updated 6/6/2007 5:59:18 PM ET 2007-06-06T21:59:18

Guests: Bob Bennett, Matt Cooper, Michael Isikoff, Kathleen Kennedy Townsend, Larry Flynt, Kathleen Troia McFarland, Kathleen Kennedy Townsend, Deroy Murdock, Terry Jeffrey

MIKE BARNICLE, GUEST HOST:  Judgment day for Scooter Libby, 30 months, $250,000.   Will Bush save him before he‘s behind bars?

Let‘s play HARDBALL.

Good evening.  I‘m Mike Barnicle, in tonight for Chris Matthews.  Scooter Libby, Vice President Cheney‘s right-hand man, was sentenced to two-and-a-half years in prison for crimes he committed in the CIA leak case.  President Bush said he felt terrible for Libby‘s family but he would not intervene right now.  But will he later?  And will his former boss, Dick Cheney, go to bat for him?  More on this in a moment.

Plus, sex and sleaze in 2008.  Porno king Larry Flynt is offering $1 million to anyone who can prove they had illicit sexual encounters with politicians.  Will former lovers kiss and tell?  Will the line form to the right, please?  Stay tuned for a racy HARDBALL debate with Larry Flynt.

But we begin tonight with today‘s big headline, Scooter Libby‘s sentencing.  NBC‘s Kevin Corke has been at the courthouse all day—Kevin.

KEVIN CORKE, NBC CORRESPONDENT:  Mike, good evening to you.  Thirty months behind bars for Scooter Libby.  However, it‘s important to point out that we‘re not sure if that‘s actually going to happen because, as you pointed out, he could still get a presidential pardon.  Now, today President Bush said he would not interfere with the process, which is ongoing.  We know that there will be an appeal.

However, here‘s an interesting question.  Will he be out of jail during that appeal, or will he be behind bars?  Judge Reggie Walton saying today he saw no reason that Lewis “Scooter” Libby should be free during his appeal, which is to say that in six or perhaps eight weeks, he could be behind bars, serving the very beginning stages of what, at this point, is 30 months behind bars for his role in the CIA leak case—Mike.

MATTHEWS:  Kevin Corke from the courthouse.  Thanks very much, Kevin.

Let‘s bring in the man, the lawyer, the legend, Bob Bennett.  He represented “New York Times” reporter Judy Miller.  Mr. Bennett, thanks for joining us.  What was this case all about?

BOB BENNETT, JUDITH MILLER‘S ATTORNEY:  Well, what—it started out as a leak case, and it ended up as an obstruction of justice perjury case.  That‘s what happened.   And that‘s what Mr. Libby got nailed on.  And when that happens, Mike, the whole system kind of is against you.  A judge cannot give you a break if you‘re convicted of lying or challenging the integrity of the system.

MATTHEWS:  You know, the whole case and Libby‘s sentencing today—first of all, were you surprised by the fact that the judge indicated from the bench that he didn‘t want to let Libby free on appeal?

BENNETT:  I was somewhat surprised at that, but you know, the test on a release pending appeal now is whether you have issues which there‘s a very good chance the jury‘s verdict will be reversed.  And Judge Walton, who‘s a play-it-by-the-book guy, said, I don‘t think there are those issues, and he delivered a pretty clear signal that he‘s not going to release him pending appeal, which puts enormous pressure on the president on the pardon issue because by the time the appellate process runs, President Bush may not be in office.

MATTHEWS:  Well, when you consider the entire context of the case, with all the peripheral issues—Iraq, you know, the 16 words in the State of the Union speech, the weapons of mass destruction, the intelligence, all the stories spun about that—all I can think of is Lenny Bruce‘s immortal line that in the halls of justice, the only justice is in the halls.

Scooter Libby seems to be hanging out there all by himself, is he not?

BENNETT:  Well, I think to a great extent, he is.  But again, you know, Mike, the thing you have to remember—and I was a federal prosecutor—you just—if you don‘t tell the truth when you‘re being interviewed by law enforcement authority or don‘t tell the truth in the grand jury, you are going to have trouble and—and because the judge and the prosecutors feel the integrity of the system is the most important thing.

I think, ironically, the great tragedy in this is it probably could have been avoided had Mr. Libby handled it differently at the front end.  He flunked the investigation, is what I‘m saying.

MATTHEWS:  When you say that, you know, you feel strongly it could have been handled differently, I think many people agree with you.  I‘ve heard many people agree with that sentiment.  But does it have to do with the lawyering up front?  Does it have to do with his representation or his own behavior?

BENNETT:  I just don‘t want to comment on the lawyering because I

don‘t know what happened between the two.  But what I do—it‘s very self-

evident that he put his feet in concrete.  His defense at trial was not

consistent with what he did during the investigation.  He was very precise

I learned this from Tim Russert—I didn‘t do that, never talked to this person—and of course, during the grand jury investigation, those things were all shown to be false.

MATTHEWS:  You represented Judith Miller, who testified at this trial, former reporter for “The New York Times,” took a couple of real professional hits reputation-wise.  What was that like, representing her in the context of this trial, given—given the charges against Libby?

