updated 5/23/2013 11:00:53 AM ET 2013-05-23T15:00:53

HARDBALL
May 22, 2013

Guests: Todd Lamb, Margie Omero, Nicholas Confessore

CHRIS MATTHEWS, MSNBC HOST: Peek-a-boo politics.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington.

"Let Me Start" tonight with this. There are two ways to look at this IRS
scandal. One is to blame it on the bureaucrats. The other is to blame the
White House, say that someone, even through mind control perhaps, somehow
got a line into that Cincinnati office.

Well, I`m inclined to buy the first perspective, but I see why millions of
people might think it`s all the work of Obama. Why? Because from the
moment this story broke, the Obama people have been engaging in rolling
disclosure, that tired old government game of ducking and covering -- first
denying, then a bit of information, then some more, until finally, the
press pummels you into telling the straight story.

Why did the Obama White House not get on the top of this story in the
beginning? Why didn`t the chief of staff tell the president what the IG
report was going to say, get the president out there in front of a lectern
and tell us all what had happened before anyone else did? Why didn`t the
president himself lead the public demand for cleaning up that office in
Cincinnati? Why didn`t the president`s team react the way a smart
political operation should, seizing the reins of this galloping story?

Well, the first rule to follow in these cases, when in doubt, get it out.
Why didn`t the president answer immediately to his clients, the American
people? They have a right to know what`s happening in the American
government. Why didn`t the president tell them? And why is the person who
ran that operation in Cincinnati, the one running this whole thing -- why
is she taking the 5th Amendment?

Howard Fineman`s the editorial director at the Huffington Post. And Steve
Schmidt is a Republican strategist. Both are MSNBC political analysts.

Steve, I want to start with you because you`re the kind of mind I`ve come
to respect, a strategic mind. Howard has one, too, of course, but you have
-- you`ve got it for a living. Howard`s trying to analyze the news.
You`ve tried to run campaigns.

(LAUGHTER)

MATTHEWS: When in doubt, put it out. If the president had (ph) his hands
-- had nothing to do with screwing around with having to decide who to give
tax-free -- tax-free status to out there in the Cincinnati office, why did
he act like he had something to do with it? Why didn`t he just come out
and say, I`m the prosecutor, I want to get to the bottom of this?

STEVE SCHMIDT, REPUBLICAN STRATEGIST, MSNBC POLITICAL ANALYST: Well,
they`re trying to keep the president distanced from it. The Republicans
are obviously trying to implicate the president in it, even though there`s
any -- there`s a lack of evidence that he is implicated in it, but that
whenever something like this happens, when you`re at this stage of it, the
administration is trying to gather the facts to communicate to the American
people. And they botched it.

They`ve handled this about as badly as they possibly could. And whether
they`re innocent or guilty, they`re doing everything they can to make
themselves look bad in the eyes of the American people with their response
and the shifting storyline.

So think the IRS situation, as we understand the facts -- it`s a very
serious situation when you have an enforcement agency of the U.S.
government abridging the 1st Amendment rights of American citizens.

And so we have that, of course, now with the Justice Department and the
leak scandals with the press combining together to form a really troubling
narrative for the administration. And they just don`t have their footing
on it yet. They`re doing a very poor job of responding to it, and they`re
making it worse, not better.

MATTHEWS: It`s like they`re all in the police interrogation room with
Sipowicz, you know, slowly -- oh, OK, maybe I was there at the time. Well,
maybe I knew something about -- (INAUDIBLE) looks like the facts here. And
everybody should pay attention to this.

Let`s look at the heart of the current mess facing the administration.
It`s called rolling disclosure. Instead of getting ahead of that IRS
story, they`ve taken a bumbling and piecemeal approach to explaining what
they knew and when they knew it.

Let`s look at the timeline. May 10th, not so long ago, IRS official Lois
Lerner reveals the agency had inappropriately scrutinized conservative
groups. President Obama says he learned about the issue from news reports
on that very day. White House press secretary Jay Carney sidesteps
questions about the White House`s prior knowledge of the IRS situation,
telling the press corps, I learned about it today. So they`re all just
learning about it.

May 13th, three days later, Carney changes his tune, saying the White House
was actually first told about the investigation into the matter sometime
during the week of April 22nd. What were they told? Well, according to
Carney, the White House counsel`s office was informed that the inspector
general was finishing a review, but that`s all they were informed. Well,
turns out that wasn`t true, either.

This Monday, Carney said that White House officials were actually told key
details about the IG report. They were told it focused on the improper
targeting of 501(c)4 organizations who had "Tea Party" and "patriot" in
their names. They were even told the report`s likely findings.

Well, that same day, we learned chief of staff Denis McDonough had been
briefed by White House counsel Kathy Ruemmler a month ago, but he chose not
to tell the president. Other senior staffers were briefed, as well.

And the timeline gets pushed back even further. Carney now says the White
House was actually told of the IG report on April 16th, not April 24th.

That brings us to yesterday. Well, it turns out that officials at the
White House not only knew about the IG findings, they had also discussed
with Treasury officials in April when and how the information must be made
public. And when Carney was challenged by the press corps about not being
forthcoming about the issue, he said, I answered the questions that were
asked of me. In other words, the questions weren`t precise enough to get
the full truth from Jay.

Howard, you cover the White House. You`ve been here before. This rolling
disclosure sends a big signal they know more than they`ve told us as of now
because all these days, they`ve been telling us more. There`s more coming.
And they`re telling us at their convenience. And you got to wonder why
they didn`t just blow it right out from day one.

