updated 7/3/2007 10:13:50 AM ET 2007-07-03T14:13:50

Guests: Howard Dean, Terry McAuliffe, Duncan Hunter, Chris Dodd, Jenny Backus, R. Emmett Tyrrell

REV. AL SHARPTON, GUEST HOST:  Tonight: Take the money and run.  For the second time, Senator Barack Obama raises more cash than any other Democratic candidate.  Can Obama turn bucks into ballots in 2008?

Let‘s play HARDBALL.

Good evening.  I‘m Reverend Al Sharpton, in for Chris Matthews, who will be back later this week.

The headline tonight out of London.  Several people have been arrested, including doctors, in connection with the terrorist attacks in Great Britain over the weekend.  In the U.S., Homeland Security secretary Michael Chertoff played down a report that al Qaeda is planning an imminent terrorist attack on American soil.

The big political news today is that for the second straight time, Barack Obama has outraised Hillary Clinton, this time by $10 million.

We begin tonight with the Democratic National Committee chair, Howard Dean.  Good afternoon—good evening, Chairman Dean.  How are you?

HOWARD DEAN, DNC CHAIRMAN:  I‘m great, Reverend.  Thanks for having me on.

SHARPTON:  How do you view Mr. Obama raising $10 million more than the top poll—at least by poll estimates, the top runner, Hillary Clinton?  How do you view that?

DEAN:  Well, you know, the amazing thing about this is how well all of them have done.  Both of them have raised a tremendous amount of money compared to what we were all raising four years ago at this time.  You know, it‘s a pretty extraordinary time.

You know, you and I have spent a long time on the campaign trail together and talked a lot about Civil Rights.  If Martin Luther King were around today, I think even he would be surprised to have a woman, an African-American and a Hispanic among the leading candidates for president of the United States in Democratic Party for the United States of America.  It is extraordinary.

SHARPTON:  Now, according to the reports, Obama‘s on-line donations, or 90 percent of them, were $100 or less.  Is he the Howard Dean of the ‘08 race?  I mean, you were the guy that had made on-line work so well in ‘04.

DEAN:  Well, that‘s very important.  What he‘s doing is bringing hundreds and thousands of new people into the Democratic Party, as we did, and to have campaigns like that, whether he- two years—or two cycles in a row is very, very good for the Democratic Party.  Look, we‘ve got a very strong field.  Nobody knows who‘s going to win this thing in the end, but I think they‘re off to a really, really good start.

SHARPTON:  Now, Chairman Dean, let me ask you, do you really think that money matters as much as people in the inside of the campaigns or inside of the Beltway, read this?  Does money translate into votes, or is that overrated in terms of what the public may vote or may not vote for?

DEAN:  It‘s important.  It‘s not overrated.  It‘s important.  But there are a lot of other things that go into this.  Grass roots organizations matter enormously.  If money had translated into votes, we might be having this conversation in a more upscale place, in Pennsylvania Avenue, Al.  So you know, it doesn‘t—it‘s not a one-for-one, but it does mean that you‘re a serious candidate, and it certainly gives you some advantages.

But on the other hand, you know, there‘s quite a few people in the

Democratic field who have raised enough money to compete.  And so I‘m not -

I don‘t think this is going to be a runaway race by any stretch of the imagination.

SHARPTON:  What happens if Michael Bloomberg, himself a billionaire and can write a check for who knows what kinds of money, if he decides to run—what will that do to the Democratic contender?  What kind of heat will it put on the party?

DEAN:  I think it‘s going to put heat on a lot of people.  At the end of the day, you know, Mike Bloomberg‘s a very, very bright guy.  You know how as well as I do.  He‘s very smart.  I don‘t believe an independent can run and win the presidency.  A third party person‘s only won the presidency once in the entire history of the United States, and that was Abraham Lincoln.

And so I‘d be very surprised if he got in because he—I don‘t think he wants to get in just for the fun of it.  It‘s a lot of work.  So my guess is he doesn‘t get in.  But if he does, so far, the preliminary indications are that he hurts the Republicans more than us, but we don‘t know that and it‘s going to be a long time before we know that.

SHARPTON:  But haven‘t the Democrats appeared to, at least in the last couple of months, hurt themselves?  And according to the polls, the president is at his lowest, but so is the Democratic Congress.  Will that hurt the Democrats at the polls next year?

DEAN:  In the long run, I think...

SHARPTON:  Seemingly, voters are disappointed with what they are getting from the Congress.

DEAN:  Well, I think in the long run, it won‘t.  You know, we‘ve accomplished more in six months than the Republicans accomplished in six years.  We raised the minimum wage, put ethics laws back in play in Congress, balancing the budget language, which the Republicans have refused to comply with, making it easier for kids to pay for college education.  These are real things that have passed and make a difference in people‘s lives.

I think what people are waiting to see is the Iraq situation -- 70 percent of the people want to see the Democrats get us out of Iraq.  I‘m not sure that‘s possible because the Republicans are obstructing us in the Senate, but I think we need to make the case to the American people that we will get them out of Iraq and that Republicans will keep them in Iraq.  And judging from what the presidential candidates are saying, I think we can make that case.

SHARPTON:  But shouldn‘t the party be saying more—I mean, it seems like the party has, being very frank about it, not come out as a party aggressively about getting us out of the war.  Maybe the bully pulpit of the chairman could be used here to make people feel we are at least aggressively trying to move the Republicans from blocking us and obstructing the exit from Iraq?

