updated 7/11/2008 10:53:06 AM ET 2008-07-11T14:53:06

Guests: David Shuster, Linda Sanchez, Jonathan Turley, Roy Sekoff Brad Blakeman, Keli Goff, Kate Obeshain, Gina Gray, Mark Zaid, Matt Harding

DAVID SHUSTER, INTERIM HOST:  Tonight: Is the U.S. House of Representatives serious about going after Karl Rove?  Today, he was a no show before Congress, what‘s next?  We‘ll talk to a key member of the U.S. House of Representatives.

Plus: The right wing is blasting Barack Obama for the interview he allowed to have with his daughters.  Are the critics going after him out of bounds?

And what happens when a military family wants media coverage of their loved ones funeral at Arlington National Cemetery?  One woman tried to help some families and for that, she says the Army fired her.  We‘ll talk to her live tonight.

VERDICT starts right now.

Good evening, everybody.  And welcome to the show.

I‘m David Shuster in for Dan who‘s off.

We start tonight with the major development in Bush League Justice.  Today, Karl Rove, the president‘s former top aide was a no show, ignoring a subpoena to appear before Congress.  A chair sat empty in the Rayburn House Office Building in Washington where Rove was invited to testify before the House Judiciary Committee.

The committee is investigating allegations that Rove played a role in prosecution of Democrat Don Siegelman, the former governor of Alabama who was sentenced to seven years for f corruption.  But Rove defied the committee‘s subpoena.  His attorney writing, quote, “As a close adviser to the president, whose testimony is sought in connection with his official duties in that capacity, he is immune from compelled congressional testimony.”

That claim was rejected this morning by a subcommittee of the judiciary committee in a seven to one vote.

Representative Linda Sanchez, who heads that subcommittee joins us now and congresswoman, OK, today, you voted to reject Rove‘s claim of executive privilege, what are you going to do now?

REP. LINDA SANCHEZ, (D) CALIFORNIA:  Well, the next step would be for the full committee to take up the contempt recommendation to vote on it, which I‘ve been told by Chairman Conyers that he‘s anxious to do and from there it would go to the full House for a vote.

SHUSTER:  And how anxious?  When will this vote in the committee take place?

SANCHEZ:  Mr. Conyers hasn‘t given a time deadline, but I would imagine that it would probably be within the next couple of weeks or so.

SHUSTER:  And you want the contempt vote to happen, right?  You do want to hold him in contempt, is that what you‘re saying today?

SANCHEZ:  Absolutely, absolutely.  The claim of executive privilege and immunity is ridiculous.  It‘s clear that in conversations that he‘s had with the U.S. attorney‘s office over different matters that he was handling, the president wasn‘t involved in those communications and so, the claim of executive privilege is really not a valid one.

SHUSTER:  And congressman, I just want to clarify there is a jail in the U.S. Capitol that hasn‘t been used for some time, but you are saying in the committee, some of your colleagues are saying tonight, you want Karl Rove in that jail.  If he continues to refuse the demands of this committee, is that what you‘re saying?

SANCHEZ:  OK, well, the inherent contempt powers of Congress were last used in the 1930s, and there was a jail cell located in the Capitol that was utilized for that purpose.  My understanding is that with some of the renovations that have gone on in the Capitol over the years, there really isn‘t an actual, physical jail there.  So, I‘d imagine that -

SHUSTER:  But in any case, you want Karl Rove put in jail for this, right?

SANCHEZ:  I would like to see him held accountable for his complete disregard of the law, absolutely.

SHUSTER:  But will you say, “Yes, Karl Rove should go to jail if he doesn‘t cooperate”?

SANCHEZ:  I personally believe, absolutely.  Anybody who scoffs at the law and has committed an offense that is punishable by jail time, should be put in jail.

SHUSTER:  Congresswoman, are you—are you worried at all about the time frame, though?  I mean, isn‘t this the sort of thing, you‘re up against the election, doesn‘t this need to happen in the next five months?

SANCHEZ:  Well, it‘s not limited to particularly this year.  I mean, in an ongoing investigation, it could potentially happen, you know, next year.  But, personally, I think that time is of the essence and that the sooner we act on this, the better.

SHUSTER:  Just to clarify, and again, real quickly here, do you believe, yes or no, that the United States House of Representatives, your colleagues will support holding Karl Rove in contempt if you guys send it to the full House?

SANCHEZ:  I think if it goes to the full House, there is a very great probability that—yes, they would hold Karl Rove in contempt.

SHUSTER:  OK.  Congresswoman Linda Sanchez, a subcommittee today, rejected Karl Rove‘s claim of executive privilege.  Congresswoman, thanks for coming on, we appreciate it.

SANCHEZ:  My pleasure.

SHUSTER:  Joining us now, Jonathan Turley, professor of law at George Washington University.  Jonathan, what do you make of Sanchez?  Are the Democrats really serious of taking this all the way to where their only leverage would be the threat of jail time?

JONATHAN TURLEY, GEORGE WASHINGTON UNIV. LAW SCHOOL:  I think John Conyers could very well be serious.  You know, he is a very interesting chairman of judiciary.  You know, he has won a lot of friend among the Republicans for how he‘s handled the committee, which has been with a great deal of deference to the GOP and, I think, in votes like this you could see that.

I mean, the invocation of executive privilege by Rove in this matter really is, I think, ridiculous on various points.  I mean, it is ridiculous to say that all of the questions that this committee wanted to ask him were covered by executive privilege.  There is no case to support that type of privilege assertion.

And I think the White House knows, once again, that it has overextended an executive privilege claim and that it would not be sustained in a court of law, but they‘re really counting on the calendar.  They‘re trying to run the clock out.

SHUSTER:  Jonathan, I want to get your reaction to what the White House said about this in a letter, advising Karl Rove not to appear, “We have been advised by the Department of Justice that a president or former immediate adviser to the president is constitutionally immuned from compelled congressional testimony about matters that arose during his or her tenure as a presidential aide and relate to his or her official duties.”

