updated 1/26/2009 11:21:36 AM ET 2009-01-26T16:21:36

Guest: Jim Moran, Brian Bilbray, Jonathan Capehart, John Heilemann, Carolyn McCarthy, Anthony Weiner, Frank Gaffney

CHRIS MATTHEWS, HOST:  Should Dick Cheney be tried?

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  Leading off tonight: Is this any way to pick a U.S. senator?  Finally, after weeks of confusion, contradiction and downright contrariness—throw intrigue into the mix—

New York governor David Paterson defied the liberal wing of his party and today named rural, pro-gun, upstate congressmen Kirsten Gillibrand to Hillary Clinton‘s seat in what was once called without irony the world‘s greatest deliberative body.

(BEGIN VIDEO CLIP)

REP. KIRSTEN GILLIBRAND (D-NY), SENATOR-DESIGNATE:  I realize that for many New Yorkers, this is the first time you‘ve heard my name and you don‘t know much about me.  Over these next two years, you will get to know me, but much more importantly, I will get to know you.

(END VIDEO CLIP)

MATTHEWS:  That‘s right, that‘s Al D‘Amato, the big Republican former senator from New York standing behind her, backing her up, I suppose, in some strange way.  Anyway, Governor Paterson‘s odd choice of the relatively unknown and very un-New Yorky politico is getting attacked from the liberals of Gotham, who are targeting her as the poster woman for the National Rifle Association.  One attacker is U.S. Congresswoman Carolyn McCarthy, whose husband was killed by a berserk gunman on a New York commuter train.  She‘s challenging or mobilizing to challenge Gillibrand when she seeks election to the Senate next year.  Carolyn McCarthy‘s coming here right up front on HARDBALL.

Our second bit story tonight—and this one‘s got a lot of intrigue -

should the new boys in town investigate the team that just left town with its tail between its collective legs?  Should Obama and Attorney General Eric Holder prosecute the Bushies who approved torture and surveillance of American citizens?  Should they go out and try to catch those who they say robbed America of its ideals, or should they just play like Jerry Ford and forget the whole thing?

And President Obama held his first bipartisan meeting with House and Senate leaders today.  He openly acknowledged house Republicans‘ dissatisfaction with his $825 billion stimulus plan, but the new president stressed the need for urgency to pass something.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  What I think unifies this group is recognition that we are experiencing an unprecedented, perhaps, economic crisis that has to be dealt with and dealt with rapidly.

(END VIDEO CLIP)

MATTHEWS:  Well, is President Obama‘s stimulus plan enough to steer the country out of recession?  And does he need to include some Republican demands, some amendments from the Republican side?  Two U.S. congressmen will be here to debate that point.

In the “Politics Fix” tonight, what kind of political fight will the New York governor have on his hands with his pick for U.S. senator to replace Hillary Clinton?  Has David Paterson‘s dance of death with Caroline Kennedy guaranteed an election challenge for him from Rudy Giuliani next year?  The raw political consequence of too much public waffling and contradiction up in Albany.

And finally, B-Rod is back.  There‘s something downright arresting about the dance of self-defense of the honorable Rod Blagojevich.

(BEGIN VIDEO CLIP)

GOV. ROD BLAGOJEVICH (D), ILLINOIS:  Under these rules, I‘m not even getting a fair trial.  They‘re just hanging me.

(END VIDEO CLIP)

MATTHEWS:  Wait until you hear the cowboy story this guy‘s telling. 

All that appropriately tonight in the “Sideshow.”

But first, Hillary Clinton‘s seat in the U.S. Senate goes to rural, upstate, pro-gun U.S. congresswoman Kirsten Gillibrand.  U.S. congresswoman Carolyn McCarthy, who‘s considering a primary challenge against her next year, joins us now from (INAUDIBLE) Congresswoman, thank you for joining us.  I‘m going over the record tonight, like a lot of us, trying to figure out this new senator‘s gun record.  How do you see it?  She seems very NRA-ish.

REP. CAROLYN MCCARTHY (D), NEW YORK:  Slightly.  No, let‘s face it, I mean, I understand that she is the NRA‘s poster child, and I think that does not fit New York state.  When you look at her record—and certainly, you know, there are a lot of members, as you know, Chris, that will vote with the NRA, but they don‘t come forward.  She has basically even taken steps much further on writing part of the briefis (ph) for disallowing D.C.  to write their own gun laws, even though the Supreme Court said that municipality cities had the right to do that to protect their citizens.

So I think as far as I‘m concerned—and by the way, this is personal for me.  This is nothing to do with politics.  I just think that she‘s the wrong fit for New York state.

MATTHEWS:  I know.  I trust your motives.  I know they‘re motives.  You‘ve been through family tragedy with the misuse of gun ownership.  Let me go to this question.  Why would an upstate U.S. congresswoman like Gillibrand get involved in filing an amicus brief, a friendly brief on behalf of the NRA in the D.C. gun law case?  Why would she stick her neck out and get involved in that case, unless she was just simply working for the NRA?

MCCARTHY:  Well, I mean, let‘s face it, she is working—she has been working for the NRA.  And that is my point.  Now, obviously, there have been some leaders from the Senate side that have said to me, Don‘t worry about it, when she gets to the Senate, she will totally turn around and not be NRA supporter.  I find that a little bit difficult to believe.

And it‘s not just on that vote.  It‘s on many votes that she has made in the last two years.  So I think that‘s something that I‘m going to be watching very carefully.  I think that there are many, many other people that were in the race that would have been great senators for New York, and I think they wouldn‘t have been any controversy if one of those other that had their hat in the ring had gotten the nod to be the next senator.

MATTHEWS:  One other point.  She co-sponsored a bill that didn‘t get anywhere last year, or two years ago, that would have basically made it more difficult for the ATF to put out information about gun trafficking so we could actually find information about where a gun came from.  Why would she get involved in a case to prohibit the public information we need about gun issues?  I mean, it‘s not about hunters‘ rights.  Hunters don‘t mind people knowing where they got their guns.  I mean, hunters—my—you know, my brother‘s an NRA member.  These regular people in the NRA simply want to be gunners and sportsmen.  Why are they stopping information moving to where it needs to go on who‘s buying guns improperly?  Why would anybody want to keep that secret?  I don‘t know.

