updated 1/30/2009 3:00:01 PM ET 2009-01-30T20:00:01

Guest: Tom McNamee, Jim Warren, John Harwood, Ed Schultz, Michelle Bernard, Jonathan Alter, Tom Brokaw

DAVID SHUSTER, HOST:  Tonight, removed from office.  Governor Blagojevich, at his impeachment trial, was convicted.  His final argument failed. 

(BEGIN VIDEO CLIP)

GOV. ROD BLAGOJEVICH (D), ILLINOIS:  I didn‘t resign then and I‘m not resigning now, because I have done nothing wrong. 

(END VIDEO CLIP)

SHUSTER:  On this dramatic day, we will talk with NBC‘s Tom Brokaw. 

Plus, Washington‘s partisan divide.  There was fallout today after every House Republican last night voted against the president‘s economic plan. 

Later, our continuing series about Ground Zero in New York, the Freedom Towers plan versus new twin towers.  The battle intensifies. 

And Wall Street bonuses.  The president calls them outrageous, but just wait until you hear the feel report from our “Muckraker of the Day.” 

All tonight on 1600 PENNSYLVANIA AVENUE.

Welcome to the show, everybody.  I‘m David Shuster, reporting tonight from Chicago. 

The anticipation across the state has been building all day long.  And just moments ago, the Illinois state legislature voted to remove Rod Blagojevich from office by convicting him on the articles of impeachment.  It‘s not clear how the process will unfold now, and when the lieutenant governor will be sworn in, but this has been an emotional day for Rod Blagojevich and for the members of the state senate who voted to remove him. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  I‘m going to cast a vote that I wish to God I never would have had to cast.  It‘s not a happy moment.  There should not be one person that walks out of this chamber jubilant, because there‘s nothing happy about this. 

(END VIDEO CLIP)

SHUSTER:  Earlier, Governor Blagojevich decided to participate in his impeachment trial after all.  He delivered an hour-long speech that was impassioned and articulate. 

(BEGIN VIDEO CLIP)

BLAGOJEVICH:  I‘m appealing to you and your sense of fairness.  And because Articles 1 through 8 don‘t allow—don‘t allow for having proven any criminal activity, I can‘t imagine how you can possibly throw me out of office for something that wasn‘t shown that I did. 

(END VIDEO CLIP)

SHUSTER:  Let‘s bring in NBC‘s Tom Brokaw, host of “Tom Brokaw Reports.” 

And Tom, it just happened the last half an hour.  What do you make of all of this? 

TOM BROKAW, HOST, “TOM BROKAW REPORTS”:  Well, I think it must be a great relief to the people of Illinois that they can get on with the business of having a chief executive of their state.  It has been a kind of combination charade, sideshow, kangaroo court, the laughing stock of the country. 

Illinois does not have a very distinguished record when it comes to its governors.  It‘s kind of like a game of Monopoly—do not pass, go directly to jail if you get elected to the state house there.  And now they have a chance to put it all back together again. 

They have enormous economic problems in the state of Illinois.  And it, after all, is the home state of the new president of the United States.  So maybe this is an opportunity for a fresh start. 

SHUSTER:  Tom, any irony that perhaps this was in some way related to the economy, in that so many lawmakers today, so many people here in Chicago, have been complaining that Rod Blagojevich wouldn‘t make the tough decisions, that the state was trying to balance its budgets, he wouldn‘t raise taxes, he wouldn‘t cut back on costs?  He would, according to the lawmakers, shake down people to get things done. 

It does feel that Rod Blagojevich, despite his own actions, also, I suppose, paid something of a price just because of the general difficult economic climate that every state is facing. 

BROKAW:  Yes, but I think, David, in the end, those tapes that they heard that we had not heard before had an enormously devastating effect on his case, to say nothing of what we heard on the first pass, when he was talking about what he wanted in exchange for naming the next senator from the state of Illinois.  But you‘re quite right, Illinois was in a fiscal meltdown. 

A number of companies that were doing business with the state of Illinois had to file for bankruptcy because they couldn‘t get paid in a timely fashion.  Some of them had been in business for 30 or 40 years, contractors and other vendors. 

So he was not a popular man before the special prosecutor—before the U.S. attorney in Chicago dropped the dime on him, so to speak, with those tapes.  And then we heard even more this week.  And all the indications are, is that the U.S. attorney has even more damaging tapes, if and when this case comes to trial. 

SHUSTER:  Tom, given your sort of long experience and understanding of politics, and also your understanding of how people view politics, you mentioned the tapes.  There is some great fears here in Chicago that when Patrick Fitzgerald, the prosecutor, releases perhaps hundreds of tapes that may come out at a trial that seems inevitable, that even regardless of the criminality that may be contained, that people are going to get a very clear and perhaps ugly view of sort of the ugly side of politics. 

How do you think that may or may not effect sort of the view that so many of us and so many citizens have of the way politics is conducted in our country? 

