updated 4/5/2004 1:14:08 PM ET 2004-04-05T17:14:08

Guests: Neil Livingstone, Lanny Davis, David Frum, Tucker Eskew, Al Franken

CHRIS MATTHEWS, HOST:  Tonight the government issues a new bulletin warning terrorists might try to bomb buses and trains in major U.S. cities this summer. 

And the politics of gas prices, jobs and the economy. 

Let‘s play HARDBALL. 

Good evening, I‘m Chris Matthews.

The skyrocketing price of gasoline has become a key issue in the presidential campaign.  We‘re going to find out who‘s to blame and what we can do about it.

Plus, we‘ll have the latest battle on the ad wars as new commercials from President Bush and from John Kerry are set to hit the airwaves. 

But first, NBC News senior investigative correspondent Lisa Myers has obtained a terrorist planning memo that lists who to target in Iraq and throughout the world—Lisa. 

LISA MYERS, CNN CORRESPONDENT:  Hi, Chris.

Well, basically this is a chilling nine-page document that was posted on the Internet earlier this week in which U.S. intelligence says appears to be authentic.  It‘s written by the leader of the al Qaeda cell in Saudi Arabia. 

Basically, it lays out preferred religious, economic and human targets.  It also ranks nationalities according to priorities in terms of killing.  It says Americans should be first priority, followed by the British, Spanish, Australians, Canadians and Italians. 

It also suggests that terror cells around the world go take out businessmen, bankers, diplomats, religious scholars.  Even Muslim clerics who don‘t go along with the militant violent regime. 

MATTHEWS:  Well, the only group they didn‘t list was tourists.  Are they going to be OK?

MYERS:  No.  Tourists are on the list, too, as are entertainment tours. 

MATTHEWS:  Well, that‘s nice.

Let me ask you about—What struck me was your statement that this came from the leader of al Qaeda in Saudi Arabia.  Is that an underground group?

MYERS:  Well, no.  The leader has been identified by the Saudi government.  He actually appeared in an al Qaeda video that was released on the Internet last month.  So he is well known to Saudi authorities and he, at least, is the person who signed this document. 

One of the interesting things, Chris, is it also refers to the bombings in Madrid.  And it says that the bombings in Madrid prove that violence, these kind of terrorist attacks, can achieve a desired political objective.  Clearly, al Qaeda believes that because of the bombings in Madrid, the Spanish government was toppled, replaced by a government which agreed to withdraw troops, all Spanish troops from Iraq. 

MATTHEWS:  Let me ask you about the old political question.  It‘s probably going to be the new political question for as long as we‘re talking about this, which is what came first, the chicken or the egg?  The alliance between al Qaeda and Iraq, did it come before the war, or has it resulted from the war?  What‘s the evidence here that al Qaeda is using the war in Iraq to further the terrorist war against the west?  Is there any evidence in this that suggests a deal beforehand?

MYERS:  Well, there‘s nothing in here that would suggest a relationship between al Qaeda and Saddam Hussein before the war.  That is going to be the—debated, probably, for many months to come. 

Clearly, this shows that al Qaeda is trying to capitalize on the war in Iraq but also to spread its message to other like-minded terrorists around the world.  Increasingly, as 77 percent of the al Qaeda leadership has killed or captured, al Qaeda cells have been more splintered and the—and other groups have risen up and become increasingly important. 

Basically what this manual does is say to these various terrorist cells, OK, guys, these are what your priorities should be. 

One of the most fascinating parts of it is toward the end.  I‘m sure you‘re a fan of the old Cold War spy novels.  And John le Carre.

MATTHEWS:  Sure.

MYERS:  Well, in it, it talks about—it tells the terrorists how to use a dead drop to communicate without being detected by police and enabling police connect the dots. 

MATTHEWS:  What is the Internet?  I mean, we all so casually look up Goggle or anything we want.  I mean, I‘m amazed of what I can get on that little computer screen of mine. 

How is that being used as a military tool, a paramilitary tool against us in the West?

MYERS:  It is being used extensively by al Qaeda.  Now, this particular document appeared on an Internet magazine that is well known to radicals. 

Other documents, more sensitive targeting information communications are sometimes hidden on the most unlikely homepages.  They have used the Internet to spread training manuals on how to use, you know, a Kalashnikov, how to use a Stinger, fire Stinger missile, all these kind of basic—the kind of things that al Qaeda can used to use in Afghanistan when they had access to the training camps. 

Now they‘re trying to do through the Internet, spread the information around the world, since they can no longer bring terrorists to a central location to train. 

MATTHEWS:  I just love this Jujitsu, where the enemies of the West are using the technology of the West to destroy it.  You know, they‘re using the most modern communications technology to destroy those societies which built this technology. 

Thank you very much, Lisa Myers, investigator for NBC News.

The Department of Homeland Security has issued a warning to law enforcement that indicates terrorists may be trying to make bombs out of fertilizer and diesel fuel and target rail lines and buses in the U.S. this summer. 

What does the terrorist bulletin mean for this summer‘s Republican and Democratic conventions in New York and Boston, as well as the Olympics this summer in Athens? 

Neil Livingstone ought to know.  He‘s a terrorist analyst and CEO of Global Options Incorporated. 

First of all, I‘ve got to ask you about what happened the other day in Fallujah.  You do this kind of work.  What was your reaction when you saw those four contract workers, you know, fried over there?

NEIL LIVINGSTONE, TERRORIST ANALYST:  It was terrible.  I mean, we‘ve worked with Blackwater, the company that employed them.  And three were ex-Navy SEALs.  We have a lot of Navy SEALs that work with us.  This is...

MATTHEWS:  They‘re tough guys.

LIVINGSTONE:  Yes.  And this is a small community; everyone knows everyone else. 

MATTHEWS:  Right.

