updated 7/13/2009 10:14:44 AM ET 2009-07-13T14:14:44

Guests: Scott Cohn, Lynn Sweet, Perry Bacon, Chris Cillizza, Jon Ralston, Caroline Waterlow, Deal Hudson, E.J. Dionne, Jon Ralston

LAWRENCE O‘DONNELL, GUEST HOST:  The president kisses the ring.

Let‘s play HARDBALL.

Good evening.  I‘m Lawrence O‘Donnell, sitting in for Chris Matthews, in New York.

Leading off tonight: The pope, the president, and America‘s Catholics.  When President Obama had his meeting today with Pope Benedict, it seemed a conservative pope may view Mr. Obama more favorably than some conservative Catholics in the United States.  Will today‘s meeting with the pope help improve the president‘s standing with some conservative Catholics who condemn his position on abortion?  We‘ll debate that one in a moment.

And here at the political sex scandal desk, we learned the shocking news yesterday that Republican Nevada senator John Ensign‘s parents shoveled $96,000 in hush money to his mistress.  Of course, Ensign‘s lawyer insists it was purely an act of generosity.  You can be the judge when we talk to the dean of Nevada political journalism, Jon Ralston, who interviewed the mistress‘s husband.

Plus: Teddy: In His Own Words, a fascinating documentary about Senator Edward Moore Kennedy, airs on HBO beginning Monday.  We‘ll talk to one of the producers about this deeply personal and intimate look at Ted Kennedy, from childhood to lion of the Senate.

Also tonight, Levi Johnston says he has a pretty good idea why Sarah Palin decided to quit, and it has nothing to do with fighting for Alaska.  That‘s in the “Politics Fix.”

And sometimes a picture is worth 1,000 smirks, like this one, for instance.  But when you see the actual video of the incident, you just might change your mind about what you think is going on here.  We‘ll show it to you in the HARDBALL “Sideshow.”

But first, the president meets the pope.  Deal Hudson is the director of Insidecatholic.com and author of “Onward Christian Soldiers,” and E.J. Dionne is a “Washington Post” columnist, a senior fellow at the Brookings Institution and the author of “Souled Out.”

Deal, it looked like a very friendly meeting at the Vatican today.  You didn‘t get any feeling of the sort that you got from some of the protesters at Notre Dame, for example, when the president was invited to speak there.  How did you read it?

DEAL HUDSON, INSIDECATHOLIC.COM:  Yes, I think it was a good day for President Obama.  I think it was a good day for Pope Benedict.  I think it basically reaffirmed the status quo, that Obama and Benedict have some things in common that Benedict didn‘t have in common with President Bush.  But at the same time the pope took the occasion to press the issue of abortion and bioethics, and he left President Obama with a document called “The Dignity of the Human Person,” which outlined the position of the church on those issues.  But it was a cordial event.  It looked good for Obama, and I think it was a good day for him.

O‘DONNELL:  E.J., you and Deal have both had personal audiences with the pope—not this pope, but previous popes.  Tell us what‘s that like.  You walk into Vatican city and work your way up to that chamber where you‘re going to meet the pope.

E.J. DIONNE, AUTHOR, “SOULED OUT”:  Well, you know, I covered the Vatican for “The New York Times” back in the 1980s and actually wrote a lot about then Cardinal Ratzinger, now Pope Benedict, in those days.  And I ended up covering him quite a lot on papal journeys.

But there was one private audience that I arranged with Abe Rosenthal—for Abe Rosenthal, the late executive editor of “The New York Times,” and there is this extraordinary feeling as you‘re walking across St. Peter‘s Square.  Abe ran “The New York Times.”  I told him I used to tell my friends in the Vatican that we had a lot in common because we worked for the only two institutions left in the world that claimed infallibility.  And I always like to say Abe didn‘t laugh.

(LAUGHTER)

DIONNE:  He took it seriously for both.

O‘DONNELL:  And I‘m sure, E.J., you weren‘t surprised to see this treatment.  This is a normal treatment by the pope of American presidents.  Was there anything in it that you noticed that was new or different in this instance?

DIONNE:  Well, I think what‘s striking is that there really is a disjunction between the attitude of the Vatican and the pope toward President Obama and the attitude of our conservative Catholic friends, who were doing all that demonstrating and complaining about Notre Dame.  Obviously, the pope and President Obama disagree on abortion, but the Vatican looks at President Obama, as Deal suggested, as a potential ally on a lot of issues.  They see the Middle East in largely the same way.  They both are interested in a dialogue with Islam.

The pope actually gave the president two documents today.  One was on the church‘s position on the life issues.  The other was his very, very progressive encyclical on the economy.  If you read that you, see that the pope is to Obama‘s left on economic questions.  And I think that was a kind of yin and yang of Catholic political and philosophical thinking.  The church is, if you will, to the right on our consensus on life issues but to the left of our American consensus on economic questions.

O‘DONNELL:  Well, Deal, and the church is with Obama on one life issue, which is the death penalty.  You know, for example, President Bush, who was at the other extreme on the death penalty as a governor, having executed more people than anyone who‘s ever occupied the White House—so you know that there‘s a disagreement between the pope and conservative Catholics on abortion, but there is this other agreement that people tend to ignore, which is also a life issue.

