updated 8/1/2007 10:19:08 AM ET 2007-08-01T14:19:08

Guests: Dana Milbank, Michael Musto, Rachel Maddow, John Dean

KEITH OLBERMANN, MSNBC HOST:  Which of these stories will you be talking about tomorrow?

Gonzogate spreads.  Now the Justice Department reported to be at war with the FBI because Director Robert Mueller contradicted Alberto Gonzales‘ testimony.  It‘s so cold, says a Mueller aide, “you could open an ice rink between the buildings.”

Back at the ranch, the White House not budging an inch on who is right.

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY:  In this particular case the attorney general has testified truthfully.

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OLBERMANN:  John Dean on a White House and not just in crisis, but evidently, in denial.  And a fresh hell for the president.  His nominee for chairman of the Joint Chiefs has evidently not gotten the surge forever memo.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  No amount of troops in no amount of time will make much of a difference.

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OLBERMANN:  Does it make a difference how many separate FBI investigations are under way of Senator Ted Stevens of Alaska?  Oh, plus the one by the Department of the Interior.

Rupert Murdoch will control the interior of the “Wall Street Journal” but could his plans to position it as a right wing foil to the “New York Times” kill its business reader base?

Business readers, you know, golfers, outdoorsmen and hey now.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  After a little bit of talking, the golf carts started rocking.

(END VIDEO CLIP)

OLBERMANN:  More on this golf story as it develops.  Plus, the University of Texas, scholarly research study, why people have sex, with Michael Musto.  I‘m sorry, “Why people have sex,” with Michael Musto as the guest analyst.

All that and more now on COUNTDOWN.

Good evening, what has looked like a flatfooted lie by the attorney general to the Senate was explained by the administration until dinnertime tonight by its catchall phrase, “Sorry, that is classified.”

Our fifth story on THE COUNTDOWN, suddenly tonight it is not classified.  In a ritual as old as the Bush presidency itself, it has been declassified.  This after former judges and prosecutors including former Justice Department staff all of whom are now serving in Congress unveiled a resolution calling for the House to begin investigating the impeachment of Alberto Gonzales for abuses of the FISA surveillance laws, for the Thursday night massacre of U.S. attorneys and for lying to Congress.

But fortunately we have the explanation for that apparent lie now.  Fortunately and suddenly and conveniently.  The dispute concerns whether Mr. Gonzales lied when he repeatedly denied any internal disagreements over the government‘s warrantless, that is illegal, surveillance program.  This morning, Tony Snow backed Mr. Gonzales with perhaps a subconscious caveat.

(BEGIN VIDEO CLIP)

SNOW:  In this particular case, the attorney general has testified truthfully and this is the kind of thing that is designed to turn up the temperature, rather than to turn on the light.

(END VIDEO CLIP)

OLBERMANN:  In this particular case.  Then tonight, after days of, it‘s classified, the promised defense for the disparity between Mr.  Gonzales‘ testimony and that of his subordinates a letter explaining he was not lying when he denied disputes over the so-called terrorist programs because when those disputes occurred, it was not yet officially called the terrorist surveillance program.  No, I‘m serious, that‘s the best they could come up with in a week.

The letter, signed by national intelligence director Mike McConnell coming in response to questions by Republican Senator Arlen Specter, who was not satisfied by a classified briefing on this issue yesterday.  McConnell not even mentioning, let alone defending the attorney general, nor does he address let alone refute, testimony by FBI Director Robert Mueller flatly contradicting Gonzales.

The “New York Daily News” meanwhile quoting an unnamed Mueller aide calling the subsequent rift between the FBI and its superiors at the DOJ now big and cold enough that quote, “you could open an ice rink between the buildings.”

Let‘s turn to now John Dean, the White House counsel during the Nixon administration, more recently, of course, author of “Worse than Watergate.”  John, thanks for your time tonight.

JOHN DEAN, NIXON WHITE HOUSE COUNSEL:  Good evening, Keith.

OLBERMANN:  You have worked inside a White House in crisis. 

Characterize this White House‘s defensive efforts today on behalf of Mr.

Gonzales, if you would be so kind.

DEAN:  I think I would have to characterize it really as a lack of defense.  In fact I saw a certain ability or push to distance themselves from Gonzales while they did support and say he is being truthful.  They did not wrap themselves in this problem and they certainly have not given any key indication that the president is pushing Gonzales to resolve it.  So it is kind of - he is not really left twisting in the wind yet but there is a distance there.

OLBERMANN:  I joked about the idea that the attorney general testified a week ago and yet, the best they could come up in that time was that the discrepancy was a result of them not having yet officially named the TSP the TSP at the time of the internal disagreements.  But all kidding aside, is that the sort of stuff you look for, are those the tea leaves before a White House actually crumbles, explanations that are greeted not so much with anger, but with laughter?

DEAN:  Well, the weakness of the defense is certainly telling.  We do know that Gonzales has several days left, Keith, yet to fix his testimony or correct his testimony if he thinks there are any errors.  And the Senate has given him that opportunity.  But of course, his problems are broader than that with the Congress in general.  Yet that might avoid a perjury prosecution if he can clean that up.

