updated 7/3/2012 9:46:20 AM ET 2012-07-03T13:46:20

Guests: Buzz Bissinger, Jeremy Roebuck, David Von Drehle, Charles Lane

MICHAEL SMERCONISH, GUEST HOST: When is a tax not a tax?

Let`s play HARDBALL.

Good evening. I`m Michael Smerconish, in for Chris Matthews

Leading off tonight: What we have here is a failure to communicate.
From the moment the Supreme Court upheld the individual mandate by calling
it a tax, Republicans say, A-ha. See? President Obama raised taxes. But
today, Mitt Romney`s chief spokesman told our Chuck Todd, No, the mandate
is not a tax after all.

Why would Eric Fehrnstrom say that? Because if it is a tax, that
means Romney raised taxes with his health care plan in Massachusetts. This
is exactly why Rick Santorum said Romney would be the worst Republican to
carry the anti-health care reform message into the fall.

Also, we`re now hearing that Chief Justice Roberts initially planned
to strike down the mandate, but switched his vote. A rare an fascinating
look at the inner workings of the Supreme Court.

Plus, count on seeing the Obama campaign keep up their attacks on Bain
Capital. Both campaigns now admit it -- the attacks on Mitt Romney`s
business experience -- they`re working.

And newly uncovered e-mails show that Joe Paterno was apparently far
more involved in protecting Jerry Sandusky from authorities than he ever
admitted. Buzz Bissinger on the crumbling of a legend.

And finally, yet another reporter learns the hard way, Don`t mess with
Chris Christie.

We begin with the debate over whether the individual mandate`s a tax
or penalty. "Time" magazine`s Mark Halperin is MSNBC`s senior political
analyst and "The Washington Post`s" Chris Cillizza is also an MSNBC
political analyst.

Gentlemen, the Supreme Court gave Republicans one major gift with
their decision on Thursday, suggesting the mandate was a tax. There`s only
one problem. Mitt Romney isn`t exactly well positioned to take advantage
of that, given his history in Massachusetts.

The problem was illustrated this morning when Eric Fehrnstrom went on
MSNBC and Chuck Todd asked if Romney agreed that the mandate is a tax.


believes that what we put in place in Massachusetts was a penalty, and he
disagrees with the court`s ruling that the mandate was a tax. But again...

agrees with the president -- but he agrees with the president that it is
not -- and he believes that you shouldn`t call the man -- the -- the tax
penalty a tax. You should call it a penalty or a fee or a fine?

FEHRNSTROM: That`s correct. But the president also needs to be held
accountable for his hypocritical and contradictory statements.


MATTHEWS: Now, that`s not in line with Republican talking points on
the issue. On Sunday, Senator Mitch McConnell was asked about the box
Romney finds himself in.


CHRIS WALLACE, "FOX NEWS SUNDAY": If the Obama mandate is a tax on
the middle class, isn`t the Romney mandate a tax on the middle class?

Romney will have to speak for himself about what was done in Massachusetts.


MATTHEWS: There`s plenty of archival footage to keep Romney playing
defense on the issue right through election day. on "MEET THE PRESS" back
in 2006, Mitt Romney had trouble explaining why the fees he raised in
Massachusetts weren`t taxes.


TIM RUSSERT, HOST: A fee`s not a tax?

a fee -- if it were a tax, it`d be called a -- it`d be called a tax.

RUSSERT: But governor, that`s a gimmick. That`s a gimmick.

ROMNEY: No, it`s -- it`s reality. It`s -- it is -- but -- and I have
no -- I am not trying to hide from the fact. We raised fees. We raised
fees $240 million.


MATTHEWS: Mark Halperin, does the GOP need Romney to play ball if
they intend to sell this as a tax?

been on this program one or two other times. I`ve never said this before.
I can`t figure it out.

I think that, clearly, you see an extreme tension between everyone
else in the Republican Party and their presidential nominee on a not
insignificant issue.

The law itself, though, is a point of tension between them. There`s
not very many people in the Republican Party today who think the law Mitt
Romney signed in Massachusetts is a good law because the individual mandate
but also because of -- of the facility that if you don`t -- if you don`t
get health insurance, you have to pay a tax or a fee, depending on what you
call it.

I think it`s possible -- possible -- that the party can finesse this
because they`re unified on repealing "Obama care," but today was an ugly
day and they benefited from the fact that Congress isn`t in session. So
while you had Mitch McConnell saying one thing and Eric Fehrnstrom saying
the other, you don`t have the ping-pong, which I think they`ll eventually
have to confront.

MATTHEWS: Chris, do they have a different route to go? I mean, maybe
it`s because of the archival footage. We showed that clip with the late,
great Tim Russert. Was there a different strategy they could have pursued?

I don`t really think so, Michael, because the biggest thing the Romney
people worry about always is he`s a flip-flopper, he lacks -- he lacks a
core. He doesn`t believe in anything.