HUDSON:  Well, that‘s an important issue, and of course, the church hasn‘t completely outlawed the death penalty, as you well know.  It‘s still prudentially (ph) possible but not really practical in a civilized society with the kind of penal system we have.  You can still...

O‘DONNELL:  No, but just for our non-Catholic audience, just to clarify the point for them, the previous pope frequently issued personal pleas to Governor Bush to not...

HUDSON:  Absolutely, and he...

O‘DONNELL:  ... execute individuals.  And those pleas were ignored by Governor Bush, and no one at Notre Dame thought that was worth protesting when President Bush showed up there.

HUDSON:  What‘s funny, you know, I went to the Notre Dame speech that President Bush gave.  At that particular commencement, it was very interesting because the student body gave President Bush repeated standing ovations.  When you looked at the faculty of Notre Dame, about a third of them refused to budge at all.

But you know, it‘s interesting what E.J. was saying about the contrast between conservative Catholics‘ protest at Notre Dame and the sense of cordiality between the Holy Father and the president.  Well, that‘s—both situations, I think, are entirely appropriate.  There should be cordiality.  There should be good diplomatic relations between the Holy Father and the president of the United States.  And it‘s entirely appropriate that some American Catholics were upset that the world‘s leading Catholic university was honoring a president who is arguably a pro-choice/pro-abortion president, against the very mandates in a document written by the United States bishops.  I don‘t see that those protests were inappropriate at all.

O‘DONNELL:  Now, you know, I‘ve kept using the phrase “conservative Catholics” here because one of the things that bothers me, as someone who was born into Catholicism and lived in Catholic communities all my life, is that there‘s this word—this word “Catholic” gets thrown around to include everyone who‘s ever been baptized in a Roman Catholic church.  There are liberal Catholics.  There are radical liberal Catholics, like the Berrigan brothers, who were in the clergy.  There are conservative Catholics.  And they have different opinions.

Let‘s take a look—let‘s consider current polling, for example, among Catholics in the United States on President Obama.  Right now, Obama is polling among Catholics at 54 percent.  John McCain—and I‘m sorry, these are exit polls.  These are exit polls from the election—

Obama 54, McCain 45.  What that means—and I have argued this politically before.  What that means is, as far as I can see, Catholics no longer function as an interesting subgroup in polling because they behave and have for many years—they behave identically to the whole.  The whole voted for Obama 53 percent.  Catholics voted for him slightly more, at 54 percent.

So what exactly is it that we‘re talking about in American politics, E.J., when we talk about Catholics?  We‘re talking about this group that seems to represent identically the entire population.

DIONNE:  Well, the way I like to put it is that there is no Catholic vote and that it‘s important...

O‘DONNELL:  Yes!

(LAUGHTER)

O‘DONNELL:  OK.

DIONNE:  ... by which I mean that, really, among Catholics, you—it‘s very hard for any Republican to get less than 40 percent of the vote.  It‘s very hard for a Democrat to get less than 40 to 45 percent.  But you‘ve got a big swing vote in the middle, and it‘s moved around considerably from election to election.

But your underlying point, I think, is right.  Catholic Catholics, like Americans, are a very diverse group.  There are a lot of Latino Catholics.  There are a lot of -- 10 percent of American Catholics are African-American.  So they do tend to mirror the electorate as a whole.

But if I could just go back to one point my colleague, Deal, made -

I think that you really have to say that American Catholic conservatives acted in a way that I don‘t think the Vatican was entirely happy with.  Now, they‘re free to do that.  It‘s a free country.  They can protest as they want.  But the Vatican, I think, was worried that this sent a partisan signal.  They don‘t want the church to be partisan.

And I think conservative Catholics want to argue that abortion is the one and only issue, and they want to play down some of these other questions, including economics.  And I think that when you saw what the pope did today, he was saying, Yes, those life issues matter, but so do these other issues that I just wrote a 30,000-word encyclical on.

I think that‘s where the argument is, not is abortion important or unimportant, but rather, how do you weigh these issues and how do you include this very rich Catholic social teaching that all of us who are Catholic have been taught?

O‘DONNELL:  Deal Hudson, can you make a theological argument that would support the notion that abortion should be not only the number one issue on which to judge an American president by American Catholics, but the only one, that there‘s no reason, there‘s no need to look at any other issues, as E.J. has just suggested, and execute a balance of them?

HUDSON:  I can make the argument that it‘s the number one issue, but I wouldn‘t even attempt nor want to make the argument that it‘s the only issue.  It‘s the number one issue because it‘s the foundation of all morality.  But one point you made earlier about polling Catholics—

Catholic polling only makes sense if you distinguish between mass-attending Catholics, regularly mass-attending Catholics, and self-identified Catholics.  That‘s when you get a true picture of how the Catholic voter is a little bit different than the general electorate.

O‘DONNELL:  Well, yes, sure.  I think that‘s a fair point, the mass-attending Catholic.  But then the sample starts to split out into a size that becomes kind of weird for people to try to use.  E.J., do you want to respond?

HUDSON:  It is weird, but...

DIONNE:  Well, I just want to say that Deal‘s point that mass-attending Catholics are on the whole a little more conservative in their voting—that‘s true, but what‘s really striking is how many mass-attending Catholics—how big a vote Obama got not just among Catholic who say—you know, who identify as Catholic but don‘t go to church.  He got a very big vote, particularly among Latinos, among mass-attending Catholics.

