updated 6/15/2004 10:07:07 AM ET 2004-06-15T14:07:07

Guests: Richard Murphy, George Pataki, Ed Rendell, Katrina Vanden Heuvel, Terry Jeffrey

CHRIS MATTHEWS, HOST:  Tonight, terrorism in Saudi Arabia.  From NBC News, Andrea Mitchell on America‘s complex relationship with the kingdom.

Plus Ronald Reagan‘s legacy and Bill Clinton‘s new book.  The role ex-presidents will play in this year‘s battle for the White House, with New York Governor George Pataki.  And Ed Rendell, governor of the battleground state of Pennsylvania.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews. 

If you thought Iraq was a dangerous place for Americans, take a look at Saudi Arabia.  There‘s been a wave of attacks against westerners in the past week. 

Last Tuesday, American Robert Jacobs was killed in a parking garage.  On Saturday, another American, Kenneth Scroggs, was shot to death in the garage of his house. 

Also on Saturday, Paul Johnson, an employee of Lockheed Martin, was abducted in the Saudi capital of Riyadh.  And now the group claiming responsibility for the kidnapping, a group called al Qaeda of the Arabian Peninsula, is threatening to treat Johnson the way U.S. troops treated Iraqis at the Abu Ghraib prison. 

Andrea Mitchell is NBC News‘ chief foreign affairs correspondent.  Connect the dots, Andrea, as we‘ve been saying for months now in all these places over there.  What‘s going on right now?

ANDREA MITCHELL, NBC NEWS CORRESPONDENT:  Well, right now, al Qaeda is clearly trying to overthrow Saudi regime. 

And if we‘re worried about Iraq, and we should be, and justifiably, there are real big concerns about Saudi Arabia because of its impact on the world economy as such a major oil exporter. 

Right now, there are about 35,000 Americans in Saudi Arabia.  Many of them are technical experts who work on the oil rigs.  They work in the infrastructure.  They‘re also defense contractors. 

And if they were all to leave, if they were to follow the advice, frankly, of the State Department and get out of there, it‘s unclear that the Saudi oil production could continue, because they need the technical workers, who are mostly westerners and Americans. 

MATTHEWS:  Well, we‘ve known from the beginning of the focus in this country, our country on al Qaeda, that its main goal was to knock over those more moderate Middle Eastern countries, especially Saudi Arabia. 

But for months, it seems they‘ve avoided making a direct attack on their own country.  Why has this country that had so much to do with not—with killing over 3,000 people on 9/11, why are they finally going at the main target?

MITCHELL:  Well, they‘ve been going at the main target for a little over a year now.  It started a year ago May when they first hit in Riyadh and then again in November of 2003.  So there has been an escalation. 

And they‘ve got the names and the people that they think they‘re searching for.  They‘ve made a lot of arrests.  The U.S. government says that the Saudi government is finally taking them seriously.  They certainly didn‘t right after 9/11.  It took them about six months until they hit close to home. 

But so far they‘ve not been able to crack this.  The Saudi—this real concern that the Saudis themselves are infiltrated by al Qaeda sympathizers, if not activists themselves. 

Because why is it so hard to make these arrests?  Why do they keep getting away?  Why do they see these hostage takings now, something that had never happened in Saudi Arabia. 

This is, in essence, a totalitarian regime.  Yet it is really being hit hard.  And even though they know that they are now at risk themselves, that the regime itself is being targeted, they don‘t seem to be able to get a handle on it. 

Colin Powell just this weekend said that they‘re doing better, but they still have not shut off all the funding, all the money that goes from sympathizers from the religious element of Saudi Arabia directly to al Qaeda. 

MATTHEWS:  What‘s the connection to Iraq and June 30?  Is there one?

MITCHELL:   Well, it‘s hard to say whether this—what‘s happening now in Saudi Arabia is really connected.  Because they have been targeted so intensively for the past 13, 14 months, that I wouldn‘t know precisely whether or not this is really connected to June 30.  Although what‘s happening in Iraq certainly is. 

MATTHEWS:  Are these people, the al Qaeda people, now swimming in the rising tide of anti-Americanism?  Is that what they‘re getting away with?  That‘s how they‘re getting away with it?

MITCHELL:  Certainly, that is a connection.  And for all of the intentions that went into going into Iraq and trying to not only overturn Saddam Hussein but change the whole direction of what was going to happen in that region, what we‘ve seen now is certainly an unintended consequence, that it has only increased the anti-Americanism and made it even harder to get control of this rising al Qaeda threat in Saudi Arabia itself. 

MATTHEWS:  So ironically, an attempt to make things safer for Saudi Arabia would put them in greater jeopardy? 

MITCHELL:  I think that‘s the only conclusion you can now draw. 

MATTHEWS:  Thank you very much, NBC‘s Andrea Mitchell.

No one knows Saudi Arabia better than Richard Murphy.  He served as our ambassador there during the Reagan administration. 

Mr. Ambassador, do you concur with what Andrea said about basically the rising tide of hostility toward the west and us, in particular, has made it easier for al Qaeda to operate against its own government?

RICHARD MURPHY, FORMER U.S. AMBASSADOR TO SAUDI ARABIA:  There was a survey last year, and I emphasize last year, that showed 50 percent of the Saudis sympathized—didn‘t say supported Osama bin Laden but sympathized with his positions of anti-Americanism.  So that... 

MATTHEWS:  ... to hide among when you‘re conducting operations against the government?

MURPHY:  Not really.  And what I‘m hoping we‘re going to see more of is what we have seen in the last few months. 

As Andrea was talking about, since May of last year, you‘ve had families actually turning in their sons to the authorities because they suspected them of planning violent action.  The Saudi population, by and large, is not a violent people.  We‘ve had 50,000 Americans there for 50 years without incident. 