OLBERMANN:  Let‘s back up to this question of impeachment.  Do these House members, five of them introducing it today have grounds for it, and if so, does that create a moral imperative for the House leadership to pursue?

DEAN:  Well, I do not think there are any—there is any question there are grounds to investigate.  And that‘s all they‘re asking for in their resolution.  I think the larger question is whether the leadership is going to grab hold of this and run with it.  Of course, impeachment, a high crime and misdemeanor does not embrace maladministration which was excluded by the founders from the Constitution, but it certainly does include lots of misdemeanors that Mr. Gonzales certainly appears to have committed.

I‘m talking about constitutional misdemeanors, not your typical criminal misdemeanors.  So there is a lot here and I would be surprised if the leadership does not let this go forward.

OLBERMANN:  Have we been in this position before?  Obviously, we have had controversial attorneys general.  We later found out one that you dealt with in John Mitchell, where illegal activities were planned within his very offices and offices of those who succeeded him.  But have we ever had a scenario in which there has been an attempt to remove an attorney general from office by impeachment?

DEAN:  I think the closest we have gotten that I can tell you off the top would be during the post Harding administration when Harry Daugherty was Coolidge had become president.  There was an effort to ease him out and he finally did resign and left willingly.  There was certainly a lot of indication that it might happen, but that is about as close as we come to the current situation that I can think of certainly in modern presidencies.

We have had nothing like this.  We have never had an attorney general who has displayed quite the incompetence that Mr. Gonzales has consistently displayed.  So it‘s sort of a new issue for the Congress.

OLBERMANN:  Teapot Dome continuing to pay dividends 85 years later.  Lastly, John, what can we expect to emerge from this reported rift between Mr. Gonzales and his chief of the FBI, if not the entirety of the FBI?

DEAN:  Well, I am told that director Mueller is not somebody who suffers fools easily and gladly.  So this is not a healthy thing to have the FBI and the Department of Justice at odds.  Theoretically, the attorney general is the director‘s boss.  And when the director has more moxie, if you will, on how to deal with problems and the attorney general, it really does create problems as to where the department should be going, where the FBI should be directing its energies.  So I think this is going to have some negative repercussions for the department until they sort them out.

OLBERMANN:  John Dean, most recently author of “Conservatives Without Conscience” and before that “Worse than Watergate.”

John, great thanks as always for your time tonight.

DEAN:  Thank you, Keith.

OLBERMANN:  In an interview with CNN the vice president eagerly lent his name to the attorney general today.  Of course he stood by a convicted perjurer even more staunchly and he defended an undersecretary of defense whose truly un-American attempt to squelch debate and inquiry has already been in a rebuke by the secretary of defense.

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LARRY KING, CNN HOST:  A member of the Department of Defense sent Hillary Clinton a letter saying she should not criticize because it helps the enemy.  Do you agree with that letter?

RICHARD CHENEY, VICE PRESIDENT:  It did not say that she should not criticize.  She was demanding plans for withdrawal from Iraq.

KING:  Do you agree with that letter?

CHENEY:  I agreed with the letter Eric Edelman wrote.  I thought it was a good letter.

(END VIDEO CLIP)

OLBERMANN:  Perhaps not surprisingly, Mr. Cheney was less than honest about Senator Clinton‘s letter which requested, quote, “briefings on what current contingency plans exist for the future withdrawal of U.S. forces from Iraq.”

She did not demand operational or classified details of any such plans.  She did not demand any military plans.  Her letter specifically asked merely for a briefing to let her and Congress know whether such plans existed.”

Perhaps to Mr. Cheney‘s chagrin, members of Congress have routinely been briefed on classifi4ed matters for 200 years.

The man President Bush wants to serve as the top uniformed military officer in the country told Congress today that American military might cannot guarantee the political progress that is needed to salvage Iraq.  And he said he does not see much of that progress.

Navy Admiral Michael Mullen spoke before the Armed Services Committee which is expected to devote this week on his nomination as the new chairman of the Joint Chiefs of Staff.

(BEGIN VIDEO CLIP)

ADM. MICHAEL MULLEN, CHAIRMAN OF JOINT CHIEFS NOMINEE:  I believe security is critical to providing the government of Iraq the breathing space it needs to work towards political and national reconciliation and economic growth which are themselves critical to a stable Iraq.

Barring that, no amount of troops in no amount of time will make much of a difference.  I look forward, as I know you do, to hearing from Ambassador Crocker and General Petraeus in September.  I believe prudence dictates that we plan for an eventual drawdown and a transition of responsibilities to Iraqi security forces.  And we need to do that wisely.

SEN. CARL LEVIN, (D) MI:  Admiral, do you agree that given the purpose of this surge, which is to give the Iraqi government what you and the president call “breathing space” to make the political compromises needed for reconciliation and a political settlement, that there has been very little or no progress in terms of political settlements?

MULLEN:  Yes, sir, I agree there does not appear to be much political progress.

