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'The Last Word with Lawrence O'Donnell' for Wednesday, June 22, 2011

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Guests: Rachel Maddow, Elizabeth Rubin, Rep. Barney Frank, Michael Isikoff, Jonathan

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LAWRENCE O‘DONNELL, HOST:  Good evening from New York.  This is MSNBC‘s live coverage of President Obama‘s address to the nation.

The president is about to speak from the White House East Room where he is expected to announce a plan for the future of the 99,000 American servicemen and women fighting the now 10-year war in Afghanistan that has claimed the lives of 1,620 Americans and wounded 12,000 more.

Two years ago, when the president told the nation he was sending 30,000 more troops to battle the Taliban and al Qaeda, he promised to begin bringing them home in July of this year.  Tonight, he is expected to announce a plan to do just that.

As NBC News has reported this week, the president has been working with military and civilian commanders to develop a drawdown of American forces that will be carried out by newly confirmed Secretary of Defense Leon Panetta, the first Democrat to head the Pentagon since 1997.  The Senate voted unanimously to confirm Secretary Panetta yesterday.

The last time the president spoke to the American people from the East Room was Sunday night, May 1st, when he announced that a secret mission to kill 9/11 mastermind, Osama bin Laden, had been a success.  Much speculation that the killing of Osama bin Laden has provided the opportunity for the president to justify a drawdown of troops at this time.

After the president speaks, I will be joined for analysis by Rachel Maddow.

Here is the president of the United States.

OBAMA:  Good evening. 

Nearly 10 years ago, America suffered the worst attack on our shores since Pearl Harbor.  This mass murder was planned by Osama bin Laden and his Al Qaida network in Afghanistan and signaled a new threat to our security, one in which the targets were no longer soldiers on a battlefield, but innocent men, women and children going about their daily lives.  In the days that followed, our nation was united as we struck at Al Qaida and routed the Taliban in Afghanistan.

Then, our focus shifted.  A second war was launched in Iraq, and we spent enormous blood and treasure to support a new government there.  By the time I took office, the war in Afghanistan had entered its seventh year, but Al Qaida‘s leaders had escaped into Pakistan and were plotting new attacks, while the Taliban had regrouped and gone on the offensive.  Without a new strategy and decisive action, our military commanders warned that we could face a resurgent Al Qaida and a Taliban taking over large parts of Afghanistan.

For this reason, in one of the most difficult decisions that I‘ve made as president, I ordered an additional 30,000 American troops into Afghanistan.  When I announced this surge at West Point, we set clear objectives:  to refocus on Al Qaida; to reverse the Taliban‘s momentum; and train Afghan security forces to defend their own country.  I also made it clear that our commitment would not be open- ended and that we would begin to drawdown our forces this July.

Tonight, I can tell you that we are fulfilling that commitment. Thanks to our extraordinary men and women in uniform, our civilian personnel, and our many coalition partners, we are meeting our goals. As a result, starting next month, we will be able to remove 10,000 of our troops from Afghanistan by the end of this year, and we will bring home a total of 33,000 troops by next summer, fully recovering the surge I announced at West Point. 

After this initial reduction, our troops will continue coming home at a steady pace as Afghan security forces move into the lead. Our mission will change from combat to support.  By 2014, this process of transition will be complete and the Afghan people will be responsible for their own security. 

We‘re starting this drawdown from a position of strength.  Al Qaida is under more pressure than at any time since 9/11.  Together with the Pakistanis, we have taken out more than half of Al Qaida‘s leadership.  And thanks to our intelligence professionals and special forces, we killed Osama bin Laden, the only leader that Al Qaida had ever known.  This was a victory for all who have served since 9/11. 

One soldier summed it up well.  “The message,” he said, “is we don‘t forget.  You will be held accountable, no matter how long it takes.” 

The information that we recovered from bin Laden‘s compound shows al Qaeda under enormous strain. Bin Laden expressed concern that al Qaeda has been unable to effectively replace senior terrorists that have been killed, and that al Qaeda has failed in its effort to portray America as a nation at war with Islam—thereby draining more widespread support. Al Qaeda remains dangerous, and we must be vigilant against attacks. But we have put al Qaeda on a path to defeat, and we will not relent until the job is done.

In Afghanistan, we‘ve inflicted serious losses on the Taliban and taken a number of its strongholds. Along with our surge, our allies also increased their commitments, which helped stabilize more of the country.  Afghan Security Forces have grown by over 100,000 troops, and in some provinces and municipalities we have already begun to transition responsibility for security to the Afghan people. In the face of violence and intimidation, Afghans are fighting and dying for their country, establishing local police forces, opening markets and schools, creating new opportunities for women and girls, and trying to turn the page on decades of war.

