updated 11/2/2007 3:52:58 PM ET 2007-11-02T19:52:58

Guest: Michael Isikoff, Dana Milbank, John Bolton, Dana Milbank, Jo-Anne

Hart, Ron Brownstein, Holly Bailey, Joan Walsh

CHRIS MATTHEWS, HOST:  Scott McClellan says that we, the reader, have to decide if Dick Cheney was the one lying about Scooter Libby in the CIA leak case.

Let‘s play HARDBALL.

I‘m Chris Matthews.  Welcome to HARDBALL.  Thank you to our troops fighting for our country in Iraq, Afghanistan, and around the world.

Tonight, the swirl of denial and insinuation continues on how the WMD case for war in Iraq was ruthlessly defended.  Yesterday, Scott McClellan, who defended the White House during those long weeks and months of the CIA leak scandal, said he was misled by top White House officials.  He said President Bush himself was involved in the misinformation campaign that said Scooter Libby Karl Rove never leaked the identity of that CIA agent, Valerie Wilson, to the press.

Later, after lots of heat directed in his direction yesterday, McClellan got word—we got word from McClellan that he didn‘t mean to say that the president lied to him, only that somebody at the top did.  Well, today I spoke with McClellan‘s editor, Peter Osnos of Public Affairs publishing house.  Peter told me that McClellan intends to, quote, “leave it to the reader,” close quote, to decide whether Vice President Cheney told the truth or, in fact, lied about the role he and his chief of staff, Libby, played in the effort to discredit Wilson and her husband, the former ambassador, a major Iraq war critic.

Here‘s what Osnos told me about the McClellan account today, about that book to be published by Scott McClellan in April.  Quote, “McClellan made his usual rounds of top White House officials before telling the press that Karl Rove and Scooter Libby were not responsible for leaking that CIA story.  B, that McClellan believes that president and his chief of staff did not lie to him in denying White House involvement in the leak.”  That‘s the president and Andy Card didn‘t lie to him intentionally.  “C”—and these are the editor‘s words, quote, “Readers are going to have to decide about Cheney, whether the vice president was lying to cover up his and his chief of staff‘s role in the leaking that was aimed at undermining the one person to come forward and undermine the administration‘s case that America was threatened by a nuclear attack before we went to war with Saddam Hussein.”

We begin tonight with HARDBALL‘s David Shuster and NBC‘s Savannah Guthrie on this ongoing story.  Savannah, you covered this story for Court TV, the whole Scooter Libby trial.  David, you‘re with me right now.  You start the ball rolling.  What does it tell you when I find out today from the publisher that Scott McClellan‘s going to, quote, “leave it to the reader” whether Dick Cheney was telling the truth about the role that he played and his chief of staff, Scooter Libby, played in leaking that CIA identity so as to undermine criticism of the war?

DAVID SHUSTER, HARDBALL CORRESPONDENT:  It says that Scott McClellan, who left the White House with his credibility in tatters, is infuriated at the vice president‘s office.  And Chris, that is so interesting.  When you go back to the two weeks when all these were being made, September the 28th, 2003, “The Washington Post” in a front-page Sunday story says the CIA had referred the Plame leak to the Justice Department for criminal investigation.

The next day, Scott McClellan publicly cleared Karl Rove, the president‘s guy, and thereby the president, but he did not specifically clear Libby and the vice president‘s office.  Watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  You said this morning that, quote, “the president knows that Karl Rove wasn‘t involved.”  How does he know that?

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY:  Well, I made it very clear that it was a ridiculous suggestion in the first place.  I saw some comments this morning from the person who made that suggestion, backing away from that.  And I said it is simply not true.  So I mean, it‘s public knowledge.  I‘ve said that it‘s not true.  And I have spoken with Karl Rove.  I‘m not going to get into conversations that the president has with advisers or staff or anything of that nature.  That‘s not my practice.

UNIDENTIFIED MALE:  (INAUDIBLE) the president has a factual basis for knowing...

MCCLELLAN:  I said it publicly.  I said that...

UNIDENTIFIED MALE:  No, I‘m not asking what you said, I‘m asking...

MCCLELLAN:  ... so I made it very clear...

(CROSSTALK)

UNIDENTIFIED MALE:  ... the president has a factual basis for saying -

for your statement that...

MCCLELLAN:  He‘s aware of what I‘ve said, that there‘s simply no truth to that suggestion.  And I have spoken with Karl about it.

UNIDENTIFIED MALE:  Does he know whether or not the vice president‘s chief of staff, Lewis Libby...

MCCLELLAN:  Do you have any specific information to bring to my attention?  Like I said, there has been nothing that‘s been brought to our attention.  You asked me earlier if we were looking into it.  There‘s nothing that‘s brought to our attention beyond the media reports.

(END VIDEO CLIP)

SHUSTER:  So in other words, a specific denial about Rove and the president‘s office, but not about Libby and Cheney.  So Libby and Cheney we know were infuriated.  The Libby trial produced evidence that the vice president and Scooter Libby actually wrote out notes, a series of talking points that they wanted Scott McClellan to deliver at another White House briefing.  And the notes said—they encouraged Scott to say, I‘ve talked to Libby.  I said it was ridiculous about Karl, and it is ridiculous about Libby.  And the vice president added in his handwriting, “Has to happen today.  Call out to key press saying same thing about Scooter as Karl.”

We also know from the trial that at a certain point in this time period, Scott McClellan still had his doubts and went to the president and they had a conversation.  And Scott was then convinced to do as the vice president‘s office wanted in the October 7, 2003 briefing.  Watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  You personally went to Scooter Libby, Karl Rove and Elliott Abrams to ask them if they were the leakers.  Is that what happened?  Why did you do that?  And can you describe the conversations you had with them?  What was the question you asked them?

