updated 8/28/2007 11:25:50 AM ET 2007-08-28T15:25:50

Guests: Charles Schumer, Debbie Wasserman Schultz, Ed Gillespie, Lance Armstrong, Leo Terrell, David Rivkin, Viet Dinh, April Ryan, Jonathan Alter

CHRIS MATTHEWS, HOST:  “Fredo, you broke my heart.” Bush treated Alberto Gonzales like the brother.  Even gave him a nickname from “The Godfather.” Then his AG acted that movie‘s ghastly hospital scene, now he‘s gone.  Let‘s play HARDBALL. 

Good evening, I‘m Chris Matthews.  Big bad news day in politics today.  President Bush has dropped yet another millstone from his neck.  First it was Rumsfeld, dumped the day after the November, 2006, election disaster.  Then came Karl Rove, the self-described Darth Vader of the administration.  Now Bush‘s ham-defended (ph) AG, a man with his fingerprints all over government surveillance of Americans, torture, and the political dismissal of U.S. attorneys. 

Here is the president putting the best face on what appears to be the rapid putrification (ph) of his political power. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  His good name was dragged through the mud for political reasons. 

(END VIDEO CLIP)

MATTHEWS:  We are going to hear from the president‘s chief political adviser, Karl Rove‘s replacement, Ed Gillespie. 

And the second story tonight, I spent the day moderating a presidential forum here in Iowa with global sports hero Lance Armstrong. 

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  Let‘s get ourselves focused and prepared and organized to win the war against cancer in the 21st Century. 

MATTHEWS:  So a President Clinton—a President Hillary Clinton, will declare a national war on cancer? 

CLINTON:  Yes. 

(APPLAUSE)

(END VIDEO CLIP)

MATTHEWS:  As you will see here in a few minutes, the Democrats we interviewed today seized their first chance to dump dirt on the grave of Alberto Gonzales.  In our HARDBALL debate tonight, was Alberto Gonzales bad for America?  We begin with HARDBALL‘s David Shuster with a report on the Gonzales exit. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, MSNBC CORRESPONDENT (voice-over):  Mired in controversy and scandal, this morning, the nation‘s first Hispanic attorney general announced he is calling it quits. 

ALBERTO GONZALES, ATTORNEY GENERAL:  Yesterday I met with President Bush and informed him of my decision to conclude my government service as attorney general of the United States, effective as of September 17th, 2007. 

SHUSTER:  Administration officials say the move was entirely Gonzales‘ decision.  They say the attorney general sent president a resignation letter on Friday and the president refused to accept it.

On Sunday, the long-time friends met in person in Texas, and according to officials, the president then agreed to the resignation reluctantly. 

BUSH:  It is sad that we live in a time when a talented and honorable person like Alberto Gonzales is impeding from doing important work because his good name was dragged through the mud for political reasons. 

SHUSTER:  But it was the Bush White House that got Gonzales in trouble in the first place.  As the president‘s lawyer in the administration‘s first term, Gonzales pushed to expand presidential powers, tried to limit the rights of prisoners at Guantanamo Bay, and write a memo endorsing interrogation tactics the Geneva Convention described as torture. 

As attorney general in the second term, Gonzales oversaw the political firings of these federal prosecutors.  He followed that by misleading Congress.

GONZALES:  Senator, I have already said that I misspoke.  It was my mistake.

SHUSTER:  Then, Gonzales appeared to perjure himself when he testified about a separate issue, the Terrorist Surveillance Program. 

SEN. ARLEN SPECTER (R-PA), RANKING MEMBER, JUDICIARY COMMITTEE:  I do not find your testimony credible, candidly.

SHUSTER:  The Gonzales controversy over the TSP climaxed over a dramatic late night sequence of events first described by former Deputy Attorney General James Comey.  Comey testified about a White House effort, led by Gonzales, to steamroll then-Attorney General John Ashcroft, while Ashcroft was in a hospital bed in critical condition. 

JAMES COMEY, FORMER DEPUTY ATTORNEY GENERAL:  I thought I had just witnessed an effort to take advantage of a very sick man. 

SHUSTER:  Gonzales insisted his actions were appropriate. 

GONZALES:  There are no rules governing whether or not General Ashcroft can decide, I am feeling well enough to make this decision. 

SPECTER:  But Attorney General Gonzales, he had already given up his authority as attorney general. 

GONZALES:  And he could always.

SPECTER:  Ashcroft was no longer attorney general.

GONZALES:  And he could always reclaim that.  There are no rules about.

SPECTER:  While he is in the hospital under sedation? 

GONZALES:  Again.

SHUSTER:  Gonzales later testified, also under oath, the disagreement was not over the terrorist surveillance program at all.

GONZALES:  The disagreement with—Mr. Comey testified about was about other intelligence activities. 

SHUSTER:  But administration documents from National Intelligence Director John Negroponte contradicted Gonzales.  The attorney general was also undermined by testimony from Michael Hayden, the former NSA director.  And Gonzales was also contradicted by testimony and documents from Robert Mueller, the current director of the FBI. 

On the U.S. attorney firings, Gonzales‘ testimony was often at odds with his former Justice Department aides.  And their testimony, combined with Justice Department documents, revealed the prosecutor firings were pushed by the White House political office run by Karl Rove. 

But whenever Gonzales was questioned about anybody at the White House, the reply always seemed to be.

GONZALES:  Senator, I don‘t recall that. 

Senator, I can‘t recall. 

I do not recall.

I don‘t recall either whether or not.