And there`s no way that you can finesse -- I`m with Mark on this. I
just don`t see any way that you can finesse calling it a fee or a penalty,
whatever you`d like, in Massachusetts and then somehow moving to calling it
a tax when it`s essentially almost the virtually the exact same thing. I
think if Mitt Romney had his way, he wouldn`t talk about health care at

The one thing that I`d point out -- saw a lot of coverage after Eric
Fehrnstrom was on with Chuck this morning about, Eric Fehrnstrom makes a
gaffe. This is not a gaffe at all.

This is the reason that the establishment of the party -- not
(INAUDIBLE) conservatives, too, but the establishment of the party were
worried about the prospect of Mitt Romney as Republican nominee because
they thought, Health care is something that revs up our base, this is
something we can go after Obama about. He spent two years getting
something that remains less -- less -- viewed less favorably than it is
unfavorably. We can go at him on this.

It`s very hard for him to do because Mitt Romney doesn`t want to
relitigate Massachusetts in any way, shape or form.

MATTHEWS: Mark Halperin, he makes Rick Santorum look like a
soothsayer. I mean, here`s what Santorum said back in March about Mitt
Romney, and it`s complications, I think, like this that Santorum had in


put someone up who is uniquely -- pick any other Republican in the country!
He is the worst Republican in the country to put up against Barack Obama!
Why would Wisconsin want to vote for someone like that?



MATTHEWS: Mark Halperin, did he have it right?

HALPERIN: Well, look, there`s still -- as Chris just said, as your
question suggests, there`s still a problem here, and I don`t think it`s
played out.

But Republicans are united more than they`re divided on "Obama care."
This is a point of tension. They want to -- all want to repeal it,
including Mitt Romney. They all point to the other tax increases in "Obama
care" that they say are bad. They all think it`s bad to have a federal
takeover of health care, and they think that you can talk about "Obama
care" as something that`s hurting the economy, so you don`t have to have an
either-or choice on health care.

This, though, is what Rick Santorum was talking about. As I said,
Romney, I think, is lucky that it`s breaking now, where it`s not white-hot.
Congress isn`t in session. You could imagine, if Congress were in session,
you`d have quotes and quotes from Republican members of Congress saying,
This is a disaster. This is a problem. We don`t know how to deal with

It`s possible, because there`s so much that unites them on health
care, that this will tamp down, and although the Obama people will try to
stoke it, that they may be able to get by. There`s no way to get by this
one point except to, again, rally around the things that unite them on the
issue of health care.

MATTHEWS: Mark, when the far right throws Chief Justice John Roberts
under the bus, like they`ve been doing -- Glenn Beck selling "traitor" T-
shirts, and so forth, how does that cut politically? What`s the message
that independents might take home from that?

HALPERIN: I`ll sneak in one more thing that unites them. They don`t
think you should do "Obama care" without reforming Medicare and Medicaid.

I think that the party is still trying to figure out what to say about
John Roberts. "The Wall Street Journal" editorial board today very tough
on him. I think it takes the Supreme Court issue away from Mitt Romney,
very hard for him to talk about the kind of justices he`d appoint.

It also, though, takes it somewhat away from the president. So even
though the Supreme Court and the ability to nominate justices for the next
four or eight years should be a huge issue in the campaign, I don`t think,
based on what Roberts did and the right`s confusion about what to say about
him -- I think that takes that off the table as an issue.

MATTHEWS: Hey, Chris, this distinguishing between tax and penalty is
difficult on both sides of the aisle. On "MEET THE PRESS" on Sunday, by
way of example, Minority Leader Nancy Pelosi was challenged on the
Democratic position that the mandate constitutes a penalty and not a tax.



DAVID GREGORY, HOST: ... sold to the American people.

PELOSI: No, it`s a penalty. It`s a penalty that comes under the tax
code for the 1 percent, perhaps, of the population who may decide that
they`re going to be free riders. But most people are not affected by that.

GREGORY: But it`s a new tax.

PELOSI: No, no.

GREGORY: It is a new tax on the American people.

PELOSI: No, no. No. It`s not a tax (INAUDIBLE) it`s a tax -- it`s a
penalty for free riders.


MATTHEWS: And exactly how many people will be affected by the mandate
and forced to pay a penalty? It`s not as many as you might think.
According to a report by the Congressional Budget Office, quote, "About 21
million non-elderly residents will be uninsured in 2016, but the majority
of them will not be subject to the penalty. In total, about 4 million
people are projected to pay a penalty."

Chris Cillizza, I can tell you that there`s a lot of confusion out
there. I have heard from any number of people on the radio who say, Well,
OK, I`m now being assessed a taxed to pay for "Obama care." And I say,
Well, do you have insurance? Yes, I already have health insurance. Well,
you`re not being assessed a tax. They think that they are.

CILLIZZA: And you know, number -- two things, Michael. One, yes,
there`s a lot of misinformation. Two, that Pelosi interview shows you why
this issue could cut and hurt Democrats and hurt Barack Obama if Mitt
Romney wasn`t the nominee. You can clearly see there Nancy Pelosi does not
want to say the word "tax" in relation to this. She simply does not.

Now, if you had -- I hate to echo Rick Santorum`s line. Remember how
much controversy, by the way, that line drew, He`d be the worst nominee.
Rick Santorum got all kinds of bad press for that.