LIVINGSTONE:  So this struck home.  And we—we give our deepest condolences to Blackwater. 

But this isn‘t the last time this is going to happen.  Titan, another company that‘s been in there has lost, I believe, 13 people thus far.  Several other companies have lost people. 

We‘ve got a large private military presence there that companies like mine and others that supply these people. 

MATTHEWS:  This morning we had 300 wounded over there this month.  As we saw last week in Walter Reed, wounded means wounded, serious damage to a person. 

Let me ask you about these attacks.  How do you protect something like Penn Station in New York, which is right underneath the Madison Square Garden, where the Republicans are going to meet?

LIVINGSTONE:  Very hard to do.  The problem with these big stations, with our rail services that‘s on is that too many people, too many stops.

MATTHEWS:  No metal detectors?

LIVINGSTONE:  No metal detectors.  And even if you put metal detectors in, for example, in New York you‘ve got millions of riders every day. 

MATTHEWS:  Commuters.

LIVINGSTONE:  Commuters.  How do you make everyone line up and walk through a metal detector?

MATTHEWS:  I‘ll tell you, it will slow everything down. 

LIVINGSTONE:  Absolutely.  It will bring the system to a stand still.  So what they‘re looking at is better surveillance, more police, and more visible signs that say, you know, report an unattended bag or something like that. 

But I think it‘s going to be very hard to find anything like or to apply anything like what we‘ve done in the airports.

MATTHEWS:  We don‘t have much time.  What would happen if somebody in sort of the Palestinian fashion were to simply, you know, gird themselves with all kind of TNT—and that doesn‘t get picked up by metal detectors, does it?

LIVINGSTONE:  Well, it depends on the detector.  It depends on what they have as an initiator in it.  And...

MATTHEWS:  Yes.

LIVINGSTONE:  But we would hope to pick it up.  The problem is, is that‘s where this is going.  That‘s where this new manual suggests that al Qaeda should be looking, is attacks on people.  They work.  They worked in Spain.  You basically have an appeasement government in Spain today. 

And so all they need to do is walk into a crowded terminal someplace, get on a train, go to a sporting event, you know, detonate themselves.  We‘ve seen it in Israel every day, and they‘re going to begin to make radical changes in the United States, maybe in our policies but certainly in how we live. 

MATTHEWS:  I never thought about it, but if you‘re doing it as a political explosive device, not just a human explosive device and your goal is to change politics, you‘ve got to figure—and I‘m not giving anyone any ideas here—but the guys on the other side are thinking go to Madison Square Garden.  Go to the Fleet Center.  Go to Boston, go where there‘s a lot—In fact they probably wouldn‘t go where the Democrats are.  They‘d go where the Republicans are because they‘re the more hawkish. 

But is that the way they‘re going to think, do you think?

LIVINGSTONE:  Well, I think the Republican convention is certainly a target.  But I think any place that they can find a chink in the armor.  That they find weak security, they‘re going to exploit it.

That might also mean something like the Mall of America or some mall out in the Midwest, where we really don‘t have our antenna up the way we do in Washington and New York. 

MATTHEWS:  It would be fairly easy for them to blow a bridge between here and New York, from Washington to New York on the way to the convention, to blow a train up.  It‘s easy, isn‘t it?  Like Lawrence of Arabia.  Just go out there and put the dynamite under the tracks. 

LIVINGSTONE:  Except our bridges are a lot better built than they were in those days.  It‘s hard to blow up a bridge.

And but nevertheless, it‘s easy to send a suicide bomber on board a bus.  I think that‘s what we really have to fear.  Now, an ammonium nitrate bomb in front, in a truck that gets close to a building is going to do tremendous damage. 

MATTHEWS:  Is that what happened here with the people, and Nichols and the others in Oklahoma City.

LIVINGSTONE:  That‘s right.  That was ammonium nitrate.  It‘s a common household fertilizer with some dynamite or some initiator.  And you saw what it did to that building there.  It can be very, very devastating.

MATTHEWS:  Well, why is that a dangerous—because it‘s easy to get that stuff?

LIVINGSTONE:  It‘s easy to get it.  I mean...

MATTHEWS:  What‘s the role of diesel fuel? 

LIVINGSTONE:  Well, it‘s an enhancer. 

MATTHEWS:  You soak it with that?

LIVINGSTONE:  You can do that, but it‘s an enhancer.  You don‘t have to have it.  And everyone‘s going to make a different type of improvised device. 

MATTHEWS:  Right.  Great weekend news.  Great.  Thank you but we better know it.  The big guys ought to know it anyway.  Thank you very much, Neil Livingstone. 

And coming up the 9/11 commission is investigating why the Bush administration is blocking the release of thousands of pages of classified terrorism documents from the Clinton administration.

Lanny Davis and David Frum will be here to fight over that.

And later, the ad war.      President Bush and John Kerry trade shots in a couple of new political commercials.  We‘ll have them here, and we‘ll talk about them and dissect them. 

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, under pressure, the Bush administration says it will allow the 9/11 commission to see thousands of classified pages of Clinton era terrorism documents.  Well, why did they wait so long?  HARDBALL, back in a minute.

(COMMERCIAL BREAK)

MATTHEWS:  The White House has been blocking ¾ of the Clinton administration‘s counterterrorism records from being handed over to the 9/11 commission. 

But just days ahead of Condoleezza Rice‘s testimony they‘ve made arrangements for the commission to review the Clinton documents this Monday. 

Lanny Davis served as special White House counsel to President Clinton.  And David Frum is a former speechwriter for President Bush.

I want to ask you, both, gentlemen, we will get on to other things.  But let‘s get to this thing fast.  On the front page of big newspapers today. 

Why would anybody—well, let me ask you this—why would anybody in the Bush administration not want to put out everything on the Clinton administration to prove that he wasn‘t up to snuff in fighting terrorism?