MCCLELLAN:  Yes, unfortunately, in Washington, D.C., at a time like this, there are a lot of rumors and innuendo.  There are unsubstantiated accusations that are made, and that‘s exactly what happened in the case of these three individuals.  They‘re good individuals.  They‘re important members of our White House team.  And that‘s why I spoke with them, so that I could come back to you and say that they were not involved.  I had no doubt of that in the beginning, but I like to check my information to make sure it‘s accurate before I report back to you.  That‘s exactly what I did.

UNIDENTIFIED MALE:  You‘re saying, categorically, those three individuals were not the leakers or did not authorize the leaks.   Is that what you‘re saying?

MCCLELLAN:  That‘s correct.  I have spoken with them.

(END VIDEO CLIP)

SHUSTER:  So in other words, you have McClellan being lied to by Rove

and Libby.  But now, Chris, you also have—and since it came out at trial

that Vice President Cheney was directing Libby‘s actions, was directing Libby on how to leak information about Valerie Wilson to reporters.  And so there you have McClellan, his credibility in tatters, and he was given the talking points by the vice president‘s office about how to say that Scooter Libby was not involved.  And these were lies.

MATTHEWS:  You know, Savannah, you covered this trial over there at that courthouse.  And I‘m looking at this guy, Scooter Libby, who took the fall.  He was convicted for perjury and obstruction of justice.  In fact, Fitzgerald—Patrick Fitzgerald, the prosecutor—named by this administration to be the prosecutor, said that not only was he guilty—and he got it proven in court by his peers he was guilty of perjury and obstruction of justice—he said he was throwing sand in the face of the umpire.  He was obstructing the prosecution, the investigation.

So here we go.  The vice president never testified in court.  Scooter Libby never testified in court.  And damn it, the minute this guy was sentenced, or about to be sentenced, the president steps in and commutes the sentence.  Anybody looking at this case from the outside, left, right and center, must assume there‘s a cover-up here because every step of the way, this administration has tried to keep the secrets, as we saw with this latest document, from the public.

I want to ask you about the trial.  What is this all about in terms of Libby?  Why did—what is Libby‘s role here?  Why—it‘s hard—Libby took the fall.  Libby‘s now faced the rest of his life as a felon.  What‘s this about?

SAVANNAH GUTHRIE, NBC CORRESPONDENT:  Well, that‘s the question that I don‘t think trial really ever got to the bottom of.  I mean, Libby took the fall.  He‘s paying the price.  He‘s still a convicted felon.  Sure, he was saved from jail time, but his good name is in tatters.  Why did he do it?  Did he do it because he had some sentiment inside where he had to—he wants to protect the vice president, or was he directed by the vice president?  I don‘t think that direct link was ever made in the trial, but there was plenty of innuendo.

You wonder what motivated Libby.  What motivates anyone to walk into an interview with the FBI twice, with the grand jury twice, and tell a story that you know is not true?  And I don‘t think the trial could ever answer the psychology of that.

MATTHEWS:  And then to find yourself in court, making a case that you yourself know you shouldn‘t go before the jury and make.  He decided not to testify.  He decided not to bring the vice president in, even as a character witness.  They all went—they all stonewalled this case.  And now we have the president of the United States not being fingered exactly, but being included among those involved in misrepresenting the fact.  And now we have the author, the president‘s own spokesman, saying, I‘ll leave it to the reader to decide whether the vice president is telling the truth or not.  It seems to me like he‘s put the heat directly on Scooter‘s boss.

GUTHRIE:  Well, exactly.  I mean, you get the feeling that Scott McClellan has a score to settle, that that press conference that we just saw really haunted him, and he wants to say what happened to him.  He feels he was lied to by Rove and Libby.  He has said publicly that the president was not a party to those lies, notwithstanding that tantalizing excerpt we saw.  You know, McClellan has already gone on record saying that, The president received false assurances, I received false assurances.

MATTHEWS:  Then why—if the president was used here, as Scott feels used, why did the president commute the sentence?  Why did he let Cheney‘s guy off, if he was lied to by Cheney and by perhaps Scooter himself?  Although I assume his conversations are with him—you help me here.  The president of the United States, if you believe the latest account of this by McClellan, did not purposely lie to him.  Well, then he was lied to.  If he was lied to people like Scooter and by the vice president, Scooter‘s boss, why did he commute the sentence?  Why‘d he give—he said he will deal with this problem.  His way of dealing with it is to basically cover it up.

SHUSTER:  Well, and Chris, there‘s a more nefarious explanation now that you‘ve spoken to the publisher.  Until today, all we had was a suggestion from the White House that maybe Scott McClellan went to the president and said, Oh, I‘m going to go tomorrow and I‘m going to clear Scooter Libby, as well as Karl Rove, and the extent of the president‘s involvement was, OK, that‘s fine.

Well, now we know, based on your conversation with the publisher, that no, the president said more to Scott McClellan, that the president repeated something that turned out not to be true, something along the lines of, I know that Karl Rove and Scooter Libby were not involved, did not—were not involved in the leaking of classified information.  So yes, it‘s OK for you to go ahead and say that.

That‘s a much more active role of the president, and it‘s the kind of thing that feeds the idea that the president was far more involved than the sort of passive involvement that the White House likes to portray.

MATTHEWS:  Tell me about the role.  You sat in court all those weeks over there, as did David, who actually—he covered it in our program.  You covered it for Court TV at the time.  The whole time the prosecutor was making the case, up against Ted Wells, his opposite number, who was defending Scooter, he was basically saying, There‘s a bigger story here.  There‘s a bigger story here.  It‘s about an attempt by a White House, a president and his people, his vice president, to deal with the fact that their case for war in Iraq had come apart.  There were no WMDs, so we went to war for what looked to be a bogus reason, a defective reason.  And he tried (ph) to kept saying, And of course, Scooter is the good soldier.  He‘s obstructing that investigation.

GUTHRIE:  Well...

MATTHEWS:  What do you make of Fitzgerald‘s thinking in all this?  Did he limit himself to just the criminal aspects of this?  By the way, the White House did get caught up in its criminality here.  Eventually, somebody swung for perjury and obstruction of justice.  They keep walking away—you know, there‘s been hardly any evening news coverage of this thing since.  They‘ve succeeded, until this bombshell, of keeping this story out of the press.