HOWARD FINEMAN, HUFFINGTON POST MEDIA GROUP, MSNBC POLITICAL ANALYST: Yes,
and then -- that was a -- that was a -- that was an interesting chronology,
Chris. But even that is -- there`s more to that that came out in the House
hearings today because there were earlier investigations. There was an
internal investigation within the IRS that they started themselves long ago
last year. And they came sort of to the same conclusion last May, just as
the inspector general was starting up his own investigation.


So the notion that this was not widely known, at least within the IRS, and
probably within the Treasury, that they had a problem and that the
conservatives and Tea Party people were right to be complaining in 2010 and
2011 and 2012 --

MATTHEWS: Yes, OK.

FINEMAN: They were right. It`s hard to believe that the echo of that
didn`t somehow reach the ears of some people in the White House. Not that
they instigated it --

MATTHEWS: Yes.

FINEMAN: -- but they made a fateful decision to stay away from it and
not shut it down. They didn`t shut it down. And their argument is, You
don`t mess with the IRS.

I talked to a top Obama person today, who said, Look, I`m not so stupid
that I`m going to mess around with the IRS. Maybe that`s true then. But
the moment that Lois Lerner said on May 10th that, We done wrong, the
president shouldn`t have waited another instant. He should have fired
everybody he could have gotten his hands on. He should have been the
Sipowicz.

MATTHEWS: That`s -- that`s --

FINEMAN: He should have been the Sipowicz.

MATTHEWS: I think he should have been the chief prosecutor in this case.

(CROSSTALK)

MATTHEWS: Steve Schmidt, my question again, would you have advised the
president, had you been Denis McDonough and given all the information that
they had in hand a month ago, Mr. President, you got very little time now.
This story`s going to leak. You better get out there in front, or else
Darrell Issa`s going to be out in front and you`re going to be the bad guy?
How about this, Mr. President? You be the good guy. You blow the story.
Why didn`t they do it?

SCHMIDT: Well --

MATTHEWS: It`s not --

(CROSSTALK)

MATTHEWS: -- instead of playing defense?

SCHMIDT: It`s inexplicable why they didn`t do it. And there has to be --
there has to be an awareness that Barack Obama was elected to the
presidency on the premise that he was going to restore faith in politics.

MATTHEWS: And transparency.

SCHMIDT: The themes of hope and change and the inspiration of it -- this
is so dissident from that. Of course, he had to do what Howard just said,
which is clean house and fire everybody who was tangentially involved in
this, knew about it. It`s too late now.

Now, that`s ultimately going to happen, but I suspect it`s going to happen
after there`s been a fair amount of political damage done to the
administration.

MATTHEWS: You know, I like a lot of what Obama`s trying to do. I hope he
gets a big immigration bill that really works. I think the health care
thing`s got to work. There`s a lot of things that are important to this
country, regardless of what happens here on this story.

But I got to ask this simple question myself all the time when I sit here
at this desk. Suppose it was the other way around. Suppose W. was still
president and they were picking off every progressive group and screwing
them around on the tax policy. And the president was saying, Well, I`ll
get to that. And yes, we learned a little more today and we heard a little
more. And they were dribbling out there.

I`d say, Wait a minute. These guys had something to do with it. I would
immediately think guys around W. in the White House had something to do
with the IRS. I would -- most people think like that.

FINEMAN: Of course. But let`s do what Steve did, which is hold the
president to his own standards. Forget about George W. Bush. I think
Steve`s right about the brand, about the Obama brand. And that`s what`s at
risk right here.

MATTHEWS: The transparency.

FINEMAN: And that`s why -- yes, and that`s why he should have been more
aggressive a few weeks ago. Look, I understand. We all know how this
works. I`m sure that there were echoes of this thing rattling around from
the IRS like -- like noise from a barrel somewhere during the fall
campaign. They didn`t want this -- somebody didn`t want this coming out.
Even maybe the IRS people were smart enough politically to say, Let`s not
put this out now.

I`m not blaming the White House for that. OK, things happen during the
midst of a campaign in an administration that administrations don`t want to
have get out, OK? That`s happened from the beginning of time.

But if you`re president, what you do after you`ve won is you say, I was
shocked. I`m shocked!

MATTHEWS: Well, yes, but --

FINEMAN: I`m shocked to find that out. And I`m going to get rid of it
root and branch!

MATTHEWS: OK.

(CROSSTALK)

MATTHEWS: I`m a little different than you. I don`t see, Steve, how
anybody in the White House would have the brass ones to call up somebody in
the IRS in Cincinnati and say, We want you to put the fix in for us now.

FINEMAN: No, no. I`m not saying that!

MATTHEWS: I know. But if that didn`t happen, and I don`t think it did,
why doesn`t the president play prosecutor here? My same question. Why
doesn`t the president come in like the prosecutor, like Sipowicz, you got
the guy in the interrogative -- start putting people on administrative
leave. Start promising to do what you can, given civil service rights, to
remove people who made these decisions. Be the leader.

I go back to that example of Reagan and the PATCO strike. The minute he
fired those guys for breaking their oaths not to go on strike, the minute
he did that, they heard that all around the world, said, God, this guy`s
president. This guy`s a leader. What`s wrong with being a leader?

SCHMIDT: George Shultz always said that was the most important foreign
policy decision Ronald Reagan ever made. People understood immediately
that he did what he said he was going to -- that he did what he said he was
going to do.

Look, in this instance, the president had it within his ability to come out
and to say, This is what we know. This is what we`re going to find out.
This is who we know is involved right now. We`re going to hold them
accountable immediately.

