updated 10/26/2007 12:53:07 PM ET 2007-10-26T16:53:07

Guests: Valerie Plame Wilson, Jim Webb, Bobby Jindal, Ezra Klein, Anne

Kornblut, Jennifer Donahue

CHRIS MATTHEWS, HOST:  Witness for the prosecution.  Tonight, the woman at the heart of the White House crimes.  Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Welcome to HARDBALL.  The top story: Will the U.S. go to war with Iran?  Secretary of State Condoleezza Rice announced new sanctions against Iran‘s military, and this is first time that our country has taken this action against another country‘s military.  We‘ll talk about this dangerous development with one of the most famous former covert CIA agents in the world, Valerie Plame Wilson, and talk about her new book, “Fair Game.”

In our second story tonight: What can the Democratic Congress do to keep Bush from going to war with Iran?  Senator Jim Webb will be here to talk about his legislation that says the president doesn‘t have the authority to use force against Iran.

Plus: President Bush is in California today, inspecting the damage from the wildfires.  But what about New Orleans, a the city still crippled Katrina‘s devastation.  Louisiana governor-elect, U.S. Congressman Bobby Jindal, the first Indian-American elected to run a state, will be coming here to HARDBALL tonight.

But we begin with HARDBALL‘s David Shuster with the background of the CIA leak case.


DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  “Fair Game” by Valerie Plame Wilson is a stark reminder of how the Bush administration sold the Iraq war and then tried to undermine and silence critics.  In the fall of 2002...

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES:  There is no doubt that Saddam Hussein now has weapons of mass destruction.

SHUSTER:  And to make the argument for war even stronger, both Vice President Cheney and President Bush said that Saddam posed a nuclear threat to the U.S. homeland.

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES:  We cannot wait for the final proof, the smoking gun that could come in the form of a mushroom cloud.

SHUSTER:  Then, in the highest profile speech before the war, the 2003 State of the Union...

BUSH:  The British government has learned that Saddam Hussein recently sought significant quantities of uranium from Africa.

SHUSTER:  The problem was the CIA had already determined the Iraq/Africa uranium connection was not true.  An inquiry one year earlier by Vice President Cheney had prompted the CIA to send an ambassador to Niger to investigate, and that ambassador, Joe Wilson, found nothing to support the Iraq/Niger claim and reported that to the CIA.  In the spring of 2003, after U.S. forces invaded Iraq and found no WMDs, articles began referring to Wilson‘s trip, prompting Vice President Cheney‘s office, led by Scooter Libby, to start calling the CIA and State Department for information about Wilson.

In July, after Wilson himself wrote this op-ed titled, “What I didn‘t find in Africa,” the White House efforts to smear him went into overdrive.  And a week later, columnist Bob Novak tried to raise questions about Wilson‘s credibility by revealing, quote, “His wife, Valerie Plame, is an agency operative, two senior administration officials told me.”

In the midst of the ensuing uproar over the disclosure of a CIA operative‘s identity, President Bush declared...

BUSH:  I don‘t know of anybody in my administration who leaked classified information.  If somebody did leak classified information, I‘d like to know it, and we‘ll take the appropriate action.

SHUSTER:  U.S. attorney Patrick Fitzgerald was then assigned to investigate the Plame leak.  Fitzgerald heard testimony from Karl Rove and Scooter Libby.  And after finally obtaining testimony from reporters, in the fall of 2005, Fitzgerald charged Libby with perjury, making false statements and obstruction of justice.

PATRICK FITZGERALD, SPECIAL PROSECUTOR:  Mr. Libby‘s story that he was at the tail end of a chain of phone calls, passing on to one reporter what he heard from another, was not true.  It was false.  He was at the beginning of the chain of the phone calls.

SHUSTER:  This winter, a two-month-long trial produced evidence that Libby and Vice President Cheney sought out information about the Wilsons from multiple government officials.  The jury also saw evidence that the vice president scribbled notes on Wilson‘s column, gave directions to Libby, told Libby to declassify information, and even wrote out White House immediate denials after Novak leaked Plame‘s identity.  Prosecutors argued Libby lied to investigators to protect Cheney, and that Cheney himself brought a cloud over the White House.  The jury agreed and convicted Libby on four of five felony counts.

FITZGERALD:  The jury was obviously convinced beyond a reasonable doubt that the defendant had lied and obstructed justice in a serious matter.

SHUSTER:  Judge Reggie Walton also said it was serious, and this spring, he sentenced Libby to 30 months in prison.  Prosecutors hoped the threat of jail would convince Libby cooperate and finally tell the truth.  But in July, President Bush commuted Libby‘s sentence.

BUSH:  But I felt like the 30-month sentencing was severe and made a judgment, a considered judgment.

SHUSTER:  The president also said he would not rule out giving Libby a pardon to wipe away the felony record.  In one of the most contentious White House press briefings of the Bush presidency, spokesman Tony Snow was pressed on whether the president owes the American people an apology for blowing the cover of a CIA agent.

TONY SNOW, WHITE HOUSE PRESS SECRETARY:  It is improper to be leaking those names.

UNIDENTIFIED FEMALE:  (INAUDIBLE) improper, so you think someone—someone in this administration owes the American public an apology?

SNOW:  I‘ll apologize.


SNOW:  I‘m done (ph).

UNIDENTIFIED FEMALE:  (INAUDIBLE) that‘s a very flippant way of doing something very serious.  It‘s a very serious matter, and it‘s very flippant.

SHUSTER:  Eight years ago, Former President Bush seemed deadly serious when he spoke about the damage done to the CIA when agents are outed.