GUTHRIE:  Well, I think that Fitzgerald took pains from opening statements to say, Jurors, you‘re not going to be asked to litigate the war.  You‘re not going to be asked to decide, Was the war right or wrong.  He tried to take himself out of the politics.  He tried to say, This is about truth.  Truth is the engine of our justice system.  Scooter Libby stole the truth.

But by the time we got to closing arguments, then you heard Fitzgerald saying things that were kind of uncharacteristic, where he says, There‘s a cloud over the vice president‘s office, there‘s a cloud, and the reason it‘s there is because of Scooter Libby, because we don‘t know the truth.

MATTHEWS:  And the president, who has kept the cloud up there because the president commutes the sentence.  He rewards the guy.  And for all I know, he‘ll end up pardoning the guy.

GUTHRIE:  But don‘t forget...

MATTHEWS:  In other words, that‘s—if you were looking at this as a conspiratorialist (ph), you would say, if you want to keep everybody secret, you reward them.  You commute the sentence.  You proffer perhaps the promise down the road, the president hasn‘t excluded it, of an actual outright pardon.  Scooter can go back to practicing law at a white shoe law firm maybe.  And he will be silenced effectively here.

But the vice president, if he did give misinformation to the president in this critical regard, why do they still have a working relationship?

SHUSTER:  Well, that‘s the be big unanswered question, Chris.  We don‘t know—when was it that the vice president was finally honest with the president?  When was it that Karl Rove finally said to the president, Oh, yes, I had these phone calls?  And what was the president‘s reaction?  What was his reaction with Scott McClellan?  And until the White House is willing to detail more about...

MATTHEWS:  OK...

SHUSTER:  ... what did president say to Scott McClellan...

(CROSSTALK)

MATTHEWS:  ... the president didn‘t want to know the truth.  He never wanted to know it.  He never quizzed his people, Scooter and Karl, Did you leak the thing, because he didn‘t want to know.

SHUSTER:  Because he didn‘t want to...

MATTHEWS:  And he still doesn‘t want anybody else to know the bad stuff that happened.

SHUSTER:  And he doesn‘t want his own comments about, Anybody in this administration who leaked will not be part of this administration, and I don‘t know of anybody in this administration who leaked.  He didn‘t want...

(CROSSTALK)

MATTHEWS:  ... we‘re going to get a lot more truth from Scott McClellan in his book than we‘re going to get from Karl Rove in his book.  Anyway, David Shuster and Savannah are going to stay with us.  We‘re going to also be talking more about the McClellan disclosure, the president and the vice president and what role they had and involved—the role they had involved and this whole question of silence—war critic—obviously, Joe Wilson—with “Newsweek” investigative reporter Mike Isikoff, an expert on this case.  He‘s coming here.  Ad well as another expert, “The Washington Post‘s” Dana Milbank.

And later: McClellan‘s charge gets right to heart of how our leaders took us into Iraq.  We‘re going to talk to a former top administration about that, John (SIC) Bolton, the former U.S. ambassador to the United Nations.

You‘re watching HARDBALL only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Time now for the HARDBALL “Big Number” tonight that tells a big story.  Tonight our “Big Number” is 15.  That‘s the buried page on which the Scott McClellan-CIA leak story appeared in today‘s “Washington Post,” page 15, buried in an “Items” column.  This is a story about how this country got manipulated into going into war in Iraq and how McClellan is pointing his fingers at the very top levels of our government.  Nothing‘s more important.  It‘s page one material, as far as I‘m concerned, and “The Post” thought it belonged buried on page 15.  That‘s the HARDBALL “Big Number” tonight.

David Shuster and Savannah Guthrie are saying with us.  We‘re joined right now by “Newsweek” investigative reporter Mike Isikoff, who‘s co-author of the book, “Hubris,” and Dana Milbank of “The Washington Post.”

Let me bring you up to date, gentlemen.  I was told today by Peter Osnos, who‘s the editor of this new book called “What Happened,” which is a teasing enough title in itself, the book that McClellan‘s coming out with this April—he says that the book is going to at least—so far, McClellan has said that the president, he believes, firmly believes, did not purposely lie to him about the role played by Rove and Libby in the leak of those CIA—that CIA identity.

However, he also exonerates, to the extent he can, knowing what he knows, Andy Card, the chief of staff to the president.  And then he leaves open the very cloying fact that McClellan intends to, quote ,”leave it to the reader” to decide on the veracity or lying of the vice president.

What do you make of that little sugarplum, Mike Isikoff?

MIKE ISIKOFF, “NEWSWEEK”:  Well, it‘s quite interesting.  Obviously, the big question in the McClellan book is how much is he really going to dish?  Is he really going to describe candidly conversations he had in the White House with top officials there, or is he going to provide the kind of anodyne, bland account that his predecessor, Ari Fleischer did, in his book?

But what was most interesting to me about the conversation you had with Osnos is, while the publisher, Osnos, seems to make it clear he‘s going to protect—McClellan‘s going to protect the president or at least defend the president on this and perhaps point fingers at the vice president, what about Karl Rove?  We know from the excerpt that—from the briefing that you gave that McClellan clearly said he had checked with Rove himself before clearing Rove from the podium in the White House.  Well, that suggests that Rove told him he had no role in it.

Now, at the—at that time, Rove clearly knew that he had spoken to Robert Novak before the original column outing Valerie Wilson, that Rove had at least been a secondary source for Novak in that column, Richard Armitage being the first one, at the State Department, and that Rove also a few days later disclosed on his own to Matt Cooper Valerie Plame Wilson‘s identity, that Joe Wilson‘s wife worked for the CIA.

So—and yet, when it blew up, Rove was assuring Scott McClellan he had no role at all.  Is Scott McClellan going to point the finger at Karl Rove in this book?  That we‘re going to have to wait for the book to know.