Does that hold up?

TURLEY:  I don‘t think it does.  I mean, when you think about how far that would extend, it would suggest that anything that occurs in the White House in relationship with Karl Rove, who, after all, is a political adviser—he‘s not the head of the Joint Chiefs of Staff—would be absolutely privileged.

Well, that‘s not what the framers created when they created the tripartite system.  They created three branches and none of those branches have enough power to govern alone.  And one of the most important functions of Congress is called oversight, and that oversight responsibility is exactly what they‘re exercising here.

No court has ever said what the White House seems to be suggesting with Karl Rove.  It would be unworkable.  It would be untenable.  We would never be able to have any check on the White House.

SHUSTER:  Jonathan, as you know, if they take this all the way to the end, that would set a huge precedence.  I mean, we‘ve heard that that jail in the Capitol hasn‘t been used since the 1930s.  Do you think that this Democratic Congress really want to set the precedent that they would set if they vote on the floor to hold them in contempt and then say, “OK, if he still doesn‘t cooperate, we‘re going to go get him and throw him in jail”?

TURLEY:  Well, they do have catacombs.  When I was a page in the House of Representatives, they had some wonderful catacombs in the basement that we would explore.  But, I don‘t think we‘re going to get to that.

And I think that most people are betting that they‘re not going it invoke inherent contempt.  I must tell you that I don‘t believe that that is nearly as absurd or exotic as people suggest.  Congress gave up the authority of inherent contempt under agreement with the Justice Department that it would be an honest broker, that it would take these cases to the grand jury.

What Attorney General Mukasey is doing right now, I think, is really far beyond bounds.  He is refusing to let a grand jury see these cases.  And I think he knows quite well that an indictment would issue against some of these officials.  He also knows, I believe, that these executive privilege claims can‘t be upheld in the court of law, certainly not to the extent that they‘re arguing.

So, I think that at this point, Congress has a right to say, “Deal‘s off, you know, if you‘re going to protect your own people.”

SHUSTER:  Jonathan Turley from George Washington University, Jonathan, thank you very much.  We appreciate it.

TURLEY:  Thanks, David.

SHUSTER:  Thank you.

And now, we get to our guests: Roy Sekoff, founding editor of the “Huffington Post,” and Brad Blakeman, a former aide to President Bush.

And, Brad, if Karl Rove did nothing wrong, why not testify?

BRAD BLAKEMAN, FORMER BUSH AIDE:  Because the president invoked executive privilege and the White House Counsel weighed in on this, the Justice Department weighed in on this -

SHUSTER:  So, that‘s the new standard in your mind if the White

House says -

BLAKEMAN:  Wait a second.  Karl‘s personal attorney weighed in on this, Karl is being a good client, he‘s listening to the good advice he‘s being given and that is the president‘s privilege trumps what the Congress wants to do.

SHUSTER:  All right, Brad.  Will you then take this opportunity, publicly—right here and right now, to state that when Bill Clinton asserted executive privilege for all his aides in the late 1990s you were absolutely fine with that and believed that there was nothing wrong?

BLAKEMAN:  No, there was—terrible things wrong with the Clinton administration as we come to find out now.

SHUSTER:  No, but on the issue of executive privilege.  Did you support then the executive privilege assertion then?

BLAKEMAN:  I support—I support the president invoking the privilege, even though it may be done incorrectly because the remedy is—for the courts to come in.  That‘s the separation of powers—you have judicial, you have legislative, and executive.  And when there is trouble between the legislative and executive, the remedy is to go to the courts. 

That‘s the remedy here.  I don‘t think -

SHUSTER:  Roy Sekoff, you agree?

BLAKEMAN:  I don‘t think Chairman Conyers is going to turn into a warden.

ROY SEKOFF, THE HUFFINGTON POST:  Brad, Brad—Brad you‘re invoking the Constitution in a case where Rove is thumbing his nose at the Constitution.  You know, in 1776, Thomas Payne said, he said, “In a monarchy is different.  In a democracy, the law is king.”

And for 7 ½ years, Rove and Bush and Cheney have made a mockery of that.  They think that they are above the law and that the ultimate power lies in their hands and not in the hands of the people.  And the law is (INAUDIBLE) and that‘s what this case is about.

BLAKEMAN:  Roy, you know, that was a good—that was a good rendition of history, but let‘s talk about the here and now—and that is, the Congress has a remedy.  Go to the court and let the court decide.

SEKOFF:  Well, they‘re supposed to go to the Justice Department, but they‘re supposed to go to the Justice Department, but the Justice Department is refusing to take it to the grand jury.  I mean, look, this is you want to talk about what‘s happening now.

Here‘s what‘s happening now.  Rove wouldn‘t show up at the Senate either and when he didn‘t do that, they held him in contempt and then what happened?  He got a great job at FOX; he got a great job at “Newsweek.”  So, of course, he‘s not coming this time.  Maybe he‘s going to get his own show.

SHUSTER:  Roy, what do you think the Democratic House is going to do with this and do you think that they really will go all the way on this one?

SEKOFF:  No, regrettably, I think that, you know, the committee will find them in contempt and the entire House will vote, those against him, like they did for Miers and Bolden and then, nothing will happen.  They‘ll refer to the Justice Department, the same Justice Department that Karl Rove politicized and then nothing will happen and it will end up going to a civil suit and, you know, the clock will run out.

SHUSTER:  And, Brad, you expect that this is going to continue or do you think that in a sense that maybe the politics doesn‘t work, given that what could happen now with the Democrats in and the way they treat the Republican Rove, essentially, could be flip-flopped the next time that there‘s a Republican Congress going after a Democratic administration?

BLAKEMAN:  I think that they‘re crying wolf.  I think it‘s a tremendous abuse of their power.  I think they know that, and that‘s exactly why they‘re not going to execute on the contempt.