BROKAW:  Well, I hope it won‘t have a damaging effect, because for the first time in a long time, this country is paying attention to the political arena and wants to get involved, with good reason.  Because we are facing not only an economic crisis, but also a crisis of confidence politically in America. 

We have here in the state of New York the former senate leader, Senator Bruno, who is under indictment for accepting bribes as well.  In fact, across the country, the state legislatures and the state houses have been too often, in too many states, kind of wells of corruption because not enough people are paying attention to them. 

It‘s kind of out of sight, out of mind.  And a lot of dirty business is done in American politics.  And I hope this will be a signal to the rest of the state legislators and state office holders across the country that everyone is looking in now. 

SHUSTER:  Tom, I wonder if you can put in perspective—I mean, we sort of imagine—the lieutenant governor, we were told, was on his way to Springfield for a swearing in that presumably could happen as early as tonight.  I wonder if you can put in perspective the enormous pressure that is confronting him, but is really confronting state governors across the country in terms of the immense challenges, the immense challenges of the decisions that‘s confronting them in the weeks and months ahead. 

BROKAW:  In fact, I was just—before I came down here, I was talking with a former Midwestern governor about the choices that can be made.  You know, that wonderful line, “A crisis is a terrible thing to waste,” a lot of governors can use this as an opportunity to consolidate a lot of the institutions and agencies that they have now that are, if not redundant, at least overlapping in too many ways. 

If you take just in the Midwest, for example, including Illinois, county and municipal governments, separate and unequal.  And why not drop the barriers between county and municipal governments, state institutions of higher learning?  Surely there are some savings that can be achieved there, to say nothing of school consolidation at the secondary and elementary level.  It takes a lot of courage to get that done, and a lot of people, as this governor said to me, still are very loyal to the idea of boosterism—it‘s my town, it‘s my school, and I don‘t want it in any way connected to that town just six miles down the road. 

SHUSTER:  Tom, one of the measures that passed today will essentially bar Blagojevich from office for life.  What do you imagine his future is?  And how much attention or no attention should be given to somebody who has essentially been removed from office and will likely be indicted? 

BROKAW:  You know, that‘s the same kind of question that we had when Eliot Spitzer, when it was disclosed that he had other nocturnal activities in Washington, D.C., than we realized.  I just don‘t see any way that he can recover from this politically. 

I would think that all of this attention now is focused on dealing with the U.S. attorney‘s office, because he still faces the very strong possibility of going before a grand jury, indictments, and then trial.  I think that is probably his short-term, mid-term, and maybe even his long-term future. 

SHUSTER:  And as far as the trial coming up, Patrick Fitzgerald, we all know he‘s a very methodical prosecutor.  Would you imagine that perhaps in some way, he‘s going through all the transcripts of all these media appearances that Rod Blagojevich has been sort of offering and putting together a case that may in fact use some of the statements, some of the conflicting statements, that Rod Blagojevich has been putting out to the public? 

BROKAW:  Well, what has been clear from the tapes that we have seen and heard so far, those that were introduced in the impeachment proceedings, and then of course those that we heard when Patrick—when Mr. Fitzgerald first put out the idea that he was under investigation and under arrest, it was pretty clear that the governor was more than indiscreet in his discussions on the telephone and with not only family members, but with lobbyists and other political supporters.  So if that‘s just the tip of the iceberg, you can only imagine what the iceberg itself must contain. 

SHUSTER:  Tom, we‘ve been talking all week about an issue in terms of American identity.  And I suppose if there‘s a way to connect Rod Blagojevich and our identity in terms of politics with this next story, this is it.  And that is, there‘s this raging debate, as you‘re aware, in New York City about how America should try to sort of rebuild and recover at Ground Zero. 

The Freedom Tower plan has not gotten off the ground.  There‘s this new movement to rebuild the twin towers. 

What‘s your view on sort of the passions over that?  I mean, passions so much about who we are as Americans and what sort of country we want? 

BROKAW:  Well, you know, I‘ve been involved in a lot of those discussions, both on the air and privately with people.  And there are so many components to this argument.  And it is so emotional, I think we just have to let some time pass. 

I can‘t imagine that we‘re going to arrive at a consensus in the short term on what kind of a memorial we should have there and what building should be built there.  Some people want to put up the old World Trade Center again, make it more reinforced, as a statement to the world, you can knock ‘em down, but you can‘t defeat us.  Others want it to be a simple memorial.  Others would like it to have a more elaborate memorial. 

There are a lot of constituencies here, and very little connective

tissue between them.  You contrast that with what happened at the Pentagon

I was at the Pentagon last year for the dedication of the memorial there, and they had more connective tissue because they were mostly military people and people who were on those airplanes.  And they worked it out in a hurry, and they have a very striking memorial, as you know, on the side of the Pentagon where the plane crashed into it and took so many lives.