So I think there‘s an attempt to say that, Oh, well, the liberal Catholics really aren‘t mass-attending.  I know that‘s not what he said directly, but I think the implication of that is wrong.  There are a lot of conscientious, mass-attending Catholic who take what Cardinal Bernardin, the late Cardinal Bernardin, called a “seamless garment” view of the church‘s position and said you got to care about all these issues in common because they overlap, and that includes, as you suggested, the death penalty.

A lot of my conservative Catholic friends—and I give them credit for this, from my point of view—have said, you know, they had been for the death penalty and they rethought it and said, Look, if I want to be consistent here, I ought to oppose the death penalty.  And I applaud the fact that they‘ve done that.

O‘DONNELL:  All right, that‘s going to have to be the last word on it today.  I want to thank you both for this thoughtful discussion of this today.  Thank you, Deal Hudson and E.J. Dionne.

Coming up: Senator John Ensign admitted his parents gave his mistress and her family $96,000.  He says it‘s all OK.  It‘s all legal.  His critics say it amounts to hush money.  Is Ensign‘s job in jeopardy?  We‘ll talk to the dean of Nevada political journalism, Jon Ralston, who interviewed the husband of Ensign‘s mistress.

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  That‘s Air Force One, having just landed on the ground in Accra, Ghana.  President Obama is about to disembark from Air Force One and be greeted in Ghana, his arrival in sub-Saharan Africa, his first visit there since taking office.  Could be any minute now, or it could be a few minutes.  They don‘t always have to just run off the plane.  They can take their time, those presidents.

All right.  Welcome back to HARDBALL.  Nevada senator John Ensign admitted having had an affair last month, but that wasn‘t the end of it.  Yesterday, we learned Ensign‘s parents paid nearly $100,000 to his mistress and her family.  What next?  Jon Ralston is a political columnist for “The Las Vegas Sun.”  Chris Cillizza covers politics for “The Washington Post.”

Jon Ralston, you had an interview today or yesterday with Doug Hampton, who‘s the husband of the woman that Ensign had the affair with, right?

JON RALSTON, “LAS VEGAS SUN”:  Yes, and indeed, that is why I think, Lawrence, the statement came out from John Ensign‘s lawyer because on the program, Doug Hampton alleged that John Ensign paid his wife, with whom he had an affair, more than $25,000, which trigged CREW, which filed the initial ethics complaint against Ensign, to ask for a criminal investigation.  They put out that statement to try to take away any legal questions.  He‘s got plenty of political, and maybe in his mind, moral questions, but they tried to take the legal questions away.  And I‘m not sure those are gone, either.

O‘DONNELL:  Well, wait a minute.  Who‘s asked for the criminal investigation?

RALSTON:  Citizens for Responsibility and Ethics in Washington initially filed an ethics complaint against him with the Senate Ethics Committee, and an FEC complaint, I believe.  After they learned of Hampton‘s allegations about more than $25,000, which triggers criminal violations, they then asked for a criminal investigation.

O‘DONNELL:  All right.  I think we have a clip of your interview today that‘s cued up and ready to go here with Doug—what is his name?

RALSTON:  Doug Hampton.

O‘DONNELL:  Doug Hampton.  Let‘s listen to that.

(BEGIN VIDEO CLIP)

DOUG HAMPTON, HUSBAND OF SEN. ENSIGN‘S MISTRESS:  He told me, basically, at the same time, he said, I‘m in love with your wife, You can‘t work for me anymore.  We were employees, not fired but orchestrated, asked to leave, ushered out.  However you have it, a powerful man changed our employment life forever.

(END VIDEO CLIP)

O‘DONNELL:  Why is he going public with this personal family tragedy like that and getting on TV with you and talking about it this way?

RALSTON:  You know, I guess only he really knows that.  I think part of the motivation certainly is he wants money.  He does want money.  He wants more money than he got from Mike and Sharon Ensign, apparently. 

I guess that hush money, if it was hush money, had an expiration date.

But I guess the answer is this guy‘s been ruined by this, he believes.  He believes John Ensign ruined his life personally and financially.  He‘s already admitted that he has asked for millions and millions of dollars from John Ensign and been rebuffed.  So I think he‘s going public, he thinks, to put more pressure on John Ensign or to get a book deal or to get some kind of financial payment for what he‘s going through.

He‘s in desperate financial straits, from what we know.  I don‘t know of any other motivation beyond that, and frankly, revenge.

O‘DONNELL:  All right, we‘re going to get to the politics of this in a second.

But there‘s more from your extraordinary interview, where he discusses why—his theory as to why John Ensign came out publicly, and was the first to come out publicly about this to try to head off—to try to get control of the story. 

Let‘s listen to what he told you about that. 

(BEGIN VIDEO CLIP)

RALSTON:  How did he find out about this, do you think, to go out and do a proactive press conference?

HAMPTON:  I really—I genuinely—I genuinely solicited—solicited FOX help, because I really believe they are very red.

RALSTON:  But how—but how did he find out, is what I‘m saying, to get out in front of it? 

HAMPTON:  One of the correspondents that is a part of FOX News is Rick Santorum.  And I...