BENNETT:  Well, I mean, it was certainly a very interesting matter to

handle, although it was not an educational experience for her.  She served

85 days in jail rather than reveal Libby as a source, and it was not until

Mr. Libby gave her a voluntary personal waiver did she cooperate with the -

you know, with the authorities.

MATTHEWS:  You know, out in the country, you have today the Libby sentence.  You also have today in Washington the indictment of Congressman William Jefferson from Louisiana.  Out in the country, in New York, your home town, in Boston, Mass., and Pocatello, Idaho, people look at these cases, I think, and say, you know, Everything stinks in Washington.  There‘s just a sleazy effect of politics in Washington.  What does the compilation of not just Libby‘s sentencing today but Jefferson‘s indictment for what he was indicted for, corruption charges—what does that do?

BENNETT:  Well, I think you‘re absolutely right.  I think it‘s terrible.  And you know, now, let‘s be fair to Jefferson.  He‘s presumed to be innocent.  But if—this is a devastating indictment, Mike.  I mean, it is incredibly detailed.  It describes a vast pattern of corruption and wrongdoing.  And this must just turn off the American people.

MATTHEWS:  What does it say about the House Ethics Committee?

BENNETT:  Well, I think it—I—you know, Mike, I have sort of—let me be fair to your listeners—an axe to grind on this.  I represent a lot of executives that go before these committees, and boy, they are just ripped to shreds because they say, Well, there was corruption at your company.  Didn‘t you know about it?  The best I can say is you were incompetent.  Well, where was the House Ethics Committee?  If you read this indictment, somebody had to know that some of this stuff was going on.

I mean, Mr. Jefferson had a nickname.  I believe they called him “Dollar Bill,” you know, or something like that.

MATTHEWS:  They called Bill Bradley that, too, for different reasons.

BENNETT:  Yes, for different reasons.

(LAUGHTER)

BENNETT:  Much different reasons.  But this shows you what—you know, that the House Ethics Committee is a joke and a laugh.  And what they should really do—which I have no expectation that they will do—is they should do what they did in the Mark Foley case.  You know, they should conduct an investigation in the House of who knew what, where and when.  You cannot tell me that the members of Congress involved with the African nations, which is the core of this indictment, were not privy to some of this information or at least had suspicions.  So the House Ethics Committee is a laugh.  And they should use a case like this to sort of do what they ask corporate America to do.

MATTHEWS:  Bob Bennett, thanks very much.

When we return, more on Libby‘s sentencing with Michael Isikoff and Matt Cooper.

And later: What‘s fair game in politics?  Larry Flynt is offering a million bucks to anyone who can provide proof of an illicit sexual encounter with a government official.  Does that cross the line?  Larry Flynt‘s coming here for the HARDBALL debate.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  For more on today‘s sentencing of Scooter Libby, we‘re joined by “Newsweek‘s” Mike Isikoff, who covered the trial, and Matt Cooper, who is the Washington editor of Conde Nast “Portfolio” magazine and was a witness in the Scooter Libby trial.  And Mike Isikoff, by the way—the updated version of “Hubris,” one of the best books about where we are today, with an afterword about the Scooter Libby trial.

But first, let‘s start with this guy, who was a vital component in the Scooter Libby trial, scared to death, legitimately so, about going to jail in the thing.  What do you think, Matthew, and Michael as well—what has this done, if anything, to reporters covering politics in Washington?  What do you think?

MATT COOPER, FORMER “TIME” CORRESPONDENT:  You know, I think, Mike, surprisingly little.  I think leaks still go on.  Reporters talk to people on various levels of confidentiality.  I think I was among those who was very worried about what would happen after this case, and I think I‘m somewhat pleasantly surprised that even though the legal ground is not good for journalists, the basic culture of reporting, I think, has not changed a lot.

MATTHEWS:  Mike Isikoff, Patrick Fitzgerald, the prosecutor, said this afternoon after the sentencing, this statement.  “We need to make the statement that the truth matters ever so much,” Patrick Fitzgerald said.  Did we get the truth in this trial?

MICHAEL ISIKOFF, “NEWSWEEK”:  Well, we got part of the truth.  But clearly, there are a lot of unanswered questions that the public has never gotten the answers to, that Fitzgerald feels he never got the answer to.  He clearly—with Scooter Libby, it‘s very clear from all the evidence at trial and everything that Fitzgerald said that, for him, the big target, the big guy he had the most questions about was Vice President Cheney.  And Fitzgerald has said explicitly that because of Scooter Libby‘s lies, for which he was convicted, he was unable to get the answer to key questions about Vice President Cheney‘s role.

We know that Vice President Cheney was Scooter Libby‘s source about Valerie Plame Wilson, that it was from him who he learned about her in the first place.  And it was at his direction, Cheney‘s direction, that he met with Judy Miller for two hours at the St. Regis Hotel, and during that conversation then disclosed Valerie Plame Wilson‘s identity.  He—Libby says that he did not disclose her identity on the direction from Vice President Cheney.  But clearly, that was the line of inquiry that Fitzgerald was most aggressively pursuing, and that‘s what he feels he could not get the answer to because Scooter Libby didn‘t tell him the truth.