They‘re not going to lock Karl Rove up.  They have a remedy.  They choose not to use that remedy and go to court.  And that‘s it.  They want Karl Rove as a political pawn before major elections to embarrass the president and embarrass Karl Rove.

SEKOFF:  David, you‘re right.  When you go back and you read what was happening, you know, in ‘98 and ‘99, the same people who are now saying, “executive privileges is absolute.”  We‘re saying, “Executive privilege, what‘s the executive privilege?”

SHUSTER:  Yes.

SEKOFF:  And, you know, and we go back to the thing—in the United States versus Nixon, they found that executive power is not absolute.  It doesn‘t apply across the board.  It applies to military and diplomatic situations, not to a thing where Karl Rove is trying to build a permanent majority with political trickery.

SHUSTER:  Well, never mind the arguments about hypocrisy and never mind whether it makes smart political sense that the Democrats to drag this out to the summer.

Roy and Brad, really quickly.  Your prediction—Roy first—will this go to the full House, will they vote for contempt and essentially try to get Karl Rove put in jail?

SEKOFF:  They will vote for the contempt; they won‘t put him in jail.

SHUSTER:  Brad?

BLAKEMAN:  I agree, that they may bring it to a vote, but certainly Karl‘s not going to jail.

SHUSTER:  All right.  Roy Sekoff and Brad Blakeman, thank you very much.

And coming up: One of John McCain‘s top economic advisors says the nation‘s economic troubles are a mental recession but he‘s still with the McCain camp.

Some on the right are now blasting Obama for letting his children do an interview but are these critics now going too far?

We‘re back in 60 seconds with Why America Hates Washington.

(COMMERCIAL BREAK)

SHUSTER:  Tonight‘s edition of Why America Hates Washington.  Congress gave itself kudos for passing an ethics (ph) law last year, and then dropped the ball on really holding anyone accountable.  The new law was supposed to force lobbyists to report contributions made to groups created or financed by members of Congress, but the disclosure form given to lobbyists has no place to put that information on it and no place for someone from a corporation or trade association to sign off and take responsibility for the disclosure.

Congress failing to come clean with a sloppy disclosure form:

Another reason Why America Hates Washington.

McCain‘s top economic advisor calls America a nation of whiners. 

That‘s next, after this.

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to VERDICT.  I‘m David Shuster tonight in for Dan Abrams.

Another McCain advisor is creating problems for the senator.  Former Texas Senator Phil Gramm, a top McCain economic advisor, told the “Washington Times,” quote, “You‘ve heard of mental depression; this is a mental recession.  We may have a recession; we haven‘t had one yet; we have sort of become a nation of whiners.  Misery sells newspapers.  Thank God the economy is not as bad as you read in the newspaper every day.”

Earlier today, Barack Obama responded to Gramm‘s remarks.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE:  A nation of whiners.  Now, this comes after Senator McCain recently admitted that his energy proposals—you know, for the gas tax holiday and the drilling—will have mainly, quote, “psychological benefits.”  I want all of you to know that America already has one Dr. Phil.  We don‘t need another one when it comes to the economy.

(END VIDEO CLIP)

SHUSTER:  John McCain also spoke today and tried to distance himself from Gramm‘s comments.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, ® PRESIDENTIAL CANDIDATE:  I don‘t agree with Senator Gramm.  I believe that the person here in Michigan that just lost his job isn‘t suffering from a mental recession.  Phil Gramm does not speak for me, I speak for me.  So, I strongly disagree.

(END VIDEO CLIP)

SHUSTER:  The question tonight: Did McCain do enough to distance himself from Gramm‘s comments?

Here now: Republican strategist, Kate Obenshain; political analyst, Keli Goff; and back with us, Roy Sekoff.

Kate, this is a big problem for John McCain, right?  I mean, this is a guy who‘s already acknowledged he‘s got problems on the economy.

KATE OBENSHAIN, REPUBLICAN STRATEGIST:  Well, I think it is.  It was absolutely a misstep, and similarly to Susan Rice and Samantha Power, when this happened on the Obama campaign, I think it‘s important to take proactive steps to make sure that what Phil Gramm does not step all over the message of John McCain.

He‘s made very clear that he does think that the economic situation is very dire and he has very proactive plans for dealing with it, cutting taxes, keeping taxes low, dealing with the gas prices shooting up.  But it‘s important not to let, even if he‘s a former congressman, don‘t let him step all over your message that you‘re supposedly focusing in on with razor-like intrusion (ph).

SHUSTER:  But he is still stepping on the message.  I mean, here‘s what Gramm did to clarify.  Here it is.

He said, quote, “I‘m not going to retract any of it.  Every word I said was true.  When I said we‘ve become a nation of whiners, I‘m talking about our leaders.  I‘m not talking about our people.

We‘ve got every kind of excuse in the world about oil prices—we‘ve got speculators, the oil companies to blame—but too many people don‘t have a program to get on with a job of producing.  If you listen to our leaders, we can‘t compete against Mexico, for God‘s sake.  If they don‘t think we can compete against Mexico, who can we compete against.”

Keli Goff, now the discussion is, do we really believe Phil Gramm when he says, “Oh, I was merely talking about our leaders”?

KELI GOFF, POLITICAL ANALYST:  I think that it sounds like Phil Gramm attended the same school of surrogates that Bill Clinton did, which is that seeming (ph) to understand that it‘s not about Phil Gramm, it‘s supposed to be about the message of the candidate that you claim to want to see elected.  And the problem is, that that statement did absolutely nothing to clarify anything except that it essentially muddled John McCain -

SHUSTER:  He‘s being defensive.

GOFF:  He‘s being extremely defensive and muddling the message.  Like I said, I think that he, Bill Clinton, perhaps Jeremiah Wright, they can all form a support group for people who don‘t know seem to know when to just sort of stop.