And we`re going to get to the bottom of this, and to make very clear that
dissent is as American as apple pie, that his political opponents are not
his enemies, and that his political opponents, people who profoundly
disagree with him, have a constitutionally protected right to do so. And
as commander-in-chief, as president of the United States, he is first in
line to defend it. And that`s what he should have done.

And the slow roll of information, the evolving story that comes out every
day -- it hasn`t impacted his approval numbers yet, but we`re still very,
very early in this and this is trending in a bad way because a lot of these
situations, a lot of these scandals are puffed up. They`re overblown.
It`s not a big deal. But the overreach of the Justice Department with
members of the press, the overreach of the IRS here with these other
groups, it`s profoundly disturbing.

MATTHEWS: I think your dog thinks you`re overreaching right there, by the
way, Steve.

(LAUGHTER)

MATTHEWS: (INAUDIBLE) that last line about the press. I`ll tell you one
thing. This could be a time of shining opportunity for this president.
The unemployment rate`s coming down. The stock market`s going up. The
deficit`s coming down. This could be a time for him to come into bloom and
to really fight for things important, like immigration reform.

Instead, we`re playing defense instead of offense. He should have been on
offense. It`s so easy, I got to say I wonder. I just wonder.

Howard Fineman, thank you. Steve Schmidt, thanks for -- Steve, always,
it`s great to have your strategic thinking.

Coming up: What really happened in that Cincinnati IRS -- we`re going into
the bowels of that office and find out what happened in there to screw this
thing up and talk about the administration out there. Who directed those
workers to target their enemies? But what happened? We`ve got some really
good reporters coming up, and also experts who ran that lonely IRS outpost
that has given us so much trouble.

Also, Oklahoma is in great need after being hit by Monday`s EF-5 tornado.
President Obama will travel there this Sunday to get a first-hand look at
the tornado damage.

And you may have worried it would come to this.

(BEGIN VIDEO CLIP)

ANTHONY WEINER (D), FMR. NY CONGRESSMAN, NYC MAYORAL CANDIDATE: Look, I
made some big mistakes, and I know I let a lot of people down. But I`ve
also learned some tough lessons. I`m running for mayor because I`ve been
fighting for the middle class and those struggling to make it my entire
life. And I hope I get a second chance to work for you.

(END VIDEO CLIP)

MATTHEWS: Well, Anthony Weiner made it official today. He`s running for
mayor of New York. Is New York -- well, is the Big Apple ready to become
Weiner`s city?

Finally, "Let Me Finish" tonight with the unfairness (sic) of the left`s
reaction to 9/11 and the right`s reaction to Benghazi. The left was fair.
The right has been very unfair about Benghazi.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: So even in the thick of this scandal at the IRS, what percentage
of Americans have favorable view of the agency? Well, according to a new
CNN poll out just this week, 34 percent say they have a very favorable or
somewhat favorable opinion of the IRS -- one third, in other words.

Now what about Congress? Well, in a new Fox News poll, only 16 percent say
they approve of the job Congress is doing. Different questions, different
polls, but twice as many Americans seem to like the IRS more than they do
the U.S. Congress that`s investigating them.

And we`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. At a time when the public`s screaming
for transparency from the IRS, one of its top officials has gone silent.
Lois Lerner, the IRS executive who first went public with the agency`s
inappropriate activity, was called to testify before the Congress today but
chose instead -- she did -- to plead the 5th Amendment. Let`s listen to
her explanation.

(BEGIN VIDEO CLIP)

LOIS LERNER, DIR., IRS EXEMPT ORGANIZATIONS: I have not done anything
wrong. I have not broken any laws. I have not violated any IRS rules or
regulations. And I have not provided false information to this or any
other congressional committee.

And while I would very much like to answer the committee`s questions today,
I`ve been advised by my counsel to assert my constitutional right not to
testify or answer questions related to the subject matter of this hearing.

(END VIDEO CLIP)

MATTHEWS: Well, Lerner went under fire, of course, for that decision and
was called out by Representative Trey Gowdy of South Carolina for refusing
to answer any questions, which she did today, and here it is, what he had
to say.

(BEGIN VIDEO CLIP)

REP. TREY GOWDY (R), SOUTH CAROLINA: Mr. Cummings just said we should run
this like a courtroom, and I agree with him. She just testified. She just
waived her 5th Amendment right to privilege. You don`t get to tell your
side of the story and then not be subjected to cross-examination! That`s
not the way it works! She waived her right to 5th Amendment privilege by
issuing an opening statement! She ought to stand here and answer our
questions!

(END VIDEO CLIP)

MATTHEWS: Wow. We should note the committee`s chairman, Darrell Issa,
wants to recall Lerner to appear before the committee some -- at some
future date. Well, today`s dramatic hearing on the IRS scandal will raise
the anger toward the government agency, of course. Ms. Lerner refused to
answer any questions from lawmakers, which, of course, only fuels
speculation there is more to the story than has been told.

This weekend "The New York Times" reported that at the core of this scandal
is a truly dysfunctional office. As the "Times" described it, quote, "an
understaffed Cincinnati outpost that was alienated from the broader IRS
culture and given little direction, overseen by a revolving cast of mid-
level managers, stalled by miscommunication with IRS lawyers and executives
in Washington and confused about the rules they were enforcing."

So what`s really going on here? One man with some insight into what Lois
Lerner was up to today and what she might have known is Marcus Owens. He`s
with me now. He held her same position in the IRS, director for tax-exempt
organizations, from 1990 to the year 2000. He`s now a tax lawyer in
private practice.

Mr. Owens, thanks for coming on. Enlighten us. Why do you think she took
the 5th?