MATTHEWS:  You know, Dana, what‘s a possibility in this whole thing is the president knew very well what was going on.  He knew very well that the vice president was protecting his chief of staff because the vice president was working hand in glove with him in terms of trying to destroy the reputation of Joe Wilson, who was the leading critic of the war policy, which was ramrodded by the vice president himself.

Clearly, the vice president had no bigger business to do than defend the case he had made for war with the president.  I don‘t see how that‘s not all possible.  It‘s very possible to conduct a conspiracy effort to keep something secret without ever lying to anybody.  You simply allow the truth to be masked by others. 

DANA MILBANK, NATIONAL POLITICAL REPORTER, “THE WASHINGTON POST”: 

Yes.  Yes, I think we‘re getting a bit hung up here.

MATTHEWS:  We all know about that in politics and journalism.  It‘s easy to let a—a lie to continue by simply not knocking it down effectively. 

MILBANK:  Yes, it‘s true enough.

And I think Scott‘s talk about whether Bush knew it was false or not is a sort of a bit of a red herring here.  And Scott himself is probably in no position to have known that.  He was famous for not being terribly plugged in.  And this is trying to get inside the president‘s head himself. 

I think you‘re rightly focusing on the vice president‘s office, and that‘s where he clearly intends to direct his fire.  And that appears very neatly with what Michael and I and others saw out there in the courtyard after that—that verdict was read, and the spokesman for the jury said they believed that Scooter Libby was the fall guy.  And that‘s—that‘s clearly the direction that Scott is heading in here. 

MATTHEWS:  Mike, it seems to me, if you‘re the president, who‘s smart enough, he‘s watching this case.  He sees that Scooter doesn‘t want to testify in court, that his—his counsel, Ted Wells, advised him not to go before the jury.

The vice president is never called in to give any kind of witness, character witness, or substantive witness at all, nothing exculpative.  The vice, you would presume, would have some exculpative information, if the vice president believed his chief of staff were innocent. 

The president watches all this.  He watches all this failure to testify openly, appeal to the jury on the facts.  And then the president, right before the sentencing, says, I‘m going to commute the sentence; he‘s not going to jail. 

Anybody watching this objectively must figure, the president is quite happy with the idea that his people are not coming forward. 

ISIKOFF:  Well, look, from the White House perspective, they always sort of dismissed the significance of this case.  They never saw it as that big a deal, that they kind of downplayed Valerie Wilson‘s role at the CIA, suggesting she was really an analyst, when Patrick Fitzgerald confirmed that she in fact was a covert agent at the time she was outed. 

But, look, the larger issues here, as you have rightly pointed out on numerous occasions, was really the selling of the war.  And, when Joe Wilson stepped forward, he was taking a shot across the bow at one of the central claims that the president and the White House used to justify the invasion. 

That was that Iraq had an active nuclear program, and, as evidence of that, the Iraqi regime had sought uranium from Niger.  At that point in time, when all this blew up, in July of ‘03, they were extremely reluctant, even more reluctant than they are today, to acknowledge any error, to acknowledge that they had misled the public or that they had put out information that, whether knowingly or not, turned out to be false. 

And any—any concession on this front, any concession that Joe Wilson might have a point, any concession that they had overreacted in responding to Wilson would have been perceived as a concession that they got something wrong in making the case for war.  And that‘s why they have always fought and always tried to downplay everything to do with this. 

MATTHEWS:  Dana, what is your evidence?  Have you been able to do any reporting on the president‘s likelihood of issuing a pardon before he leaves office for Scooter Libby, to—just to completely seal this—this catacomb tight forever?

MILBANK:  Well, this was the talk yesterday.

MATTHEWS:  Sort of in the notion of “Cask of Amontillado.”

(LAUGHTER)

MATTHEWS:  Cementing the whole thing up for history, so we never get inside this baby.

MILBANK:  Well, of course.  This was the talk yesterday while he was pardoning the Thanksgiving turkey.  And, of course, the joke was that Scooter—Scooter only got commuted. 

But I think it‘s pretty safe.

(LAUGHTER)

MILBANK:  The question, is it mid-November or is it in fact late December of 2008 when the pardon comes through?  I don‘t think anybody is doubting it.  There—it will look a little stupid, since they have made their arguments otherwise, but I think you can take that to a bank. 

MATTHEWS:  Are they going to refund the $250,000 fine he has to pay, too? 

MILBANK:  I thought you had...

MATTHEWS:  Dana?

MILBANK:  I thought you had started a Scooter Libby defense fund. 

MATTHEWS:  Anything I can do to get the truth out. 

David?

SHUSTER:  The irony, Chris, is that the White House now is trying to get reporters away from this story by saying, oh, it is old news. 

MATTHEWS:  I know...

(CROSSTALK)

SHUSTER:  ... when there are so many unanswered questions, so many details.  If they think it‘s old news, then answer the questions, fill in these holes. 

(CROSSTALK)

MATTHEWS:  Let me tell how good their job was.

Not only did they commute the guy‘s sentence.  They shut the story up.  Subsequent to the commutation of Scooter Libby‘s multi-year sentencing, three times since then, “The Nightly News,” “The Evening News, “World News” has mentioned Scooter Libby‘s name. 

He has done the job, the president.  He has shut this story down.  He has created an instant amnesia in the country for criminality in the White House. 

Good move.  Good move, Mr. President. 

Anyway, thank you, Mike Isikoff. 

Thank you, Dana Milbank. 

And thank you, David Shuster and Savannah Guthrie, who covered the trial.

Still ahead, much more on the McClellan story.  We will talk about what the president knew and when he knew it with former U.N. Ambassador John Bolton. 

And up next, it‘s another round in the battle between Hillary Clinton and Barack Obama.  And Barack is gaining. 

You‘re watching HARDBALL on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

So, what else is new out there in politics? 