DAVID FRUM, FORMER BUSH SPEECHWRITER:  I have no idea what‘s in those documents.  And it‘s very possible that some of them would have national security considerations, maybe some embarrassing things like what happened with the Saudi portion of the report. 

There are a lot of allies who are allies in name who aren‘t allies in fact.  And you don‘t necessarily want to embarrass them.  There may be...

MATTHEWS:  You wouldn‘t want to embarrass the Saudis not the Bush administration. 

FRUM:  The Bush administration might think, “Well, there‘s some embarrassing things here.”  And not just about the Saudis, the Egyptians, the Algerians.  There are a lot of people who claim to be Americans friends who haven‘t really been so. 

MATTHEWS:  Speaking of which, if you heard the report that we just put on that the head of al Qaeda in Saudi Arabia is now issuing these reports and these manuals about to how to operate against us, openly?

FRUM:  No, I don‘t know—I don‘t know about that.  But it wouldn‘t be a departure.  Because they are preaching openly.  Incredible things go on there.  And it‘s not just Saudi Arabia.  It‘s all through the region.

MATTHEWS:  Should we invade Saudi Arabia?  Is that on your hit list?

There are some people that think—Richard Clarke was on the other night.  He thinks the next hit list for the hawks is going to be Iran or Syria. 

FRUM:  Reforming Saudi Arabia and making sure that that government is the ally it says it is ought to be a supreme objective of the United States.  And we ought to attach a little bit less attention to who‘s occupying their throne and a little bit more attention to how are they doing and how are they helping the United States? 

MATTHEWS:  OK, let‘s go to Lanny.  The question: is the Bush administration cheating here by not putting out all the documents that might exculpate President Clinton‘s role in stopping terrorism before 9/11?

LANNY DAVID, FORMER WHITE HOUSE COUNSEL:  Well, first of all, I agree with David.  We don‘t know why, but what‘s clear is that this White House is making the same mistake that other White Houses, including the one I served in make, which is that you fight for principal, executive privilege, separation of powers.  You end up getting hurt politically, and then you give it up anyway. 

And they did this Condoleezza Rice dance, which we all knew was going to have the same ending as when we fought Dan Burton. 

MATTHEWS:  So now we‘ve figured out the secret.  So the real problem Bill Clinton faces in history was that he fight too hard for principle.  I mean, I now realize, through a glass darkly, I realize that was what was wrong with Clinton.

DAVIS:  We fought hard for principle of executive privilege, and we lost politically. 

MATTHEWS:  What‘s wrong with that?  Ike created executive privilege 50 years ago, to get on the subject.  And he did it for a very good reason, because they were trying to pull a lot of people into Army McCarthy hearings.  And he said, “My people who advise me during the day are going to be fired that night if they start talking to Congress.” 

DAVIS:  The reason to not have sympathy for this particular                fight by the White House because, for the ages, all presidents are going to have to yield to the politics and the media frenzy whenever Congress demands something. 

Having said that it makes no sense to me why, once you go there and let everything how out, you then make a distinction between your papers and Bill Clinton‘s papers.  That doesn‘t make any sense to me.

FRUM:  Wait a minute.  There‘s a big difference from saying it‘s predictable they were going to yield on Condoleezza Rice and saying they should have yielded at the start and gracefully, and saying Congress has to get—or a creature of Congress has to get every paper it wants. 

I mean, no one can really think—no one can really think that all of the papers of the presidents of national security matters have to be given to anybody that asks for them. 

MATTHEWS:  Think about it.  Why did Condi Rice—Why is Condi Rice only now releasing the national security directive the president was going to sign on 9/11?  Is this to show that the president was on top of al Qaeda before the attack on 9/11?

FRUM:  I think that there may be a danger here that the administration gets backed into defending an untenable position. 

MATTHEWS:  Right.

FRUM:  I mean, they can‘t say...

MATTHEWS:  We were ready. 

FRUM:  ... we were ready.  I mean, obviously the United States wasn‘t ready. 

MATTHEWS:  By the way, the break he gets from history and from the American people.  And it‘s still true.  Two-third of the American people, including me, believe he can‘t be blamed for 9/11 for happening.  You‘re blamed for not doing your best. 

FRUM:  Twenty year of mistakes into 9/11. 

DAVIS:  Let me give a heretical theory.

MATTHEWS:  By the way, Kristen Breitweiser and these widows are not going to take that answer.  I hope we all agree on that.  The widows of 9/11, a lot of them, are not going to take the government‘s answer they couldn‘t have stopped this.  I can take that...

DAVIS:  No, but I think they will take the answer that we‘re all to blame.  That Democrats and Republicans. 

MATTHEWS:  That‘s an old liberal thing, we‘re all guilty. 

DAVIS:  The fact is that nobody could have foreseen...

MATTHEWS:  Are you personally guilty?  Am I personally guilty?  What do you mean, we‘re all guilty?

DAVIS:  I think that if Democrats engage in the blame game about George Bush not anticipating 9/11, and Republicans engage in the blame game about the Clinton White House not anticipating, everybody loses. 

MATTHEWS:  Are you...?

DAVIS:  I think that that‘s what‘s up and...

MATTHEWS:  You can argue that because you‘re outside the political arena.  Do you think it‘s OK for two Republican commissioners on the 9/11 commission to be having a little meeting down at the White House, a little ex parte meeting with the Bush general counsel, Alberto Gonzales, before they started attacking Clarke this week?

Is there anything to getting your notes, your talking points written

by the White House, the 9/11 commission?

DAVIS:  What‘s dumb is to assume that you can do that and not have everybody know about it.  And if you‘re...

MATTHEWS:  Well, the names are Jim Thompson and Fred Fielding, and they met with the White House counsel.

What did you think of that? 

FRUM:  I thought it was harmless.  I mean, this is not a... 

MATTHEWS:  Harmless?  To get talking points?

