Rieckhoff and Rajiv Chandrasekaran.

And this Thursday, it‘s the first in the country Democratic candidates‘ presidential debate.  The candidates will meet at South Carolina State University for their first test.  It‘s going to moderated by NBC‘s Brian Williams.  That‘s this Thursday at 7:00 Eastern right here on MSNBC.

And later on HARDBALL tonight, we‘ll preview the debate and take a look at some of the great debate moments in history.  Political junkies, stand by tonight.  You‘re going to have a lot of fun.  We‘re going back to Lloyd Bentsen and Dan Quayle and that great debate.  Poor Dan Quayle on that one.  And some other great moments or infamous moments, if you‘re on the losing side.

And next Thursday, May 3, I‘ll moderate the Republicans‘ first debate at the Ronald Reagan Presidential Library in Simi Valley California.  What a beautiful spot that is.  Two big debates coming up right here and only here on MSNBC.

(BEGIN VIDEO CLIP)

DAN QUAYLE (R-IN), VICE PRESIDENTIAL CANDIDATE:  I have as much experience in the Congress as Jack Kennedy did when he sought the presidency.

LLOYD BENTSEN (D-TX), VICE PRESIDENTIAL CANDIDATE:  I served with Jack Kennedy.  I knew Jack Kennedy.  Jack Kennedy was a friend of mine.  Senator, you‘re no Jack Kennedy.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.

We‘re back with Rajiv Chandrasekaran of “The Washington Post” and Paul Rieckhoff of Iraq and Afghanistan Veterans of America.

Let me go to Rajiv about this story that ran today on the front page of “USA Today” that Maliki is in trouble over there.  They interviewed a lot of lawmakers, members of the parliament, who say this guy has got a few days left, it seems.

What‘s going on over there with Maliki? 

CHANDRASEKARAN:  Well, he‘s under fire from all sides.  Members of Muqtada al-Sadr‘s political organization have pulled out of Maliki‘s cabinet. 

MATTHEWS:  OK.  That‘s six seats he‘s lost, right?  Does he have enough for a majority? 

CHANDRASEKARAN:  Well, they haven‘t quite left parliament.  They have sort of left his cabinet. 

MATTHEWS:  Yes?

CHANDRASEKARAN:  So, that doesn‘t really affect his parliamentary majority.

But, clearly, their support is in doubt.  Other Shiite political parties now are—are sort of jockeying for better positioning here.  You have got the Sunni parties, who never were really too keen on Maliki, now becoming a but more emboldened.  They—they see themselves as having certain elements of veto power over these efforts that the White House wants at national reconciliation. 

Maliki‘s political clout is—is really in question.  And, more importantly, Chris, a lot of these key initiatives that the president wants the Iraqis to move forward on, on de-Baathification, on the oil law, on revising the Constitution, they‘re all ground to a halt, because the Iraqis aren‘t willing to move on them. 

You know, that‘s the second half of this whole surge strategy, Chris. 

MATTHEWS:  Right. 

CHANDRASEKARAN:  You know, it‘s trying to create some security, so these guys will act inside the Green Zone.  Well, the Iraqis aren‘t acting. 

MATTHEWS:  Well, Paul, that gets to the question of how long we can stay in that country and what we can get done.

For months, I would ask the question, how long should we stay?  Or, better yet, if we stay two more years, what can we get done?  If we stay three more years, what can we get done?

We‘re not going to be there probably in strength for more than a couple of years.  And the question you have to ask—forget the party politics on this and Harry Reid vs. the president—what can we get done?  If we‘re not bringing together the Sunni and the Shia in some kind of political combination, we‘re just admitting that the civil war will get worse...

RIECKHOFF:  That‘s...

MATTHEWS:  ... it seems to me. 

RIECKHOFF:  That‘s exactly right.  And that puts our troops in a very precarious situation, because they feel like they‘re just riding around, waiting to get blown up, until the politicians figure out what to do with them.

And I think a good example of a tough spot they‘re in right now is in Adhamiya, in eastern Baghdad, where I was, where they‘re trying to put this wall up now to divide the Sunnis and the Shias in that area.  And I have been in touch with both soldiers and Iraqi civilians on the ground there, and this thing is universally unpopular. 

The idea that we can build a wall and try to segregate or separate these two different types of people in the most violent area of Baghdad is very unpopular.  And the current Iraqi government doesn‘t support it either.