MCCARTHY:  But see, Chris, that‘s the whole thing.  Here she is, putting out legislation like that, when we have Mayor Bloomberg, who basically has been going through the whole country, bringing mayors together to try to reduce gun violence in this country.  What is wrong with our police officers trying to find out the information when a crime is made, on why they can‘t work with their other police officers in other states on trying to find out where did that gun come from, the tracing of it.  How does that interfere with someone legally owning a gun, or how does that interfere with any of my hunters that want to go out hunting on the weekends?

I don‘t have a problem with that.  I have never had a problem with that.  But even representing a Republican district, upstate New York—and if you remember, Chris, when I first ran, I represented a very heavy Republican district, but I certainly stood up for what I believed in.

MATTHEWS:  Let me ask you this.  Are you going to run against her, Gillibrand?

MCCARTHY:  I will run against her, Chris.  I had said that.  I was hoping that someone else would go forward, somebody younger.  I do believe that we should have a younger person running for this seat, mainly so that they can be there for a very long time and represent New York state and raise up, certainly, in the Senate ladder so that they can bring power and help back to New York state.

But with that being said, if no one comes forward, Monday I will be meeting with my financial team and I‘m going to be starting to raise money so that I can be ready if I need to run against her in 2010.

MATTHEWS:  Well, that‘s pretty sacrificial.  I mean, you‘ve worked hard and you‘ve gone through tragedy on the way—of course, not on purpose—but you‘ve become a United States congresswoman.  You‘ve been pretty respected all these years.  To give up the House permanently so that you have a shot in the primary in a Senate race, that‘s pretty sacrificial.  Are you willing to do that, give up your seat that you fought so hard for forever so you can have a shot at the Senate seat?

MCCARTHY:  Listen, I never wanted to run for the Senate.  That‘s why I never put my hat into the Senate race.  I certainly talked to Governor Paterson a couple of weeks ago and, again, laid out why he should not pick her.  But with that being said, as I said, my voice is for the victims not only of this state but across the country.  And as far as I‘m concerned, yes, I will go against her, and yes, I will give up my House seat.  That‘s how important it is for me to make sure that we have a senator that does not belong to the NRA.

MATTHEWS:  Well, apparently, he didn‘t pick her on the rebound.  Here he is, the governor of New York, saying that he made up his mind to pick Congresswoman Gillibrand, we‘re talking about, from upstate, even before he sat down at the inaugural on Tuesday.  He didn‘t pick her after the Kennedy thing fell apart.  He picked her—he had her in mind.  In fact, she was his choice way before Caroline Kennedy made any statements this week.  Here it is, the governor.

(BEGIN VIDEO CLIP)

GOV. DAVID PATERSON (D), NEW YORK:  I was completely sure by the time I was sitting at the inauguration.  And I figured, I‘m freezing and I still want Kirsten Gillibrand, so she must be the right choice.

(END VIDEO CLIP)

MATTHEWS:  So are we to believe that he‘s telling the truth, that he made up his mind and Caroline Kennedy wasn‘t even in the running at that point and that her withdrawal from the campaign the following day, from the effort the following day, was just sort of after the fact?  Do we believe that he made up his mind long ago for Gillibrand?

MCCARTHY:  Listen, if that‘s the case, Chris, I‘m really sorry about hearing something like that because, obviously, not only for Caroline Kennedy but for all the others that were thinking that they had a chance in this race, why didn‘t he make the announcement then?  We know certainly for the last several weeks that Mrs. Clinton was going to be confirmed as being the next secretary of state, and I think that it should have been ended a few weeks ago.

MATTHEWS:  OK.  Thank you very much.  It‘s great to have you on the show, Carolyn McCarthy, U.S. congresswoman from New York and looks like likely candidate for the United States Senate next year.

Congressman Anthony Weiner of New York is also from New York.  He‘s also a Democrat.  He has a position on this.  Congressman Weiner, it‘s good to have you back on HARDBALL...

REP. ANTHONY WEINER (D), NEW YORK:  Thank you.

MATTHEWS:  ... under these strange circumstances.  Did you buy the fact that the governor had made up his mind on behalf of Gillibrand—

Kirsten Gillibrand of upstate New York—long before, apparently—well, Caroline Kennedy knew what was going on here?

WEINER:  Well, I take him at his word that he did.  Remember, that, you know, there‘s actually been a long period of time that the governor‘s had to think about this.  First we thought for sure that Hillary Clinton would be the president, and then there was this appointment was made, so he‘s had some time to think about it.  I take him at his word.

Look, we‘ve had a pretty deep bench, and the people that had put their name in the ring gave him a lot of great choices, and I think he made a great choice from the great list.

MATTHEWS:  You mean better than Caroline Kennedy, better than Andrew Cuomo, better than the other candidates?

WEINER:  No, I think...

MATTHEWS:  She‘s stronger—you‘re saying she‘s a stronger United States senator, looking ahead, than either Andrew Cuomo or Caroline Kennedy, a better choice?

WEINER:  No, this is the governor‘s choice, and I‘m just saying I‘d probably be on your show commending the choice of them, as well.  They‘re all very good candidates.

MATTHEWS:  Well, let me ask you about her, Gillibrand.  What do you make of Carolyn McCarthy—Carolyn McCarthy just saying, as a gun control advocate because of her husband‘s tragedy—what happened to him on that commuter train, being killed by that berserk, crazy—I don‘t know what his legal condition was, but he was berserk, killing her husband and other people—what do you make of her opposition now to Gillibrand on the gun control issue?  You‘re from a—you‘re from Brooklyn, from Park Slope out there.  You know how dangerous guns are.  How can you defend a pro-NRA congresswoman?

WEINER:  Well, Carolyn McCarthy is a leader on the issues.  I, like she is—we get F‘s every year from the NRA.  And I think that Senator Gillibrand would be very wise to take Carolyn McCarthy aside and say, How do I get these issues correct?  How do I vote on them right in the Senate?

MATTHEWS:  You mean flip.

WEINER:  But I would...

MATTHEWS:  You want her to flip?

WEINER:  Well, let‘s...

MATTHEWS:  You want to her...

WEINER:  I certainly...

MATTHEWS:  ... to drop her allegiance to the NRA...