GEORGE H.W. BUSH, PRESIDENT OF THE UNITED STATES:  I have nothing but contempt and anger for those who betray the trust by exposing the name of our sources.  They are, in my view, the most insidious of traitors.

SHUSTER:  Complicating the CIA leak case for this President Bush is the fact that Valerie Plame Wilson‘s husband, Joe Wilson, was right from the beginning.  Iraq did not seek uranium from Niger.  The administration‘s case for war was wrong.

Also complicating matters for the White House now is the issue of Iran.  As MSNBC first reported a year ago, intelligence sources say Valerie Wilson was part of an operation tracking the proliferation of nuclear weapons material into Iran.

(on camera):  And the sources charge that when Mrs. Wilson‘s cover was blown, the Bush administration‘s ability to track Iran‘s nuclear ambitions was damaged, as well.  In other words, in the course of treating Valerie Plame Wilson as fair game, the Bush administration not only ruined her career but also harmed U.S. national security.

I‘m David Shuster for HARDBALL.


MATTHEWS:  Thank you, David.  I thought that was a great report.  What did you think?

VALERIE PLAME WILSON, FORMER CIA AGENT:  Very thorough.  He covered a lot of territory in a short amount of time.

MATTHEWS:  We don‘t have a whole lot of time tonight, but this is an important night for me.  Here‘s what I care about.  I care about how we got in this war and whether it was sold honestly to the American people.  What I understood at the time of us going into war—and I was skeptical as hell about the whole thing—was that there was a nuclear threat facing the United States—not the region, but us.  It was sold to us, that threat, by the vice president over and over again, a mushroom cloud.  We were going to be hit here in this country by a nuclear weapon from Saddam Hussein‘s Iraq.

Now, let me ask you this.  When you were hearing the president making those claims, when you were hearing the vice president make them over and over again, especially the State of the Union address by the president, what were you thinking?

WILSON:  I have to tell you it wasn‘t until Secretary Colin Powell and his speech before the U.N. that I began to think, Wait a minute, the intelligence that I know about, what I‘m privy to, is thin and patchy and it‘s not matching up with this overarching administration rhetoric.  Up until that point, I have to say my head was sort of in the operational weeds.  I was busy running secure operations, trying to get intelligence to the policy makers.

MATTHEWS:  There were two points made in the build-up to war about the nuclear weapons, the aluminum tubes and the trip to Niger, buying the yellowcake from Niger, the uranium material.  Did you know at the time that the president was making the claims about that in his State of the Union that those claims weren‘t true?

WILSON:  I will tell you, when I heard the now infamous 16 words in the State of the Union address, I thought it was odd.  But don‘t forget, there are two other countries in Africa that also mine yellowcake ore.


WILSON:  So you know, it just seemed strange.  And Joe spent the next couple months discreetly working back channels to try to understand how such a whopper got into the State of the Union address, when on at least on four occasions the CIA had taken that claim, the nuclear threat, out of major speeches done by the president.

MATTHEWS:  Knowing what you know, do you believe that there was a hard case that we faced a nuclear threat from Iraq?

SHUSTER:  At what point?

MATTHEWS:  The point we went into war.

SHUSTER:  No.  I was horrified.  I—what I really was thinking was we just didn‘t find it because, certainly, Saddam Hussein was a threat.  He‘d used WMD on his own people.


WILSON:  There was no question he was a troublemaker.  He was—you know, the—his history was not good.  And I—my sense was maybe we just didn‘t find it.  We just didn‘t the right scientists.  I didn‘t find the right person to get into the right program so that we could really understand what was going on.

MATTHEWS:  So the people watching this program and people in this country who said, yes, I‘ll go along with the war with Iraq because although I think there‘s a lot of problems with the war and what it‘s going to cause us to be involved with, we better act against a nuclear threat, they were misled?

WILSON:  I would say so.  The intelligence definitely was thin and patchy and it was also—don‘t forget, it was so fast.  From the shadow of 9/11, when, as we now know, the interest swiftly turned from Afghanistan to Iraq, we—it was a rush to war.  And it takes time to develop sources and to vet them and corroborate them.  And we didn‘t have that time.

MATTHEWS:  You heard from the vice president‘s office that the vice president wanted to know if there was, in fact, a deal by Saddam Hussein to buy uranium yellowcake from the government of Niger.  You know that that was checked out by your high school.  Ultimately, he went to Niger, and he reported back there was no evidence of that deal, right?

SHUSTER:  That‘s correct.

MATTHEWS:  And then you heard the vice president and the president attest that we faced a threat from nuclear weaponry in the hands of Saddam Hussein, based upon this African deal.  What did you think then?

WILSON:  Well, again, I was kind of—I was desperately hoping that officers in the CIA well above my pay grade had access to intelligence that would support some of these claims because it‘s a terrible feeling to think that you‘re—the government...


MATTHEWS:  ... in the end?

WILSON:  Pardon me?

MATTHEWS:  Was that hope justified in the end?

WILSON:  No.  It‘s clear now that what we went to war under—under manipulated intelligence, at best.

MATTHEWS:  Scooter Libby, the vice president‘s former chief of staff, was in charge of intelligence in the White House.  He was the president‘s guy.  He was the vice president‘s guy.  He brought all the information to the president on why we should go to war.  All that information about mushroom clouds, all that stuff was coming through Scooter Libby.  He was also—as the vice president‘s chief of staff, he had a hand in all the paper flow going to and from the president.  There‘s no way the president could have given that State of the Union address pointing out the threat of a nuclear war—a nuclear weapon in the hands of Saddam Hussein, based upon British intelligence, that couldn‘t have cleared through his desk.