SHUSTER:  And, Roy Sekoff, this has got to be the break Democrats have been hoping for, right?  In this week, in the midst of all this stuff with Jesse Jackson and Barack Obama, there is Phil Gramm making this not only a bad one-day story, but a bad two-day story.

SEKOFF:  Yes.  I mean, there couldn‘t have been a more tone-deaf statement that‘s coming from a millionaire with the American people with soaring gas prices and collapsing home value to say, “Hey, it‘s all in your head, you know, stop whining.”

But let‘s not forget—let‘s keep it on John McCain.  John McCain was the one who said that he felt that the American people had made excellent economic progress under George Bush.  So, it‘s not that he knows it‘s under dire circumstances, he thinks we‘ve made excellent progress and I think that‘s the (INAUDIBLE).

(CROSSTALK)

GOFF:  Roy, he did also say that the economy is not necessarily his

strong suit.  So -

(CROSSTALK)

SHUSTER:  Kate, wait a second.  When Phil Gramm says he was talking about our nation‘s leaders, do you believe him?  Do you believe he was talking about our nation‘s leaders in the original statement when he said we are a nation of whiners?

OBENSHAIN:  You know, I would take Phil Gramm at his word, but I don‘t think that‘s really the issue here.  I think the issue is –

SHUSTER:  But it was like, which word, the original one or the clarification, that‘s the problem -

OBENSHAIN:  I don‘t think, I really - I really think the point here is, do we think that Phil Gramm‘s message is John McCain‘s.  No, it‘s not.  John McCain came out and said, “I‘m the guy running for president and this is not, I believe we are in economic difficulties.”

SEKOFF:  John McCain said that Phil Gramm was his economic guru.  That‘s what he said, his economic guru.  And let‘s look at this, Phil Gramm.

(CROSSTALK)

SHUSTER:  We‘ve got to leave it there.  We‘ll see how this is going to play out.  We‘re going to see what John McCain is going to say tomorrow.  Believe me, this story is not over.

Kate, Roy, Keli, thank you very much.

GOFF:  Thank you.

SHUSTER:  Coming up:  An army employee fired because she says she refused to lie to the media about the rules governing covering military funerals.  She joins us live.

And: CNN‘s Wolf Blitzer struggled yesterday to tease (ph) the latest report of Jesse Jackson‘s crude comments about Barack Obama, but his colleague didn‘t hold back.  That‘s next in Beat the Press.

(COMMERCIAL BREAK)

SHUSTER:  Time for tonight‘s Beat the Press: Our daily look back at media hypocrisy, agendas, and the amusing perils of live TV.

First up: It‘s not easy to make quick judgments about breaking news while you‘re live on the air.  But CNN‘s Wolf Blitzer was clearly struggling to reach the right balance between accuracy (ph) and good faith yesterday while trying to report Jesse Jackson‘s crude comments about Barack Obama.

(BEGIN VIDEO CLIP, “THE SITUATION ROOM”/CNN/WEDNESDAY)

WOLF BLITZER, CNN ANCHOR:  It‘s so crude; we can‘t even repeat it.  The remarks so crude, we can‘t even tell you.  I can‘t even report exactly what he said.  We can‘t even repeat it or report precisely his words here.  They were so crude, we simply can‘t report it.

(END VIDEO CLIP)

SHUSTER:  Well, maybe crude, but CNN‘s approach involved from being exceptionally careful to letting it rip, so to speak.  Watch.

(BEGIN VIDEO CLIP, CNN)

UNIDENTIFIED MALE:  The best way to put it is, as being cutting his manhood or something -

BLITZER:  Male private parts.  The suggestion really was castration.

LOU DOBBS, CNN HOST:  Cutting off his testicles.

UNIDENTIFIED MALE:  Cutting off a part of Barack Obama‘s anatomy but we don‘t want to go there.

UNIDENTIFIED FEMALE:  He would cut Barack Obama where, let‘s just say, no man wants cutting.

(END VIDEO CLIP)

SHUSTER:  That‘s right.  And I‘m glad it wasn‘t me trying to figure out how to describe it.

Next up: Reverend Jackson gave some interviews yesterday to try and clarify those remarks.

(BEGIN VIDEO CLIP)

DON LEMON, CNN HOST:  Reverend Jesse Jackson joining us from Chicago, thank you very much, sir.

REV. JESSE JACKSON, CIVIL RIGHTS ACTIVIST:  Well, Don, how are you?

GRETA VAN SUSTEREN, FOX HOST:  Reverend Jackson joins us live on the phone.  Reverend Jackson, thanks for joining us.

JACKSON:  Let me thank you.

(END VIDEO CLIP)

SHUSTER:  But ABC‘s “Good Morning America” must have missed it somehow.  ABC claimed their interview with Reverend Jackson this morning made it an exclusive.

(BEGIN VIDEO CLIP, “GOOD MORNING AMERICA”/ABC)

UNIDENTIFIED FEMALE:  We are going to get a chance to talk to Reverend Jackson; he is standing by, an exclusive interview coming up now.

(END VIDEO CLIP)

SHUSTER:  Let us thank you, ABC, for giving us the opportunity to remind viewers that Jackson was on the cable networks yesterday and again today, proving, once again, that the word exclusive is an extremely flexible one, at least at “Good Morning America.”

Finally: FOX News reported on the Iranian missile strike yesterday but watch how the reporter and the graphics department identified the location.

(BEGIN VIDEO CLIP, “YOUR WORLD”/FOX NEWS/WEDNESDAY)

UNIDENTIFIED FEMALE REPORTER:  The missile launch happened near the Strait of Hormuz today which is a waterway where 40 percent of the world‘s oil passes through.

(END VIDEO CLIP)

SHUSTER:  Actually, it‘s Hormuz and let‘s take a closer look at that graphic.  Notice how the word “strait” is spelled.  It‘s not supposed to have an “E.”  And that location of the yellow arrow that would be Kuwait or Basra, you‘re pointing at.  The actual Strait of Hormuz is further south.