Well, Hillary Clinton is now actually mocking Barack Obama for a lack of foreign policy experience.  Anyway, here‘s what she said in response to Obama citing his youthful time in Indonesia as helping him understand how people around the world live. 

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  Now voters will judge whether living in a foreign country at the age of 10 prepares one to face the big, complex international challenges the next president will face.  I think we need a president with more experience than that.

(END VIDEO CLIP)

MATTHEWS:  Anyway, Obama spokesman Bill Burton hit back.

Here‘s his reply—quote—“Dick Cheney and Don Rumsfeld have spent time in the White House and traveled to many countries as well.  But, along with Hillary Clinton, they led us into the worst foreign policy disaster in a generation”—close quote—pretty tough stuff. 

Governor Mike Huckabee‘s gun-toting prescription for protecting the streets seems to be catching on in some circles—quote—Students for Concealed Carry on Campus—Concealed Carry on Campus—is a student group with 8,000 members who want to lift the restrictions that prevent students in college from having guns on most campuses.  The group gained steam after the Virginia Tech shootings, and now they‘re speaking out even louder. 

Finally, yesterday, we brought you Barack Obama‘s comments about his drug use as a kid, as well as Rudy Giuliani‘s saying he respected Obama‘s honesty.  Well, not so from Mitt Romney. 

Here is his take on Barack‘s admission—admission—quote—“It‘s just not a good idea for people running for president of the United States, who potentially could be a role model for a lot of people, to talk about their personal failings while they were kids, because it opens the doorway to other kids thinking, well, I can do that, too, and become president of the United States.  Well, I think that was a huge error by Barack Obama. 

And it‘s just the wrong way for people who want to be leader of the free

world” 

Well, there‘s what Mitt Romney said.  Don‘t tell your kids about what you did wrong when you were a kid.  Well, that‘s exactly the kind of advice George W. Bush must have gotten when he kept his DUI conviction secret all those years.  He didn‘t want his daughters to know about it. 

I‘m sorry.  I thought we were supposed to tell our kids our mistakes growing up, so that they would learn and not repeat them. 

Up next:  One of the central figures in the lead-up to war with Iraq, former U.N. Ambassador John Bolton, I will get his take on Scott McClellan‘s charge that the president and the vice president were involved in covering up the role that Karl Rove and Scooter Libby played in that outing of a CIA agent, Valerie Wilson—we‘re going to go through that whole mess—and whether history is repeating itself now with regard to the actions against Iran.

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

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

Not much to be thankful for, though, today on Wall Street.  The Dow Jones industrial plunged 211 points, and closed at their lowest level in seven months.  The S&P 500 fell almost 23 points, wiping out all its gains for this year.  And the Nasdaq lost 34 points. 

The markets are closed tomorrow, of course, for Thanksgiving, and they will close early, at 1:00 p.m., On Friday. 

Oil surged to a record high, above $99 a barrel, before retreating. 

Crude closed in New York at $97.29 a barrel, down 74 cents on the day. 

The index of leading economic indicators fell a larger-than-expected five-tenths-of-a-percent last month, signaling the economy is likely to continue to slow down into next year.

But some positive news here:  Jobless claims fell by 11,000 last week.  That is a sign that the job market remains stable, in the face of problems in the housing and credit markets. 

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

HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

President Bush and Vice President Cheney say that no option is off the table when it comes to Iran.  Does the administration‘s hard-line rhetoric on Iran mirror the run-up to the Iraq war?  And are we gearing up for—for another war in the Middle East? 

John Bolton was one of the principals of the Bush administration.  He served as undersecretary of state for arms control in the run-up to the war with Iraq, and later became our permanent representative to the United Nations.  He‘s now written a book called “Surrender Is Not an Option.”

And Jo-Anne Hart is an Iran expert at Brown University and at Lesley University.  She also wrote “Perceptions and Courses of Action Toward Iran,” which was published by the U.S. Army. 

You first, Ambassador. 

What are the lessons in this regard, WMD, of Iraq? 

JOHN BOLTON, FORMER UNITED STATES AMBASSADOR TO UNITED NATIONS:  Well, I think the president stated very clearly at the early part of his administration that you should not allow the world‘s most dangerous weapons to fall into the hands of the world‘s most dangerous people.  And I think the overthrow of Saddam Hussein was a major strategic victory for the United States and had the correlative strategic impact of getting Libya to get—give up its nuclear weapons program as well. 

MATTHEWS:  What did we learn from the invasion and occupation of Iraq? 

BOLTON:  Well, I think there are two separate questions. 

I think the overthrow of Saddam remains, unquestionably, the right decision.  I think, certainly, in 20/20 hindsight, I would have turned authority over to Iraqis much more quickly and reduced the American presence there much more... 

(CROSSTALK)

MATTHEWS:  Could we have done that?  I have often thought of that.  Could we have turned it over to the Ahmad Chalabi and the Iraqi National Congress and just walked, and just said, here‘s your baby; we got rid of your guy? 

(CROSSTALK)

MATTHEWS:  The problem with that, sir, is that we didn‘t catch Saddam Hussein for several months.  So, could we have left without catching him? 

BOLTON:  No, I think we had to do that.  And we did that.  And—but when—when that occurred, then I think what we should have done was require the Iraqis to make the hard political decisions. 

I think, by...

MATTHEWS:  Did you say that at the time? 

BOLTON:  I was not that much involved in the Iraq debate.  As I say in the book...

MATTHEWS:  But did you say that at the time? 

BOLTON:  ... Secretary Powell cut me out of it, because he was worried that I had a different point of view than he did.

MATTHEWS:  But did you have that point of view that you shared with your colleagues... 

BOLTON:  I said.

MATTHEWS:  ... that we should get out at that time?

BOLTON:  I have always felt that.  I don‘t think Republicans are any better at nation-building than Democrats. 

MATTHEWS:  Wow.

Let me ask you, what do you think were the lessons, the WMD lessons of Iraq?  Going to war over WMD, to a large extent, what did we learn? 