SEN. CHARLES SCHUMER (D-NY), JUDICIARY COMMITTEE:  It was clear to anyone who watched even five minutes of the hearings that he was doing everything he could to avoid telling the truth. 

SHUSTER:  Today, Gonzales never mentioned the controversies. 

GONZALES:  And I am profoundly grateful to President Bush for his friendship and for the many opportunities he has given me to serve. 

SHUSTER:  But Democrats made the scandals the central focus.  Senate Majority Leader Harry Reid, quote: “He lacked judgment and he lacked the spine to say no to Karl Rove.”

Barack Obama, quote: “Alberto Gonzales subverted justice to promote a political agenda.”

Hilary Clinton, today at a forum moderated by Chris Matthews:

CLINTON:  And I think we should set a standard that the next attorney general cares more about the rule of law more than he cares about protecting the president. 

SCHUMER:  What I really found surprising was it took so long for the president and the administration to come to their senses. 

(END VIDEOTAPE)

(AUDIO GAP)

SHUSTER:  . today thanked Gonzales for his service.  But privately, some members of the GOP expressed relief that Gonzales is leaving, calling him, Chris, “political dead weight”—Chris. 

MATTHEWS:  Thank you, David Shuster is staying with us.  Democratic Senator from New York Chuck Schumer, is a member of the Judiciary Committee.  He joins us now by telephone. 

Senator Schumer, was this a firing or was this a resignation?  How do you see it? 

SCHUMER:  I believe it was a firing.  I think that the administration came to its senses and finally realized that so many things that they found important: renegotiating a FISA bill, dealing with anti-crime, dealing with terrorism, just couldn‘t function as long as Gonzales stayed as attorney general. 

MATTHEWS:  One of his toughest critics has been Arlen Specter of Pennsylvania, a Republican.  Do you believe that the Republicans had a hand in undermining this appointment and bringing about this resignation, this firing, as you call it? 

SCHUMER:  Well, I think it was clear to the Republicans in the Senate, many of them, including Senator Specter, that this man was way above his head.  That he really couldn‘t do the job.  And just because he was a loyal friend of the president‘s doesn‘t mean that he should be attorney general. 

So I think that what everybody saw about the attorney general, his inability to really come clean with the truth, his incompetence in running the department just kept weighing and weighing on them.  And they realized they couldn‘t get things done. 

I would make one more quick point, Chris.  I think the departure of Rove, the fact that maybe Gillespie and Bolten are now gaining an upper hand may mean a change in this administration‘s policies of just pure confrontation on issues like this. 

MATTHEWS:  Well, let‘s talk about the bright side of this.  Bob Gates came in as secretary of defense and he cleaned up things as best he could.  And in the short run at Walter Reed we saw that.  He cleaned house over there.  Do you think Josh Bolten at the White House is doing the same?  Do you believe he is really going to change the face of this administration? 

SCHUMER:  Well, I hope so.  Because it has been an administration basically of confrontation, particularly on security issues and the kinds of issues that are so important in the Justice Department.  And it hasn‘t gotten them very far.  They have a year-and-a-half left in their term. 

And they could do what Ronald Reagan did in his year-and-a-half—last year-and-a-half, which is work with other side which had gained ascendancy in the midterm elections.  And Reagan looked much better for it.  I hope Bush will do the same. 

MATTHEWS:  Well, that is true, he had a good ending to his administration, Ronald Reagan.  Let me ask you about some of the particulars that bother citizens beyond politics.  The torture issue, do you believe we will get somebody in as attorney general who will have a different attitude about the Geneva Convention? 

SCHUMER:  You know, generally, Chris, we Democrats want to come to an agreement with George Bush.  And the criteria has to be, not that the person has liberal or more Democratic political views, they are going to be a conservative.  That is Bush‘s right.  But they at least put rule of law first.

When it comes to torture, when it comes to wiretapping, when it comes to U.S. attorneys, all of that, we need someone who will put rule of law first.  Even John Ashcroft, who was more conservative than Gonzales, put that first. 

MATTHEWS:  Do you believe that Attorney General Gonzales.

SCHUMER:  And by the way.

MATTHEWS:  . broke the law?

SCHUMER:  . if the president nominates somebody who is like that, we will work with the president.  We don‘t want a confrontational hearing. 

MATTHEWS:  OK.  Well, let me ask you about the standards.  You

remember back—a senator back in Watergate days, when Senator Kennedy was

on Judiciary and he was able to basically hold up the confirmation of Eliot

Richardson for attorney general during the worst days of Watergate by

saying, we want special guarantees that the independent counsel will be

protected from any kind of odd political firing—Archibald Cox

Do you think you, as members of the committee, will be able to hold up the confirmation this time of a new attorney general by setting certain standards that new member—that the new AG will have to meet? 

SCHUMER:  I think we can.  But I think it is our preference that the president chooses an attorney general who will uphold the rule of law.  And I think there is a great debate in the White House—I have talked to some people there today, right now as to whether to do that.

I think there is a real possibility they may.  And then we won‘t have to hold up and confront on issue after issue, but rather we will get some real results.  And that is what the American people need and want. 

We are not in a mode that we are looking to pick a fight.  We hope the president is in the same.  And then we can come to some kind of agreement. 

MATTHEWS:  If the president hadn‘t fired Gonzales, as you say, would you have been able to impeach him or would you have been stuck—would we have all, as the country, been stuck with him, if you will? 

SCHUMER:  I think we probably would have been stuck with him, because the Republican senators, as badly as they thought of Gonzales, were unwilling to vote against him.  In that vote of no confidence, we got 56 or 57, but not more.  We needed 60.