WEINER:  Yes.

MATTHEWS:  ... and become a gun control person.

WEINER:  Yes, I do.

MATTHEWS:  Is that credible?

WEINER:  Well, yes, it is...

MATTHEWS:  Doesn‘t that make her look like a flip-flopper and a person who‘s not really truly for gun control...

WEINER:  No, this...

MATTHEWS:  ... because the only reason they‘re flipping is because they got a new job.

WEINER:  No, this happens all the time when people from one part of a state run to represent the whole state.  I saw it when I watched Hillary Clinton walk around Iowa.  You know, you say, Oh, you‘re the guy—you‘re the candidate from New York City.  I saw when Chuck Schumer learned agriculture issues when he went from Brooklyn...

MATTHEWS:  Yes.

WEINER:  ... to representing upstate.  You know, we can‘t be so pure to believe that every candidate‘s going to believe—going to agree with us on every issue.  We need someone who‘s going to be able to get elected, be a vote, a Democratic vote in the Senate, someone who‘s going to be—who understand downstate and upstate.  And Kirsten Gillibrand is that kind of person.

MATTHEWS:  But if you‘re a top NRA official—just to look at it from the other side—they think they got somebody here.  They got a member who‘s going to be a senator on their side of the issue.  Are they wrong?

WEINER:  Well, I‘ll tell you this...

MATTHEWS:  You‘re saying they‘re wrong.

WEINER:  I...

MATTHEWS:  The NRA is wrong in endorsing this person.

WEINER:  No, I‘m going to let Kirsten Gillibrand decide how she‘s going to vote on issues, but I do believe this.  I believe that when someone represents the entire state of New York, they‘re smart enough to represent the entire state of New York.  And maybe Al D‘Amato, when he was working on Long Island, didn‘t perhaps understand the orthodox Jewish community of my district, but when he became a senator, he sure did.  Does that mean he flip-flopped or he grew or he learned?

The important thing about Kirsten Gillibrand is that she‘s smart, she understands the whole state.  And there are not issues that all of us are going to agree on, but I think she‘s going to get reelected and be a reliable Democratic vote, which is a very important thing to all of us.

MATTHEWS:  Do you think big cities have a right to control guns?

WEINER:  I believe...

MATTHEWS:  Do you think states and federal government officials have the right to control guns?

WEINER:  Yes, I do.

MATTHEWS:  Or do you believe the individual right to control a firearm is absolute?  Where do you stand?

WEINER:  Well, I...

MATTHEWS:  Because the NRA believes it‘s pretty much absolute.

WEINER:  I disagree with the NRA.

MATTHEWS:  But you support their candidate.

WEINER:  I support Kirsten Gillibrand for the United States Senate.  I think she‘s a great choice.  I think she‘s smart.  Does that mean I agree with her on every single issue?  Certainly not.  But as—you know, let me reiterate.  She‘s now going...

MATTHEWS:  Will you vote for her, will you support her if she continues to follow the NRA line?  If she continues to follow the NRA line, will you still support her?

WEINER:  I think—I have to tell you something.  That‘s one issue among others.  I don‘t believe that she will.  I believe that she‘ll grow and learn about—and I‘m going to try to help her learn about the state.  But the idea that you‘ve got to have a perfect slate of votes before you become eligible to become a United States senator is just wrong.  She represents a tough district upstate, 2-to-1 registration advantage for Republicans.  She gets elected, and that‘s important.  We want someone who can win.

MATTHEWS:  Come back some other time.  You‘re a great guest.  Anthony Weiner of New York—I think you‘re going to be mayor some day, but that guy Bloomberg just won‘t get out of that seat.  When‘s his problem?  Why doesn‘t he follow the law and leave?

WEINER:  I‘ve been wondering the same exact thing.  Maybe you could offer him a job.

(LAUGHTER)

MATTHEWS:  I can‘t afford the salary!

(LAUGHTER)

MATTHEWS:  Hey, thank you.

WEINER:  Thank you, Chris.

MATTHEWS:  Not that I‘m hiring.  Thank you, U.S. Congressman—I like Bloomberg, too.  Anyway, thank you, Anthony Weiner, for joining us.

Coming up: Should the new Obama team investigate the Bushies who approved of torture of detainees and surveillance of Americans, or should the new president take a page from former president Jerry Ford and pardon them, basically, and move on?

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Did President Obama essentially end the war on terror by shuttering Guantanamo Bay, banning torture and closing down the CIA‘s secret overseas prisons?  And should President Bush administration—or Bush administration officials be investigated and possibly prosecuted for war crimes?

Frank Gaffney‘s with the Center for Security Policy and David Corn is the Washington bureau chief for “Mother Jones”—he said darkly.

(LAUGHTER)

MATTHEWS:  Let‘s take at a couple of things.  Let‘s go to John Conyers, who has some thoughts here.  He said—he wrote last week, quote, “A future president will face the same fear and uncertainty that we did after September 11, 2001, and will feel the same temptation to believe that the ends justify the means, the temptation that drew our nation over to the dark side under the leadership of President Bush and Vice President Cheney.  If those temptations are to be resisted, if we are to face new threats in a manner that keeps faith with our values and strengthens, rather than diminishes, our authority around the world, we must fully learn the lessons of our recent past.”

Frank Gaffney, he wants a truth and reconciliation commission to take a look at any use of torture, any improper use of surveillance of Americans, find out who the bad guys before we move forward.  Where are you?

FRANK GAFFNEY, CENTER FOR SECURITY POLICY:  Well...

MATTHEWS:  Should we study what happened under the last eight years?

GAFFNEY:  Studying, lessons learned, all that‘s fine.  What I think he really has in mind is some sort of witch hunt...

MATTHEWS:  A show trial.

GAFFNEY:  ... some sort of—yes, inquisition. 

MATTHEWS:  But why would a show trial or witch-hunt be bad? 

GAFFNEY:  Well, I think it would reduce us to sort of banana republic territory, and it would almost certainly be the end of the Barack Obama honeymoon, at the very least, if not of the administration.

MATTHEWS:  Well, should the innocent fear anything by this?  Why should the innocent fear? 

GAFFNEY:  Well, I think—I think what you don‘t want to do, if you‘re serious about these kinds of policy matters, is to have courts deciding what are, in fact, policy matters. 