Of course, huge challenges remain. This is the beginning—but not the end—of our effort to wind down this war. We will have to do the hard work of keeping the gains that we have made, while we drawdown our forces and transition responsibility for security to the Afghan government. And next May, in Chicago, we will host a summit with our NATO allies and partners to shape the next phase of this transition.

We do know that peace cannot come to a land that has known so much war without a political settlement. So as we strengthen the Afghan government and Security Forces, America will join initiatives that reconcile the Afghan people, including the Taliban. Our position on these talks is clear:

they must be led by the Afghan government, and those who want to be a part of a peaceful Afghanistan must break from al Qaeda, abandon violence, and abide by the Afghan Constitution. But, in part because of our military effort, we have reason to believe that progress can be made.

The goal that we seek is achievable, and can be expressed simply: no safe-haven from which al Qaeda or its affiliates can launch attacks against our homeland, or our allies. We will not try to make Afghanistan a perfect place. We will not police its streets or patrol its mountains indefinitely.  That is the responsibility of the Afghan government, which must step up its ability to protect its people; and move from an economy shaped by war to one that can sustain a lasting peace. What we can do, and will do, is build a partnership with the Afghan people that endures—one that ensures that we will be able to continue targeting terrorists and supporting a sovereign Afghan government.

Of course, our efforts must also address terrorist safe-havens in Pakistan. No country is more endangered by the presence of violent extremists, which is why we will continue to press Pakistan to expand its participation in securing a more peaceful future for this war-torn region.  We will work with the Pakistani government to root out the cancer of violent extremism, and we will insist that it keep its commitments. For there should be no doubt that so long as I am President, the United States will never tolerate a safe-haven for those who aim to kill us: they cannot elude us, nor escape the justice they deserve.

My fellow Americans, this has been a difficult decade for our country.  We have learned anew the profound cost of war—a cost that has been paid by the nearly 4,500 Americans who have given their lives in Iraq, and the over 1500 who have done so in Afghanistan—men and women who will not live to enjoy the freedom that they defended. Thousands more have been wounded. Some have lost limbs on the field of battle, and others still battle the demons that have followed them home.

Yet tonight, we take comfort in knowing that the tide of war is receding. Fewer of our sons and daughters are serving in harm‘s way. We have ended our combat mission in Iraq, with 100,000 American troops already out of that country. And even as there will be dark days ahead in Afghanistan, the light of a secure peace can be seen in the distance. These long wars will come to a responsible end.

As they do, we must learn their lessons. Already this decade of war has caused many to question the nature of America‘s engagement around the world.  Some would have America retreat from our responsibility as an anchor of global security, and embrace an isolation that ignores the very real threats that we face.  Others would have America overextend ourselves, confronting every evil that can be found abroad.

We must chart a more centered course.  Like generations before, we must embrace America‘s singular role in the course of human events. But we must be as pragmatic as we are passionate; as strategic as we are resolute.  When threatened, we must respond with force.  But when that force can be targeted, we need not deploy large armies overseas. When innocents are being slaughtered and global security endangered, we don‘t have to choose between standing idly by or acting on our own.

Instead, we must rally international action, which we are doing in Libya, where we do not have a single soldier on the ground, but are supporting allies in protecting the Libyan people and giving them the chance to determine their destiny.

In all that we do, we must remember that what sets America apart is not solely our power—it is the principles upon which our union was founded.  We are a nation which brings our enemies to justice while adhering to the rule of law, and respecting the rights of all our citizens.  We protect our own freedom and prosperity by extending it to others.  We stand not for empire, but for self-determination. That is why we have a stake in the democratic aspirations that are now washing across the Arab World.  We will support those revolutions with fidelity to our ideals, with the power of our example, and with an unwavering belief that all human beings deserve to live with freedom and dignity.

Above all, we are a nation whose strength abroad has been anchored in opportunity for our citizens at home.  Over the last decade, we have spent a trillion dollars on war, at a time of rising debt and hard economic times.  Now, we must invest in America‘s greatest resource—our people.  We must unleash innovation that creates new jobs and industry, while living within our means.  We must rebuild our infrastructure and find new and clean sources of energy. And most of all, after a decade of passionate debate, we must recapture the common purpose that we shared at the beginning of this time of war.  For our nation draws strength from our differences, and when our union is strong no hill is too steep and no horizon is beyond our reach.

America, it is time to focus on nation building here at home.  In this effort, we draw inspiration from our fellow Americans who have sacrificed so much on our behalf.  To our troops, our veterans and their families, I speak for all Americans when I say that we will keep our sacred trust with you, and provide you with the care, and benefits and opportunity that you deserve.