So, what do we do when our units on the ground are taking defensive operations and building defensive structures, and the Iraqi government doesn‘t approve?  That really puts us in a tough clash on the ground. 

MATTHEWS:  Rajiv, why do you think the military covered up the friendly-fire death of Pat Tillman? 

CHANDRASEKARAN:  Well, I think it—it was a—it conflicted with the story of heroism that the Pentagon was trying to put out, just like with the case with Jessica Lynch. 

And I think it was seen to be embarrassing.  And they didn‘t want this great American hero, a guy who had put his NFL career aside to go and enlist after 9/11, to be seen to be a victim of—of what they call a blue-on-blue incident. 

MATTHEWS:  Yes. 

CHANDRASEKARAN:  They wanted to—to—to perpetuate this myth that this was actually a hostile engagement. 

MATTHEWS:  But isn‘t the fact that he accepted duty, that he went over there and gave up his career in football—and your career in football doesn‘t last that long—that he was willing to make that sacrifice, that ended up being a total sacrifice, wasn‘t that the real story, not the conditions on the battlefield or which—who got shot by whom, but the fact that he offered himself up for his country? 

Isn‘t that the good story here?  And wasn‘t that enough? 

CHANDRASEKARAN:  Well, that is the good story.  And—and that is the

the story we can‘t forget. 

But, at the same time, Chris, you know, our—our government, our military has an obligation to tell the truth about these things. 

MATTHEWS:  Well, that‘s what I mean.  Why didn‘t they let the truth get out?  The truth will set us free.  I mean, war is hell, and accidents happen.  And, at—in every great war, including, I‘m sure, the Revolutionary War, you know, the Continental Army fired on itself occasionally, I got to assume. 

Isn‘t that part of it, Paul?

RIECKHOFF:  Yes, absolutely.

I mean, Ms. Tillman said it best.  They blew up their poster boy.  Pat Tillman was the one American soldier that every single American in this country felt like they knew, felt like they knew where he came from and about his personal history.

And, when he died, it created a bit of a visceral connection for most Americans for the first time in this war.  And I think it was a real tipping point in the way the American public understood this war.  And you have got...

MATTHEWS:  Well, would it have mattered that he—had he been shot by the enemy? 

RIECKHOFF:  No.  No.  It shouldn‘t matter. 

I mean, the guy is a hero because he served.  And in what fashion he died really shouldn‘t matter at all.

(CROSSTALK)

RIECKHOFF:  And his brother has been the first one to say it. 

And his brother, testifying today—you have got to remember, his brother was in the same unit.  He as in Ranger Battalion as well.  And I think he demonstrated some tremendous courage today, as did Jessica Lynch. 

MATTHEWS:  Well...

RIECKHOFF:  What she did today was as courageous as what she did on the ground in Iraq a few years ago. 

MATTHEWS:  I—I hope, a year or two from now, we remember Pat Tillman as a great man...

RIECKHOFF:  Absolutely.

MATTHEWS:  ... and forget this, because this is just a distraction from his greatness and his courage and his obvious total sacrifice. 

Paul Rieckhoff, thank you, you and your buddies.  Thank you. 

RIECKHOFF:  Thank you, Chris. 

MATTHEWS:  And, Rajiv Chandrasekaran, you have written the best book about the Green Zone.  It looks like the Green Zone isn‘t as safe as we thought it was, despite the hamburgers and the bowling alleys. 

Anyway, just kidding.

(LAUGHTER)

MATTHEWS:  No bowling alleys.  They used to build them in Vietnam.

Up next: just two days before the first debate of the presidential election.   The Democrats are going to South Carolina.  We will preview that debate coming your way on Thursday right here on MSNBC. 

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

Just two days now until the first Democratic debate for president in the upcoming elections.  NBC‘s Brian Williams is moderating.  And we‘re going to bring you all the action here on MSNBC and MSNBC.com.  Viewers and users alike will be able to watch the debate in a whole new way, more interactive than ever before. 

Here to talk about it all is MSNBC.com‘s political editor, Lauren Vicary. 

Lauren, first of all, some substance here.  What do this candidates have to do on national television Thursday night in their first joint appearance?