We know FOX News is going to beat the drum for war against Iran, but hey, FOX News graphics department, at least get the geography right.  Your so-called reporters and analysts don‘t need more help making us laugh.

We need your help Beating the Press.  If you see anything right or wrong, amusing or absurd in the press, go to our Web site at Verdict.msnbc.com and leave us the tip in the tip box.  Please include the show and the time you saw the item.

Up next: The right is still piling on Obama for letting his kids be interviewed by “Access Hollywood.”  Is this a Win, Lose or Draw for him?  We‘ll have more of that interview.

And later: A woman is fired from the Pentagon and according to her, it‘s because she blew the whistle on the government allegedly trying to limit media access to soldiers‘ funerals at Arlington Cemetery.  She will be with us live.

(COMMERCIAL BREAK)

(NEWS BREAK)

DAVID SHUSTER, HOST:  Welcome back, I‘m David Shuster, in tonight for Dan who‘s off.  Barack Obama under fire tonight from some right wingers for allowing his kids to be interviewed by “Access Hollywood.”  And John McCain pulls off his biggest fundraising month yet.  As always, we‘re on their trail making the call on who won and lost the day—Obama or McCain.  Back with us, Roy Sekoff from the “Huffington Post”; Republican strategist Kate Obenshain; and Democratic strategist Keli Goff.

KELI GOFF, POLITICAL ANALYST:  I‘m an analyst. 

SHUSTER:  You‘re an analyst?

GOFF:  Sorry.

SHUSTER:  Sorry.  Keli is an analyst, not a strategist.  Now that we have that clarified, let‘s move on. 

GOFF:  Sorry.

SHUSTER:  First off, Barack Obama still facing heavy criticism tonight for allowing his two daughters, Sasha and Malia, to join him and his wife for an interview with “Access Hollywood.”  They aired yet another part of that interview tonight.  Here‘s some of what‘s already aired. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE REPORTER:  What is the most recent romantic gesture you guys have done for each other? 

MICHELLE OBAMA, WIFE OF BARACK OBAMA:  Barack is very romantic.  I mean you brought me flowers the other day.  He always brings me flowers and we always go on dates.  When he‘s home, we usually have—we always had date nights. 

UNIDENTIFIED FEMALE REPORTER:  What‘s the most recent romantic thing you‘ve done for him? 

M. OBAMA:  Oh, I take care of your children.  That is love.

UNIDENTIFIED FEMALE REPORTER:  That is love. 

SEN. BARACK OBAMA (D-IL), PRESUMPTIVE DEMOCRATIC PRESIDENTIAL NOMINEE: 

That is pretty romantic. 

M. OBAMA:  I think it‘s the little, you know, kisses, the little, you know he likes to get attention, you know, just coming in and sitting on his lap and telling him I‘m proud of him. 

SASHA OBAMA, BARACK OBAMA‘S ELDER DAUGHTER:  And I‘ll tell them it makes me feel good when you guys, you know—

M. OBAMA:  See, here, kids like—

S. OBAMA:  Kids like it when their parents, you know, are all—sometimes when you get to be a teenager, like—

M. OBAMA:  It‘s a little embarrassing. 

S. OBAMA:  Sometimes people think it‘s embarrassing.  I like it, though.  I like it when (UNINTELLIGIBLE).

M. OBAMA:  They like it when mommy and daddy hold hands and we hug and we cuddle. 

(END VIDEO CLIP)

SHUSTER:  Obama said yesterday he regrets doing the interview.  And now, some on the right are pouncing on his initial decision. 

Conservative columnist Andrew Sullivan who‘s actually supporting Obama writes in the “Atlantic,” quote, “I was gob-smacked by the Obamas‘ decision to include their children in a soft-focus TV interview.  One great aspect of the Obama marriage has been the way in which they appear to have brought up their daughters as very regular girls, down to earth, normal and sane.  Displaying them in this way was bad judgment and poor parenting.  Fame is a toxin.  Children deserve to be protected from it as much as they would from lead paint.”

Keli Goff, what‘s wrong with Andrew Sullivan‘s argument that this isn‘t good for the kids?

GOFF:  Well, first of all, none of us are in a position to judge what is good or not good for someone else‘s children, particularly children that we don‘t know.  I think that‘s first of all, with all due respect to Andrew‘s argument.  And second of all, the irony of the argument that he‘s making is that they come across as really well-adjusted, down-to-earth normal kids.  I mean that‘s what‘s so funny about what he‘s saying.  I don‘t know that I would have done that and who knows the Obamas are saying they wouldn‘t do it, I guess, a second time. 

But, look, the reality is there‘s obviously, you know—the same people who are judging this, we all know that there‘s some voters sitting at home who thought, “Gee, they seem a lot like my kids‘ soccer - and you know, the kids that my kids play soccer with.  So the reality is it makes a difference.  There are some voters who are going to find it appealing.  It‘s a win for him. 

SHUSTER:  Kate Obenshain, I heard a lot of people on Republican talk radio today acknowledging that, yes, it was charming but saying, this was all Machiavellian, that surely Obama must have known that while this would be charming, he would essentially be displaying a double standard using his kids and therefore he could just—Do you believe there really was this conspiracy theory here? 

KATE OBENSHAIN, REPUBLICAN STRATEGIST:  Look a loss for Obama.  No matter how adorable the children are, and they are, you don‘t put your kids on, of all things, “Access Hollywood” to score some political points.  And the part ...