MATTHEWS:  Well, let me ask you to break it down.  Among traditional older people, who are obviously very tribal and very traditional in their lifestyle, do they tend to be more for supporting the government?

MURPHY:  Yes. 

MATTHEWS:  The younger, more educated crowd.  I spent this weekend with a lot of those people from that part of the world.  Are they—did they tend to split 50/50 against us, something like that?

MURPHY:  Well, they‘re certainly worried about, they don‘t have the jobs.  They don‘t have the income that their fathers had.  The population has exploded and the pressure from the young is certainly critical.  It is critical of the leadership and to a degree, of their alliance with us. 

MATTHEWS:  When they get up and read the paper in the morning over a cup of coffee at some cafe—I always ask this question—are they sitting there snickering and rooting against us and hoping for the insurgents in Iraq and hoping for al Qaeda, or are they rooting for us?

MURPHY:  They‘re certainly not hoping for al Qaeda to take over from the royal family, if that‘s behind your question.  They‘re...

MATTHEWS:  How about they kill us one at a time?

MURPHY:  I think there‘s a sympathy with, you know, the big guys getting it.

MATTHEWS:  Right.

MURPHY:  There‘s some of that feeling, sure. 

MATTHEWS:  Well, could that be determined here?

MURPHY:  I don‘t think so. 

MATTHEWS:  Do you think the people of Saudi Arabia are still basically conservative and on our side?

MURPHY:  I think they are conservative.  They‘re very critical of us over Israel-Palestine.  They‘re very critical of us over Iraq.  And Iraq, that‘s what Andrea, again, was talking about.  It has created a new level of anti-Americanism which helps al Qaeda. 

MATTHEWS:  So if you add together the fact that we‘re on the Israelis‘ side more and more now under this administration, if you add together that we attacked and overthrew an Arab country, does that create more jeopardy, as Andrea said a moment ago, for the Saudi Arabia government, if you put it all together?

MURPHY:  Yes, I think it does. 

MATTHEWS:  What can we do about it?

MURPHY:  We‘ve got to do better...

MATTHEWS:  You can‘t cut our alliance with Israel.  We‘ve got to modify that—our relationship.  Each president of the United Stats has a different take on that situation over there. 

But assuming that‘s fairly stuck, what can we move?  What can we change in our policy?

MURPHY:  Well, we can do better on Arab-Israel in terms of putting our shoulder to the wheel to get those negotiations restarted.  We haven‘t done much directly on that for a year and more. 

On Iraq, it‘s only with time, when this government is about to take over, gives way to an elected government next year that we‘ll begin to get across the impression we really aren‘t there to stay.  We aren‘t there to suck their blood, to take their oil.  That we went in to get rid of Saddam Hussein and we were worried about WMD. 

MATTHEWS:  Do you think they‘ll buy this new government?  The young people in the streets?

MURPHY:  It will still be seen as an American imposed government. 

MATTHEWS:  Well, then, what are we getting—how are we improving our situation by installing an interim government and ultimately an elected government?

MURPHY:  We‘re improving it gradually, but it‘s not going to take place on July 1.  They‘re going to have to show stand-up—in fact, they‘re going to have to criticize us in a very variety of ways. 

They‘re going to have to demand a big say on how our military operates or doesn‘t operate in their country.  And then they‘re going to have to give way to an elective government. 

So being anti-American at least in rhetoric is going to be have to job, to say...

MATTHEWS:  Well, we know from our own revolution, anybody studying it, there was a period of time when we Americans would like to stay with Britain.  Then we got angrier and angrier at them over tax policy and their arrogance. 

And eventually we said, “OK, we‘ll go with”—Most people said, “We‘ll go with the radicals and dump them.”

Is the attitude...

MURPHY:  And tossed a lot of good tea, yes. 

MATTHEWS:  Right, I know.  But during the course of everything we‘ve studied with Saudi Arabia, below the surface of this terrorism against us, this killing of our people, killing the Irish people, killing all the westerners, is this education that the west is to blame for everything.  That Israel is to blame for everything else.  And that they‘re the good guys. 

Isn‘t that going to continue?  Or is the Saudi government going to stop that stuff?  Those madras schools, will they stop that?

MURPHY:  They can‘t turn it around overnight.  They did start before 9/11, reforms in their education system.  I‘ve tracked those.  I visited some of the schools.  They are trying.  They‘re cleaning up the textbooks.  Cleaning out some of the hate material that goes back over the centuries, that the outsider is evil or is bad and the infidel.

There is an arrogance there that comes from isolation and comes from a conviction that they have the best practice of Islam and they know best. 

MATTHEWS:  See, the thing about that, that sounds to me like a rationale for killing outsiders when you come into the country. 

MURPHY:  But it hasn‘t been over the centuries.  That‘s my point.  It doesn‘t—has not translated into a violent series of actions. 

MATTHEWS:  Is it increasingly doing so?

MURPHY:  These are very troubled time. 

MATTHEWS:  In other words, the dream of getting the westerners out of the east is becoming the mission today? 

MURPHY:  Remember, Kipling, “The fool I see who tried to hustle the east.” 

We are putting a lot of pressure for change.  And there is a pressure from their own societies for change.  So it‘s an unsettled time. 

MURPHY:  That‘s for sure.  Thank you very much for coming on with your expertise.  Ambassador Richard Murphy. 

Coming up, the Republican convention here in New York is less than three months away.  When we come back, New York Governor George Pataki, a close friend of President George W. Bush, is coming here next.

And later, George Bush and John Kerry are battling over the purple states, the ones that aren‘t solidly red or blue.  You remember your crayons.  The governor of one of the biggest purple states, Pennsylvania, will be here.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:   Coming up, the Republican Party is getting ready for its convention here in New York City.  New York Governor Pataki will join us when HARDBALL returns.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

In less than three months, the Republican Party will descend upon New York City for their national convention. 