DEAN:  Right.  Well, I think I‘ve been pretty clear for four years that we ought not to be in Iraq.  But if you look—here‘s the difference.  Every single one of the Republican candidates for president believe we ought to be in Iraq and supports the president, with one exception, who‘s a libertarian.  On the Democratic side, every single one of the eight people running for president believes we ought to get out of Iraq and has a plan to do so.

So I think when the American people make their choice about a year-and-a-half from now, it‘s going to be really clear if you want to stay in Iraq, you vote Republican.  If you want us to get out of Iraq, you vote for the Democratic candidate for president.

SHARPTON:  According to most polls, Hillary Clinton is ahead as the frontrunner.  If she wins the nomination, you, as the leading anti-war candidate in ‘04 and a leading opponent of the war—how will you reconcile being the chairman of the party with her position on the war?

DEAN:  Well, I think it‘s pretty clear that both Senator Clinton, Senator Obama, Senator Edwards, Governor Richardson, Senator Dodd—all of them have said—Senator Biden—that we ought to be out of Iraq.  Every single one of them have said that.  There may be some nuances in their positions, but every single one of them believes we were misled by the Republicans and the president and that we should not be in Iraq.  And 70 percent of the American people agree with us.  So I‘m not too worried about my positions on the war, as opposed to anybody else‘s in the Democratic Party.

SHARPTON:  Now, let me look at the other side a minute.  The other news we got from the filings, the financial filings, is it seems like John McCain is collapsing.  He raised less money this quarter than last quarter.  He‘s even cutting back staff.  Is John McCain finished?

DEAN:  Well, I wouldn‘t go so far as to say that.  You know, first of all, I got enough trouble with Democratic politics without getting into the Republican side too much.  But I think, you know, $11 million is still a lot of money to raise, and I think it‘s kind of inside-the-Beltway punditry to say that a campaign dead yet.  Clearly, the Republicans are having trouble.  The Democrats are going to outraise the Republicans by a lot, and that‘s—that means that the American people in general believe that the Democrats are more able to lead the country in the direction that the public wants than the Republicans are.

SHARPTON:  Now, Hillary Clinton is in Iowa, or en route to Iowa.  She‘s bringing with her her husband, Bill Clinton.  What does Bill Clinton mean on the circuit as a campaigner?  And how will you use him in ‘08, no matter who the candidate ends up being for the party?

DEAN:  Well, he‘s been great to us.  He‘s helped us raise money already.  We did a big dinner in New York last fall.  And he‘s obviously a huge asset, as a very popular former president.  But remember, the spouses of some of these other candidates are pretty tremendous, as well.  I think particularly Michelle Obama and Elizabeth Edwards have gotten huge positive reviews, as well.

So obviously, President Clinton has a special niche in everybody‘s heart, but I think that at the end of the day, every candidate‘s going to have to stand up for themselves and be judged.  And a strong spouse is a good thing, but there‘s more than one candidate with a strong spouse.

SHARPTON:  Thank you, Howard Dean.

Coming up, Barack Obama beat Hillary Clinton in the latest fund-raising report.  How does she plan to beat him for the nomination?  Clinton campaign chairman Terry McAuliffe will be here.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

SHARPTON:  Welcome back to HARDBALL.  I‘m Reverend Al Sharpton.  Chris will be back later in the week.

Hillary Clinton is spending the 4th of July in Iowa with what some people see as her secret weapon, Bill Clinton.  Terry McAuliffe is the chairman of the Clinton campaign.  Welcome to HARDBALL, Terry.

TERRY MCAULIFFE, CLINTON CAMPAIGN CHAIRMAN:  Reverend, great to be with you.

SHARPTON:  Why Bill Clinton?  Why now?  Is this a reaction to the financial reports that have Barack Obama outraising you guys $10 million this quarter, or was this already planned?

MCAULIFFE:  Well, as you know, we raised $27.5 million, almost $28 million on top of the $26 million we did the first quarter.  We raised $54 million, so we‘re very happy where we are.  We‘re going to have all the money we need.  Barack Obama‘s going to have all the money he needs.

Look at the polls today, Reverend.  Hillary‘s ahead in 35 of the first 36 states.  She‘s won all the debates.  She‘s doing great.  They‘re going out there to spend July 4th.  I was with the president today.  They‘re off.  They left this afternoon.  They‘ll be out there for three days.

You know, he‘s going to be the chief biographer, and he‘s going to introduce Hillary, and Hillary‘s going to talk about her vision for where she wants to take this country and talk about...

SHARPTON:  But you‘re the big money man.  I mean, everybody knows, when you were chair of the party, you raised money.  You paid off the debt.

MCAULIFFE:  Yes.

SHARPTON:  Is this a personal setback to you, for Obama to outraise you in two quarters in a row?

MCAULIFFE:  Well, I think it‘s actually great that he‘s raising so much money because when we‘re the nominee on February 6, all those people he‘s brought into the party and all those people that he‘s energized will be there for us for the general election.  But we‘re raising money.  Raising money is one piece of the whole campaign.  Who‘s got the best message?  Who‘s the best candidate?  And right now, as you know, Reverend Hillary is walking away with this nomination.

Now, it‘s not today.  We got a long way to go.  But if you look at the polls out today, up 3 points in Iowa, ARG poll came up, up, like, 16, in South Carolina, up 10 in New Hampshire.  We‘re winning in all of these early states because people are seeing Hillary, they‘re listening to her, and they‘re liking what they‘re hearing.  And they‘re coming out in record numbers to support her.

SHARPTON:  Talking about polls, though, right now, there‘s a poll saying 52 percent of people say they would never consider voting for Hillary Clinton.  How do you respond to that poll?

