updated 3/13/2008 11:38:13 AM ET 2008-03-13T15:38:13

Guests: Laura Schwartz, Jonathan Dienst, Seth Levine, Kelli Goff

DAN ABRAMS, HOST:  Tonight: As that fire storm continues over Geraldine Ferraro‘s comments about Obama‘s race comments for which she‘s now resigned from the Clinton, my interview from earlier today with Ferraro where she remained defiant and not sorry.

And: A new NBC News poll out tonight with some surprising numbers in the Obama v. Clinton head-to-head battle.

Plus: The woman who‘s tryst lead to the disgrace of the New York Governor Eliot Spitzer, today he resigns.  Federal prosecutors say there is no deal to keep him out of trouble.  That means prosecutors may still go after him.

But first: The fire on the campaign trail today over the controversial comments made by one-time vice presidential candidate and Hillary Clinton supporter, Geraldine Ferraro.

As always: We‘re On Their Trail: assessing the latest misstatements, cheap shots and blunders on the road to the White House.

Tonight: Ferraro resigns from the Clinton campaign, after refusing to apologize, including during an interview with me today.

The comment that created the controversy, Ferraro quoted by a California newspaper, “The Daily Breeze” saying, “If Obama was a white man he would not be in this position, and if he was a woman of any color, he would not be in this position.  He happens to be very lucky to be who he is.  And the country is caught up in the concept.”

Senator Clinton tried to calm the storm today.

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE:  Obviously, I don‘t agree with what she said.  And I said that earlier today.  And I regret that.

UNIDENTIFIED REPORTER:  Is that an apology?

CLINTON:  Well, I didn‘t say it.  And I regret that it was said and I obviously reject that, I don‘t agree with that.

(END VIDEO CLIP)

ABRAMS:  But Ferraro continue to be - at least stands by what she said, going as far as to say tonight, that the Obama camp owes her an apology for playing the race card.

(BEGIN VIDEO CLIP)

GERALDINE FERRARO, CLINTON SUPPORTER:  I personally think that this is the last time the Obama campaign is going to be able to play this type of a race card because I think that‘s what it is.

UNIDENTIFIED FEMALE:  You‘re saying they‘re playing the race card?

FERRARO:  Absolutely.  And I‘ll tell you (INAUDIBLE) they should apologize to me for calling me a racist.

(END VIDEO CLIP)

ABRAMS:  I spoke to Ferraro today as well and she was just as forceful, telling me, quote: “I am not a racist.  I will not apologize, what I said is the truth.  It‘s a fact.  Maybe I have done a politically incorrect thing, but it‘s honest.”

Now, when I asked her about saying Obama was, quote, “lucky,” she told me, quote, “Maybe that was not a good use of the word.”  Ferraro then turned her fire towards the Obama campaign telling me, quote, “They have come at me with some of the vilest e-mails you have ever seen.  It‘s amazing how many times that campaign raises the race card.”

So, here to help separate fact from fiction, cheap shot from fair game, MSNBC political analyst and Air America host, Rachel Maddow; MSNBC political analyst, Pat Buchanan; and Democratic strategist, Keli Goff.

Look, were the comments are racist or not, I‘m sticking by my ruling from earlier this week that this is a blunder for the Clinton campaign.  They denounced her comments but they certainly didn‘t stop her from going out and defending them when she was still part of the campaign.

And I just can‘t see how this helps the Clinton campaign in a Democratic primary, Pat?

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  Well, I don‘t think it does help the Clinton campaign but I don‘t think it helps the Obama campaign now either because—I mean, Geraldine Ferraro is an icon of American woman.  She‘s a heroin to feminist all over.

And the fact that she‘s been driven out of this campaign and humiliated for something, I think, was utterly inoffensive, a simple statement of fact, I think it‘s going to hurt Obama in his effort to try to bring the party together.  And so, I think, both campaigns have been damaged and the Democratic Party has been damaged.

ABRAMS:  So, Rachel, hero to feminist everywhere, I think you consider yourself a feminist.

RACHEL MADDOW, MSNBC POLITICAL ANALYST:  As much as I love Pat, and Pat as much as you and I spent a lot of time in TV together, it‘s hard to hear you define the icons of feminism.  I don‘t think the people are going to be mad about Geraldine Ferraro getting kicked out of the Clinton for this.  I think what she said was patently ridiculous.  It was not only over the line, it was ridiculous.  Like he‘s won some sort of black privileged lottery that we didn‘t know about people were.  The fact that she wasn‘t drag (ph) out of the campaign is the only scandal.

ABRAMS:  But what she‘s been doing, Keli is she‘s been trying to say, tell me whether it‘s true.  In essence, she‘s been saying, look, we know she said similar comments about Jesse Jackson -

KELI GOFF, DEMOCRATIC STRATEGIST:  (INAUDIBLE) to be born a black man in America based on all the statistics.  That‘s patently false.

ABRAMS:  No, but see what her comments here that she made the same comments about herself being a woman that she never would have become a vice president in 1984 -

GOFF:  Unifying your experience as the white female in America and sort of we‘ve everyone else has experienced as part of, you know, one of the minority groups of this country to them.  And I think what‘s really—the real crime in all this is not the initial statement, it was how she behaved afterwards.

You know, people tend to give the benefit of the doubt to allow people to explain the context and what have you, and to come back and say that she‘s the victim after making such—it looks like she inserted one foot in her mouth in and was so hungry, she had to go for the second.

ABRAMS:  There‘s more of what she said tonight on the NIGHTLY NEWS.