Joining me from Albany, New York, is the governor of New York and close friend of President Bush, George Pataki. 

Governor Pataki, what influence will the legacy of Ronald Reagan, so honored so much last week, what will it have on this upcoming election?

GOV. GEORGE PATAKI ®, NEW YORK:  Well, first let me say I think it was completely appropriate that the nation recognize one of our great presidents with the pomp and the circumstance, that it was justified. 

I had the privilege with Libby to be at the cathedral Friday for the memorial service, for the funeral.  And it was just incredibly moving.  And it was wonderful to see how people, not just those who supported President Reagan when he was in office but those who may have been his critics, all came together to appreciate the greatness of his efforts. 

And I think there is going to be a lasting legacy.  Not just the changes he made to our country and the changes he made to the world.  Getting rid of the Iron Curtain and the Soviet empire and putting us back on the road to optimism and prosperity. 

But one of the things President Reagan did was, by his death, unite us with a sense of purpose and a belief in a brighter future again.  And I think that‘s something that, as Americans reflect. 

This is a great country.  And we‘ve been through some tough times.  But this—We are getting better.  We are coming back.  The jobs are beginning to grow.  And I think that‘s going to help my party.  And more importantly, I think it‘s going to help the country. 

MATTHEWS:  I agree.  Let me ask you this about the legacy, the political legacy.  Do you think President Bush is a Reaganite?

PATAKI:  Oh, sure.  There‘s no question he‘s a Reaganite.  When you think of Ronald Reagan, he was someone with a clear vision, the courage to stand up to the critics and work to impose that vision against those who stood in his way, whether it was ending the moral equivalence between east and west and the Soviet empire and the free countries of the west, or in so many other areas. 

And I remember in 1982, Reaganomics was a joke.  Because he had passed the tax cuts, reduced the size of the federal government.  But the economy was in recession because he was bringing down inflation from 18, 19, 20 percent, which today is unthinkable.  But it was the reality we lived with then.  So it was very controversial at the time. 

A number of President Bush‘s policies, whether it‘s been the tax cuts or his standing up to terror, have been controversial in our time.  But I think history will prove that they both had the clarity of vision and purpose that our country needed in difficult times. 

MATTHEWS:  Would you say that George Bush, the president, is a favored candidate to win in New York State this fall?

PATAKI:  I don‘t think a Republican is ever a favored candidate to win in New York State in the fall.  This is an overwhelmingly Democratic state. 

But I think President Bush has the ability, as President Reagan did, to appeal across party lines, to Democrats and particularly, to independents who share our belief that when you cut taxes, you create more jobs. 

You know, three, four, two months ago, the Democrats were all railing about the jobless recovery.  In the last three months, this country has created almost a million new jobs.  Extraordinary job growth. 

MATTHEWS:  Right.

PATAKI:  And so I think—I think that‘s going to continue.  And if that does continue, I think a lot of those who were looking, you know, are the president‘s policies really right for my state, for my family, they‘re going to say, yes, they are. 

MATTHEWS:  Ronald Reagan carried New York state twice.  Why wouldn‘t you think that George W. Bush would be a favored candidate up there if he‘s a Reaganite?

PATAKI:  Well, I don‘t think Ronald Reagan was favored either time either.  I remember back then in ‘80 and ‘84.  And you know, the pundits discounted President Reagan.  He was underestimated.  He was a Hollywood actor, even though he had been governor of California for two very successful terms. 

MATTHEWS:  Right.

PATAKI:  But what Ronald Reagan was able to do, which is what you have to do as a Republican to win in New York, is be able to cross party lines.  Get independents, get Democrats, get conservatives, get people who support your philosophy and not necessarily your party, to believe that you are the right person. 

And I think if you looked at the history of this state since 1984, it‘s been enormously difficult for a Republican to carry it.  But if the president‘s policies, as I believe will be the case, continue to create more jobs and bring us back to economic strength, continue to take the war on terror to those who would attack us again.  And I think a lot of New Yorkers are going to say that he made the tough calls.  They were the right calls in our state and our country are getting better. 

MATTHEWS:  Would you bet on him winning New York?

PATAKI:  No. 

MATTHEWS:  OK.  Let me ask you about the war in Iraq...

PATAKI:  I wouldn‘t have bet on myself winning New York in any of the three time that I ran. 

MATTHEWS:  OK.  But you did, because you put your life on the line. 

PATAKI:  I did.  I did.

MATTHEWS:  Let me ask you about the war in Iraq, because we only have 90 seconds, Governor.  I‘d love your view on this. 

As a question in the streets among people you talk to, do you think that Iraq is being seen more as a blunder than as a success today?  Or is it about the same?

PATAKI:  I think there‘s a lot of questioning about it.  But there‘s also this inherent understanding that if we don‘t succeed in Iraq, if the front line in terror isn‘t in the streets of Baghdad but it‘s the streets of Brooklyn or on Broadway, that we have suffered enormously. 

So I think particularly with the unanimous U.N. Security Council resolution, that has now given the global international community support for the new government that will take office on June 30...

MATTHEWS:  Right.

PATAKI:  That a lot of those who had been skeptical will say, “Well, it is a government we have to support.  It is a move towards democracy in an unstable part of the world.  We‘ve been through a tough time.  It‘s a required sacrifice.  But we‘re going to come out of it all right.”

MATTHEWS:  Are you ready to accept the vice-presidential nomination if it becomes available in the Republican Party this year?

PATAKI:  It‘s not available.  The ticket will be President Bush and Vice President Cheney, and I‘m just... 

MATTHEWS:  And you‘re betting on that?  And you‘re sure?  That‘s where you‘re sure?

PATAKI:  Very optimistic.  We‘re going to win this race.  That‘s one I would bet on, Chris. 