(END VIDEO CLIP)

OLBERMANN:  Prior Joint Chiefs Chairman General Peter Pace lost that job, largely because the administration wanted to avoid the grilling he would get in his renomination hearing.  We learned today that Mr. Bush‘s appoint of General Petraeus to fight the war in Iraq might have brought the president some time with some Democrats.

The “Washington Post” reporting that House Democratic whip James Clyburn who counts vote, keeps party discipline, says that a strongly positive report from Petraeus in September would like lead some moderate and conservative Democrats to drop their support of a timetable for withdrawal.

Let‘s turn now to MSNBC political analyst Dana Milbank, also of course national political report with the “Washington Post.”  Dana, thanks for your time tonight.

DANA MILBANK, “WASHINGTON POST”:  Hello, Keith.

OLBERMANN:  Admiral Mullen seemed to echo many war critics there, but why do I get the feeling that that does not necessarily translate to him going in and advising withdrawal of troops?

MILBANK:  Well, I think if he testifies like that one more time he is going to win himself a hunting trip with the vice-president.

But I think there is reason to give some credibility to what Mullen is saying.  He seems to be a much more traditional Joint Chiefs chairman, giving frank advice, as opposed to the yes men that Pace and Myers had been before him.

And I think one of the more important things he said today is the military facts are going to require a reduction in forces.  He is saying the surge cannot possibly go on beyond next April simply because he is going to enforce a 15 month cap on tours of duty there.  So one way or the other, it seems he is heading towards this albeit gradual withdrawal.

OLBERMANN:  But Dana, if he is not a yes man, how did he get a job in the administration?

MILBANK:  He, as you had just noted, the Democrats may not have been successful in bringing about a withdrawal date, but they were successful in raising objections to Pace and I think it was not just the grilling, it was the possibility of him being rejected that led to that being pulled out.

And also the president‘s Gates at the Department of Defense is a very real change from Rumsfeld.

Now you don‘t want to get carried away here.  Mullen was still saying it is going to take a three-four years just to cut the number of American troops in Iraq in half.  So taking three to four years to get to 80,000 troops is not exactly a rapid withdrawal.

OLBERMANN:  President Bush says Iraq‘s main problem is al Qaeda in Iraq.  And if that happens to be the case, why would he bring, quite seriously, a Joint Chiefs chairman such as Admiral Mullen who obviously  states that Iraq‘s problems are primarily political and not military?

MILBANK:  I think, again, because he did not really have a choice in the matter.  The president has been very good at saying, I listened to my generals, and then finding generals who have agreed with his point of view in the first place.  It is possible that he has now reached the end of that list and they are bringing in those who are, as one general noted, not willing to be a parrot on the defense secretary‘s shoulder.

OLBERMANN:  To the undersecretary of defense, Mr. Edelman and Vice President Cheney‘s remarks to CNN defending that letter which the secretary of defense basically washed his hands of, is—what are the political implications of this that there is some undersecretary in the Pentagon who is towing the Cheney line as opposed to what even the secretary of defense is saying?  Where is that going to go from here?  Why did Cheney let that thing get reignited today?

MILBANK:  Well, that is the vice-president for you, but let‘s remember that Eric Edelman, the official in question who is actually a civil servant, by the way, had worked in the White House for the vice president before.  But I think there again you see a bit of the rift there that Gates is heading in a more moderate direction and the vice- president is certainly pulling back.  There‘ll be another confrontation when Edelman is before the Senate Armed Services Committee with Hillary Clinton herself later this week, but they have wisely decided to close that to the public.

OLBERMANN:  And then Secretary Gates can join Admiral Mullen on their hunting trip.

Our own Dana Milbank, national political reporter of the “Washington Post,” as always, Dana, great thanks.

MILBANK:  Thanks, Keith.

OLBERMANN:  Breaking news tonight, the House hearings in the cover-up of the friendly fire death of former football star Pat Tillman in Afghanistan tomorrow will include an unexpected witness, former secretary of defense Donald Rumsfeld.  Rumsfeld had originally told the House Oversight and Government Reform Committee that he would not be appearing.  Tonight, he revealed his change of heart, but offered no explanation.

The Army today formally slapped a four star general on the wrist and sent letters of concern to other officers even as evidence mounts that Tillman‘s death was almost immediately identified on the scene as a result of friendly fire.

Generals John Abizaid and Richard Myers will also testify to the House tomorrow.

Americans first went to Alaska for the promise of gold with no questions asked.  A promise the FBI seems to think has been kept for Alaska‘s senior senator.  And finally, somebody is doing something to make watching golf more interesting.  It used to be bears and deer spotted on courses, now it is strippers.

You‘re watching COUNTDOWN on MSNBC.

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OLBERMANN:  Get a pencil and a piece of paper and write this down.  An overwhelmingly solid bipartisan vote in the House today—Democrats and Republicans voting 411-8 in favor of a new ethics rules including an attempt to crack down on billions of dollars in pet projects slipped into nearly unreadable spending bills sometimes in the middle of the night.

If it is called the Honest Leadership and an Open Government Act of 2007.  It might as well have been called the Neuter Ted Stevens Act.