FRUM:  This is not grand jury.  It‘s not a judicial body.  It is a fact-finding commission whose job it is, is to solve problems. 

And one of the things that has happened at this commission that is tragic, is here‘s a body that ought to be saying is the FBI better?  Probably not.  Is the CIA better?  What do we do with the immigration service?  How did this happen?  And instead, it is turning into...

MATTHEWS:  Would you liked to have known that the Warren Commission was getting its—its sort of talking points from Johnson? 

FRUM:  It would—It wouldn‘t have surprised me at all, unless you think that Johnson‘s up to no good, which I wouldn‘t have thought. 

DAVIS:  The issue is they don‘t do it openly.  And that‘s the problem.

MATTHEWS:  OK.  Well, it‘s open now, buddy.

Lanny Davis, David Frum, thanks for coming back. 

Up next—we‘ll have you back next time to talk about something you really understand.  Because nobody knows what we‘re talking about.  This is the toughest thing, because we haven‘t seen these documents which are being withheld.

MSNBC‘s Chris Jansing on the heavy campaigning by Kerry and President Bush in New Mexico, coming up.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

Two hundred and thirteen days until election day, and every week between now and then we‘re zeroing in on states that will make or break the battle for the White House.  We‘re calling it “Battleground America.”

Tonight, MSNBC‘s Chris Jansing joins us from Albuquerque—Chris. 

CHRIS JANSING, NBC NEWS CORRESPONDENT:  Hi, Chris. 

In terms of sheer numbers, no state had closer vote totals in 2000 than New Mexico.  And it‘s shaping up to be another nail-biter this year.

Gore did win four years ago.  There‘s a very popular Democratic governor who is putting his organization to work for John Kerry. 

On the other hand this is basically a rural conservative Western state.  That would favor George W. Bush.  And that‘s the reason why this is one of the critical states where both candidates will be spending most of their time and money over the next seven months. 

(BEGIN VIDEOTAPE)

JANSING (voice-over):  At 58, Bill Walters of Albuquerque has voted for both Republicans and Democrats for president, and this year he‘s just what George Bush and John Kerry covet: an undecided voter in one of 17 states that could decide the election. 

BILL WALTERS, SWING VOTER:  I thought about both sides.  I mean, I like some things that Bush does and I like some things Kerry does and vice versa.  I don‘t like some of things either one of them do. 

JANSING:  Battleground America, states Bush won or lost by six percentage points or less in 20000, 10 of them by four percent or less. 

MARK BARABAK, “LOS ANGELES TIMES”:  If we‘re looking at an election like we had in 2000... 

JANSING (on camera):  Three hundred and 66 in New Mexico, 537 in Florida. 

BARABAK:  Exactly.  Exactly.  Just a relative handful of votes in any one of those states, if it is as close as the last time, could wind up tipping the election again. 

JANSING (voice-over):  Right now 22 states are solidly Bush country.  Eleven more and the District of Columbia for John Kerry.  And the rest, the race could go down to the wire. 

The Midwest, five states with heavy job losses, especially Ohio.  No Republican has won the White House without it. 

BETH FOUHY, ASSOCIATED PRES:  These are also states that tend to have more blue collar sort of conservative voters who could either go with Democrats because of the economic issue or with Republicans because of social issues. 

JANSING:  The Southwest: Arizona and New Mexico, a true bellwether that has voted with the winner in all but one presidential election.  It‘s the second poorest state in the nation but has gained jobs under President Bush. 

(on camera) You‘ve got a fight on your hands. 

GOV. BILL RICHARDSON (D), NEW MEXICO:  We have a fight on your hands.  President Bush has invested in a lot of visits in New Mexico.  The Republican National Committee is going to pour a lot of money in our state. 

President Bush does have appeal to Hispanic voters. 

JANSING (voice-over:  Governor Richardson may help counter that. 

Hugely popular and a possible V.P. choice for Kerry. 

Further west, Washington, Nevada and Oregon, a state Al Gore won by less than 7,000 votes but where Bush‘s no tax message is catching on. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  Because we cut the taxes right at the right time.

JANSING:  In the northeast, arguably Kerry territory, New Hampshire and Maine are very much in play. 

And in a category all its own, Florida.  The hanging chads are gone, but the latest polls show something else familiar, a virtual dead heat. 

UNIDENTIFIED MALE:  Some people have wacky ideas like taxing gasoline more so people drive less.  That‘s John Kerry.

JANSING:  The 17 battleground states have been inundated with campaign ads, mostly from the cash-rich Bush campaign.  It‘s working.  The attacks on Kerry have cost him in the polls.  His once narrow lead is evaporating.  It‘s back to a dead heat. 

SHERRY BEBITCH JEFFE, UNIVERSITY OF SOUTH CALIFORNIA:  This is perhaps the most complex, volatile, fluid election I‘ve seen in a very long time, of course, if you don‘t count the six-week election night in 2000. 

JANSING (on camera):  Could something like that happen again?  Maybe not six weeks, but where we have recounts in multiple states?

JEFFE:  It‘s quite possible.  This is a very, very close election. 

JANSING (voice-over):  Which makes Bill Walters very much a wanted man. 

(on camera) You sound like somebody who‘s not going to make their mind up maybe until November. 

WALTERS:  That‘s usually what I do.  You know, if election day is November 4, I make up my mind on November 3, November 4. 

(END VIDEOTAPE)

JANSING:  And there‘s one more reason people are watching New Mexico so closely.  It‘s a barometer state.  Growing Hispanic population, growing manufacturing.  A lot of easterners have been moving here. 

As the governor puts it, this really is a microcosm of what America will look like in the future—Chris. 

MATTHEWS:  Thanks a lot, Chris Jansing.

Up next, how will rising gasoline prices affect the battle for the White House?  Joe Trippi and Tucker Eskew will be here to battle that one out.