MARCUS OWENS, FMR. DIRECTOR IRS EXEMPT ORGANIZATIONS: Well, she had to.
There have been calls for a criminal investigation. Department of Justice
has answered those calls. And she`s been accused of lying by members of
Congress. She had no choice, frankly.

MATTHEWS: Why not -- I`m just going to play average citizen here and you
can be the sophisticate from the government, or the former government.
Why, if you have nothing to hide and you`re a truth teller and you`re of
sound mind, and she seems to be -- why doesn`t she sit in that witness
stand and answer truthfully? What`s she got to be afraid of?

OWENS: Well, what she has to be afraid of is people distorting words and
just the process of an investigation. There undoubtedly will be a criminal
investigation. Department of Justice has said they`re going to be going
in. So everyone has to be careful about what they say publicly.

MATTHEWS: Well, why wouldn`t she want to clear her reputation today?

OWENS: I`m certain she does. But today and in a -- the circus-like
atmosphere of a congressional hearing is not the place you clear your name
and not the place that you can take a position that could keep you in jail
or keep you out of jail.

MATTHEWS: What would make a person who`s working hard for the federal
government -- and I respect federal employees. And I remember an old guy
say, people don`t do their best work when they`re being peed on. So, I`m
not going to add that . People that work, they ought to be treated well and
get paid for it, especially for their competence.

Now, what would cause a member of the IRS to say, you know what, I have got
to figure out this big -- I have got thousands of applications for tax-
exempt status by these groups who claim to be public welfare or whatever,
social welfare organizations. A lot of them have political sounding names.
Why don`t I just go through the list that says -- well, Tea Party, that`s a
shorter way to do it. And it`s like profiling. And why don`t I look at
the ones that say patriot because that probably means right-wing this
current -- by current nomenclature. And I will put in some progressive
groups, and that way I can shorten my time and get the job done without
going, I don`t know what this group is all about.

How -- is that what happened, as you understand it?

OWENS: Well, not exactly.

What happens is, there is a river of applications flowing into the
Cincinnati office, between 60,000 and 70,000 a year. The IRS has about 150
to 200 employees there. And they have to categorize the work. The less
complicated work goes to employees with less experience. The more complex
stuff goes to employees with greater experience.

And they have to categorize it. There`s some 370 pages of IRS regulations
that these people need to be familiar with. And so it really is a huge
task to try and get --

MATTHEWS: Well, explain -- cut to the chase here. Why would they look for
patriot or look for Tea Party in the names? That doesn`t show misbehavior,
does it?

(CROSSTALK)

OWENS: Well, it doesn`t show misbehavior. What it shows is a lack of
appreciation, one, for the sensitivities of it and for the task at hand,
because the criteria for categorizing the cases should have been based on
objective nonpartisan facts that actually related --

(CROSSTALK)

MATTHEWS: How would you determine whether a group was breaking the law,
for example, a group called the Tea Party Nation, whatever they were
called? How would you know it had crossed the line from being a public --
a social welfare organization primarily concerned with values and national
purpose to getting involved in campaigning?

OWENS: I do what the federal courts have done. I would look at the people
who run the organization. I would look at how they spend their money. I
would look at whether their advertisements or media buys reference
candidates in elections. I would look at where they get their money from.

MATTHEWS: So is this like -- I go to the airport and I`m running TSA.
Instead of deciding based upon people`s movements around the world that
might be suspicious, going to countries that cause us trouble, I just look
for everybody that looks Arab and I put them in one line. The American
people would say that`s outrageous.

OWENS: That`s a problem. That`s a problem.

MATTHEWS: And that`s what this is like.

OWENS: Well, in a sense.

What the criteria should have been are things like whether the organization
was formed within, say, a year of an election. These things spring up like
mushrooms in anticipation of an election.

MATTHEWS: I --

(CROSSTALK)

OWENS: They should have picked factors like --

MATTHEWS: I get you. It`s like buying your airplane tickets with cash,
things like that.

OWENS: Exactly.

MATTHEWS: Yes, thanks.

OWENS: Exactly.

MATTHEWS: You`re a good guest. You`re a good guest. Thank you very much
for helping us, Marcus Owens, who worked at the IRS.

By the way, "The New York Times"` Nicholas Confessore wrote that long
article we have been thinking about for days now during this terrible
tornado.

We have wanted to get to you so long, Nicholas.

NICHOLAS CONFESSORE, "THE NEW YORK TIMES": Thanks, Chris.

MATTHEWS: Everybody is so impressed by your work, because you really got
into the bowels of that place in Cincinnati.

So, bottom line, what do you know that the average person who has been out
there screaming about this, me included, thinking about this, doesn`t get,
how something this screwed up could happen, as Mr. Owens has been talking
about, where people just flag organizations that have the name Tea Party?

CONFESSORE: Well, I`m going to say up front what I don`t know and what we
all don`t know, which was which manager and which specialist set into
motion that search for Tea Party groups and why they did it.

I think those are the key unanswered questions out of Cincinnati. What we
do know -- and this is a mixture of interviews and the report from the I.G.
-- is that this was a unit that had incredible turnover. They had more
managers than, you know, Spinal Tap had drummers. They constantly had this
turnover of specialists. They were moving responsibility for these cases
from one group to another.

And it is complicated stuff, as Marcus was saying. It`s not really very
easy to say with finality this group is doing too much politics. And they
have to consult with lawyers back in Washington to get real close advice on
the tax rules. It`s not an easy process. And they appear to have screwed
it up.

MATTHEWS: Well, I hate to get into a hunt here. I wouldn`t call it a
witch-hunt, because there aren`t any such things as witches.