(CROSSTALK)

RALSTON:  The former U.S. senator from Pennsylvania...

HAMPTON:  Correct.

RALSTON:  ... close friend of Ensign‘s.

HAMPTON:  I sent a note to Rick.  I begged Rick to—to call me to talk to me before.  And he didn‘t.  Obviously—in my opinion.  I could be wrong, but that would be what I would suppose happened. 

And, if I‘m wrong, Rick, forgive me. 

(END VIDEO CLIP)

O‘DONNELL:  So, he‘s saying that FOX News had the story, John Ensign was tipped off that FOX News had the story by FOX News employee of sorts Rick Santorum, former—former senator from Pennsylvania.  And, so, John—John Ensign then goes out to the microphone and tells the world, “I had an affair.”

Chris Cillizza, this is going to the Ethics Committee in the Senate, isn‘t it?  There‘s no way to head off this investigation, is there? 

CHRIS CILLIZZA, “THE WASHINGTON POST”:  I don‘t think so. 

Let me first commend my friend Jon Ralston, because, before he sat down with Doug Hampton for these two—this one long interview broken into two parts, this story had largely gone away.  We had heard tale—talk of the potential of money being involved, but—but we didn‘t know. 

I will be honest.  As a reporter, I wasn‘t able to get it.  So, kudos to John. 

The other thing is, yes, this is very—this complicates John Ensign‘s political career drastically.  An affair is one thing, as we have learned many times in politics.  And—and I believe that, if it was just the affair, John Ensign would almost certainly survive. 

I think it‘s more iffy now, though.  I have gotten out of the predicting of resignation business ever since I said that Mark Sanford was a goner for sure. 

(LAUGHTER)

CILLIZZA:  So, you never know how things play out in politics. 

But this—this is headed toward, if not legal—a legal proceeding, it‘s certainly headed toward a deeper dig and look into the finances here, and—and that‘s problematic for Senator Ensign. 

O‘DONNELL:  Chris Cillizza, I know you don‘t have it on your monitor there, but I just wanted you to know that you‘re speaking on a split-screen—or were—in juxtaposition with the live coverage we have of President Obama‘s arrival in  Accra, Ghana, this historic moment, where our first African-American president is arriving in Sub-Saharan Africa as president for the first time. 

These are the kind of odd juxtapositions in today‘s...

(LAUGHTER)

O‘DONNELL:  ... world of politics that seem unavoidable. 

Jon Ralston, it seems that Nevada is more understanding of this kind of thing than Washington, D.C., is.  If it were up to the voters of Nevada, what would they like John Ensign to do next? 

RALSTON:  Are you saying we‘re an understanding lot out in Nevada...

(LAUGHTER)

RALSTON:  ... or we have slack morals?

O‘DONNELL:  You can‘t...

(CROSSTALK)

RALSTON:  Or is this a stereotype of Nevada we‘re hearing here?

(CROSSTALK)

O‘DONNELL:  Jon, you can‘t keep running those “What happens in Vegas stays in Vegas” commercials and expect us, you know, to not take them seriously. 

(LAUGHTER)

RALSTON:  Listen, I understand that—that feeling.  And it‘s interesting, because I have heard people say, oh, Nevadans are going to forgive John Ensign.

And—and there is some anecdotal evidence that people are angry with Doug Hampton.  They think what he‘s doing is even worse than what John Ensign did, which I find to be, frankly, laughable and kind of sickening.

But there‘s also some polling data I have heard about, Lawrence, that suggests that John Ensign, who was just a month ago the most popular elected official in this state, is plunging in—in—in popularity. 

I think people, as Chris said, would forgive an affair, perhaps, but they don‘t forgive hypocrisy, payoffs off the family.  And now we don‘t know where this is going with the Senate Ethics Committee.  Or, frankly, we don‘t know if we know everything about the legalities of these payments yet. 

CILLIZZA:  You know, you know, one thing to watch, I would say, is watch what Ensign‘s colleagues in the Senate do. 

There was a quote in “The Las Vegas Sun,” the paper Jon Ralston works for, out there today from John Cornyn, who is the head of the National Republican Senatorial Committee, basically saying he didn‘t know if John Ensign was going to survive. 

That‘s not helpful to John Ensign, to have one of his colleagues essentially saying—sort of tossing their hands up and saying, well, he might make it and he might not. 

Watch what his colleagues do.  So far, they have largely stayed behind the scenes, no one calling for his resignation.  If they feel the political pressure that this is a boil that just has to be lanced for them to move on, talk about the economy, talk about health care, they will do it.  Politicians are survivors, and they have always got that survivor instinct in the back of their mind. 

O‘DONNELL:  You just talk amongst yourselves. 

(LAUGHTER)

O‘DONNELL:  I‘m watching—I‘m watching this moving moment of the African-American president of the United States arrive in Africa for the first time in his role as president. 

This is truly an amazing moment for us to be able to bring to the world.  And—and this is really one of those things, Chris Cillizza, that, when he was campaigning and people were talking about what will be different, what will it be like having an—an African-American president, this is that kind of thing that you couldn‘t necessarily specifically anticipate, but this is exactly the kind of thing that is so different, isn‘t it? 

CILLIZZA:  The—the—the visual power of these sorts of things, I think, can‘t be underestimated. 