MATTHEWS:  So what happens next, Matt?  What happens next?  I mean, the questions that were raised, the questions that are unanswered—where do we go from here?

COOPER:  Well, I‘m not sure, Michael.  I mean, I think the Democrats in Congress will have to, you know, look in their own, you know, political interests and conscience and see to what degree they want to hold hearings or pursue these questions.  I mean, Henry Waxman has shown interest.  He had Valerie Plame in a couple of months ago to testify.  You know, he may do more on this case.

But if the Democrats don‘t, I don‘t see—and maybe Michael feels differently—I don‘t think there‘s any other legal case where this is going to get (INAUDIBLE)

ISIKOFF:  No, I don‘t—I mean, I think that the idea that Scooter Libby is now going to—is free to tell the truth and is going to roll on the vice president is a pipe dream in some people‘s minds.  I don‘t think that‘s going to happen.  I think it‘s possible you could get some hearings from Henry Waxman on the Hill.  But the idea that we‘re going to suddenly learn something startlingly new on this I think is pretty unlikely.

MATTHEWS:  What about the school of thought that there are two schools

of thought with regard to this.  There‘s the Washington school of thought -

you know, the Libby trial occurred and he got sentenced today, he‘s got 30 months.  But out in the country, there must be a lot of people walking around, thinking, OK, well, they think they know what happened here.  It‘s very—it‘s kind of unclear.  It‘s kind of cloudy.  But they might think that, Boy, this guy got hosed because there‘s something bigger here.  There‘s bigger people here.

ISIKOFF:  I don‘t know about bigger, but this—the whole case was muddy from beginning to end.  I mean, nothing was clear-cut about it.  The theories that partisans on both sides started with didn‘t really pan out.  When you—you know, the original theory of the critics on the left was that this was all one big White House conspiracy.  That wasn‘t exactly the case, especially when we disclosed that it was actually Richard Armitage at the State Department who was the original source for Robert Novak.  So that kind of put a cloud in that picture.

On the other hand, there was plenty of evidence that people in the White House were involved.  And the theory of people on the right that this was all much ado about nothing and that she wasn‘t really even a covert agent, Valerie Plame Wilson, that was shot down by Patrick Fitzgerald pretty forcefully and the CIA just within the last week.  They said, absolutely, she was a covert agent under the law, and she did travel overseas in an undercover capacity.

MATTHEWS:  In the minds of the jurors—I realize you can‘t put yourself in the minds of the jurors...

COOPER:  Right.

MATTHEWS:  ... but how much of this is about the legal charges that he was found guilty of and how much do you figure Iraq, the way the war has been managed, hubris—I mean, you can read “Hubris”—how much of that is involved in this?

COOPER:  Well, I think for the jurors, it was a pretty cut-and-dried kind of he lied kind of case.  You know, like a lot of white-collar cases, there was tons of evidence that the guy was not telling the truth, and I think they convicted on that.  But I think at the end of the day, you know, in the court of public opinion, it is about Iraq.  And you know, it‘s about the mistruths and half truths that got us into this mess.

MATTHEWS:  Thanks, Mike Isikoff and Matt Cooper.

Up next: Larry Flynt.  The “Hustler” kingpin is offering a million dollars to anyone who has evidence of a high-ranking government official in an illicit sexual relationship.  Is that fair game or dirty politics?

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

BARNICLE:  Welcome back to HARDBALL. 

Larry Flynt is at it again.  The “Hustler” magazine publisher placed this ad in “The Washington Post,” offering up to $1 million to anyone who can document sexual or intimate relations with a congressperson, senator, or any other prominent officeholder. 

The last time Larry Flynt did this was in 1998 during President Clinton‘s impeachment hearings, and it led to the resignation of then Speaker Bob Livingston of Louisiana. 

So, is this dirty politics or fair game? 

Larry Flynt joins us this evening to tell us why he is back looking for Washington sex secrets.  Also joining us is former New York Senate candidate K.T. McFarland. 

Good evening to both of you. 

Larry, why are you doing this?  Why now?  Why again?   

LARRY FLYNT, PUBLISHER, “HUSTLER”:  Well, first of all, you know, I have been accused of just wanting to expose people‘s sex lives.

And nothing could be the farther.  You know, I mean, I think people are entitled to privacy.  When you‘re in public office, and you‘re putting forth a public life that is contrary to the way that you are living your private life, then I think you become fair game. 

I also feel that hypocrisy is the biggest threat that democracy has.  And, more, you know, they are like a nest of hornets in Washington when it comes to hypocrisy.  I don‘t—they don‘t know...

BARNICLE:  But, Larry...

FLYNT:  ... how to tell the truth. 

BARNICLE:  Larry, I‘m with you on hypocrisy.  And I think—I think most people are with you on hypocrisy.

But isn‘t it kind of hypocritical that you are getting probably anonymous e-mails, anonymous phone calls having to do with a public person‘s sex life, when they are obviously—when they‘re probably not walking around, you know, talking about it, or not walking around holding hands with whomever they are holding hands with? 