Our fourth story in the COUNTDOWN, the 83 year old senator, the poster boy for pork who has delivered billions of dollars to only 670,000 fellow Alaskans for decades.  That is, until his infamous attempt at a $300 million bridge to nowhere, which outraged taxpayers and colleagues alike, and kind of started the ethics ball rolling.

But now Stevens has other more direct problems.  No bridge going anywhere here.  The FBI and IRS rating his half million dollar vacation home near Anchorage, part of a federal corruption probe.  The feds taking videos, removing a truckload of documents, computer drives, other material, even photographing bottles of wine.

Remodeling contractors are reported to have told a grand jury that a Stevens supporter, the CEO of an oil services company that did business with Uncle Sam paid to remodel that home, a charge that Stevens denies.

The same CEO and Stevens ally has already pleaded guilty to bribing state lawmakers with wads of hundred dollars bills and phony consulting fees.  Let‘s than a year ago the feds raided the office of Ben Stevens, the senator‘s son and a top state lawmaker until he resigned.

Let‘s bring in our home improvement correspondent in Washington, David Shuster.  David, good evening.

DAVID SHUSTER, MSNBC CORRESPONDENT:  Good evening, Keith.

OLBERMANN:  Stevens, the longest serving Republican ever in the Senate

39 years worth of seniority, chairman of the Appropriations Committee at one point, top Republican on Commerce.  Today, it was reported that his Senate clerk had testified to a grand jury about remodeling.  Where is this all going?

SHUSTER:  Well, Keith, the testimony by Barbara Flanders recently, who is an aide to Senator Stevens and also handled some of his personal bills certainly suggests that this investigation has a bull‘s eye on Senator Stevens and that he is at least the subject, if not a target of a grand jury investigation.

When prosecutors subpoena somebody‘s financial records, and are not satisfied by what is in those records and demand testimony from a person who pays the bills, that is often the sign of a grand jury investigation that is headed in a very serious direction.

Also, regarding the raid yesterday of Senator Stevens‘ home, officials are not allowed to conduct such searches until they have convinced a judge that there is a good chance that the home contains evidence related to a crime.  So the key issue in all of this of course is the connection between Senator Stevens and a former energy company executive who has admitted to bribing Alaska politicians.  That same executive, of course, is the one who oversaw the lavish remodeling of Stevens‘ home a few years ago and the executive‘s company during the same period received millions of dollars in federal contracts.

The question for investigators, Keith, is whether Stevens paid the bills as he maintained or received something he should not have from a company that got lucrative government contracts in part because Stevens was on the Appropriations Committee.

OLBERMANN:  David, this former CEO of Veco, Bill Allen, who had pleaded guilty to bribing Alaska officials, his connection to Senator Stevens is what, and what about the gas pipeline project that is supposed to be at the center of this probe?

SHUSTER:  Keith, Bill Allen is the executive who is the one who was eagerly, essentially, overseeing the refurbishing of Senator Stevens‘ home and was apparently quite eager to do so.  Also, it was Allen who was trying to win favorable tax legislation for a gas pipeline project which is in the middle of all of this.  Allen allegedly bribed some lawmakers by handing out wads of hundred dollar bills.  That kind of lobbying effort, though, for the gas pipeline project or any other is not legal.

OLBERMANN:  What is the reaction inside the Senate to Mr. Stevens and this raid and his troubles and speaking not just about Democrats but Republicans as well?

SHUSTER:  Keith, it‘s been very quiet.  The Senate is very much of an exclusive club.  Both Senate Democrats and Republicans have been very muted in all of this.  Even Senate majority leader Harry Reid, a Democrat, said he did not know enough about this and wanted to wait until the investigation was complete.

Some lawmakers, though, Keith, away from the cameras are pointing out that it would be foolish to say anything negative about Senator Stevens right now just in case Senator Stevens survives this and does not get charged.  Because after all, even though he is no longer running the Appropriations Committee, Senator Stevens still wields a lot of power on the Senate Commerce Committee.

OLBERMANN:  Last question, David, this new ethics bill passed by the House, will it need any resistance in the Senate?  How is it supposed to clean up Washington?  How does Senator Stevens stand on it?

SHUSTER:  Ironically, Keith, Senator Stevens is one of the senators who is pledging to block the ethics bill.  He complains that it would severely punish lawmakers who rely on private aircraft to get to places that commercial aircraft do not serve.  The other problem with the bill, Keith, may be that it really sort of a sunshine bill.  It essentially casts more light on what the senators are doing as far as their lobbying efforts, who is lobbying them and what pet projects they are doing.  All of this of course has to be put on the Internet very quickly.  Some lawmakers argue that it simply is not strong enough.  That it doesn‘t  really do anything as far as the ethics related to whether something is legal or not.

And then again, you have some senators like Senator Stevens to do not like certain provisions of the bill and are vowing to try and kill it.  Keith?

OLBERMANN:  Our own David Shuster working the scandal beat.  As always, thanks for joining us, as always.

SHUSTER:  Thanks, Keith.

OLBERMANN:  How will the “Wall Street Journal” defend Senator Stevens?  Tomorrow perhaps only in its editorial pages, if even that, but in the future under new owner Rupert Murdoch perhaps with big banner headlines and photoshopped pictures of Democrats.