And later, political comedian, best selling author and now radio talk jock Al Franken will be here to talk about his new show, “The O‘Franken Factor.” 

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  This half hour on HARDBALL.  Who‘s to blame for skyrocketing gasoline prices and will prices at the pump affect the presidential election?

Plus, Al Franken and the new liberal radio network, Air America.  But first, the latest headlines right now.

(NEWSBREAK)

MATTHEWS:  Welcome back to HARDBALL.  Gasoline prices nationwide are hitting new highs and all day long on MSNBC we‘re taking a special look at the rising costs at the pump.  The average price of a gallon of gas is topping $2 in California and other western states.  And skyrocketing gas prices nationwide have become an issue in the upcoming presidential election.  Joe Trippi is a Democratic strategist and an MSNBC analyst and Tucker Eskew is an adviser to the Bush-Cheney re-election campaign.  Tucker, I‘m looking at the numbers.  Up to $1.70 plus for regular.  This is something that cost Richard Nixon, maybe his presidential career.  You can talk about Watergate.  What blew that guy out of the (UNINTELLIGIBLE) was high gas prices.

TUCKER ESKEW, BUSH-CHENEY ‘04 CAMPAIGN ADVISER:  And not having a plan to do something about it.  The president‘s got a plan up on the hill.  He‘s jawboning Congress to try to get that plan passed.  He‘s also working with the oil producing countries.  There were meetings today at the White House, meetings at the state department.  We‘re pushing hard for some...

MATTHEWS:  You‘re giggling.  Joe Trippi‘s (UNINTELLIGIBLE).  He‘s bated breath here.

JOE TRIPPI, MSNBC ANALYST:  Jawboning Congress.  The president in 2000 campaigned saying he was going to jawbone OPEC into releasing more...

(CROSSTALK)

MATTHEWS:  But going back to (UNINTELLIGIBLE) back 1940‘s.  Doesn‘t the Bush family take pride in the fact that they have close personal relationships with a lot of these Saudi guys?  Can they jawbone, is that true? 

ESKEW:  ...a lot of close relationships around the world.  We‘re fortunate to have that and, yes, the president does make use of those relationships. 

MATTHEWS:  To what effect? 

ESKEW:  Advance America‘s interest.

MATTHEWS:  To what effect? 

ESKEW:  Around the world including...

MATTHEWS:  To what effect? 

(CROSSTALK)

ESKEW:  There are something called market forces some liberals don‘t understand that have had some upward pressure.  We need to increase supply so that we have market forces that help lower prices.  And John Kerry doesn‘t have a plan.  He has a 50 cent a gallon tax increase. 

TRIPPI:  You know what‘s going on here?  What‘s going on is gas prices are rising which loses your vote.  So what you do is you start blaming it on a tax that has never happened...

(CROSSTALK)

MATTHEWS:  When did John Kerry propose a 50 cent tax a gallon.

ESKEW:  1994, he told the Concord Coalition that he was really, really dismayed that they didn‘t take into his account his support for a 50 cent per gallon gas tax...

TRIPPI:  You see no statute of limitations on that.

(CROSSTALK)

ESKEW:  But if he didn‘t have 350 other times that he has been in favor of higher taxes it would stand out, it would be something separate.  Instead it‘s part of a pattern. 

TRIPPI:  This is the credibility gap that keeps building here.  You got the Halliburton no bid contracts, you got the oil guys coming in to write our energy policy and now we‘ve got an energy policy that‘s rising gas—gas prices rise 11.5 percent since the Bush administration has come in.  He promised he was going to jawbone OPEC.  He hasn‘t done it.  Oh, he started to do it today.  Big whoop.  Now he‘s jawboning Congress. 

MATTHEWS:  Let me ask you this. Condi Rice has been put forward by the president to testify before the 9/11 Commission about the most sensitive matters of national security.  So the president was willing to buckle the principal on that one or put principal aside in terms of executive privilege.  Is the vice president going to do the same thing with regard to his energy advisers? 

ESKEW:  I think the vice president will do what he needs to do so advance America‘s energy interest and to be as open as we can be while protecting executive privilege...

MATTHEWS:  Would you like to see the vice president say who he gets advice from on energy policy? 

ESKEW:  I think he‘s given those categories before.  I think that‘s a side show.  I haven‘t studied that.  You ought to ask the White House.  I really hadn‘t thought about that. 

(CROSSTALK)

MATTHEWS:  Who‘s going to—where are you going to get oil with Kerry?  Kerry says he won‘t get oil from Alaska because it will offend the environment.  He doesn‘t want to depend on Middle East oil because he gets us involved in there more than we should be.  Where are we getting our oil from? 

TRIPPI:  I think a lot of the problem right now is Venezuela and a lot of other countries where there‘s been disruption and political problems in the country but beyond that...

MATTHEWS:  You mean, he‘s going to be interventionist than this administration in Venezuela. 

TRIPPI:  No, I think what the Kerry campaign has been about from the beginning is energy independence and...

MATTHEWS:  Explain. 

TRIPPI:  Getting out beyond oil. 

MATTHEWS:  Explain, Lucy.  If we get beyond oil.  My car requires gasoline or diesel...

TRIPPI:  More hybrid vehicles. 

MATTHEWS:  When will this happen?

TRIPPI:  It‘s happening now but it needs some leadership and the Bush administration hasn‘t provided any...

MATTHEWS:  You honestly believe there‘s a chance for an alternative fuel to gasoline and diesel within the life of the next administration? 

TRIPPI:  No, you can do things that diminish the nation‘s need for oil by 5 percent or 10 percent, wind energy and other ways to do it.

MATTHEWS:  We‘ll have our cars blown around the country? 

TRIPPI:  Electric and you have hybrid.  And hybrid cars are—SUVs that are hybrid, there‘s three or four models coming out... 