WILSON:  I would assume so.

MATTHEWS:  OK, let me ask you this.  When they began to target you and your husband and began to put out the fact that you were covert—and we know Ari Fleischer did it, we know that Karl Rove did it, we know that Scooter did it, we know that Armitage did it.  We know that there‘s all kinds of evidence and there was a real scattergun attempt to get the information out about you from the White House.  Did you believe that they were covering their trail, that they were trying to prove that they were right or disprove that your case against them was factual?

SHUSTER:  I think what they were—they were furious that Joe had the audacity to go after their primary reason, their primary rationale for war in Iraq, which was a nuclear threat.  And then they went after me.  And I think—I don‘t think there‘s any question, as special prosecutor Fitzgerald noted in the filing, there was—he said something like—it would—he can‘t imagine any evidence that would disprove a conspiracy by a multitude of people in the White House to discredit and undermine Joe Wilson because Joe‘s op-ed piece went to the heart of their argument and it really shook them.

MATTHEWS:  Were you surprised that the president commuted the sentence of the chief of staff to the vice president?

WILSON:  Not surprised.  Deeply disappointed, naturally.

MATTHEWS:  Do you think he‘ll be pardoned ultimately by the president?

WILSON:  I wouldn‘t be surprised.  I don‘t think the president really cares anymore.

MATTHEWS:  Are you surprised that much of the White House press corps, a lot of them, act like this never happened?  A lot of people act like there was no criminality because the sentence was commuted.  If you raise the issue, like I did a couple weeks ago, that there was criminality in the White House, they say, What criminality?  It‘s become amnesia.  They‘ve forgotten what they did because the sentence was commuted.

WILSON:  I think...

MATTHEWS:  I‘m asking you.  I find it fascinating to be in the middle of a case and have a case brought to a jury, and all these counts of criminality, long prison sentence decided by the jury and the judge, and then all of a sudden, people say they don‘t remember it happening.  What criminality?

WILSON:  What struck me about the Libby trial, one of the things besides the reckless way in which my name was used by senior administration officials, but truly, the symbiotic relationship and not particularly healthy one between the Washington press corps and this administration.  Access is paramount.  Everyone understands that.

MATTHEWS:  What do you think about the vice president—according to the prosecutor, Hey, there‘s a cloud over him, his chief of staff operating with him—I mean, he was—Scooter wasn‘t out robbing gas stations at night.  This wasn‘t extracurricular.  In the line of his duties at work, he performed these services which led to his incrimination, right?

WILSON:  Correct.

MATTHEWS:  Now they act like they had nothing to do with it.  The president plays dumb on this one, to be putting it nicely.  He acts like he didn‘t know what was happening.  He said, however, in the beginning of this case, that he was going to deal with anybody who leaked.

WILSON:  Yes.  Clearly, the president...

MATTHEWS:  His way of dealing with it was to commute their sentence.

WILSON:  ... is not a man of his word.  He‘s not a man of his word, and that‘s being charitable.

MATTHEWS:  What was the feeling among your colleagues?  I know you were an anonymous source—not an anonymous source, you were an anonymous person within the agency.  You‘re a classic government servant, right?

WILSON:  Very private.

MATTHEWS:  Anonymous as hell.

WILSON:  I loved my job.  I was proud to serve my country.

MATTHEWS:  Your neighbors didn‘t know what you were doing?


MATTHEWS:  OK.  What do the people—what do the spooks you work with think, the real hard case spies?  Do they feel that this impeached their role, that this really undercut them, this whole Valerie Wilson case?

WILSON:  They know that it happened to me, but it could have just as easily happened to them.  Something I feel passionately about is the amount of politics that has spilled into the intelligence realm, which distorts and dilutes the product and thereby harms our national security.

MATTHEWS:  When your husband filed the story with “The New York Times” attesting the fact that he‘d gone on that trip to Niger and he‘d come back with nothing, that there wasn‘t evidence of a deal, he must have known, didn‘t he, he was going to light a match that would lead all the way to you, the fuse was just lit, they were coming to you?  Did you think that he wasn‘t going to—that match wasn‘t going to be lit?

WILSON:  You cannot possibly be suggesting that with Joe‘s credentials, my air-tight cover, that we actually anticipated that senior government officials would commit treason as part of—by blowing my covert identity, my affiliation with the CIA...

MATTHEWS:  But you had already accused them...

WILSON:  ... as part of their...

MATTHEWS:  You had already accused them of covering up a false case for war.  That‘s serious business.  If they‘re willing to cover up a false case for a war, wouldn‘t they out you?

WILSON:  Well, call me naive, but that wasn‘t on our list of options.

MATTHEWS:  When you think of it logically now, they were playing pretty tough.

WILSON:  Joe was more than prepared for pushback against him.  That was understandable.  He was made ambassador under George H.W. Bush.  He had his letters.  He had his commendations.  He was called a true American hero for his work in the first—so no, we didn‘t actually consider that they would betray our country‘s national security to get at me and to further, you know, take punitive action.

MATTHEWS:  Well, now do you know they did.

WILSON:  Oh, yes, four-and-a-half later.  And it‘s a story—what I write about in my book, I think the whole thing tells the consequences of speaking truth to power.  It‘s a cautionary tale.

MATTHEWS:  Well, they play rough.  I like the title of your book, “Fair Game”.

WILSON:  Thank you.  Thank you very much...