Maybe even with a quick flash from this guy, the newest Boston Celtic.  We will explain and show you more of him then you want to see when COUNTDOWN continues.

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OLBERMANN:  On this date in 1900, with the hot breath of the summer on the prairie all about him, at Elmo Roper was born at Hebron, Nebraska.  He along with George Gallup and Archibald Crossly developed scientific sampling techniques that conclude if you can ask enough cross-eyed blue haired men who they were going to vote for you could predict how all the cross-eyed blue haired men were going to vote.

Roper and the others using slightly different methodologies correctly forecast the 1936 presidential election and politics has never been the same since.

And on that chilling note, let‘s play “Oddball.”

We began in Webster, Massachusetts, where Hollywood‘s out of control panty-less starlets habits are having a terrible impact on the elderly.  This 82 year old man is facing obscenity charges for lifting his killed and flashing his rear to 3,000 people gathered at a Celtic festival.  Ooh, the Celts have got Kevin Garnet.  Wicked trade, eh?

We have removed the offending video for your protection.  The man now says he regrets flashing his can, and in the man‘s defense, people really should not pretend they did not see this coming.  After all, the man‘s name is David McCracken (ph).  Tell everyone how you did it, Dave. 

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UNIDENTIFIED MALE:  I run with my back towards the spectators‘ gallery, bowed down, lifted my kilt at the back and waggled my buttocks. 

(END VIDEO CLIP)

OLBERMANN:  To Orlando, Florida, where this kid ate some bling, bling.  Bobby Tedesco‘s (ph) mother brought her son a set of fake diamond encrusted grills at a local flea market.  Not long after, Bobby put them into his mouth.  He swallowed them.  It‘s a simple story, really.  Boy meets grill, boy eats grill, boy gets x-rays of grill in stomach, boy waits for grill to exit stage right. 

Doctors said the tooth would take one to three days to leave Bobby‘s belly.  He also suggested that when they do come out, Bobby should not put them back in his mouth. 

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OLBERMANN:  In a similarly vain story, the evil empire gets another Xerox machine.  Rupert buys the “Wall Street Journal.”  But might his plans for it backfire?  Speaking of backfire, whole new meaning to that golf phrase hole in one. 

These stories ahead, but first here are COUNTDOWN‘s top three news makers of this day.  Number three, Mister Christopholus‘ (ph) second grade class at William V. Wright Elementary School in Las Vegas.  Its members did what you and I have dreamt of a since we were in the second grade.  They started a letter-writing campaign to the lunch lady, Conny Dweeks (ph), to plead with her to get rid of those horrible green beans.  Anything, anything, wrote one boy; I will even eat broccoli.  Dear Mrs. Dweeks, wrote one boy, the food is so yummy and yummy, but there are one problem.  It is the green beans. 

One kid got a little carried away and asked for lobster.  Mrs. Dweeks has replaced the green beans though with alternating corn and carrots.

Number two, Nelson Piquet of Brazil, Formula One‘s world champ driver in 81, 83 and 87.  He has now had one too many run ins with the law and has suffered the revocation of his license.  He can get it back if he completes a 30 hour driver ed course and does not average 187.34 miles an hour while doing it.

Number one, Canada‘s Deputy Foreign Minister Leonard Edwards, invited to the presidential state dinner at the palace in Manila in the Philippines.  Upon arrival, all of those attendees were given barongs (ph), nearly see through Philippine shirts to wear to all the meetings.  But Mr.  Edwards did not get the memo.  He wore his barong to the state dinner.  So what if everybody else was there in suit and tie and generally a white shirt, and they took the official group picture, and put you in your barong in the front row. 

Just remember, minister, when it comes to shirt wearing at a state dinner, even two barong‘s don‘t make a white.

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OLBERMANN:  At some point, fear of Rupert Murdoch‘s reputation may overcome the lure of his money.  It did not in my case.  In our third story in the COUNTDOWN, not yet.  Murdoch will now add to his media empire a newspaper with the second highest circulation in the United States.  The deal as of this hour is officially done.  It has just been approved by the boards of both Dow Jones, publishers of the “Wall Street Journal,” and News Corp, which is Murdoch‘s corporate name. 

The takeover bid has won the support of at least 32 percent of Dow Jones voting shares held by the Bancroft family.  In other words, about half that family, which controls 64 percent of all voting shares, favored the deal.  A spokesman for Dow Jones said, quote, the Bancroft family has accepted, but only after months of doubt and turmoil. 

The Bancroft family has controlled Dow Jones for more than a century, and many argue that its gem, the “Wall Street Journal,” will be damaged with Murdoch as its new boss.  But the prospect of making 60 dollars a share for stock that was trading at about 36 dollars a share proved too strong.  Family members will also reportedly earn about 30 million dollars in advisory fees. 

Let‘s turn now to the host of the “Rachel Maddow Show” on Air America, surprisingly enough, Rachel Maddow.  Thanks for your time tonight, Rachel.

RACHEL MADDOW, AIR AMERICA:  Hi Keith.