MATTHEWS:  OK, senator.  Senator Charles Schumer, member.

SCHUMER:  Just one thing, Chris... 

MATTHEWS:  . of the Senate Judiciary Committee—yes?

SCHUMER:  . I want to say hello from Gloversville, New York, I took time out from meeting with the Gloversville Chamber of Commerce, so I hope people remember Gloversville, it is a great place. 

MATTHEWS:  Well, as somebody we both knew and loved, “all politics is local,” sir. 

SCHUMER:  Thank you, sir, indeed.

MATTHEWS:  Thank you very much.

SCHUMER:  Goodbye. 

MATTHEWS:  Senator Charles Schumer of New York. 

Let‘s bring in Congresswoman Debbie Wasserman Schultz of Florida, a Democrat who sits on the House Judiciary Committee. 

You don‘t have confirmation rights, but do you think there is a standard that the Democrats will insist upon in a new attorney general, Congresswoman? 

REP. DEBBIE WASSERMAN SCHULTZ (D-FL), JUDICIARY COMMITTEE: 

Absolutely.  And good afternoon, Chris.  The standard that we are going to use is that we want to hold the president to making a hiring decision for the next attorney general that is a lawyer for the people, and not for the president. 

And clearly the next move that he makes should not be bringing in another Bush loyalist.  An example that I would use is, the name of Secretary Chertoff has been thrown around today, which is particularly egregious on the second anniversary of Hurricane Katrina. 

This is not a person who did a stellar job in the aftermath of that tragedy, and having him step in and add insult to injury would not be the best move that the president could make. 

MATTHEWS:  Well, let me ask you about the standards.  Let me ask you about what do you think was the biggest problem?  I‘m opening the door here, I suppose, but I have opened.

(LAUGHTER)

MATTHEWS:  . fairly.  Can you claim right now that Alberto Gonzales broke any law of the United States as attorney general?  Can you claim that right now?

SCHULTZ:  Well, I will tell you what the biggest problem is.  The biggest problem is that in terms of the way he ran the Justice Department, we went from, as the senator said, Secretary—Attorney General Ashcroft, who arguably did apply the rule of law, to essentially having a Lady Justice who was supposed to be blind, holding balance scales, to having—to holding scales that tipped far too much to the right. 

And we need to make sure that there is a new attorney general that rebalances those scales and keeps justice blind.  And that was, I think, to me, the most offensive thing is the way that this attorney general conducted business at the Justice Department. 

He politicized it.  He let the White House basically run the legal and law enforcement divisions and the civil rights division from the White House.  And we do need someone that has a spine that can stand up to the politics that I believe we all need recognize as going to continue to come out of the White House. 

I don‘t have any confidence.

MATTHEWS:  And now that Rumsfeld is gone.

SCHULTZ:  I don‘t have any confidence.

MATTHEWS:  Let me ask you.

SCHULTZ:  . in the next year-and-a-half. 

MATTHEWS:  . a final question...

SCHULTZ:  . that the White House is going to change their.

MATTHEWS:  Well, let me ask you the.

SCHULTZ:  . stripes.

MATTHEWS:  Let me ask you to reaffirm that in a different way if you will.  Rove is gone.  Karl Rove has resigned.  Rumsfeld has been fired.  According to Chuck Schumer—Senator Schumer, now Gonzales has been fired, is there going to be a truce now, a period of cease-fire between the White House and the Democrats in the Senate and the House? 

SCHULTZ:  Sure, there will be as long as the president takes the steps that he needs to take to put a neutral face on Lady Justice and make sure that we return the Justice Department to the people and take the politicization out of it. 

And in particular, we need to make sure that there is a clear understanding that the departure of the attorney general doesn‘t mean that we are not going to need to get to the bottom of holding the White House accountable for the littered road scandal that this attorney general has left. 

MATTHEWS:  OK.  Thank you very much, U.S. Congresswoman Debbie Wasserman Schultz of Florida.  Let‘s go back now to David Shuster for some breaking news—David. 

SHUSTER:  Chris, Roll Call magazine is reporting some news involving Senator Larry Craig, Republican from Idaho, who is up for reelection next year.  According to Roll Call, they have obtained an arrest record that shows that on August the 8th, almost three weeks ago, Craig pleaded guilty to misdemeanor for disorderly conduct in the Minneapolis-St. Paul International Airport. 

And according to Roll Call, which is citing the documents, this involves lewd conduct complaints in a men‘s public restroom.  The—

Craig‘s office is saying this is a he said/he said misunderstanding, but according to Roll Call, the documents indicate that the police were investigating charges—allegations and complaints of lewd conduct in the men‘s restroom at the international airport there in Minneapolis. 

And at least arrest record, according to Roll Call, reports that Craig did plead guilty to a misdemeanor, paid more than $500 in fines and fees, and had a 10-day jail sentence stayed. 

Again, Larry Craig, his office has repeatedly denied that he was gay.  They said that such allegations, when a gay Web site outed him, suggested that that was completely ridiculous.  But now, Chris, of course, at least Roll Call repeating that there is an arrest record for Larry Craig, who is up for reelection next year—Chris. 

MATTHEWS:  Well, a sad story.  Thank you very much, David Shuster. 

Coming up.  The Democrats control who gets approved as the next attorney general.  Will their price be too high for President Bush?  The president‘s chief political adviser, Ed Gillespie, will be with us in just a moment.  You are watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH:  It is sad.  We live in a time when a talented and honorable person like Alberto Gonzales is impeded from doing important work because his good name was dragged through the mud for political reasons. 