MATTHEWS:  Anyway, thank you, Valerie Plame Wilson.  The book‘s called “Fair Game.”  Some of it‘s been redacted by the CIA, but you get the gist of it, believe me.  Go take a look at it at the book store and buy it.

Anyway, much more on the new drumbeat of war with Iran and how eerily similar it sounds to what the administration told us before the war with Iraq.  Senator Jim Webb is going to join us.  You‘re watching HARDBALL, only on MSNBC.


BUSH:  I told people that if you‘re interested in avoiding World War III, it seems like you ought to be interested in preventing them from having the knowledge necessary to make a nuclear weapon.  And I take the threat of Iran with a nuclear weapon very seriously.



BUSH:  We cannot wait for the final proof, the smoking gun that could come in the form of a mushroom cloud.



MATTHEWS:  Welcome back to HARDBALL. 

The Bush administration slapped new sanction against Iran‘s Revolutionary Guard today, marking the first time in history that the United States has taken such steps against the armed forces of another country.  Will this pave the way for war with Iran? 

Senator Jim Webb of Virginia sits on the Armed Services and the Foreign Relations Committee.  He‘s also former secretary of the Navy. 

Senator, thank you for joining us.

What is this all about, this new talk about acting against Iran?  Is this to avoid a war or to make one? 

SEN. JIM WEBB (D), VIRGINIA:  Well, I think the problem is that we have so many balls in the air, in terms of the rhetoric that‘s flying back and forth, that we need some protection against unintended consequences or, perhaps, intended consequences from some people in the administration.

And that‘s why I introduced a bill last March that would say that the administration cannot take unilateral action against Iran, absent a couple of very specific circumstances, unless it comes to the Congress again.

MATTHEWS:  But the president hasn‘t—you haven‘t passed that in both houses...

WEBB:  No. 

MATTHEWS:  ... and the president hasn‘t signed it.  So, can‘t he say, “Nice try, Senator Webb; I still have the power”?

WEBB:  Well, here we are.  And, you know, I‘m saying that because we‘re going to make another push on this starting very soon, because where you are right now is, we have—they didn‘t go quite as far in this declaration today that they did in this Kyl/Lieberman amendment that passed the Senate, which called the Iranian Guards an actual foreign terrorist organization, but they came very close.

And, so, we really need some definitions here between the legislative and executive branch priorities.  And the bill is one way to get there.  And we‘re hoping we can get there.

MATTHEWS:  Well, are Lieberman and Kyl carrying water for the administration, for the hawks inside the administration?  Why are they passing bills like this?

WEBB:  I don‘t think there‘s any doubt about that.  And I think that what we have to really sit down and figure out is, behind this announcement today, which had a strange term, specially designated, global terrorists, as opposed to foreign terrorist organizations, there is the potential for some very significant movement by this administration.

They were saying today this is the most significant movement from the United States toward Iran in 28 years.  And they‘re doing it sort of unilaterally, and what we need to make very clear is that there are certain things that a country like ours should be able to do, in terms of sanction, that are defensive and proper, but there are others that might be taking place that are designed to mask potential offensive operations.  And that‘s where the Congress has to step in.

MATTHEWS:  Well, you know, the people who pushed for war with Iraq had a wonderful method, which was to get people to agree in principle, when it didn‘t matter, in terms of operations, that we needed to go to war, and then get us to follow up on our agreement in principle.

MATTHEWS:  So they had something called the Iraqi Liberation Act, which had no real military component to it, no actionable part.  And now they keep going back after that and saying, oh, you signed on to that; you must be for war.  Bill Clinton signed that.  He must be for war. 

WEBB:  Exactly.

MATTHEWS:  And here they are again trying to get the resolutions through.  It looks to me like they love these promissory notes.  They get people to sign in principle, and then they come back and say, where‘s the war?  You promised me a war.

WEBB:  Well, it‘s actually—it‘s called getting people on the record.  I think that people over here got maneuvered an issue at a time, just as you mentioned, before the war in Iraq, so that, by the time the actual vote came, they were boxed in so that they had to vote for it. 


WEBB:  And a lot of that is going on right now.  The Kyl/Lieberman amendment‘s a classic example.  If you look at the vote on that, even though more than 70 senators voted in favor of it, the top six senators on the Foreign Relations Committee, the two ranking Republicans and the four ranking Democrats, all voted against it. 

So, the people who have long experience in foreign policy can see this sort of thing coming, and the others kind of go along with the motion of the moment.  And they need to take a lot closer at the language of what‘s coming this way. 

MATTHEWS:  What‘s the story on Kyl and Lieberman?

Let‘s start with Kyl.  He seems to be very much in bed with the administration‘s most hawkish elements.  He seems like he just does what they want him to do. 

If they say, let‘s get ready; let‘s get ready for a war, he goes out and he gets a resolution passed. 

We know Joe Lieberman—and I give him credit for this.  He is what he says he is, a real down-the-line hawk when it comes to the Middle East and elsewhere. 

Is that what they‘re up to, just arming the Senate and the country with language that can be used, six months or five months from now, to go to war? 

WEBB:  Well, there are different theories on how to bring Iran into either the international community or to change the regime there.  And I don‘t believe that we‘re going to get there without engaging them in a very aggressive way diplomatically. 


WEBB:  And we can get there. 

MATTHEWS:  Yes, but these guys...


WEBB:  And I think we got there with China in 1971.

MATTHEWS:  But Kyl and Lieberman are not diplomats.  They‘re hawks. 

WEBB:  Well, the Cheney element of the administration is well represented in the United States Senate. 

MATTHEWS:  Well said. 