LAUREN VICARY, POLITICAL EDITOR, MSNBC.COM:  Well, it‘s the first time a lot of people are seeing them.  So, the first thing is, they can‘t screw up, basically.

And they can‘t do it because they don‘t—they don‘t just have the regular TV audience.  They also have it streamed live dot-com.  When you have both, you have twice the opportunity now, because of YouTube and all the other places that it can re-air over and over and over again. 

Candidates really have to be sure that, with the first time a lot of people are seeing them in this kind of debate, that they don‘t mess up, they don‘t trip up; they don‘t fall into some traps. 

MATTHEWS:  Will their handlers to—be saying, get out there and do no harm, like, in other words, advising them the way you‘re advising us; in other words, it‘s better to be a little boring and a little safe? 

VICARY:  I‘m not sure if boring and safe is—is the best way to go. 

And we actually—we put on the site just today NBC‘s political director, Chuck Todd, and the deputy political director, Mark Murray, put together, actually, a really great box for our users to come to that looks at kind of their advice, their dos and don‘ts. 

MATTHEWS:  OK.  Give me some of the best dos. 

VICARY:  OK.

Some of the best dos—they start slow, because this is alphabetical. 

So, with Biden, it was:  Don‘t over-apologize for your tendency to be verbose.  And don‘t repeat your Alito confirmation hearing performance. 

Clinton was:  Don‘t speak in perfect paragraphs.  You know, make sure that you‘re actually sounding not completely rehearsed.  I mean, there‘s real substance...

MATTHEWS:  You mean rehearse not being rehearsed? 

VICARY:  Well, yes, but try not to be...

MATTHEWS:  Yes. 

VICARY:  ... just stump speech.

MATTHEWS:  I get it.  I agree with this.  I agree with it all.

VICARY:  And—and the thing is, while—while Chuck and Mark, there is some tongue in cheek with this, there‘s also really serious recommendations.

MATTHEWS:  No, it‘s true.  And give me some more of these babies.  I love them. 

VICARY:  Some of them—with Dodd, the first do was:  Speak Spanish before Richardson does. 

MATTHEWS:  I hear he‘s better than Richardson. 

VICARY:  I—I don‘t know. 

MATTHEWS:  Yes. 

VICARY:  I—I...

MATTHEWS:  He was in the Peace Corps in the Dominican Republic.  And he really has a, you know—he has conversational Spanish. 

Let me ask you about this whole thing with blogging, because some people watching the show right now are bloggers.  They‘re going to be able to do what in real time during the debate? 

VICARY:  There‘s a couple different things. 

And you have to remember that, for some people, they really don‘t dig very deep on the Web.  They‘re looking for information.  And they want to go watch.  It‘s not everyone that‘s necessarily posting a message or blogging themselves. 

MATTHEWS:  So, if you want...

VICARY:  So...

MATTHEWS:  ... to hear the chatter, how do you do it? 

VICARY:  There‘s a couple ways.

What we‘re doing, of course, is, Chuck and Mark will be blogging, as they always do, with First Read.  And it will be live up-to-date blogging commentary while the debates are going on.  We‘re also going to have some of your folks blogging for us.

MATTHEWS:  Right.  You are going to have Joe Scarborough.  You are going to have Bob Shrum.

VICARY:  Right.  Right, a lot of...

(CROSSTALK)

VICARY:  ... people.

MATTHEWS:  Andrea Mitchell, Chuck Todd, as you said. 

VICARY:  Right, right in the hall, giving you the atmospherics, you know, who is sweating behind the collar. 

(CROSSTALK)

MATTHEWS:  This is going to be multitasking for some people.

VICARY:  Exactly.  

MATTHEWS:  They‘re going to be up there like on a switchboard.

VICARY:  Exactly. 

MATTHEWS:  I think it‘s great, because you can watch the thing.  And, if it slows down for three seconds, you can check in and see what somebody thinks about it. 

VICARY:  Right. 

MATTHEWS:  And, also, you have got these people scoring the gaffes and the zingers. 

So, if you go on—but I‘m worried there aren‘t going to be any zingers.  These people are going to be too afraid to take a shot. 

VICARY:  I don‘t know.  I can‘t—I can‘t really say.  I don‘t have a sense yet, because we haven‘t seen them in this kind of forum. 

But the thing is that—that the users can come to the site, and, not only do they have the opportunity to read what everyone is saying; they themselves can post. 