I met some of those patriotic Americans at Fort Campbell.  A while back, I spoke to the 101st Airborne that has fought to turn the tide in Afghanistan, and to the team that took out Osama bin Laden. Standing in front of a model of bin Laden‘s compound, the Navy SEAL who led that effort paid tribute to those who had been lost, brothers and sisters in arms whose names are now written on bases where our troops stand guard overseas, and on headstones in quiet corners of our country where their memory will never be forgotten.  This officer—like so many others I have met with on bases, in Baghdad and Bagram, and at Walter Reed and Bethesda Naval Hospital—spoke with humility about how his unit worked together as one - - depending on each other and trusting one another, as a family might do in a time of peril.

That‘s a lesson worth remembering—that we are all a part of one American family.  Though we have known disagreement and division, we are bound together by the creed that is written into our founding documents, and a conviction that the United States of America is a country that can achieve whatever it sets out to accomplish.

Now, let us finish the work at hand.  Let us responsibly end these wars, and reclaim the American Dream that is at the center of our story.  With confidence in our cause, with faith in our fellow citizens and with hope in our hearts, let us go about the work of extending the promise of America—for this generation, and the next. May God bless our troops. And may God bless the United States of America.         

O‘DONNELL:  The president of the United States taking a little over 13 ½ minutes to make the historic announcement that he is beginning the withdrawal of troops from Afghanistan, making that announcement to a war-weary nation after a 10-year commitment now to Afghanistan.

He outlined how that troop withdrawal would occur—first 10,000 troops would be removed this year.  Followed by an additional 33,000 --

33,000 total of the surge troops coming out by the end of September, 2012, next year.

The president maintains that the surge worked—the Obama surge in Afghanistan.

He defined the goal in Afghanistan, saying, “The goal that we seek is achievable and can be expressed simply.  No safe haven from which al Qaeda or its affiliates can launch attacks against our homeland or our allies.”

Joining me now, host of “THE RACHEL MADDOW SHOW,” Rachel Maddow, and “The New York Times Magazine” contributing writer who spent time embedded with troops in Afghanistan, Elizabeth Rubin.

Rachel, your reaction.

RACHEL MADDOW, “TRMS” HOST:  My reaction is that I want more information.  And I don‘t usually feel that way after this president‘s speeches.  For him to have said that we are going to, as you say, remove 10,000 of our troops from Afghanistan starting next month, they‘ll be gone by the end of the year, a total of 33,000 will be home by next summer.

But then, for two and a half years thereafter, there are double the number of troops there were when President Obama was inaugurated, and why.  During that two and a half years, there will be a transition that he described—our mission changing from combat to support.  But we know both from the experience of Iraq and from what things are like on the ground in Afghanistan, that that can be a fuzzy line anywhere.

And I think we frankly deserve to know more about what‘s going to happen in Afghanistan between now and the end of 2014, which is a really long way away for a nation that has already been enduring this war for a decade.

O‘DONNELL:  Elizabeth, 2014, he seems to be setting as the date for the end of American withdrawal, certainly the end of American policing in effect of that country.

ELIZABETH RUBIN, NYT MAGAZINE:  Yes, I think what struck me—I totally agree with you, what happens after these 33,000 troops are—you know, we have 70,000 more.

But what I was very happy to hear and what many people did not expect to hear is that he talked about the seriousness of the political solution.  And he talked about bringing the Taliban, discussing negotiations with the Taliban, with anybody who wants to talk about peace.

And I think the Afghans are dying for this.  I think the region is dying for this.  I think Americans are, too.

And up until now, it‘s been very confusing about where America stands on that political process.  So, to me, that was very reassuring.

The second thing was that he stated quite clearly that Pakistan is a problem and that until those sanctuaries, until the Taliban and al Qaeda are no longer operating with Pakistani government support, it‘s going to be very hard to end that war.

O‘DONNELL:  I want to take a look at a graph showing our troop commitment to Afghanistan and showing that if the Obama withdrawal plan goes as scheduled, when it is completed—the withdrawal announced tonight -- when that amount of the withdrawal is completed in December of 2012, we will have slightly more—or significantly more, almost double, the number of troops in Afghanistan as were there when President Obama was inaugurated.

MADDOW:  Yes.  And he talked about tonight—I mean, he used some pretty language, but he talked about the tide of war receding, the light of a secure peace can be seen in the distance.  He talked about the start of what will be a very long end to this.

But again, the point is not that he is warning us that things will go very slowly or that what we are very slow low moving toward is eventually an end to this war, which he sort of explicitly promised tonight, the question is why it has to be so slow?  Why can there has to be another two and a half years, three years‘ commitment, more than three years, in fact, commitment to the United States having significant military presence there?

And that is what we have not yet heard.  We‘ve heard so much reporting, so much interesting reporting on the issue of what the U.S.  thinks can be best achieved in Afghanistan.  Whether or not counterinsurgency is still something they believe in, whether they would rather be looking at something that‘s a more limited counterterrorism mission.