But I would like to get to the question. Mr. Miller, the acting director,
was asked who was in charge. Well, instead of saying, the way the chain of
command works, this person`s in charge, he wouldn`t be saying they`re the
bad person, but he`d say they had organizational responsibility. The fact
that you, a top reporter for "The New York Times," doesn`t know yet who`s
in charge, it does make people think, what kind of an operation is this
where nobody knows what anybody is doing?

CONFESSORE: Well, it`s very strange, Chris.

MATTHEWS: Or doesn`t want to say, is the way we react to it.

CONFESSORE: If you were watching yesterday`s testimony, at one point, they
said -- they said that the -- the current IRS said we think we know who the
manager and the specialists were.

And then they come back a few minutes later and say, actually, we thought
we knew who the person was and we asked them. And we were wrong.

And I find it astonishing. You would think it would be evident in document
traces, in e-mail traces who got this going.

MATTHEWS: Yes.

CONFESSORE: Even the I.G. apparently couldn`t figure that out, which
speaks to a level of kind of ineptitude in that office to some extent.

MATTHEWS: Well, you know, I have to ask about Lois Lerner, the one who`s
on the skillet right now for taking the Fifth, when she should get credit,
I think. I`m not a lawyer in this case, but she should get credit for
having blown the whistle on this a while back a couple years ago and told
those people to stop using the shorthand of looking for Tea Party people.

Then she found out later they had resorted back to that shorthand
technology again which has now been so discredited.

CONFESSORE: Right.

MATTHEWS: She must have known who she talked to and told not to do this
anymore.

CONFESSORE: That`s right.

I mean, she had a briefing in 2011 where she was told about these criteria
and said, you can`t do that. You have to change them back.

We don`t really know who was in that room.

MATTHEWS: Right.

CONFESSORE: We don`t even know if the room was in Cincinnati or
Washington, frankly.

She was the one, when she heard about it, went and said, you can`t do this.
And what`s fascinating is someone below her, it appears a couple of levels
below her in the ranks turned that around. It may even have been the
specialists themselves who decided on their own that those terms that she
came up with were too generic and made it more specific again, which is to
say kind of dangerously specific.

So, there is all this confusion about who these people were at the bottom
level. We know some of their names in general from looking at the tax
forms and the correspondence, but the groups -- but the actual people, who
did what at which time is something that even the I.G. hasn`t told us yet.

MATTHEWS: Well, I just make a political observation here. You know who
wins with all this. The murkier it gets, the more the right wing wings.

The more there`s a murky notion that everybody in the federal government is
out to get them, they`re all tainted to the left, they`re all out there to
screw them, and the more it`s impossible to get those headless nails out of
there, the more the right wing loves it, because then they can run next
year against them, and the year after that, and 20 years from now, and say
that damn IRS is still there. They`re still the bad guys.

CONFESSORE: Well, Chris, I think every American taxpayer deserves to
understand what happened. And I think that whenever the coercive power of
the government is at work there, everyone should know how this worked and
who screwed up.

MATTHEWS: Well, good work by you, Nicholas Confessore of "The New York
Times." Great reporting, because it got to the facts.

CONFESSORE: Thanks, Chris.

MATTHEWS: Coming up, a regular Texas two-step as Rick Perry and Louie
Gohmert punch their tickets to the HARDBALL "Sideshow." By the way, Louie
is a lifelong member of the "Sideshow." He`s never getting out.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL and now to the "Sideshow."

First, remember this ad from Rick Perry`s presidential campaign?

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R), TEXAS: I`m not ashamed to admit that I`m a Christian.
But you don`t need to be in the pew every Sunday to know that there`s
something wrong in this country when gays can serve openly in the military,
but our kids can`t openly celebrate Christmas or pray in school.

(END VIDEO CLIP)

MATTHEWS: Well, the Republican-led Texas legislature stepped up months in
advance to crack down on what some call the war on Christmas with what`s
been dubbed the merry Christmas bill. It ensures that faculty and staff at
public schools can -- quote -- "offer traditional greetings around the
holidays" like merry Christmas or happy Hanukkah and not get into trouble
for displaying decorations related to those holidays.

Well, here`s the Web site set up by the bill`s sponsors. Evidently,
they`re all about Christmas. Well, the bill now heads to Governor Perry
for his signature. But I don`t think supporters of the bill have anything
to worry about on that front.

Finally, the "Sideshow" regular Louie Gohmert, the Texas Republican
congressman and one of the founding members of the birther crowd. Gohmert
recently took criticism of the IRS up a notch or two, you might say. Here
he is tying it all together, with a nod, of course, to the Boston Tea Party
of old.

(BEGIN VIDEO CLIP)

REP. LOUIE GOHMERT (R), TEXAS: You know, thank goodness that the IRS was
not around to help the founders when they founded the country, or otherwise
they would probably have shot the Boston Tea Party participants. They
would have killed off over half of the signers of the Declaration of
Independence.

(END VIDEO CLIP)

MATTHEWS: And it`s not just the IRS. In the same speech, Gohmert
expressed relief that the Department of Homeland Security wasn`t around at
the time of the country`s founding because of its sympathy for, as he put
it, Muslim extremists. That`s the Homeland Security Department; it loves
Muslim extremists.

Anyway, up next, the devastation from Monday`s tornado is massive, of
course. And with President Obama heading to Oklahoma to see it firsthand,
there`s no space for politics here or anywhere. That`s ahead.

And you`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MARY THOMPSON, CNBC CORRESPONDENT: I`m Mary Thompson with your CNBC
"Market Wrap."