But in a way -- let`s say you had anybody but Mitt Romney, someone who
had passed a health care law that had that penalty, that fee, that tax in
it. You can bet Republicans would be much more united on that front.
You`d have them all bashing that idea that, See? Tax-and-spend liberal.
Barack Obama wants to grow government, he wants to raise your taxes, and he
wants to do it to pay for a health care bill you don`t even want.

Now, I agree with Mark, they`re more united on health care than they
are divided. Repeal is the message they will rally behind. But imagine a
scenario in which Mitt Romney was not the Republican presidential nominee.
You would have a more unified party. We would not be spending time talking

MATTHEWS: I have to -- I have to...


MATTHEWS: ... tax issue.

CILLIZZA: This should be a 100 percent winner for Republicans any
time they talk about taxes. Nancy Pelosi`s reaction proves that.

MATTHEWS: I would say this. I think the Obama administration has
done a terrible job in selling the key aspects of it, if a large number of
Americans are walking around thinking they`re about to be assessed a tax,
when, in fact, they aren`t.


CILLIZZA: ... been the case, Michael. I mean, that`s -- if you go
back and look at the data, you know -- if you ask people, Do you support
the Affordable Care Act, you`re going to get in the low 40s view it
favorably, the high 40s view it unfavorably.

If you ask some of the specific provisions on it...

MATTHEWS: Right. They like it.

CILLIZZA: ... wildly more popular.


CILLIZZA: But the bill itself is just not popular, and I don`t -- the
law itself -- and I just don`t see that changing because people have
cemented -- they think they know things that they don`t know about.

MATTHEWS: Well, let me -- let me focus on Mitch McConnell for a
moment because -- question? What`s the Republican proposal to help the 30
million-plus Americans without health insurance? That`s what McConnell was
asked this weekend. Watch his response.


WALLACE: What`s specific thing are you going to do to provide
universal coverage to the 30 million people who are uninsured?

MCCONNELL: That is not the issue. The question is, how can you go
step by step to improve the American health care system? It is already the
finest health care system in the world...

WALLACE: But you don`t think the 30 million...

MCCONNELL: ... what our friends on the other...

WALLACE: You don`t think the 30 million Americans uninsured is an

MCCONNELL: Let me tell you what we`re not going to do. We`re not
going to turn the American health care system into a Western European


MATTHEWS: Mark Halperin, quick "Game Change" kind of a question.
Does the GOP need to do more than that? People are saying, Well, they got
to articulate something. Do they? Is articulating opposition enough?

HALPERIN: Well, look, unfortunately, because I think we shouldn`t be
the only industrialized democracy that doesn`t have universal health care,
it is not a politically dangerous place to be, where Mitch McConnell is, to
say, You know what? We should do things to make health -- access to health
care easier and more likely but not guaranteed.

That`s the position the Republican Party has pretty much had
throughout its history, and they don`t seem to pay much of a price for it.
I`m not sure, given that the current law`s unpopular, this is the election
where they`ll feel on the defensive to take that position.

They do have some policies that Mitt Romney supports that are in --
some of which are in Paul Ryan`s budget, some of which are supported by
Senate Republicans, that would extend health care, in theory, to more

MATTHEWS: But nothing comprehensive.

HALPERIN: But not comprehensive...


HALPERIN: ... and not universal and not very easy to explain.

MATTHEWS: Understood. Mark Halperin, thank you. Chris Cillizza,
thank you very much.

Coming up: You can bet the Obama campaign will keep up their attacks
on Mitt Romney`s record at Bain Capital because both sides now admit
they`re working.

This is HARDBALL, the place for politics.


MATTHEWS: Mitt Romney is the least liked presidential candidate at
this point of the campaign since Bill Clinton 20 years ago. That`s
according to the polling by NBC News and "The Wall Street Journal." Romney
is viewed positively by just 33 percent of Americans, 39 percent view him
negatively, and that`s about where Bill Clinton was in the summer of 1992.

Of course, Clinton turned things around with a series of town halls
and that famous appearance where he played sax on "The Arsenio Hall Show."

So who are the candidates with the highest favorability rating at this
point in their campaigns? Bill Clinton 1996, George W. Bush the year 2000,
and Barack Obama in 2008.

We`ll be right back.


MATTHEWS: Welcome back to HARDBALL. The Obama campaign`s Bain
strategy criticizing Mitt Romney for his work with Bain Capital is paying
dividends in crucial battleground states. New data from Cantar (ph) Media
shows that from early April through late June, 100 percent of the ads
sponsored by pro-Obama super-PAC Priorities USA mentioned Bain Capital by

The super-PAC showered the swing states with multi-million-dollar ad
buys aiming to chip away at Romney`s purported business bona fides. And
both the Obama and Romney campaigns agree the ads are working.

Eugene Robinson is an MSNBC political analyst and columnist for ""The
Washington Post." "Mother Jones" magazine`s David Corn is also an MSNBC
political analyst and author of "Showdown."