I expected to hear a lot of military strategy in the speech.  We didn‘t hear that.

RUBIN:  No.

O‘DONNELL:  What happens in 2014 when—this graph ends in 2012.  We don‘t know what happens to the line after that.  We have reason to believe that it might just stay static for a while and we have 65,000 or so there in 2014.

Then, do we have a sudden withdrawal of 65,000?  Or—this is what you‘re wondering about?

MADDOW:  This is what we‘re wondering.  After this initial reduction, our troops will continue coming home at a steady pace.  Our mission will change from combat to support by 2014.  The process of transition will be complete.

But I think Elizabeth points out that we also have a sort of war in Pakistan next door, the president talking about how important that is.

What is the relationship between a large U.S. military presence in Afghanistan and what it is that we are doing in Pakistan?  And that being a big American priority.  Has it helped to have 100,000 troops in Afghanistan while we‘ve been pursuing our aims in Pakistan?  Has it helped?  Has it hurt?

And if that changes in Afghanistan, what‘s that going to do to our continued efforts to try to make Pakistan be not the anti-nuclear place on earth?

O‘DONNELL:  We used Afghanistan as the launching base to go into Pakistan to get Osama bin Laden.

Have we reached the point where part of this commitment, -- I‘m putting it another way—part of this commitment in Afghanistan is actually about policing Pakistan.  Has there been a mission shift where some percentage of what we‘re doing on the ground in Afghanistan is about Afghanistan and some other percentage is actually about being militarily, physically, as close to Pakistan as we can be in order to perhaps have to do something there?

RUBIN:  I think we would hope that is the case.  We don‘t know if it‘s the case, but I certainly hope it is, because I absolutely think that‘s where the problem is.

We‘ve now left Kunar, which is the province that borders Pakistan where the Korengal Valley where many Americans were lost and many other bases there.  In fact, I suspect the most Americans were probably lost in Kunar.  We have withdrawn many, many forces from there.

All of the Pakistani groups have now infiltrated into Kunar and are attacking Pakistan from Afghanistan.

So, the situation has reversed.  So, it‘s really a tricky—you know, we are all located down in the south and up in the north and we‘ve left the border.

I think what you asked is that‘s key.  You know, are we going to now use Afghanistan to police Pakistan, which is a very, very, very unstable country right now?

O‘DONNELL:  Rachel, this clear domestic political consumption in this speech.  He knows he has a country that wants to hear this, 56 percent polling now saying we‘re ready to get out of Afghanistan right now.  He used the phrase nation-building at home.

MADDOW:  Right.  The U.S. Conference of Mayors 40 years ago passed an anti-Vietnam War resolution.  They have done no foreign policy since, until this week when the U.S. Conference of Mayors passed a resolution saying, hey, you know that $120 billion that we‘re spending quite regularly—that‘s the budget for Afghanistan this year.  We could really use that in St. Louis.  We could really use that in a lot of American cities.

And we‘re sure that what you‘re doing in Kandahar is lovely for the Kandaharis, but we could actually use it in Baltimore, too.  Using that very same nation-building at home sort of language.

And I think the president knows how well that resonates.  He, in fact, met with the mayors this week.  We also addressed what he called the isolationists—sounding very much, frankly, like John McCain—who has been critical of Republican criticism of the president on Libya, specifically, but also a little on Afghanistan, that the U.S. should be less involved overseas.

Frankly, you can deride it as isolationism all you want.  You can do it by either party, but a huge majority of the American people right now thinks that we are too involved in too many places militarily over the world, 72 percent telling “The Hill” that this week.  It‘s a message that is very, very non-partisan.

O‘DONNELL:  We are going to leave it here for this hour.  You‘re going to—I think you‘ve going to take up this subject at 9:00 maybe.

MADDOW:  Either that or I‘ll just reenact Jon Huntsman‘s dirt bike campaign ads.

(LAUGHTER)

O‘DONNELL:  Elizabeth Rubin of “The New York Times Magazine” and Rachel Maddow of MSNBC, of course—thank you both very much for joining me tonight.

MADDOW:  Thanks, Lawrence.

O‘DONNELL:  Up next, the congressional reaction to President Obama‘s speech.  Congressman Barney Frank joins me.

And later, we now know the answer to the question what did Newt Gingrich buy at Tiffany‘s and why did it make his staff actually quit the campaign.  Michael Isikoff joins me with the new details.

(COMMERCIAL BREAK)

O‘DONNELL:  President Obama has just announced plans for the withdrawal of 33,000 surge troops from Afghanistan no later than September 2012.  Ten thousand troops will depart this year, another 23,000 next year.  That still will leave roughly 66,000 U.S. troops in Afghanistan, which will be nearly double the amount present when President Obama first took office.