MATTHEWS:  How does wind energy help a car? 

TRIPPI:  Wind energy helps lower our dependence on oil.  We use oil for other things besides cars.  And you have to just lower 5 or 10 percent.  Governor Dean was talking about that in his campaign.  Kerry‘s talking about that.  The president has done, with a lot of things, lip service and has not done anything on alternative...

MATTHEWS:  So you think he has to take a more realistic view (UNINTELLIGIBLE) we‘ve got to get oil from the Middle East? 

TRIPPI:  Kerry‘s recommended that we start using our oil reserves and get them into the market. 

MATTHEWS:  You like that idea? 

(CROSSTALK)

TRIPPI:  There‘s things he wants to do right now but he‘s got...

(CROSSTALK)

MATTHEWS:  Here‘s a serious question about price.  If we stop feeding

oil into the soft columns down there, if we stop doing it that will lower

the price of gas, should we do it

ESKEW:  No, we should not do and John Kerry himself said so in 1996 or 1997.

TRIPPI:  This is 2003.

ESKEW:  Well, and so changing principals happens an awful lot with this guy.  Joe, you weren‘t paying attention while the president jawboned the Congress and the Saudis on oil and you weren‘t paying attention—wait a minute, let me finish...

MATTHEWS:  We got more.  We‘ve got to finish when we come back.  More with Tucker Eskew on behalf of the re-election team.  More from Joe Trippi with his new favorite candidate John Kerry.  And political air wars are heating up.  David Shuster will be here tonight to dissect the latest Bush and Kerry advertisements on television.  I hope we really dissect them tough because a lot of these things are full of it.  Anyway, you‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with Joe Trippi and Tucker Eskew.  Today, John Kerry released his first negative ad of the general election, attacking George Bush over jobs.  And what a day to do it.  The latest economic numbers show surging job growth.  But in service sectors, not manufacturing.

Meanwhile, the Bush campaign is responding to Kerry with more negative ads of their own.  And a Democratic group is also in the fray.  HARDBALL election correspondent David Shuster and his ad watch team bring us the latest campaign commercial reality check. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Seeking to hang the country‘s economic problems around President Bush‘s neck, John Kerry‘s first negative ad attacks the president for outsources. 

UNIDENTIFIED MALE:  While jobs are leaving our country in record numbers, George Bush says sending jobs overseas makes sense for America.  His top economic advisers say moving American jobs to low-cost countries is a plus for the U.S.

SHUSTER:  The commercial is meant to exploit a possible presidential weakness, the overall loss of more than two million jobs.  But the president himself, contrary to what the ad claims, never said that sending jobs overseas makes sense.  The president signed an economic report with that line, a report that focused primarily on the benefits from free trade.  The attack ad also includes a contrast. 

UNIDENTIFIED MALE:  John Kerry has proposed a different economic plan that encourages companies to keep jobs here.  It‘s part of a detailed economic agenda to create 10 million jobs. 

SHUSTER:  It‘s true John Kerry wants to give tax breaks to companies that stay in America, but economists dispute his claim that his agenda would create 10 million jobs.  Furthermore, Kerry still has not outlined his agenda‘s cost. 

As for the Bush campaign, their new attack ad released one hour after Kerry‘s, hammers the Democrat over taxes.

UNIDENTIFIED MALE:  John Kerry‘s record on the economy, troubling.  He opposed tax relief for married couples 22 times.  Opposed the increase in the child tax credit 18 times.  Kerry supported higher taxes over 350 times. 

SHUSTER:  Actually, many of those votes were not higher taxes, but were for maintaining the status quo instead of lowering taxes for the rich.  And when Kerry did vote for higher taxes, they were part of a 1993 Clinton package that helped balance the budget, something the Bush administration has failed to do. 

Finally, a Democratic group backed by financier George Soros has also released a new ad, this time attacks President Bush‘s priorities. 

UNIDENTIFIED MALE:  We could rebuild our electric grid.  We could make sure every child has insurance.  George Bush is spending $87 billion more in Iraq.  But after three years, where‘s his plan for taking care of America? 

SHUSTER:  Targeting the contrast may be effective, but the ad implies U.S. troops could suddenly be pulled out of Iraq and the money transferred immediately into domestic problems.  That is not reality.  And even most Democrats believe that ending the occupation now would be a mistake. 

(on camera):  All of these negative ads are running in general election battleground states.  And both presidential campaigns confirm they‘ve got dozens of other attack ads ready to go.  For more information on the ad war, we‘re keeping track of every shot at hardball.msnbc.com.

I‘m Davis Shuster, for HARDBALL, in Washington.

(END VIDEOTAPE)

MATTHEWS:  Tucker, I don‘t know about—I dislike the voice of the Republican ad guy more.  It‘s snarcastic (ph), snarky, wise-ass voice of your guys.  Yeah, right.  And your guy is like the grim reaper talking there.  Who picks these guys?

ESKEW:  Well, we got a group of pros.  I like that ad.  I like the—

I like the message, which is the numbers—you know, your piece cannot debunk the fact that over and over hundreds of times, John Kerry supports higher taxes. 

(CROSSTALK)

MATTHEWS:  Your ad campaign, just to make the point, explain the $900 billion fact.  Your ads have been saying Kerry will raise taxes by almost $1 trillion. 

ESKEW:  Yeah, in the first—in the first 100 days. 

MATTHEWS:  Give me the math. 

ESKEW:  Because this—he has a plan for $1.7 trillion more than the GDP of France, Joe, to spend in his first year.  He‘s got spending plans worth more than $1.7 trillion.  And he wants to raise taxes.  Now, he says it‘s just on the rich.  If you do that, even by the most liberal assessment, you don‘t get anywhere near close to covering the gap.

TRIPPI:  He wants to repeal...

ESKEW:  And reduce the deficit, he can‘t do it.

