updated 8/21/2009 1:11:17 PM ET 2009-08-21T17:11:17

Guests: Howard Fineman, Jonathan Alter, John Dean, Jeremy Scahill, Jon Ralston

           

(BEGIN VIDEOTAPE)

KEITH OLBERMANN, HOST (voice-over):  Which of these stories will be talking about tomorrow?

The president goes all Dr. Dick Solomon on us.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  This is sort of like the belt and suspenders concept to keep up your pants.  You know—the insurance reforms are the belt.  The public option can be the suspenders.

(END VIDEO CLIP)

OLBERMANN:  He also goes on conservative radio to insist that Chuck Grassley and other Repubs are dedicated on this.

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OBAMA:  I want to give them a chance to work through these processes.

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OLBERMANN:  Oh, they‘ve already been given a chance, all right, Mr.

President.

Any chance “The Wall Street Journal” is right and the Dems will split the bill, the no-brainer stuff, in one part to let Republicans pretend they helped the actual reform—the suspenders—in the other.

“The Nexus of Politics and Terror” confirmed.  The first secretary of homeland security, Tom Ridge, admits what he had previously only hinted at, that cockamamie color-coded terror threat system he was pushed to raise it on the eve of the 2004 presidential election—even he knew it was politically motivated.  John Dean on the verification from the official in the Bush administration that Mr. Bush used fear of terrorism for political gain—which is itself terrorism.

A new nexus: The CIA assassination teams, the gang that couldn‘t shoot al Qaeda straight—it was supposed to be outsourced to Blackwater.

“Worsts”: Glenn Beck suspended for calling the president a racist?

And worse at even spouting his own new birther talking points, Tom DeLay.

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TOM DELAY ®, FORMER HOUSE MAJORITY LEADER:  Will you ask the president to tell me his gift certificate—I mean, his—gift certificate—his birth certificate?

(END VIDEO CLIP)

OLBERMANN:  Tom wants coupons.

And Senator John Ensign‘s pretzel logic: His infamous infidelity was nowhere as bad as President Clinton‘s and he shouldn‘t be impeached because.

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SEN. JOHN ENSIGN ®, NEVADA:  I haven‘t done anything legally wrong.

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OLBERMANN:  So, Senator Vitter‘s infidelity with illegal prostitutes -

Senator Ensign, you‘re saying Senator Vitter should be impeached?  Uh-oh!

           

All that and more—now on COUNTDOWN.

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UNIDENTIFIED MALE:  This is a good deal.

(END AUDIO CLIP)

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OLBERMANN:  Good evening from New York.

In the classic “Peanuts” comic strip, Lucy repeatedly convinced Charlie Brown that she would allow him this time to kick the football she held out for him.  Time after time, she pulled it away at the last possible second, causing him to fly in the air and land flat on his back.

The allegory of Charlie Brown and the football possibly reflected in our fifth story on the COUNTDOWN: In one breath this afternoon, the president taking direct aim at unnamed Republicans, accusing them of making a decision to deny him a victory on health care—pure politics.  In the next breath, the president adding that he wants to give the Republicans negotiating health care in the Senate a chance.

The president—addressing two very different audiences this afternoon, fielding questions from supporters at DNC; hours earlier, from callers to the radio show of a conservative talk show host.

On the radio, the president accusing the opposition of trying to obstruct health care reform at all costs.

(BEGIN VIDEO CLIP)

OBAMA:  I think early on, a decision was made by the Republican leadership that said, “Look, let‘s not give them a victory.  Maybe we can have a replay of 1993-‘94 when Clinton came in.  He failed on health care and then we won in the midterm elections and we got the majority.”  And I think there are some folks who were taking a page out of that playbook.

(END VIDEO CLIP)

OLBERMANN:  At the DNC, President Obama ripping another page out of the Republican playbook to defeat the Democrat‘s health care plan.  They‘re lying about what‘s in it.

(BEGIN VIDEO CLIP)

OBAMA:  The truth is: There‘s no plan that has ever been considered under health care reform in Congress that covers illegal immigrants.  Nobody‘s proposed that, and yet, a huge percentage believe that that‘s the case.  Nobody has proposed anything remotely close to a government takeover of health care; none of the plans that are out there.

The most liberal progressive plans that have come forward and come out of committee, all of them presume that if you‘ve got private health insurance, you can keep your health insurance.

(END VIDEO CLIP)

OLBERMANN:  The president though, not exactly clearing up the confusion about whether he would sign a bill without a public option in it.

(BEGIN VIDEO CLIP)

OBAMA:  This is sort of like the belt and suspenders concept to keep up your pants.  You know—the insurance reforms are the belt.  The public option can be the suspenders.  And what we‘re trying to just suggest to people is, is that all these things are important.

(END VIDEO CLIP)

OLBERMANN:  Mr. Obama having guaranteed one radio caller that he would get a health care reform bill passed telling both him and the audience at the DNC that he would prefer to do so with the support of the Republicans.

(BEGIN VIDEO CLIP)

OBAMA:  We don‘t know yet whether we‘ve got any Republican support.  We‘ve got three Republicans who‘ve been working very diligently—Charles Grassley, Mike Enzi and Olympia Snowe.  I give those three Republicans a lot of credit because they‘re under enormous pressure not to engage in any kind of negotiations at all.  And in the current political climate, they are showing, you know, some significant result.  I don‘t know if in the end they can get there.