Following the president‘s announcement, House Speaker John Boehner released a statement reading in part, “Continuing to degrade al Qaeda‘s capabilities in Afghanistan and the surrounding region must take priority over any calendar dates.  It is my hope that the president will continue to listen to our commanders on the ground as we move forward.  Congress will hold the administration accountable for ensuring that the pace and scope of the drawdown does not undermine the progress we‘ve made thus far.”

Joining me now for more congressional reaction, Massachusetts Democratic Congressman Barney Frank.

Thank you very much for joining me tonight, Congressman Frank.

REP. BARNEY FRANK (D), MASSACHUSETTS:  You‘re welcome.

O‘DONNELL:  Congressman, what is your reaction to the president‘s schedule of drawdown as he announced tonight?

FRANK:  Well, I‘m disappointed, but I‘m more disappointed in the demagoguery of John Boehner.  This is a man who is opposed on raising any taxes above what we now have, even on the riches people in the country.  He‘s prepared to make savage cuts in local law enforcement, in environmental protection, in health care and other quality of life measures, and he‘s apparently criticizing the president because he is going to not keep troops there for as long as Mr. Boehner wants.

To be in Mr. Boehner‘s position—you know, if he really believes that it is so essential that we keep troops there indefinitely, which is kind of what he‘s saying, then he ought to be willing to tax some of his wealthy friends to get there.

So, I first want to express my complete disappointment in what that means.

Beyond that, while I am a continued strong admirer of the president, I was disappointed in his speech.  Removing the 33,000 troops in over a year in our budget crisis is not nearly good enough.

And I want to be very clear.  I also am troubled by the president‘s, I thought, unfair characterization of many of us in effect as isolationists.  I‘d like to see us do more to combat hunger in the world and to combat disease.  I don‘t think it‘s isolationist to say that it is fruitless for us to try to do nation building in Afghanistan.  And in fact, yes, I‘m in favor of trying to go after al Qaeda, but it doesn‘t take 100,000 troops to do that. 

Removing 10,000 troops now, leaving 90,000 for the rest of this year and on into next year, that‘s beyond our capacity.  The other thing that troubles me is the president‘s assertion of his role for the United States as the anchor of global security.  We should be one of those providing global security, but this notion that America somehow has a responsibility to the rest of the world, which they shrink, is counter-productive, because we can‘t do it by ourselves. 

And it puts a strain on our economy, which we can no longer maintain.  We are no longer rich enough, and the rest of the world is no longer poor and weak enough, to justify that predominance of the United States. 

O‘DONNELL:  Congressman Frank, can I take you back to one other line in the Boehner statement where he said “it is my hope that the president will continue to listen to our commanders on the ground as we move forward.” 

I take in that statement, the hope that the president will continue to listen to commanders, a very Republican, deliberate implication that the president is going to make decisions or is willing to make decisions about military engagement in Afghanistan without listening to the commanders. 

FRANK:  Well, I would say this.  It‘s I think an abdication of the principle that ultimately in democracy you have a civilian decision.  The military are the advisers on how to combat a particular engagement.  But whether or not it is worth staying in there and at what cost is not a military decision. 

The military doesn‘t decide whether we raise taxes or cut Medicare or do these other things that would be necessary if you want to spend as much as they want to spend.  It‘s a total misunderstanding of the way things ought to work. 

It is an unfair implication that the president is somehow unwilling to listen.  But this is a national decision.  It is a national decision.  And it is clear. 

And here‘s another part that‘s related.  The president said we can‘t allow any haven for al Qaeda.  He didn‘t say just in Afghanistan.  I wish we could do that, but it‘s impossible.  We cannot plug every rat hole in the world. 

It‘s not just Afghanistan or Pakistan.  It could be Yemen. It can be Sudan.  It could be a lot of other places.  If we were to do a better job of protecting ourselves, which we can do if we brought some of that money home—and then realistically, yes, let‘s try to go after those people where the intelligence tells us they‘re there. 

One other thing, by the way, that troubles me is he made only brief

reference to Iraq.  I would like some assurance that all of the troops will

be out of Iraq by the end of the year, because you have some trying to keep troops in Iraq at a cost of more billions of dollars. 

The fact is—but it goes back, to me, to the president saying we‘re the anchor of global security.  No, we cannot defend the whole world against all threats while they back off.  I don‘t think it‘s isolationism to say we have for too long been asked to do more than our fair share.  We will continue to do more than any other country, but we cannot sustain economically, with any regard for the quality of life, what we‘ve been doing. 