MATTHEWS:  We‘ll talk.  Anyway, thank you, Governor George Pataki.

PATAKI:  Thank you.

MATTHEWS:  Up next, George W. Bush and John Kerry are in a hot fight over those purple states, so called because they‘re not solidly red or blue.  Remember those crayons, put them together, ends up purple?

And later, the governor of a key purple state, Governor Ed Rendell of Pennsylvania on which way his state‘s going to go.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Tonight, the presidential campaign is back in gear, following the break that both President Bush and John Kerry took last week for Ronald Reagan‘s funeral.

And the battle ‘s particularly intense, in the so-called purple states, those toss-up states that aren‘t really red or blue. 

HARDBALL election correspondent David Shuster reports.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, MSNBC NEWS CORRESPONDENT:  As the president headed to Missouri today to discuss Medicare approved prescription drug cards, Democrats were already waiting for him in Kansas City with this new radio ad. 

UNIDENTIFIED FEMALE:  The president will be rushed to his photo op.  But he won‘t stop to hear from the families who are paying an average of $2,700 more for health care.

SHUSTER:  In Orlando this morning, where Vice President Cheney spoke about progress in Afghanistan...

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES:  Now a new government has been established under President Hamid Karzai.  The nation is being rebuilt, children are going to school and a constitution has been written. 

SHUSTER:  The local Kerry campaign was alleging to Floridians the Bush administration cut money for first responders here at home. 

And this past weekend in Pennsylvania, where Kerry was talking economics, the local Bush campaign outlined how much Kerry‘s plan might cost in taxes on Pennsylvania workers. 

The punch and counter punch strategy may seem a bit obsessive.  But in the 16 battleground states decided in the last election by five percentage points or less, the brutal fight for every vote has become a hallmark of this year‘s campaign. 

JOE TRIPPI, MSNBC POLITICAL ANALYST:  The winner of those states, any two or three of them, of those states could end up deciding who the next president is going to be. 

SHUSTER:  Political analysts refer to such battleground states as the purple states, the color you get when you combine red for Republicans and blue for Democrats. 

And these are the states including Ohio, Pennsylvania, Florida, and Missouri, where small attitude changes can have a dramatic impact. 

Over the last few weeks, an economic recovery, once considered crucial for President Bush, has been drowned out by growing voter frustration with the problems in Iraq, including the prisoner abuse scandal.  As a result, the latest state polls show President Bush in trouble. 

Of the eight purple states he won in the last election, the president is now losing five of them.  Of the Gore states from four years ago, John Kerry is only behind in one: Iowa. 

TRIPPI:  You‘re ahead.  That‘s always good.  But you can‘t count on it.  You still have to pass the ball.  You still have to take some risks, take some chances and fight and put your resources in the right place. 

SHUSTER (on camera):  And both campaigns caution that many people have yet to start tuning in.  That hasn‘t stopped the campaigns from aiming almost every political ad and every candidate‘s visit at purple state voters. 

I‘m David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  Thank you, David Shuster. 

Up next, Pennsylvania Governor Ed Rendell on what it‘s going to take to turn his home state from purple to blue for John Kerry.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  They‘re not red.  They‘re not blue.  This half-hour on HARDBALL, the battle over the purple states, the states that could go either way this election.  Pennsylvania Governor Ed Rendell will join us. 

But, first, the latest headlines right now. 

(NEWS BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

Governor Ed Rendell is the governor of one of the most important purple states, states that could go either way this election, Pennsylvania. 

Governor, how does it look right now for the president up there?  Can the president win that state? 

GOV. ED RENDELL (D), PENNSYLVANIA:  Oh, sure, he can win it. 

I think it is a little bit of an uphill battle for him, but he can win it, no question about that.

MATTHEWS:  What‘s driving this election, Iraq or the economy? 

RENDELL:  Well, for the longest while, it was the economy.  The economy was the No. 1 issue by far in Pennsylvania.  And that issue was cutting against the president. 

Even though there have been some signs of the recovery and our taxes -

·         our tax collection in Pennsylvania has improved, it is still for us here in Pennsylvania basically a jobless recovery.  But, recently, Iraq has at least pulled even with the economy in terms of what Pennsylvanians are going to cast their votes on. 

MATTHEWS:  In terms of the economy, is the direction up or down? 

RENDELL:  Well, in Pennsylvania, we‘re starting to see some up signs, but not in terms of jobs and not in terms of jobs for the blue-collar worker who is so important.

As you know, when Ronald Reagan and George Bush carried Pennsylvania, Chris, they carried a lot of the blue-collar Democrats, the working Democrats, the hunters, people like that.  Right now, the sector of our economy that‘s performing the worst, where it is a jobless recovery and where firms continue to close, is the manufacturing sector, where most of those blue-collar Democrats are working. 

MATTHEWS:  Who do the people blame that on? 

RENDELL:  I think there‘s a general belief that the administration‘s economic priorities are not good for working people, that we haven‘t been strong enough in foreign trade.  And I think the president shares most of the—gets most of blame for that. 

MATTHEWS:  Do you think Iraq was a blunder yourself? 

RENDELL:  To go in?

(CROSSTALK)

MATTHEWS:  No, to go to war with Iraq and take over the country and get responsibility for that country, was that a blunder? 

RENDELL:  Well, I think it was, in some ways, the right thing to do, because Saddam Hussein was a tyrant, killing his own people, destroying the Kurds, trying to commit genocide on the Kurds. 

So I think there was a moral justification for going in.  But to go in

·         and we control the timing, Chris.  To go in when we were so totally unprepared for the peace is shocking to me, in retrospect.  I never believed...

MATTHEWS:  Do you think we should have predicted the fact that there would be resistance in that country to our occupation? 

RENDELL:  Oh, of course.  Of course.