MCAULIFFE:  Well, I think you know as well as anybody, take a poll at this point, you can only use it for what it‘s worth.  By the time we get to the general election, I can give you poll after poll that shows Hillary—now a “Newsweek” poll, over 50 percent against every single Republican.  All the polls, Reverend, show that Hillary is the best Democrat in the general election.  Every one has said that.  She has the highest favorables of all the Democrats in the race.  As I say, “Newsweek” has her over 50 percent.  We got a long way to go.

SHARPTON:  Is there going to be any new strategy, any new way to raise money, to reach out to more grassroots people as a result of this last filing?  Are you going to tweak anything?

MCAULIFFE:  I‘m very happy where we were.  Our goal was, we raised $26.2 million the first quarter, which was an all-time record.  We wanted to do more the second quarter than we did the first to show continued strength.  We actually raised almost $28 million, so you know, lots of cash on hand.  We‘re doing great.  We‘ll have all the money we need.  Barack Obama will have all the money that he needs.  We‘ll see where John Edwards is and the other candidates.  We have the money, so money‘s not an issue for Hillary Clinton.  It now goes back to the candidate, and she‘s winning because she is the most experienced and will be the best president.

SHARPTON:  Now, one thing she did surprise a lot of people, she seemed to have bested out everyone at Howard University...

MCAULIFFE:  Right.

SHARPTON:  ... in the debate last Thursday.  Let‘s look at Hillary Clinton last week at the debate at Howard.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  You know, it is hard to disagree with anything that has been said, but let me just put this in perspective.  If HIV/AIDS were the leading cause of death for white women between the ages of 25 and 34, there would be an outraged outcry in this country!

(APPLAUSE)

(END VIDEO CLIP)

SHARPTON:  I think that she fared very well that night.  I was in audience.  And I‘m told that a South Carolina poll is encouraging to you.  But with the news of her being beat by Obama in fund-raising, do you worry that those polls will change, that he becomes more believable to the undecided?  What is the strategy?  Just between us, Terry, aren‘t you going to have to do a little more work?

MCAULIFFE:  I don‘t think we can do much more work.  I mean, we, as I say, are in very good shape.  I don‘t think one primary or caucus voter in this country could care less about how much money Hillary Clinton raises, and how much money Barack Obama or John Edwards or Joe Biden or any of them.  Money allows you to run an effective campaign.  We have the money to run the campaign we need for the primaries, and the other candidates will, too.

But I don‘t think anyone outside this—Washington, D.C., could care less about who raised what.  You know that.  You ran a very effective campaign for president, and you were always at the bottom at raising money, but you still got your message out.  So I say money‘s important.  We have cleared the threshold.  We have had two record-breaking quarters raising money.  We will have the money we need for our primaries.  Now it goes to the issues.  It goes to the candidate.  Overwhelmingly, people are now saying, We want Hillary Clinton.  We are up 18, 19, 20 points head-to-head against any Democratic opponent.  We now beat every Republican in the race.  And we‘re just starting. So we feel very...

SHARPTON:  Talking about money and effectiveness—John McCain had a very low showing with—in fact, he‘s laying off staff.  Do you think his campaign is finished?

MCAULIFFE:  It‘s never a good story to say you‘re laying off 50 staff at the beginning of a campaign.  I think they probably ramped up awful early, got things going.  I never count anyone out in this business.  I think this thing will be over in seven months.  About seven months from today, we‘ll hit February 5.

SHARPTON:  Now, that‘s the big day.  You, when you were chairman, were for front-loading primaries.  Now we‘re front-loaded even more.  Is this good for the party?

MCAULIFFE:  Well, what I did, If you remember, I changed it to allow certain states to come in early...

SHARPTON:  Yes.

MCAULIFFE:  ... to represent the African-American community.  That‘s why we brought up South Carolina, we brought up Arizona, we brought up New Mexico.  So we only had seven that were scattered, as you know, on that calendar.  So it wasn‘t front load in that sense.  But I do believe Iowa and New Hampshire are great states, but we needed to show the diversity of our party, so I worked very hard and very selectively to bring up certain smaller states who could help represent the diversity of our party.

This calendar, it is what it is.  I believe, Reverend, this will be over in 22 days.  I think from January 14 to February 5, it‘s over.  There‘s too many big states on February 5 -- California, Texas, New York, Illinois, Michigan, New Jersey.  How do you possibly compete?  How do these second-tier candidates, if they do well in Iowa and New Hampshire, raise the money, process it and get it on television?  It‘s almost impossible.

SHARPTON:  Well, we‘ll see what happens.  Bill Clinton hits the trail tonight in Iowa, and Terry McAuliffe is still smiling.

MCAULIFFE:  Always smiling.

SHARPTON:  Thank you, Terry McAuliffe.

Up next, Republican presidential candidate Duncan Hunter.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

SHARPTON:  Welcome back to HARDBALL.

Joining me right now is Republican Congressman and presidential candidate Duncan Hunter, who is Ann Coulter‘s top choice for president.

Let‘s take a look at the exchange she had with Elizabeth Edwards last week on HARDBALL. 

(BEGIN VIDEO CLIP)

ELIZABETH EDWARDS, WIFE OF JOHN EDWARDS:  I‘m making this call as a mother.  I‘m the mother of that boy who died.  My children participate.  These young people behind you are the age of my children.  You‘re asking them to participate in a dialogue that is based on hatefulness and ugliness, instead of on the issues.

And I don‘t—I don‘t think that is serving them or this country very well. 