Isn‘t it kind of hypocritical to pose this, to put this ad in the paper, and going after someone‘s private life that has nothing to do with their public life? 

BARNICLE:  No, because we—look, we have over 10 -- over 200 leads so far.  We will be lucky if 2 or 3 percent of those pan out. 

You know, we are not just going after anyone.  We—we‘re going after the people who many of the journalists know in Washington.  But—but nothing is being done about it.  And I think we should. 

BARNICLE:  K.T. McFarland, your name was on the ballot.  You ran for public office. 

KATHLEEN TROIA MCFARLAND ®, FORMER NEW YORK SENATORIAL CANDIDATE: 

Mm-hmm. 

BARNICLE:  I mean, given what Larry Flynt is doing here—well, talk to him about it.  I mean, why would anyone put their name on the ballot?  Why would anyone want to be part of public life, when you have this stuff going on? 

MCFARLAND:  Well, I think that Larry has a certain point, when—if he is going after people who are doing illegal things, sexual harassment, you know, illegal activities with interns or underage children, sure, you go get them.

But, if what he is talking about is just titillating sexual information about—with two consenting adults, forget it.  I mean, I‘m much more outraged about the hypocrisy of a member of Congress who claims to be in favor—against pork-barrel spending and he‘s all for the people, yet, he is in the pocketbooks of lobbyists, or he trades his vote on an issue, or he puts in an earmark on a bill in exchange for campaign contributions. 

To me, that is the—that is the bigger outrage and that is the bigger hypocrisy, because that affects everybody in the country. 

BARNICLE:  Larry, you know, clearly...

FLYNT:  Right. 

BARNICLE:  ... that extramarital sex is more appealing to the reader, to the viewer, than an earmark is, correct?

FLYNT:  Look, take Bob Livingston as an example.  He made Bill Clinton look like Mary Poppins.

(LAUGHTER)

FLYNT:  You know, he—the day before he resigned, you know, he said he had nothing to do with a lobbyist or an intern or any other government official.  And those were all three of our sources.  But he actually had more mistresses than that than we could actually document. 

Now, he was already speaker-elect of the House.  He would have gotten Denny Hastert‘s job.  You know, I don‘t think you want a man like that in that job. 

But what irked me so much, these guys were so upset with Clinton, but they were doing the same thing.  And, to me, that is more than I can swallow.  You know, I—I—I don‘t get it. 

(CROSSTALK)

BARNICLE:  Yes, but, Larry...

MCFARLAND:  Could I—could I interrupt for just a second and interject what it is like from the point of view of a candidate, of someone who wants to run against the system?

BARNICLE:  Yes. 

MCFARLAND:  What you do—maybe Mr. Flynt has—has great standards of—of proof.  And I‘m sure that he has great integrity in pursuing these stories.

But there are plenty of journalists that don‘t.  And there are plenty of news outlets that will print any kind of rumor they hear, whether it‘s true or not.  And it has a chilling effect on anybody who wants to get into public service. 

You can have the—you could be the most honorable and decent person, with the most wonderful motives, but you have got to be looking over your shoulder.  Who is going to say something about me?  Who is going to make something up?  Who is going to go after my children?  Who is going to go after my family? 

It really puts a damper.  And I feel that, regardless of what some people‘s motives are, at the end of the day, you have far fewer candidates who want to step forward who really hope to serve the country.  And it has a chilling effect on voters, who, when they hear...

(CROSSTALK)

MCFARLAND:  ... they hear this time and time again this guy is a crook, that guy is a creep, people don‘t even want to go to the polls anymore. 

(CROSSTALK)

BARNICLE:  No, there‘s—there‘s no doubt about it.

MCFARLAND:  Yes. 

BARNICLE:  That is a huge reason for the low—lower and lower and lower turnouts in elections all across the country, both local and national.

MCFARLAND:  Mm-hmm. 

BARNICLE:  Larry Flynt and K.T. McFarland are staying with us.

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

VERA GIBBONS, CNBC CORRESPONDENT:  I‘m Vera Gibbons with your CNBC “Market Wrap.”

Stocks fell this Tuesday, the Dow Jones industrial average dropping almost 81 points.  The S&P 500 lost eight, and the Nasdaq down seven. 

Upbeat comments about the economy from by Fed Reserve Chief Ben Bernanke helped send stocks lower.  Wall Street interpreted his remarks to mean that the Fed won‘t cut interest rates any time soon.  Better-than-expected growth in the service sector also hurt stocks. 

Oil prices dropped, as concerns about a cyclone in the Persian Gulf eased.  Cruise—crude fell 60 cents in New York trading, closing at $65.61 a barrel. 

And a new player in the battle for Dow Jones—investor Ron Burkle has partnered with a Dow Jones workers union that is seeking alternatives to Rupert Murdoch‘s $5 billion takeover bid.  The union also says it has reached out to Warren Buffett. 

That‘s it from CNBC, America‘s business channel—now back to

HARDBALL. 

BARNICLE:  Welcome back to HARDBALL and the HARDBALL debate between Larry Flynt, who is offering $1 million to anyone with evidence of an illicit sexual affair involving high-ranking government officials, and former New York Senate candidate K.T. McFarland.