(END VIDEO CLIP)

MATTHEWS:  Now here is Hillary Clinton on what she says she wants to see in the next attorney general. 

(BEGIN VIDEO CLIP)

CLINTON:  I think we should set a standard that the next attorney general cares about the rule of law more than he cares about protecting the president, that the next attorney general, when he.

(APPLAUSE)

CLINTON:  When he takes an oath to uphold the Constitution, actually means it, understands it, and will protect and defend the Constitution of the United States.

(APPLAUSE)

(END VIDEO CLIP)

MATTHEWS:  Ed Gillespie is the counselor to the president of the United States.  He joins us now from the White House North Lawn. 

Mr. Gillespie, there are those who have said on this program already that this is a positive sign that the White House is smartening up its operation, that this is sign of good things to come.  Is that your view?

ED GILLESPIE, COUNSELOR TO PRESIDENT BUSH:  Well, my view, Chris, is that the attorney general thought over the quiet of the summer recess about what was in the best interests of the department, and, as he has done for two-and-a-half years, did what he considered to be in the best interests of the department. 

Let‘s stop for a second, Chris, and give this man proper credit and due for all that he has done for our country as attorney general.  He has made us safer as a country.  He has put a major imprint on important legislation, like the Patriot Act and the Military Commissions Act.  He has made a priority of protecting children from Internet predators and enforcing our civil rights laws.  He‘s cracked down on corporate scandal and public corruption. 

He‘s had a very strong tenure as attorney general.  And, as the president said, it‘s sad that—that, you know, we live in a time where people can have their good name dragged through the mud.  This is a man who came from literally humble beginnings, Humble, Texas, outside of Houston, 10 -- a family of 10 in a two-bedroom house built by his father, no hot water, not telephone, rose to attorney general. 

He is an honorable and talented person.  And it‘s—it is reluctant -

with reluctance that the president accepted his resignation on Friday. 

MATTHEWS:  But one of his chief accusers, one of his top critics in the country—and we just saw some clips of it—was Arlen Specter of Pennsylvania, the top Republican on the Judiciary Committee.  If this is a partisan issue, why is his top accuser a Republican? 

GILLESPIE:  Well, I don‘t think that Arlen Specter would agree with your characterization that he is his top accuser.  They had differences of opinion.  But the fact is, in the course of all of these hearings that we had and all of the documents produced...

MATTHEWS:  He said the man was incredible.  He said he not to be—but, Ed, he was saying he was not to be believed; he couldn‘t believe his testimony. 

GILLESPIE:  Actually, if you—after the testimony, Arlen Specter accepted a briefing from the intelligence community.  Remember that what the attorney general was asked to do was to testify in a public setting about very sensitive highly classified information.  And that is a difficult situation for anyone to be in.

After Senator Specter was briefed by the intelligence community, he had a better understanding of the fine line that Attorney General Gonzales was trying to do.  It would have been helpful had other members of the committee agreed to accept a similar briefing.  They would have a better understanding of the attorney general‘s testimony.

My point to you, Chris, is that they had differences.  I‘m not denying that.  But the fact is that this is a man, Alberto Gonzales, who has much to be proud of.  We are proud of his service at the Department of Justice, and we will look for someone to fill that role.  The president will weigh options. 

And we have got kind of competing demands here.  One is, it‘s a very important job, and you want to fill it in a timely manner.  But, at the same time, it‘s a very important job, and you want to weigh the options carefully and come forward with a well-qualified nominee. 

MATTHEWS:  Is one of your concerns that Gonzales might have hurt your candidacies for Republican office-holders at the local level this year in November elections? 

GILLESPIE:  Chris, there‘s only two people who determine the attorney general‘s tenure in office.  One is the attorney general.  He came to the conclusion that it was the best interest of the department for him to tender his resignation.  The second is the president of the United States, who reluctantly accepted that. 

And if think that, if you look at his tenure in office—not only, by the way, his time as attorney general, but his time as White House counsel, where he played a critical role in identify qualified nominees in countless positions on the federal bench today, but, before that, as secretary of state of Texas, as a member of the Supreme Court of Texas—this is someone who always put the public interest first. 

And I think the only assessment he made during the quiet months of the August recess, while Congress was out of town and there was a cessation of all of these hearings and demands and all that, was a quiet assessment of whether or not it was in the best interest of the Department of Justice to remain in the job and put the interests of the department and our country first.  And we should appreciate him for that and we do.

MATTHEWS:  Let‘s look forward.  Do you think the president would be open to a compromise with the Democrats on the Judiciary Committee if they make demands about a future nominee‘s position on issues like the tenure of U.S. attorneys, or positions on surveillance, or torture, or any of the issues of executive privilege that have come along?  Do you think the president will be open to negotiation with people like Senator Kennedy, who have, in the past, demanded certain guarantees before approving a nominee? 

GILLESPIE:  Well, Chris, the president is going to put forward a nominee who is consistent in his views about the policies of the Department of Justice.  That‘s the role of the president.  That‘s the role of a presidential appointee.

The Democrats may not agree with all of those policies, but this is a very important position to be filled.  And that person, I‘m sure, will be a qualified nominee.  And I don‘t think the Democrats would want to hold up a qualified nominee from serving in that vital position at a time when we have to continue to keep the country safer, at a time when we are in a war on terror. 

And Alberto Gonzales was very effective in helping to keep us safer.  And we need to keep—have an attorney general there who can keep those policies in place to do that. 

And I don‘t think the Democrats would want to stall the confirmation of a qualified nominee just because they—that person doesn‘t agree with Ted Kennedy, but agrees with the president of the United States. 