(CHEERING AND APPLAUSE)  

CHRIS MATTHEWS, HOST:  Thank you very much, Elizabeth Edwards.

Do you want to—you have all the time in the world to respond to that. 

ANN COULTER, AUTHOR, “GODLESS: THE CHURCH OF LIBERALISM”:  I think we heard all we need to hear.  The wife of a presidential candidate is asking me to stop speaking. 

No.

(END VIDEO CLIP)

SHARPTON:  Congressman Hunter, welcome.

Ann Coulter has said that you are her top choice.  She didn‘t endorse you, but she spoke glowingly of you.

Do you think that Senator Edwards‘ wife was out of line or correct in calling her, saying, “Let‘s take a lot of the personal attacks out of politics”?

REP. DUNCAN HUNTER (R-CA), PRESIDENTIAL CANDIDATE:  Well, I think what Senator Edwards‘ wife said was very consistent with what lots of Democrats and lots of liberals have said since—since the amnesty bill went down in flames, and that is that we need to silence conservative voices.  In some cases, of course, those voices are going to be the voices of talk radio, whom the Democrats are particularly focusing on. 

In this case, Ann Coulter is a very articulate spokeswoman for the conservative view.  And I think the idea that, when conservatives talk, they‘re talking about—they‘re considered to talk about—in a mean way, and, yet, when Democrats talk, they‘re exercising their right to free speech and they‘re simply conveying a philosophy. 

Of course, the whole idea in politics is to try to marginalize the other guy and make him appear to be extreme.  But I think, especially since Ann Coulter said nice things about me, I think she‘s closely approaching that level of being a great American, Al.

(LAUGHTER)

SHARPTON:  Well, is she a great American because she spoke nicely of you, or is it all right to talk about the fact is, the Edwards‘ son getting killed?  I mean, these are very personal things that go way beyond politics.

HUNTER:  Well, listen, I haven‘t seen all of the—I haven‘t seen all of the back-and-forth. 

But, you know, I‘m reminded of—I‘m reminded of the debates between John Edwards and Dick Cheney, in which John Edwards said some pretty personal things about Vice President Cheney‘s family, and Vice President Cheney just kept on talking about the issues.

So, you know, I‘m running a campaign on a basis of a strong national defense, enforceable borders—I built that border fence in San Diego, and I wrote the law that takes it across Arizona, New Mexico, and Texas.  That‘s what this administration needs to focus on.

And one thing, incidentally, Al, that Democrats aren‘t focusing on this year—in fact, you just—you had on the Democrat leadership a few minutes ago.  They never mention these words: jobs.  Jobs are important.  And we‘re pushing lots of jobs offshore because we‘re allowing China to cheat on trade. 

And, you know, that‘s something I‘m running on, is to stop China‘s cheating on trade, to level that playing field that right now is gutting the American manufacturing base, and has taken 3 million jobs offshore in the last five years. 

That‘s something Democrats aren‘t talking about, and a lot of those guys with some fairly bloated campaign coffers that you just ran up on the tote board have been filled with Wall Street money from Wall Street financiers who have made their money pushing jobs to China, to India, to other places.

I think we have got a great opportunity in the Republican Party to talk about jobs this year.  But Ann Coulter, I think Ann Coulter is good.

SHARPTON:  Well, when you talk about—when you talk about Republicans and Democrats—well, in this case, you said Democrat with Wall Street money—there was a story out about Fred Thompson‘s whole family being engaged, and he himself, in lobbying and becoming very comfortable with some of the big guys that influence Washington.

If he enters the race, will you use his lobbying connections against him, since this kind of rankles you with Democrats?

HUNTER:  Well, it‘s not lobbying, per se, Al. 

What it is, is that we have—we have seen lots of American industry where financial analysts in Wall Street have come in and said, “Listen, if you move your production company from America to China, and you go from paying 20 bucks an hour for your workers to paying 50 cents an hour to a dollar an hour for workers in China, the value of your company goes up from $10 million to $20 million.” 

And those moves are being made all the time, lots of financial money coming out of Wall Street that is generating that exodus from America‘s shores with our manufacturing base. 

And, as a defense guy who‘s chaired the Armed Services Committee for the last four years, I see this great arsenal of democracy, our ability to make things in peacetime that we can use in time of war—that is, the industrial base that won World War I, World War II and the Cold War—I see that moving offshore.  I think that‘s bad for the country.  It‘s bad for jobs, bad for working families.  It‘s also bad for national security.

So, if I see candidates who are being fueled by Wall Street money that has come from this massive exodus of American industry, this movement offshore, sure, I will bring that out.

Now, I don‘t know anything about where—I don‘t know where...

SHARPTON:  All right.  Well, let me ask you.  We have about a minute left.  Let me ask you this.

HUNTER:  OK.

SHARPTON:  What distinguishes you from your Republican opponents?

HUNTER:  I think, first, that jobs issue, the fact that I am not an absolute free-trader, that I think we have got a non-level playing field right now, and we have moved a lot of jobs offshore.  And I‘m the one guy who will stop China from cheating on trade.

Also, I have actually built a border fence in San Diego.  And we reduced the smuggling of people and narcotics by more than 90 percent.  And I wrote the bill that takes it across Arizona, New Mexico, and Texas.  I know how to solve the enforceable border issue.

And, lastly, I stand for a strong national defense.  I have served in

in Vietnam, didn‘t do anything special, but I wore the uniform.  My son serves in Afghanistan as we speak.  I can look the American people in the eye and say, “When we‘re in a war, you know we‘re all in this together.” 

I think that‘s important.

SHARPTON:  All right.