Larry, you indicated in the last segment that you already had a hundred or a couple hundred tips after this ad was posted.  How do you check them out? 

FLYNT:  Well—well, we go through each one very meticulously.  And we say documented evidence.  What we need is, we need photographs.  We need hotel or motel lodgings.  There‘s a variety of different things that can link the two together. 

BARNICLE:  Well, who—who checks them out? 

FLYNT:  But we...

BARNICLE:  Because you can doctor photographs today...

FLYNT:  No, I...

BARNICLE:  ... given the technology. 

FLYNT:  Look, I...

(CROSSTALK)

BARNICLE:  You could—you could have...

(CROSSTALK)

BARNICLE:  You could have the speaker of the House with—you know, with a giraffe. 

FLYNT:  I have got one of the best detectives in Washington.  His name is Dan Moldea.  He is very good.  And I have got two others working with me on the West Coast.

If I might say something...

BARNICLE:  Sure.

FLYNT:  ... you know, Livingston, when he resigned, he did an interview with “The New York Times.”  And they asked him what he thought about me.  And he said I was a bottom-feeder. 

So, “The Times” called me for a comment.  And I said, that is right, but look what I found when I got down there. 

(LAUGHTER)

BARNICLE:  But, you know, you got—you got Bob Livingston, but you missed Newt Gingrich. 

FLYNT:  No.  Wrong.  We were right in there.  There were—there were several people.  And we will take as much credit as anyone on—on Gingrich.

MCFARLAND:  Could I—could I ask Mr. Flynt question? 

BARNICLE:  Sure. 

MCFARLAND:  Mr. Flynt, you, I‘m sure, use the highest standards of integrity in checking out these stories, and have proof and, like you‘re talking about, actual evidence. 

What about the media or the journalists or the tabloids, which just print rumors or don‘t have that kind of evidence?  What kind of a standard should we hold to them?  Because they have the ability to take a candidate or a member of Congress and just, in a second, destroy their lives, on the basis of innuendo. 

(CROSSTALK)

MCFARLAND:  What do we do with them? 

FLYNT:  I don‘t—I don‘t buy that argument, because we have libel laws in this country.  And they have been with us for many, many decades.  And they work very well.  And they are very easy to prove, too.

So—and I also don‘t buy that people are afraid to go in politics because they might be exposed for something that—that they are doing.  You know, it is just a question of whether they realize...

BARNICLE:  But, but, Larry—Larry—Larry...

FLYNT:  ... that their behavior must be above reproach. 

BARNICLE:  Larry, excuse me for interrupting you.

But there is a huge difference between the word exposed in politics and the word brutalized in politics in the daily prints.  Do you agree with that or not? 

Don‘t answer that. 

I want to ask you the important question before we leave.  In the advertisement, you said, spouses will not be affected.  You are not interested in spouses. 

Does that mean former President Bill Clinton? 

FLYNT:  Yes.

And, you know, also, Bob Livingston‘s wife pleaded with us not to publish the details of the report on his investigation.  And we didn‘t do it.

BARNICLE:  Yes.  You know...

FLYNT:  We want the guys who cast the votes.

BARNICLE:  Well, I—I—I can‘t, in all honesty, say good luck to you, Larry.  But I appreciate you joining us. 

Larry Flynt and K.T. McFarland, thanks for joining us. 

And, if you want to—want to watch the HARDBALL debate in full, go to our Web site, HARDBALL.MSNBC.com. 

Up next:  Hillary Clinton says her faith helped her through Bill‘s infidelity.  But will it help her win votes?   

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

BARNICLE:  Welcome back to HARDBALL. 

Well, we have dug into the headlines of the day, Libby‘s tough sentence, Larry Flynt‘s $1 million proposal, and Hillary‘s faith in her personal life.

Now it‘s time to tell you what it all means, HARDBALL on speed.  

And, to do that, let‘s bring in former Maryland Lieutenant Governor Kathleen Kennedy Townsend...

KATHLEEN KENNEDY TOWNSEND, FORMER MARYLAND LIEUTENANT GOVERNOR:  How

you doing?

BARNICLE:  ... “The National Review”‘s Deroy Murdock, and HumanEvents.com‘s Terry Jeffrey.

First up, Libby gets 30 months.  That is a tough sentence today for convicted felon Scooter Libby, Vice President Cheney‘s former right-hand man, 30 months in prison, plus a quarter-of-a-million-dollar fine, this despite a barrage of leniency letters from his allies, Don Rumsfeld, Henry Kissinger, a terrific letter from Mary Matalin and James Carville, John Bolton, Alan Simpson, and a bunch of others.

NBC News reports that Scooter Libby was stoic as he stomached the tough news in the courtroom today.  So will President Bush pardon him?  And if he does, when would he do it?  Kathleen Kennedy Townsend, pardon, no pardon, if so, when? 

TOWNSEND:  I think Bush will pardon him, but I think it is a very strong sentence that said lying is wrong.  That is a message that this administration should have heard six years ago.  I hope it hears it today. 