TRIPPI:  ... repeal the Bush tax cuts on the rich and on the wealthy. 

That‘s what he‘s been talking about doing.

ESKEW:  Raise taxes.

TRIPPI:  No.  On the wealthy, that‘s right.  And give the middle class a tax cut and provide health care, which the Bush administration has failed to promote or do anything about.

(CROSSTALK)

MATTHEWS:  The president keeps promising to cut taxes, cut taxes, cut taxes every year.  Is that always good policy?

ESKEW:  It‘s good policy when you do it the right way.  This tax cut we have now, it had been...

TRIPPI:  It‘s not (UNINTELLIGIBLE)...

ESKEW:  ... the best timed tax cut in a generation at least. 

MATTHEWS:  What‘s wrong with the Bush tax cut and will your guy raise taxes? 

TRIPPI:  They sat around, they gave too much tax cuts to the rich, they didn‘t give anything to the middle class, working poor. 

(CROSSTALK)

TRIPPI:  It‘s not.  And it‘s like the gasoline stuff today.  Who‘s paying these higher rates?  It‘s regressive, because our people who want to try to get to work have to pay these higher tax bills.  They don‘t have an energy policy that works for them. 

ESKEW:  (UNINTELLIGIBLE) more.

TRIPPI:  No, that‘s not true.  And the other thing that these guys have done is they just keep doing the tax cut, tax cut, tax cut.  This is about tax fairness.  It‘s about removing and repealing the tax cuts that the Bush administration gave the rich and giving a middle class tax cut to the middle class, which is a shift in the right direction, not the wrong direction the way the Bush administration did it.  And then you guys promised that all these tax cuts were going to create millions of jobs.  Instead we lost two to three million jobs. 

ESKEW:  I‘m glad you brought up jobs, Joe.

TRIPPI:  All manufacturing jobs.  And that‘s what that Kerry spot gets into, is the job loss.  And you... 

MATTHEWS:  What about the 300,000 new jobs in March?

TRIPPI:  So it‘s what?  We‘ve got a net two million loss.  And not only that, it‘s not in manufacturing.  This is in service sector jobs.  I don‘t think this is going to help the Bush people, because California is not going to vote for Bush.  I don‘t think they will.  And the states like Ohio and West Virginia, where the manufacturing jobs have really been lost, Pennsylvania.  They aren‘t getting any back. 

(CROSSTALK)

MATTHEWS:  Tucker, let me ask you this, what would you say if a Democratic administration had come into office and had taken a $500 billion surplus and turned it into a $500 billion deficit?  What would you say about that administration?  What would you say about that administration? 

ESKEW:  You know what, I would say if they were leading a war on terror globally, if they were contending with a recession handed to them...

MATTHEWS:  But we‘re not spending $500 billion here on a war—we‘re not spending $500 billion fighting in Iraq. 

(CROSSTALK)

ESKEW:  ... and the effects of 9/11, and you‘d say, you know what, I‘d be cheering for that administration if they were doing what this one‘s doing.  And what this one‘s doing, best timed tax cuts, but you won‘t talk about the job creation, because 308,000, it‘s nearly 800,000 in the last seven months, Chris.  And if you‘re a pessimist, if you‘re a pessimist, you don‘t like this news today.  And if you‘re a pessimist, you‘re probably for John Kerry.  The blame America first crowd doesn‘t see what‘s going on. 

(CROSSTALK)

MATTHEWS:  He didn‘t blame America yet.  Did he? 

(CROSSTALK)

MATTHEWS:  What has Joe said against our country? 

TRIPPI:  You want me to smile and watch gas prices go up because that‘s a great vision thing? 

(CROSSTALK)

TRIPPI:  ... long-term on the environment... 

ESKEW:  I would see interest rates at record lows...

TRIPPI:  It‘s say one thing and do another.  That‘s what the entire administration‘s been doing. 

(CROSSTALK)

MATTHEWS:  Are interest rates going to stay low right through the election?

ESKEW:  I think so, yeah.

MATTHEWS:  I hope so.

ESKEW:  Good time.

(CROSSTALK)

MATTHEWS:  Thank you very much, Joe Trippi, Tucker Carlson—Mr.  Tucker Eskew.  I‘m sorry.  Up next, the star of the new liberal radio network, Al Franken himself.  “The O‘Franken Factor” he calls it.  You‘re watching HARDBALL on MSNBC.  Al‘s coming here.

(COMMERCIAL BREAK)

MATTHEWS:  This week the liberal radio network Air America debuted in four cities in an attempt to challenge the radio dominance of the political right.  Political humorist and best selling author Al Franken is one of the stars of the new network.  Franken‘s show is called “The O‘Franken Factor.” Has that gotten to Mr. O‘Reilly, your name itself? 

AL FRANKEN, HOST, “THE O‘FRANKEN FACTOR”:  That was the object, was to annoy and bait him.  And yes, he‘s already—he‘s now started a feud with G. Gordon Liddy.  G and I are friends.  I‘m so friendly with him I actually call him G.  And I‘m the only one allowed to do that.  And G went on the show and Bill got mad at him, and now there‘s some kind of a feud. 

MATTHEWS:  Well, let me ask you about this, do you know, a lot of liberals listen to conservative radio and a lot of liberals read “The New York Post,” and a lot of liberals listen to O‘Reilly and Sean on radio and TV.  Do you think conservatives have the same sort of frisky, adventuresome attitude, which is they‘ll always listen to the other side if only to get excited? 

FRANKEN:  I hope so.  I hope they, you know, dial up to get annoyed at me.  And so far, some already have.  And we‘ve heard from them, yeah. 

MATTHEWS:  All right, are they the more inveterate call-in people, the conservative people? 

FRANKEN:  Hope so.  I‘m looking for a right-wing crank to call in regularly.  We‘ve got to get the right one, I want a real right-wing crank, the kind who thinks he knows a lot and will argue with me a lot.  So we‘re looking—we‘re looking for that guy. 