OLBERMANN:  This is far more than a business acquisition for Rupert Murdoch.  I think that‘s fair to say.  But what are the actual dimensions in his mind, do you think? 

MADDOW:  It‘s interesting.  I mean, anybody who is trying to make money right now; anybody who‘s looking for a pure business proposition is not in the market for a newspaper.  If you just look at Rupert Murdoch‘s own media empire, newspapers make up less than 15 percent of his operating income.  The “New York Post” alone loses tens of millions of dollars a year. 

He holds on to them because they offer him a pulpit, a great megaphone

for his political views.  And it is pretty clear—it is no secret in this

case that this makes him, along with the plans for a Fox Business Channel -

it makes him the single, unchallenged dominate voice in the American media on news about business. 

OLBERMANN:  Mr. Murdoch claims that nobody at the “Wall Street Journal” should worry about him meddling, since News Corp has this agreement to create a committee that would have to sign off on any decision to hire or fire top editors at the paper.  Nothing to see here, right? 

MADDOW:  A committee!  Wow, a committee.  Therefore, our sacred honor and our values will obviously be totally intact.  He made similar promises when he took over the “Times of London.”  And the experience of the “Times of London” should offer no one comfort.  The “Times of London” used to be a respectable, if conservative, publication before Murdoch got his hands on it.  The same thing cannot be said of it today.  He‘s made these promises before. 

OLBERMANN:  Any chances though, under these circumstances, of a reader backlash if Murdoch tries to position, as he has said, the “Wall Street Journal” as a conservative counter to the “New York Times” as a national newspaper?  By this, I mean, the Journal‘s editorial page is just to the right of Attila the Hun, but people who buy the paper for the paper itself generally have wanted insightful business news and perspective they can carry to and from the office and ways to make money and more ways to make money. 

Can he conceivably blow that by getting all political on them? 

MADDOW:  One thing that will be interesting to watch is the way that Murdoch has showed his editorial influence in the past.  Because yes, it is right wing politics and a willingness to stretch the truth in order to further his right wing political aims, on the one hand.  But the other thing that he is really known for is just sheer tastelessness.  I mean, this is the guy who puts the naked ladies in the paper every day, he promises.  And he runs these wingo (ph) games and stuff to try to entice people to buy the paper when naked ladies aren‘t enough.

The experience of him with the “Chicago Sun-Times,” for example, is remembered almost as much for that sheer cheesy tastelessness as it is for his political eccentricities.  So, we may see a number of different kinds of reader backlash with this “Wall Street Journal” takeover. 

OLBERMANN:  And the “Daily Kos” reminded its readers of a lawsuit that had been filed by two employees against the Fox News Station in the Tampa area in 2003.  They had been fired by the station—this is opposed to the national network—for refusing to distort a story, they said.  Fox News actually argued in the appeal that broadcasters have the first amendment right to lie, or deliberately distort news reports on the public airwaves.  And Fox News—Fox Corporation anyway—won, although on slightly narrower grounds than that. 

First amendment protections are strong, but Fox is brash enough to claim we can lie and the constitution says we can lie?

MADDOW:  This is getting to the really issue here, the really big story.  This is not just about media consolidation.  It is not just about supporting Republican candidates or conservative policies.  The big issue here is—and the big agenda here is, I think, to simply make news worse, to undermine the idea of a discoverable truth about information that can be researched and conveyed and believed in. 

When you bill the work of Sean Hannity and Bill O‘Reilly as news, when you call that the Fox News Channel, you are degrading the very idea of news.  You‘re making news something that should be questioned alongside propaganda or opinion.  You‘re putting the very idea of news in the gutter, where it lives with equal stature to propaganda.  It simply undermines the very idea of journalism as something that deserves respect. 

It gets us back to the Bush administration‘s assertions about the reality based community being something that should be questioned by people who live outside that reality based community.  That‘s the big agenda here, undermining the whole idea of journalism.  And that‘s the thing to worry about. 

OLBERMANN:  The good old ministry of truth has another outlet.  Rachel Maddow, host of “The Rachel Maddow Show” on Air America, as always, great thanks for your time, Rachel. 

MADDOW:  Thank you, Keith.

OLBERMANN:  And so it was time for News Corp to celebrate.  This video?  This video has nothing to do with News Corp.  It does however pertain to an epidemic of strippers on golf courses.  No segue intended here either.  These young ladies have lost not their honor, but their TV show.  That‘s next.  This is COUNTDOWN.

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OLBERMANN:  If it is an epidemic of lawlessness and lewdness, at least it is going to be an entertaining one.  Our number two story in the COUNTDOWN, first the Poconos, now metropolitan Philadelphia rocked by a story of strippers on a golf course.  I know.  I know.  Why would you need anything besides gold to make a golf course interesting?  And how many gad jokes could you make about a sport that includes the familiar terms hole in one, you‘re hooking to the left, and, of course, I had trouble with my puts all day.  From our NBC station in Philadelphia, WCAU, our correspondent is Harry Hairston. 

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE:  That is assault!  That is assault.