SHUSTER:  But Kate, it might be ethical loss—

OBENSHAIN:  No, but let me just finish.  The part about Obama now coming out and saying, “Oh, it was sort of spur-of-the-moment and I wish we hadn‘t done it.”  Look, this is the most disciplined political campaign that we‘ve seen in a long time.  To suggest that he didn‘t plan it out, that he and Michelle didn‘t decide to do this is not just genuine.  And frankly, that brings up the question of, is Barack Obama really being genuine?  It reminds voters of Jeremiah Wright, that he didn‘t know Jeremiah Wright after 20 years. 

(CROSS TALK)

ROY SEKOFF, “HUFFINGTON POST”:  It‘s the opposite of that.  It‘s the opposite of that.  I mean, look.  Seeing them as what they are—young, vibrant, loving couple with smart, wonderful, adorable children is a great way to dispel the demonic portraiture that they‘re trying to do of Michelle.  I think it got a little out of hand, so I consider it a draw for Obama. 

GOFF:  Can you just say that the cute kids really hurt the Kennedys, by the way.  If this is Camelot, (UNINTELLIGIBLE).

OBENSHAIN:  They didn‘t put them on “Access Hollywood.”  They didn‘t parade them around.

GOFF:  I mean that‘s—“Access Hollywood” didn‘t exist then.  It didn‘t exist then. 

SEKOFF:  But (UNINTELLIGIBLE).  “Access Hollywood” hosted by Billy Bush. 

(CROSS TALK)

SHUSTER:  Hold on a second.  There are two issues.  There‘s ethical issue, there‘s the political issue.  On the political issue, this is a winner for Barack Obama. 

OBENSHAIN:  I don‘t think so. 

SHUSTER:  On the ethical issue, sure as a debate, I think this is a long-term loss for Barack Obama because if he really thought this has surprised him the way the media would deal with this, then it shows he is even more tone deaf in understanding the media than he already suggests he might be. 

GOFF:  Moms sitting at home aren‘t thinking as hard as those of us playing inside baseball on this. 

(CROSS TALK)

SHUSTER:  Next up, the fallout continues today over Rev. Jesse Jackson‘s vulgar comments towards Barack Obama that were caught on tape.  Jackson‘s apology to her took across almost every television network today after this comment was picked up by an open microphone yesterday. 

(BEGIN VIDEO CLIP)

REV. JESSE JACKSON:  See, Barack been talking down to black people on this faith based—I want to cut his (EXPLETIVE DELETED) off.  Barack—he‘s talking down to black people.

(END VIDEO CLIP)

SHUSTER:  Barack Obama accepted Rev. Jackson‘s apology, but that didn‘t stop some on the right from pouncing on Jackson‘s comments, including Rush Limbaugh. 

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, CONSERVATIVE RADIO TALK SHOW HOST:  What does all this mean?  Well, it means that the messiah Lord Obama has yet another reverend problem, ladies and gentlemen.  He can no more throw the reverend of (UNINTELLIGIBLE) under the bus than he can throw Rev. Wright under the bus.  The racism and the bigotry, once again, on full display in the Democrat Party. 

(END VIDEO CLIP)

SHUSTER:  Wow.  Racism?  Kate, you start. 

SEKOFF:  It‘s crazy.

OBENSHAIN:  Well, all right, I‘ll take it from, is it a win or loss for Obama?  And I would say, actually, it‘s a win.  And by the way, of course, people are going to be attacking the comments of Jesse Jackson.  They deserve to be attacked.  But I think Obama‘s measured response to this just highlighted that he‘s got this sort of, this laid-back approach where he doesn‘t pound people who make mistakes attacking him. 

And I think it was—and it also distinguished him, set him apart from Jesse Jackson who was seen as a radical and sort of pigeonholed as the black candidate and it really helped Obama establish himself, yet again, as the post-racial candidate. 

SHUSTER:  I agree with Kate, 100 percent on this.  But in terms of the politics, doesn‘t this sort of reinforce the idea that there are members of the African-American community who don‘t like Barack Obama going into these communities and essentially preaching to them about, “Here‘s how you must raise your kids,” when we just talked about him putting his children out there for an interview. 

SEKOFF:  David, he‘s not going to lose the black vote. 

GOFF:  Right.

SEKOFF:  And parts of middle America are saying that what he‘s talking about—they like what he‘s talking about. 

GOFF:  Right.

SEKOFF:  He‘s talking about real kind of family values, you know.  The only thing I love about this story is somewhere, George Carlin is laughing his you-know-what off, because, you know, you can talk about Planters.  You can talk about almonds but you can‘t—you beep it right here when you talk about nuts. 

SHUSTER:  Keli? 

GOFF:  Well, I have written about this in the past, what they call an illness among some older African-American leaders that I called JNS syndrome, which stands for “jealous negro syndrome” in my book, which is this idea of these older leaders who resent some of the younger guards sort of coming along, and, you know, essentially, I guess, reaping the rewards of what they see as their hard work.  But it‘s sad to see it play out in this type of way.  And I 100 percent agree with everyone on the panel that I think this is nothing but a win for Obama and it‘s a huge loss for Jackson and others tarnished just by the (UNINTELLIGIBLE).

SHUSTER:  In my view, it‘s a draw for Obama but a huge loss for Jesse Jackson especially because for so many years, he was the one who was the best voice and most effective voice on raising these very issues that he criticized Barack Obama for and that is the African-American community holding and taking responsibility for itself.  And it‘s sad to see Jesse Jackson get involved in this jealousy issue. 

GOFF:  Can I say ...

SHUSTER:  Go ahead, really quickly.

GOFF:  ... really quickly.  It‘s a win for African-Americans because it finally firmly reinforces that there‘s no longer one idea for black leadership, right? 

SHUSTER:  Fair enough.

Next up, who says Barack Obama is the rock star in politics when it comes to fundraising?  John McCain just pulled off his biggest fund-raising month yet.  McCain raised $22 million in the month of June—that gives his campaign about $27 million in cash on hand.  That number explodes to $95 million when you add it to the RNC‘s war chest, which is more than twice what Obama and the DNC have. 

Roy, are you nervous? 