Remember, President Obama campaigned on the idea that he was going to change the way in which the United States was viewed by the world community.  Going to sub-Saharan Africa as the first African-American president, someone whose name is Barack Hussein Obama, I think, is incredibly meaningful. 

Look back to his speech about—to the Islamic world.  Same thing.  It‘s the messenger we know matters.  And when that the messenger looks and sounds different than past the messengers, I think just the visual symbolism of it is powerful.  And Barack Obama and his team understand that.

O‘DONNELL:  There was an extraordinary moment at his press conference that we carried live this morning on “MORNING JOE” from Italy, where he was being asked about economic aid to Africa and economic development issues in Africa.

And he went—he started off with a very professorial answer about GDP measurement and how, when his father left Kenya, the GDP there was the same as South Korea‘s, and then South Korea took off, and Kenya got left behind.  It was a—it was a very interesting economic analysis.

And there came a moment in the middle, in that very dry Obama way, where he simply said, “I have relatives who live in communities...”

CILLIZZA:  Right. 

O‘DONNELL:  “... and villages that know hunger.”

And, there, we saw the eight most powerful leaders in the world, and the most powerful among them actually telling the world that his relatives live in villages where there is hunger.  That is a dynamic that we could not possibly have imagined being in the dialogue, the personal dialogue, of the president of the United States with G8 members before this president, could we, Chris? 

CILLIZZA:  No.

And, you know, in truth, I think we couldn‘t have anticipated it.  We also can‘t really anticipate what effect it will have.  You know, we‘re we‘re—never totally sure, because I feel like, in my job, you know, you write a blog, you stand one inch from this gigantic picture.  You‘re—you‘re very rarely able to take 20 steps back and say, oh, it‘s actually a picture of...

(LAUGHTER)

CILLIZZA:  of—of a cow or of a horse.  You know, we don‘t necessarily know what it is yet.

But I do think, again, the symbolic power of—of an African-American president going to Ghana, going to sub-Saharan Africa, traveling around the world, it is part and parcel of that change message, Barack Obama‘s message that: “Not only do I have a different resume from members—from people who have been elected to the presidency in the past.  I look different.  I have a different background.  And all of those things will help me make the case to the world.”

So, what we‘re seeing, the visual, sort of—we‘re seeing that happen right now. 

O‘DONNELL:  OK. 

Thanks, Chris. 

Jon Ralston, we‘re going to have you back.  The Ensign story is not going away.  This show is going to stay on this story.  Thank you very much, Jon Ralston and Chris Cillizza. 

Up next:  So, what was really going on in President Obama‘s mind when this picture was taken?  The photograph got a lot of snickers, but the video tells another story. 

Stick around for the “Sideshow.”

You‘re watching HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

O‘DONNELL:  Welcome back to HARDBALL.  Time for the “Sideshow.” 

President Obama is in Africa tonight for the last leg of his weeklong trip.  This week, we have seen a bunch of handshakes, group photos, and even one misstep, literally, when the president tripped his way through a doorway in Italy. 

This particular photo snapped last night is getting a lot of looks today, both here and overseas.  The Drudge Report featured it all last night and today.

But it just—it just goes to show that sometimes a photograph can be misleading. 

Now, let‘s watch the video of this exact moment, and you can be the referee on this one.  The woman moves.  He takes the hand of the—did he really—what was he really looking at?  Let‘s see that again.  He moves.  He—where are his eyes? 

I—I—I don‘t know.  I think—but, now, watch—one more time, watch Sarkozy.  One—one—let‘s do this one more time.  Keep your eye on Sarkozy this time.  We are going to circle Sarkozy.  And, yeah, OK. 

Well, I don‘t know.  It looks like no foul for President Obama, but, Sarkozy, he‘s playing by the French rules. 

Next up:  Franken goes to Washington.  Al Franken was underestimated by everyone, especially the Republican Party, from the day he announced he was running for the Senate—everyone except me.  As soon as he announced, I predicted he was going to win. 

I used a lot of the usual political arithmetic in making that prediction, but, mostly, I used my personal knowledge of Al Franken.  For 30 years, I have known him to be a smart guy who works hard.  And he knows how to do his homework.  That‘s how he got into Harvard, and that‘s how I knew he was going to get into the Senate. 

Now everyone is wondering which Al Franken is going to show up for Monday‘s Supreme Court confirmation hearing of Sonia Sotomayor.  Remember this guy?  That‘s Paul Simon, very hardworking, very boring United States senator, when Al was still a wild and crazy guy writing and performing at “Saturday Night Live.” 

The Al Franken you‘re going to see on Monday—that, by the way, is a shot of Al Franken playing Paul Simon on “Saturday Night Live.” 

The guy you‘re going to see on Monday, that‘s going to be the serious Al Franken, maybe even the boring Al Franken.  If you want to see the funny Al Franken, you‘re going to have to buy “SNL” DVDs. 

Up next, the lion of the Senate—a new documentary explores the life and 46-year Senate career of Ted Kennedy, who many argue is the greatest senator to have ever served.  We will talk to the documentary‘s producer next. 

You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

SCOTT COHN, CNBC CORRESPONDENT:  I‘m Scott Cohn with your CNBC “Market Wrap.”