(BEGIN VIDEO CLIP)

FERRARO:  I have spent 40 years fighting discrimination.  I mean, it is so hurtful and to head a campaign of over 100 negative e-mails, phone calls to my office.  They actually kind of touch with the CEO of the firms that they thought I was still with and it‘s to fire me which is—I mean, it was crazy.

(END VIDEO CLIP)

ABRAMS:  Rachel, I mean, when I talked to Geraldine Ferraro today, she was basically telling me that they have been playing the race card - the Obama campaign, again and again in the context of this campaign.  She also cited the example of Bill Clinton in South Carolina, et cetera.  Whether you agree with her or not, it‘s probably not the best way to help Hillary Clinton in the Democratic primary.

MADDOW:  It‘s almost like you can‘t get more fundamental than this.  If you say that the person‘s achievements should be questioned on the basis of their race, that he got some sort of  secret free pass that all black men get at birth in America and then, say that the target of that acquisition is the person who played the race card that‘s—it‘s logically impossible.

It actually makes no sense at all.  I mean, there‘s no grounds on which this can be defended as being Obama‘s fault.  It doesn‘t make sense.

ABRAMS:  Go ahead, Pat.

BUCHANAN:  Look, if Barack Obama thinks there‘s no correlation between the fact he‘s an African-American and his career has been so spectacular, he would be as delusional as George W. Bush saying the fact, he‘s president of the United States.

UNIDENTIFIED FEMALE:  (INAUDIBLE)

BUCHANAN:  I don‘t care what he do or not.  Had nothing to do with the fact that the first George Bush was president of the United States.  Look, Barack Obama got 91 percent of the African-American vote in Mississippi.  He was a state senator given a spectacular honor of keynoting the Democratic convention.  Does anyone think that it had nothing to do with the fact that he‘s an African-American?

ABRAMS:  Pat, I‘m literally having to stop Keli and Rachel from screaming.

BUCHANAN:  Let them go, Dan.  It‘s important that they go.

ABRAMS:  Keli, go ahead.

GOFF:  Pat, (INAUDIBLE) he didn‘t have securing the majority of the black vote and lead (ph) after South Carolina.  So, to just make this blatant assumption, this generalization that he was winning all the black votes because of his being black is ludicrous.

BUCHANAN:  All right.  Let me answer that -

GOFF:  (INAUDIBLE) someone like Barack Obama who‘s a self-made individual to someone like George W. Bush -

(CROSSTALK)

ABRAMS:  Pat, hang on.

(CROSSTALK)

GOFF:  (INAUDIBLE) it‘s just not even comparable.

(CROSSTALK)

BUCHANAN:  Let‘s talk -

ABRAMS:  Pat.

GOFF:  I‘m actually not surprised to hear you make such a correlation.  What conservative wouldn‘t, I mean, this is so typical.

BUCHANAN:  Look, in Iowa and New Hampshire, there aren‘t that many black folks.  He skipped Michigan.  The first big contest was South Carolina.

(CROSSTALK)

GOFF:  (INAUDIBLE)

BUCHANAN:  Shut up for a second, please.

(CROSSTALK)

ABRAMS:  Wait, wait, everyone stop.  Stop.

BUCHANAN:   The first contest was South Carolina and he got 76 percent of the black vote.  Case closed.

GOFF:  He wasn‘t winning the majority.  You‘re forgetting all the states before that, Pat.

BUCHANAN:  What are they?

GOFF:  Nationally, in the national polls, he was not winning the majority of black voters -

(CROSSTALK)

GOFF:  You‘re factually wrong.

ABRAMS:  Hang on, hang on.  Rachel, go ahead.

MADDOW:  Let me jump in here.  First of all, I would just say, as a matter of procedure here, Pat, I‘ve been with television with you, million times, I have never heard you calling anybody to shut up before.  That was absolutely, completely ridiculous of you.

Second of all, tell me about how the black vote explains Obama‘s winning Utah?

BUCHANAN:  No, I did not say that‘s the only thing for heaven‘s sakes neither did she.  He‘s done a tremendous campaign.  But the indispensable to his success is these enormous numbers he‘s rolling up in the south among African-Americans and every other state.

(CROSSTALK)

GOFF:  What race are you watching?

BUCHANAN:  No one says that‘s the only thing if she had said, I‘d disagree with her.

MADDOW:  You‘re saying he‘s only winning because he‘s black and black people want to vote for him.

BUCHANAN:  I‘m not saying only.  No one said only.  It‘s an attribute in this race.  And as Joe Biden said, he‘s got a storybook.

GOFF:  (INAUDIBLE) try being a black man for a day, and see how it works out for you.  I‘m sure you‘ll have a lovely time in America.

(CROSSTALK)

ABRAMS:  All right.  All right, all right.  The bottom line is I rule on these.  I‘m going against Clinton on the score card.   As I said before, this is only bad for her in the primaries.  Whatever you think of the statement, however you interpret, this is only bad for Hillary Clinton, giving us one strike against Clinton, none for Obama.

Moving on, I think the rest of these are going to be a lot easier, I promise.

Obama seems to be flip-flopping over the best way to handle revotes in Florida and Michigan.  The Obama camp is now criticizing a proposed mail-in voting system with chief strategist David Axelrod citing a number of concerns including eligibility and ballot security.  And Obama himself is joining the course.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE:  I think there‘s some concerns in terms of making sure that whatever we do is fair and that votes are properly counted and the logistics make sense.