JO-ANNE HART, MIDDLE EAST EXPERT, BROWN UNIVERSITY:  That it‘s all the more important that we shouldn‘t get pushed into this dangerous position about getting tougher on Iran, because that‘s when we could get into a shooting war, another shooting war. 

There‘s this idea that we could have limited airstrikes against Iranian nuclear facilities.  But that‘s not some Nintendo war.  That‘s, we start a war, we start bombing and killing Iranians; we hand them their very own 9/11.  And that‘s all kinds of trouble for us. 

MATTHEWS:  Tell me what that trouble will look like. 

HART:  Well...

MATTHEWS:  Give me some elements of what a—we all know that mission accomplished doesn‘t mean mission accomplished, that the first stage of war is not the last stage.  We know that. 

What do we have to fear, in terms of a second and third round of warfare with—with Iran? 

HART:  Well, just talk about the day after. 

We have the strike.  What‘s the day after look like?  We have got Iranians flooding over the border into Iran—Iraq to fight us there.  They might go to Afghanistan.  We already can‘t sustain the surge.  So, where are we going to get the troops from?  How much more tax dollars are going to go up? 

And then what about into the Gulf?  Iran can go right into the Gulf and just harass shipping.  There goes the price of oil. 

MATTHEWS:  So, it‘s a risk-free escalation on their part? 

HART:  Well, no.  They will pay high penalties.  They don‘t want to be bombed.  They don‘t want us to come after them.  But I‘m talking about the pain that we have to pay.

MATTHEWS:  I‘m talking if they—if they react to our bombing of their nuclear facilities with a vengeance.  You‘re saying that‘s a risk-free move by them?

HART:  I‘m not saying that.  I‘m saying the risk to us is so much greater.

MATTHEWS:  No, for them, though.

HART:  Right. 

Well, no, because that—that escalates it. 

MATTHEWS:  OK. 

HART:  Then—presumably, then we would start shooting harder. 

MATTHEWS:  Mr. Ambassador, that‘s the question a lot of people are raising.  We say everything is on the table, but is it really?  If we do attack the nuclear facilities, where we think they are, in Iran, doesn‘t that open up Hezbollah to attack us up and down the Americas?  Doesn‘t that open up all kinds of possibilities in that region? 

BOLTON:  Well, I don‘t think anybody wants to resort to military force, but life is about choices.

And, if the choice is between a nuclear-capable Iran and the targeted use of the military force against its nuclear facilities, I think you have to look at it.  It‘s not—it‘s not a happy prospect.  I wish we weren‘t in this position.  But if you‘re—if you‘re worried...

MATTHEWS:  Are we better off attacking Iran or having Iran have nuclear facilities?

BOLTON:  I think we‘re better off attacking it.

If you‘re worried about all these capabilities that Iran currently has, being the central banker for international terrorism, imagine how much worse it‘s going to be once they have a nuclear weapon. 

HART:  Now, I have got to get in here, because one of the lessons from Iraq is that we have to listen to our military advisers.

And military leaders are telling us it‘s a bad idea to go to war in Iran.  And...

BOLTON:  Some—some are.  Some aren‘t. 

HART:  Oh, no.  I‘m going to...

(CROSSTALK)

BOLTON:  And it‘s not—frankly, it‘s not...

HART:  I‘m sorry, no, I‘m looking at General Abizaid, who was the head of Central Command and he says it‘s better not to go to war with Iran, even if it means they get nuclear weapons.  

BOLTON:  Let‘s consider that.  It is not for military leaders to make political decisions.  

HART:  They‘re not making decisions.  They‘re giving us advice.  

BOLTON:  As for General Abizaid saying we can live with a nuclear Iran, that is saying that the threat of nuclear terrorism is in the hands of Mahmoud Ahmadinejad, of who Dan Gillerman, the Israeli ambassador to the U.N. said we have a regime that denies - let me just finish, one second here.

HART:  You‘re not right.

MATTHEWS:  Let him finish, we‘ll get back to you.

BOLTON:  We have a regime that denies the existence of the original Holocaust, while preparing for next one.   That‘s the fact.  

MATTHEWS:  Let me ask you—your turn.  

HART:  We don‘t have to overstate the importance of Ahmadinejad.  He‘s making irresponsible comments, but there‘s no way that Iran is going to commit suicide by using nuclear weapons against Israel or the U.S.  Their No. 1 priority is to stay in power and they know we have second-strike capability.  They‘re not going to blow themselves up for the sake of the Palestinians.  

BOLTON:  The worst case is they give a nuclear weapon to a terrorist

group that detonates it in the United States and we can‘t trace the

originate of that weapon.  This is a hugely complicated task.  This is far

more dangerous once they get nuclear weapons.  Nobody wants to be in the

position we‘re in now.  I wish we had been working on regime change for the

last four years.  Then we might not face this very difficult -

MATTHEWS:  What do you mean by regime change?  That phrase is new to me in the last couple of years.  What does it mean?

BOLTON:  I think there is enormous dissatisfaction inside Iran with this regime.  I think it‘s more.

MATTHEWS:  . But they had an election.  We have to live with.  You‘re part of the administration that believes elections offer some deliverance from unpleasant realities, when in fact they keep electing the people we don‘t like.

BOLTON:  That was never my position. 

MATTHEWS:  But the administration‘s position is elections are magic.  

BOLTON:  Indeed that is the administration position.  It‘s not mine.  There is enormous economic dissatisfaction in Iran.  The mullahs have made hash of the economy since the Islamic revolution.  The young people who are nearly 70 percent of the population under 30 know they could have—

MATTHEWS:  What happens if we attack that country by air and we blow up their suspected nuclear sites and we kill a few people?  That always happens.  Do you think that the civilian, the secular population of that country, the secular people, do you think they‘ll turn against us? 

BOLTON:  I think it‘s very important if we have to use military force and I stress again this is a last resort, but if we do have to use military force, we should accompany it with a very extensive effort at regime change and public diplomacy.  

MATTHEWS:  Won‘t that be counterproductive because they will unite against us, won‘t they? 