SEKOFF:  No.  But, I mean, if you ever, at any time, thought that the Republican presidential nominee was not going to have a load of cash coming his way, you‘re sadly mistaken.  I think that John McCain is looking at his decision to opt into the public financing system and saying, “What was I thinking?”  You know.

SHUSTER:  Kate, have they underplayed McCain as they essentially suggested that he‘s not as strong as he really is? 

OBENSHAIN:  No, I think Obama‘s advantage was as a result of the ongoing contest among the Democrats and that McCain was expected to start picking up the steam as we roll towards the general election when McCain is compared to Barack Obama and Republicans and conservatives start to realize, “Oh, my gosh.  We‘re going to have this incredible leftist elected unless we get moving and start stroking some checks.  And I don‘t think, I‘ve heard the argument that, “Oh, John McCain is even wishing that he could opt back—opt out of the federal funds. 

SEKOFF:  He did it before.

OBENSHAIN:  Well, John McCain is a man of honor.  Listen, John McCain is man of honor—

SEKOFF:  What do you mean he‘s a man of honor?  He got a loan using that—

OBENSHAIN:  Let me just—Can I just finish a sentence, please, tonight. 

SHUSTER:  Let her finish.  Kate, go ahead.

OBENSHAIN:  John McCain is a man who sticks to his word.  Barack Obama said he was going to take public financing; he didn‘t.  John McCain said that he was going to win regardless of how the cash starts pouring in.  He‘s going to stick to his words and he‘s going to start getting out there and articulating his message instead of raising money. 

SEKOFF:  But in the primaries, he said he was going—

SHUSTER:  Kate Obenshain, you have gotten the last word.  Thank you very much.  Roy, thank you very much.  We appreciate it.  And Keli Goff here in the studio—Keli, thank you. 

GOFF:  Thank you. 

SHUSTER:  Up next, a buffalo has its way with a woman visiting a national park.  And the former public affairs director at Arlington National Cemetery says she was fired from the Pentagon after she objected to their policy of media coverage of Iraq war soldiers‘ funerals.  She will be with us live.  We‘re back in 60 seconds. 

(COMMERCIAL BREAK)

SHUSTER:  Now to “Reality Bites” or should I say lick?  This woman got a taste of what happens when you ignore the “Do Not Feed the Animals” sign at national parks.  Buffalo stuck its head through the car window for a treat and tried to plant its wet tongue all over the woman‘s face.  Instead of closing the window and driving away, she offered the bison another biscuit.  I guess she liked it.  We‘ll be right back. 

(COMMERCIAL BREAK)

SHUSTER:  Welcome back.  Tonight, a military public affairs official claiming she was fired from her job because she refused to help tap down media access to soldiers‘ funerals.  In a moment, we‘ll hear those allegations from Gina Gray in her first live television interview. 

Gray took over as public affairs director in Arlington National Cemetery in April.  Not long after she started, Gray says she butted heads with her bosses over media access at a funeral for a lieutenant colonel whose family had agreed to open the ceremony to the media. 

The next day “The Washington Post‘s” Dana Milbank wrote about Gray‘s efforts to keep the funeral more open to the press.  Within two months, Gray was fired.  The army says its media policies have never changed. 

Joining us now, Gina Gray and her attorney Mark Zaid.  Now, Gina, did you have any warning that you were getting into trouble at Arlington or did you just find yourself fired one day? 

GINA GRAY, FORMER PUBLIC AFFAIRS DIRECTOR, ARLINGTON CEMETERY:  Well, I had no idea I was going to be fired, David.  But I certainly—from the first incident at the Lieutenant Colonel Hall funeral, I butted heads and it was apparent that we were on opposite sides of the fence. 

SHUSTER:  How did you butt heads?  What did they say to you about that? 

GRAY:  Well, I wanted—my ultimate goal is that I wanted there to be clear rules and regulations and policies just like the army has.  The same rules and regulations needed to apply at the cemetery and cemetery officials felt like they were the exception to the rule that they didn‘t have to play by the same rules. 

SHUSTER:  The army—Gina, the Army Secretary Pete Geren told “The Washington Post” that he couldn‘t comment on your firing but the military‘s position is that the media policy for funerals has not changed.  And Secretary Geren told “The Post,” quote, “It appears to me that we struck the right balance consistent with the wishes of the family.” 

How do you respond to that, particularly when he says, “with the wishes of the family?” 

GRAY:  Well, I think if the family is the one who says—and ultimately, the family has the right to say yes or no to media coverage.  And if the family says they want media coverage, then it‘s up to the families to decide how close or how far away they want the media to be.  It‘s not up to Arlington Cemetery officials to do that. 

SHUSTER:  And you‘re saying in this particular case, there was no dispute, but that the family wanted the media to be there?

GRAY:  The family allowed media coverage there, just like about 63 percent of the families of active duty casualties had allowed media coverage there.  But what they were not given the opportunity to do was to decide what that coverage meant.  To some families, coverage might mean that a reporter can sit next to them and hear everything.  Other families migh$t say, “No, we want them to be far away but we want a picture or we‘d like the media to be allowed the right to cover that.

SHUSTER:  Let‘s bring in the “Huffington Post‘s” Roy Sekoff.  And Roy, what‘s your reaction to Gina‘s story?  Paint the big picture for us here. 

SEKOFF:  Yes.  I mean this is part and parcel of the Bush administration‘s policy of trying to keep the human toll of the Iraq War hidden.  I mean they don‘t have pictures.  They don‘t allow pictures of flag-draped coffins to be taken.  And this is what we‘ve seen from them, you know, again and again.  They talk about sacrifice.  They like to use it as an applause line in a stump speech.  But they don‘t want the American people to see that that sacrifice also includes, you know, grieving widows and kids who are never going to have a dad. 