(END VIDEO CLIP)

ABRAMS:  All right.  I‘m ruling this one an Obama blunder.  His campaign is now citing concerns about the fairness of the process.

The only problem?  Back in June, he co-sponsored a bill in Congress that sung the praises of that very same process, saying vote by mail, quote, “allows voters to educate themselves because they receive ballot well before election day, results in a more accurate vote count, and results in a more up-to-date voter rolls.”

Rachel, anyway to defend Obama on this one?

MADDOW:  No, ‘m with you on this.  And I think we‘re seeing a lot of embarrassing news like this across the Democratic Party as everybody realizes what has to happen procedurally in order for them to get their desired outcome.  Everybody is trying to invent principles to go along with - and their procedural case.

ABRAMS:  Yes.  There are fundamental things, Keli, that they previously were saying and they‘re now saying, well, you know what, Hillary Clinton saying, we‘re not going to go after pledged delegates.  Well, you know what - yes.

GOFF:  Right.

ABRAMS:  They are in play.

GOFF:  I like to call this the YouTube election, the Internet election where people forget that the things that they‘ve actually said before can be easily located quickly by the media.  Yes, this is a little silly on the Obama camp‘s part.

ABRAMS:  Pat, this is a much easier question than the last round, what do you make of this one?

BUCHANAN:  Well, basically, he‘s in favor of this process.  The only argument he‘s got is this very, very truncated, it‘s going to be very, very short.  And he‘s got a legitimate question as to whether it can be handled well in that short of time.  That‘s the only defense.

ABRAMS:  He flip-flopped.

BUCHANAN:  No, he didn‘t say this is a horrible system, he said make sure this thing is managed well.  So, I can‘t give a demerit on this one.

ABRAMS:  Well, look, but his campaign, he‘s talking about a lot of concerns about this.  So, I‘m giving Obama the strike on this one.  That leaves us tied one to one heading into the commercial.  Our panel is going to stick around.

Up next, coming up: More On Their Trail.  Clinton v. Obama—more misstatements, cheap shots and blunders.

Plus: NBC News confirming tonight that pictures seen here from “The New York Times” Web site are of the escort at the center of the Eliot Spitzer scandal.  She‘s 22.  She told “The Times” today, she doesn‘t want people to think she‘s a monster.

Coming up.

(COMMERCIAL BREAK)

ABRAMS:  Coming up: More On Their Trail.  Clinton v. Obama, the latest misstatements, cheap shots and blunders.

Coming up.

(COMMERCIAL BREAK)

ABRAMS:  Tonight: The new NBC News/”Wall Street Journal” poll contains some surprising results about the Obama-Clinton race.  In the national head-to-head match up, Clinton has a slight lead: 47 to 43, but that is within the margin of error.  This race is still really close.

As to the best bet to beat John McCain in the fall, the poll found Obama the winner on that: 48 percent of those polled said the Illinois senator has a better chance of defeating McCain versus 38 percent who said Clinton would.  This just shows you, it‘s creating all sorts of nasty back and forth because it‘s so close between Obama and Clinton which is why we‘re On Their Trail.

So far tonight, Obama and Clinton tied with one strike each: misstatements, blunders or cheap shots.

All right, panel is back with us.

Next up: Obama took the stage with retired admirals and generals today in Chicago.  One of them is retired General Tony McPeak, one of Obama‘s national co-chair and as a foreign policy adviser.  He discussed Obama‘s mental fitness to be commander in chief compared to say, Clinton‘s.

(BEGIN VIDEO CLIP)

RET. GEN. TONY MCPEAK, OBAMA CAMPAIGN ADVISER:  We‘ve seen this so often in this campaign, good news and bad.  You know, Senator Obama was up in Iowa, maybe not so up in New Hampshire, but he was the same Barack Obama on the one day as the other.  Steady, reliable, you know, no shock Barack kind of guy.  No drama, Obama.

So, when that phone rings, when that red phone rings at 3:00 a.m., you want a guy with this kind of temperament to answer that telephone.

(END VIDEO CLIP)

ABRAMS:  All right.  The statement alone is fair game.

It‘s part of an ongoing cheap shot from General McPeak, I think.  He‘s previously said Obama is more qualified because he won‘t, quote, “go on television with crying fits.”  It‘s a remark he later had to retract.  Now, he‘s referencing Clinton‘s red phone ad and using phrases about drama.

All right.  This is a close call, Rachel, but when you have McPeak out there who‘s previously made this statement, and with everyone saying, oh, the 3:00 a.m. ad is the worst thing, you know ever that‘s happen to the Democratic Party, is you kind of said them, that badly summarizing what you‘ve said.

But it does seem to me that this gets into the slight cheap shot realm

MADDOW:  In context, maybe.  When you take just that statement on its face in terms of what it said, it sounded to like he was talking about John McCain there.  I mean, John McCain, one of his big weaknesses maybe his temperament, including what his fellow Republican senator say about him losing his temper.

And so, that sounded to me like an anti-McCain line.  That would be great for the Democrats right now.

ABRAMS:  But when you talk of women, Keli, a lot of the time they will say, use words like drama.  And you say no drama, and they can say that word is loaded.  There‘s something loaded about it.

GOFF:  I think (INAUDIBLE) with words like monster and, you know, racial offensive (ph) remarks, I think this isn‘t even close to being a cheap shot.  I think what (INAUDIBLE) fine line between clever and being offensive -

(CROSSTALK)

ABRAMS:  But the first comment he had to retract was clearly, I mean -

(CROSSTALK)

MADDOW:  Yes, it‘s not about McCain..