Eugene, when I hear that they`re doing it by super-PAC, it tells me
that it`s not an ad that requires the president at the end saying, I`m
Barack Obama and I approved this message. Very, very successful, and yet
the president maintains some distance from it.

The president gets to have clean hands in all of this, while allies go
after Mitt Romney on what he portrays as his strength, his business -- his
record in business, his record of success.

He says, That qualifies me to be president. And the president`s side
is arguing, Well, wait a minute. Let`s look at what he did in business and
look and see if this is the kind of experience we want in the president of
the United States.

MATTHEWS: It reminds me, David Corn, of Governor Romney`s handling of
his religion. In other words, it`s a subject he seems loath to discuss.
He`ll talk about his record as creating jobs, vaguely described, maybe a
reference to Staples or some other business, but you just don`t hear him
address the nitty-gritty of Bain. Is it because he has no message that he
can sell in that regard? I mean, what`s holding him back?

the nitty-gritty is kind of dirty. I mean -- I mean -- I don`t want to be
too pejorative here, but their point was -- and the president made this
point himself, not ads but in remarks -- that Bain`s existence was to
create profits, not jobs, for the investors. And sometimes that led to
good results for the firms they bought. Other times, as Priorities USA and
others are pointing out, it led to disastrous results for the workers.

And so if you get into the nitty-gritty of the private equity world,
it`s not necessarily a template that you want to bring to the White House.

So if you, you know, couldn`t -- could Mitt Romney come on this show -
- as if he would ever -- and talk for 10, 15, 20 minutes about some of the
details of the deals he did or where his initial investment money came
from? Salvadoran families. There`s a lot in Bain that just wouldn`t sit
right with middle class Americans.

MATTHEWS: Eugene, do you buy into that? I mean, I love Staples. I
am a stationery store kind of a guy. Don`t ask me why. It`s one of my
quirks. Isn`t there a Staples story that he could be touting in a 60-
second spot and walk you through the growth that Bain produced?

ROBINSON: You know, I don`t know if he would sustain that for a whole 60


ROBINSON: I mean, maybe for a 15-second or 30-second spot,we -- you
know, we helped Staples get started and it`s -- you have one around the
corner from where you live.


ROBINSON: And it`s a great thing. You like to go there.

But to talk about the details of that deal, I`m not sure that that
really connects with people.

SMERCONISH: Well, let`s take a look at how these things are being
raised thus far.

Here`s a pro-Obama super PAC Priorities USA Ad attacking Romney`s
tenure with Bain Capital.


NARRATOR: Romney bought companies, drowned them in debt. Many went
bankrupt. Thousands of workers lost jobs, benefits and pensions. But for
every company he drove into the ground, Romney averaged a $92 million
profit. Now he says his business experience would make him a good
president? If Romney wins, the middle class loses.


SMERCONISH: Hey, David, did...

CORN: Yes.

SMERCONISH: ... the Cory Bookers of the world know misjudge the
impact this would have? And when I say Cory Bookers, you of course know
I`m referring...

CORN: Yes.

SMERCONISH: ... to those D`s who came out and said, hey, not all --
not all things about Bain are bad. Did they not see this coming? Because
it seems like outside the beltway, it played very well.

CORN: Four years ago, we had a crash. Wall Street crashed and really
Main Street paid the price with 14 million lost jobs.

I think that the Bain attack from the Obama side and the criticism, if
you will, or critique, has to be effective. I don`t think Americans like
the idea of people like Mitt Romney, who get golden parachutes, have golden
elevators -- he had no risk when he took the Bain Capital job and also when
companies lost money, he still made money.

It`s sort of the certain type of free enterprise that is maybe not all
that free, but very enterprising for the 1 percent. So, I never understand
understood Mayor Booker`s arguments. President Clinton referred to this
and others did. I think this is a very -- this cuts to the heart of Mitt
Romney`s values.


SMERCONISH: When I say they have been effective, let me back that up.
Because the latest NBC/"Wall Street Journal" poll -- and we showed it on
HARDBALL last week -- shows evidence of how effective the Obama campaign`s
Bain strategy may be.

People in the dozen swing states polled, just 18 percent said that
what they have heard about Romney`s business career gives them a more
favorable opinion of him. A third of the group said they have formed a
more negative opinion. The swing state polling is worse for Romney than
the national numbers, which show a significantly closer split.

Eugene Robinson, your reaction to those numbers.

ROBINSON: Well, I mean, first of all, I think they`re targeting the
right swing states from the Obama campaign`s point of view because they`re
-- as you said, the impact seems to be greater there than nationally.

You know, it -- I think that the interesting disconnect is between
kind of the New York-Washington Acela line access, which all seem to think
that private equity fine and why are the president`s people being so mean,
and the rest of the country, which really doesn`t -- which has a problem, I
think, with this particular style or this slice of this -- of capitalism.


SMERCONISH: Well, I agree with you, for what it`s worth. I think
because everybody in that Acela corridor knows -- has a relative or knows
somebody, or if...

ROBINSON: There you go.

SMERCONISH: ... they`re a politician, took money from someone who`s
in that.


ROBINSON: There you go.