(END VIDEO CLIP)

OLBERMANN:  Especially every time Senator Grassley opens his mouth.  The Iowa Republican is now directly challenging the president to give up the public option as a condition of Republican involvement, telling “The Washington Post,” it was, quote, “pretty important if you‘re really interested in a bipartisan bill.”

But, wait, there‘s more.  Senator Grassley pointing at town hall anger is the reason why the scope of reform needs to be drastically scaled back.  Quote, “People are signaling that we ought to slow up and find out where we are and don‘t spend so much money and don‘t get us so far into debt.”

If you can consider health industry employees, a sort of right-wing militia members, and those who know nothing of health care but only know they hate this president, if you consider them regular people.

And a message today from Senator Ted Kennedy that it is time to start planning for a future without him in it.  Fifteen months into his battle with brain cancer, our favorite viewer is urging Governor Patrick of Massachusetts and state legislators there to change the state law that requires a Senate seat which has been vacated to remain empty for at least five months before anything can be done to fill it.

Time now to turn to our own Howard Fineman of “Newsweek” magazine.

And good evening, Howard.

HOWARD FINEMAN, MSNBC POLITICAL ANALYST:  Hi, Keith.

OLBERMANN:  By stating flat out that he believed Republicans made this decision to deny him a political victory on health care reform, to do to him what they did to President Clinton in ‘94, especially when you consider his audience at the time—is that the most forceful, the most unequivocal we‘ve heard the president yet in this debate?

FINEMAN:  Well, he‘s being forceful in tactics.  I think this is the most tactically forceful accusation that he‘s made, saying flat out that he thinks maybe the Republicans are out to do him in.  But the problem is, he hasn‘t been forceful enough on the substance and clear enough because they haven‘t fully decided on exactly what‘s in the plan.  So, you‘ve got suspenders and you‘ve got a belt, but really Obama standing there in his boxers.

(LAUGHTER)

OLBERMANN:  We‘ll continue the delightful imagery of the day that the president started.

One thing of all things here that really confused me as a tactic, you‘ve got one audience, this conservative radio show describes the Republicans negotiating health care on the finance committee as working constructively signal—he said that at least Grassley, and he mentioned a couple others, but particularly Grassley, as dedicated.  And then goes to a roomful of Democratic supporters at the DNC and he says, “We don‘t know yet whether we‘ve got any Republican support.”  The three Republicans are working diligently, but concluded he didn‘t know if they could get there.

People who heard the first message aren‘t capable of getting the second message via some other means.  Did the president not know that?  The message tailoring seems to be a thing that went out about 1906.

FINEMAN:  Well, I‘ve come to the conclusion that he likes the idea of deliberate confusion for what he thinks is bargaining room, I guess.  But as I‘ve said before, right here, I don‘t think it works that way.

OLBERMANN:  Yes.

FINEMAN:  . when you‘re dealing with the Congress, you got to hit them over the hit with a two-by-four, he got to be very clear and very specific.  And he hasn‘t done that.  I think the reason is that he has people inside the White House who are telling him that he‘s got to get to 60 votes in the Senate.

The whole business about using reconciliation and only 50 votes is problematic because you don‘t get all of what you want.  Don‘t have the power.  It‘s confusing in the conference committee.

And Jim Messina, who‘s the deputy chief of staff under Rahm Emanuel, is very close to Max Baucus, who is the chief Democratic negotiator in that finance committee.  I think Messina is telling the president hang in there, we might be able to get a bipartisan deal.  Ironically, I think his boss, Rahm Emanuel, is more skeptical about that.

OLBERMANN:  Of the other two-by-fours in the room, did the president indicate whether or not he would sign the bill without the public option?  Did he give a tell on that at all or do we have two answers?

FINEMAN:  Yes.  I think he gave a tell which is that he doesn‘t—

it‘s not a deal-breaker if it‘s not in there.  If you listen carefully to

what he said, he said—and we return to haberdashery, he said that the

reform of regulation increased regulation of the health care industry is

the belt and the public option can be the suspenders.  I take the “can be”

I‘m trying to read some tea leaves here—means that he doesn‘t—you know, it‘s not a deal-breaker.  I‘ve been told all along that it isn‘t really a deal-breaker for him.  It never has been.

           

OLBERMANN:  Well, what is he going to do if he doesn‘t have any Democratic pants?

(LAUGHTER)

OLBERMANN:  Quite serious, what happens if he alienates the people who elected him?

FINEMAN:  Well, I think that‘s in the process of happening if he plays it too cute by half here.

OLBERMANN:  Yes.

FINEMAN:  . which I think—which I think he‘s doing.  I‘m not quite sure what their strategy is.  They emanate a sense of confusion—the other thing is that, Keith, air time is valuable for him.  People‘s attention span is not unlimited.  Every time you see—every time you see the president on TV, he‘s explaining what‘s not in the bill.

OLBERMANN:  Right.

FINEMAN:  Not what‘s in the bill.

OLBERMANN:  Yes, the football season starts in two weeks.  He‘s going to lose 20 percent of them right there.

Howard Fineman of MSNBC and “Newsweek”—as always, great thanks, Howard.

FINEMAN:  Thank you, Keith.

OLBERMANN:  For more, let‘s turn to our own Jonathan Alter, senior editor at “Newsweek” magazine.

Jon, good evening.

JONATHAN ALTER, MSNBC POLITICAL ANALYST:  Hi, Keith.

OLBERMANN:  Do you—do we know what the president is doing?  Do you have a better idea than Howard or I do?