MATTHEWS:  Well, why didn‘t they do it?  How come the people like Secretary Rumsfeld told me to my face, they never imagined it would be a difficult—in fact, he didn‘t imagine there would be an occupation.  He thought it would just be a takeover and we would just appoint a few people to government like Chalabi and that would be the end of it and we would have our job done.

RENDELL:  Well, first of all, that was wishful thinking.  Iraq was never Afghanistan in its relationship and its feelings toward the U.S.

And even in Afghanistan, we‘re still fighting today, even though the public in Afghanistan rejoiced when we came in.  They should have known that the Sunnis weren‘t going to turn around and go away.  The Sunnis weren‘t going to say, oh, God bless the United States of America. 

MATTHEWS:  No. 

RENDELL:  I mean, their intelligence was just pathetic.  They heard what they wanted to hear.  And, in government, if you let yourself do that, you are going down a dangerous path. 

MATTHEWS:  Do you think most Democrats in Pennsylvania agree with you, that we should have gone in and attacked Saddam Hussein and taken over the country? 

RENDELL:  I think there‘s probably 50...

MATTHEWS:  Most Democrats. 

RENDELL:  Probably 50/50.  I think there are enough Democrats here...

MATTHEWS:  And which way is that number going, Governor?  Is it going more for support for the war with Iraq or against it? 

RENDELL:  Oh, clearly trending against it. 

MATTHEWS:  How about you? 

RENDELL:  No, I still think we did the right thing. 

But I think we did the right thing in the wrong context.  How could we be so unprepared for the peace?  How did we not have a game plan?  You know, Chris, when I helped to turn around Philadelphia, there were symbols that we did, symbolic things that meant so much to the people of the city.  What about symbols?  What about saying, OK, folks, we‘re here?  The oil revenues that your country has been producing all these years never went to you. 

We‘re going to pass those oil revenues.  As soon as we get the wells back working, we‘re going to pass them back to you.  What an incredible symbolic gesture that would have been.  It would have turned those people on their heads.  What about things like that?  We didn‘t do them.  We didn‘t do any sales, any marketing.  We just assumed everybody was going to treat us like—like when we liberated Paris. 

MATTHEWS:  I know. 

Let me ask you about politics here at home.  We have two conventions coming up right now, one of them in Boston.  The Democratic Convention will be first one at the end of July.  Do you think that John Kerry should wait until the convention to pick a V.P.? 

RENDELL:  Yes, I do. 

I think, if there was ever any benefit from the strategy of picking early, that benefit has dissipated.  I think he should wait.  And it‘s one of the few suspense cards for the convention.  And, plus, I think you should make that selection as late as you can...

MATTHEWS:  Right. 

RENDELL:  So you can understand what is driving voters.

MATTHEWS:  Well, you don‘t have until then, Governor.  And I want to ask you if you feel lucky.  Do you feel lucky? 

RENDELL:  For me? 

(LAUGHTER)

MATTHEWS:  Yes, I want to ask you to pick.  Is it Gephardt, Clark or is it Edwards? 

RENDELL:  I think it is likely to be Edwards. 

But I will tell you a dark horse that I would consider and I think some of the people in the Kerry camp are considering...

MATTHEWS:  Right. 

RENDELL:  ... is Joe Biden, who has tremendous foreign relations experience.

MATTHEWS:  Two Catholics?  Two Catholics on the same ticket? 

RENDELL:  I don‘t think it matters, Chris.  I don‘t think it matters.

MATTHEWS:  It doesn‘t matter in Missouri or Ohio or Arkansas? 

RENDELL:  I don‘t think it matters.  I think it is more the person than the individual... 

MATTHEWS:  You‘re such a tolerant liberal guy.  I‘m not sure it‘s true everybody is.

RENDELL:  Wait a second.  We saw that with Joe Lieberman. 

MATTHEWS:  I know.

RENDELL:  Do you think the fact that Joe Lieberman was a Jew hurt our ticket?  I think it helped our ticket.  I don‘t think it hurt our ticket. 

MATTHEWS:  It just didn‘t do the job on the gold coast it should have. 

RENDELL:  Well, that was because the Florida Democratic Party didn‘t check the ballot.

MATTHEWS:  But they voted for Pat Buchanan is the problem that happened down there. 

RENDELL:  That‘s right. 

MATTHEWS:  Let me ask you about the—do you think Cheney is locked into this ticket, the Republican ticket?  Is he a lock-in right now? 

RENDELL:  If they go into their convention 10 points down, which I don‘t think is going to happen, I think you could see some movement.

Although I think the president is extremely loyal to Dick Cheney and Dick Cheney is a very important part of what they do...

MATTHEWS:  Right. 

RENDELL:  If they‘re 10 points down and Cheney is viewed as a negative, I think they may make a move. 

(CROSSTALK)

MATTHEWS:  Did you see the unveiling today of the—I‘m sorry to rush you.  I have got one great question only for you, because you‘re a good guy.  Did you see the unveiling of Bill Clinton‘s portrait at the White House today?  

RENDELL:  No, I missed it.  I believe ...

(CROSSTALK)

MATTHEWS:  Oh, darn it.  I wanted to ask you what you thought of it. 

RENDELL:  The picture?

MATTHEWS:  I have a theory he hates it.  He looked at it for a tenth of a second and turned away with the saddest look.  It was so great.  It was so Clinton.  I loved it.

RENDELL:  Well, did he pick the artist?

MATTHEWS:  I don‘t know, but he didn‘t like the results.  I don‘t think that.  Anyway, just guessing. 

Thank you very much, Ed Rendell.

RENDELL:  OK, Chris. 

MATTHEWS:  The very popular governor of Pennsylvania. 

Up next...