MATTHEWS:  Well said. 

Thank you very much, presidential counselor Ed Gillespie.  Thanks for joining us from the White House on HARDBALL.

Much more on Gonzales leaving office, resignation or firing, depending how it‘s getting interpreted, later in the hour, including our HARDBALL debate tonight.  And it‘s pretty blunt:  Was Alberto Gonzales bad or good for America? 

Up next: Lance Armstrong, the cancer survivor and the world hero, my co-moderator today at the LIVESTRONG Presidential Cancer Forum out here in Iowa, scene of the first big contest for the presidential election.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

Today, I co-moderate the first ever LIVESTRONG Presidential Cancer Forum out here in Iowa, alongside seven-time Tour de France winner Lance Armstrong. 

We asked four Democratic contenders, including Hillary Clinton and John Edwards, how this country can beat cancer and improve our health care system. 

Lance Armstrong joins me now.

LANCE ARMSTRONG, FORMER TOUR DE FRANCE WINNER:  Thanks for having me.

MATTHEWS:  It‘s a great honor.

ARMSTRONG:  Thank you. 

MATTHEWS:  Let‘s take a look, before we get going here, at what Hillary Clinton said today.  It was probably the big news story of the day out here in Iowa. 

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  We are on the brink of so many medical breakthroughs right now, and instead of pushing forward with the resources and the focus that is needed, the current administration has literally called a halt to the war against cancer.

You know, between 1993 and 2001, we doubled the budget for the National Institutes of Health, and increased dramatically the funding going to the National Cancer Institute.  Now we‘re, kind of, in a stalemate. 

We need to get back to unleash the genius of our researchers, our physicians.  We need to get more people into clinical trials. 

(APPLAUSE)

CLINTON:  We need to speed up the approval of drugs from the Food and Drug Administration.

And I‘m convinced we can do that.

MATTHEWS:  President Hillary Clinton will declare a national war on cancer?

CLINTON:  Yes.  Yes.

(CHEERING AND APPLAUSE) 

(END VIDEO CLIP)

MATTHEWS:  Well, there you have it. 

Are you—are you—this is what you set this up for, I have to assume, to get some commitments from these candidates.

ARMSTRONG:  Absolutely.  And I—and I think that it goes without saying that we got some pretty strong commitments today. 

MATTHEWS:  What did you make of that commitment to—to begin anew the national war on cancer, which Richard Nixon began?  It‘s ironic, because Hillary Clinton was part of the impeachment effort of Richard Nixon, but here she was saying, let‘s try it again. 

ARMSTRONG:  Right. 

Well, 36 years later, we‘re still—you know, we are still in the

midst of it.  It still takes 550,000 or 600,000 lives a year just here in

America alone, seven million around the world.  I mean, this is a war.  And

there is no other way to—to describe it.  And having, you know, a

potential commander in chief show up and—and re-declare a war and also

re-declare their interest in—in increased funding is—it‘s a home run

for us, as cancer survivors. 

MATTHEWS:  You had John Edwards here, whose wife is suffering from cancer.  She‘s a survivor so far, making an heroic—what did you think of his presentation? 

ARMSTRONG:  Clearly a personal connection.  I mean, he lives with a

woman who has just relapsed from—with breast cancer.  And, you know, you

we can‘t question or doubt his passion.

And I—and I thought his—his plan and his agenda was solid as well. 

MATTHEWS:  Let me ask you about the candidates who didn‘t show up.  John McCain, of course, is suffering—and we all can see it in his surgery—from melanoma.  He was treated for that.  And that was pretty serious business.  And, of course, Rudy Giuliani had prostate cancer. 

ARMSTRONG:  Mm-hmm. 

MATTHEWS:  It took him out of the race for Senate back seven years or so. 

Barack Obama—I didn‘t realize this until I did some homework—

Barack Obama‘s mom died of ovarian cancer at the age of 51. 

ARMSTRONG:  Fifty-one, right.

MATTHEWS:  And, of course, Fred Thompson, who may get in this race, may well get in it, is also a cancer survivor.

It‘s become so prevalent, Lance.  You are one of them. 

ARMSTRONG:  Chris, it touches everybody.  I mean, I sit here as a cancer survivor.  You don‘t—you are not necessarily...

MATTHEWS:  My mother-in-law died of it.

(CROSSTALK)

MATTHEWS:  I lost my nephew to leukemia. 

ARMSTRONG:  Exactly.  So, it‘s close enough.  I mean, it literally touches 100 percent of this population. 

And, so, you know, I prefer to look at the candidates that—that no-showed and just say, listen, this is not the one and only time we‘re going to discuss this.  We may do another forum.  And we would love to have you there.  I understand, for some of the Republican candidates, the health care issue and perhaps the stem cell issue is—is a tricky issue. 

And on Obama‘s side, I...

(CROSSTALK)

MATTHEWS:  Well, why is it tricky to—I mean, cancer is something that Nixon saw in the old days as basically hitting the broad American middle class, which is about 80 percent of the country.

ARMSTRONG:  Right. 

MATTHEWS:  Why would a Republican today not see that same target, the same vulnerability? 

ARMSTRONG:  Listen, the only way I can sum it up, the easiest way to sum it up, is that the issue, this issue, the fight against cancer, is bipartisan. 

MATTHEWS:  Yes. 

ARMSTRONG:  It is apolitical.  It doesn‘t pick a side, just like you see Senator McCain, Mayor Giuliani, Senator Thompson, all cancer survivors.  The same goes on the other—I mean, it doesn‘t—cancer doesn‘t care. 