SMERCONISH: Mitt Romney`s campaign -- Mitt Romney`s campaign is
pushing a new line of attack that will aggressively portray Obama as a
craven political figure.


SMERCONISH: According to "The New York Times" it revived this 4-year-
old footage to make this debut ad. Let`s watch this.


NARRATOR: Barack Obama`s attacks against Mitt Romney, they are just
not true. "The Washington Post" says on just about every level, this ad is
misleading, unfair and untrue. But that`s Barack Obama. He also attacked
Hillary Clinton with vicious lies.

spend millions of dollars perpetuating falsehoods.

NARRATOR: Mitt Romney has a plan to get America working. Barack
Obama, worst job record since the Depression.

CLINTON: So shame on you, Barack Obama.


SMERCONISH: David Corn, I don`t know. There`s a lot more recent
footage out there from the GOP side where they`re all sniping at one
another. Is that effective to dust off Hillary from four years ago?

CORN: I don`t think Hillary is a big critic of Barack Obama these

You have Newt Gingrich calling Mitt Romney a liar just a couple of
months ago. You could dust off, you know, miles of footage of John McCain
saying similar things about Mitt Romney from the 2008 campaign.

Listen, this is one thing I don`t understand about the Romney strategy
and some of the super PACs on his side. Barack Obama, I don`t know if they
got the memo, he`s been president for three and a half years now.
Americans can -- will and can judge him on what he`s done as president. No
one`s going look at what he did or didn`t do in 2008 and what was said or
not said about him that far back. It`s kind of idiotic.

SMERCONISH: I think it`s also a reflection of her strong numbers.
And that`s why they`re using it.

Thank you, Eugene Robinson.


SMERCONISH: Thank you, David Corn. We appreciate it.

CORN: Sure thing.

SMERCONISH: Up next, a reporter in New Jersey gets the Chris Christie
treatment after asking the governor a question he didn`t want to answer.
That`s next in the "Sideshow."

And, remember, you can follow me on Twitter if you can spell

This is HARDBALL, the place for politics.


SMERCONISH: Back to HARDBALL and now for the "Sideshow."

First off, we have seen what happens when somebody breaks Chris
Christie`s ground rules at a press conference, right? Well, this weekend
was no exception. The New Jersey wanted to answer questions about a
damaged water treatment plant in his state. No other topics allowed.

Here`s what went down when a reporter tried to shift subjects.


QUESTION: On Monday, are you going to be addressing the legislature?

GOV. CHRIS CHRISTIE (R), NEW JERSEY: Did stay on topic? Are you
stupid? On topic. On topic. Next question. Good. Thank you.


CHRISTIE: Thank you. Thank you. Thank you all very much. And I`m
sorry for the idiot over there. Take care.


SMERCONISH: He didn`t even get the full question out before being
called stupid an and idiot.

Next, what does Mardi Gras have to do with Supreme Court decision on
health care? Before you say absolutely nothing, let`s turn to Louisiana
Governor Bobby Jindal. Here`s his attempt at defending Mitt Romney`s
support of the individual mandate when he was governor of Massachusetts .


GOV. BOBBY JINDAL (R), LOUISIANA: Mitt Romney`s always been against
the national mandate. He`s always been against Obamacare, always said he
wanted to repeal it. Look, states are different. I come from one of the
most distinct cultural states in the entire country. Mardi Gras is great
for Louisiana. It may not work as well in Vermont or other states.

Mardi Gras to universal health insurance?

JINDAL: What I`m saying is, every state is difference.


SMERCONISH: Mardi Gras and health care? I`m with David Gregory on
that one.

And Chief Justice John Roberts has been getting a lot of attention for
being the unexpected swing vote in the health care decision. The folks at
Business Insider wanted to do something to highlight his surge in
popularity. How about some ideas for his own hey, girl meme, you know,
like the one featuring Ryan Gosling?

Here`s one. "Hey, girl, your beauty should be unconstitutional." Or
"Hey, girl, our love is for a life term" as she gazes at Antonin Scalia. A
Pew poll back in 2010 found that fewer than three in 10 Americans knew that
Roberts was chief justice.

On the day the decision came down, Google reported that searches for
Justice Roberts jumped over 25,000 percent.

Finally, team Romney got some unsolicited advice from none other than
Rupert Murdoch this weekend via Twitter. He said what he -- quote -- "Met
Romney last week. Tough O. Chicago pros will be hard to beat, unless he
drops old friends from team and hires some real pros. Doubtful."

I guess that didn`t sit well with team Romney, because here`s this
morning Murdoch follow up. "Romney people upset at me. Of course I want
him to win, save us from socialism, et cetera, but should listen to good
advice and get stuck in," whatever that means.

That one came after a tweet reminding us not to forget about the
Fourth of July.

Thank you, Rupert.

Up next: Legendary Penn State coach Joe Paterno may have been far
more involved in protecting Jerry Sandusky than he ever admitted. Buzz
Bissinger joins us for the latest blockbuster in the Sandusky case. That`s

You`re watching HARDBALL, the place for politics.


CNBC "Market Wrap."