Thank you, Congressman Hunter.

HUNTER:  Hey, many thanks, Al.

SHARPTON:  Up next—up next: another presidential contender, Senator Chris Dodd.

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

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

A triple-digit success story for the blue-chippers, the Dow gaining 126 points today, to close at 13535.  The S&P rose 16 points, closing at 1519.  And the Nasdaq picked up 29 points, to close at 2632. 

Helping to fuel today‘s rally on Wall Street, good news on manufacturing.  An industry report shows, the manufacturing sector outperformed expectations in June, posting the best monthly gain in more than a year. 

On the energy front, the price of oil hits a 10-month high, settling at $71 a barrel—traders showing concern over a refinery outage in Kansas that was caused by flooding.

And iPhone sales are sizzling.  According to a “Los Angeles Times” report, Apple has sold more than half-a-million iPhones since Friday‘s launch.  Half of the Apple stores on the West Coast reportedly sold out of the iPhone on the first day—from CNBC headquarters, now back to HARDBALL. 

SHARPTON:  Welcome back to HARDBALL.

I am the Reverend Al Sharpton, in for Chris Matthews.  Chris will be back later in the week. 

Democratic presidential candidate Chris Dodd is fighting to break into the top tiers of the candidates, even though he has only raised $3.25 million in primary funds for the second quarter. 

Senator Dodd, welcome.

SEN. CHRISTOPHER DODD (D-CT), PRESIDENTIAL CANDIDATE:  Well, nice to see you, Reverend. 

SHARPTON:  How are you? 

DODD:  I am doing very well.  Thanks for asking. 

SHARPTON:  The public has been polled, and they have given low grades to the president, but they have also given low grades to Democrats in the Congress in terms of ending this war. 

What is the problem?  Why haven‘t the Democrats in the Senate and the Congress been able to deliver to the expectations of the voters that put them in power in ‘06? 

DODD:  Well, first of all, Reverend, I want you to know, we have about

we have raised about $13 million for the campaign, have about $7 million on hand.  So, while the quarter numbers were not as strong as some others, we are in very good shape, in terms of finances in the campaign.

Now, as to your substantive question here, well, I think for a lot of reasons.  First of all, you are dealing with a diverse group of people.  I mean, they don‘t all share the same view, unfortunately.

I have tried—in fact, the last time around, when the supplemental package was up, I urged, in every way I could, for Democrats to vote against that, and to send the president a message that we want this war to be over with; we want these troops to come home; we want to give them enough time to do it between now and the end of March next year.  And I regret that only 11 of us actually took that position. 

I think that was wrong.  But, again, I understand the leadership‘s difficulties in building some consensus.  But, frankly, I think the American public are way ahead of everybody on this issue.  After $2 billion a week, $8 billion a month, with some 50 percent of the Iraqi people think it is all right to kill Americans, 70 percent think we are the cause of their chaos, it‘s a civil war in that nation.  It‘s hurting our work everyplace else.

In fact, Reverend, we‘re more—or less secure today, more vulnerable, more isolated today than at any point in recent past history.  This issue is hurting us on every single front, and we need to stop the funding immediately. 

SHARPTON:  Are you disappointed in some of your fellow Democrats, particularly that are serving in the Congress, frankly, caving in on this issue? 

DODD:  I am, frankly.  I don‘t think they‘re listening carefully to people here.  No one‘s talking about getting the troops home next week or next month.  We realize it will take some time to do it safely. 

But I think the clarity of that message may just have the beneficial effect of convincing the Iraqis that they‘re going to have to take control of their own destiny here.  There‘s not a treasury deep enough or an army big enough. 

We talk about what‘s happened to our people.  And we should understand that., the 3,500 of our people who have lost their lives, the 27,000 who have been injured.

But let me also point out, in addition to those tragic numbers, 70,000 Iraqis have died.  Two million have left the country.  A million more are displaced within the country here.  This is a situation which is tearing them apart.  And the assumption that our military here can provide a victory for them, I don‘t know of a military leader, Reverend, who over the last couple of years, has once believed that there‘s a military solution to the civil war in Iraq.

So, the clarity of announcing that we‘re bringing our troops back home by the end of March next year, I think could help.  And I regret that others haven‘t embraced that view.

SHARPTON:  If you were president right now, Senator Dodd, what would you do immediately about Iraq?  What would President Dodd do today if you were sitting in the White House?

DODD:  Well, I would have announced that we‘re withdrawing our troops, beginning a process that might take six or seven months, but will be terminated on a certain date certain.

I would—secondly, I would close down Guantanamo immediately here, because that‘s been a symbol of our—of our destroyed and damaged moral leadership in the world.

I would be simultaneously, Reverend, engaging in the kind of robust diplomacy that this administration treats as a favor to your enemy or a sign of weakness.  Statecraft has been abandoned here.

I would be urging the regional powers, the moderate Arab states—the so-called states—to get deeply involved in this issue, if they want to have continued support from the United States.  I would be using all of these tools available to me, while simultaneously calling for the removal of our troops in Iraq.

SHARPTON:  What distinguishes your position—you‘re trying to break into what they call the top tier.  What distinguishes your position from that of Senator Clinton and Senator Obama?

DODD:  Well, I will let them speak for themselves.  But I don‘t think there‘s been clarity here.  I think people want some very clear answers on this, and—and laid out. 

And I have done that over the last number of months.  I tried it in January, some six or seven months ago, when we got back in, we had a majority, and every step along the way.

And I think, frankly, the rhetoric is wonderful, but I think we would like to see some action taken that would allow us to get closer to the results you and I are talking about.