It is obviously wrong to lie under oath.  It is wrong to lie to FBI officers, but it is also wrong to lie to the American people.  I hope this administration gets off its lying kick. 

BARNICLE:  Deroy Murdoch, pardon, up or down? 

DEROY MURDOCK, “NATIONAL REVIEW ONLINE”:  I imagine there will be a pardon at some point.  I suspect the White House will do it at a time when it is quiet in the news, when people are distracted, maybe fourth of July or Christmas time or something like that. 

I agree with what Kathleen Townsend said about the lying.  I think that he was, in fact, convicted of not telling the truth and covering things up.  And that, of course, is wrong.  I do think there is an interesting contrast between his very lengthy 30 month sentence and the treatment of Sandy Berger, Bill Clinton‘s national security advisor, who, as people know, took information out of the National Archives related to the Clinton administration‘s treatment or non treatment of Osama bin Laden, hid that under a construction trailer, took that classified information home and cut it up with scissors. 

He was given a 50,000 dollar fine and community service, spent no time in jail, and lost his security clearance for just three years.  He can get it back in time and perhaps even be secretary of state if the Democrats win the White House.  I think it is really outrageous that Sandy Berger has been able to get away with not just a slap on the wrist, but I describe it as a massage on the wrist, for the crimes he committed. 

TOWNSEND:  Is that because you think there should be better sentencing guidelines? 

MURDOCK:  I do not know what the specific guidelines ought to be, but I think when you actively take information out of the National Archives and cut it up so the 911 Commission cannot read that, you ought to get something more than a 50,000 dollar fine. 

TERRY JEFFREY, “HUMAN EVENTS”:  Michael let me get in here.  I think Kathleen and Deroy are right.  Libby should have told the truth to the Grand Jury.  That‘s a crime.  I think he has been sufficiently punished for it at this time.  I think President Bush, who prides himself on being a compassionate conservative, and has made a great deal of the loyalty he has shown people in his administration, ought to come forward and say exactly that; this guy‘s been punished enough.  What he did was not right, but I‘m pardoning him now. 

Quite frankly, President Bush is riding so low in the favorability polls, I don‘t think he could go much lower.   

TOWNSEND:  You know, I think that is an interesting question about being punished enough.  I mean, I‘m telling you, if you are convicted of crimes here in the city of Baltimore and the state of Maryland, you often have to go to jail.  You don‘t get—just because you get to be close to the president that you should get off.

JEFFREY:  To put it bluntly, I do not remember a single Democrat saying that Bill Clinton should go to jail for perjuring himself and committed obstruction of justice, crimes for which he was held in contempt by a federal judge and disbarred.  Now Kathleen, if you think that Bill Clinton should have gone to jail, then I think it would be OK for you to think about Scooter Libby.  What do you think?  Should Bill Clinton have gone to jail?

TOWNSEND:  I think it is a very different situation, and you know it is a very different situation. 

JEFFREY:  He was president of the United States. 

MURDOCK:  The one name we do not hear in this, that really should be part of this discussion, is Richard Armitage, who was a very high level secretary of state official, who was the man who gave Valerie Plame‘s name to Robert Novak.  That name—Richard Armitage, who brought forth that information; there has been no repercussion for him.  He‘s enjoying his post-governmental career.   

(CROSS TALK)

TOWNSEND:  He told the truth. 

JEFFREY:  The underlying law that this special prosecutor was supposed to be investigating was the Agent Identities Protection Act.  It remains a question today whether that act was ever violated by anyone.  If it was violated by anyone, it would‘ve been originally by Richard Armitage.  He was not charged.  So it seems what happened was that Libby got caught up and made a mistake by not telling the truth to federal investigators and the Grand Jury, even though the underlying federal statute was never violated. 

TOWNSEND:  You know, it is one of the first things you should do, you learn, as a young child, tell the truth.  Tell the truth.  And what is, of course, interesting about this discussion is that it sounds to me—I can‘t see you, unfortunately—that that does not seem to offend you. 

(CROSS TALK)

MURDOCK:  It is very important in the war on terror that we keep quiet about the names of intelligence officials.  It does not help us get sources overseas who will come to us with information about the next terrorist attack if people see American intelligence agents on television, going before juries, testifying on Capital Hill.  I think it is very smart for all of us, henceforth, to be very quiet about the names of CIA agents, whether they‘re overt or covert, unless you‘re talking about the director of Central Intelligence, the top level people, who do press conferences. 

BARNICLE:  There is no sensible segue.  We have a lot of topics here in this epic segment of the program.  There is no sensible segue between Libby and the 2008 sex primary.  Larry Flynt was just on asking the question can you have sex without politics or politics without sex?  Larry Flynt digging up dirt on politicians, Mike Wallace asking Mitt Romney the other evening on TV about premarital sex, Rudy Giuliani; he‘s got the marriages, the scandals, his family.  Is anyone safe? 

Monday night, at the Democratic Religious Forum, Hillary Clinton was asked how her faith got her through Bills philandering.  Take a look at this from last night.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), NEW YORK:  I‘m not sure I would have gotten through it without my faith.  I take my faith very seriously and very personally.  I come from a tradition that is perhaps a little too suspicious of people who wear their faith on their sleeves. 