The Dow ends down nine points, the S&P is up three, the Nasdaq at 16
points. Stocks wavered after a weaker-than-expected report on
manufacturing, which showed contraction in the sector for the first time
since July of 2009. Meanwhile, Barclays` chairman resigned following an
interest rate rigging scandal. The company has been fined $453 million.

And Bristol-Myers Squibb is paying $5.3 billion for biotech firm

That`s it from CNBC, first in business worldwide -- now back to


The late Joe Paterno may have played a much bigger role than he had
claimed in persuading Penn State officials not to report Jerry Sandusky to
authorities. Now, as you say, graduate assistant Mike McQueary reported
that he saw Sandusky sexually abuse a young boy in the campus showers.

NBC`s Michael Isikoff reports that in one e-mail among college
officials following that report, then athletic director Tim Curley
references a conversation he had with Paterno. The details of that
conversation are unknown, but following that conversation, Penn State
officials changed their minds on how to proceed, and they didn`t report the
alleged abuse to authorities.

Jeremy Roebuck has been covering the story for "The Philadelphia
Inquirer." The great Buzz Bissinger is the bestselling author of "Friday
Night Lights" -- that`s his latest book -- and "Father`s Day" -- that`s his
latest book. Now he`s a regular talk show host on WPHT 1210 AM in
Philadelphia, as well as a sports columnist for The Daily Beast.

Jeremy, let`s walk through what we think we know. So, there were
deliberations allegedly, reportedly, as to what they were going to do about
two weeks after the McQueary incident. And the plan that they seem to have
adopted was a three-part plan where they were going to as one prong contact
the authorities. Then something changed.

What can you shed on that?

came to light over the weekend about these e-mails, we heard that athletic
director Tim Curley referenced this conversation with Paterno and said,
after thinking about this, chatting it over with Paterno, he came back and
suggested to the other people involved in this controversy , maybe the best
thing to do is to sit down with Jerry Sandusky first, talk it over with
him, tell his charity, but hold off on notifying the authorities until they
see how he reacted.

SMERCONISH: And then they have a go-around and they actually use
supposedly the word vulnerable. This may be the best course. They want to
be humane, not necessarily to the victims, but to Sandusky. And they
recognize that they might be vulnerable if this is the posture they adopt.

ROEBUCK: Yes, according to these e-mails, university president -- or
then university president Graham Spanier was the one that actually used
that word vulnerable.

He said this sounded like a decent plan and it sounded like a humane
plan, as you said. And he suggested though he was a little concerned
about, say, Sandusky didn`t listen or they couldn`t get the response that
they desired, that they might be vulnerable to some repercussions down the
road if it did come out that they didn`t report it at the time.

SMERCONISH: And one thing we do know for sure is what Graham Spanier
said when he was fired. And he said in his statement in part was that he
had no knowledge of any of these sort of acts having taken place. True?

ROEBUCK: Yes, absolutely, although it is kind of important to note
that it`s a little unclear from what we have learned about these e-mails so
far whether these gentlemen are talking about child rape, as Mike McQueary
said that he told them and made very clear that that was what he saw, or
whether this is more along the lines of what they later told the grand
jury, that they were thinking the whole incident was horseplay.

SMERCONISH: Well, yes, but there`s also reference supposedly to the
prior incident.

And, Buzz, that would mean the 1998 incident, which, if you add it all
up -- well, I`m not going to add it up. You add it up, Buzz. What`s the

takeaway is, is that, as far as I`m concerned, Joe Paterno has no legacy

You don`t have to be a rocket scientist to figure out that Tim Curley
has a three-pronged plan, one of which is, it`s going to be reported to the
Department of Welfare. He talks to Paterno. All of a sudden, the key
element of that plan has disappeared.

And even Paterno himself in his very brief and frankly odd grand jury
testimony said he knows that something of a sexual nature occurred. They
know that Sandusky, at the very least, was in the shower with a 10-year-old
boy. They don`t care about the victim. It`s all about spin. It`s about
treating Jerry humanely.

And Graham Spanier was right. It gets out, they were vulnerable and
more than vulnerable. I think it just cements Paterno not only as someone
who was cowardly and did not do what he should have in the beginning, but
also a liar.

SMERCONISH: Hey, Buzz, you know that according to testimony presented
at the Sandusky trial -- I don`t think I have to say allegedly, reportedly
any longer -- within...


SMERCONISH: ... six months of this McQueary incident, one of these
victims was assaulted by Jerry Sandusky.

And there are a lot of bad acts that took place in the decade that
followed. The real takeaway here is that, had these men acted, presumably,
a decades` worth of abuse would not have taken place.

BISSINGER: Well, you know, at this point, anyone who believes that Joe
Paterno did not know about the 1998 incident is a fool. He did know.

SMERCONISH: I`m sorry. I was going to say the family says, look,
Joe was not an e-mail guy. Joe didn`t participate in any of this email.
Don`t jump to conclusions based on leaked reports. I apologize, I cut you

BISSINGER: Yes, but I don`t -- so he didn`t use e-mail. I mean, I
think he still had the ability to talk. He must have told Curley something
to get Curley to change his mind and say, let`s not report it to welfare

I`m now convinced and just connecting the dots and every dot has been
connected. Paterno knows about the 1998 incident, why does Jerry Sandusky,
the defensive coach of the year then resign a year later?