I‘m the only candidate for president that‘s called for the closing down of Guantanamo.  Colin Powell has called for it.  Others have as well.  It‘s a tragic symbol for what‘s gone wrong.

I would also—and I should have added this, Reverend.  I would also restore our Constitution.  If we don‘t do it before January of 2009, I will use executive power to restore habeas corpus, to abandon torture as a means of getting information, and to reassert our position within the Geneva Convention.  Those three steps have done us incredible damage as well.

SHARPTON:  Well, thank you, Senator Dodd. 

And I...

DODD:  Thank you, Reverend.

SHARPTON:  ... think you were very clear on your positions. 

DODD:  Thank you.

SHARPTON:  Up next, tonight‘s HARDBALL debate:  Has the Supreme Court gone too far to the right? 

This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

SHARPTON:  Welcome back to HARDBALL.  Time now for the HARDBALL debate.  The Supreme Court wrapped up its term with rulings that limited abortion rights, restricted school integration programs and struck down a key provision of the McCain-Feingold campaign finance law.  Has the Supreme Court gone too far to the right? 

Bob Tyrrell is founder and editor in chief of the “American Spectator,” and Jenny Backus is a Democratic consultant.  How about it?  Has the court gone too far to the right, Jenny? 

JENNY BACKUS, DEMOCRATIC STRATEGIST:  I think so.  What we learned, I think, at the end of this term, is how much a president matters, and what a difference a conservative president verses of more progressive president in the White House could mean.  This is a terrible, terrible term for people who don‘t have power.  And right now a lot of voters are out there and they feel like Washington doesn‘t—they have no solution through the Congress and the presidency, that they don‘t listen to them.

So the courts of been there last resort.  We have learned now, with this Supreme Court, and Roberts and Alito on that court, that this court does not care about the rights of minorities.  They don‘t seem to care about the rights of women.  Very controversial court case striking down—making it harder to file discrimination in pay cases.  The rights of women, in terms of having the right to choose and the right to privacy. 

It is an ominous sign and the scariest that, I think, for me as a progressive, is to take a look at the photos that were in that “New York Time” cover piece.  Look how young the conservative judges are? 

SHARPTON:  They will be there a long time.  Bob, did the president stack the court with right-winners?  We are getting a move to the right?

R. EMMETT TYRRELL, “THE AMERICAN SPECTATOR”:  The point that you should be concerned about is that judges interpret the law.  They don‘t make the law.  Your question is best answered, I suppose, is to say that these judges are interpreting the law—the constitution as written by the founding fathers.  And if the founding fathers are in your opinion far right, I disagree with you. 

What you want, if you want law to be written differently, have the laws written differently.  The court is the one neutral place you can go.  And the question is, what does the law say?  What is the interpretation of the law, written by the founding fathers?  And if you do not like the law, rewrite the laws. 

BACKUS:  But Bob, don‘t you think that what we‘ve seen in a shift in this courts, especially with Roberts and Alito, is the rise of activist conservatives?  There‘s that old argument that these judges in court hearings, in front of Senator Leahy, that they would uphold precedent.  They are not upholding precedent.  They threw out recent precedent, especially in the case of the federal abortion legislation. 

SHARPTON:  Let me ask you something about activists using the legal system.  We just got breaking news that President Bush just commuted the sentence of Scooter Libby.  That is a very aggressive active political move.  Wouldn‘t you think so, Bob?

TYRRELL:  Well, it is within his right.  He can pardon—

SHARPTON:  We‘re not talking about rights. 

TYRRELL:  He has got the right to use the pardon. 

SHARPTON:  What is your reaction?  You think that that is good for the country?  Here is a man that was part of exposing and then covering up the exposing of a CIA operative that is there to protect the country and protect the people of this country.  What kind of signal does that send? 

TYRRELL:  That is not what he was found guilty for.  He was found guilty of telling a lie. 

SHARPTON:  A lie about the (INAUDIBLE) of a covert operative? 

TYRRELL:  It was slightly different than that, but the—you ask me one question at a time.  The point is, in the case of Scooter Libby, he had no motive to lie.  And if he did lie, it was the stupidest lie in the history of the world—

SHARPTON:  But he was convicted.

TYRRELL:  Wait, let me finish.  Yes, he was convicted, but it is

perfectly within the president‘s right to pardon.  Your favorite president

SHARPTON:  He was convicted of lying to protect this White House, this vice president, and this president‘s policies.  The whole thing was whether or not this was exposed for political reasons. 

TYRRELL:  The question ought to be is he within his rights to or not too?  Now, if you, who just stood our President Bill Clinton, who engaged in something like 200 ethical questionable pardons in his last 24 hours in White House, if you are opposed to this one puny little pardon, my heavens.  You have a double standard.  

BACKUS:  First of all, let me offer my opinion here, which is that I think this administration has consistently sent a terrible message to people.  You and I may disagree on a lot of things, but I think everyone agrees that we have got to uphold the law, and we have got to uphold the standards.  This guy did not uphold the law.  This administration does not uphold the law. 

What kind of message does it send to the American people when Scooter Libby is allowed to walk free? 

(CROSS TALK)

BACKUS:  Jury of his peers.

TYRRELL:  So the president is no longer allowed to grant a pardon? 

BACKUS:  No, I am saying the president can do what he wants.  His legal rights are not in dispute here.  His political judgment is. 

TYRRELL:  You‘ve changed your position.

BACKUS:  I did not change my position. 