I don‘t think that that will happen in New York City.  We‘re a contentious city.  It is part of the culture here.  And of course, that was an opened wound in New York City, and it has not completely healed.

SHUSTER:  NBC‘s Tom Brokaw.

Tom, thank you so much.  We appreciate your coming in and helping us tonight.

BROKAW:  My pleasure.

SHUSTER:  Again, we‘re going to be talking about more of Ground Zero later in the show.

But still ahead, two veteran Chicago journalists will weigh in on the last-minute effort by Rod Blagojevich today to try to save his job.  Chicago is buzzing with speculation and fear about some audiotapes that have not yet been released.

Plus, Vice President Joe Biden has had the best seat to observe President Obama‘s first nine days in office.  We will bring you an intriguing interview of Biden conducted today by CNBC‘s John Harwood.

And how about the youngsters working in the White House?  There‘s a whole collection of 20-somethings who have a lot of responsibility in the Obama administration.

More ahead on 1600 PENNSYLVANIA AVENUE.

(COMMERCIAL BREAK)

SHUSTER:  Rod Blagojevich is no longer the governor of Illinois.  He was convicted on his impeachment charges late today by the Illinois state senate.  And The Associated Press is now reporting that Lieutenant Governor Pat Quinn has now been sworn in as Illinois governor.  Blagojevich becomes the eighth governor in our nation to be impeached and removed from office. 

As we continue to watch the fallout on this big story here in Illinois, let‘s bring in Tom McNamee.  He‘s an editorial page editor of “The Chicago Sun-Times.”  And Jim Warren is a former editor for “The Chicago Tribune,” now an MSNBC analyst. 

Jim, first of all, what do you make of everything that happened this afternoon? 

JIM WARREN, MSNBC ANALYST:  Well, first, David, welcome to town.  I hope you‘ll leave without any major ethical taint or at least much slush on your shoes. 

You know, when I think back, it was vintage Rod Blagojevich, self-absorbed, grandstanding, not fully attentive to the truth, although it did have its underlying pathos.  And then it was as historical as you said.  And I think there may bee some folks, including myself, who will wonder, should one have gone down this path of impeachment and not just waited a couple of years to let the voters get him at the voting booth? 

But, you know, it was quite an amazing day, one filled with lots of evasions on the part of Rod Blagojevich.  And for the first time ever, I must admit that I really wanted Rod Blagojevich to talk even longer than he did. 

You know, I was fearful of a Castro-like, you know, three or four hours.  But the 46 or 47 minutes, in a weird way, seemed insufficient, given all the questions that remained which he failed to address. 

And I think as important, and maybe Tom will agree, is what he said were the many things what were left unsaid, such as the alleged extortion of a hospital executive, of a children‘s hospital just a couple of blocks from here.  Forgotten, as Rod Blagojevich sort of portrayed himself as friend of the working man, friend of children, friend of senior citizen.  This was a guy who was willing to hold up $800 million in funds for that hospital until he got some money from this executive. 

SHUSTER:  Tom McNamee, what do you make of the divide between people obviously across the country who see Rod Blagojevich as a sympathetic character...

TOM MCNAMEE, EDITORIAL PAGE EDITOR, “CHICAGO SUN-TIMES”:  Right.

SHUSTER:  ... don‘t like the process that was unfolding there in Springfield?  And yet for people who know these issues down in Springfield, journalists like yourself, it seemed so crystal clear that Rod Blagojevich was either stretching the truth or simply not telling the truth today. 

MCNAMEE:  Well, actually, on the cab ride to this studio, I asked the cab driver, because he was listening on the radio—the whole city‘s listening.  And I asked him, “What do you think?”  And he said, “You know, I don‘t understand this.  This is just—he was just talking on the phone, nothing really happened.  I can‘t understand why they‘re throwing this guy off office.”

And I would say that, a little bit different from Jim, I would argue that we had to remove the governor from office now, Mr. Blagojevich now, because we can‘t wait two years.  In fact, Illinois has really been without a governor now for at least a year. 

Nothing‘s been getting done.  We have all kinds of problems in this state.  And going back to the point that‘s often been made, this is not a criminal trial. 

This was, in fact, an impeachment trial.  And the standard is, has he abused the power of his office, and can he govern?  And I think the answer to the second question is absolutely no, he can‘t govern. 

Illinois needs a real governor.  Pat Quinn‘s going to be an interesting guy.  During the last campaign for president, we kept hearing the word “maverick.”  In Illinois, Pat Quinn is about as much of a maverick as you are going to get. 

SHUSTER:  Tom, I want to cut you off, because we‘re now seeing a news conference involving the senate president in the state legislature.  He‘s talking about the conviction today.  And let‘s watch. 

(JOINED IN PROGRESS)

JOHN CULLERTON (D), ILLINOIS SENATE PRESIDENT:  Our decision recognizes that for too long, the trust of the people of the state of Illinois that they placed in their governor has been severely abused.  We cannot change the past.  The people of Illinois have every right to expect a future with those who are elected to serve the public to do so in a manner befitting their office. 