(BEGIN VIDEO CLIP)

RON REAGAN, NBC CONTRIBUTOR:  Dad was also a deeply, unabashedly religious man.  But he never made the fatal mistake of so many politicians, wearing his faith on his sleeve to gain political advantage. 

(END VIDEO CLIP)

MATTHEWS:  That tribute by Ron Reagan caught some attention Friday night.  We‘ll talk religion and politics with Katrina Vanden Heuvel and Terry Jeffrey. 

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, the impact of Ronald Reagan‘s legacy on the battle for the White House—when HARDBALL returns.

(COMMERCIAL BREAK)

MATTHEWS:  How will Ronald Reagan‘s legacy and the honor given to it last week affect the upcoming battle for the White House? 

Joining me now is Terry Jeffrey, who is editor of “Human Events” magazine.  And Katrina Vanden Heuvel is editor of “The Nation” magazine.”

Terry, you first, sir.

What do you think will be the impact, not just of the honor given to the president last week, but the legacy itself?

TERRY JEFFREY, EDITOR, “HUMAN EVENTS”:  Well, generally, I think it has been a positive thing for George Bush, Chris. 

First of all, you had a week of generally positive news and good feeling in the country.  For the weeks leading up to that, we had bad news coming out of Iraq.  President Bush was being beaten up on the front pages of the newspaper incessantly.  That stopped for a week.  That was good for the president. 

Secondly, obviously, President Bush has tried to attach himself philosophically and also in his disposition toward running the country with President Reagan.  To some degree, I think he‘s been successful at that.  And I think that he will be able to get a little bit of a bounce out of the good feeling about what Reagan represented. 

MATTHEWS:  Do you have do you buy that attachment yourself as an editor of a magazine? 

JEFFREY:  Well, I think there are some places where President Bush shares the same vision and agenda as President Reagan.  I think there‘s other places where he doesn‘t. 

I think that President Reagan was much more committed to limited government.  I think that President Reagan had a more realistic and less ideological foreign policy than President Bush has.  I think they‘re very close on the social and cultural issues and also on the role of traditional morality in American life.  So I think there are some things where he is definitely a Reaganite and other places where he‘s not. 

MATTHEWS:  Would Ronald Reagan have gone to Iraq? 

KATRINA VANDEN HEUVEL, EDITOR, “THE NATION”:  No.  No. 

Ronald Reagan knew that it took two to tango and he tangled with Mikhail Gorbachev and brought an end to the Cold War, though Gorbachev played the main role.  I think he—Bush would have listened to the neocons like Dick Cheney, who told Reagan, don‘t go near Gorbachev.  He‘s a Stalinist in Gucci shoes.  That was insane.

MATTHEWS:  Yes. 

VANDEN HEUVEL:  I just want to say to Terry Jeffrey, I don‘t think what happened last week was media coverage.  I think it was hero worship.  I think it masked half of this country‘s understanding that Reagan was a very contentious president. 

And that isn‘t going to go away.  He was a very polarizing figure.  Chris, now, he was a great communicator and he brought much of the country to him on the strength of his ideological beliefs.  But this president, in comparison, you could see it in the church that day.  Even in comparison to his father, he was so inarticulate.  This president is a great prevaricator. 

MATTHEWS:  Shouldn‘t funerals be time-outs? 

VANDEN HEUVEL:  A great prevaricator.

MATTHEWS:  Shouldn‘t funerals be times out?  

VANDEN HEUVEL:  But, Chris, don‘t you think that the media owes to it this country as a service to be clear-eyed in its assessment?

(CROSSTALK)

MATTHEWS:  I think it‘s very much a matter of timing. 

Remember what happened with Paul Wellstone‘s funeral?  It was turned into a political hype.  Shouldn‘t funerals be time out from politics?

(CROSSTALK)

VANDEN HEUVEL:  But this wasn‘t a time-out.  This was not a time-out.  This was a hero worship which did a disservice to the country and to Ronald Reagan‘s very complex legacy. 

MATTHEWS:  Well, for me, it was a political time-out.  I can tell you that.

(CROSSTALK)

MATTHEWS:  I didn‘t see it as a political week.

Let me go back to Terry.

Do you believe that last week should have been a political time-out? 

JEFFREY:  Absolutely, it should have been a political time-out.

I think it was good time for the country, just as today, Chris, when Bill Clinton went out to the White House and had his portrait hung up there.  George Walker Bush took a time-out and Bill Clinton took a time-out.  It wasn‘t a partisan day. 

(CROSSTALK)

MATTHEWS:  Well, maybe they have a mutual—maybe they have a mutual interest in a Democrat not winning this November.  Am I the...

(LAUGHTER)

MATTHEWS:  ... cynic?

JEFFREY:  Well, that may be true, too.

MATTHEWS:  You would agree with that, too, Terry, wouldn‘t you?  You‘re laughing because you know he would rather keep that seat warm for Hillary than have it filled by that guy from Massachusetts. 

JEFFREY:  Well, I think that‘s exactly right, Chris.  I think that Bill Clinton right now basically is Hillary Clinton‘s campaign manager for 2008.  If John Kerry is elected in November, that‘s bad news for the Clintons.  I do believe they would like to see George Bush reelected. 

VANDEN HEUVEL:  You know, I think today you had Karl Rove in the basement of the White House getting his dirty tricks ready for this next period.  This was jovial and all, but, at the same time..

MATTHEWS:  So you believe in time-out for portrait hangings of Bill Clinton, but not for somebody‘s funeral and burial. 

(CROSSTALK)

VANDEN HEUVEL:  No, I don‘t.  I don‘t.

MATTHEWS:  Give me a break. 

VANDEN HEUVEL:  No, I don‘t.

Hey, wait a minute, Chris.  I wasn‘t talking about a time-out last week.  I was talking about the role the media plays in this country, doing the real job of explaining to the country the first draft of history.  It was hero worship last week.  Reagan deserved—the country deserved far better. 