ALTER:  I think he‘s undergoing some message confusion to put it politely.  To my mind, the problem is that he hasn‘t gotten to the core moral argument.  He tried to do it when he was on that call with religious leaders yesterday and tried to say it was a moral imperative, but he hasn‘t closed that sale with the American people.  In fact, hasn‘t even be gone that sale and, instead everybody is talking about public options and costs and this and that, and not focusing on the fact that this—this bill would end discrimination against sick people.

OLBERMANN:  Right.

ALTER:  . or people who have been sick or might be sick in the future.  And that it really is if you look at it, in principle, it‘s a combination of the Social Security Act and the Civil Rights Act.  And it‘s just not being sold that way.  And so, people aren‘t buying right now.

OLBERMANN:  Yes, even if you‘re president, you can only eat one desert at a time.  You have to pick which one you want and explain why you want that one desert.

ALTER:  Yes, and you do have to, you know, KISS, keep it simple, stupid.

OLBERMANN:  Yes.

ALTER:  If you look at the polling that we saw on MSNBC earlier in the day of people‘s understanding or misunderstanding of the bill, Barack Obama likes to treat people like adults, but I think in this case, maybe he should treat them more like children and simplify.

OLBERMANN:  And how well has that worked for Senator Grassley, to turn over to his part of this, he tells “The Washington Post” on Wednesday that, quote, “We ought to be focusing on getting 80 votes,” Monday he says he has no intention for voting for any bill even if it‘s a negotiation he has achieved and attained.

Exactly how many chances does a Republican, like Senator Grassley, get in this equation—never mind from this president—how many has he earned politically?

ALTER:  I don‘t think any.

OLBERMANN:  Yes.

ALTER:  I mean, what‘s happening with him is he is worried about a Republican primary in 2010 in Iowa.  And remember, the Iowa Republican Party, they—in the 1988 Iowa caucuses, they voted for Pat Robertson.  You know, that‘s how conservative Iowa Republicans are.

So, I think the odds of Senator Grassley supporting any bill are very small, and the only reason that he‘s still in this process is that the chairman of his committee, Max Baucus, has a lot of respect for him.  They worked closely together.  It‘s important to both of them that they continue to have a good working relationship, and that is the only thing that‘s keeping Baucus—keeping Grassley in the equation.

OLBERMANN:  And both Grassley and Baucus occasionally interface with the Democrats.

The story in “The Wall Street Journal” today, do we buy into this?  Is this some sort of secondary set of negotiations or we‘re going—whether there‘s going to be a simple “let‘s increase the number of people in insurance bill” and then the Republicans might actually vote for, so they don‘t look like they‘re trying to kill this, and then there‘s going to be a separate bill.  Is there anything to this idea of splitting the difference?

ALTER:  I think there is something to it, but not necessarily for Republican votes, except for perhaps Olympia Snowe, one or two others.  But for some Democrats, let‘s remember, they have not closed the deal with Democrats.  That‘s what we keep—have to remind ourselves of over and over again, and—the public option is not a done deal with a lot of blue dog Democrats.

So I think what‘s going to happen is to the left, you‘re going to see some votes in the House where they‘re given a chance to vote on single-payer, to vote on a public option, and then after more liberal members have gotten that out of their system, then they‘ll get to, you know, real deal-cutting time and you‘ll see perhaps this bifurcating of the bill so that the tougher ones go through—under reconciliation, only requiring 51 votes for the tough votes and then the ones that are easier, they‘ll do one of their ordinary business requiring 60 votes.

OLBERMANN:  Jonathan Alter of “Newsweek” and MSNBC—thank you for coming in, Jon.

ALTER:  Yes, thanks, Keith.

OLBERMANN:  Have a good night.

ALTER:  You too.

OLBERMANN:  Using phony, fantastic—but to the gullible—easy to believe fears of death to influence politics, “death panels.”  Ever seen Republicans do that before, right?  When I reported that the Bush administration was exploiting fear of death by terrorism for political purposes, I was called every name up to and including traitor.  Today, Mr.  Bush‘s first secretary of homeland security admits Ashcroft and Rumsfeld pressured him to raise the threat level the day before the 2004 election.

To have been right about this is about as unpleasant a feeling as those reporters got who were right that the World Series was fixed that one year or that Bernie Madoff was a Ponzi artist.

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OLBERMANN:  The Bush administration used the threat of terrorism to influence domestic events and elections.  When I said it here, we called it “the nexus of politics and terror.”  When Mr. Bush‘s first secretary of homeland security said it today, he called his new book.  Exclusive excerpts and John Dean‘s reaction—next.

You‘re watching COUNTDOWN on MSNBC.

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OLBERMANN:  Manipulating the fear of terrorism for political gain is itself terrorism.  And the nexus of politics and terror, as employed by the Bush administration, is now tonight confirmed.

In our fourth story on the COUNTDOWN: A push to raise the terror threat level on the very eve of the presidential election of 2004.  Tom Ridge, the former secretary of homeland security, claims to have stopped that particular instance of it.  John Dean joins me in a moment.

COUNTDOWN has obtained an advance copy of Mr. Ridge‘s book, “The Test of Our Times.”  A key passage concerns the events immediately preceding the 2004 election.

On Friday, October 29th, 2004, four days before the vote, Osama bin Laden released a new videotape, you‘ll remember.  Mr. Ridge did not think that warranted a change in the terror alert status.  He writes, “At this point, there was nothing to indicate a specific threat and no reason to cause undue public alarm.”