BOLTON:  To persuade people that is against the regime, not against the people.  I think the Irani people are smart enough to see that distinction.

MATTHEWS:  The trouble with neoconservatives.

BOLTON:  I‘m not a neoconservatives.

MATTHEWS:  The trouble with you people who take this position is you ignore nationalism.  You always ignore it.  You ignore the fact that there will be a resentment of our occupation of Iraq.  You ignore the fact that there in Iran who don‘t like the mullahs, who would like to come to school here and go to Michigan State and be engineers, who resent the idea of us telling them what to do.  You also ignore the tribal aspect.

BOLTON:  I think—

MATTHEWS:  Don‘t you? 

HART:  Yes. 

MATTHEWS:  You won‘t admit it here.  

BOLTON:  Normally I‘m the one who is accused of being excessively nationalistic, so I think that I understand what nationalism is.  The key here is that the mullahs have been pursuing nuclear weapons for nearly 20 years.  If you have regime change, there‘s every prospect that a new, truly Democratic government would give up the pursuit of nuclear weapons as South Africa.

MATTHEWS:  Your response?

HART:  This is—we‘re not in the position to do this.   We cannot use military force.  It‘s counterproductive for us.  The pain for us is so great, and therefore, the other point of it is we don‘t need to.  Iranians are not anti-American. 

MATTHEWS:  Let me ask you.  Would you rather have an Iran that hated us a little less because we haven‘t attacked their nuclear facilities and they have nuclear weapons, or a country that really hates our guts because we got rid of their nuclear weapons?  Which one would you like? 

HART:  They‘re not anti-American.  There‘s plenty of support.

MATTHEWS:  They won‘t be after an attack by us? 

HART:  That‘s another lesson from Iraq.

MATTHEWS:  What would you rather have?  You made it clear, you‘re rather have an Iraq that‘s a little more ticked at us than having nuclear weapons.  You believe that their nationalism wouldn‘t rebuild those weapons, they wouldn‘t just come right back at us again?

BOLTON:  I give the Iranians more credit than you do.  I think they‘re smart enough to understand that an attack against the nuclear program is not directed at them and this could well—

MATTHEWS:  Do you listen to any poll data? 

BOLTON:  Foment.

MATTHEWS:  Do you find any evidence that the Iraqi people don‘t take an attack on their country, their sovereign territory as an attack on their people?  Where do you get this evidence from? 

BOLTON:  I think people dislike this regime inside Iran intensely and I think making it clear this is an attack on the regime gives us the opportunity to help overthrow them. 

MATTHEWS:  But you‘ve always thought this about everything over there.  You also believed.  You believe we‘d be great as liberators.  You believe that this country was going to be on our side once we decapitated Saddam Hussein. 

BOLTON:  I always felt that getting out as soon as we had done it, as soon as practical, as soon as we had eliminated whatever WMD capability was the way to do it. 

MATTHEWS:  Last word. 

HART:  I was just out on an aircraft carrier and I salute the Harry S.  Truman.  They‘re on their way to the Gulf.  I was talking to them about Iran.  You look at the people, these great Americans that are serving this country, you would never put them in harm‘s way unless it was the absolute less last thing. 

And we have a lot more mutual interests with Iran that we should be pursuing.  We could help build their oil infrastructure, get more oil on the market.  It‘s a win-win for everybody.  It doesn‘t make any sense to speak irresponsibly about regime change. 

MATTHEWS:  Well I like a lot of Iranians I meet in this country.  I wish they were all back there calling the shots, because all the best Iranians are here unfortunately, from our perspective.

But I do believe once your country‘s attacked, whether you‘re Cuban, you‘re Iraqi or Iranian, you turn against the invader, you turn against the attacker.  It is called patriotism.  We may not like it, but it happens.  By the way, I bank more on patriotism and nationalism than I do on this notion that you have of this democracy. 

I do like the fact that you‘re turning against the president on the issue of elections being magical. 

BOLTON:  I expected you would.  

HART:  Iran is twice the size of Iraq, four times.

MATTHEWS:  You can‘t figure me out.  Thank you.  Here‘s the book, it‘s doing well.  It‘s only two places behind Valerie Wilson on “The New York Times” best seller list, something I couldn‘t get on.  Anyway, there it is.  “Surrender Is No Option,” I‘m sure there‘s a market for this book.  Anyway thank you Professor Jo-Anne Hart for making the other side here.

Up next, the roundtable and what President Bush knew and when he knew it.  This is HARDBALL only on MSNBC.     

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.

Let‘s get right to the roundtable.  Ron Brownstein is at the “National Journal” and author of “The Second Civil War,” how extreme partisanship has paralyzed Washington.  There it is, and polarized America.

Holly Bailey is with “Newsweek” and Joan Walsh is with Salon.

Joan, I have to start with you, for a lot of reasons, but what do you make of the latest on this Scott McClellan sort of—what do you call it?  I‘m trying to think of the right Latin here. 

JOAN WALSH, SALON.COM:  Somebody culpa.  

MATTHEWS:  Somebody culpa.  Somebody told me some bad things, I told them, but I can‘t say it‘s the president, I can‘t say it‘s Andy Card, but I‘m going to leave it off quote.

I love this, we got it from his editor today, Peter Osnos.  I‘ll leave it to the reader to decide whether Vice President Cheney was lying to me about his chief of staff Scooter Libby when he leaked the identity of Valerie Wilson.  

WALSH:  It‘s an amazing story, Chris, and I have to thank you for actually going out and trying to do some real reporting on it yourself.  I was shocked to open “The New York Times” today and not see a word about it.  I‘m shocked that the way the mainstream media has pretty much dropped it. 

It‘s on Salon‘s cover today, but I think we need Congress or somebody to get to the bottom of what is Scott McClellan trying to say to us?   I don‘t want to as the reader, to draw my own conclusion, I want to know if he has evidence about Vice President Cheney‘s involvement because it sort of sounds like he does. 