GOFF:  But there was the presidential candidate who got in trouble in the 70s for crying.  I don‘t think that you can -

ABRAMS:  Oh, come on.  I mean, Rachel, you‘re not going to suggest that it‘s OK to talk about this candidate is not going to start crying as some sort of quality to be president?

MADDOW:  Well, I would hope that they‘d be talking about Mitt Romney because he‘s the guy who cries the most.

ABRAMS:  Come on.

MADDOW:  I think McPeak‘s earlier remarks were about Clinton, but they should have been about Romney.  But the big problem here is that the Democrats are never talking about the Republicans.  That‘s the problem.

ABRAMS:  Because they‘re in a primary.

MADDOW:  They ought to be competing on who can hit the Republicans the hardest.  He can hit McCain the hardest.  Temperament is a great thing they‘re (ph) hitting on.

ABRAMS:  Or who can hit Pat the hardest.

All right.  Pat, hang on one a second.  Let me move on from this one.  I‘m still giving Obama a strike here.  It‘s a just small strike, but he still gets a strike here bring us to, still the same guy, I think for anyone to deny his previous comment was sexist is not being fair.  This is, go along the lines of the same theme.  I‘m giving him a small strike.  It gives us two Obama against one Clinton.

Next up: The Clinton campaign‘s series of questions for Obama continues.  They found a familiar theme, hammering Obama over his foreign policy experience.  Their e-mail asking Obama, quote:  “As voters evaluate you as a potential Commander-in-Chief, do you think it‘s legitimate for people to be concerned that you have traveled to only one NATO country, on a brief stopover trip in 2005, and have never traveled to Latin America?”

It‘s cheap shot.  The idea that we‘re going to start comparing passports stamps to determine who‘s got more foreign policy experience, Pat?

BUCHANAN:  Well, it‘s not a cheap shot at all.  Look, George W. Bush was denounced and ridiculed and laughed at because he‘d never been abroad or only if rarely ever taken any trip abroad and to suggest that someone has only go on to NATO countries once and never been to Latin America and he pretends to be leader on foreign policy -

ABRAMS:  Come on.  (INAUDIBLE) identify which African countries he‘s been to and which Central America, maybe.  Or which countries north of the United States -

BUCHANAN:  Look, Dan, you seem to want to deny the American people information I think they have a right to have.  It‘s an interesting fact.

ABRAMS:  No, hang on, someone is talking in my ear.

BUCHANAN:  It‘s an interesting fact and you‘re trying to block information flow to the American people.

ABRAMS:  No, what I‘m trying to do is not look at this through the politics as usual prism.  I‘m trying to say, you know what, as someone who isn‘t jaded by politics, some of this stuff just sounds either cheap to me or wrong to me or unfair to me.  And I‘ll admit that some of it is good politics.

BUCHANAN:  It could be, Dan, just naivete on your part.  This is an important issue whether somebody has traveled abroad and when he‘s close to 50 years old at a time when everybody goes abroad for heaven‘s sakes only one NATO country.

ABRAMS:  So, Pat, if he had a Euro real to take trains from London to all the way south to Greece when he was in law school, you would say, you know what, the guy‘s got a lot of nice things on his passport, I think it‘s pretty good.

BUCHANAN:  What I just said, here‘s a fellow that is interested in the world and the old world once (ph) we came.  And he shows an interest in foreign policy.  He‘s not a George W. Bush.  This is a guy that‘s really interested.

ABRAMS:  All right.  On this strike, I‘m sorry, I‘m giving this strike against Clinton.  And we had another one.  We ran out of time.  So, we finished up tonight a tie at two strikes each but I think the Clinton strikes are more substantial tonight than the Obama strikes.

All right.  Rachel Maddow, Pat Buchanan, Keli Goff, whoa, what a night.

MADDOW:  Meet me in Ohio, Pat.

ABRAMS:  Coming up: We‘re learning new details tonight about the call girl Eliot Spitzer was allegedly using.  NBC News has confirmed, she‘s known as Kristen.  She‘s 22 and left a broken home on New Jersey shore (ph) to come to New York City to sing in nightclubs.  She said today, she doesn‘t want to be thought of as a monster.

And: I totally blew it Monday when I repeated details of how Ivanka Trump allegedly treats her assistants and her own wax figure.  I will be featured in tonight‘s Beat the Press.

Coming up.

(COMMERCIAL BREAK)

ABRAMS:  It‘s time for tonight‘s Beat the Press: Our daily look back of the absurd and sometimes amusing perils of live TV.

First up: FOX‘s Steve Doocy had it again this morning accusing the mainstream media of ignoring the fact that New York Governor Eliot Spitzer was a superdelegate pledged to Senator Clinton.

(BEGIN VIDEO CLIP)

STEVE DOOCY, TV HOST:  We talked about the fact that Eliot Spitzer is a superdelegate for Hillary Rodham Clinton.  We‘ve talked about whether or not there would be political ramifications for her.  And yet, on the mainstream media, nada.

(END VIDEO CLIP)

ABRAMS:  Oh, really?  Oh, we found a lot of examples like these of FOX‘s competitors talking about Governor Spitzer as a superdelegate and Clinton supporter.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  The lieutenant governor is a superdelegate so if he resigns, she would be down a superdelegate.

CARLSON TUCKER, TV HOST:  Spitzer‘s role as superdelegate committed to Hillary Clinton.

UNIDENTIFIED MALE:  Well, Eliot Spitzer is not just a Clinton supporter, he‘s also a superdelegate.