But in a subsequent video conference call, quote, “a vigorous, some might say dramatic discussion ensued.  Attorney General John Ashcroft strongly urged an increase in the threat level and was supported by Defense Secretary Donald Rumsfeld.  There was absolutely no support for that position within our department, none.  I wondered, ‘Is this about security or politics?‘  Post-election analysis demonstrated a significant increase in the president‘s approval ratings in the days after the raising of the threat level.”

The position of DHAS ultimately prevailed, according to Ridge, because some White House staff agreed that raising the threat level could look politically motivated.  He wrote again, “I believe our strong interventions have pulled the ‘go-up‘ advocates back from the brink.  But I consider the episode to be not only a dramatic moment in Washington‘s recent history, but another illustration of the intersection of politics, fear, credibility and security.  After that episode, I knew I had to follow through with my plans to leave the federal government.”

Mr. Ridge also claims that his department was justified in raising the terror threat level to orange in August of 2004 for the financial centers in New York, New Jersey and Washington.  The warning had come just three days after the Democratic National Convention, and it soon became evident that the evidence supporting that warning was about four years old and largely out of date.

Never have I more wanted to be wrong about something, but beginning in October 2005, we periodically ran a segment called “The Nexus of Politics and Terror.”  As this brief introduction from the first time will suggest, sad to say, we told you so.

(BEGIN VIDEO CLIP)

OLBERMANN:  On May 10th of this year, after his resignation, former

Secretary of Homeland Security Ridge looked back on the terror alert level

changes that were issued on his watch.  Mr. Ridge said, “More often than

not we were the least inclined to raise it.  Sometimes we disagreed with

the intelligence assessment.  Sometimes we thought even if the intelligence

was good, you don‘t necessarily put the country on alert.  There were times

when some people were really aggressive about raising it, and we said, ‘For

that?‘”

“The Nexus of Politics and Terror”—please, judge for yourself.

(END VIDEO CLIP)

OLBERMANN:  We hope to have the time to bring you the whole piece again updated tomorrow.

For now, let‘s bring in, as promised, FindLaw.com columnist, John Dean, also author of “Worse Than Watergate” and “Conservatives Without Conscience.”

John, good evening.

JOHN DEAN, FINDLAW.COM:  Good evening, Keith.

OLBERMANN:  Rate this in terms of its confirmation of our worst fears on this subject—that the terror threat apparatus, not just the color-coded bar chart, the whole thing was manipulated for political purposes at least some of the time.

DEAN:  Well, I‘d say this is a modified limited hangout, Keith.  It‘s not a full confirmation.  It‘s a hedge.  Tom Ridge is a former U.S.  attorney.  He knows that he‘s talking about what could be criminal behavior.  And he says at one point he wonders if this was—if this was political or security.

So, he backs off—he doesn‘t tell us why he wondered it, what he thought that Rumsfeld had said or Ashcroft had said.  So, he strongly suggested they said something that made him think it was political.  But he hasn‘t given us.  He certainly has opened the door and raised the question.

OLBERMANN:  And you—and you describe it just now in terms of criminal activity.  Who is potentially liable and is anybody in position to do anything about it at this late date?

DEAN:  Well, that‘s the problem.  It is a late date.  The statute of limitations has run.

As I say, if there was pressure, if you do manipulate an agency of government, it is a criminal offense.  This is one of the things that caught a lot of people in Watergate.  It‘s a conspiracy to defraud the government under Title 18 USC 371, one that, as I say, a lot of people learned painfully what that statute meant.  And if you try to have a department do something that‘s not supposed to do and doing it for political reasons, you can go to jail for that.

So as I say, I think that—I think Ridge has hedged this.  He‘s been careful.  But he certainly suggested he might have gotten information that indicated this was the reason that he had concerns.

OLBERMANN:  And as opportunistic as it might look, he did say these things, as I pointed out in the piece from 2005, right after the resignation.  So, there is a continuity here.  It‘s not like just he invented this or presented it for the first time out of whole cloth.

The other side of the argument, though, John, that has been raised today, that since the one example he points to from the days before the election in 2004, did not end in elevation of the terror level threat, that that diminishes in some way the fact of pressure that was applied.  Is there not an obvious fallacy in there?

DEAN:  There is an obvious fallacy and that isn‘t the way the criminal law works, for example.  If somebody actually conspired to do this, an overt act was made, pressure was made, and they didn‘t get the pressure to succeed, it wouldn‘t any way diminish the crime.  Looking at this in a broader context, if this was the conduct—and history reveals to me the conduct, these people got away with a crime.

OLBERMANN:  The secretary‘s reaction to this was he needed to leave government.  He needed to resign.  But, of course he didn‘t do it in the days before the election and he did not—neither did he resign immediately.  But was he not in a position perhaps to investigate this in some way, at least start to investigate it before somebody shut off his alarm clock?

DEAN:  Well, when listening to your piece, I thought if he‘s trying in the book to make this a principled resignation, instead of retroactively, I don‘t think it‘s going to work at all.  The question is: Why didn‘t he maybe investigate this further?  Indeed, was there more going on that made him wonder if this was political rather than national security?  Was he being told from the White House how to make national security decisions on homeland security?

These are, as I say, and this is a very loaded little bit of commentary from this book.

OLBERMANN:  The message ultimately of the 2004 Bush re-election campaign was: Vote for us or you might die.  Is anybody potentially going to be held account for that message having infected apparently official government actions as Mr. Ridge at least implies if not confirms?