Stocks ending mostly lower, after Chevron issued a profit warning, and some key tech stocks got a ratings upgrade.  The Dow Jones industrials lost 39 points, the S&P 500 down three points.  The Nasdaq eked out a small gain, up two points.

Chevron was the biggest drag on the Dow today, its shares losing more than 2.5 percent, after warning its second-quarter earnings would be hit by a sharp decline. 

General Motors shares rose 37 percent after the automaker announced it‘s out of bankruptcy much sooner than expected. 

Shares in AIG up almost 24 percent today—they are looking for the government‘s permission to pay out millions more in bonuses to top executives. 

And tech stocks turned mixed after an earlier boost on a ratings upgrade for some key hardware-makers.  Dell gained a half-point, Apple up two points.

That‘s it from CNBC, first in business worldwide—now back to

HARDBALL. 

(BEGIN VIDEO CLIP, AUGUST 25, 2008)

SEN. EDWARD KENNEDY (D), MASSACHUSETTS:  I have come here tonight to stand with you to change America...

(CHEERING AND APPLAUSE) 

UNIDENTIFIED FEMALE:  Yeah!

KENNEDY:  ... to restore its future, to rise to our best ideals, and to elect Barack Obama president of the United States.

(CHEERING AND APPLAUSE) 

(END VIDEO CLIP)

O‘DONNELL:  Welcome back to HARDBALL.  That was Senator Ted Kennedy speaking at the Democratic National Convention last summer. 

HBO‘s new documentary, “Teddy: In His Own Words,” chronicles the life and political career of the man now known as the lion of the Senate.  It airs on Monday at 9:00 p.m. Eastern. 

And Caroline Waterlow co-produced the film. 

Caroline, I want to get right to the movie.  There‘s so much ground to cover.  We—we don‘t have enough time for this.  And I want to show the people out there, people under 60, who don‘t know the early Ted Kennedy, don‘t remember the early Ted Kennedy, I want to show what you have got in this movie, especially these kids that—you know, that convention was watched by a lot of young voters, a lot of kids at that convention.  I was there. 

That‘s the only Ted Kennedy they know. 

CAROLINE WATERLOW, CO-PRODUCER, “TEDDY: IN HIS OWN WORDS”: 

Absolutely. 

I also am one of those people who know him as a—knew him as a—a senior senator, very vocal, very confident, and older gentleman.  And so, yes, to—to see him when he was in the early ‘60s starting out, just as feisty, and—is—is incredible. 

O‘DONNELL:  He started out pretty young running for the United States Senate.  He was an assistant district attorney in Boston.  His brother got elected to the presidency.  That meant there was going to be an open Senate seat to run for in two years.  And he ran. 

And he found himself in his very first senatorial campaign debate. 

You have footage of that in your movie. 

Let‘s take a look at that right now.  

(BEGIN VIDEO CLIP, “TEDDY: IN HIS OWN WORDS”)

EDWARD JOSEPH MCCORMACK JR. (D), MASSACHUSETTS SENATORIAL

CANDIDATE:  If his name was Edward Moore, with his qualifications, with your qualifications, Teddy, if it was Edward Moore, your candidacy would be a joke.

But nobody is laughing. 

(CHEERING AND APPLAUSE) 

MCCORMACK:  Nobody is laughing.  And nobody is laughing, because his name is not Edward Moore.  It‘s Edward Moore Kennedy. 

UNIDENTIFIED MALE:  It was a full-court press by Eddie McCormack. 

It was really quite a baptism by fire. 

MCCORMACK:  You are not running on qualifications.  You are running on a slogan.  You can do more for Massachusetts. 

This is the most insulting slogan I have seen in Massachusetts politics, because this slogan means:  Vote for this man because he has influence, he has connections, he has relations. 

KENNEDY:  We should not have any talk about personalities or families.  I feel that we should be talking about the people‘s destiny in Massachusetts. 

(CHEERING AND APPLAUSE) 

(END VIDEO CLIP)

O‘DONNELL:  Now, the ironic thing about that particular debate is that if Eddie McCormack was running against anyone else, the opponent would have said the same thing about Eddie McCormack, because Eddie McCormack‘s uncle was then John McCormack, the speaker of the House of Representatives.  So he was running on a very famous political name, very famous political family.  But it was the second most political name in Massachusetts at the time. 

That was something that Ted Kennedy had to figure out how to bear and then enter the Senate like Al Franken is now, but much bigger version, as a big celebrity.  Everybody had their eyes on him and how he was going to perform.  How did he perform? 

WATERLOW:  I think he did very well.  I mean, it was amazing to see all the issues that he cares about passionately now are the things that he was caring—he has always cared passionately about.  He always, from the beginning, was talking about health care, health care for seniors.  Those are issues that he has really stuck to his guns, and I think is very admirable for that. 

O‘DONNELL:  Richard Nixon was absolutely obsessed with the Kennedys, having lost a presidential election to JFK.  Then he‘s in the White House and he‘s still not confident he‘s beaten the Kennedys.  And he was completely obsessed with Teddy.  We‘re going to listen to it right now, to a secret White House recording of Nixon wanting to go after Teddy Kennedy.  This is from the Nixon tapes.  Listen to this. 