(CROSSTALK)

VANDEN HEUVEL:  Wait a minute. 

On Clinton, what‘s interesting about Clinton is, he is about to go on this book tour.  He is going to tower because of the barrenness of the landscape around him.  I‘m talking primarily about the...

(CROSSTALK)

MATTHEWS:  Is this “The Nation”‘s book review as we listen here? 

VANDEN HEUVEL:  The extremist administration.

(CROSSTALK)

MATTHEWS:  By the way, Terry, there was—I‘m sorry—Katrina and Terry. 

There was one voice of criticism last week, not about the man being buried and honored, of course, but about the current president.  It was clear as a bell. 

VANDEN HEUVEL:  Yes, it was wonderful.

MATTHEWS:  As Ron Reagan eulogized his father last week, take a look at what he said about the role of religion in politics.  And it was a well directed, purposely directed commentary. 

(BEGIN VIDEO CLIP)

REAGAN:  Dad was also a deeply, unabashedly religious man.  But he never made the fatal mistake of so many politicians wearing his faith on his sleeve to gain political advantage.  True, after he was shot and nearly killed early in his presidency, he came to believe that God had spared him in order that he might do good.  But he accepted that as a responsibility, not a mandate.  And there is a profound difference. 

(END VIDEO CLIP)

MATTHEWS:  Katrina, would you explicate that, as you might?

VANDEN HEUVEL:  Sharp as a tack.  That was the shrewdest criticism. 

MATTHEWS:  What was it?  Say it your way?

VANDEN HEUVEL:  It was saying that this country should be governed by evidence, not theology, and that we have in the White House right now a man who has subsumed the national interests to the interests of a religious, right-wing crowd.  And there, he speaks for his mother as well, who...

MATTHEWS:  That‘s not what I heard. 

(CROSSTALK)

MATTHEWS:  Well, go ahead.  That‘s what you heard.

(CROSSTALK)

MATTHEWS:  What did you hear, Terry? 

(CROSSTALK)  

MATTHEWS:  ... interpretation of what they heard. 

What did you hear?

JEFFREY:  I believe the most moral foreign policy is one that looks to moral ends through realistic means. 

And if you go back and look at what Ronald Reagan himself said and wrote, you will recall that, in his very first press conference as president, he told reporters that the Soviet Union knew no morality, that it was an atheistic regime bent on a socialistic or communist one-world state. 

In 1983, when he gave his evil empire speech to the National Association of Evangelicals, he quoted Whittaker Chambers‘ “Witness,” a book I know you‘re well familiar with. 

MATTHEWS:  Right. 

JEFFREY:  In which Whittaker Chambers said that there were two great struggles in the world then.  And they‘re at core the same.  One was a global struggle between atheist communism and the Christian civilization of the West.  The other was a struggle against—between people in the United States themselves over how those traditional moral values were going to be articulated in our society. 

MATTHEWS:  Sure.

JEFFREY:  Ronald Reagan was for traditional—the traditional moral and religious foundations of our civilization.  He saw how the left in the Soviet Union was a threat to that.  He also saw how the left in the United States of America was a threat to that. 

He was a pragmatist and a realist in how he forwarded that in the political arena. 

MATTHEWS:  I think it‘s more he was saying something like, if Richard Nixon wanted to invade Cambodia as a matter of his thinking process and he thought it was a good idea, fine.  But don‘t say, God told me to invade Cambodia.  I think that‘s what he was saying. 

We‘re talking about particular policies here, not whether you should fight for the freedom and the security of your own country. 

(CROSSTALK)

MATTHEWS:  Let‘s take a look at this latest poll.  This is the latest “TIME” magazine poll that found that, among Americans who consider themselves—quote—“very religious,” 59 percent support President Bush and only 35 percent support Senator Kerry.  Those who say they‘re not religious—that‘s an interesting thing for somebody to say, by the way, in this country—they favored Kerry 69-22. 

(CROSSTALK)

MATTHEWS:  What do you make of that number? 

VANDEN HEUVEL:  Let me just come back to it.  Ron Reagan Jr...

(CROSSTALK)

MATTHEWS:  Are you afraid of these numbers? 

VANDEN HEUVEL:  No, I‘m not. 

MATTHEWS:  Are these like wolfsbane?  Are they scaring you? 

VANDEN HEUVEL:  No, but Ron Reagan was speaking about a president who says when asked, Did you talk too your father about invading Iraq?” and he says to Bob Woodward, “I spoke to a higher father,” as if he has a mandate from God to take and mislead a country into war.

(CROSSTALK)

MATTHEWS:  On that track, you might be right. 

(CROSSTALK)

MATTHEWS:  Can you answer this question?  Doesn‘t it scare that you nonreligious people are favoring the candidate of the Democratic Party and religious people are pretty strongly the other way? 

VANDEN HEUVEL:  I think there are a lot of games being played with these numbers, Chris.  There was a religious survey about a week ago which shows that many evangelicals are also Democrats.  What do you do...

(CROSSTALK)

MATTHEWS:  Many? 

(CROSSTALK)

VANDEN HEUVEL:  With African-American and Latinos....

MATTHEWS:  The “TIME” magazine poll counted those who support Bush and who support Kerry.  And they found that the people who to go church regularly are very much for Bush.  And the other people who don‘t go are very much—even more so.  You are really cornering the market on nonreligious people. 

VANDEN HEUVEL:  Regular church attendance in declining in this country. 

MATTHEWS:  You‘re skipping the...

(CROSSTALK)

MATTHEWS:  Talk about the implications of those numbers. 

VANDEN HEUVEL:  The implications of those numbers are not clear. 

I think that you have Catholics are supporting Kerry.  Even, you have Jews who are supporting Kerry.  And you have evangelicals, who are too often perceived by Democrats as a monolithic base for Republicans.  That is not the case. 