You want them to be deliberated, because you may well find you can‘t successfully prosecute these people, which could throw into a cocked hat again lot of the thinking that David and some of his friends have made about water-boarding as torture and the like.  So, I wouldn‘t go there if I were these guys.  But they might.

MATTHEWS:  David, go ahead.  Speak for yourself.  I‘m going to let you speak for yourself.

(CROSSTALK)

CORN:  I will speak for myself. 

MATTHEWS:  If torture...

CORN:  Yes, yes.

MATTHEWS:  ... if water-boarding is torture, and torture is criminal...

CORN:  Right. 

MATTHEWS:  ... why not prosecute it, and prosecute it all the way up the line?  That‘s my question. 

CORN:  Right. 

I—I think, before you get to the question of prosecution, you have to engage in fact-finding.  And I think it is best for Congress, inspector-generals in various agencies, CIA, Justice Department, wherever, to look at it. 

We already have one investigation into the destruction of the water-boarding tapes at the CIA that Justice is pursuing.  But I think—but, as you know, as we learned from Patrick Fitzgerald with the Scooter Libby investigation, that, if a prosecutor investigates, at the end of the day, he doesn‘t bring to bear the information he has found.  It stays private, unless he uses it in a prosecution. 

If Congress investigates, if I.G.s investigate, that investigation might somehow become of use to a prosecution down the road.  But it certainly goes to the public and gets to the point you made about lessons learned.  I think lessons learned is probably more important, ultimately, and keeping things honest, than in prosecutions. 

If you find egregious examples of what might—which are clear cases that could be prosecutable, then maybe you can make a decision to go ahead with that.  But I think talking about prosecutions is getting way ahead of the game, while I wouldn‘t mind, though, seeing these investigations...

(CROSSTALK)

MATTHEWS:  You want something like they had in South Africa after the fall of the apartheid regime?

CORN:  I don‘t think—I don‘t think you need...

MATTHEWS:  Truth and reconciliation, public trials, public hearings? 

(CROSSTALK)

CORN:  We have got 535 guys and gals whose job it is to do oversight of the government.  That‘s Congress.  So, intelligence Committee, the Justice—Judiciary Committees, all of these can take a bite of the apple and start doing their own look. 

(CROSSTALK)

MATTHEWS:  Frank, let‘s take a look at—let‘s take a look...

(CROSSTALK)

GAFFNEY:  ... clear, Chris, that would be the end of this sort of post-partisan period...

MATTHEWS:  I know. 

GAFFNEY:  ... and the productivity, I think, of the administration. 

MATTHEWS:  Crime knows no—knows no harbor here. 

(CROSSTALK)

MATTHEWS:  Let‘s take a look at Dick Cheney and what he said about torture when he was in office.  Let‘s take a look. 

I‘m sorry.  Here he is.  This is a Q&A.  We can‘t get the authority to read this.  We have to read this from ABC. 

Anyway, “Did you, Mr. Vice President, authorize the tactics that were used against Khalid Sheikh Mohammed?”

Cheney: “I was aware of the program, certainly, and involved in helping get the process cleared, as the agency in effect came in and wanted to know what they could and couldn‘t do.  And they talked to me, as well as to others, to explain what they wanted to do.  And I supported it.”

Question: “In hindsight, do you think any of those tactics that were used against Khalid Sheikh Mohammed and others went too far?”

Cheney: “I don‘t.”

So, he‘s basically saying he approved water-boarding of Khalid Sheikh Mohammed, right? 

GAFFNEY:  He supported it; that‘s for sure. 

CORN:  Yes, he did support it. 

MATTHEWS:  Well, isn‘t—isn‘t water-boarding torture?

CORN:  Well, I believe it is.  And I think most...

(CROSSTALK)

MATTHEWS:  And isn‘t torture illegal?  I‘m just doing a syllogism here.

CORN:  No, no, no, you‘re right.  But the thing is...

(CROSSTALK)

GAFFNEY:  I don‘t think it is. 

CORN:  ... to play Cheney‘s defense attorney, which I don‘t do too often, if there are legal...

(CROSSTALK)

GAFFNEY:  But what a great new role, David.

CORN:  Yes.  I wonder how much he will pay.

(LAUGHTER)

CORN:  But if there are legal authorities for this, you know, this—these are the issues we had with John Yoo, writing these opinions out of Justice, which many lawyers, in fact, many Republican lawyers who also were working at Justice disagreed with, you know, if you have some—if you have an opinion that is based on faulty legal reasoning, but then you act under it, what is the responsibility of the person acting on it? 

That‘s why, to me, the—the key thing first is figuring out what happened. 

MATTHEWS:  Right. 

CORN:  Making as much of it public as possible, and then determining if there are clear cases.

MATTHEWS:  I don‘t want to jump this—jump this too far.  There‘s no comparison to what happened in the ‘40s.  But the old argument, it was decided under international, you could not simply say, I was only obeying orders.  That doesn‘t work.

(CROSSTALK)

CORN:  Do you say it does work? 

GAFFNEY:  No, no, I don‘t think it does.  That‘s the Nuremberg principle. 

(CROSSTALK)

MATTHEWS:  Yes, but that you can‘t say, somebody told me to do it. 

CORN:  Exactly. 

But, before we decide—but there are degrees of which there are legal protections and legal coverage.

And, if he supports it, but doesn‘t authorize it, what does that mean in terms of prosecutions?

MATTHEWS:  OK.  Here‘s my question.  It‘s easy to prosecute small fry.

(CROSSTALK)   

MATTHEWS:  Look what happened at Abu Ghraib.  We picked up some...

(CROSSTALK)

MATTHEWS:  ... people, enlisted people in the military, Lynndie England and people like that. They get picked up.  They get sent away.  And you know they copped a plea.  They end up with a couple years.  They had long sentences after the plea-copping. 

So, they were really in trouble.  And they were probably warned by their attorneys, you better cop, or you‘re going in for 10 years.  So, they face serious imprisonment for that hot-dogging of hanging—putting—stacking people up together, humiliating these prisoners. 

If that was done under orders, if that general allowance was said, make life miserable for these people, and it came down from the Pentagon, our job is to soften these people up for intelligence-gathering, so make their lives miserable in prison, humiliate them, do whatever it takes, if that was from the top, don‘t you think it should be prosecuted, even now, Frank, if that came from the top?