We did not do this for political expediency.  We‘re not settling old scores.  We did not conspire to remove the governor for our own amusement or advantage.  We acted in the best interest of the people of this state. 

I personally voted to remove Mr. Blagojevich, the former governor, from office today for three reasons.  He has demonstrated a clear inability to govern.  He has shown disdain for the laws and the processes of this state.  And he has deliberately and pathologically abused his power without regard for the people he was elected to serve. 

If we just look at his actions this last week, rather than defend himself and his actions to those of us who were constitutionally bound to decide whether he was fit to serve in the highest office, he left Illinois to criticize the rules that he had every opportunity to help develop.  And for all this talk about his inability to call witnesses, he himself never sat before the senate as a witness in his own defense.

Rather than to submit to cross-examination, he chose to deliver an argument without answering any questions.  This is self-aggrandizing and absentee style of leadership that has characterized Mr. Blagojevich‘s tenure in office.  It‘s indicative of a governor who was more concerned about his own self-interest than the interests and the needs of the people of Illinois. 

We can take some comfort in the manner in which the general assembly carried out our obligations under the Constitution.  These trial rules were established by a bipartisan committee, in an open forum, and modeled after the rules by which former President William Jefferson Clinton successfully defended himself in his impeachment trial. 

He—Mr. Blagojevich has decried the similarities between an impeachment trial and a criminal proceeding.  However, unlike criminal defendants, he was afforded an opportunity to help craft the rules that would be used to decide his political fate.  And when he declined, it was our responsibility to draft the rules in his absence, that he would ensure he was being given a fair and impartial hearing, and we did that. 

So now it‘s time to turn our attention to that which is most important, serving the interests of the people of the state of Illinois.  We face serious challenges, but we now have the opportunity to work together to meet them. 

Thank you.  I‘ll be happy to answer any questions. 

QUESTION:  Senator, the governor several times, back in Chicago, at his press conference, said that this was a tax-driven conspiracy.  As soon as he was out of office, there would be an income tax hike. 

Can you address that? 

CULLERTON:  That‘s not what this impeachment was about.  We read the impeachment articles that the House charged him with, criminal offenses and abuse of power.  And that‘s what the debate is about and was about.  And that‘s how we conducted ourselves. 

And everybody saw the seriousness and the importance we brought to this matter.  So it‘s just another disappointing statement from the governor—former governor. 

(CROSSTALK)

QUESTION:  Going forward, we do have a budget shortfall.  We do have serious financial issues.  Tax revenues are down.  That is something...

SHUSTER:  All right.  So we‘re watching the senate president there talking and defending the conviction of Rod Blagojevich. 

Let‘s bring back in Tom McNamee and Jim Warren.

Tom, on this issue of all sorts of audiotapes that Patrick Fitzgerald, the prosecutor here in Chicago, the federal prosecutor, will likely spring on Blagojevich, once he is indicted, how much of that stink may end up spilling over on other Illinois politicians? 

MCNAMEE:  You know, I don‘t know, but I think a lot of people are worried about that. 

I remember when this first came out, back before the new year, and every politician you talked to was saying, “Well, you know, I made a phone call to the governor and the governor made a phone call to me.”  And they all say, “I think I‘m OK.”  And, in fact, they thought they were fine, but they wondered about the next guy. 

I think it‘s going to be fascinating to see what comes out of this. 

You know, I wanted to make one point about those tapes.  The governor was arguing that, without hearing the entire transcript or all of the tapes, it would be difficult, impossible to understand the context of the things he said. 

One thing that was so clear, when you read the transcripts or when you listen to the audiotapes that were played at the impeachment trial, was that the things he said himself were so damning.  His own words were the things that really put him away. 

It showed that he really wasn‘t just making idle chitchat with his chief of staff.  That he really was directing people to take action against various opponents, against “The Chicago Tribune,” to have their editorial page people fired.  This was more than talk. 

SHUSTER:  And Jim Warren, real quickly, you‘d agree with that, that the criminal case should be pretty strong when it does finally get delivered, right? 

WARREN:  Yes.  Don‘t forget, there are 12 or 13 people around Blagojevich who have already been indicted or convicted.  The name best known to your audience would probably be Tony Rezko—remember, the developer who was involved in helping Barack Obama purchase his house?  He is about another mile away from here at this very moment.

The last time I checked, he is in solitary confinement.  Talk about getting squeezed by a federal prosecutor, Pat Fitzgerald.  They‘ve been squeezing him for months, and he‘s probably got a lot to say.

SHUSTER:  Right.

WARREN:  And so I think as a result of those previous prosecutions, boy, the final indictment against Blagojevich is going to be akin to the Manhattan Yellow Pages, it could be so thick. 

SHUSTER:  Jim Warren and Tom McNamee, thank you both so much.  We appreciate you joining us today on what is certainly a historic night here in Illinois. 