(END VIDEO CLIP)

ABRAMS:  Including on his own network.  Nada?

Next up: CNN books (ph) well-known former federal prosecutor, Kendall Coffey on the Spitzer story, he‘s a good legal analyst, but just not right for this story.

(BEGIN VIDEO CLIP)

TONY HARRIS, CNN ANCHOR:  Is there anyway for the governor in your view to ride this out?

KENDALL COFFEY, LEGAL ANALYST:  This is not survivable.

(END VIDEO CLIP)

ABRAMS:  Well, he should know.  He quit his U.S. attorney job after allegedly biting a topless dancer in 1996.  No mention of Coffey‘s past was made by CNN.

(BEGIN VIDEO CLIP)

HARRIS:  Kendall Coffey, man, that‘s a point on the end of that, bang.

(END VIDEO CLIP)

ABRAMS:  Bang.  They apologize.  I like Kendall Coffey as a legal analyst.

Finally: Time for some self-flagellation on New York on Monday.  “The New York Daily News” another outlet has reported some unflattering details of how Ivanka Trump allegedly treats her assistants.  She became one of our Losers of the Day.

(BEGIN VIDEO CLIP)

ABRAMS:  Our bronze Loser: Ivanka Trump.  The 26-year-old mogul-in-training reportedly sends her assistant to touch up the nail polish of the wax statue of her likeness at Madame Tussaud‘s here in New York City.

(END VIDEO CLIP)

ABRAMS:  Oh, really, Dan?  Only I have since learn that there is no wax figure of Ivanka Trump at Madame Tussaud‘s in New York City.  Just of her parents.  I‘m an idiot for not wondering why they would have a wax figure of Ivanka Trump.

Coming up: Eliot Spitzer is out.  No deals on the table.  Now, I think he probably should not spend a day behind bars and I‘ll tell you why.

And tonight: NBC News confirms, this is the high price escort at the center of the political firestorm.  And she is speaking out.

Coming up.

(COMMERCIAL BREAK)

DAN ABRAMS, HOST:  Up next, we‘re on their trail.  Tonight, Obama accuses the Clinton campaign of leaking a smear photo of him.  But last month, he said Clinton had nothing to do with it.  The biggest misstatements, cheap shots and blunders are coming up. 

And later, inside the investigation in Eliot Spitzer‘s alleged involvement in a prostitution ring.  According to one new report, the New York governor might have been soliciting prostitutes for up to a decade.  Coming up.

(COMMERCIAL BREAK)

(NEWSBREAK)

ABRAMS:  Tonight, a win for Barack Obama in the Mississippi primary.  The latest numbers showing Obama leading Clinton 52 to 46, that‘s only with 18 percent of the precincts reporting so far.  Obama and Clinton battling it out with both camps continuing the nasty and negative attacks today on the campaign trail.  As always, we‘re on their trail, keeping track of who‘s guilty of more misstatements, blunders and cheap shots. 

Here to separate fact from fiction, cheap shot from fair game, Democratic political analyst Laura Schwartz and MSNBC political analyst Pat Buchanan. 

All right.  First up, the battle over experience.  Both Clinton and Obama taking nasty swipes at the other‘s foreign policy record.  The Clinton campaign now pouncing on this answer given by Obama adviser Susan Rice this morning when she was asked to list Obama‘s foreign policy experience.

(BEGIN VIDEO CLIP)

SUSAN RICE, OBAMA‘S ADVISER:  Barack Obama had served in the senate on the Foreign Relations Committee for four years now.  He has passed legislation with Richard Lugar, to secure loose nuclear materials around the world.  He‘s led to end the genocide in the Darfur.  He has passed legislation on ethics reform which is crucial.

(END VIDEO CLIP)

ABRAMS:  All right.  Let‘s start.  We‘re going to first rule a small misstatement from the Obama camp.  He‘s actually only been in the senate for a little over three years.  So Rice is wrong to cite his quote, “four years on the Senate Foreign Relations Committee.” 

But the Clinton camp is getting a strike here too for a cheap shot.  They cherry picked Rice‘s answer and took her out of context, posting on Clinton‘s Web site, quote, “When asked about his foreign policy experience, top Obama adviser cites his work on ethics reform.”  They left out the meat of Rice‘s answer - his efforts to secure loose nukes, his against genocide in Darfur, et cetera.  That is a cheap shot in my book.  Laura, what do you think of my ruling here, one-on-one?

LAURA SCHWARTZ, DEMOCRATIC POLITICAL ANALYST:  I think they definitely cherry picked it.  That‘s what you do in politics.  You try to take it out and make it the most negative as you can, and that‘s certainly what she‘s doing.  But at the same time, this isn‘t the first blunder, sort of, for Susan Rice.  So perhaps they should keep her to foreign policy which she‘s very strong on, extremely credible on.  And let‘s have David Axelrod and Bill Burton and the rest out there talk in communications. 

ABRAMS:  What do you think, pat?

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  I think it‘s a cheap shot.  I agree with you, Dan.  I do agree with Ms. Rice; it does not seem ready for primetime if she‘s throwing that in as one of the big three.  It shows you‘ve got two aces, not three. 

ABRAMS:  All right.  They are both getting strikes on this one, giving us a score of one for Clinton and one for Obama. 