MATTHEWS:  Thank you very much, Jim Webb, who‘s leading the way in the Democratic Party.  He‘s one Democratic senator who remembers the election. 

MATTHEWS:  Up next, the political headlines.  John McCain talks about Woodstock, Hillary and that Hanoi Hilton. 


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  I wasn‘t there.  I‘m sure it was a cultural and pharmaceutical event. 


MCCAIN:  I was—I was tied up at the time. 



MATTHEWS:  Great words. 

Anyway, word that Rudy Giuliani dodged a mob hit back in the 1980s, we are going to talk about that. 

You‘re watching HARDBALL, only on MSNBC.  


MATTHEWS:  Welcome back to HARDBALL. 

Time now for some interesting politics. 

John McCain brought down the House in the last Republican debate by whacking Hillary for wanting to spend a million tax dollars on a museum to honor the Woodstock concert back in the summer of ‘69.  McCain said he was tied up at the time, a wondrous reminder that he was in the captivity of the North Vietnamese back then, getting tortured and thrown into solitary confinement for years at a time. 

Here he is bringing it home. 


MCCAIN:  A few days ago, Senator Clinton tried to spend $1 million on the Woodstock concert museum. 


MCCAIN:  Now, my friends, I wasn‘t there.  I‘m sure it was a cultural and pharmaceutical event. 


MCCAIN:  I was—I was tied up at the time. 


MCCAIN:  No one can be president of the United States that supports projects such as these. 

I‘m John McCain, and I approve this message. 


MATTHEWS:  Well, it got a standing O, as you saw. 

The Republicans had their Contract With America.  Now we hear there was a contract on Rudy.  According to newly released FBI documents, the five New York crime families met back in ‘86 to decide whether or not to put a contact out on Giuliani, who was then a federal prosecutor.

They voted 3-2 against doing it.  Those in favor of killing him included John Gotti and Carmine “The Snake” Persico.

Well, I guess it‘s democracy in action.  As Thomas Jefferson once wrote, the whole principle of democratic government is the acceptance by all of a simple one-vote majority. 

Speaking of life and death, Hillary is thinking big thoughts these days.  She told “The New York Daily News”—quote—“I‘m something who believes that death is part of life.  I don‘t have any fear of it.  I don‘t have any anxiety about it.  I just want to live every day to the best that I can.”

Finally, World Series.  I was at the game last night up at Boston. 

And take my word for it, I got a thrill just walking out into the stands.  You had to feel for the Colorado players, having to walk into Fenway Park last night.  It‘s a place that reeks of baseball history. 

And Larry Lucchino, the president of the Red Sox, gave me this to wear.  I‘m not sure I can wear it, because I‘m a Phillies guy, but what a great shirt to get while I was up there.

Anyway, the Phillies may not have made it this year, but something powerful happens when these baseball teams go at it in the cold weather, like last night. 

Let‘s hope, when we get to Denver, it isn‘t snowing. 

Up next, President Bush tours the damage from the California wildfires.  What has he learned since looking out the window of Air Force One over New Orleans after Katrina?  Louisiana governor-elect Bobby Jindal joins us next. 

You‘re watching HARDBALL, only on MSNBC.  


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

Stocks edged lower today.  The Dow Jones industrials lost three points.  The S&P 500 was down a point-and-a-half, and the Nasdaq fell almost 24 points. 

After the closing well, though, Microsoft reported, quarterly profit rose 29 percent.  Earnings easily beat analyst estimates.  And, in after-hours trading, Microsoft shares are up 10 percent.

Oil closed at a record high of $90.46 a barrel, after surging $3.36.  The big jump is blamed on tight inventories and indications OPEC will ignore calls to increase output when it meets informally next month. 

Some good news, though, for once about the housing market.  New home sales rose unexpectedly last month, nearly 5 percent.  The median price of homes sold also rose 2.5 percent.  But sales of new homes in August were revised down sharply. 

And orders of big-ticket manufactured goods dropped unexpectedly last month. 

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



GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  I appreciate the leadership of Governor Schwarzenegger.  I said earlier when we were at the neighborhood, you know, there‘s no hill he‘s not willing to charge, no problem he‘s not willing to solve.

And we got a big problem out here, and I appreciate his leadership.  It makes a significant difference when you have somebody in the statehouse willing to take the lead. 


MATTHEWS:  That‘s Dianne Feinstein behind him there. 

Welcome back to HARDBALL. 

That‘s President Bush in California today, after he surveyed the damage from the wildfires we have all been watching out there. 

Is the government‘s response better than it was during Hurricane Katrina?  Well, that‘s an easy one. 

U.S. Congressman Bobby Jindal is the Republican—he‘s a Republican from Louisiana.  And, more importantly, he‘s the next governor of Louisiana. 

Mr. Jindal, we have never met.  It‘s an honor, sir. 


MATTHEWS:  You‘re a pathfinder, a pioneer of greatness, a change agent, and the governor of an interesting state. 

Is the state of Louisiana now serious about politics? 

JINDAL:  Chris, well, first of all, thank you for having me on the show. 

And I agree with you.  Certainly, the response couldn‘t have been any worse than what happened down here in Katrina‘s aftermath.  Absolutely.  Louisiana voted this past weekend for a massive change.  I think we‘re showing the country we‘re ready to declare war on corruption. 

You know, all these rankings have us on the bottom of the list.  I campaigned, saying my first special session would stop legislators from doing business with the state, lobbying the state, would require them to disclose their income. 

We said, literally, that we‘re not going to do anything else until we get that done, so we stop being 50th when it comes to having the nation‘s weakest ethics laws.  I think our state is ready for change.