DEAN:  Well, I think all of us—those of us who followed this certainly believe this was the case.  They did manipulate it for political purpose, it did work.  The question is—I doubt if Congress, even on this issue, will proceed any further even with this lead that Ridge has given.  If they won‘t, for example, look at torture, why are they going to look at color-coded warnings as being—which aren‘t even close to that problem, politically manipulated?

OLBERMANN:  Yes, since we got rid of the color-coding system, the problem could never come up again.  So, we don‘t have to prosecute it.  That‘s the line of logic now.

(CROSSTALK)

OLBERMANN:  Yes.

DEAN:  We only had to elect Bush to get rid of the color-coding system.

OLBERMANN:  John Dean, author of “Broken Government,” “Worse Than Watergate,” “Conservatives Without Conscience,” pick a book, they all seem to apply to our topic tonight.  Thanks as always, John.

DEAN:  Thank you, Keith.

OLBERMANN:  Then there‘s the nexus of one baseball manager‘s head and one baseball coach‘s fist.  A minor league management fight.

And for the record, it‘s a vacation, an industry Web site says it is a suspension for calling the president a racist.  “Worst Persons”—ahead on COUNTDOWN.

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OLBERMANN:  “Bests” in a moment.  And Obama birth certificate, Obama‘s gift certificate—whatever.

First, on this date in 1907 was born Teddy Bergman who acted under that name and the name Alan Reed.  He had memorable on-camera roles, Sally Tomato in “Breakfast at Tiffany‘s.”  He played Pancho Villa in “Viva Zapata.”  He was in “The Postman Always Rings Twice.”

There‘s one job he took as a voice actor that made him immortal.  Here‘s your hint.  Yaba daba doo!  Alan Reed even dreamt up the signature expression of joy of Fred Flintstone and also yelled it.

Let‘s play “Oddball.”

Speaking of that, we begin Winnipeg, Manitoba, Canada, where 5,600 fans showed up for a minor league baseball game, and a hockey fight broke out.  The game was between the Fargo-Moorhead RedHawks and the Winnipeg Goldeyes.  And after RedHawk pitcher Ace Walker threw a pitch behind the Goldeye batter, the umpire warned both benches to knock it off.  But Gold Eye coach Tom Vaith (ph) started jawing with the Red Hawks‘ third baseman.  Red Hawk manager Doug Samanak (ph) got involved, stepping in between his player and the opposing coach.  And luckily, cooler heads prevailed. 

Or not.  We got a coach fight, people.  Both men traded blows, then tried to pull the other guy‘s sweater over their head.  Eventually, their players pulled them apart.  Vaith is just jealous because Samanak was once a baseball card and he wasn‘t.

Time for the Oddball technology report.  This is a magazine insert that will go out in September to select subscribers of “Entertainment Weekly.”  Inside not is there imagery of a soft drink and a TV network, but there‘s a two-inch TV screen on which you can watch Pepsi commercials and clips from the CBS fall lineup.  Did I mention Joel McHale has a new show coming up on NBC? 

Only select subscribers in New York and LA will get this issue, probably due to the prohibitive cost of the stunt.  By the way, this footage was shot by “Wired Magazine.”  So you‘re watching a TV in a magazine, shot by a magazine, on your TV, unless you just downloaded this. 

How did we all not see this coming.  A secret Bush CIA international assassination squad.  It was out-sourced to Blackwater.  And Senator Ensign says his infidelity was not as big as Bill Clinton‘s.  There‘s a lot of jokes to choose from there. 

These stories ahead, but first time for COUNTDOWN‘s top three best persons in the world.  Theme warning tonight, best oopsies. 

Dateline New York, number three, best TV oopsy, Sean Hannity of Fixed News and Stuart Varney of the Fox we‘re not doing any Business channel.  Hannity said “two bits of news came out today that really scared me.  Max Baucus says Social Security could face default within two years.” 

My old friend Mr. Varney, the man who taught me how to read a teleprompter, promptly agreed.  Spencer Bachus said Social Security could face a default within two years, Republican Congressman Spencer Bachus of Missouri, not Democratic Senator Max Baucus of Montana. 

Oh, and Congressman Bachus later admitted he made a mistake.  He meant to say deficit.  Social Security could face a deficit within two years.  It‘s first chance at default would be 2037.  So Fox got the name wrong and the branch of government wrong and the political party wrong and the quote wrong and the fact wrong.  There‘s been no correction. 

Dateline Washington, number two, best ex-politician oopsie, Tom Delay, now affiliated with “Dancing With the Stars,” on with Chris.  Never mind, for the moment, that he has turned into one of those invasion of the body snatchers, conspiracy theory birther things.  Listen for the blooper. 

(BEGIN VIDEO CLIP)

TOM DELAY, FMR. HOUSE MAJORITY LEADER:  Will you do me a favor.  Will you ask the president to show me his gift certificate—I mean his gift certificate?  His birth certificate. 

(END VIDEO CLIP)

OLBERMANN:  That‘s how Obama can reform health care.  Send everybody a gift certificate.  Genius.  Genius, I tell you. 

And dateline La Marque, Texas, number one, best politician oopsie, Senator Kay Bailey Hutchison, vowing to make education a cornerstone of her candidacy for governor there, which she announced at the high school she attended, La Marque High, where she was Carnation Queen in 1961.  “I want to help to create an education system like I had.”