MATTHEWS:  OK. 

I‘m betting on Richardson, Biden and Chris Dodd to be really aggressive, because they have got to get into this game.  And the other guys are going to be playing defense. 

(CROSSTALK)

MATTHEWS:  Anyway, thank you Lauren Vicary.  It was great to have you.

The first-in-the-country-debate comes up Thursday in South Carolina. 

Brian Williams is going to be the moderator.

Up next:  Which of the second-tier candidates—I love that phrase—they hate it—is poised to join Hillary and Obama at the head of the pack?  We‘re going to talk that with the HARDBALLERS when we get on, because that is what it‘s really about.  Is this really just about three people running, Obama, Hillary, and Edwards?  Or is Dodd and Biden and Richardson and the others going to get into this thing? 

It will be interesting to watch.  We will be watching it Thursday night.

(COMMERCIAL BREAK)

REBECCA JARVIS, CNBC CORRESPONDENT:  Rebecca Jarvis with your CNBC “Market Wrap.”

The blue-chippers flirt with history, the Dow Jones industrial average reaching a new intraday high, coming within 11 points of 13000.  But the Dow closed at 12953, for a 34.5-point gain.  The S&P 500 finished a half-point down.  The Nasdaq inched up almost a point. 

Sales of existing homes plunged more than 8 percent in March, the biggest one-month decline in 18 years.  Realtors blame the weather and the subprime meltdown. 

And Toyota zooms past General Motors to become the world‘s best-selling car in the first quarter of the year.  It‘s the first time that‘s ever happened. 

And when the new Skybus Airlines launches next month, it will offer $10 one-way fares, a great deal, perhaps.  You will have to pay for food and checked bags—now back to HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

In two days, the Democratic candidates for president debate each other for the first time.  And you can watch all the action here on MSNBC and on MSNBC.com. 

What do Hillary and Obama need to do on Thursday?  What do the second-tier candidates need to do to break out of the pack and to break into the top pack? 

Also, here it is, the investigation of Karl Rove. 

Here to dig into it all is Tony Blankley of “The Washington Times,” Lynn Sweet of “The Chicago Sun-Times,” and Clarence Page of “The Chicago Tribune.”

But on the phone right now is David Iglesias, who was fired from his post as a U.S.  attorney in New Mexico. 

Mr.  Iglesias, was your complaint to the Office of Special Counsel the reason for this investigation of Karl Rove?

DAVID IGLESIAS, FIRED U.S. ATTORNEY:  It—it—it could have started the ball rolling, yes.  This is something I filed back on April 3 of this year. 

MATTHEWS:  Well, April 3 is not that long ago. 

What—what, in terms of the timeline, leads you to believe that your

that your complaint led to this probe?

IGLESIAS:  Well, based on Special Counsel having powers to investigate where the evidence goes. 

I actually filed a Hatch Act complaint against Gonzales, McNulty, Kyle Sampson, and Monica Goodling.  And I think OSC is already getting information, getting documents produced from the Justice Department and possibly from the White House already. 

MATTHEWS:  The Hatch Act prevents public employees, government employees, from doing political work or being told to do political work. 

Who did such a thing that you noticed?

IGLESIAS:  Well, that—and that‘s why I authorized OSC to look into this. 

You know, we‘re—we‘re—as U.S.  attorneys, we‘re told to stay out of politics.  Every two years, we get the e-mails and whatnot.  And I believe the main reason I was forced to resign was for not getting involved in political activities, in activities that could have assisted a member of Congress. 

MATTHEWS:  Was that to go after election fraud?

IGLESIAS:  Well, the election fraud was the initial problem, and then I think what broke the back, so to speak—the straw that broke the camel‘s back was the non-rushing of politically sensitive corruption cases against Democrats in New Mexico. 

MATTHEWS:  And you felt you were operating on a good timetable? You weren‘t slowing anything down?

IGLESIAS:  No.  I mean, in fact, the indictment got filed last month, when it was ready.  But it wasn‘t ready last fall.  And I felt pressured to take action then. 

MATTHEWS:  Are you a Republican?

IGLESIAS:  Yes, I am. 

MATTHEWS:  Are you a partisan? Did you vote for the president a couple of times? He ran twice.  Did you vote for the guy who appointed you?

IGLESIAS:  Sure. 