The storms didn‘t cause all of our problems.  Rita and Katrina revealed our problems.  They have given us a chance now to address those problems, because of the nation‘s attention, because of the billions of dollars being spent on recovery, and because of a lot of the railed institutions.  Charity Hospital, public schools, public housing now need to be rebuilt, in some cases, from scratch. 

MATTHEWS:  Was it a big thing just for the president to get out there this week?  He didn‘t get to Louisiana for a while.  Is it important that he show up? 

JINDAL:  Absolutely.  Not only is it symbolically important, but the federal government has to be more proactive. 

I do hope the country has learned lessons from the failures after the 2005 storms.  It is important to plan before the disasters.  It‘s important to be there on the ground personally.

But now, after the attention, you know, after they put out these fires, I hope California has a better—better response from the federal government in terms of the ongoing recovery.  We‘re two years after the storms.  We‘re very grateful for the nation‘s help.  We live in a very generous country, but we‘re still dealing with FEMA red tape and bureaucracy. 

We still have billions of dollars of needs that haven‘t been met.  And, again, I do hope that California‘s experience reflects some of the changes that have been made in FEMA since 2005. 

MATTHEWS:  Let‘s talk turkey here, and a little tough, because I know it‘s early to do this.  And I don‘t want to be insensitive, but insurance covers—insurance, it covers calamity like fires and floods in many cases.

But, when you ask for tax dollars to solve a problem, some people wonder—I‘m one of them—why do we build housing so close to very—you know, very dangerous parklands, forest lands, where there—where there‘s dryness, and there‘s danger from wood that could catch fire quickly?  And the homes are right up next to them.

Why do we build homes below sea level in Louisiana, if we know that, when the cycle of nature turns, we are going to have to pay a lot money to pay for relief?  Is that smart?

JINDAL:  Well, I think it‘s a very reasonable question.

In Louisiana‘s case, let‘s be clear now.  A big cause of flooding was the failure of federally built and designed levees.  If they had worked the way they were supposed to, Katrina would have been a bad storm, but, Chris, it wouldn‘t have been this awful catastrophe. 

Yes, there would have been loss of life, there would have been significant damage, but it would not be the—the over $200 billion of damage that we saw after Katrina. 

So, let‘s remember, it wasn‘t just because people built in low areas.  It wasn‘t because people took undo risk.  It was because the levees didn‘t do what they were supposed to do. 

I‘m glad you mentioned insurance.  We have got an insurance crisis on the Gulf Coast.  Premiums have gone up.  People are—companies are dropping coverage.  You saw, even before the wildfires, Allstate said they didn‘t want to cover fire damage in California. 

I have co-sponsored some bipartisan bills with Democratic colleagues to have national reinsurance, the way that we helped New York City after their terrorist attack on 9/11.  We, as a country, have got to make sure that insurance is widely available and affordable.  If insurance companies don‘t want to cover risk—You know, it‘s getting harder to buy wind coverage on the Atlantic Coast, on the Gulf Coast. 

I suspect it will be harder to buy fire coverage on the West Coast now.  The whole point of insurance is to protect us against unlikely events.  The country, I think, has to step in and make sure we get what we‘re paying for when we send those insurance companies our premiums.  They‘re making record profits; let‘s make sure they‘re actually providing real coverage. 

MATTHEWS:  Let me ask you about Louisiana.  It has been somewhat comical over the years, tragic as well.  You have had Huey Long.  You‘ve had Earl Long, a man who was insane, I believe.  Huey Long was questionable, to put it lightly.  You have Edwin Edwards, who I think is still in prison.  You have had a history of electing people that aren‘t good public officials down there and everyone enjoys the joke.  Is that gone? 

You elected—David Duke was your predecessor as the Republican nominee for governor.  I think that states a lot about how far the state has come, that a guy from the Klan has been replaced by a fellow like yourself, with your background.  Is that a sign of Louisiana waking up from its years of thinking politics is a joke, and that public service is somehow something to be used for sport? 

JINDAL:  Absolutely.  The jokes aren‘t funny.  Our local university did a study—LSU surveyed 945 business leaders.  They said the number one thing we can do to grow our economy is to crack down on corruption.  For the first time in our state‘s history, we have term limits on our legislature.  We should have dozens of new legislators this session.  My victory in the primary was the first time that‘s ever happened in the primary. 

I think the voters spoke very loudly.  They‘re tired of seeing their young people leave.  We lose 30,000 people a year.  We‘re not a poor state.  We have had poor leadership.  The jokes aren‘t funny.  Our politics aren‘t meant to be entertainment.  The signal, the message we want to send the country is it‘s a new day in Louisiana.  We‘re going to have the nation‘s toughest ethics code.  We‘re going to get rid of those new job taxes.

We‘re a wealthy state in ports, in our people, our rivers, our oil and gas, our fisheries.  This is a great place.  It‘s a new day.  We want people to take a second look at Louisiana.  I hope my election causes then to do that. 

But Chris, you‘re right, for too long, elections have been sport; it‘s been entertainment.  Our people are tired of that.  They‘re tired of their young children going to Dallas and Houston and Austin and Atlanta to pursue their dreams.  They want their kids to stay right here in Louisiana. 

MATTHEWS:  Well, you have got a great state.  I tell you, I have always loved New Orleans.  I loved going to training down there.  I trained in Baker, Louisiana for the Peace Corps, believe it or not, at the old Leyland College down there.  I love the place.  I hope you make it back.  Good luck and congratulations on making history, sir.  I hope you do it as governor, not just in getting elected. 