MCNAMEE:  Thank you, David.

SHUSTER:  Up next on 1600, we‘ll get back to some of the politics of the day back in Washington.  John Harwood from CNBC conducted an exclusive interview and a fascinating one today with Vice President Joe Biden.  The vice president lashed out today at some new reports of recession-proof Wall Street bonuses. 

(BEGIN VIDEO CLIP)

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES:  It just offends the sensibilities.  I mean, I‘d like to throw these guys in the brig.  I mean, it‘s just like—it‘s just—I don‘t know—I do know what they‘re thinking, and they‘re thinking the same old think that got us here, greed. 

(COMMERCIAL BREAK)

SHUSTER:  Welcome back to 1600.

This afternoon, CNBC‘s Chief Washington Correspondent John Harwood sat down with Vice President Biden to talk about the economic stimulus package and the White House plan for improving the economy.  It was a fascinating interview, and here to talk about is John Harwood, CNBC chief Washington correspondent and political writer for “The New York Times.” 

And John, what was the vice president‘s reaction to the fact that not a single House Republican voted for the administration‘s stimulus plan last night? 

JOHN HARWOOD, CNBC CHIEF WASHINGTON CORRESPONDENT:  It was interesting, David.  I think the White House was surprised by that outcome.  And it‘s not the outcome that they wanted. 

You saw that President Obama and Vice President Biden both had been very aggressive in reaching out, but what the vice president told me today was the process is not over, we‘re moving now on to the Senate.  He predicted some changes to add infrastructure spending, perhaps to cut some spending programs that have drawn fire, and maybe even add some tax cuts.  That‘s a key Republican demand, as you know.  And he said that once this gets through the Senate and the House Senate Conference Committee, final passage, you‘re going to see support from Republicans in both chambers.

SHUSTER:  John, there‘s been so much criticism of the so-called Wall Street bailout, as you know, with banks not being able to say what they did with the money from the Troubled Asset Relief Program, or Tarp.  Here‘s a clip from your interview on that with the vice president. 

(BEGIN VIDEO CLIP)

BIDEN:  The president and to some extent, I, we put ourselves on the

line to get another 350 billion dollars for an acronym that no one in the

public understands, the Tarp.  We have to, in order to do that, spend this

expend this 350 billion dollars much more wisely.  It‘s got to be transparent.  It‘s got to be accountable. 

(END VIDEO CLIP)

SHUSTER:  John, how confident was he that they would be able to provide that accountability with this next tranche of the 350 billion? 

HARWOOD:  He was confident and he was also emotional, as the president was at that photo op today, about these Wall Street bonuses, despite the downturn in the economy, and the fact that many of the firms at which executives were receiving bonus were getting bailed out by the taxpayers. 

He pounded his fist at one point and said, I would like to throw some of these guys in the brig.  And I think that represents a coordinated message by the White House to try to tell American taxpayers, yes, we want you to pitch in.  We want you to support spending and tax policies to get us out of recession, support to fix these financial markets.  But we‘re looking out on your behalf that this money isn‘t going to get wasted and go into golden parachutes or bonuses or corporate jets or rehabbed bathrooms for Wall Street executives. 

SHUSTER:  Since you mention it, here is that portion of the interview again.  So fascinating to watch his emotions come out.  Here he is responding to your question about Wall Street behavior.  Watch. 

(BEGIN VIDEO CLIP)

BIDEN:  I promise you, there ain‘t going to be any 40 million jets being bought.  There‘s not going to be expenditures of bonuses going—I mean, it‘s been outrageous.  I mean, it just offends the sensibilities.  I mean, I would like to throw these guys in the brig. 

(END VIDEO CLIP)

SHUSTER:  John, what was his overall mood?  He‘s had a front row seat for the last nine days.  Obviously, emotional about these stories that are coming out about Wall Street.  But his overall mood in terms of what he has seen in these historic last nine days. 

HARWOOD:  I thought his mood was great, David.  I‘ve covered Joe Biden for a long time, all the way back to his first presidential race in 1998, when he was the young hot shot candidate appealing to young voters.  And he said that he never expected to be vice president.  It was surprising, but also gratifying. 

And he also talked about how different the feel for this White House is from others that he has seen in the past.  My colleague, Sheryl Stoleberg (ph) of the “New York Times,” wrote a story today about the informality of the Obama White House.  He goes to the Oval Office in shirt sleeves, where George W. Bush insisted everyone wear a coat and tie when they were there. 

Joe Biden also indicated that Barack Obama was more open to hearing different points of view.  He talked a little about the example that was going to be set to the rest of the country, about seeing this African American rise to the op of the American power structure.  And so overall, I think his mood was quite upbeat, which is all the more surprising when you consider the depth of the problems that he and Barack Obama are tackling right now. 

SHUSTER:  John, it was a great interview, terrific interview today with the vice president.  And thank you so much for coming on and sharing some of that with us for this hour.  We appreciate it. 