An early rally fades, and the Dow slides 80 points, the S&P down -- closes
down 13. The Nasdaq falls 38.

Stocks sold off after the latest Fed minutes showed Central Bankers are
divided on whether to scale back stimulus measures. Meanwhile, Lowe`s
reported earnings that fell short of estimates. And Target also posted
profits that were well below forecasts. Both retailers blame the weather
for their troubles.

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

MATTHEWS: Welcome back to HARDBALL.

We learned today that President Obama will visit the Oklahoma City area on
Sunday to tour the devastation from Monday`s deadly tornado and see
firsthand the response effort under way. Well, today, we also learned that
the cost of the tornado is being estimated at $2 billion. That`s an early
damage tally by the Oklahoma Insurance Department.

We also know that the medical examiner`s office has identified positively
23 of the 24 people who died in the tornado. That`s 24 deaths, 10 of them
children, including two infants.

Well, joining me now for more is MSNBC`s Craig Melvin -- Craig.

CRAIG MELVIN, MSNBC CORRESPONDENT: Hey there, Chris Matthews.

Some good news here. Officials say, at this point, they do not expect that
death toll will rise. At this point, they`re not actively looking for
anyone in particular.

I do want to show you behind me what has -- what has started to happen
here. And this is happening all over Moore, Oklahoma, today, folks in this
town literally picking up the pieces right now, as you can see. This is
that hospital that we have been looking at over the past 48 hours or so.
Workers have been there all day removing debris.

At this point, no word on whether they are going to reopen that hospital or
whether they`re going to have to simply demolish it because the structural
damage was that severe. You mentioned the $2 billion insurance estimate.
That`s an early estimate. At this point, officials aren`t saying exactly
how high that could rise.

But we did learn a few hours ago that the state legislature here in
Oklahoma, government -- a rare example of government moving quickly here --
the state legislature approved $45 billion -- $45 million in emergency aid
relief. It`s been approved by the state today. They expect that`s going
to go to the governor and will happen.

Something else that`s also started to happen here, Chris, we have started
to get -- get pictures like this. And this is something that we didn`t
really think about until it started to happen. When you have got a tornado
like this one that decimated entire neighborhoods and schools, keepsakes,
family heirlooms, pictures had been tossed about, I mean, in this parking
lot -- this is just a picture on the back. It says, reading it -- it`s
from `66.

So, that`s something that struck us throughout the day, along with these
stories of survival that we continue to hear. I spent some time this
afternoon with a man that owns a day care center. And he talked about how
his two teachers and 18 students had to huddle together in a bathroom and
that bathroom was the only part of the structure left standing. All of
them were OK.

We have continued to hear stories like that throughout the day as well here
in Moore, Chris.

MATTHEWS: Thank you so much, Craig Melvin, down there in Moore, Oklahoma.

On the president`s visit to Oklahoma Sunday, he will once again remind us
that in times of crisis, we all pull together, of course. It was that
message of a united America, not one divided into red states and blue
states, that first electrified this country back in 2004, when Obama gave
that keynote at the Democratic National Convention.

Let`s look at that reminder of times when we were much more united. Let`s
watch.

(BEGIN VIDEO CLIP, 2004)

SEN. BARACK OBAMA (D), ILLINOIS: There is not a black America and a white
America and Latino America and Asian America. There`s the United States of
America.

(CHEERING AND APPLAUSE)

OBAMA: The pundits -- the pundits like to slice and dice our country into
red states and blue states, red states for Republicans, blue states for
Democrats. But I`ve got news for them, too. We worship an awesome God in
the blue states, and we don`t like federal agents poking around in our
libraries in the red states.

(END VIDEO CLIP)

MATTHEWS: Wow, throwing again (ph).

Anyway, Todd Lamb is Oklahoma`s lieutenant governor.

And, Governor, thank you for joining us. I think that`s the spirit around
my office. We`re here to help and whatever we can do. This day is not a
time for politics.

Give us a sense of the need, though. We want to know what you`re going to
be going to Congress for. What do you need from FEMA? What do you need
just to get through this?

I can`t believe it`s just been 48 hours ago. I can`t believe this time has
been so packed with horror.

LT. GOV. TODD LAMB (R), OKLAHOMA: It has been packed with horror. And as
you just saw, it`s been packed with recovery as well. The electrical poles
are up. Residents at 3:00 today, they were allowed back into their homes.
I say allowed back into their homes, but some were kept out and just
brought in a bit at a time so they could get their property. But they`re
all back on property looking for their things that they cherish and try to
dig things out of their rubble.

Chris, everything -- to answer your question, everything we`ve asked for
from FEMA, the federal government we have received in Oklahoma. I had an
at length conversation with Congressman Tom Cole this morning here on site.
He`s going to remain on site for several days ahead. My staff will work
with his.

And he`s going to be the leader on Capitol Hill in both houses to make sure
Moore is taken care of and any federal relief that needs to come through
will come through.

You just heard what the Oklahoma state Senate did today, $45 million out of
our rainy day fund to the Office of Emergency Management. That will be
passed by the state House of Representatives tomorrow and on to the
governor for her signature. So, it`ll be $45 million from the state of
Oklahoma to address some of these needs.

MATTHEWS: You know, I`m still overwhelmed by the ability of the people in
Moore, Oklahoma, and its surroundings to basically protect themselves. The
horror of losing a couple of dozen people is real, and there`ll be funerals
and the emotional loss within those families and the real personal loss is,
of course, permanent.

But the fact that all this devastation has occurred, the proportionality
amazes me. This much physical devastation could occur.