MATTHEWS:  Yes. 

ARMSTRONG:  Cancer doesn‘t care where you vote, where you live, how you...

(CROSSTALK)

MATTHEWS:  And you were probably the most fittest guy around. 

ARMSTRONG:  Well, I don‘t—I don‘t know... 

(CROSSTALK)

MATTHEWS:  Well, seven times. 

ARMSTRONG:  That was before.

MATTHEWS:  You‘re the Boston Celtics of bicycle racing. 

(LAUGHTER)

ARMSTRONG:  In the old days. 

MATTHEWS:  In the old—well, thank you for being here. 

ARMSTRONG:  And thank you. 

MATTHEWS:  I mean, I thank you for having us here.

And we are going to be back tomorrow with him and the Republican candidates.  Tomorrow, we‘re going to see what they have to say about this very obviously powerful issue of cancer. 

Up next, the HARDBALL debate:  Was Alberto Gonzales bad for America? 

You‘re watching HARDBALL. 

And it‘s HARDBALL tonight, a bad night for the—the crowd from Crawford, Texas.  The president has lost another ramrod, Alberto Gonzales, the man he called Fredo.  I‘m not sure that was a—a tribute or not. 

We will be back to talk about that on HARDBALL when we come back.

(COMMERCIAL BREAK)

MIKE HUCKMAN, CNBC CORRESPONDENT:  I am Mike Huckman with your CNBC “Market Wrap.”

And stocks closed lower on more glum news about housing.  The Dow Jones industrials lost 56 points.  The S&P 500 fell 12 points.  And the Nasdaq dropped 15 points.  Sales of existing homes fell for a fifth straight month in July, while the number of unsold homes climbed to a record level.  Existing homes are now selling at the slowest pace in five years.  The median price of homes sold also dropped six-tenths of 1 percent from one year ago.

Home Depot has reportedly agreed to cut the price for its wholesale supply unit by nearly $2 billion to save a deal to sell the unit to private equity firms.  The deal was in jeopardy after the buyers lost financing amid the ongoing credit crunch. 

And oil rose 88 cents in New York trading today, closing at $71.97 a barrel. 

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

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

The resignation today of Attorney General Gonzales Alberto Gonzales raises the question, was he bad or good for America?  That‘s the HARDBALL debate tonight.

David Rivkin was an attorney in the Department of Justice during the Bush 41 administration.  And Leo Terrell is a civil rights attorney and a radio talk show host.

I want to start with Leo. 

Was Alberto Gonzales bad for America? 

LEO TERRELL, CIVIL RIGHTS ATTORNEY/RADIO TALK SHOW HOST:  Let me think about that.  Yes.  Yes.  Chris, this is no doubt about it.

Alberto Gonzales tried to violate American civil liberties.  That argument about Ashcroft, when Ashcroft relinquished authority, and—and Gonzales tried to get him to sign a document extending the wireless search, Chris, that right there is the most single act that Alberto Gonzales committed to demonstrate that this man didn‘t understand the rule of law. 

And this is not partisan, Chris.  Republicans thought that Ashcroft was—excuse me—not Ashcroft, but Gonzales was wrong. 

MATTHEWS:  Can you defend him, Mr. Rivkin? 

DAVID RIVKIN, FORMER ASSOCIATE WHITE HOUSE COUNSEL:  Absolutely, Chris. 

All the confrontations involving FISA/warrantless surveillance, the Patriot Act, executive privilege, U.S. attorney firings, are essentially institutional confrontations between Congress and the executive in the middle of a war on terror, with some partisan tinge. 

They had very little to do with Gonzales‘ personality.  And, with all due respect to Leo, the example he mentions actually proves the reverse.  We have a nuanced debate among senior government officials.  Incidentally, Ashcroft was maligned and pilloried by the left as well over the precise parameters of the warrantless surveillance program.  To people like Leo and most of the Democrats, the very idea of warrantless surveillance is anathema. 

Gonzales has done a good job.

TERRELL:  Chris...

RIVKIN:  He has served his country well. 

TERRELL:  Chris, you know what? 

MATTHEWS:  Go ahead, Leo.

TERRELL:  He‘s trying to make this—he‘s...

MATTHEWS:  I want to bring up the question, though, that it was Leo—it was James Comey, the deputy attorney general, and it was Arlen Specter, and it was—it was the—Robert Mueller, the FBI people; all of those people were involved in ganging up, if you will, on Gonzales.  It wasn‘t just the Democrats, sir. 

(CROSS TALK)

RIVKIN:  Hold on.  This was has debate. 

TERRELL:  This was not a debate. 

RIVKIN:  There was a debate within the administration after several years of surveilling warrantlessly, a certain range of conversations, including conversations within the United States.  People decided that you wanted to survey warrantless conversations. 

TERRELL:  Chris, he is filibustering right now.  The issue here is this Chris—it is very clear, you have to have probable cause.  That wireless search conduct, without getting a judge to sign it, Chris, violated every rule of law.  Alberto Gonzales was nothing less than a tool of the government and a tool of George Bush. 

We don‘t have to stop with the wireless search, Chris.  We need to talk about the whole disbandment of the Geneva Convention.  He instituted torture in this country.  We are above that.  We have a higher moral standard.

MATTHEWS:  OK, let Mr. Rivkin respond to those charges.  Mr. Rivkin, take a minute, sir.