And, Michael, you write a terrific column that got no play at all.
Why was Mike McQueary made the receiver`s coach? He was a quarterback. He
had no experience. There was a guy named Kenny Jackson who had been the
receivers coach for Penn State, then for the Steelers, had played at Penn
State, had four times the experience and I now believe it was Paterno, he
was embarrassed and it was almost like hush money.

SMERCONISH: I`m going to address as a matter of fact at the end of
tonight`s program.

Jeremy Roebuck from the "Philadelphia Inquirer". I thought it a bit
odd the response from the Curley-Schultz lawyers after this report
dominated the cycle this weekend. They seemed to wrap themselves in
Pennsylvania Governor Tom Corbett.

Can you explain that to our audience?

Governor Corbett has come under a little bit of pressure in the sense of
why did they take so long to arrest Jerry Sandusky. And he said all along
that they had to build a case, they had to know that they had the evidence
to convict him. Otherwise these would have been all blown up in their

So, when the information about these emails came out this weekend, we
heard from Curley and Schultz`s lawyer who said, you know, as Corbett said
earlier, our clients had to sit there and figure out what was the best way
to handle this allegation, because they, you know, rushed and put that
information in the hands of child welfare authorities and it turned out not
to be true, it could blow up in their faces. Now, whether that`s an
argument we can all get behind, that`s at least the argument that they`re
making for now.

SMERCONISH: Jeremy, thanks so much. It will be interesting to see
whether the Louis Freeh investigation also gets into the matter of why this
was an apparently understaffed investigation for its first year? Why did
it take them so long by way of example to even figure out that Sandusky had
written a book with the oddly named title, "Touched"?

Thank you, Buzz Bissinger. Thank you, Jeremy Roebuck.

Up next, did Chief Justice John Roberts actually switch his vote to
uphold the health care reform law? We`re now hearing that he initially
planned to strike down the mandate, but flipped to the other side. That`s

This is HARDBALL, the place for politics.


SMERCONISH: Latino voters will be key to President Obama`s
reelection hopes, especially in key swing states like Florida, Colorado and
New Mexico. The Gallup polling shows more than half of Latino identified
as political independents. Fifty-one percent say they`re independents,
versus 32 percent who call themselves Democrats and just 11 percent who say
they`re Republicans. But asked which way they lean, those independents
shift to the Democratic Party by a margin to 2-1, 52 percent to just 23

We`ll be right back.


SMERCONISH: We`re back.

Ever since Thursday morning`s health care decision, there`s been
speculation that Chief Justice John Roberts switched his vote late in the
game. Legal scholars say that the conservative dissent reads more like a
majority opinion that lost its fifth vote at the last minute. And now, CBS
News is reporting that based on two sources with knowledge of the
deliberations Justice Roberts did indeed initially side with the other
conservatives, but changed his vote.

According to CBS, Roberts then withstood a month long desperate
campaign to bring him back to his original position, the sources said.
Ironically, Justice Anthony Kennedy believed by many conservatives to be
the justice most likely to defect and vote for the law -- led the effort to
try to bring Roberts back to the fold. "He was relentless," one source
said of Kennedy`s efforts. "He was very engaged in this."

What should we make of it all?

David Von Drehle is editor at large for "Time" magazine. He wrote
this week`s cover story on Justice Roberts.

And Charles Lanes is an opinion writer for "The Washington Post.`

David, does it comport with your reading of the tea leaves about the
way in which Justice Roberts functions -- Chief Justice Roberts -- and the
way in which court members treat one another?

DAVID VON DREHLE, TIME MAGAZINE: Well, sure. This is not entirely
surprising. This is -- this case is one of a kind. So, to expect it to go
simply and easily is probably a bit naive.

Jan Crawford, who reported that for CBS, is a terrific reporter, one
of the best. Her sources are excellent. So, I believe what she`s reported
there, my one question is whether he changed his vote or whether he added
to his vote. He did decide that the law was unconstitutional under the
Commerce Clause and what he did was to uphold the law under a different
congressional power, the power to tax.

And so it may not be so much that he changed his opinion as simply
did something he announced he was going to do at the first conference where
they discuss their initial reaction.

SMERCONISH: On the issue of how much pressure he may have faced, how
much was Justice Roberts influenced by outside pressure, CBS said this,
quote, "Over the next six, as Roberts began to craft the decision striking
down the mandate, the external pressure began to grow. Robert almost
certainly was aware of it. Roberts pays attention to media coverage. As
chief justice, he is keenly aware of his leadership role on the court. And
he`s also sensitive to how the court is perceived by the public."

Charles, does that make sense to you, that perhaps he took one for
the team? I mean, I note that you`ve got Tom Friedman on the left and
Charles Krauthammer on the right, both coming the conclusion that this is
why Roberts may have taken this path.