I again repeat to keep the troops in Afghanistan, the notion that they‘re going to be ready soon—you know, there are a lot of Afghans there who are not in the Taliban.  Why aren‘t they ready now?  If they‘re not ready now, what makes us think they will bow a year or two years from now. 

The Taliban doesn‘t have nuclear weapons.  The Taliban is not theoretically some invincible force.  Why is it that 100,000 American troops, 70,000 American troops have to stay there so one faction of Afghans can be equal to another?  I don‘t understand that.  If that‘s the case now, I don‘t see why it changes. 

O‘DONNELL:  Congressman Barney Frank, Democrat of Massachusetts, thank you very much for joining us on this important night. 

FRANK:  You‘re welcome. 

O‘DONNELL:  Coming up, we‘ll turn to the Republican campaign for president, which isn‘t going well for any of the candidates.  Michael Isikoff is here with his report on why the Gingrich campaign staff deserted the campaign and why Gingrich‘s credit history at Tiffany‘s is a much more serious problem than we thought. 

And later, Sarah Palin quits her bus tour even before the halfway point.  She criticizes the media for reporting on her closing down the bus tour.  And in a first for Palin, she criticizes her employer, Fox News.                  

(COMMERCIAL BREAK)

O‘DONNELL:  NBC News has new details tonight on what has fast become the strangest story of the Republican presidential campaign so far, the complications involving Newt Gingrich‘s credit history at Tiffany‘s. 

Joining me now, NBC News national investigative correspondent, Michael Isikoff.  Michael, thanks for joining me tonight. 

You know, since we discovered yesterday that Gingrich not only had the half million dollar line of credit at Tiffany‘s that we had already known about, but also a second line of credit for a million dollars at Tiffany‘s, you‘ve been reporting on this story, and found that it‘s had a larger impact than just the Tiffany‘s bill, but it‘s actually had an impact on that campaign staff and on their resignations. 

What have you found? 

MICHAEL ISIKOFF, NBC NEWS INVESTIGATIVE CORRESPONDENT:  Well, absolutely.  First of all, I should say, Lawrence, the amazing thing about American political campaigns is you never know what‘s going to erupt and become a major issue.  I think it‘s fair to say if a few months ago, somebody was going to suggest that the purchases of Tiffany jewelry would be part of the downfall of one of the presidential candidates, you would have had a hard time believing it. 

But that‘s how it has emerged with Newt Gingrich.  Look, after this story first erupted over a month ago, when it was reported that he had that initial line of credit, you know, Gingrich first didn‘t answer questions, then went on “Face the Nation” and said, look, I paid this debt off.  I shouldn‘t have to answer questions about this.  We live within our means.  And that we are a very frugal couple, was the phrase that everybody remembered. 

And when he said that, his advisers, his campaign strategists knew that they had a real problem on their hands, not just because that was hard to reconcile with what was already out there, but they knew that they were going to have to report, when Gingrich files his financial disclosure form next month and it becomes public at the end of July, that there was this second additional line of credit between half a million and a million dollars that was opened up just last year. 

And the really surprising thing about it—there‘s so many aspects of this—is Gingrich thought that he wouldn‘t have to report this, that because he paid the debt off—and we don‘t know exactly when he did so—that he wouldn‘t have to report it on his campaign personal financial disclosure that all presidential candidates have to file.  And then he was informed by his campaign finance lawyer not the case, it‘s a liability.

Even if it‘s been paid off, he had it during the year in question that he‘s filing the financial disclosure form, and it was going to have to be reported.  And I was told today by one of the advisers to Gingrich that this was a shock to the Gingriches.  They never imagined they were going to have to make this public.

And more importantly, the campaign staff knew they were going to have a whole other wave of stories at the end of July when this—when the financial disclosure was formed.  And that was one of the factors that led to the mass resignation a couple of weeks ago.  Sixteen top advisers resigned. 

O‘DONNELL:  Michael, I want us to take a look again at that moment that Bob Schieffer had with Newt Gingrich on his show about this.

(BEGIN VIDEO CLIP)

BOB SCHIEFER, “FACE THE NATION”:  It‘s very odd to me that someone would run up a half million dollars bill at a jewelry store. 

NEWT GINGRICH ®, PRESIDENTIAL CANDIDATE:  Go talk to Tiffany‘s.  All I‘m telling you is we are very frugal. 

(END VIDEO CLIP)

O‘DONNELL:  What I love about it, Michael, is the Washington veteran, Bob Schieffer, just put it exactly right.  “There‘s something odd.”  He could tell there was something wrong here. 

His gut said I‘ve been around this long enough, there is something wrong here.  Was it the staff frustration with Gingrich‘s complete lack of comprehension of the financial disclosure rules that made them feel if he can trip over something like this, he‘s going to become very, very difficult for us to handle, because there must be a lot of other things that he can trip over like this? 