RIVKIN:  Charges are utterly ridiculous, because both prior to the episode that Leo is talking about—there was warrantless surveillance.  And there is warrantless surveillance after that.  If you want to portray Mr. Mueller and Mr. Comey as heroes, at least accept that there was—

(CROSS TALK)

RIVKIN:  The issues were nuanced and not at all black and white. 

(CROSS TALK)

RIVKIN:  The government does all sorts of things warantlessly. 

(CROSS TALK)

MATTHEWS:  Mr. Rivkin, I want to ask you about—I guess the acid test here is will the president, who has the power to name the next attorney general, pick someone in line with Gonzales on these issues you‘re debating, or someone different?  What do you believe he will do?

RIVKIN:  I think he will pick up someone similar for a simple reason, Chris.  It‘s not the attorney general who sets the legal and the constitutional policy of his country.  It‘s the president.  The president is going to pick somebody who as much in line with him.  I don‘t believe there have been any abuses.

I don‘t believe we had an imperial presidency.  He‘s going to pick a person who is congenial to his view of the presidential power. 

MATTHEWS:  Leo, respond please. 

TERRELL:  Thank you very much, Chris.  This man is reading talking points from the White House.  Gonzales was a tool of the Bush administration.  If any civil rights attorney is listening to this gentlemen here—Chris, I want to make something clear; every lawyer in this country knows that when a lawyer says I don‘t recall, as Alberto Gonzales said over and over again, they are hiding something.  That is a lawyers trick to say I don‘t recall.

I‘m telling you that Alberto Gonzales was disingenuous to the Judiciary Committee and he was disingenuous to the American public.  You must have probable cause to search your house, Chris, my house. 

MATTHEWS:  OK, let me—Let Mr. Rivkin respond.  We showed earlier in the program—I don‘t know if you saw it—in David Shuster‘s news package, a series of situations where Alberto Gonzales, the attorney general, was asked questions under oath before the Senate Judiciary Committee.  And he again and again said I don‘t recall.

Do you think that‘s legitimate or is that a dodge, sir? 

RIVKIN:  I don‘t believe it was a dodge. 

(CROSS TALK)

RIVKIN:  To me the more serious proposition is this—let‘s forget about what Alberto Gonzales told the committees—

TERRELL:  No, don‘t change the subject. 

RIVKIN:  We are going to have unfortunately the same confrontation no matter who is attorney general, because the Democrats in Congress are interested in dismantling the presidential power. 

MATTHEWS:  Gentlemen, Mr. Terrell, I‘m out of time.  Mr. Rivkin, I‘m out of time. But we will have you both back to talk about the next candidate, because I believe we are going to get an appointment very soon.  It will be interesting to see if it‘s someone like Ted Olson or if it‘s someone different.  We will be back. 

Coming up next, we have the big round table.  The question again, the demise of Alberto Gonzales, a shot out of nowhere; was he fired?  Did he quit.  The Democrat, Charles Schumer, said he was fired.  The White House has put out the word kindly that he chose to resign and, in fact, had to argue with the president over the weekend at the ranch that he wanted to quit.

This is HARDBALL.  Coming up, the round table on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Time now for our political round table, former assistant attorney general Viet Dinh, “Newsweek‘s” Jonathan Alter, whose with me out here in Iowa, and American Urban Radio‘s April Ryan.

First up, Gonzales calls it quits, or does he?  Dogged by the U.S.  attorney firing scandal, domestic spying and torture policy, today, Attorney General Alberto Gonzales announced his resignation.  He joins Donald Rumsfeld and Karl Rove in leaving the White House in a swirl of controversy. 

Was Gonzales bad for America, and is his departure good for the Bush presidency?  Ironic questions.  First question up is the fact question.  Was he fired?  Jonathan?

JONATHAN ALTER, “NEWSWEEK”:  I don‘t know for sure, but I think he jumped.  This is a guy who would do anything to protect the president.  Remember, when Bush was governor, he got him out of jury duty because his drunk driving might have come out.  Every single thing Gonzales did --  

MATTHEWS:  So he‘s not Fredo in the “Godfather.”  He‘s loyal to Michael. 

ALTER:  Totally loyal.  He thought that as he got raked over the coals this fall on Capital Hill, that that would hurt the president.  

MATTHEWS:  So he did the decent thing.  Let me go to Viet Dinh.  Sir, do you believe he was fired today or he resigned voluntarily? 

VIET DINH, FORMER ASSISTANT ATTORNEY GENERAL:  No, I think the relationship with the attorney general is so deep—it‘s almost a brotherly relationship.  It‘s unimaginable for me to see the president asking him to leave.  I do agree with Jonathan that he saw this would be best for the administration that he support. 

More importantly, being a political punching bag hurts.  I think at the end of the day, he and Beckie realized, with some vantage point away from Washington, D.C., that they don‘t need to be here, and it can be in capable hands in order to protect the nation and the administration.

MATTHEWS:  April Ryan, do you believe it was that benign, that it was two brothers deciding what was in the best interest of both of them? 

APRIL RYAN, AMERICAN URBAN RADIO NETWORKS:  Chris, it was a strategically placed resignation.  One, you have to remember that the president is more stubborn than he is loyal.  He wasn‘t going to let him go during a time of controversy.  He‘s allowing him to go reluctantly now, because in September everything is going to come back and running.  And everyone has to be in place at that time. 

Not only that, Chris, I had heard weeks ago that this White House had indeed been looking for a replacement for Alberto Gonzales when the all the controversy was very thick in Washington, inside the beltway, but no one wanted to take the man‘s job, especially as the president was saying he stood by him. 