What was the secret to getting so many people out of harm`s way, Governor?

LAMB: Well, off to my left, on another camera, is one of our
meteorologists. I just walked up to him before this interview, put my arms
around him and I said, thank you. Thank you for what you have done. Our
meteorologists in Oklahoma are second to none, absolutely first rate.

We were warned about the tornado on Monday that wreaked this havoc behind
me. We were warned about that tornado Monday. On Saturday and Sunday, for
the potential of high tornadic activity on Monday. The forecasting is
absolutely incredible. The automobile tornado sirens were, of course,
working. 16 minutes` advance notice which doesn`t sound like a lot of time
before a tornado. That is a lot of time.

And Oklahoma`s good. I say that someone unfortunately, we are good at
responding to tragedies like this because we get a lot of practice as it.
And the Oklahoma standard is just that. We respond. We help. Oklahomans
are doing that.

But, of course, we have a lot of out of state help right now. People have
driven up from Texas. We`ve had people from Arkansas. As a matter of
fact, a retired police officer from the state of New York, I visited with
him just yesterday.

MATTHEWS: You`re a great guest and you`re a great man, I can tell.
Governor, thank you so much for joining us.

Lieutenant Governor Todd Lamb of the state of Oklahoma.

LAMB: Thanks, Chris.

MATTHEWS: Up next, look who`s running for mayor of New York. I don`t know
-- get the kids inside.

Former Congressman Anthony Weiner -- just kidding -- is about to make a
political comeback. He`s actually got a shot of winning this thing.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Talking about sore losers. Nearly six in 10 Republicans say the
2012 election between President Obama and Mitt Romney wasn`t fair! That`s
according to a new poll from Hamilton College. The poll also found more
than 80 percent of Republicans say voter fraud and intimidation -- catch
this -- in big cities had at least some impact on the results of the
election. Big cities.

President Obama won re-election by a rather decisive four points, by the
way. And maybe the real reason people don`t like to think it wasn`t fair
is because they didn`t win. They didn`t like the outcome.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: We`re back.

Big city mayors in this country aren`t just the face of the city, they are
the city. For better or worse, they reflect the personality and character
of a big city they (INAUDIBLE).

They think of Rudy Giuliani and Mike Bloomberg. They were New York when
they were mayor. D.C.`s Marion Berry, at this worst and at his best when
he first started. My old city, Frank Rizzo, he was the city.

But in the race for the city`s next mayor of New York, do New Yorkers
really want their hometown to be known as Weiner city?

Former U.S. Congressman Anthony Weiner is running. He resigned, by the
way, in 2011, just two years ago, after accidentally he said sending out a
lewd photo of himself -- that`s not the lewdest -- of himself to his tens
of thousands of Twitter follower. And after first claiming he`d been
hacked, he later admitted he had add online relationships with several
women and had sent over photos of himself, as I said, which are far less
decent than that one.

Now, he`s running for mayor begging the question -- is he in to win this
thing or just to cleanse himself through the operation?

MSNBC political analyst Gene Robinson, who`d rather not talk about this.
He`s Pulitzer Prize-winning columnist. You didn`t win your prize writing
about this stuff.

And Margie Omero is a real Democratic pollster and strategist, who`s really
been in the trenches.

Let`s take a look at the web ad for Weiner`s campaign, the one he`s running
now.

(BEGIN VIDEO CLIP)

ANTHONY WEINER (D), FORMER U.S. CONGRESSMAN: Look, I made some big
mistakes. And I know I let a lot of people down. But I`ve also learned
some tough lessons.

I`m running for mayor because I`ve been fighting for the middle class and
those struggling to make it for my entire life. And I hope a get a second
chance to work for you.

New York City should be the middle class capital of the world. And I`ve
got some ideas on how to do it. Sixty-four of them right on my Web site.
Take a look. Tell me what you think.

HUMA ABEDIN, WEINER`S WIFE: We love this city. And no one will work
harder to make it better than Anthony.

WEINER: I will fight for you every single day. Thank you for watching.

(END VIDEO CLIP)

MATTHEWS: Chutzpah, just chutzpah. But my question is, should there --
well, you`re not going to tell me because you root for all Democrats,
right? You want him to win, right?

MARGIE OMERO, DEMOCRATIC STRATEGIST: Yes. I mean, look, there`s a strong
Democratic field and New York City is going to have a Democratic mayor.

MATTHEWS: And?

OMERO: And right now, but a plurality are undecided. So it makes sense
that Weiner looked at it and said there could be a chance for me. His
wife, Huma, who is loved, stands him.

MATTHEWS: Yes.

OMERO: That`s why she`s -- that`s part of the reason she`s in that video.
His parents are in there, shows his roots.

MATTHEWS: Clinton said -- by the way, one of the people that loves Huma,
has just said, we have nothing to do with this thing. That`s interesting.
Nothing to do with Bill and Hillary Clinton.

Your thoughts, Gene?

EUGENE ROBINSON, THE WASHINGTON POST: Yes.

MATTHEWS: I find it hard. I grew up in a big city. One thing about big
cities as opposed to rural areas, you really do identify with mayor. It`s
probably the most -- that and the president are most personal decisions.
You like the guy, Jersey, for example, and old state, loved Ed Koch for New
York. He was their mayor in many ways. Rizzo in south Philly, couldn`t
say a word against the guy. He was South Philly.

And certainly some of the better mayors, like, Tommy Menino. They love
him.

ROBINSON: Yes.

MATTHEWS: Can you love a Weiner? Can you love a man after this?