Thank you sir for coming on, Bobby Jindal, the next governor of Louisiana.  Up next, we‘re going to run the numbers on the newest polls from Iowa, New Hampshire, Florida.  This is HARDBALL, only on MSNBC.


MATTHEWS:  Welcome back to HARDBALL.  The round table is here.  Anne Kornblut writes for the “Washington Post.”  Jennifer Donahue is with the New Hampshire Institute of Politics.  And Ezra Klein is with the “American Prospect,” which is sort of like the new “New Republic,” right?  Liberal—anyway. 

First of all, I want to ask you everything.  I was really happy to see Valerie Wilson come on the program, because Valerie Wilson has reminded us there was, in fact, a crime committed by the vice president‘s office, a multi-count crime that led to years of imprisonment, except the president commuted it.  What bothers me, Anne, is people have not only allowed the president to commute—he‘s allowed to.  They‘ve allowed the president to erase the blackboard and say it never happened. 

There has been no criminality in the vice president‘s office, or in the White House.  It never happens.  That‘s the way people—is everybody a jug-head now in politics? 

ANNE KORNBLUT, “THE WASHINGTON POST”:  Look, I think unfortunately for the country, a lot has happened since then that has allowed people to forget about it. 

MATTHEWS:  I think it‘s worse than that.  What do you think, Ezra?  Why do the people in the White House get away with this stuff, with felonies, with obstructing justice, throwing dust in the umpire‘s face so he can‘t pursue the case he was trying to pursue, don‘t testify in court—the vice president doesn‘t testify.  And then they commute the sentence so everybody is cleared.  And nobody—everybody acts like nothing has happened. 

EZRA KLEIN, “THE AMERICAN PROSPECT”:  We have always been at war with Oceania.  I mean, that‘s what it reminds me—It‘s a little bit Orwellian.  But in part it strikes me as a the media failure.  You go back to the 1990‘s, Whitewater, which turned out to have no criminality involved whatsoever at the end of the investigation, that was all over for years.  It couldn‘t get dropped. 

Yet somehow, this just sort of evaporated from the press.  I‘m not exactly sure—

MATTHEWS:  I mentioned criminality in the vice president‘s office a few weeks ago, and some reporter said he didn‘t know what I was talking about.  Is it amnesia?  Is it just bad reporting?  I think it‘s probably the latter.

Anyway, according to a new field poll in California, Rudy Giuliani is only at 25 percent.  But he‘s double digit over the pack.  I‘m amazed by that, Anne, because here we have Schwarzenegger, a pro-choice, moderate Republican in many ways—many, many ways—Maria Shriver‘s husband in many ways.  And that seems to catching on as the new paradigm in California for Rudy. 

KORNBLUT:  That‘s a great model for him.  They‘re similar in a lot of ways.  Temperamentally, maybe not so.  But he is the Californians‘ kind of Republican.  But what I think is interesting is that nationally Schwarzenegger has been at the vanguard of this kind of Republicanism.  It‘s much more western Republicanism.  It leaves the southern conservatives, the religious conservatives somewhat in the dust. 

I‘m surprised, in fact, that Rudy isn‘t doing better.  You say, he‘s only at 25 percent. 

MATTHEWS:  I wonder if it might even be bi-coastal.  I think it represents where I grew up in Pennsylvania and New York and Connecticut.  It‘s much more the Republican party of old days, before Goldwater maybe, the party that represented both coasts. 

KLEIN:  Sure, I‘ve got to tell you, Chris, I think Giuliani is antithetical to this trend.  I think he is absolutely what Schwarzenegger is not.  He is constantly going at Hillary.  He‘s been—he‘s running on the fact that he‘s more aggressive against the Democrats.  Look at what happened to Schwarzenegger. 

I‘m a Californian.  My home state is burning down a little bit.  So it‘s not a good week for us.  He Schwarzenegger came in.  He had a real tough couple years because he went after the Democrats, tried to beat them, tried to do -- 

MATTHEWS:  You say it‘s tonally different, but ideological it‘s similar? 

KLEIN:  Ideologically, the difference between them is Giuliani is running on an aggressive policy and Schwarzenegger doesn‘t have a fleet of bombers under his command.  Schwarzenegger has been running on doing a health care plan.  Giuliani‘s health care plan is a tax exemption. 

MATTHEWS:  Let me go to Jennifer.  Jennifer, let‘s look at New Hampshire up here.  You have the Institute of Politics, a new poll of New Hampshire voters.  On the Democratic side, you have Hillary once again doubling Obama.  What is that about?  Is Obama failing or is Hillary power charged?  What‘s going on?

JENNIFER DONAHUE, NH INSTITUTE OF POLITICS:  Hillary is power charged.  She‘s got all of the pieces in a row.  She has every age group, every demographic, every religion going in her favor.  So far, she has been able to correct a problem she had, which is that she had a gender gap.  And, Anne, I saw you up here last week covering the Women‘s Week for Hillary Clinton.  She reached out to women, especially middle aged and older women, who doubted her, didn‘t trust her, didn‘t like her response when her husband was president to some of the things that happened at the end of the presidency. 

She‘s getting those women.  Now, Obama, there‘s room to grow.  There are young people who are up for grabs.  One very important thing about this poll, what we saw was that 40 percent of independents look like they will vote in the Democratic primary.  At this point in time—it is just a snapshot -- 24 percent don‘t know which party they‘ll vote in.  So those are up for grabs, and those are people that Obama could try to attract. 

Right now though, establishment Democrats are going for Hillary, whether they‘re liberal or moderate. 