MATTHEWS:  Do you root for the Republican side or do you have a problem with Karl Rove, in terms of his behavior as a political operative?

IGLESIAS:  Well, nobody broke the law. 

MATTHEWS:  Do you have a general problem with Karl Rove?

IGLESIAS:  No.  But I‘d like to find out whether he‘s involved in violating the law.  Nobody is above the law, Chris, including Karl Rove. 

MATTHEWS:  What law do you believe he broke?

IGLESIAS:  He could have violated the Hatch Act by putting undue pressure on the Justice Department to fire me and my colleagues. 

MATTHEWS:  Do you have any evidence that Karl Rove had a hand in your dumping, your firing?

IGLESIAS:  There are some emails—there is some evidence.  It is circumstantial now.  I believe if OSC digs in, they can get direct evidence establishing that link. 

MATTHEWS:  If you were prosecuting the case against Karl Rove, the man who you believe had a hand in firing you, what evidence would you go for right now?

IGLESIAS:  Right now I‘d go for memoranda.  I‘d go for emails.  I‘d go for meetings.  I want to find out what the link is. 

MATTHEWS:  OK, suppose Karl Rove decided he didn‘t like the cut of your jib, totally a matter of just hunch.  He didn‘t think you were one of his people, so called.  Would that be a violation of the law?

IGLESIAS:  No. 

MATTHEWS:  Or would he have to find that you weren‘t doing some political act he wanted you to do?

IGLESIAS:  If he didn‘t like the cut of my jib, didn‘t like the cut of my suit, you know, he could put pressure to let me go.  But I don‘t believe that‘s what happened in this case. 

MATTHEWS:  Is it possible that they will get nailed here in this case, by the probe by the Office of Special Counsel for something to do with the Iraq war? Under the law, if you‘re a reserve officer, like you are, no one can punish you at the workplace, including a public workplace, like the U.S.  attorney‘s office, if you were called away to do your reserve duty.  Do you believe that that was one of the reasons that they cited for removing you as U.S.  attorney, the fact that you were busy with your duty to the country?

IGLESIAS:  Yes, I do.  I was gone between 40 and 45 days per year on military duty, which is a lot. 

MATTHEWS:  Did they cite that as a reason for your removal?

IGLESIAS:  That‘s one of the three bases for authorizing special counsel to look into this, yes. 

MATTHEWS:  Do you believe the investigation—have they talked to you at all? Have the people in the office of—has Scott Bloch talked to you at all?

IGLESIAS:  Yes.  I had a conversation with Mr.  Bloch and his deputy and two other attorneys approximately three weeks ago. 

MATTHEWS:  Did that lead you to believe they were going to act like they have?

IGLESIAS:  Yes.  Yes, it did. 

MATTHEWS:  So you believe affirmatively that your complaint to the Office of Special Counsel in the Justice Department led to this probe, which we‘re reading about today in the “L.A.  Times,” the Associated Press and here on NBC?

IGLESIAS:  I do.  There may be other complainants that I‘m not aware of.  But I believe my complaints are at least a partial basis for that. 

MATTHEWS:  You know the law better than I, sir.  Mr.  Iglesias, can the Office of Special Counsel prosecute or must it refer?

IGLESIAS:  They don‘t have criminal jurisdiction.  But they have civil enforcement powers.  That means they can force the agencies to do specific acts, like reinstating people, like awarding back pay, things of that nature. 

MATTHEWS:  Can they subpoena Karl Rove to get the information or do they have to let somebody else do it?

IGLESIAS:  Oh, no.  They have powers to subpoena any member of the executive branch except the president and vice president. 

MATTHEWS:  Have they used that?

IGLESIAS:  That‘s a great question.  I don‘t know the history of the special counsel as much as I should.  But they do have.

MATTHEWS:  Why did you go to them if you thought they might be feeble?  You must have some confidence that going to them would get you some justice here, as you see it. 

IGLESIAS:  Because their entire mission is to bring enforcement actions against the executive branch of the federal government.  Also, their deputy is a military reservist, and I‘ve got a lot of faith and confidence in him and in Mr.  Bloch. 

MATTHEWS:  What do you think of Gonzales?

IGLESIAS:  Well, I think, you know—that‘s a large question.  You mean in terms of his testimony or personally?

MATTHEWS:  What do you think of him?