HARRY HAIRSTON, NBC NEWS CORRESPONDENT (voice-over):  This man did not want the NBC 10 investigators to see what any one could have seen from a public street, strippers from Club Risque engaging in very risky activity at the Island Green Golf Course in northeast Philadelphia. 

(on camera):  Something going on that should not be? 

(voice-over):  This man would not talk and left after we called police about him shoving my photographer around.  But someone who wants to remain anonymous did talk earlier, alerting the NBC 10 investigators about strippers bearing more than bikinis in plain view, right in the middle of the residential area. 

Within minutes of driving through this northeast neighborhood, I looked out the passenger window and spotted a topless woman fondling her breasts.  And when we stopped for a closer look, we saw more than just fondling.  One by one, golf carts pulled up.  After a little bit of talking, the golf carts started rocking with lap dances. 

And when the hot session cooled, cold cash came out.  We showed the video to several area residents. 

UNIDENTIFIED MALE:  Pretty amazing.  Unbelievable.  I am shocked. 

UNIDENTIFIED FEMALE:  This is disgusting.  It is out in the open.  It is day time.  What if someone and their family walked by?

HAIRSTON:  I contacted the golf course, but management refused to talk and hung up on me.  I also contacted the gentleman‘s club.  A spokesman for Club Risque told me they sponsored the outing and the strippers worked for them.  The spokesman also told me the strippers were supposed to only pose in bikinis. 

UNIDENTIFIED FEMALE:  I think it is terrible, disgusting, and they should be arrested, especially whoever is that on the top. 

(END VIDEOTAPE)

OLBERMANN:  Four!  Time to take the wraps off our nightly look at celebrity and entertainment news, Keeping Tabs.  If you are desperately trying to lose a few pounds this summer, maybe you‘ll want to know how Star Jones did.  You know, outspoken Star Jones Reynolds, formerly of “The View,” formerly topping 300.  She raised all kinds of curiosity, even concern, over her dramatic weight loss over the last three years from more than 300 pounds to about 147. 

Now, in an essay in “Clamor Magazine,” she writes that a combination of psychological therapy and stomach bypass surgery helped her lose 160 pounds.  She also said she intentionally evaded questions about the surgery because she was ashamed.  The old Star turning to double bacon cheeseburgers for comfort.  The new Star says it‘s not that women need to be thin, but that they should strive to be healthy. 

Then there is the Paris Hilton, Nicole Richie career weight loss program, a simple way to remove 500 pounds of ugly television.  “The Simple Life” canceled by the E Network.  According to a source from E, the DUI duo was too difficult to work with and over exposed, if you can imagine that.  Plus, they needed the time for two more shows for Joel McCale (ph), the Soup‘s best of the Emergency Broadcast System clips 2007, and the Soup‘s Ann Curry Good Morning marathon 2007. 

Of course, there was also the little matter of the gals‘ conduct, you know, unexpectedly winding up behind bars, now and then.  First Paris, now Nicole getting ready to spend four days in the big house for driving the wrong way down a freeway while drunk.  You know what they say, for every prison door that is slammed shut, another door opens, at least for Paris Hilton. 

She has landed a role in a new movie musical called “Repo, The Genetic Opera.”   It takes place in the year 2056, by which time, presumably, cars will drive themselves. 

Here‘s a segment even they will watch, the academic study indicating there are at least 237 different reasons to have sex.  Reason number 147, quote, I wanted to keep warm.  You bet.  That‘s ahead, but first time for COUNTDOWN‘s latest list of nominees for Worst Person in the World.

Number three, Rudy Giuliani, repeating his claim in New Hampshire this week that as mayor of New York he cut or eliminated taxes 23 times.  Problem is, some of his fellow law makers, Republicans included, in New York City, say that is not true.  Four of those 23 times the tax cut was initiated by others.  One more he‘s counting twice.  And another one of those 23 times the tax cut was one Mayor Giuliani opposed and tried to prevent.  It is not 23.  Generously, it is 19.  Realistically, it is 17.  The value of those cuts is not the nine billion Giuliani claims, but less than five. 

Number two, your Department of Homeland Security, somewhat after the fact.  It is revealed that those possible terrorist dry runs that everybody got so freaked out about, the gel bags and the cheese with the wires and the cell phones and stuff—all four of the incidents have valid innocent explanations.  No charges and no dry runs.  And, by the way, no headlines mentioning no charges or no dry runs.

But our winner, Juliane Cho (ph), associate commissioner of the mayor‘s office of film, theater and broadcasting for New York City.  She has written the email indicating the city is pushing for new rules that would require any group of two more people who want to film, videotape, or take still pictures in a public place in New York for 30 minutes or more would have to get a city permit and have to get a million dollars in liability insurance. 

If it is a group of five people and a tripod, the time frame drops to 10 minutes.  And even though the new regulations don‘t mention any exemptions, the city claims this would not affect amateurs or tourists. 

Of course it won‘t.  There is still a constitution of the United States, Miss Cho.  And these rules are so obviously in violation of so much of it Alberto Gonzales would not try to sneak this past anybody.  Juliane Cho, and the mayor‘s office of Film, Theater and Broadcasting for the city of New York, today‘s Worst Persons in the World.