Yes, when Senator Hutchison attended La Marque High School in Texas, it was segregated. 

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OLBERMANN:  When news came out that CIA Director Leon Panetta rushed to notify Congress after learning of a secret CIA program to kill al Qaeda leaders, we all knew there had to be something more to that.  Our third story tonight, more.  The “New York Times” reports the CIA actually out-sourced parts of the job to Blackwater, the right-wing mercenary firm that viewed its work there as obliterating the Muslim faith from the Earth, and used call signs from the Christian crusades against Muslims. 

According to the Times, Blackwater‘s involvement was, quote, a major reason that Panetta became alarmed and called the emergency meeting.  Congresswoman Jan Schakowsy now telling “The Nation Magazine” that House and Intelligence Committee will now add Blackwater to its ongoing probe of the CIA plan.  Why would the CIA outsource a highly sensitive function? 

From today‘s “Washington Post,” “the program was initially managed by the CIA‘s counter-terrorism center, but its functions were partly transferred to Blackwater when key officials from the center retired from the CIA and went to work for the private contractor.”

The Post reporting Blackwater got millions to train CIA teams in simulated kidnappings.  But the plan was killed because it failed to get off the ground.  Blackwater founder Evangelical patron Erik Prince got his first CIA contract early in 2002 from CIA Executive Director Alvin Krongard, a good buddy of Prince‘s, according to “The Nation.”  Mr.  Krongard wound up joining, surprise, the Blackwater Advisory Board in 2007. 

CIA counter-terrorism chief Cofer Black, who ran the rendition program in which Blackwater has also been implicated, joined Blackwater in 2005.  The Times reports that Blackwater‘s involvement in the program ended years ago under Bush, quote, “after senior CIA officials themselves questioned the wisdom of using outsiders in a targeted killing program.” 

With us once again on this story tonight, “The Nation Magazine” contribute Jeremy Scahill, also author of “Blackwater, the Rise of the World‘s Most Powerful Mercenary Army.”  Thanks for coming in again. 

JEREMY SCAHILL, “THE NATION MAGAZINE”:  Nice to be with you, Keith. 

OLBERMANN:  Explain why even the Bush administration would think it was a bad idea to pay a private company for something so sensitive that even Congress couldn‘t be told about it? 

SCAHILL:  I don‘t think it‘s necessarily the case that the Bush administration thought it was a bad idea.  Let‘s remember here what‘s at the center, the epicenter of this scandal, is the fact that Dick Cheney is alleged to have ordered the CIA to conceal from the Congress, which has oversight authority, the existence of a secret CIA assassination plan. 

Blackwater was on from almost day one of the so-called war on terror, as part of the war that Bush labeled the crusade.  They worked overtly for the administration.  We know, as of May of 2002, they were boots on the ground in Afghanistan.  I‘m not so sure the program has even ended to this day. 

Blackwater continues to be paid by the United States government for work in both Afghanistan and Iraq.  The issue here, Keith, as representative Jan Schakowsky told me last night, is how far up the chain did the relationship between Erik Prince and the administration go?  She said to me that clearly the Bush administration trusted Erik Prince, the mercenary kingpin of Blackwater, more than the elected representatives of the Congress, who are supposed to have oversight, because they shared these details with him and not the Congress. 

OLBERMANN:  They shared more than details.  They basically shared staffs.  It was a sequential thing, the way football coaches retire and work in television for a year, and then get another job in football.  You‘ve got Cofer Black, Buzzy Krongard, this unnamed group of CIA officials retiring, by the way, to go to work at Blackwater.  Explain the role of that evolving—or the revolving door and the—relative to the assassination ring, if you will. 

SCAHILL:  Right.  So shortly after 9/11, A.K. Buzzy Krongard, the number three man at the CIA, meets with Erik Prince, and they authorize a five million dollar black contract, a covert contract for Blackwater to insert inside of Afghanistan in Kabul, as well as in a town called Schkin (ph), which is along the Afghan/Pakistan border, where Blackwater and the CIA operated out of a mud fortress that they called the Alamo. 

Prince went over.  He is himself a former Navy SEAL.  He went over with that initial Blackwater deployment.  And then, after a week or so there, according to a CIA operative that we talked to for my book, Prince then went to Kabul to try to win more business for Blackwater.  That launched Blackwater, Keith, as a mercenary operation. 

At the time that Prince and Krongard were crafting this relationship between the CIA and Blackwater, you had Cofer Black running the CIA‘s counter-terrorism center, leading the hunt for bin Laden, talking about the gloves had come off.  There was a before 9/11 and an after 9/11, and saying that there were no limits on what operatives would be authorized to do in hunting down terrorists. 

So you have this history of Blackwater, from 2002 to the present, where they have worked overtly and covertly for the US government.  And then Prince hires Cofer Black, Buzzy Krongard, Robert Richard, former deputy director of the CIA, Enrique Rick Prado, a veteran of the CIA‘s paramilitary division, to run his own private CIA, called Total Intelligence Solutions, which worked simultaneously for the U.S. government and foreign governments. 

OLBERMANN:  We already have Blackwater employees who pleaded guilty to weapons smuggling, including those armor piercing ammo devices that detonate in human flesh, as you pointed out.  There are affidavits from two of the vets of Blackwater claiming that Erik Prince principally went into this, to some degree at least, because he wanted to kill Muslim people.  Now we find out that they were hired as part of a secret international hit squad that Congress was never supposed to know about. 