HARWOOD:  Thanks, David. 

SHUSTER:  Up next, our continuing series on Ground Zero.  We will talk with our panel about the symbolism of the Twin Towers and the unusual process that led to the selection of a very different rebuilding plan, a plan that seems stuck. 

Later, the corruption in Great Britain‘s Lower House of Parliament.  It was caught on tape and it makes some of our convicted politicians look like choir boys. 

But before we hit the brakes today, White House Press Secretary Robert Gibbs said President Obama invited some members of Congress over to 1600 PENNSYLVANIA AVENUE to watch the Super Bowl on Sunday.  So who will the president be rooting for, the Pittsburgh Steelers or the Arizona Cardinals? 

(BEGIN VIDEO CLIP)

OBAMA:  I wish the best to the Cardinals.  They‘ve been long suffering.  It‘s a great Cinderella story.  But other than the Bears, the Steelers are probably the team that‘s closest to my heart. 

(END VIDEO CLIP)

SHUSTER:  All week, we‘ve been focusing at this time in our show on Ground Zero and the on-going delays in rebuilding the site.  Seven years after terrorists knocked down the Twin Towers, an iconic symbol of capitalism and the American spirit, Lower Manhattan still reflects the terrorists‘ wishes.  The Freedom Tower plan, involving four smaller office towers of different shapes and sizes, hasn‘t gotten off the ground, thanks to bureaucratic fights, engineering mistakes, and assorted other problems. 

Meanwhile, a growing number of 9/11 families are demanding the Freedom Tower plan be scrapped and that New York officials embrace an independent plan to rebuild the Twin Towers, taller, stronger, and safer.  Joining us now is Ed Schultz, nationally syndicated radio talk show, Michelle Bernard, president of the Independent Women‘s Forum, and an MSNBC analyst, and Jonathan Alter, senior editor for “Newsweek” and also an MSNBC analyst.  He‘s also the author of a great book, “The Defining Moment: FDR‘s 100 Days and The Triumph of Hope.”

I want to play for all of you, to set this up, part of an interview we did last night with the parents of a New York firefighter killed on 9/11. 

(BEGIN VIDEO CLIP)

MAUREEN SANTORA, MOTHER OF 9/11 VICTIM:  This new plan is exactly what our son would have wanted.  He would have wanted two towers be put up.  He would want the memories of the almost 3,000 individuals to be memorialized.  And he would want to make sure that everybody in the world knew that we would not—have not succumbed to the terrorists. 

(END VIDEO CLIP)

SHUSTER:  They want to Twin Towers rebuilt and say anything less is a victory for the terrorists.  Ed Schultz, what do you make of it? 

ED SCHULTZ, RADIO TALK SHOW HOST:  Well, I think there‘s a void of leadership in all of this, David.  I think Mayor Bloomberg is powerful enough where he can get all factions together, take the bull by the horns, and make sure something happens on behalf of the victims with great honor, dignity, and respect, and to move the city forward. 

These were heroes that were on the front line.  These were heroes that showed the rest of the country how to act under terrible, adverse conditions.  It‘s unfortunate that it‘s taken this long.  And I think Mayor Bloomberg deserves—bears a great deal of responsibility in all of this, to move this project forward.  I know there‘s a lot of people at the table, but rocks go with the farm.  He needs to take a real leadership role in all of this and get this project moving and get it done with respect that it deserves. 

SHUSTER:  Jonathan, how symbolic were the Twin Towers around the world?  And the people who say, you know what, because they were so symbolic, they should also be symbolic to us. 

JONATHAN ALTER, “NEWSWEEK”:  Well, you know, the architecture of the Twin Towers was not very well regarded by architecture critics.  I don‘t think before 9/11 they were hugely symbolic around the world.  So it doesn‘t seem like they have to rebuild them exactly as they were. 

But Ed is right.  This is a terrible failure of leadership, not just on Mayor Bloomberg‘s part, but on former President Bush‘s part.  Now, it‘s another thing to add to a long list of particulars where he failed.  But for him not to be able to get this rebuilt after seven years, get something built there, is just—it‘s kind of pathetic when you look at it in the longer sweep of American history. 

You would think that the first thing that he would have done would have been to make sure that this got rebuilt, to use presidential leadership, to bring the parties together, light a fire under them.  If there were bureaucratic impediments, beat those impediments.  That‘s what Franklin Roosevelt would have done when he got three million people to work in a two-month period.  That‘s what he did, building an arsenal to fight World War II. 

When you need to get something done, the president has to get behind it.  So it‘s a tremendous failure of leadership from Washington. 

SHUSTER:  Michelle, what do you think should be done with the site? 