Up next, an Obama campaign staffer creating problems for Team Obama by dredging up a few Clinton sex scandals of the ‘90s.  Maxim Thorne(ph), a member of Obama‘s Lesbian, Gay, Bisexual and Transgender Leadership Council, fired off an E-mail saying, quote, “At 3:00 a.m., Hillary said she and Bill were in bed and she knows of all the calls the president at different times of the day and night.  Really? So much involvement - so much togetherness.  Where was she when Monica was having sex with Bill?  Thirty-five years of experience?  When he was intimidating Kathleen Wiley and Paula Jones?” 

I‘m going to give this one a major cheap shot in the Obama campaign.  They were forced to come out and denounce these comments immediately.  Thorne is sent to resign from Obama‘s leadership council.  I mean, Pat, is this the strategy sometimes?  You‘re sent out - you‘re sort of a kamikaze pilot to go out there and say something really inflammatory, and then the person steps down?

BUCHANAN:  You do sometimes.  But sometimes you do that and have the person, you know, take the real hit for it.  But this looks to me like a gaffe because it throws out the old stuff.  And then you fire your person.  The big story is the - was it LBGT?  Or whatever it is, Dan, the fact they were fired and gone.  So I think this is a blunder on the part of the Obama person.  They probably did the right thing in moving him out.

ABRAMS:  But again, is there some value, Laura, in - you know, again the campaign doesn‘t want to say they are doing it.  But is there some value in getting it out there, reminding the voters about Kathleen Wiley, about Paula Jones, et cetera?

SCHWARTZ:  Absolutely not, and that‘s because Bill Clinton is popular among all Democrats for the majority.  And I‘ve got to tell you, Dan, this is not an Obama staffer.  The Obama campaign didn‘t send this guy out.  He‘s a volunteer.  He‘s on that council of LGBT community, and he whipped this out in the middle of the night.  It‘s completely misspelled.  It was informal.  IT was totally wrong.  And it shouldn‘t have been done.  And the Barack team immediately had him resign. 

So to say that the campaign did this, or the staffer did this, it‘s totally unrealistic.  And on a day especially with Geraldine Ferraro, finance chair, doing what she‘s doing, I don‘t think you can really hold this against the Obama team. 

ABRAMS:  Really?  I mean, look.  Last night, I held it against Ferraro.  I mean - and Pat disagrees about the Ferraro thing.  I mean, he thinks that the Ferraro comments are justifiable. 

BUCHANAN:  The first ones. 

ABRAMS:  But why can‘t we both hold it against Ferraro for making those comments?  And look, she‘s a closer member of the team than this guy. 

SCHWARTZ:  Obviously. 

ABRAMS:  But look, it‘s still - you‘ve got to get stuck to some degree.  I mean the fact that the Obama camp has to come out and denounce it and say, “We don‘t support it.”  All right.  I get.  They did the right thing. 

SCHWARTZ:  Yes, and they did the right thing and they did it quickly.

ABRAMS:  But it‘s not irrelevant.  But do we then just say, “It doesn‘t matter.  It‘s not out there.” 

SCHWARTZ:  Hey, as long as there is no memo from the Obama campaign saying, “Hey, write this E-mail and send it to your (UNINTELLIGIBLE)

(CROSSTALK)

ABRAMS:  Oh, come on.  But none of their surrogates - then surrogates matter. 

BUCHANAN:  Dan, Dan.  You‘re raising too high a bar for them.  Look, you‘ve got people putting E-mails out at 3:00 in the morning.  I mean all these thousands of people in campaigns.  I‘ve had people that are volunteers put out stuff you never heard of and you just say their gone.  There‘s no way you can control that.  This is not the old Soviet Union.

ABRAMS:  Well, look.  We‘re going to call this one a strike for Obama and you can appeal it at the end when the final score card is out, because that currently gives us two to one.  This could become a crucial fight at the end. 

ABRAMS:  Next up, Clinton hammering Obama today over a 2005 energy bill that he supported and she voted against. 

(BEGIN VIDEO CLIP)

SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE:  In 2005, when we had a chance to say no to Dick Cheney and his energy bill, my opponent said yes and voted for it with all of those tax subsidies and giveaways that have been used by the oil companies and others to retard the development of clean, renewable energy. 

(END VIDEO CLIP)

ABRAMS:  We are ruling this one a Clinton misstatement.  According to the independent Web site, “FactCheck.org,” the 2005 energy bill actually raised taxes on the oil industry more than it decreased them.  And contrary to Clinton‘s claims that the bill retarded the development of clean, renewable energy, the spokesperson for the Renewable Fuels Association said, “It obviously wasn‘t a step backward.  It created a meaningful market for renewable fuels like ethanol and biodiesel.  All right.  So, bottom line here, Laura, did the Clinton camp hope that they were just going to get away with punch and no one‘s going to call them on it?

SCHWARTZ:  Exactly and they got called on.  You know, whenever you inject Cheney‘s name, it riles up the crowd.  You know, good for her, but this is when Obama needs to reach for his record and talk about his vote that, like you said, taxed big oil gave the largest funds to renewable energy and gave tax credits to the wind industry.  It‘s going to be good for Obama.

BUCHANAN:  Dan, Dan.  Hillary‘s statement is nonsense, and Hillary Rodham Clinton ought to be doing what you‘re doing.  He ought to come in - Barack Obama ought to be doing what you‘re doing.  He ought to come at her and say, “Look.  This did so many good things for this new energy sources.  You don‘t know what you‘re talking about,” and really hammer her.

ABRAMS:  Well, the problem is, it‘s not a sound biting.  I mean it‘s only on this show we go through the fact checking that you get to actually say, “All right.  You know what?  I know the energy bill isn‘t going to be the big issue.”  But you know what?  We‘re going to fact check her but she‘s going to go out and she‘s going to claim that this is some sort of a horrible thing that Obama was involved in. 