Put it together in terms of a context for us.  What more do we know now we didn‘t know before this came out? 

SCAHILL:  What you have here is a confirmation that Blackwater not only was working in an overt capacity for the State Department and for the Department of Defense, where they were overtly killing people, shooting Iraqis civilian, et cetera, all in a day‘s work, so to speak.  But that they also were involved at the highest level of the clandestine operations. 

Blackwater, we now know, served as a buffer between the executive branch of the government and accountability.  In other words, what you have is the White House being able to have ultimate plausible deniability, because you don‘t even have your own CIA guys doing it, you have actually farmed it out to a private company.  What this was effectively, Keith, was a hit squad that responded to one branch of government, the executive branch, at the expense of oversight or involvement of the other two. 

I would say that this was unconstitutional. 

OLBERMANN:  It‘s also—it was already used in the movie “Catch 22.” 

This is Milo and the private army winded up taking over the world. 

SCAHILL:  Right, you have sort of lord of the Christian Supremacist Flies here. 

OLBERMANN:  Jeremy Scahill, whose latest Blackwater article appears in “The Nation.”  The story continues to unfold.  Thank you for illuminating it for us. 

John Ensign says Bill Clinton was a worse infidelitator (ph) than he was.  But in so doing, he implies that Senator David Vitter should be impeached.   

And worsts, House Minority Whip Blunt says at his age, 59, if he needed a hip replacement, he could not get one in the national health systems of Canada or England.  When he turns out to be lying wildly, he just says in response, I didn‘t just pull that number out of thin air.  No, we know where you pulled it out. 

When Rachel joins you at the top of the hour, why Senator Grassley is now using the manufactured Astroturf movements at town halls to try to kill health care reform altogether.

(COMMERCIAL BREAK)

OLBERMANN:  Senator Ensign now explains his infidelity was not nearly as bad as President Clinton‘s.  But he does so in such a way that he implies his fellow Republican Senator David Vitter should be impeached.  That‘s next, but first time for COUNTDOWN‘s number two story, tonight‘s worst persons in the world, brought to you by Glenn Beck.  His radio people deny he was suspended for calling the president a racist, or more likely for angering enough sponsors that 20 of them canceled their commercials.  But sources tell the industry website TVNewsers that, quote, it was Beck himself who was telling Fox staffers last week that he was, quote, forced to take the week off.

Our bronze tonight to Karl Rove, newly inducted into the Scandinavian American hall of fame, and described by that group as one of the most prominent Norwegian American statesmen in the United States.  He has been emboldened enough to demand apologies from two newspapers, because he has yet to be indicted in the political prosecution of Alabama former Governor Don Siegelman.  “Perhaps then Judiciary Democrats will focus on more important issues and the Times and Post will admit their mistakes.  It would be the responsible thing to do.” 

I‘ll apologize for them.  I‘m sorry you haven‘t been indicted yet, Karl.  There‘s plenty of time remaining. 

Our runner-up, Senator John Cornyn of Texas, still pumping the paranoia that the White House offered to correct any spurious emails about health care reform was a, quote, fishy way to collect e-mail addresses of its opponent.  The same collection of addresses, by the way, is done at the website of Senator John Cornyn of Texas.  You want to write a letter of complaint to the senator, you oppose him, you‘re his enemy?  You have to leave your e-mail address and you‘re real-life address too, street address and everything, where you live.  One thing left out of this equation, people, some of them people who work for insurance companies, are sending out these mass spam e-mails and urging recipients to send them on to everybody they know.  You got your wish, shut up. 

But our winner tonight, Congressman Roy Blunt of Missouri.  The minority whip has told this one to the editorial boards of newspapers in Springfield, MO, and St. Louis.  “I‘m 59,” he says.  “In either Canada or Great Britain, if I broke my hip, I couldn‘t get it replaced.” 

Two-thirds of the hip replacements done by the National Health Service in Great Britain last year were done on people 65 or older; 63 percent of those done in the Canadian system were done on people 65 or older; 1,200 of them in Canada were done on people older than 85. 

Confronted with the astonishing inaccuracy of his bull crap, Congressman Blunt did not live up to his name.  “I didn‘t just pull that number out of thin air.  It came from, quote, some people who were supposed to be experts on Canadian health care.” 

You didn‘t just pull that number out of thin air?  You pulled it out of your backside.  This illustrates how much those public servants owned by the insurance and health care industry—how much they‘re expected to try to kill reform.  They have not merely suspended the supposed minimum standard, don‘t lie, they‘ve now suspended even the pretense of getting away with the lie.  Like Senator Blunt, who just lied to his constituents, lied to the entire nation, lied to the media, and lied stupidly, and in such a way that his lying would be caught within minutes. 

It‘s too bad we‘re more worried about lies like those of Senator Ensign or Vitter.  Their lies might eventually cost them office.  Senator Blunt‘s lie is egregious enough, insulting enough that in a perfect world, it would force him to resign.  Congressman Roy Blunt, liar, today‘s worst person in the world. 

(COMMERCIAL BREAK)

OLBERMANN:  After having an affair with his married staffer, who happened to be married to another staff, who happened to be one of his close friends; after being driven to a Fedex by a gang of religious conservatives, and made to send an overnight note ending the affair, and then meeting his mistress the next day in Vegas anyway; after his parents gave the mistress and her husband 96,000 dollars as a gift, Nevada Senator John Ensign will not resign.  In fact, the man who voted to impeach a president for his actions, declares his own such actions unimpeachable, because, in his words, I haven‘t done anything legally wrong. 