MATTHEWS:  And also, let me ask you the same question, Ron.  It seems he doesn‘t want to be blamed himself.  Let‘s start with the usual presumption in Washington, don‘t blame me.  I didn‘t lie on purpose, I was lied to.  I‘m not telling you until you pay me 25 or 30 bucks who lied to me.  

RON BROWNSTEIN, NATIONAL JOURNAL:  Joan‘s point I think is very well taken.  From the 125 words they put on the Web site, it is a little opaque what he is trying to tell us.  The language is very diffuse.  He says I had to knowingly pass along false information and others were involved in my doing so.

That was a passive instruction.  Not really clear what they are doing.  And having known Scott McClellan for a long time, long before Washington and watched his interaction with President Bush and Governor Bush, I remain to be convinced that he will produce a revelation that will be truly damaging to the president. 

MATTHEWS:  Drawing a line here that I like.  Does he have the same loyalty to Dick Cheney? 

BROWNSTEIN:  I don‘t think he has anywhere near the personal loyalty.   But again, this is someone who has been part of this administration, and, you know, it is really hard to take a shot at the vice president without wounding the president as well.  

MATTHEWS:  Through his editor, he has put out the word, Scott McClellan, that he is not saying that Andy Card lied, the chief of staff to the president.  He‘s not saying that the president lied, leaving three people.  The two culprits, Karl Rove and Scooter Libby and guess who else, the vice president of the United States.  And he‘s quoted in that regard, offering a very directed advice to us, the jury.  I‘ll leave it to you whether he was lying or not. 

HOLLY BAILEY, NEWSWEEK:  Well I don‘t think we have to look hard to see that Scott McClellan is not a fan of Vice President Cheney.  You just have to look at the handling of the shooting, when Vice President Cheney accidentally shot someone in Texas.  Scott McClellan put all of the blame on the handling of the press on that, on Vice President Cheney‘s office, made clear that he thought he mishandled it.  He‘s not a fan of Vice President Cheney, not at all.  

MATTHEWS:  Well, 4,000 people, Americans, have been shot over this war.  And how we got into this war remains a major issue of our time.  And I‘m telling you, if we don‘t get this from journalism or some kind of commission, historians are going to be damn well trying to figure out how the hell did the United States find the American army, put the American army in the middle of Arabia surrounded by its enemies.  Who made that call?  And the answer is the American people made it upon the advice of a president saying if we don‘t act, we‘re going to have a nuclear mushroom cloud hit us over here.  We‘ll be right back with our roundtable.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with the roundtable.  Holly, I have to ask you about this exciting race out in Iowa.  You know once you take away the holidays, Christmas, Hanukkah, Thanksgiving, of course the best one coming tomorrow.  In many ways the best one, because you don‘t have to do anything, you only have about three weeks of campaigning left. 

It‘s finally happening.  We‘re on the verge of a test in Iowa. 

Obama is moving up.  Hillary is sort of stalled.  What‘s happening?

BAILEY:  Well, I think we‘re going to see a lot of shake up in the polls frankly.  The past few weeks we saw her move up in the polls a lot.  But the fact is that they‘re pouring all their resources there, they‘re spending all kinds of time there and traditionally, it‘s really hard to poll people in Iowa.  You never know what people are going to do when they get in the caucus because obviously you stand in a corner make decisions and you can be swayed.

MATTHEWS:  Obama is leading among women, even by a point.  It‘s outstanding.  I always thought if she got - if Hillary got half the women, she‘d win any contest.  She‘s not getting half the women, she‘s getting 31 percent.

BROWNSTEIN:  I was very different than everywhere else, still ahead among women in New Hampshire.  Still ahead nationally.  But Iowa is a tough audience for her.  It has been all the way through.  It‘s an anti-war sentiment. 

Also they see the candidates much more, they get to make more of personal judgment.  I really wonder about her reaction in the last 48 hours.  You‘re basically losing ground around the argument that you‘re too political, too calculated.  You go out with a very shrill political attack on living abroad for Obama.  It just seems like a strange - they seemed a little bit off and overreacting. 

MATTHEWS:  She has some tough customers advising her I think sometimes, Mandy, I think Mark are really smart, but they‘re too tough.  Joan, I was shocked - not shocked, I‘m not shocked by anything.  She goes after Obama for claiming that as a 10-year-old he picked up on a perspective of America from overseas, living in Indonesia those years.  She mocked him for that. 

WALSH:  I was surprised by it too.  I do not think that was a good move on her part.  I think he deserves credit for his worldliness and she just doesn‘t need to be in defensive crouch right now. 

But Chris, the fact that the polls are showing women support Obama more than Hillary in Iowa actually makes me distrust the polls even more because that‘s just not what we‘re seeing in the rest of the country.  So I think Holly‘s right.  We really can‘t read Iowa from these polls yet. 

MATTHEWS:  What about the fact that Iowa has never elected a woman to anything on the federal level, ever?  Could it be a particular country attitude?  Are they insular?  I don‘t know what the view is. I always thought women do better in states that have large bodies of water nearby whether it‘s one of the Great Lakes or one of the oceans.  It‘s very hard for women who live in landlocked areas.  It‘s true.

WALSH:  They have a great lieutenant governor.  They have a great female lieutenant governor, Sally Peterson.  You know, I think Hillary - I think we shouldn‘t count Hillary out.  This is the week, this is the mystery week where we‘re all surprised. 

MATTHEWS:  I‘m not going to count her out.  I‘m asking you whether you can count Obama in. 

WALSH:  Yes, absolutely. 

MATTHEWS:  I‘ve got to go.  Thank you, Ron Brownstein, one of the greatest.  Thank you Holly Bailey, Joan Walsh.  Thank you Joan, have a nice vacation.  All of you have a nice Thanksgiving and especially to our troops overseas who are protecting us.  Thank you for your service and thank to you your families for the sacrifice.  “TUCKER” is coming up next.  Have a safe Thanksgiving.

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