BUCHANAN:  But Dan, this is exactly what the press is looking for, for him to step in with a right cross and a counter punch and let her have it and she‘s wide open. 

ABRAMS:  This one goes against Clinton.  We‘re tied at two strikes each going into the final round.  Obama.

SCHWARTZ:  Wow, we‘re close. 

ABRAMS:  We‘re going to come back and fight about the other one.  Obama (UNINTELLIGIBLE) for the first time pointing the finger directly to Clinton campaign for deliberately leaking a smear photo of him, they say.  To the “Drudge Report,” that photo featured Obama dressed in traditional African garb.  It turned up on the Web site last month.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE:  When in the midst of a campaign, you decide to throw the kitchen sink at your opponent because you‘re behind.  And you start - your campaign starts leaking photographs of me when I‘m traveling overseas, wearing the native clothes of those folks to make people afraid -

(END VIDEO CLIP)

ABRAMS:  All right.  I‘m going to rule this one an Obama blunder.  He‘s now very directly accusing the Clinton camp of being behind the leak of the photo.  Who knows whether it‘s true?  But just last month, he accepted that she had nothing to do with it and said it‘s time to move on. 

(BEGIN VIDEO CLIP)

OBAMA:  Well, first of all, I take Sen. Clinton at her word that she knew nothing about the photo.  So I think that‘s something that we can set aside.

(END VIDEO CLIP)

ABRAMS:  Pat, have they done an investigation since then?

BUCHANAN:  No.  But I do believe Drudge when he said the Clintonites leaked it.  So I don‘t blame Obama for doing that.  But I agree with you it‘s a blunder.  Why would Obama call attention to his Alibaba outfit, you know, now?

And I do think the Clintons leaked it, but I don‘t know why he brought this up when before he said he dismissed it.  So it looks like he‘s inconsistent and now he‘s reaching to play the hardball that‘s being played against him.  I say a down for Obama.

ABRAMS:  We‘re giving Obama a strike on this one, giving us a final score depending on how counted that other one.  I‘m counting it three to two Obama.  The two of you would say two to two.  So we‘ll just to leave it at that.  Laura Schwartz, Pat Buchanan, thanks a lot. 

BUCHANAN:  Thank you.

SCHWARTZ:  Thanks, Dan. 

ABRAMS:  Up next, inside the Eliot Spitzer investigation.  Apparently, the governor was a good tipper, although suspicious wire transfers from his commercial bank account is what tipped off the feds.  We‘ve got the latest on that investigation coming up.    

(COMMERCIAL BREAK)

ABRAMS:  We‘re learning tonight that the governor of New York reportedly spent tens of thousands of dollars on prostitutes over a several-year period.  Coming up.

(COMMERCIAL BREAK)

ABRAMS:  We‘re back with the investigation of New York governor Eliot Spitzer.  New, sordid details emerging tonight about his involvement with an international prostitution ring.  Spitzer allegedly spent tens of thousands of dollars, according to one report.  Maybe as much as $80,000, according to the Associate Press, on high-end call girls. 

“Newsday” reports he met with seven or eight in locations across the country.  The “New York Post” says he‘s been soliciting hookers for at least six years, possibly more than a decade. 

Meanwhile, ABC News reporting new allegations from a 22-year-old escort on another call girl Web site that Spitzer was one of her customers two years ago, she says.  That was when he was attorney general.  Well, prostitutes may have been Spitzer‘s weakness, money was his downfall.  Specifically, transactions that his bank thought were suspicious and referred to the IRS. 

Here to explain how Spitzer got caught WNBC‘s investigative reporter, Jonathan Dienst.  And we‘re joined by former federal prosecutor in eastern district, Seth Levine.  All right, Jonathan, what was his downfall?

JONATHAN DIENST, WNBC INVESTIGATIVE JOURNALIST:  Basically, the banks where he had some accounts who was funneling this money allegedly to these other accounts linked to this prostitution ring. 

The banks raised some red flags saying, “Hey, we‘ve got this money being funneled here, IRS.  Take a look at this.  There, in under $10,000-increments.  Take a look.   This is a bit unusual.”  And the IRS began to take a look at it and it wound up going to this prostitution ring.

Originally, they were concerned there, perhaps, was money laundering or corruption issues involved.  But it did turn out to be this prostitution case.  And now, you‘re talking in the amounts of anywhere from as low as $15,000, as you were saying, Dan, the Associated Press saying the number going as high as $80,000.

ABRAMS:  All right.  This is according to the “New York Times” and “Newsday,” all right?  Spitzer transferred $10,000 by breaking it into smaller amounts.  He then asked the bank to take his name off the wires; the bank declined.  The bank filed a suspicious activity report.  The IRS believed transactions could be political corruption or bribery. 

IRS joined the prosecutors in the southern district of New York.  The Public Corruption Squad joined the investigation.  The judge approved wiretaps on cell phones of suspects.  Seth, a lot of people are asking, what the heck were they doing investigating this little amount of money, and then getting all of these major prosecutors involved? 

SETH LEVINE, FORMER PROSECUTOR:  Well, look, Dan.  Since 9/11, and since the Patriot Act, there‘s been intense scrutiny on banks to make sure that any suspicious activities are reported.  Here, if you have somebody that‘s breaking money into smaller amounts, there‘s always the possibility of a crime called (UNINTELLIGIBLE). 