(END VIDEO CLIP)

BARNICLE:  Kathleen, you are the only person here who has had your name on a ballot statewide.  What is all of this doing to the possibility of attracting more good people to running for public office?  What does all of this do? 

TOWNSEND:  Actually, I disagree with your previous person about how it discourages people, because I think politics is a tough business, A.  and I think that when you enter the public realm, you have got to be ready to fight for what you believe in. 

So, if they‘re going to go into your personal life, do I like it?  No.  Do I think it is wrong?  Yes, I think it is wrong.  And I don‘t think it‘s the right question.  But very frankly, if you want to fight for children‘s health, if you want to fight for freedom in this country, if you want to fight for civil rights, if they are going to throw everything at you, I want tough people who are ready to fight against that. 

I don‘t think we politicians should be intimidated.  I don‘t think Bill Clinton was intimidated.  They were throwing a lot of things at him, and he kept fighting back.  So I believe—I do not like what Larry Flynt is doing.  I think it is wrong.  But I don‘t the politicians or people who want to go into politics should be scared off, because there are really tough things that you are fighting for. 

We are asking people to die over in Iraq for our country.  If you‘re going to get involved in politics, you‘re going to have to give something up. 

MURDOCK:  I think this only is relevant if the issue of hypocrisy comes up.  If you are holding yourself up as holier than thou while you are engaged in adultery, that I think is legitimate news and should be a matter of public discourse. 

BARNICLE:  Like Newt Gingrich.

MURDOCK:  Yes, exactly like Newt Gingrich, perfect example.  He should have behaved himself while he was engaged in the impeachment process against President Clinton. 

TOWNSEND:  Or maybe he should not have started the impeachment process. 

MURDOCK:  But you look at, for example, President Bush, who has been married to the same woman for about 30 years, goes to church every Sunday, reads the Bible every night, we are led to believe, and he is at 30 percent right now.  So if marital fidelity and holiness, if you will, are the recipe for a successful presidency, why is he at 30 percent and falling? 

Look at Jimmy Carter, who was a very good man and a good Christian, taught Sunday school, monogamous, loving family, a disastrous president.  So I‘m not saying that we should put philanderers deliberately in the White House as a matter of principle, but I do not think that sort of thing should disqualify people, unless there is hypocrisy. 

JEFFREY:  You have to admire people who are ready to run the gauntlet, get into public life, run for office, and, as Kathleen said, seek to do what they believe is right, even though they may get brutalized by the press and other people.  But look, the level of public debate about political issues is already so low in our country, you wish you had something other than Larry Flynt about to give as the input he wants to give, and that we could talk about the things that are really of profound importance to the future of the entire country. 

BARNICLE:  Like the casualties in the war in Iraq.  Our panelists are staying with us, and you are watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

BARNICLE:  We‘re back with former Maryland Lieutenant Governor Kathleen Kennedy Townsend, the “National Review‘s” Deroy Murdock, and Terry Jeffrey of “Human Events Magazine.”  Next up Clinton and Obama all tied up.  A new “USA Today”/Gallup poll shows Hillary and Obama neck and neck.  Obama gets 30 percent, Clinton 29 percent, Al Gore 17 percent, and John Edwards 11 percent.

Just a month ago, Hillary led Obama by nine points.  Are the two new Hillary exposes taking their toll?  Is Obama scoring points for having opposed the war from the get-go.  What gives?  Terry, is it just he‘s selling the next new thing, he‘s selling hope? 

JEFFREY:  No.  I think it is the war.  You know, earlier this year I expected this to happen.  I expected Obama to pull ahead.  It didn‘t happen.  It didn‘t happen.  I finally gave up on it last week. 

But I do believe he has a very clear position on the war.  He made this point in the debate the other night, he was against the war when John Edwards and Hillary Clinton were for it.  He has a clear statement about it, and I think that clearly appeals to the Democratic base in this country, when Hillary has a tortured and very confused position on the war. 

BARNICLE:  Kathleen, first of all, have you endorsed anyone in this race?  If so, whom?  And what do you attribute the closing of these numbers to? 

TOWNSEND:  I have endorsed.  I endorsed Hillary Clinton.  I think she‘s very experienced.  She‘s smart.  And I think she‘ll be a great president.  And I‘m very excited about having the first woman president. 

I think this is one poll.  There are have been polls out in the last few weeks that showed her substantially ahead.  Right after the New Hampshire debate, there was a poll taken in which 60 percent said that Hillary Clinton had won the debate.  So this is going to happen in ups and downs, but I think Hillary, again, showing right after the debate, when people could see her, hear her talk, compare her to Barack Obama, thought she did the best. 

BARNICLE:  Deroy, we‘re at least—probably at least several months away from the first primary, the Iowa caucuses.  Should we pay any attention at all to these polls at this point in time? 