ISIKOFF:  Well, look, it was part of the mix.  As we‘ve talked before, there were a lot of factors that were creating frustrations for them: maintaining discipline, getting Gingrich to engage in the kinds of campaigning you need to do, particularly in fund-raising, and particularly the distractions created, as many of the advisers said, by Callista Gingrich and how she wanted time carved out on the schedule for these screenings to promote the movies done by Gingrich Productions, which is a for-profit enterprise, taking away campaign time, and then, of course, the final straw, which was that two-week vacation in the Greek islands, the cruise. 

All of that led them to believe, look, he just doesn‘t have the discipline that‘s needed to make this campaign work. 

O‘DONNELL:  In the words of Bob Schieffer, “it‘s very odd to me.” 

Michael Isikoff of NBC News, thank you very much for joining us tonight. 

ISIKOFF:  Thank you. 

O‘DONNELL:  Coming up, the Republican on Republican attacks begin in the race for the presidential nomination.  In round one, Rick Santorum humiliates Jon Huntsman in their competition to see who will come in last in the Republican primaries.  That‘s in the Rewrite. 

And later, Sarah Palin versus Fox News.  Today, Sarah Palin includes her employer in her claim that the news media is always wrong about her.

(COMMERCIAL BREAK)

O‘DONNELL:  Time for tonight‘s Rewrite.  Former Utah Governor Jon Huntsman thinks that it‘s really, really amazing that he does this. 

He thinks it‘s so amazing that he rides dirt bikes that his three campaign commercials so far have shown him doing nothing but riding that motorcycle.  You don‘t hear his voice, just a little music.  You get nothing but the image of a Republican former governor riding a dirt bike, presumably somewhere in his home state of Utah. 

One little problem with the ads, though, that‘s not actually Huntsman riding the bike.  So in his first commercials, Jon Huntsman used a stunt man.  After watching Huntsman‘s announcement speech yesterday, you‘ve got to wonder if he should use the stunt man for more than just riding the bike in the commercials. 

Now, I ride motorcycles too.  I‘ve owned a bunch of motorcycles over the years, a lot of them.  But it‘s the not the first thing I tell people about myself.  It‘s not how I introduce myself, like Huntsman. 

In fact, this is the first time I‘ve ever mentioned motorcycles without being asked about it.  But I guess if I was a Republican, I might think that people would think I‘m a stiff, starchy guy who does nothing cooler than play golf.  And if I do something cooler, then I should tell people that, like right away, show them how different I am from stiff, starchy Republicans. 

So that‘s what these commercials are about.  The first thing this stiff, starchy Mormon Republican from Utah is trying to convince you of is that he‘s really cool.  He‘s got a little Brando in him maybe.  Maybe some James Dean.  I don‘t think he‘s going for my favorite biker image of all time, Dennis Hopper, but he just doesn‘t want you to think he‘s this guy, the other stiff, starchy, Mormon Republican in the race. 

These ads were made by the worst ad guy still employed in American politics, Fred Davis.  He‘s the guy who brought you this. 

(BEGIN VIDEO CLIP)

CHRISTINE O‘DONNELL ®, FORMER CANDIDATE FOR SENATE:  I‘m not a witch.  I‘m nothing you‘ve heard.  I‘m you. 

(END VIDEO CLIP)

O‘DONNELL:  These ads are not going to pull Huntsman up from his position in the polls, from his current one percent in the polls, even if these ads were to go unanswered.  But they have been answered by Huntsman‘s competition for last place in the race, Rick Santorum. 

Here is Santorum‘s Rewrite of the Huntsman ads. 

Enjoy it while you can.  We‘ve only got about eight more months left of Republicans attacking each other in the presidential campaign ads.  And to Rick Santorum, I make this promise: even if you don‘t have enough money to buy broadcast time in the primary states, your attack ads on Republican candidates will always find an audience here at THE LAST WORD.

(COMMERCIAL BREAK)

O‘DONNELL:  Sarah Palin, back home now with her family in Alaska, appears to have lost interest in her own One Nation Bus Tour, the self-promoting, lecture fee increasing publicity tour that most of the political media mistook for a warm-up of a Palin presidential campaign that viewers of this show know will never occur. 

Palin has not offered any indication on her website about when or where her tour would resume.  And today, when press reports indicated that Palin put the tour on ice, Palin tweeted this.  “I did?  Hmm, glad I have media to let me know my plans.  They never cease to amaze.” 

Her Tweet then linked to a media report on FoxNews.com saying that the tour was no more.  So here‘s Palin pretending to be amazed that her employer, Fox News, actually knows what she‘s really up to. 