(CROSSTALK)

MATTHEWS: He`s not just here to fix the sewers or to keep the -- he`s the
symbol of the city. Can you do that to a guy with this recent history of
exhibitionism and narcissism, whatever you call this situation?

ROBINSON: Look, I would love to poll this race, right? The polling is
going to be fascinating because who are the Weiner supporters, who are the
opponents, how does it break out by age, whatever?

Here we have a sex handle where there was not actually sex, OK, but --

MATTHEWS: What was it?

ROBINSON: -- there was -- there was sexting.

MATTHEWS: Yes.

ROBINSON: -- which is kind of a new-age transgression and formation age
transgression and it will be fascinating to see how people react.

(CROSSTALK)

MATTHEWS: The fact here is not orientation. It`s not people having a sex
drive which God invented, none of us did. It`s this weird desire to be
known in a strange way by tens and thousands of people or lots of
strangers. There`s a strange impulse here and I don`t see any evidence
that it`s gone except it`s transforming into this desire to campaign for
public office, which you have to wonder, are they connected, these
pastimes?

OMERO: You can be an idiot on the Internet and still be good man.

MATTHEWS: Idiot -- what do you mean by idiot?

OMERO: By the way he behaved. I think everybody can agree --

MATTHEWS: You mean a monumental error. He wanted to do something else,
and did this by accident?

OMERO: No. You know, the way he behaved with the pictures --

MATTHEWS: Mistakes were made?

OMERO: Yes. I mean, clearly, everyone agrees that was dumb, right? And
he said as much.

MATTHEWS: Dumb and mistakes. Is this what you mean by this? You don`t
think this tells you anything more than sort of a mental or head, sort of
unforced error in baseball? You think there wasn`t something here?

OMERO: It`s clearly an unforced - -look, you`re right. If he -- he talks
about that "New York Times" magazine piece about wanting this attention,
and if voters find that`s a bigger driver than fighting for them, then --

MATTHEWS: Fighting for them is another metaphor. What do you mean by
fighting for them?

OMERO: Well, is he going to be a strong advocate for New York? But he is
a strong progressive voice. He`s going to add some sizzle to this race.

MATTHEWS: Would you want to send him to the National Mayors Conference on
behalf of New York? Would you want him traveling around the country saying
this is the face of New York?

OMERO: Sure. Why not?

(CROSSTALK)

ROBINSON: But that`s the question. That`s the question that`s going to be
fascinating to see as this race develops.

I frankly don`t think he will win. I think Christine Quinn probably will
win the mayor`s office. But, you know, her lead isn`t that big at this
point, given her status as the front-runner, 25 percent doesn`t make you
that much of a front-runner. So anything could happen. I think we`ll just
learn something about how people think about this particular --

(CROSSTALK)

MATTHEWS: Look, you know what I think? I think people ought to show shame
in public life. When they do something really wrong like this, humiliating
to not jus them but to the country that`s paid attention to them, they
should get out of action for a while. Go away, garden somewhere, spend --

(CROSSTALK)

MATTHEWS: Obviously we don`t agree on this. Spencer, for example, he
asked me something and I said, you ought to go away for a while and do some
job that`s not very high profile, do something for the people for once and
maybe you can work your way back.

But the shameless, coming right back to the public and say, give me another
chance like we`re supposed to forgive him, it`s not about forgiving. It`s
about putting him up on the pedestal, a mayor of New York. That`s not the
same as forgiving. You can forgive a lot -- I don`t know why you`d forgive
this -- and put him on the pedestal and say, you are the person to welcome
everybody to America. You`re the face of New York City.

I would find it incredible.

ROBINSON: People see the Internet as somehow a private space, as a space
with its own zone of privacy that we don`t yet understand where the
boundaries are, but do people see dumb, stupid, not dumb and stupid, but
offensive, frankly, because he was sending pictures of his crotch to random
women.

MATTHEWS: (INAUDIBLE) by the tens and thousands.

ROBINSON: Well, you know, do people see that as different from being, say,
an exhibitionist in the flesh?

OMERO: Or do they see it as having nothing to do with making sure that
trains are running on time and garbage is getting picked up.

MATTHEWS: You`re a very good advocate. Maybe they`ll hire you to do this.
Fair enough.

I agree with you, he`s in the game and that says a lot about us.

Eugene Robinson and Margie Omero, thanks for coming on.

When we return, let me finish with the unfairness I see of the right wing`s
reaction of Benghazi. And it`s really unfair.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with this.

I was thinking the other day about the constant unfairness of the so-called
Benghazi issue. When our country was hit in 2001 with those planes flying
into the World Trade Center up in New York and the Pentagon down here in
Washington, the country accepted the horror. Sure, there was some finger-
pointing about the warning the CIA had given the president about al Qaeda
attacking in the United States, but nobody serious was out there saying it
was George W. Bush who is behind 9/11, nobody really calling him a bad guy
over it, and certainly, nobody is serious talking about impeachment.

And then I read the other day about some Republican talking about
impeaching President Obama over the attack by terrorists on a CIA facility
in Benghazi, out there in the wilds of revolutionary Libya. Think for a
second of how disproportionate this is.

In one case, the United States is attacked in its greatest city and its
capitol. The casualty is climbing to the thousands. In the other case, an
ambassador is killed in the midst of his duties, out there in the location
that even under quiet circumstances was risky. And in the case of 9/11,
the political critics polled with the president. They put politics aside.
In the case of that outpost in Libya, they make grounds for the biggest
scandal in God`s creation, the basis for all out political warfare.


Who is being reasonable here? Who is being fair?

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

"POLITICS NATION" with Al Sharpton starts right now.

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