CHARLES LANE, THE WASHINGTON POST: Well, it`s plausible. I don`t
see this as some capitulation to pressure because if you read this bundle
of opinions carefully, you`ll see that Roberts accomplished many of the
conservatives` movements of objectives. First of all, enshrining this
narrow video of the Commerce Clause. Secondly getting a 7-2 holding that
the Medicaid expansion is unconstitutionally coercive. That`s something
conservatives can use a lot in the future.

And there are two liberal justices, Stephen Breyer and Elena Kagan,
and they seem to have switched their votes. I`d like to hear more about
that because at oral argument, both of them said there was nothing coercive
about this Medicaid expansion, much less anything unconstitutional about
it. Then lo and behold they sign an opinion that says it`s
unconstitutionally coercive.

That tells me that they have to give a lot to get Justice Roberts to
come over. That doesn`t sound like somebody who`s so freaked out by the
negative press coverage that he just capitulated.

SMERCONISH: You know, since the decision, conservatives have said
that they feel betrayed by Justice Roberts. Congressman Jack Kingston
tweeted Thursday, "With Obamacare ruling, I feel like I lost two great
friends, America and Justice Roberts."

And an editorial in "The Wall Street Journal" said the particular
tragedy is all four justices would have overturned all of Obamacare as
unconstitutional. Only John Roberts prevented it.

David on the right, a lot of consternation. Isn`t that they not
appreciating what Charles just said? That perhaps Roberts is striking a
compromise that preserves much of what conservatives were looking for.

VON DREHLE: Sure. But on the right there are a lot of conservatives
who didn`t want a compromise here. They wanted a clear cut, hands down,
100 percent victory. And they did not get that. The law is still on the

But what Chief Justice Roberts has to pay attention to is the fact
that the Supreme Court is not a seminar at a law school. It is a branch of
the United States government. And so, politics does come into play there.

And this was an incredibly politically charged situation in which you
had four justices on the right, all of them appointed by Republicans.
That`s very unusual. Four on the left all appointed by Democrats.

Again, to have this ideological split match up with the partisan
split is very rare in the history of the court. We`re in the middle of an
election campaign. We`re talking about a huge piece of legislation passed
by the Congress, signed by the president. And to walk into that and say
that I`m going to decide this case exactly the way I want to because I`m on
the court and let the consequences fall as they may, it`s not necessarily
what the chief justice`s job is to do.

SMERCONISH: Charles, I have just 30 seconds left. If you could
answer this quickly, I`d appreciate it. Is it possible to an extent there
was a late switch by the chief justice, those who were disappointed with
him deliberately left words intact so that tea leaves could be read and
people would know, hey, this is not the way he was initially going to go.

CHARLES: It`s possible and I sure would like to know who these
people leaking are. These people trying to spin the story purporting to
have inside knowledge of the Supreme Court trying to make the chief justice
look bad. That is a pretty interesting phenomenon. You rarely see that
kind of leak coming out of the court.

SMERCONISH: It made me think -- I guess the book was "The Brethren".
It made me think of "The Brethren." We haven`t had such an insight into
the court since that book came out.

In any event, thank you, David Von Drehle and Charles Lane.

When we return, allow me to finish with the latest news in the
Sandusky case and what it might reveal about Joe Paterno.

You`re watching HARDBALL, the place for politics.


SMERCONISH: Let me finish tonight with this: Penn State and Jerry
Sandusky were back in the news this weekend amid reports that e-mails show
that top Penn State administrators included president Graham Spanier
weighed whether to report Sandusky back to authorities back in 2001 after
Mike McQueary`s report of a shower incident.

Then says one of the emails, after one of them spoke to Joe Paterno,
they changed course, decided not to make the report while worrying that
their new plan could leave them, quote, "vulnerable".

Jo Becker had a tidbit in one of the final paragraphs of her coverage
in "The New York Times" yesterday. She said that former FBI director,
Louis Freeh, as part of his investigation is exploring the circumstances
the surrounding Paterno`s hiring of Mike McQueary.

Well, I think I know why that might be of interest. I find it
curious he was hired as the receiver coach four years after he reported the
Sandusky episode. McQueary, after all, played quarterback for Penn State.
Then after an unsuccessful attempt to pro ball, he returned to his alma
matter in 2000 to pursue a career in coaching.

At the time of the shower incident, he was a graduate assistant.
Then he become an administrative assistant and then he was hired to coach
the wide receivers.

But in 2005, Paterno could have invited someone else to return to the
wide receiver coaching position, Kenny Jackson. Jackson was the school`s
first all American receiver, an important part of a national championship
team. He played pro ball as a wide receiver. And then the coached wide
receivers at both Penn State and for the Pittsburgh Steelers. He was
available at the time that McQueary was hired.

So why in 2005 didn`t Joe Paterno ask the 42-year-old former all-
American receiver to return to Penn State instead of hiring a 29-year-old
former college quarterback with very limited coaching experience? Maybe
because McQueary`s resume included one thing Jackson was lacking: a report
to Paterno about what he`d seen in the showers in 2001.

That`s HARDBALL for now. Thanks for being with us.

"POLITICS NATION" with Al Sharpton starts right now.


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