MURDOCK:  Well, it‘s early and obviously things can change.  But it is interesting that Obama, at least in this poll, is one point ahead of putative front runner, Hillary Clinton.  I don‘t know if there actually is global warming going on.  But if there is, it‘s not happening anywhere near Hillary Clinton.  She‘s sort of a one woman polar ice cap.

And I think part of the reason that she‘s not more popular and hasn‘t run away with this thing is I think a lot of people just don‘t really care for her.  She has done OK in the polls.  But I think a lot of Democrats are hesitant about her answers on many issues, seem kind of tortured.  There doesn‘t seem to be any great interesting vision around which people can rally. 

And people seem sort of thinking, well, I guess she‘s ahead.  I guess I will support her.  I don‘t see any tremendous enthusiasm on the part of  very many people for Hillary Clinton. 

BARNICLE:  Kathleen are you going to take that? 

TOWNSEND:  Not at all.  Where has this person been?  I think there‘s a lot of enthusiasm, because this is a person who has lived in the public eye.  We were talking about that earlier, knows the issues, is incredibly smart about health care, child care, what we should do to defend our country.  She‘s been on the ground.  She understands what people‘s needs are.  She talks to people about what it is that yearning in their hearts. 

And the fact is, to be blunt, it is very hard for a woman to run for president.  This is a country that has not had a history of women leadership in politics.  We have never had a woman president.  Other countries have. We don‘t have queens.  And so it‘s very difficult for Americans to—

(CROSS TALK)

MURDOCK:  How can you sea say that when you have Nancy Pelosi as the speaker of the House of Representatives? 

(CROSS TALK)

JEFFREY:  -- Hillary perhaps being the first female president.  There‘s no doubt that Hillary, from the beginning, has viewed this as a great problem.  She needs to convince people that she can be the first female commander in chief ever elected in this country.  Yet she has this problem with temperament, where people see her as too strident and too hard.  It‘s a difficult line for her to walk.   

I actually thought on that score she had did a very good job in the debate on Sunday night.  It will be interesting to see what the next poll shows, whether she got any boost out of that or not. 

BARNICLE:  Al Gore was in the “New York Times” today, in Bob Herbert‘s column, claiming he‘s not good at politics.  So the question—He told Bob Herbert, I don‘t think I‘m really good at politic, to tell you the truth.  He also said that what politics has become requires a level of tolerance for triviality and artifice and nonsense that I find I have in sort supply.  Stark honesty, sour grapes or pure politics, Terry? 

JEFFREY:  I think it‘s politics.  I think he‘s sort of toying with running for president still.  He obviously is pretty good at politics.  The guy elected to the House of Representatives, Senate, vice president, almost got elected president of the United States. 

I thought, actually, in that piece, he made a very excellent point about Iraq that I wish some of the other Democrats would listen to.  He said the problem is, even if you want to get out of there, the job of a president is to deal with what is now a very complex situation and not make it worse with what you do.  I‘d like to see other Democrats answer the dilemma that Al Gore put forward, because I think it‘s an honest one. 

MURDOCK:  I think Al Gore‘s—I wonder if he‘s gotten over the big drawback that I think essentially kept him out of the White House in 2000, which is sort of the stiffness, the woodenness, and also his, sort of, playing fast and loose with the truth, saying that he was the inventor of the Internet and that sort of thing. 

One positive for him is that he is obviously the most eloquent advocate for the global warming theory.  I happen to not agree with it!  But that is a pretty coherent viewpoint.  It‘s one that he could use to advance a whole number of issues.  It at least it gives him a coherent philosophy or coherent set of policy positions to put forward, for better or for worse. 

BARNICLE:  Kathleen Kennedy Townsend, I‘d like to talk to you about something quite personal to you, quite personal to a lot of people; 39 years ago this week you‘re dad died in Los Angeles.  What do you think your father, Senator Robert F. Kennedy, candidate for president then, would be thinking about the politics of this country, the issues of this country today? 

TOWNSEND:  You know, thank you for asking.  I‘m always reluctant to say what my father would say in this year, because I—but he said a lot of things about the issues that are still with us today, which is that we should get out of an unjust war that‘s killing people without a real end-goal in sight.  He talked brilliantly and compassionately about walking in other people‘s shoes with Cesar Chavez or African Americans in the Delta. 

And he believed very much that it was his job to shed light on the injustices that occur in our own country, and to believe greatly in what our nation has to offer around the world.  And so whether ever he went, whether it was South America or Japan or Africa or Europe, there were people who believed in this country.  And I would think he‘d be very disappointed with what‘s going on today. 

BARNICLE:  I assume you miss your dad every single day of your life, but are there moments in time, in politics, in the time of politics that you miss him more than in other moments? 

TOWNSEND:  Well, I—I do miss him very much.  I think at the times when people are asking, you know, where are the candidates of courage, where are the candidates of leadership, where are those who can open our eyes to how other people live, I wish my father were here.  But he was also the father of 11 children.  And I think it‘s very tough to lose that too. 

BARNICLE:  Kathleen Kennedy Townsend, Deroy Murdock, Terry Jeffrey, thanks all very much.  Chris Matthews will be back here tomorrow.  Right now it‘s time for “TUCKER.”

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

END   

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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