IGLESIAS:  I think he‘s come a long ways, inspiring story, but did terribly when he testified last week. 

MATTHEWS:  Do you think he knew about your firing?

IGLESIAS:  Oh, I‘m sure he had to have.  You don‘t get rid of .

MATTHEWS:  OK, here is the key bureaucratic question, which I‘ve been trying to get to—I don‘t know the particulars of your case.  I know what you‘ve told me.  I know about Pete Domenici, someone I‘ve always respected.  When Pete Domenici called you up, do you think you were being pressured?

IGLESIAS:  Yes. 

MATTHEWS:  You thought it was political interference in your job?

IGLESIAS:  Yes. 

MATTHEWS:  Why? What was it that made you think that?

IGLESIAS:  Oh, because the timing of the call, right before the election; the questions he was asking me.  He didn‘t have any business knowing about indictments that hadn‘t been filed yet. 

MATTHEWS:  Who was behind him? Who gave him his talking points? Who goosed him into making that call to you, as you understand it?

IGLESIAS:  That‘s a great question.  It could have been local Republicans.  It could have been his chief of staff.  It could have been Karl Rove.  I mean, you know, we‘re still at the beginning of this, Chris. 

MATTHEWS:  Do you believe that the attorney general, who sits today, Alberto Gonzales, who you say, I think quite rightly, has come a long way in his life, and it‘s a good American story, do you believe he‘s a cipher or he is actually running the Justice Department politically? He is the boss or is he simply a figurehead in a department where the president and Karl Rove are basically using that agency for their own purposes?

IGLESIAS:  I used to think he was the bona fide leader of the Justice Department.  After watching his performance on the Hill last week, I‘ve got real doubts and I think he may be a figurehead. 

MATTHEWS:  Therefore, who really calls the shots?

IGLESIAS:  Great question.  Kyle Sampson doesn‘t.  Perhaps White House counsel.  Perhaps Karl Rove.  I mean, it‘s still early.  I can‘t answer that question directly. 

MATTHEWS:  How did you get your job? How did you get appointed by this system that seems to be working against you now?

IGLESIAS:  It‘s a political process.  I ran for office.  I did pretty well.  I made friends with Pete Domenici and interviewed and was one of four names sent up to the White House. 

MATTHEWS:  So you got a job through politics, but then you expected that, in your service, you would not be forced to act politically?

IGLESIAS:  Exactly, because of what John Ashcroft told every incoming attorney in 2001.  He said stay out of politics.  I took him at his word. 

MATTHEWS:  Are you going to write a book?

IGLESIAS:  I‘m thinking very seriously about it. 

MATTHEWS:  Have you got a contract?

IGLESIAS:  No. 

MATTHEWS:  Have you got an agent?

IGLESIAS:  I‘ve got four agents in contact with me. 

MATTHEWS:  So you are hawking the book?

IGLESIAS:  Well, I‘m trying to figure out.

MATTHEWS:  Have you written out a book proposal?

IGLESIAS:  No, I haven‘t done that yet. 

MATTHEWS:  Do you feel that you are a poster boy for misuse of political authority in the Justice Department?

IGLESIAS:  I think I was one of seven poster children. 

MATTHEWS:  OK, it‘s great having you on.  Thanks for calling in.  We like people to call in with the news.  And you have a firsthand account of your side of this.  You‘re going to stay with us.  When we return, we‘re going to talk more about this, reaction from the HARDBALLers, Blankley, Lynn Sweet and Clarence Page.  This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We are back with former U.S.  Attorney David Iglesias, who was luckily enough, in fact, nice enough for us to call in tonight in the wake of the news that the U.S.  Office of Special Counsel of the Justice Department is probing Karl Rove for possible political misuse of his office.  So we want to bring in Tony Blankley of the “Washington Times,” Lynn Sweet of the “Chicago Sun Times,” and Clarence Page of the “Chicago Tribune.” In that order, your witness, Tony? Ask David what you want. 

TONY BLANKLEY, WASHINGTON TIMES:  You have a reputation for being a smart lawyer and having been a loyal Republican activist.  If you are still applying that good judgment, what you have said is quite damning.  Are you confident that you haven‘t let any bitterness over these events distort your judgment? Because I‘m impressed by what you said and the firmness with which you said it. 