(CROSSTALK)

GAFFNEY:  I personally don‘t see any basis for saying that is the case.  You have asked a hypothetical. 

MATTHEWS:  You think it was all original on their part?

GAFFNEY:  Well, that‘s what successive investigations have established, Chris. 

MATTHEWS:  Yes. 

GAFFNEY:  And that‘s one of the reasons why I think this is...

MATTHEWS:  And I retain my suspicions.

GAFFNEY:  As your friend Barack Obama says, I think we are better off looking forward, rather than backward. 

MATTHEWS:  That‘s a political judgment.  It‘s not a journalistic judgment.

GAFFNEY:  It is.  It‘s a political judgment you‘re asking people to make. 

MATTHEWS:  Truth is more important than politics.

(CROSSTALK)

MATTHEWS:  By the way, I think Jerry Ford was right...

(CROSSTALK)

MATTHEWS:  Jerry Ford was wrong about Nixon.  Jerry Ford was wrong.

(CROSSTALK)

MATTHEWS:  We needed to have the truth come out about Watergate.  It would have been much better than that long period of murkiness. 

CORN:  The key thing is the truth.  I would want to get the facts out first, and then decide whether prosecutions are merited and whether they make sense.  All prosecutions are a political...

MATTHEWS:  Can we stand the truth, to ask Jack Nicholson‘s question in “A Few Good Men”?

CORN:  Well, it may be tough. 

(CROSSTALK)

MATTHEWS:  Can you stand the truth?  Can you stand the truth? 

CORN:  It may be hard for Jack Bauer. 

GAFFNEY:  Can I make an alternate point?

I think what we want is to insure that we continue to wage this war effectively.  And this notion that, somehow, it‘s over because Barack Obama has said it‘s over is ludicrous. 

CORN:  No one says it‘s over. 

(CROSSTALK)

GAFFNEY: “The Washington Post” headline today says it, that the war on terror is over. 

(CROSSTALK)

MATTHEWS:  But terrorism is not an enemy. 

(CROSSTALK)

GAFFNEY:  Chris, you have got people who are fighting this war now...

MATTHEWS:  Right. 

(CROSSTALK)

GAFFNEY:  ... and you are going to impede their ability to do it even more. 

(CROSSTALK)

MATTHEWS:  Let‘s fight terrorists.  Let‘s fight our enemy.  But stop calling it an “ism.”  We‘re dealing with a real problem out here of zealotry, religious zealotry.  We have got a...

(CROSSTALK)

GAFFNEY:  I‘m calling it Sharia. 

MATTHEWS:  That‘s fine with me.  Just don‘t get it terrorism, because it‘s not...

(CROSSTALK)

GAFFNEY:  Good.  Fine for me. 

MATTHEWS:  It‘s like secret...

(CROSSTALK)

GAFFNEY:  But don‘t think we‘re stopping the fight because Barack Obama says we are. 

MATTHEWS:  We will be right back.

I don‘t think we‘re stopping the fight.  You don‘t have to make that case here. 

You agree with that, right? 

CORN:  Yes. 

(CROSSTALK)

MATTHEWS:  The fight goes on.

CORN:  The fight goes on.

MATTHEWS:  Thank you. 

It‘s a common enemy, the people who are trying to hurt our country. 

GAFFNEY:  To destroy it.

MATTHEWS:  Frank Gaffney, David Corn, happy weekend.

(CROSSTALK)

MATTHEWS:  We—I think we will get through the weekend. 

Up next, Illinois Governor Rod Blagojevich tells tales of the Old West.  Wait until you hear this guy.  This is some politics.  This guy is fighting for his career or his freedom or something.  But what stories he has to tell us on the way are highly entertaining. 

And, by the way, Sarah Palin is looking to cash in.  She‘s the subject of her very own “Big Number” tonight.  If she can read, if she can write, she is going to make some money. 

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Wow.  Back to HARDBALL.  Time for the “Sideshow.”

In Chicago, Illinois, Governor Blagojevich played hardball today, saying he can‘t get a fair impeachment trial unless he can call people like White House Chief of Staff Rahm Emanuel and presidential aide Valerie Jarrett as defense witnesses.  He says he‘s facing a lynch mob out of the old cowboy movies. 

Here‘s the man we call B-Rod drawing the picture. 

(BEGIN VIDEO CLIP)

GOV. ROD BLAGOJEVICH (D), ILLINOIS:  There was an old saying in the Old West.  There was a cowboy who was charged with stealing a horse in town and some of the other cowboys, especially the guy whose horse was stolen, were very unhappy with that guy. 

And one of the cowboys said, let‘s hang him.  And the other cowboys say, hold on.  Before we hang him, let‘s first give him a fair trial.  Then we will hang him.  Under these rules, I‘m not even getting a fair trial.  They‘re just hanging me. 

(END VIDEO CLIP)

MATTHEWS:  That guy writes his own stuff. 

And here‘s the Chicago Mayor Richard Daley earlier today offering his take on Governor Blagojevich. 

(BEGIN VIDEO CLIP)

RICHARD DALEY (D), MAYOR OF CHICAGO:  I said cuckoo once.  I will say it again: cuckoo.  Thank you. 

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS:  And, as inauguration week draws to a close, here‘s something from Tuesday‘s ceremony you might have missed.  See those musicians playing at the inauguration, legends like Yo-Yo Ma and Itzhak Perlman? 

Well, it turns out the music we heard over the public address system and on air Tuesday wasn‘t live, but, instead, was a recording made two days earlier.  We‘re told it was simply too cold for these great musicians to play up to their usual standards. 

Up next, this year had a lot of firsts for Barack Obama.  Perhaps none were as exciting as that first trip on Air Force One.  Here‘s a behind-the-scenes look from “National Geographic” at that flight. 

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  You‘re the pilot of Air Force One? 

UNIDENTIFIED MALE:  Yes, sir.  It will be my pleasure to serve you...

(CROSSTALK)

OBAMA:  You know, I have got to say you‘re out of central casting. 

(LAUGHTER)

OBAMA:  You‘re exactly what I want the pilot of Air Force One to look like. 