MATTHEWS:  That seems to be the case everywhere, Anne.  The establishment, the interest groups, the older women, the working women, the minorities, minorities—I don‘t know if gays—if they‘re significant, but they‘re probably for Hillary too.  It‘s unbelievable.

KORNBLUT:  In a way it‘s almost bad news for them.  When our last poll came out, there was a lot of talk about whether she could be peaking too soon, because there was almost nowhere in the poll that you could see good news if you were Obama or Edwards or somewhere that you could poke some holes in it.  It‘s hard to imagine this trajectory continuing all the way until January. 

For now, Jennifer is seeing what we saw in our last poll, which is a lot of good news for them. 

MATTHEWS:  This is more like the Republican party behaved in the past, where you had a clear front runner going back to Reagan or going back to Eisenhower or certainly going back to George Bush, Jr., the current president, where the party just seems to act as one.  It seems to move as a body. 

DONAHUE:  They seem to have anointed Hillary Clinton.  For some strange reason, it‘s stuck for all these months.  You‘d think there would be a problem with that, but no.  She started off with a stumble, because Obama came on strong, stomped him out.  So far, he hasn‘t regrown.  It‘s not out of the question that if Hillary Clinton didn‘t do as well as expected in Iowa, she‘d have trouble coming into New Hampshire, and this grass roots underground network for Obama would come up out of the wood work and give her trouble. 

That could happen.  But the real play is on the Republican side, Chris. 

MATTHEWS:  Take a look at that. 

DONAHUE:  Romney is now over ten points ahead of Giuliani, ten points in what you‘re probably showing, a little over that.  Over him significantly with women.  There is a huge gender gap in Romney‘s favor.  So what you can really draw from that is Romney has been here week after week after week.  Giuliani has cruised through the state, hasn‘t really had hand holding experience here.  You know what?  The more people know Romney, the more they like him.  The more people know Giuliani, the less they like him.  I bet you are going to see that play out on the national stage.  It just hasn‘t happened yet.

MATTHEWS:  I‘m amazed by that.  What do you think of that?  I don‘t see the Romney appeal nationally.  But among women, I don‘t know how to explain it, except maybe Rudy is too rough in character for them.  What do you think?   

DONAHUE:  Have you met him in person? 

KLEIN:  I have not met Mitt Romney in person.  I think he‘s an appealing candidate though.  I think more so a little bit than Giuliani.  I have been surprised at Giuliani‘s appeal.  He‘s made terrorism into a cultural issue.  But I don‘t know that that will work in New Hampshire.  I think this poll is bad news for New Hampshire as a primary state.  Hillary is crushing the Democrats here.  She‘s ahead by 20 some points.  That makes Iowa, where she‘s only ahead by a couple, the only thing that matters. 

MATTHEWS:  It looks to me like if Romney loses in Iowa, he could still lose in New Hampshire.  This is interesting.  We‘ll be back.  I can see McCain coming up there too.  We‘ll be right back with the round table.  You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  Welcome back to the round table.  I would like everyone to take a look at this new John McCain ad.  We showed it earlier, but it so thrilling.  I find myself liking John McCain—I‘ve said this before—no matter how I disagree with him on a lot of issues, and how I think he‘s had to play some politics over the last couple years that‘s taken him somewhere away from the straight talk that he‘s known for.  I still like the guy‘s history.  Let‘s take a look at it.


MCCAIN:  A few days ago, Senator Clinton tried to spend one million dollars on the Woodstock Concert Museum.  Now, my friends, I wasn‘t there.  I‘m sure it was a cultural and pharmaceutical event.  I was—I was tied up at the time. 

No one can be president of the United States that supports projects such as these. 

I‘m John McCain, and I approve this message. 


MATTHEWS:  Ezra, how many politicians getting standing ovations at debates. 

KLEIN:  Not many.  Although, look—


KLEIN:  I‘m not of the Boomer generation.  I don‘t want to see us have another fight over who‘s a hippie and who‘s a soldier.  I find it dull. 

MATTHEWS:  I don‘t.  I find it inspiring. 

DONAHUE:  You know who doesn‘t find it dull?  Military moms don‘t find that dull.  Voters don‘t find that dull.  There‘s a war going on and they find that important.  McCain is using his sense of humor here. 

KLEIN:  McCain is on the wrong side of that war. 


KORNBLUT:  I think one thing that everyone can agree on is that Hillary Clinton was not—Hillary Clinton was not at Woodstock.  She‘s maybe been there on the campaign trail. 

MATTHEWS:  But she wanted to spend a million dollars of our tax money, or borrowed money from the federal government, to pay for a museum at Woodstock.  Shouldn‘t that be one of the areas in which private charity pays for cultural institutions?  Should the federal government pay for a monument to Woodstock?

KORNBLUT:  News flash, a senator—

MATTHEWS:  Speaking for the 1960‘s, we shouldn‘t be taking money from pigs.  Remember that?  That was the attitude back in the old days; don‘t take the pigs money.  Now we‘re saying, we‘ll take the tax payers money.  I like the old anti-establishment attitude better, build our own museum.  Woodstock nation. 

DONAHUE:  Yes, Woodstock nation.  But look, you can reach the liberals. 

KLEIN:  It‘s called Burning Man.

MATTHEWS:  I don‘t know if I like the new liberal.  Anyway, thank you.  Thank you, Jennifer Donahue.  It‘s good to see you back.  Glad we got a cameraman up there.  Thank you Ezra Klein and Anne Kornblut.  What a great crowd.  Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL.  Right now it‘s time for “TUCKER.”



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