MICHELLE BERNARD, MSNBC POLITICAL ANALYST:  You know, listening to the woman that you had on in the clip earlier today, it‘s a very, very powerful statement that she made.  And I think, regardless of what people thought about the Twin Towers and the architecture prior to 9/11, on 9/11 that site, along with the other sites here in the country where people were murdered by these terrorists, became holy ground.  And I think that there is a very important symbolism to be had, when these families say to us that they want the Twin Towers to be rebuilt, to be bigger, and to be better.  I think that‘s something that‘s very important. 

These people‘s voices need to be heard.  And quite frankly, David, if there was ever an argument as to why we should have limited government and the fact that government—there are certain things that government just doesn‘t do well, this is a very shiny example of the kind of failures that we see when we have government doing things that would be better left to private individuals. 

ALTER:  Hey, David, how‘s this for a quick idea: for Barack Obama to pledge that by September 11, 2010, there will be something built there.  Not necessarily the Twin Towers as they were, but that we will get this accomplished as a nation.  It would be great for the hard-hit New York area, which is suffering greatly in this recession.  It would show a sense of national purpose.  And they could get it done. 

SHUSTER:  I agree. 

ALTER:  Within 18 months, we can do this. 

SHUSTER:  I absolutely agree.  By the way, we‘re going to have more on the battle over Ground Zero tomorrow.  The Port Authority of New York and New Jersey is responsible for the site and the rebuilding efforts, and Commissioner Christopher Ward has agreed to an interview.  And we look forward to his appearance live on this program tomorrow night.  He‘s ready for the tough questions and we thank him in advance for joining us. 

But panel, I was just told in my ear that Rod Blagojevich, the ex-governor of Illinois, he‘s going to speak at five minutes after the top of the hour.  He‘s going to have a news conference.  The new governor is speaking apparently right now, Pat Quinn.  Let‘s listen to him and then we‘ll get your reaction. 

GOV. PAT QUINN (D), ILLINOIS:  The state that has been here for 191 years—in this moment, our hearts are hurt.  And it is very important that all of us understand that we have a duty, a mission to restore the faith of the people of Illinois, and the integrity of our government, and to make sure that all of our elected officials have the confidence of the voters. 

I think this is our highest calling.  That‘s what we have to do in the coming days.  And I‘m very confident that with the people of this legislature and with the people of our state, that we will come together in the best traditions of Abraham Lincoln‘s democracy. 

At Gettysburg in 1863, Abraham Lincoln from our state said in 272 words the essence of American democracy; that it‘s government of the people and by the people and for the people, and it shall not perish from this Earth.  And in the past 50 days, we saw the government of the people of the state of Illinois operate according to its constitution and act according to the public will. 

And now it‘s our job to call upon the people of Illinois to make the sacrifices necessary to address the serious challenges that we have before us: the integrity challenge, the challenge of our economy, the challenge of making sure that we pay our bills.  And I think the best way to summon that energy from the people of Illinois is to remember something that I learned a long time ago, that service to others is the rent we pay for our place on God‘s Earth. 

I think if we have an ethic of service in Illinois, where we help our neighbor, we help those who need a helping hand, that is the best of Illinois, and the best way to show the people of this country and this world what Illinois truly is all about.  I learned that from my parents a long time ago. 

My parents taught me that everybody can be great, because everyone can serve.  My mom is here today.  She‘s age 91.  My dad, who died this past year, last February, was 93 years old.  And I wish he was here. 

But I think he—his life certainly serves as a role model for me and I think all people in Illinois.  God gave him 93 years, five months and ten days on this Earth.  And on the night before his funeral, my mother and I were going through his papers and we came across a letter from his commanding officer in World War II.  His name was H.A. Kerry, Admiral Kerry, commanding officer of the Night Torpedo Squadron 52 of the United States Navy. 

And he wrote of my father, “Patrick J. Quinn is one of the finest men with whom I have ever worked.  Extremely capable in his work, he was at all times—

SHUSTER:  There he is—Pat Quinn talking about his family and those who have supported him over so many years.  Quite an emotional and dramatic moment for him, as he takes the oath of office earlier this afternoon, minutes after Rod Blagojevich was essentially thrown out of office after being convicted in his impeachment trial.

Still with us, Ed Schultz, Jonathan Alter, and Michelle Bernard.  Michelle, we‘re going to hear from Rod Blagojevich, apparently, at the top of the hour.  What do you make of this whole scene? 

BERNARD:  It‘s just been such a dramatic day.  It‘s been a dramatic scenes since day one, political theater, as we keep saying over and over again.  Blagojevich‘s testimony, if that‘s what we want to call it, earlier today, full of drama, a lot of things that didn‘t really seem to make sense.  Very nice things to hear about, for example, going to Canada to get prescription drugs at a lower price for his constituents.  Didn‘t really have anything to do with his impeachment trial in Illinois. 

Watching the new governor give his remarks, clearly, he seemed a little bit pained.  I guess it‘s been a very—this thing has really taken a toll on the new governor, as well as really hard to make any sense of what the future holds for the state of Illinois politics. 