UNIDENTIFIED MALE:  Thank you, sir.

OBAMA:  You look like you know how to fly.  You look like Sam Shepard in “The Right”—“The Right Stuff.”

UNIDENTIFIED MALE:  Thank you. 

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS:  I love it, a pilot that looks like a pilot. 

One of the big perks of flying on Air Force One, you get to pick your own meals.  Obama has ended up picking—he ended up picking a medium-well hamburger, salad and fries.  What a regular guy. 

Time now for the “Big Number.” 

It looks like Alaska Governor Sarah Palin is shopping her memoirs. 

“The L.A. Times” reports that her asking price may be as high as $11

million.  To put that number in context, Bill Clinton, a two-term

president, got about the same for his memoirs.  The big question is, who‘s

going to actually write the Palin book?  The only politician I know who can

write is Barack Obama.  Palin‘s hoping for $11 million for her book.  Wow -

tonight‘s “Big Number.” 

Up next:  President Obama tells Republican critics of his stimulus plan, “Hey, I won.”  He‘s talking about the election, but can he win the fight over his stimulus plan?  And will it work?

You‘re watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MARGARET BRENNAN, CNBC CORRESPONDENT:  I‘m Margaret Brennan with your CNBC “Market Wrap.”

Stocks closing mixed this Friday.  The Dow Jones industrial average lost 45 points, but it had been down about 200 points earlier in the day.  The S&P 500 gained about four, and the Nasdaq higher by nearly 12. 

Major earnings news today—Dow component, and our parent company, General Electric reported that fourth-quarter profit fell 46 percent, hurt by weakness in its GE Capital Finance arms.  But earnings were in line with analysts lowered estimates.  And GE affirmed its intention to maintain its dividends and its AAA credit rating.  Shares still fell 10 percent on the day. 

The world‘s largest drugmaker may be even getting bigger.  CNBC confirms that Pfizer is in talks to buy rival Wyeth for about $60 billion.  And that deal-making news did help out stocks. 

Oil prices surged, with crude oil rising $2.80, closing at $46.47 a barrel.

That‘s it from CNBC, first in business worldwide—now back to Chris and HARDBALL. 

MATTHEWS:  Welcome back to HARDBALL. 

President Obama met with Democratic and Republican leaders from Congress today.  And he acknowledged that the House Republicans oppose part of his stimulus bill.  Let‘s take a listen. 

(BEGIN VIDEO CLIP)

OBAMA:  what I think unifies this group is recognition that we are experiencing an unprecedented, perhaps, economic crisis that has to be dealt with and dealt with rapidly. 

(END VIDEO CLIP)

MATTHEWS:  It looks like he is sitting at a restaurant where they closed it for the night, all those chairs behind him.

Anyway, will the—will his $825 billion stimulus package shore up our sinking economy?  And is the president serious about getting Republicans to sign onto it and perhaps agree with them on some changes?

Democratic Congressman Jim Moran come from Moran—he‘s a member of -

he comes from Virginia—he‘s a member of the Appropriations Committee in the House.  He supports the bill as written by the House Democrats.  And Republican U.S. Congressman Brian Bilbray of California is opposed the package. 

I‘m going to give you a chance, sirs.  What is wrong with the  Barack package?  Is it the sundry nature of some of the spending stuff in it...

REP. BRIAN BILBRAY ®, CALIFORNIA:  Well, first, 50 percent...

MATTHEWS:  ... like the condoms in there, that stuff? 

(LAUGHTER)

BILBRAY:  That—that is.

But let‘s start off with, 50 percent will not do any—will not be spent within two years.  So, it doesn‘t do anything about stimulating the economy now, according to the stated purpose of it. 

Then, you have got all the other stuff what happened.  Remember, what happened is, it‘s become a grab bag, just like Washington always does.  You just use a crisis as an excuse to throw all this stuff in. 

MATTHEWS:  All this contraceptive relief and all that stuff, you think it‘s just a Christmas tree? 

BILBRAY:  Christmas—well, it‘s not just that. 

I mean, there‘s—there‘s all kinds of other things about, let‘s go after and start subsidizing the states on the Medicare issue and health care and whatever for two years.  But then what happens in two years?  Does that mean the federal government is going to cut the states‘ funding after that? 

MATTHEWS:  Yes. 

BILBRAY:  And—and how does—you know, there‘s so much of this—when you say 50 percent of the funds committed are not going to fulfill the stated purpose, there‘s a problem. 

And even, you know, Democrats understand that.

MATTHEWS:  So, you‘re saying half the spending cuts don‘t take effect for how long? 

BILBRAY:  They—they—what is your... 

(CROSSTALK)

MATTHEWS:  Yes, I thought you said there‘s a time lag here. 

BILBRAY:  No, the time lag is that 50 percent of these funds won‘t be available to be spent, will not—the projects won‘t be able to be online for two years.

MATTHEWS:  OK. 

BILBRAY:  And, so, you have got half of this won‘t be around for 24 months, and won‘t do anything for the economy.

MATTHEWS:  OK. 

BILBRAY:  So, why don‘t we take that 20 -- that—that 50 percent and take that out this bill, and sit down and reasonably and rationally talk about how we spend this?

MATTHEWS:  OK.

Congressman, you‘re on Appropriations.  Can you tell that there‘s a time lag in the outlays?  Is it a two-year delay?

REP. JIM MORAN (D), VIRGINIA:  There will be some time lag, but the reality is that it will change people‘s attitude. 

It will get them spending.  Now, all of it may not be...

MATTHEWS:  How will it do that? 

MORAN:  The states and localities are cutting back right now.  If they know there‘s money coming in, they‘re less likely to be firing people.  We see estimates of tens of thousands of public employees being laid off.

And in terms of the private sector, all of those folks that work for construction companies, cement companies, asphalt, you name it, they‘re losing their jobs.  If they know that money is on the way, that there is going to be a need, they‘re going to keep those people on and they‘re going to start hiring more.  They‘re going to start training people. 

You know, what we want is for people to be acting in a positive way toward the future.  Right now, they‘re retrenching.  And the reason why we‘re putting the kind of money we‘re putting in is that we need to go to people who will spend money.  I know one of the big objections is that so much is going for food stamps, unemployment insurance.  But that money‘s going to be spent immediately.  It has—

MATTHEWS:  Isn‘t it true that people in need tend to spend every nickel they get their hands on? 