SHARPTON:  We‘re not talking legal.  Let‘s forget about legality.  Legally, let us stipulate.  I stipulate he has the right to do it.  But politically, doesn‘t this stink that he is pardoning somebody that was involved in what would appear to be covering up some things that may have come from his own administration? 

TYRRELL:  I don‘t think—It did not look to me like he covered up anything.  It looked to me like he misspoke, forgot what he and Russert—

(CROSS TALK)

TYRRELL:  It was the stupidest lie on earth.  He actually said this conversation took place.  And then he expected Russert, no particular friend of his, to come forward and verify. 

SHARPTON:  Breaking news from the Associated Press is that President Bush has commuted the prison sentence for former White House aide I Lewis Scooter Libby, who was convicted of perjury and obstruction.  NBC‘s Patty Culhane joins us from the White House.

PATTY CULHANE, NBC NEWS WHITE HOUSE CORRESPONDENT:  Al, I can tell you that the president arrived here just a very short time ago from Kennebunkport, Maine.  The helicopter came in.  We saw Mrs. Bush walk right to the residence.  The president walked off the helicopter and walked right into the West Wing, followed by some of his closest aide.  This was not leaked out before his arrival. 

All of a sudden, it hit the wires that he had commuted the sentence.  Keep in mind, the president had been under tremendous pressure from his base.  Scooter Libby was considered a very close friend to Vice President Dick Cheney.  He had been defending him over these last few weeks.  Now, the White House, officially, it said they were not going to get involved.  They were not going to talk about this issue while it was in the appeals process. 

Just today, the appeals court said there was no legal reason to let Scooter Libby stay out of prison while pending the appeal.  They said there were no close legal issues.  So his lawyer said he was going to have to report to prison in just the next few weeks.  So today, the president did not say anything in advance, just walked right into his West Wing office and commuted the sentence of a very top aide, a former top aide of Vice-President Dick Cheney.  Al? 

SHARPTON:  Thank you.  As we get more, we will keep the—certainly all of our audience updated.  I mean, all of the signals were they weren‘t going to get involved.  All of the signals were that we have got to wait and see.  There‘s not legal basis.  Then he comes back, walks into the White House, boom, commutes it.  You don‘t think that—

TYRRELL:  And that is perfectly legal. 

SHARPTON:  -- will upset the American public. 

TYRRELL:  And does what‘s perfect—well, your leadership is supposed 

not to—is supposed to do with—with the masses, or it is to do with the rule of law. 

SHARPTON:  This man lied about something that is serious, and you call this leadership? 

TYRRELL:  I call it one pardon, as opposed to your guy‘s 200 pardons. 

SHARPTON:  So now we‘re going to compare?  But you guys beat up on the Clintons on the pardons. 

BACKUS:  Now you won‘t?  Where‘s the consistency?  Exactly, that‘s your point. 

TYRRELL:  There‘s a difference between 200 and one.  And in the case of Clinton, these were drug peddlers, international fugitives, Mark Rich -- 

(CROSS TALK)

SHARPTON:  If those were all wrong, does that make this right? 

TYRRELL:  There is nothing wrong with it. 

SHARPTON:  You think this is morally right?  Forget the legal.  Are you saying this is morally right? 

TYRRELL:  I work my syndicated column saying I urge the president to do it.  I‘m glad to see the president is taking my advice.

BACKUS:  How can you be the party of law and order?  How can you be the party that attacked Bill Clinton, like you just did, for pardons, and then, when they do something with a guy who lies about a reason that took us to war for administration that has not told the truth about the war—

TYRRELL:  Wait a second.  It had nothing to do with war? 

BACKUS:  Excuse me? 

SHARPTON:  Was not the revelation about this person‘s status with the CIA because the husband had written—

TYRRELL:  That has not been established either. 

SHARPTON:  Oh, it hasn‘t? 

TYRRELL:  In the case of—Once they

BACKUS:  You don‘t think that they were worried about the fact that they were fabricating reasons to take this country to war and fabricating excuses about weapons of mass destruction? 

TYRRELL:  Frankly, this is one of your fabrications.  This president, as far as going to war, accepted the intelligence that the British accepted, that your guy, Bill Clinton, accepted. 

BACKUS:  Where is the stepping up to the responsibility.

SHARPTON:  He took us to war.  I mean, let us not blame the British.  Let us not blame Bill Clinton.  He took us to war.  The weapons were not there.  And this man wrote an op-ed piece that said that there was some misinformation that had already been given.  And, all of a sudden, his wife‘s position was leaked.  And it all led to, among other things, Libby saying what you said was stupid, what a jury said was criminal. 

TYRRELL:  The truth is that the person who took us to war was that provocateur, Saddam Hussein. 

SHARPTON:  I‘ve got to break, and we‘re trying to give more information to the public.  NBC‘s White House correspondent Kelly O‘Donnell is traveling with the president and joins us from Maine. 

KELLY O‘DONNELL, NBC NEWS WHITE HOUSE CORRESPONDENT:  Good afternoon, Al.  We are just receiving two pages of the statement by the president.  Literally, it was printed from his junior staffers who are here, a complete surprise here in Kennebunkport.  The president lays out in great detail his reasoning in the Scooter Libby case.  As you know, Scooter Libby was not only the chief of staff and national security advisor to the vice president; he was assistant to President Bush.

And in the lengthy explanation, the president says this, “I respect the jury‘s verdict, but I have concluded that the prison sentence given to Mr. Libby is excessive.”  It is 30 months, as you know.  “Therefore, I am commuting the portion of Mr. Libby‘s sentence that requires him to spend 30 months in prison.  My decision to commute his prison sentence leaves in place harsh punishment for Mr. Libby.”  That is the 250,000 dollar fine. 