MATTHEWS:  I have to tell you, my brother—I‘ve told you before—he‘s a Republican office holder in Pennsylvania and he and his colleagues had called on the White to remove him from office.  I know that they were concerned of the electoral impact of this situation.  

Let‘s take a look at what Hillary Clinton, who is clearly a Democrat, had to say.  Earlier today, here in Iowa, with Lance Armstrong and I, we talked to Senator Clinton at the Live Strong Cancer Forum.  But here she is blasting away at Gonzales and the resignation. 

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D), NEW  YORK:  I think we should set a standard that the next attorney general cares about the rule of the law more than he cares about protecting president, that the next attorney general, when he takes an oath to uphold the constitution of the United States, actually means it, understands it, and will protect and defend the constitution of the United States.  

(END VIDEO CLIP)

MATTHEWS:  That reminded me of a scene from the movie “Dave,” where the president at the end resigns—She was obviously thinking about that ahead of time. 

ALTER:  Yes, she actually clapped when you told her about the resignation. 

MATTHEWS:  Oh really?  She claps a lot. 

ALTER:  Clearly, this is about them pretty much nailing those skins to the law. 

MATTHEWS:  Are they going to set standards for confirmation that they have never set before? 

ALTER:  Absolutely.  The confirmation hearings be bruising.  But one of the reasons he left is that there will be less bruising than what would have been Gonzales‘ next trip to Capital Hill.  So the administration prefers to have tough confirmation hearings on a new candidate, a fresh face, than to go over all this old ground. 

MATTHEWS:  Mr. Dinh, I was told for weeks now that the reason Gonzales

hadn‘t left is that they were fearful of these hearings coming up now for

confirmation for a successor.  Do you believe the Democrats will try to

attach standards to the new nominee?

DINH:  There‘s no question about it.  I think the chairman of the Senate Judiciary Committee has already said he‘s not going to move any nominees unless certain criteria are met, and certain demands are met by the administration.  It is already the opening of the political season.

But look it, nobody can claim, even his friends and strongest supporters, can claim that Al Gonzales‘ appearance before the Senate Judiciary Committee, fairly hostile audience, was the highlight of his career.  Every political calculation that you are making; you‘ve got to say that the confirmation hearing would be less than any additional baggage that he has to suffer through in the fall through this partisan political process. 

MATTHEWS:  Ryan, it looked to me like watching those hearings that Senator Specter of Pennsylvania had the most ferocious look in his eye when he was questioning him.  In fact, he did say at one point, I don‘t believe you.  This wasn‘t all partisan.  This was some of the Republicans jumping on this guy.

RYAN:  Republicans and Democrats were against him.  Number one, he is creating the drama, as the White House said, political theater, by not remembering so many issues.  But, Chris, earlier today I did talk with House Majority Whip James Clyburn.  He already said that if they do try to send Michael Chertoff, Homeland Security head, to the Hill for a nomination for this post—they said it‘s not going to fly, because, number one, what happened with Hurricane Katrina.

MATTHEWS:  You know, I heard Gonzales say I don‘t remember so many times, I wonder if he‘s going to remember being attorney general.  We‘ll be right back with the round table.  You‘re watching it on HARDBALL.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with the round table.  Today at the Live Strong presidential Cancer Forum out here in Iowa, I asked John Edwards, the former senator from North Carolina, about Hillary Clinton accepting lobbyist money from the health care industry.  Let‘s take a listen.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE:  We have a basic disagreement.  Here‘s what I believe: I believe that the insurance companies and the drug companies and their lobbyists killed the health care reform that was attempted in the 1990s by Senator Clinton.  We applaud her for her work.  But I think they are the people who killed it.

I think the lesson from that—my lesson is not the same as hers.  Her lesson is give them a seat at the table, at least that‘s what I heard her say just a few minutes ago.  I think if you give drug companies, insurance companies and their lobbyists a seat at the table, they will eat all of the food.  I think you have to take their power away from them. 

(END VIDEO CLIP)

MATTHEWS:  Here is Hillary Clinton today at the forum on accepting money from health care lobbyists.

(BEGIN VIDEO CLIP

CLINTON:  Absolutely.  Probably nobody has been more criticized or attacked about health care than I have.  And I wear that as somewhat of a badge of honor, because I thought we tried to do the right thing in 1993 and 1994.  And I intend to do—

I intend to do everything I possibly can to be the president who signs into law national health care, quality affordable health care.  But I think it is important that we understand that the people at the bed side are the doctors and the nurses, the hospitals, and the pharmaceutical companies making these life saving therapies.  I believe in working with everybody and being influenced by nobody. 

(END VIDEO CLIP)

MATTHEWS:  That sounds like pay-to-play, April.  She is saying she‘s taken over a million dollars this past cycle, Hillary Clinton, from the pharmaceutical industry, largely from doctors and nurses and people in the health industry, a million dollars, even more than she took the first time she ran for the Senate.  Is that a sellable argument that she is clean of any kind of influence, much less corruption, if she is taking all money from the health industry? 

RYAN:  Yes, and no.  She makes a good argument, saying she has to talk to everyone.  But at the same time, it is about research.  You know, Chris, as you said, you have been affected by cancer in your personal family life/ So have I.  One in three Americans die—

MATTHEWS:  Why should she take money from these interest groups? 

RYAN:  You have to be very careful because you have to worry about stepping across the lines.  Also, as a reporter, my question is—also Lance Armstrong, he is a friend of this president.

MATTHEWS:  OK, we‘re over.  OK, thank you very much.  Thanks for joining us again.

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.

transcript

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

Discuss:

Discussion comments

,