SHUSTER:  Roy, you mentioned the sort of the big picture of the policy.  They don‘t want flag-draped coffins.  So many Americans may remember the photograph of coffins inside a cargo plane.  This was taken by a military contractor who was based in Kuwait in 2004, Tami Silicio.  She gave the photo to the “Seattle Times,” and Silicio and her husband were fired from the job as a result.  And there of course—that is the issue with Tami Silicio—

SEKOFF:  But David, what we see is that truth tellers and whistle blowers -

they don‘t get rewarded.  They get a pink slip. 

SHUSTER:  You know, Ms. Gray, I want to ask about the termination notice that you were given.  Maybe you can help clear it up.  The termination notice says, quote, “You have failed to follow my instructions, failed to provide complete details for your work assignments, been disrespectful to me as your supervisor and failed to act in an appropriate manner,”  Phyllis White, director of administrative services.  Would you respond to that? 

GRAY:  I‘m guilty of not acting inappropriately. 

SHUSTER:  Well, that was—I think that was sort of a typo.  But is the - I mean, specifically, the military thing, “Look we did nothing wrong.  We have a consistent policy.  There were personnel issues in terms of you and your immediate supervisor.”  How do you respond to that? 

GRAY:  Well, I think the bottom line—it is not, you know, Army Public Affairs did step in and did try to make the changes.  But you have a deputy director, Thurman Higgenbottom who has been there for over 30 years, and is kind of running the show on his own.  He is making up the rules as he goes along.  And you have people there who just don‘t seem to understand that they fall under the department of the Army and they can‘t make up the rules on their own whim. 

MARK ZAID, ATTORNEY FOR GINA GRAY:  This has been an issue that had been going on for a while in a hostile work environment, not just for Gina but her two predecessors as well.  In fact, Gina had complained up the chain of command including to the supervisor of the superintendent of the cemetery a month before.  And while an investigation by the EEO was going on as far as discrimination against her, in the hostile work environment.  She was terminated.

SHUSTER:  But Mark, we don‘t want to get into the details of that.  But can you just say yes or no—are you planning legal action as a result of this case? 

ZAID:  There is an administrative action pending under the Equal Employment Opportunity office for discrimination hostile work environment, and that will be taken forward.  And I think, you know, with pun intended, to some extent, you‘re going to see some skeletons unearthed at Arlington, but it‘s going to be of the management, not of those who have sacrificed and are buried there. 

SHUSTER:  OK.  Mark Zaid, lawyer for Gina Gray.  Gina, thank you very much.  Good luck to you.  We appreciate you coming on tonight.  And Roy Sekoff, thank you to you as well. 

SEKOFF:  OK, David. 

SHUSTER:  Up next, the man who has danced all over the world and become an Internet sensation will be dancing with us here, right here.  We‘ll be right back.

(COMMERCIAL BREAK)

SHUSTER:  Time for tonight‘s “Winners and Losers.”  No losers tonight, but our big winner, Internet sensation, Matt Harding, whose video of him dancing all over the world has become a huge phenomenon, racking up more than 10 million hits. 

(VIDEO OF MATT HARDING DANCING)

SHUSTER:  Joining us now, the dancing man himself, Matt Harding.  Matt, thanks for being with us. 

MATT HARDING, “DANCING” CREATOR:  Thanks for having me on. 

SHUSTER:  Dancing all over the world.  How did you get the idea to do this? 

HARDING:  You know, it was just goofing around.  I was traveling with a friend.  We were in Vietnam taking pictures.  And he just said, “Why don‘t you stand over there and do that stupid dance you do and I‘ll film it.” 

SHUSTER:  And then it just took off, and you just thought, well, the next place you will do it again. 

HARDING:  I just made a habit of it, a sort of a memento of every place I went.  I shoot a video clip and then I strung them all together and put them on the Internet.  And there you go. 

SHUSTER:  And who paid for all this?  Who paid for your travel to get from place to place? 

HARDING:  Well, the first one I did on my own.  And then it got popular on the Internet.  And a few years ago, Stride and Gum called me up and they said, “Hey, how would you like to do this again for us, keep making videos?”  So ever since then, I have been doing videos with Stride. 

SHUSTER:  And how many places now have you been to? 

HARDING:  I have been to 80 countries. 

SHUSTER:  Eighty countries.  And do people now come up to you and say, “Hey, the Dancing Guy”? 

HARDING:  You know, it‘s starting to happen every now and then which is really weird.  Most often when I‘m dancing, which actually isn‘t very often, but sometimes, just walking down the street. 

SHUSTER:  And have you learned anything about some of these places based on how they dance with you or how they respond to you? 

HARDING:  A bit.  Yes, there‘s some cultural differences police to place.  Some times, you know, I‘ll meet up with a bunch of people in Sweden and they‘re just kind of ready to dance.  And as soon as they‘re dancing, they‘d go on—or in Spain, they‘ll hug me and kiss me.  And say, “Come on!  Bailamos.”  So—

SHUSTER:  Is there some place you haven‘t danced that you would look to dance? 

HARDING:  Someday, I would look to go to the moon or outer space. 

SHUSTER:  Well, you know what?  We can make that happen.  You are on the moon.  All right, are you ready? 

HARDING:  I‘m ready.

SHUSTER:  All right, now, Matt, what about with those Filipino prisoners that‘s also a YouTube hit.  Can you dance with them?

HARDING:  Why not?

SHUSTER:  Although you look sort of like Gulliver on that one.  How about with Barack Obama and Ellen?  Have you ever wanted to dance with a presidential candidate?  Uh-oh, uh-oh. 

And finally, our interns.  They have always wanted to dance with you. 

Can you dance with them, our interns?

HARDING:  Sure.  Bring it on. 

SHUSTER:  In Times Square, our interns and Matt Harding.  Matt, thank you very much.  That‘s all the time we have for tonight. 

Dan will be back next week, dancing right here with all of us.  Good night, everybody.  Thanks for being with us.

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

END   

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