ABRAMS:  Don‘t a lot of people do that?  Don‘t a lot of people, you know, break it down?  I mean because some people are now suggesting that, you know, there‘s somebody at the bank that wanted to get him.  They tagged him.  They said, “That‘s Eliot Spitzer the governor.  Let‘s get him.”

LEVINE:  And that‘s always possible and the facts will come out.  But the bottom line is when banks suspect that there‘s some suspicious activity, and one of the concerns is whether people are trying to conceal amounts of money that are more than $10,000 into smaller amounts. 

One of the obligations banks can have is to file a SAR - a suspicious activity report, and allow authorities to take a look.  And here, we don‘t know yet, but it certainly suggests that that‘s how this all got started.  And therefore, the other authorities started looking into this.  As you know, Dan, once you have money, you have to follow the money.  And that‘s what they did.

ABRAMS:  Jonathan, you have been a New York reporter for a long time.  Did anyone suspect this?  We‘re talking about up to six years.  People talking about $80,000.  He was with a number of prostitutes, allegedly.  It‘s hard to believe that no one said, “I was just with the governor of New York.”

DIENST:  Well, look.  We started hearing rumblings that this prostitution case was coming.  And pay attention, there are some names on the customer list and start taking a look. 

But prior to this, I had not and many of my colleagues in the political unit and at the newspapers did not have any inkling that this Mr. Straight and Narrow who cleaned up Wall Street, who was going to go clean up Albany and ethics reform that he was involved in anything like this.  So, yes, it came as a big shock to insiders in Albany and to members of the press corps. 

ABRAMS:  Seth, what crime?  You mentioned structuring.  This is about how you sort of deal with money a person, you know, with one or more transactions in currency.  Let‘s put up number two as to what structuring is.  When a conductor attempts to conduct using one or more transactions in currency in any amount at one or more financial institutions on one or more days for the purpose of evading the reporting requirement.  In a sense, it‘s what?

LEVINE:  If you have more than $10,000 and you purposely break it up into smaller amounts so the bank won‘t report that -

ABRAMS:  Crime?

LEVINE:  That can be a crime. 

ABRAMS:  Felony?

LEVINE:  Yes.

ABRAMS:  What kind of time?

LEVINE:  I believe it‘s punishable by for instances up to five years in prison. 

ABRAMS:  Seth, thanks very much.  Appreciate it.  Jonathan Dienst, as always. 

Up next, who will be tonight‘s big winner or loser in our special Eliot Spitzer edition?  Lt. Gov. David Paterson who doesn‘t really want to be the governor of New York; the other nine Emperors Club VIP clients who really didn‘t want to be outed in the Spitzer investigation; or the real George Fox who really didn‘t want to be Spitzer‘s sexcapade alias.  “Winners and Losers” is up next. 

(COMMERCIAL BREAK)

ABRAMS:  It‘s time for a special Eliot Spitzer edition of “Winners and Losers” for the 11th day of March, 2008.  Our bronze loser, New York Lt. Gov. David Paterson.  Sure, once Spitzer resigns, Paterson will take over as acting governor becoming the first African-American to run the state.  But Paterson was apparently hoping to be appointed by Spitzer to the U.S. Senate if Hillary won for president. 

Our silver loser, Emperors Club VIP clients one through eight and number 10.  In the FBI affidavit, Spitzer was referred to as client nine.  And if it wasn‘t for him, the other nine would be under the radar instead of waiting for the ax to fall. 

But the big loser of the day, the real George Fox.  Spitzer used the alias George Fox for his once-secret sexcapades.  But George Fox is not only a real person, but a long time fundraiser and Spitzer friend, who had nothing to do with any of this. 

Our big winner of the day?  Light and navy blue suits, red-striped ties and pearl necklaces.  That is apparently the uniform you wear when diffusing a sex scandal.  On the left, former New Jersey Gov. Jim McGreevey with his wife, Dina in 2004.  McGreevey resigned after admitting he had an affair with a male aide.  And on the right, likely to resign Gov. Eliot Spitzer with his wife Silda. 

Time for the “P.O.‘ed Box.”  In last night‘s, “On Their Trail,” I gave the Clinton camp a cheap shot for suggesting Obama take the number two spot on the Democratic ticket. 

Racord from Dayton, Ohio, “How can you say Barack is the frontrunner, when he has won only one big blue state, Illinois?”

I thought the fact that he has more pledged delegates and has won twice as many states and leads in the popular votes, would make him the frontrunner.  But I guess, Racord, that‘s why I‘m an idiot. 

And I gave the Clinton camp another strike for supporter Geraldine Ferraro‘s comments that quote, “If Obama was a white man, he would not be in this position.  And if he is a woman of any color, he would not be in this position.  He happens to be very lucky to be who he is, and the country is caught up in the concept.”

Gordon Nagayama Hall from Eugene, Oregon, “Has she forgotten charges that she was chosen as the vice presidential candidate only because of her gender?”  I think she agreed to that today.

Paul Chernoff from Columbia, South Carolina, “Ms. Ferraro should not be ostracized for an intelligent statement of a sensitive issue.” 

And yesterday, we announced the launch of our new show, “VERDICT” which premieres on Monday.  Peggy Roney, from Avondale Estates, Georgia, “Please don‘t tell me your show is being replaced by some show called “VERDICT,” which you mentioned tonight.  “VERDICT” sounds like another justice show.” 

Peggy, it will be the same show, but better.  It‘s always nice to hear your feedback.  E-mail to us at Abrams@MSNBC.com.  Chris Mathews, a special edition of “HARD BALL,” next.

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

END   

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