(BEGIN VIDEO CLIP)

RICHARD NIXON, FMR. PRESIDENT OF THE UNITED STATES:  I‘d like to get Teddy Taped.  That why I want a lot more of wire tapping. 

UNIDENTIFIED MALE:  Supposing there‘s something that we can really hang Teddy or the Kennedy clan with.  And we‘re going to want to run with it. 

NIXON:  I mean to get the real scandal on them. 

UNIDENTIFIED MALE:  Just looking for scandal or impropriety. 

NIXON:  Now you‘re talking. 

(END VIDEO CLIP)

O‘DONNELL:  Imagine that.  Here you are, a senator.  You have a president of the United States obsessing all day, is there something we can hang on him.  Is there something we can accuse him of? 

WATERLOW:  With all—to think of Teddy, with all the things he was dealing with politically and within his family and all of the losses he has suffered, he was also—

O‘DONNELL:  He lost his oldest brother in World War II.  He then has his remaining oldest brother assassinated November 22nd, 1963, as president of the United States.  His then—his remaining oldest brother is assassinated while running for president in 1968.  And at this point, having lived through all of that, here we are in 1972 and Nixon is trying to figure out how to make this guy‘s life worse. 

WATERLOW:  Yes. 

O‘DONNELL:  But he perseveres.  He keeps going.  And he eventually himself wants to run for the presidency. 

WATERLOW:  Yes.  That was something that I also had not fully appreciated going into this project, that from about ‘68 right after Bobby‘s death, people are talking to him about running for president.  And there was an effort to draft him in ‘68 to take Bobby‘s place, and really for—yes, up until 1980 or ‘79 when he finally decides he is going to run for president president, this is a question that‘s hanging over him and it‘s something people are asking him about that whole time. 

O‘DONNELL:  When you look at that early Senate career of Ted Kennedy, leading up prior to running for president in the ‘80s, it‘s hard to find the easy year for Teddy.  Early on as senator, he had a plane crash, a small plane goes down in western Massachusetts.  He‘s in the plane.  He injuries his back.  He‘s never going to be able to walk the same way again for the rest of his life. 

One of the things I think about when I watch him in front of these audiences like last summer is the young kids don‘t understand what the older people in that convention hall—what‘s happened to them when they‘re crying listening to Ted Kennedy.  They don‘t know the emotional base of the relationship that he has with those voters. 

Let‘s take a look at Ted Kennedy giving what I believe was the most public eloquent public eulogy ever given.  It was his eulogy of his brother, Robert Kennedy. 

(BEGIN VIDEO CLIP)

T. KENNEDY:  My brother need not be idealized or enlarged in death beyond what he was in life.  To be remembered simply as a good and decent man, who saw wrong and tried to right it, who saw suffering and tried to heal it, who saw war and tried to stop it. 

(END VIDEO CLIP)

O‘DONNELL:  Not easy to watch. 

WATERLOW:  No, it‘s incredibly emotional moment, and really we tried very hard in this film—it‘s entirely archival interviews and footage.  We tried to let the footage speak for itself.  You can see the emotion and you can see Teddy just by watching him and letting it play. 

O‘DONNELL:  Monday night at 9:00 on HBO.  Thank you Caroline Waterlow. 

Up next.  Levi Johnson, the father of Bristol Palin‘s baby, says he knows why Sarah Palin quit as governor.  We‘ll get Levi‘s take next in the politics fix.  This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

O‘DONNELL:  And we‘re back.  Time now for the politics fix with Lynn Sweet of the “Chicago Sun Times” and the “Washington Post‘s” Perry Bacon. 

Levi Johnston, the father of Bristol Palin‘s baby, has his own theory about why Governor Sarah Palin will step down in 16 days.  In an interview with the Associated Press, Levi said that Governor Palin, quote, “had talked about how nice it would be to take some of this money people had been offering us and, you know, just run with it.  Say forget everything else.  I think the big deal was the book.  That was millions of dollars.” 

A Palin family spokeswoman shot back with a little wise-guy quip, as usually, “it is interesting to learn Levi is working on a piece of fiction while honing his acting skills.”

Lynn Sweet, this soap opera continues.  What do you make of Levi‘s latest entry?  It‘s as good an explanation as anyone‘s come up with, isn‘t it? 

LYNN SWEET, “THE CHICAGO SUN TIMES”:  Well, it is good.  Money is a motivator.  I‘m in the camp right now where I don‘t know she had that much to gain by staying in Alaska to finish out her term.  Even though, you know, conventional wisdom would say that‘s what she should do.  It might not hurt her for whatever her future holds for her. 

O‘DONNELL:  Perry Bacon, are you persuaded by Levi‘s hearsay? 

PERRY BACON, “THE WASHINGTON POST”:  I don‘t know how much Levi talks to the governor.  But I think, that said, I think it is likely she‘ll make a book, and it is likely she will make more money being out of the governor‘s office than she would in the governor‘s office. 

O‘DONNELL:  We‘ve been taking bets all week of—and Lynn and Perry, I‘d like you each to put your bet down.  Can she plot her way from here to a presidential campaign?  Or is she completely out of it? 

SWEET:  Yes, she can.  What do we know?  We know that she has to expand her base, which is going to stick with her.  She‘s in a sense—remember the days when Hillary Rodham Clinton was seen as a very polarizing figure?  That changes.  You can change your personae.  It‘s very hard.  If she wants to sell a lot of books and become a national figure that is accepted by all the Republican party, not just a segment, she has to figure out a way to do that.  I don‘t know if she has yet. 