Number one story, Senator John Ensign says his extramarital affair isn‘t as bad as President Clinton‘s was, because he did not lie to the public about it.  Which might not be true, incidentally, and which also puts his Republican colleague Senator Vitter in something of a spot.  Does it not? 

In his first string of public appearances since admitting to a legal affair with Cindy Hampton, Ensign making a de facto apology tour in the northern part of the state, and, in an interview with the Associated Press, attempting to explain why not all affairs are created equal. 

(BEGIN VIDEO CLIP)

SEN. JOHN ENSIGN ®, NEVADA:  President Clinton, first of all, he was president.  He stood right before the American people, and he lied to the American people.  You know, you remember the famous day that he lied to the American people.  Plus the fact that I thought he suborned perjury. 

(END VIDEO CLIP)

OLBERMANN:  Joining me now, columnist for the “Las Vegas Sun,” Jon Ralston.  Thanks for some of your time tonight, sir. 

JON RALSTON, “THE LAS VEGAS SUN”:  Thanks for having me, Keith. 

OLBERMANN:  Any logical reason why the senator should have invoked the former president?  I mean, did it not occur to him that anybody could then find his quote from 1998, which was, “think about it.  He,” meaning Clinton, “sent taxpayer-paid staff out to lie for him.  And that is a misuse of office.”  Might those words come back to haunt the senator, do you think? 

RALSTON:  Well, of course, they should, Keith.  He said all kinds of things back then.  He said during that rehabilitation tour, the de facto apology tour, as you called it, that he was different than Bill Clinton because he didn‘t do anything legally wrong, as you said. 

That‘s not even true, because that‘s not why he asked Bill Clinton to resign.  He said Bill Clinton should resign before the Starr report even came out, because he had lost credibility. 

You mentioned David Vitter.  He did no rush to judgment there, did he?  He did a rush to judgment with Larry Craig, you know, because he solicited gay sex, which is so offensive to John Ensign, who believes in the sanctity of marriage.  And look at the rush to judgment he did with Bill Clinton. 

It‘s not John Ensign—shouldn‘t be calling for David Vitter to be impeached.  John Ensign, by his own standards he set in 1998, Keith, should be calling for John Ensign to resign. 

OLBERMANN:  The other part of this, of course, the—Ensign‘s lawyer is maintaining that the senator‘s parents gave the Hampton family 96,000 dollars as a gift.  You famously interviewed Doug Hampton, the husband of Ensign‘s mistress, and he said it was flat out severance, compensation essentially.  When Ensign says, in the AP article, one of the reasons he voted to impeach President Clinton was I thought it was a violation of a felony; couldn‘t he himself face a felony charge, out of a finance law violation, because of where the money came from? 

RALSTON:  Yes, indeed.  The Senate Ethics Committee and the Federal Election Commission may be investigating just that.  It is a potential felony to not disclose more than 25,000 dollars in severance.  As you mentioned, Doug Hampton said on my program that that was certainly severance.  Listen, his explanation through his lawyer that it‘s 96,000 dollars, as you derisively point out in gifts, is just not credible, because, first of all, they left out one of the kids.

What‘s wrong with one of the kids?  Was he a badly behaving boy or something like that, Keith.  Of course not.  This just isn‘t credible.  And the timing; make sure people know when the gifts occurred.  They happened at exactly the same time that John Ensign sent Doug Hampton and Cindy Hampton packing from D.C. and back to Las Vegas.  Some gift. 

OLBERMANN:  We mentioned Senator Vitter.  And with this logic, shouldn‘t he in fact be calling for Vitter to either resign or to be removed forcibly, because if it‘s a question of your affair being illegal or legal, your infidelity being legal or illegal—prostitution in Washington is still illegal, even if you‘re a senator, right? 

RALSTON:  Indeed, it is, Keith, at least technically.  So I guess you would say that he should be calling for Vitter to be out of office too.  He‘s already defended Vitter, saying he wasn‘t convicted of anything yet.  But, again, John Ensign clearly has different standards for Democrats or Republicans who solicit gay sex, than he does for himself or his pal David Vitter. 

I just don‘t know why he would continue to talk about this, and try to say that my affair was less bad than other people‘s.  And first of all, as I said, what he is saying is patently false about why he called for Bill Clinton to resign.  He did not call for him to resign because he thought he committed a felony.  He called for him to resign because he said, quote, he had lost credibility. 

And, again, Bill Clinton, whatever you think of him, did not go around pointing fingers at others.  John Ensign has spent his career being up on that high horse.  Who is it that really has lost credibility here, Keith? 

OLBERMANN:  When you try to keep a very complicated, nonsensical line of defense together, it does tend to fall apart in rather obvious places, even if you don‘t see how obvious it is.  Jon Ralston of the “Las Vegas Sun,” great work on the story and great thanks for your time. 

RALSTON:  Thanks, Keith. 

OLBERMANN:  That‘s COUNTDOWN for this, the 2,303rd day since the previous president declared mission accomplished in Iraq.  I‘m Keith Olbermann.  As Lloyd Dobbins used to say, and so it goes.

Now, the president says he‘s dedicated.  But there‘s more evidence now that Chuck Grassley‘s dedication is to use Astroturfing to kill all health care reform.  With that, ladies and gentlemen, here is Rachel Maddow.  Good evening, Rachel. 

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

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