BILBRAY:  The fact is, that‘s not necessarily so that that stimulates the economy. 

MATTHEWS:  What do they do with the money? 

BILBRAY:  The fact is there are expenditures, but it‘s an artificial stimulus.  The fact is that just spending money does not get the ball rolling again.  There‘s a lot of investment.  There‘s—you‘re right, there‘s a lot credibility. 

MATTHEWS:  Say there‘s a poor neighborhood.  They go out to the local store.  They start spending 100 bucks you give them.  Doesn‘t that help the economy? 

BILBRAY:  The fact is it helps the economy for a little bit, makes us feel good like we did in the ‘70s, and then when it starts coming down in two years, those funds starts coming down, you start reducing those funding, then you start going back. 

The concept is don‘t worry, we‘ll make—the stimulus will work so well that we‘ll be able to pay this off.  That‘s exactly what we did in the ‘70s.  And it feels good politically right away.  And the long-term impact was devastating on us at that time.  The whole point is let‘s be reasonable in this.  It‘s so easy for Washington to spend other peoples‘ money and commit huge—and the argument is it‘s not big enough.  The fact is you can go ahead and say we are going to spend for these programs and get these guys to spend over here. 

MATTHEWS:  Well, the problem is you just said something contradictory.  You said some of the money will only have a two-year impact and it will wear out.  And then you say half the money is not going to kick in for two years.  It sounds like you‘ve got stage one, all the immediate spending, and stage two picks up with that other spending.  

BILBRAY:  No. 

MATTHEWS:  Sounds like it works well. 

BILBRAY:  The fact is the other half, the 50 percent that we go in there is—that so much of this is social program that is will kick in for now, be around for 24 months and will drop off like a rock unless—unless what will be what you market—Washington starts funding a social program; when will cut?  When will they reduce?  They never cut. 

MATTHEWS:  Congressman?  Any programs? 

MORAN:  I understand these concerns.  But we were told by 19 out of the 20 most prominent economists in this country, you‘ve got to put over 800 billion dollars into this economy or it is going to shut down, just like a computer shuts down, no more juice.  So if you get this in there, we will have two percent less unemployment than we otherwise would.  We‘ll have four million more people employed.  And we felt that‘s worth it. 

We‘re in an emergency room now. 

MATTHEWS:  You say cut the number from 800 billion to below that number?  The amount‘s an issue. 

BILBRAY:  Even the Congressional Budget Office says half of this money will not stimulate the economy within two years, so why don‘t we take that out and—

MATTHEWS:  We‘ve got a 10 trillion dollar short fall in terms of demand.  Don‘t you have to have a big sized stimulus package to even kick the economy? 

BILBRAY:  No.  That is the illusion that just spending money does it all.  Just throw money at the program.  There are institutional changes—

MATTHEWS:  Do we know what will work, Congressman?  Do we know this stimulus package is going to get the economy growing again?  Do we know it‘s a fact? 

MORAN:  We know if you extend unemployment insurance, 1.76 is spent for every dollar you give somebody that‘s unemployed, because it has that spin-off affect.  Food stamps, it is about 1.64.  We need to get money into the economy. 

It is good to save and pay off debt.  But right now, it‘s most important to spend that money.  And where we‘re putting we feel is where it is going to spend.  But there‘s another priority and that is to lay the foundation for future economic growth.  That‘s why we‘re putting it into the infrastructure that‘s been neglected. 

MATTHEWS:  I think the best way to spend money would be to make Medicare cover every person that‘s alive right now, everybody goes to the doctor tomorrow morning. 

MORAN:  Not the way our health care system is now.  We‘d waste too much money. 

MATTHEWS:  A lot of people want health care that can‘t afford it and they would like to have that money right now to go to the doctors.  Thank you, Congressman Jim Moran.  Thank you, Congressman Brian Bilbray from California.  Jim Moran is from Virginia. 

Up next, what kind of political mess has New York‘s governor—this is the craziest dance of death.  For the last two months, teasing Caroline Kennedy and then giving it to somebody he already had in mind, he says.  This is strange.  We‘re going to talk about this crazy selection of a United States senator up in New York when we come right back.  What a weird, weird dance of death it‘s been.  Gillibrand is a conservative Democrat.  Is that a smart move for New York State Democrats to pick a pro-gun, rural upstate Democrat to contest that Senate Democratic seat?  We‘ll see when we come back.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We are back.  Time for the politics fix tonight.  John Heilemann is with “New York Magazine,” and Jonathan Capehart is with the “Washington Post.”  Jonathan and John, both look at this tape.  This is Governor Paterson this morning, around noon actually, when he decided to choose - saying when he decided to choose Congresswoman Gillibrand for United States senator from New York. 

(BEGIN VIDEO CLIP)

GOV. DAVID PATERSON (D), NEW YORK:  I was completely sure by the time I was sitting there at the inauguration.  And I figured I‘m freezing and I still want Kirsten Gillibrand, so she must be the right choice. 

(END VIDEO CLIP)

MATTHEWS:  John Heilemann, what do we make of that?  We had Caroline kennedy, the big eruption of news Wednesday night, when I had to come on and do the phone, trying to figure this out.  My first assumption was that the Kennedy family or Caroline Kennedy had been notified, you‘re not going to get it, withdraw your name so you‘re not embarrassed.  Maybe that‘s what happened.  We don‘t know.  Is that possibly what happened here, the scenario?

JOHN HEILEMANN, “NEW YORK MAGAZINE”:  I think it is certainly possible.  It‘s amazing how much murk there is still around this story.  That was certainly my conclusion.  At first when Caroline announced she was going to pull out for personal reasons, my immediate thought was that she was pulling, that the personal reason was she wanted to avoid public humiliation. 

You know, I think Gillibrand is a good pick for Paterson in terms of New York politics.  It is a pick that solves two big problems for him, which are geography and gender.  Geography, her being an upstate candidate, and, of course, her being a woman—most of the other candidates, Caroline Kennedy aside, would have been down state and male and would not have helped him as much as this does with the constituencies he needs to care about for 2010. 