Remember that her employer, Fox News, told all of the potential Republican candidates for president on its payroll back in March that they could not remain on the payroll if they were even thinking about running for president.  Rick Santorum and Newt Gingrich then left Fox News‘ payroll to begin their losing presidential campaigns.

But remember, Mike Huckabee and Sarah Palin wisely stayed on the Fox News payroll, knowing that their real chances at the presidency are actually no better than Gingrich‘s or Santorum‘s. 

Joining me now, Jonathan Capehart, “Washington Post” editorial writer and MSNBC contributor.  Jonathan, thanks for joining us tonight. 

JONATHAN CAPEHART, “THE WASHINGTON POST”:  Thanks, Lawrence. 

O‘DONNELL:  We do have an update that‘s just come in on Sarah Palin‘s Facebook page, of course. 

CAPEHART:  Yes. 

O‘DONNELL:  She explains on her Facebook page—I assume you‘ve seen it—that she has to stay in Alaska for jury duty. 

CAPEHART:  Right. 

O‘DONNELL:  I don‘t think she‘s going to get a long trial to sit through.  She makes a very vague reference in here to say—she says “I‘m looking forward to hitting the open road again.” 

Well, so am I at some point.  But it is now incumbent on her to tell us when and where.  And even with all these reports today saying it‘s over, she‘s not going to do that anymore, she cannot come out and say here‘s what I really am going to do. 

CAPEHART:  Well, remember, she‘s an unconventional politician.  The laws of presidential physics don‘t apply to her.  She‘s one of a kind.  When she wants to tell us when that bus tour is going to happen, well, she‘ll tell us.  Until then, we just might as well cool our jets. 

Lawrence, this is ridiculous.  When I saw the news that her bus tour had shifted into park, I just thought you can‘t make this stuff up.  She‘s stopped doing this halfway through. 

You‘ve been right all along.  She‘s not running for president.  I‘ve been saying for more than a year now that she‘s not running for president.  She‘s not a good—she‘s not a good politician.  But she‘s a phenomenal star. 

And when you look at Sarah Palin through the prism of a star—you know stars very well, Lawrence—she‘s spectacular at doing what stars need to do to stay in the public eye, maintain attention and feed their bank accounts. 

O‘DONNELL:  Yeah, she is a really brilliant celebrity, wherein the mission is the maintenance of celebrity and keeping that celebrity bubble up as high as it can float. 

CAPEHART:  Yeah. 

O‘DONNELL:  I‘ve got to say, quitting the bus tour halfway through is not more shocking than quitting the governorship halfway through. 

CAPEHART:  Well, no. 

O‘DONNELL:  But once someone has quit a governorship halfway through, the media should be ready for this.  I love seeing now—before we even got to this point in the story, talk about Sarah Palin running for president had evaporated from the media because she had allowed a couple of weeks to go by where she didn‘t do any fake moves about running for president. 

When that happens, the media just kind of goes—just comes to its senses and realizes she‘s not running for anything. 

CAPEHART:  Right.  She‘s basically media catnip.  She pops up.  She goes around.  Everybody follows around.  And I‘m fine with that, covering her and what she does and what she says, as long as people keep it in the context of not politics, but celebrity, and treat her as seriously as that. 

Quite frankly, I treat her with the same seriousness as I would a Lindsay Lohan trial.  Interesting, but it‘s not Earth shattering.  It‘s not going to change any lives.  And it‘s not terribly important to the day-to-day lives of the American people. 

O‘DONNELL:  The other Tweet she did today was a plug for her daughter‘s book, her daughter‘s memoirs. 

CAPEHART:  Right. 

O‘DONNELL:  “Not Afraid of Life, My Journey So Far.” 

Now, I would suggest to you, Jonathan, that good parenting includes the advice to not do your memoirs at age 20, that there might be some sentences in there that you will soon regret, like by the time you‘re 21. 

CAPEHART:  Right.  But maybe she doesn‘t care?  Maybe she just figures let me ride this gravy train for as long as I can.  I‘m glad you showed the cover of that book, because it‘s actually a very nice and tasteful cover. 

Now, this book comes out before Levi Johnston‘s book comes out.  And that book cover is hilarious.  The title of the book is also hilarious.  It‘s called “Deer in The Headlights.”

O‘DONNELL:  Levi knows how to keep his celebrity bubble going too.  Jonathan Capehart of the “Washington Post” and MSNBC, thanks for joining me tonight. 

CAPEHART:  Thanks, Lawrence. 

O‘DONNELL:  You can have THE LAST WORD online at our blog, TheLastWord.MSNBC.com. 

A quick programming night, tomorrow night on this show, I‘ll have my exclusive interview with House Minority Leader Nancy Pelosi.

“THE RACHEL MADDOW SHOW” is up next.  Good evening, Rachel. 

END   

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