SHUSTER:  And I can‘t make any sense of Rod Blagojevich even now.  If I were his lawyer, and he‘s certainly going to be indicted at a certain point, why on Earth would you go out and make a statement.  What can he possibly say that‘s going to help him, Ed Schultz? 

SCHULTZ:  Well, I don‘t know what would help him.  It‘s all his personality right now, David.  Beyond the charisma and the poise, you just don‘t have style points that are going to undo what this guy has done.  But I think an interesting comment earlier in your broadcast tonight, David, by Tom Brokaw, talking about what effect this might have on the rest of the country.  This call to public service and how other state legislators and leaders around the country should take notice that this is how bad it can get. 

The big thing is that now that this stimulus package is apparently going to go through, there are going to be billions of dollars going to states around the country.  And where there‘s money, there‘s opportunity.  Where there‘s opportunity, there can be corruption and scandal.  This story, I really think, is a wake-up call to a lot of Americans that they have to bear the responsibility that when government is willing to step in and help out, you can‘t have people like Rod Blagojevich hanging around the front office. 

And the serious tone that was taken by many of the senators who stood up and spoke in the Illinois Senate today really struck me.  They have really been moved by this.  This was not an easy thing for them to do.  And it has tarnished Illinois.  And they‘re doing everything they can to get it back on the right track. 

And I don‘t know—selfishly, David, this guy is made for talk radio. 

This story never ends. 

SHUSTER:  Ed Schultz, Michelle Bernard, and Jonathan Alter, you guys are the best.  Thank you so much.  We‘re going to regroup on this end.  Some changing things in our hour.  You can see it there with those microphones that are set up.  We do expect Rod Blagojevich to speak at five minutes after the top of the hour.  That will be in “HARDBALL.”  We‘ll bring it to you live.  We‘ll have more here on 1600, on an amazing day both here in Illinois, but also in Washington, in the wake of that historic vote last night in the House of Representatives.  The economy is in shambles.  We‘ll talk more on the other side of the break.  You‘re watching MSNBC, 1600, the place for politics. 

(COMMERCIAL BREAK)

SHUSTER:  We are continuing our live coverage here in Chicago, about ten minutes away from Rod Blagojevich expected statement to the press about his being removed from office today.  A quick programming note about this show.  I know many of you have been telling us that Shuster.MSNBC.com, that you particularly enjoy some franchise segments we do every day, including Hypocrisy Watch and Muckraker of the Day.  Obviously, those got pushed aside today, because of the news involving Governor Blagojevich.  But I promise, we‘ll get back to those tomorrow night. 

In the meantime, as we wait for Rod Blagojevich to speak about the dramatic developments here in Illinois, Jonathan Alter still with us.  He‘s with “Newsweek.”  Jonathan, you spent so much time here in Chicago, have so many great connections to the city.  What did you make of Rod Blagojevich‘s performance today and everything that happened down in Springfield? 

ALTER:  I thought it was brilliant political theater, David, by Blagojevich.  Obviously, it‘s a hard day for him.  He‘s out as governor of Illinois.  But in terms of saving his skin so he doesn‘t go to the penitentiary, it was a good day for him, in terms of influencing the jury pool of the people in whose hands his fate will reside. 

He needs just one juror to vote to acquit and he might not, you know, have to be removed from his family.  So that performance today, if you hadn‘t paid any attention to a lot of the case—and many people in Illinois had not been paying close attention—he came across very well in that performance. 

SHUSTER:  Michelle Bernard, that‘s I suppose how we should view whatever statement he makes in the next ten minutes? 

BERNARD:  It will be another performance.  I was actually thinking the exact same thing that Jonathan said.  He‘s thinking about the potential jury pool and hoping that any potential juror that might get called has seen him on television and will look at him as, you know, a Rocky Balboa, scrappy guy, who has been out there fighting for the people of Illinois and has been persecuted unfairly. 

That‘s who he‘s talking to.  That‘s what he‘s thinking about.  Because, you know, undoubtedly, there will be a criminal trial.  And you know the most important thing to him is going to be his freedom. 

SHUSTER:  Ed Schultz, 20 seconds, final thought? 

SCHULTZ:  I think his best move at the top of the hour here, David, is to take it like a man and say he respects the judgment of the Senate.  He‘s going to move forward into the next stage of patching up his reputation and fighting in criminal court.  That‘s his best play right now. 

SHUSTER:  Ed Schultz, Michelle Bernard, Jonathan Alter, thank you very much.  We appreciate it.  Again, amazing day here in Chicago, also, across the state of Illinois and throughout the political world.  Rod Blagojevich was only the eighth governor in U.S. history to be impeached and removed from office.  He faces an almost certain indictment by federal prosecutors, perhaps in the weeks or months to come. 

He‘ll be making statements about his removal from office in just a couple of minutes.  “HARDBALL” will bring those to you live.  I‘m David Shuster.  “HARDBALL” with Chris Matthews starts live right now.

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

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