“The reputation he gained through his years of public service and professional work in the legal community is forever damaged.  As a felony conviction, he would lose his law license.  He will remain on probation.  The significant fines imposed by the judge will remain in effect.” 

And he goes on to say, “the constitution gives the president power of clemency, to be used when he deems it to be warranted.  It is my judgment that a commutation of the prison term in Mr. Libby‘s case is an appropriate exercise of this power.”

So the president is doing something short of a pardon, which would wipe the slate clean, take away the convictions.  And in this case, he is sparing Libby from jail time, but he remains a convicted felon.  He will likely lose his law license.  He will have to pay 250,000 dollars in fines that were deemed by the court.  And he will continue to be on probation. 

Politically, this allows the president to split the difference.  A full pardon could have been viewed by critics as really allowing someone who worked for the president to be above the law.  At the same time, many conservatives were pressuring the president to take some sort of action.  And when, today, the appeals court said that Libby‘s prison time could not be stayed while he appealed, the president decided to take this action. 

It is a two page statement from President Bush clearly laying out the criticism, his consideration of what happened and this dramatic step that he is taking today.  Reverend Al?   

SHARPTON:  Kelly, so, in effect, the president is maybe attempting, in whatever way—we might say clumsily—to have it both ways.  He is not letting Libby all the way off the hook, because he is going to uphold the conviction of him being a felon and a fine.  But he will not do jail time.  Is that the bottom line of these two pages? 

O‘DONNELL:  That is my understanding.  I am not a lawyer, but I did cover every minute of the Lewis Scooter Libby trial and became familiar with all of the events and issues that were at stake.  He talks in this report, this two-page statement, about the importance of telling the truth and that he had instructed—the president had—all of his staffers to cooperate. 

He also explains that he believes the sentence was excessive, that 30 months for a first-time offender was simply too much, in his judgment.  And we do not talk often about the power of a present to commute a sentence.  We think more often about pardons.  And the president, like presidents before him, has granted pardons.  I believe Mr. Bush is up to about 113. 

Usually though what he requires is that somebody would have already served their sentence, shown remorse, and it‘s a long process to get to the pardon at a presidential level.  This short circuits all of that. 

SHARPTON:  Have we ever seen Mr. Libby show any remorse here?  Hasn‘t he been, frankly, fighting this all the way down?  I mean, you‘re not dealing with someone who has expressed a lot of remorse here.  And second, Kelly, while I have you, how do you explain the secret nature of how this unraveled?  You were traveling with him, a member of the media.  You had no clue at all this was coming?  What is the politics behind that? 

O‘DONNELL:  Well, we have been talking since the conviction took place to the most senior officials who would be a part of the process of consideration.  How would the president think about this?  What factors would he use?  And repeatedly, the most close and trusted advisors to the president simply said that they could not shed light on this issue.  They could not walk us into the thinking of the president, because it is so politically volatile, and it is a type of power the president has that is something that, ultimately, he has got to decide on his own. 

So we were not given any heads up.  The real timing has to do with the action by the U.S. appeals court, which would compel Libby to show up, as far as the Federal Bureau of Prisons set his time for reporting.  He had hoped that the appeals process could unfold and he would be able to stay free. 

When you mention remorse, he has not publicly stated it, in part, because he has been constrained by his own attorneys.  Libby himself is a lawyer.  And in trying to fight this case, of course, he pleaded innocent during the trial.  And then, in subsequent papers, tried to appeal the decision and maintained his innocence. 

This does require him to apologize or to say he was wrong.  It gives the president, as you indicated, a way to sort of find a middle ground that politically may be sellable because critics will say Libby is still getting a tough punishment, in that he must pay a 250,000 dollar fine and will remain a convicted felon.  And for critics who believe that the president should have completely pardoned him, this is something they can point to show that the president believed, as many who are conservatives feel, that this prosecution should not have taken place. 

One of the points the president makes is that Libby, and no one else, was ever charged with the underlying crime in the CIA leak investigation, revealing the classified status of a covert agent.  What he is charged with, and what he was convicted of, is perjury and false statements to the FBI, serious crimes according to U.S. counsel, but in the view of many critics, they felt it was criminalizing politics. 

There is a lot to be said about all of this.  But it was a surprise.  The timing was really triggered by the action at the court level, and the president has already left Kennebunkport, flying on Air Force One.  We stayed behind to wrap up our reporting on the Putin meetings.  And then this bulletin came through.  Reverend Al?

SHARPTON:  Has anyone from the administration been available to be questioned by the media?  Are the two pages released the only thing the media has to work with at this point?  No one is defending or going through Q&A on this? 

O‘DONNELL:  Well, the most senior officials were on Air Force One with the president, the chief of staff, the press secretary, his closest advisers.  So the people who know the most about this have already left Kennebunkport and are back at the White House.  We, the traveling press, will be leaving later this evening.  So we have less access to the people who would be close up to this.  And literally, it came off the printer, and I ran up the hill to bring this to you. 

So we will try to sort it out and get some analysis.  And I am sure senior officials will give us sort of a read out of what the president‘s thinking was.  But as you see, the fullness of this document, the president really lays it out himself. 

SHARPTON:  Thank you NBC‘s Kelly O‘Donnell.  HARDBALL will be back live at 7:00 p.m. for more on President Bush‘s decision to commute the sentence of Scooter Libby.  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.

Watch Hardball each weeknight at 5 & 7 p.m. ET

Discuss:

Discussion comments

,