MATTHEWS:  I have a theory about radio, which you may not like to hear, but the people who spend a lot of time in their cars, traveling salesmen, who get up at 7:00 or 8:00, or they get up, let‘s be honest, 6:30, they see their family off to school, they get off and they get in their car, and all day long they‘re selling stuff.  Medical supplies.  Stuff that‘s hard to sell, whatever, and all day long they‘re hearing Rush say, you‘re the greatest guy in the world and these damn feminazis are no good and affirmative action is no good, and you‘re the greatest guy, you‘re carrying the load.  Isn‘t there something that‘s automatically conservative about that audience in the daytime? 

FRANKEN:  The salesmen...

MATTHEWS:  The people in their cars all day? 

FRANKEN:  ... who are selling herbal supplements?

MATTHEWS:  Well, whatever.  Good products, of course.

FRANKEN:  Yeah, I don‘t think so.  I think these are people who are probably earning low to middle income and would probably be helped by the policies of someone like John Kerry, as opposed to the policies of someone like George W. Bush, who is giving big tax cuts to the very wealthy and very, very small cuts to those in the middle. 

MATTHEWS:  But Rush makes people feel good, doesn‘t it?  Can you make people feel as good as he and Hannity can?  He makes them feel like they‘re right, they‘re better off for having their views, the country is better off for having you in it.

FRANKEN:  He‘s not appealing to their better angels, I know that.  And I‘ve kind of—listen, I‘ve appealed to a lot of people.  My last book sold about a million copies and it makes people—there‘s a lot of anger among Democrats and among liberals...

MATTHEWS:  I know there is.

FRANKEN:  ... and I think they‘re—I‘m going to be their voice. 

MATTHEWS:  Well, let‘s talk about this undercurrent out there, and I saw it covering the campaign, I mean, going into this campaign, I thought Bush was going to win this thing easily.  And what I discovered, like everybody else who went out there was, at least among those who voted in the Democratic primaries and showed up for meetings, this—I wouldn‘t call it Bush hatred, that‘s a cheap, that explains maybe a third of it. 

FRANKEN:  Right.  I think there‘s anger...

MATTHEWS:  But there are people out there who are genuinely upset about something, and I can‘t quite get my hand on it, something they don‘t like about the way things are going.  Do you know what it is? 

FRANKEN:  Yeah.  I think I do.  I did a lot of touring for my book, and this is among a lot of people—of course there‘s Florida and there‘s him going to the right after Florida, but I think what really—what really angered people is that after 9/11, this was the most united this country has ever been, and this guy ran as the uniter not a divider, and we had the world behind us.  And he had a chance to lead this country in a spirit of mutual purpose and mutual sacrifice, and instead he hijacked 9/11 and used it to win the 2002 election, by running against Max Cleland the way they did, and I think that—I think that this is the real anger at him.  I mean, everyone was caught up in the patriotic fervor, even people you‘d never—never would think, like a friend of mine went out right to his closet, got out his America t-shirt—it took him about four hours to (UNINTELLIGIBLE), but still, everyone was caught up, wanted to be led, and he didn‘t. 

MATTHEWS:  Is it the personal traits of the president, sort of the swagger you see coming from the helicopter, the smirk, or is it some combination of politics and policy?  Try to fine-tune what you think it is? 

FRANKEN:  Well, I don‘t think it helps, the smirk, especially when this is a guy who clearly is disengaged, that‘s what we‘re getting from the O‘Neill book, that‘s what we‘re getting from the Clarke book.

MATTHEWS:  That‘s true.

FRANKEN:  This is a guy who doesn‘t read, who doesn‘t pay attention.  This is a guy who lands on an aircraft carrier and stands under a banner that says “mission accomplished” and doesn‘t take responsibility for it.

MATTHEWS:  But Clinton—I mean, you‘re a liberal, but Clinton was fun to have fun with.  I mean, you could criticize Clinton and have some fun and feel good about it because you know he‘s this big brilliant in many ways guy with a lot of personal problems, but this brilliant guy, who is going to get past it.  You knew you could laugh at Clinton.  I knew, and you still knew he was going to get through the night.

FRANKEN:  Right.

MATTHEWS:  Why can‘t you have as much fun, why can‘t I have as much fun tagging the president now?  Why is this president no fun tagging? 

FRANKEN:  Oh, he‘s fun.

MATTHEWS:  People who say they make fun of him because he‘s not smart

·         I don‘t buy the fact of not smart.  I think the charge against him might be lack of intellectual curiosity? 

FRANKEN:  That‘s certainly true.  For example, if I were Russert on that interview, and maybe if you get to interview the president, next time you get to, ask him, like, say, Mr. President, I didn‘t serve in the military, you know like you did, but I understand it‘s a really bonding experience.  Could you tell me about some of the characters you hung out with out there, down there in Alabama?  What were their names?  What were some of their hijinx?

MATTHEWS:  You are so sarcastic, because you know, that is the question I thought when they were hitting him for not serving, all he had to do was call on a couple of guys he served with.  That would have been over with.

FRANKEN:  Yeah, but he doesn‘t—you know, all he knows is Stretch and Pilot Guy. 

MATTHEWS:  I know.  Hey, Al Franken, good luck with the network. 

FRANKEN:  Thank you, Chris.

MATTHEWS:  (UNINTELLIGIBLE), I‘d love to come on. 

FRANKEN:  OK, great.

MATTHEWS:  This weekend, watch an encore presentation of my interview with former Bush terrorism adviser Richard Clarke.  Tomorrow at 5:00 Eastern, and Sunday at noon.  And Monday, we‘ll look at what makes a good vice presidential candidate.  Right now, it‘s time for COUNTDOWN with Keith. 

END   

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