MATTHEWS:  Well, Catholics are roughly split. 

Terry, what do you make of those numbers? 

JEFFREY:  Well, Chris, I think there‘s a deep divide in America. 

There‘s culture war.  These numbers reflect it. 

From Cicero to Martin Luther King, people in Western civilizations thought that statecraft and making law was really how you put God‘s will, what‘s right and wrong, into the rules of civil society.  Martin Luther King said in the Birmingham jail, quoting Thomas Aquinas, that a just law is a law that comports with the law of God. 

You bring that forward today, the question people are asking themselves in America today, does partial-birth abortion comport with God‘s law?  Does gay marriage comport with God‘s law?  Does our foreign policy indeed comport with God‘s law?  John Kerry is on the other side of Western tradition.  And at least George Bush, for whatever shortcomings he may have, is lining himself up with the tradition of our country and our civilization. 

MATTHEWS:  The trick, of course, is knowing what is God‘s law.  And we have to make that decision as best we can. 

(CROSSTALK)

JEFFREY:  That‘s right. 

MATTHEWS:  More with Katrina Vanden Heuvel and Terry Jeffrey.

You‘re watching HARDBALL—and it is that again—on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with Terry Jeffrey and Katrina Vanden Heuvel. 

Here is what President Bush said today, as the White House unveiled the official portraits of President Clinton and his wife, Senator Hillary Rodham Clinton. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  As chief executive, he showed a deep and far-ranging knowledge of public policy, a great compassion for people in need, and the forward-looking spirit that Americans like in a president.  Bill Clinton could always see a better day ahead.  And Americans knew he was working hard to bring that day closer. 

(END VIDEO CLIP)

MATTHEWS:  So what the heck is going on there, Katrina?

VANDEN HEUVEL:  I don‘t know what he‘s...

MATTHEWS:  What is that com—that little kiss from current to past president? 

VANDEN HEUVEL:  To me, it‘s a little dagger. 

MATTHEWS:  A dagger at Kerry. 

VANDEN HEUVEL:  A little dagger, yes, at Kerry at the...

(CROSSTALK)

MATTHEWS:  Terry Jeffrey, down from your ideological heights, this is pure politics here.  What was going on there? 

JEFFREY:  I think that President Bush was showing he could be a gracious head of state.  He was acting as head of state.

VANDEN HEUVEL:  Oh, please. 

JEFFREY:  That‘s exactly what he was doing.  He had to—it was a ceremony they had to have.  They were going to put up Bill Clinton and Hillary Clinton‘s portraits in the White House. 

And I think, actually, President Bush did an excellent job of dealing with it.  He said positive things about President Clinton that are true...

MATTHEWS:  Right. 

JEFFREY:  ... while avoiding all the things about what President Clinton did that were bad. 

MATTHEWS:  I got you. 

But could it also have had the added advantage of being a presidential protection league being formed right now?  We incumbents all love each other?

(CROSSTALK)

JEFFREY:  I don‘t think that‘s true, because if you believe the “New York Times,” when Bill Clinton‘s book comes out next week, he‘s going to be out essentially out campaigning for John Kerry.  Like I said...

MATTHEWS:  I read that.

JEFFREY:  ... I think Clinton wants Hillary in 2008.

MATTHEWS:  That was the biggest if I have ever heard you throw at me. 

That was a big if.

Let me ask you about Halliburton, fascinating Halliburton story this week.

VANDEN HEUVEL:  Halliburton, yes.

MATTHEWS:  Apparently, the vice president‘s office was sitting in a meeting with the Defense Department, top deputies meeting, talking about whether to give a contract to Halliburton.  The vice president has always said, I have nothing to do—my office has nothing to do with these contracts. 

Katrina.

VANDEN HEUVEL:  Contradicted. 

We now learn that an Army official was overruled by people in Cheney‘s office, who directed a $7 billion sweetheart contract to Cheney‘s old contract. 

MATTHEWS:  Well, you‘re using the word sweetheart.  OK.

VANDEN HEUVEL:  All right.  Well, but...

(CROSSTALK)

MATTHEWS:  Terry, does this smell or is this just a problem of the inconvenient coincidence of a vice president from a big company now getting a lot of government business? 

JEFFREY:  Well, I think there‘s an important distinction here.

If I understood “The Los Angeles Times” story this morning, the vice president‘s office didn‘t direct anything.  They were informed after the fact about the decision.  I believe...

MATTHEWS:  But why did they have a meeting about it between the Defense Department and the vice president‘s office? 

JEFFREY:  Chris, it was imprudent.  It was stupid.  I think Congress has a right to look a.  It, the vice president and his staff and the Defense Department should cooperate. 

But if the facts are as told by “The L.A. Times” this morning, it‘s a story of stupidity, not of corruption.  But, nonetheless, it‘s a story of stupidity.

VANDEN HEUVEL:  Terry, one problem is that this administration ...

(CROSSTALK)

MATTHEWS:  We need more information.  That‘s my response.  We need more information.

VANDEN HEUVEL:  One problem is that this administration has stonewalled on information.

MATTHEWS:  Let‘s get more good reporting on this.  We‘ll come back and talk about this.  I really don‘t know.  But it is obviously an inconvenient embarrassment. 

Anyway, thank you, Katrina Vanden Heuvel.  Good you have to back, dear.

VANDEN HEUVEL:  Thank you. 

(LAUGHTER)

MATTHEWS:  Terry Jeffrey, good to see you.

JEFFREY:  Thank you, Chris.   

MATTHEWS:  And join us again tomorrow night at 7:00 Eastern for more HARDBALL.  Our guests will include Al Franken.

Right now, it‘s time for the “COUNTDOWN” with Keith.

END   

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