IGLESIAS:  Thank you.  Bitterness? No, I really try not to do bitterness.  It ends up hurting the person more than the target.  I just want to get down to the truth.  I mean, I want to find out why I got fired and why my colleagues got fired, who were all doing good jobs.  The answers that the attorney general gave last week were just totally insufficient. 

MATTHEWS:  Lynn Sweet?

LYNN SWEET, CHICAGO SUN-TIMES:  When you talk about how you wanted to know the link between e-mails and the memos, sometimes a good lawyer knows the answer to the question before they ask it.  Do you know what are in some of those memos and emails?

IGLESIAS:  No, I sure don‘t.  But I do know that the Justice Department papers everything.  I mean, the most minute issue has an incredible, you know, researched and memo product.  There has to be a paper trail.  I haven‘t seen it yet.  If it‘s not at the Justice Department, it has got to be at the White House. 

CLARENCE PAGE, CHICAGO TRIBUNE:  Yes, you mentioned that you don‘t know why these firings took place.  I was wondering what is your best guess, in your heart of hearts? What is your feeling about why the firings of the U.S.  attorneys took place?

IGLESIAS:  You know, I—I know Lindsey Graham said, when he questioned the A.G., something to the effect of, you know, there were personality conflicts between your staff members and some of the U.S.  attorneys.  I think that is true as to some of my colleagues.  That‘s not true as to all of them. 

In my case, I didn‘t authorize authorization prosecutions involving voter fraud and I didn‘t hurry up political corruption prosecutions, which got the local Republicans so angry they took their complaints to the White House.  I believe that‘s what got me fired. 

MATTHEWS:  Do you have a political future, sir?

IGLESIAS:  No, sir, zero. 

MATTHEWS:  You‘re not going to run for political office on the Republican side again?

IGLESIAS:  No, I think I am persona non grata. 

MATTHEWS:  Well, you never know.  Times change.  We will be back with you, David Iglesias.  Stay here as our star witness, Tony Blankley, Lynn Sweet and Clarence Page.  You are watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We are back with former U.S.  Attorney David Iglesias, Tony Blankley of the “Washington Times,” Lynn Sweet of the “Chicago Sun Times,” and Clarence Page of the “Chicago Tribune.”

Mr.  Iglesias, let me ask you about how you foresee this probe by the Office of Special Counsel into Karl Rove proceeding.  You pointed out they have the power of subpoena.  Who would you like to see questioned under oath? Would you like to see the attorney general, Mr.  Gonzales, questioned under oath on the manner and the information he has about how you were fired?

IGLESIAS:  No, I mean, that has been tried.  I watched the five hours of testimony.  That was fruitless.  I think Monica Goodling holds the keys to the kingdom.  I think if they get her to testify under oath, with a transcript, and have her describe the process between the information flow between the White House counsel, the White House and the Justice Department, I believe the picture becomes a lot clearer. 

MATTHEWS:  So if Karl Rove or one of his deputies wanted to influence something in your department, they would work through her, through Monica Goodling?

IGLESIAS:  Yes, she wore two hats.  She was counselor to the attorney general.  She was also the White House liaison.  So her job was to serve as a conduit for information between the Justice Department and the White House. 

MATTHEWS:  Do you know if Karl Rove‘s communications with her were through the White House e-mail system or through something else, through a private one, the Republican National Committee, for example?

IGLESIAS:  I really don‘t have any knowledge as to that.  But normally I would think that they would use the .gov email system. 

MATTHEWS:  OK, let me ask you why that is important.  If one of the local politicians in your are, in New Mexico, were to complain that there wasn‘t enough action quick enough, lickety-split prosecutions enough to help the election, which was very close out there this November, they would go through the RNC perhaps.  And therefore Karl Rove would legitimately be able to take the e-mail and go back and forth on someone else‘s account without having a paper trail.  Is that possible?

IGLESIAS:  That‘s very possible, yes. 

MATTHEWS:  I‘m wondering if that isn‘t his MO.  Anyway, thank you very much David Iglesias.  Please call in, anybody out there with news.  We love to know the firsthand, especially in a case this big, with Karl Rove in the crosshairs.  Tony Blankley, Lynn Sweet, Clarence Page, we‘ll have to talk again next time about this amazing South Carolina poll that‘s just been taken.  Anyway, right now it‘s time for “TUCKER.”

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

END   

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