MATTHEWS:  What was Republican Al D‘Amato doing standing there so prominently?  There he is, right there.  What was he doing there?  Is he a backer?  Is this a right wing Democratic pick?  What is it ? 

HEILEMANN:  Me, Chris? 

MATTHEWS:  Let Jonathan take it. 

(CROSS TALK)

JONATHAN CAPEHART, “THE WASHINGTON POST”:  I cannot remember his name, but I think he‘s one of the Senate—one of the Senate leaders.  I remember looking at the tape and saying, what is Al D‘Amato doing there?  It‘s not him. 

MATTHEWS:  That‘s not Al D‘Amato?   

CAPEHART:  I don‘t think so. 

MATTHEWS:  It is Al D‘Amato.

CAPEHART:  Did you see the tape? 

MATTHEWS:  It is Al D‘Amato, take my word for it. 

HEILEMANN:  That is certainly Al D‘Amato on the tape there.  You‘ve been away too long, Jonathan, we miss you here. 

CAPEHART:  Al D‘Amato has put on a little weight then. 

MATTHEWS:  It‘s either him or his porky big.  I think it‘s Al D‘Amato. 

Go ahead. 

HEILEMANN:  Chris, to your point, she‘s certainly not a super progressive candidate.  To the extent there‘s been some grumbling about her, it‘s that she‘s not the most liberal—she‘s not the most liberal of the available candidates. 

MATTHEWS:  -- a friend of the court brief when we have the NRA.  She intervened in the D.C. gun law.  She co-sponsored, along with tons of Republicans, some bill to make it hard track the trafficking in guns.  She seems like she‘s going beyond simply being a hunter supporter, as she puts it, someone who just supports upstate hunters.  She seems to be working as an ally, an agent even of the NRA. 

CAPEHART:  There‘s that problem that I think Governor Paterson is going to have.  He‘s often said that if he picked someone from the delegation, he was going to create enemies.  It would have been fine, I think, for the Democratic delegation if he had chosen someone who people view—who the delegation viewed as, you know, a tried and true Democrat.  The NRA cred that she has, that might play well up state, is not going over very well with the Congressional delegation. 

Now you have Congresswoman McCarthy from Long Island who is going to challenge her.  Already said—

MATTHEWS:  John, I predict he will be gang tackled by two Italians.  One name is Andrew Cuomo, who will go after him in the primary.  The other one is Rudy Giuliani in the general.  Does that look like what‘s going to happen here because of this?

HEILEMANN:  Well, Paterson certainly looks really weak right now.  The presumption up here is that he‘s going to get primaried by someone.  I wonder about Cuomo.  It occurs to me that one of the great advantages to Gillibrand is if he‘s going to run in a primary in 2010, he could either run against Paterson, in a Democratic primary for governor, or he could run against Gillibrand. 

If I‘m Andrew Cuomo, thinking about which of those two candidates is a weaker candidate to pick off in the Democratic primary, I might decide to run for the Senate.  I might decide to try to take Gillibrand on rather than Paterson.  It might actually be a deviously brilliant move on Paterson‘s part. 

MATTHEWS:  I love this.  I love the way you guys think.  You‘ve out Machiavellied me. 

Thank you.  We‘ll be right back with John Heilemann and Jonathan Capehart for more.  Let‘s talk about a war crimes trial featuring Richard Cheney as the defendant.  You‘re watching HARDBALL, only MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back.  We‘re back with John Heilemann and Jonathan Capehart.  Jonathan, do you think it makes sense, as this new administration takes over, to take a look back, a serious look back and see if the laws were broken with regard to torture and surveillance of Americans over the last eight years? 

CAPEHART:  I do think—as a journalist, I think it‘s very important for us to get to the bottom of what happened with regard to the two things that you mentioned.  It‘s important for the country to know what happened, who made decisions, when and—

MATTHEWS:  How high up it went. 

CAPEHART:  How high up it went.  Where I have difficulty is, then what?  What do you do with all this information? 

MATTHEWS:  I have an easy answer—

CAPEHART:  I know what your answer is. 

(CROSS TALK)

MATTHEWS:  Do to the big people what you do to the little people.  Let me go back to John Heilemann.  You take all those rural people, enlisted people, people in the ranks, out there in Abu Ghraib, and they threatened them with huge prison sentences, so they copped a plea for a couple years a piece.  Serious threats against their freedom and their reputations and their rank and everything they fought for in their lives.  Why don‘t we do the same things to the bosses who told them to do it?  Tell people to do stuff like that, if you catch them, if you catch them? 

HEILEMANN:  I think the only answer is political inconvenience.  It‘s not a very good answer, Chris.  I mean, I think the argument you‘re making is pretty powerful.  I think as a matter of—I mean, the discussion topic here is, kind of, would it cost Barack Obama politically?  I think it would and it would run, to some extent, counter to his stated objective, which is move out of the past and look toward the future. 

I think justice demands certain things.  And I think it‘s good idea for the reasons both you and Jonathan explained a second ago. 

MATTHEWS:  If someone comes out of the woodwork and blows the whistle, and says, look, this went on on my watch.  I can say it now.  The air is clear.  We have a new administration.  We find out people were tortured, worse than water boarding or whatever.  Why not go to the person who gave the orders? 

CAPEHART:  Someone comes out of the woodwork—

(CROSS TALK)

CAPEHART:  A process would have to be set up to investigate and look into whether these claims are true. 

MATTHEWS:  Yes, I‘m talking about courts.  I‘m talking about justice here.  Why not administer justice now that it can be done?  There‘s nobody protecting anybody now. 

CAPEHART:  If someone comes forward with evidence then, yes, sure, go to court.  But I do think there needs to be something official done, maybe Congressional hearings, or something to look into this. 

MATTHEWS:  If water boarding is torture and torture is criminal, and it came from Cheney‘s office, I don‘t see why there‘s a problem prosecuting.  If water boarding is torture and torture is criminal, and it has been ordered from the top, I don‘t see the problem with prosecuting, unless there‘s a political reason that obstructs it.  I don‘t think that‘s justice.   

Anyway, thank you, John Heilemann.  Thank you, Jonathan Capehart. 

Join us again Monday night at 5:00 and 7:00 Eastern for more HARDBALL. 

Right now, it‘s time for “1600 PENNSYLVANIA AVENUE” with David Shuster.

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

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