(COMMERCIAL BREAK)

OLBERMANN:  To the top of the COUNTDOWN and our number one story tonight, sex.  Not how people get it or how people have it, but why people do it.  Apparently it is not just biology or chemistry.  There are 237 other reasons involved.  Psychologists at the University of Texas asked 400 people to list the various reasons they have ever had sex.  Then using that list, they asked 2,000 more people which reasons applied to them.  The top reason for both sexes, I was attracted to the person. 

For women, being in love ranked high, reason number nine.  For men it was number 17.  For men, a desirable body was reason number 16.  For women, it was number 34.  Some reasons are pretty disturbing.  I wanted to punish myself.  That must have been fun.  Option 30 on the survey, I was married and you‘re supposed to.  Some were pretty practical, number 131, it seemed like good exercise.  Number 147, I wanted to keep warm. 

Some were pretty basic; I wanted to have a child and I had not had sex for a long time.  For more sex, we turn to Michael Musto, columnist for the “Village Voice,” and author of “La Dolce Musto.”  Michael, thanks for joining us.

MICHAEL MUSTO, “THE VILLAGE VOICE”:  Hi, Keith.

OLBERMANN:  Some of these reasons on this list; I wanted to feel closer to god, or because of a bet.  Number 176 is I wanted to burn calories.  And number 160 was I wanted to change the topic of conversation.  Are these for real? 

MUSTO:  I thought you said because I am a vet.  These sound OK, except for the changing topic one.  Women generally change topics with these lips.  Also, the god one—the god one—news flash people, god is in children and flowers and the morning dew.  He is not way up a vagina.  OK?  Look elsewhere.

OLBERMANN:  It does not seem too surprising that women would cite emotional reasons more than men.  That‘s the cliche about humans.  Or that men would cite attraction more.  That‘s the other cliche about humans.  But are you surprised that sleeping with someone for money, for a job, for increased social status wasn‘t more prevalent than the study suggests? 

MUSTO:  Yes, because the most popular reason I know is I wanted a gift.  OK?  They obviously did not poll any whores in this poll.  I don‘t just mean people that work the highway like Lindsay Lohan.  I mean, people I know.  I mean, generally, for any sensible person, sex equals opportunity.  Even a guy will fake an orgasm to get chocolate on the pillow.  

OLBERMANN:  Both sexes repeatedly in this study cited, quote, it just happened.  So it is like a car accident or a toilet backing up?  What does that tell us about our society?

MUSTO:  I‘m going to have a seizure from rolling my eyes.  It just happens if you go to a bar, dart your tongue, spread your legs and get somebody blado (ph) enough to trail you home.  Sex is not an accident or a tsunami Keith.  It is more like an over priced Carnival cruises that you book for two years and you get stuck on and you leave holding your stomach. 

OLBERMANN:  All right, we don‘t have this part of it.  I thought maybe we could improvise some in this study here from UT.  People that we assume have had sex, thanks to either offspring or video evidence, can you figure out what their reasoning might have been?  A, Britney Spears and Kevin Federline? 

MUSTO:  That was like an intellectual exercise; can you feel when something small goes into something big? 

OLBERMANN:  B, Pamela Anderson and Tommy Lee? 

MUSTO:  He was thinking I need to get an STD so I will have ammo in the custody battle.  She wanted the chocolate on the pillow. 

OLBERMANN:  C, Paris Hilton and Rick Solomon? 

MUSTO:  They were both thinking, our only chance to ever be in a movie.  She could not foresee “Repo, the Genetic Opera” in her future.

OLBERMANN:  Angelina Jolie and Brad Pitt. 

MUSTO:  He was thinking, all right, she is not Jennifer.  And she was thinking, he‘s not Jennifer, but I will do him anyway. 

OLBERMANN:  Katie Holmes and Tom Cruise? 

MUSTO:  That hasn‘t happened yet.  I have no idea.  No, kidding.  It was pure, primal animal lust.  Not since Ethel Merman and Ernest Borgnine has reason flown to the window with such force.

OLBERMANN:  I think actually number 30 was the correct answer there; I was married and you are supposed to.  That might have been it.  Or it seemed like good exercises.  Lastly in this, back to this really extraordinary study.  Are there reasons that you did not see on this list that you would expect to have scored fairly high on the list? 

MUST:  There were three that were very popular that were not included.  Phil Specter made me go down on his loaded weapon.  Kobe Bryant strongly advised me do it.  And Michael Jackson served me Jesus Juice and a blank check. 

OLBERMANN:  Well, there it is.  We have a complete set.  Everybody that could possibly be offended has been offended.  And the lawsuits will be coming in.  That is reason number 182, I was threatened with legal action.  The inestimable Michael Musto of the “Village Voice”—

MUSTO:  Cigarette?

OLBERMANN:  As always, Michael, thanks for your time.  OK, that is COUNTDOWN for this the 1,553rd day since the declaration of mission accomplished in Iraq.  That was some segue tonight at the end.  I‘m Keith Olbermann, good night and good luck.

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

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