Better to be in the lower 48 to talk to people than to be stuck in the legislature in Alaska.  That‘s why some of this kind of makes sense.  Two things can happen at once.  You can make a lot of money in a book and maybe, just maybe, put together an organization or an image where you can give it a try.  Running for president—

O‘DONNELL:  There‘s a lot of resistance—there‘s a lot of resistance within the Republican party to Palin. 

SWEET:  Absolutely. 

O‘DONNELL:  That frequently gets overlooked in this coverage. 

Let‘s consider what Peggy Noonan had to say about Sarah Palin today. 

“In television interviews she was out of her depth in a shallow pool.  She was limited in her ability to explain and defend her positions, and sometimes in knowing them.  She couldn‘t say what she read because she didn‘t read anything.  She was utterly unconcerned by all of this and seemed, in fact, rather proud of it.  It was evidence of her authenticity.” 

Perry, with people like Peggy Noonan taking those kind of shots from within the Republican tent, how can she find her way back into credible presidential campaigning? 

BACON:  I think what changed over the last week is not—in some ways is not that much.  Before, a lot of Republicans liked Peggy Noonan, who live in Washington, live in New York, didn‘t really think Sarah Palin was very qualified in the first place.  In some sense, this is people who already did not like her very much, are reinforcing that? 

I do think it hurts her in that you‘ll need some amount of Republican strategists, people in Washington to help you run for president, if she wants to do that.  She lost credibility with those people and some activists who are more politically involved.  She lost credibility with those kind of people with her unexplained behavior this week. 

I still think, like Lynn said, she has a strong support from activists who will be behind her.  The polls suggest—the few polls we‘ve seen so far seem to suggest what happened in the last week hasn‘t really changed much at all, in that people who liked her before still like her, and Democrats, independents still don‘t like her. 

O‘DONNELL:  All right.  We‘ll be back with Lynn Sweet and Perry Bacon for more of the politics fix.  You‘re watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP

SEN. ROLAND BURRIS (D), ILLINOIS:  And so today, I have returned to the place where my political journey began back in 1978, back to the south side of Chicago, back to my community and my constituency, to announce, my friends, that I will not be a candidate in the 2010 election.  And that I will not run for a United States Senate seat. 

(END VIDEO CLIP)

O‘DONNELL:  That was senator Roland Burris announcing today that he won‘t run for election to the seat he was appointed to by Rod Blagojevich.  We‘re back with Lynn Sweet of the “Chicago Sun-Times,” and “the Washington Post‘s” Perry Bacon for more the politics fix.

Lynn Sweet, what‘s going on in Chicago?  Did he just do the math and figure, hey, I can‘t win this seat; there‘s no sense trying?  He raised no money.  He had more upon in his pocket than he did in his campaign account, didn‘t he? 

SWEET:  He did try.  He went to party leaders in May.  He tried to do some fund-raising.  The numbers weren‘t there.  He told me in May that it doesn‘t matter what I want to do, if I don‘t have any money, I can‘t run.  And it took him awhile to realize that this was it, because he did want to try and get elected to the seat he was appointed to.  The politics in Illinois were stacked against him.  No one, national or local, of any Democratic stature, would have backed him. 

O‘DONNELL:  Perry Bacon, he seemed to love the job.  He seemed to be thrilled getting that appointment.  It looked like the place he wanted to spend the better part of the next decade, at least.  Looks like he‘s got no fight left in him, huh? 

BACON:  Yes.  I saw him earlier this week, talked to him a bit.  He made the same point Lynn made, which is he really wanted to be in this job.  He enjoyed it.  He always had a smile on his face while he was in the Senate.  For Democrats, I think this is good news for them.  They wanted to avoid having him in a primary, because they didn‘t think he was a very viable candidate to win.  I think they‘re happy about that. 

Two, you‘ve seen Barack Obama—President Obama trying to recruit other candidates to run for this race personally at times.  It avoids having a divisive primary where the president himself is trying to defeat the only black senator out there.  I think that‘s good news for Democrats, who have been hoping, trying to dissuade him from running for quite a while. 

O‘DONNELL:  Lynn Sweet, you‘re our Chicago expert, handicap the race for us now.  Who‘s the front-runner on the Democrat side and Republican side? 

SWEET:  The front-runner on the Republican side is Mark Kirk, who is not locked in to run.  Reports today in, out.  I think as of now he‘s in.  There‘s a few roadblocks that I think will be cleared up.  Three main people on the Democratic side.  And this is interesting that you just ran all the Ted Kennedy stuff, because of one of his nephews who lives in the Chicago area, Chris Kennedy, has been organizing the campaign.  Then you have the state treasurer, 1.8 million dollars already in the war chest.  Cheryl Jackson, who is the chief of the Chicago Urban League.  I would say—

O‘DONNELL:  We‘re going to have to leave it there.  Thank you, Lynn Sweet and Perry Bacon.  Chris Matthews returns Monday at 5:00 and 7:00 Eastern for more HARDBALL.  Right now, it‘s time for “THE ED SHOW” with Ed Schultz. 

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

END   

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