updated 8/9/2013 10:32:00 AM ET 2013-08-09T14:32:00

HARDBALL
August 8, 2013
Guests: Margie Omero, Laura Fink, Moises Valencia, Peter Applebome

MICHAEL SMERCONISH, GUEST HOST: Reince`s trifecta -- bash the media, bash
Hillary and rally the base.

Let`s play HARDBALL.

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

Leading off tonight, RNC chairman Reince Priebus continues his attack on
NBC and CNN for their upcoming projects about Hillary Clinton. And why
wouldn`t he? This issue has everything Republicans could ever dream of,
slamming the liberal media, bashing Hillary and rallying the base all at
the same time. It`s the far-right trifecta and Priebus knows it.

Here`s his plan. Priebus is threatening to shut those networks out of the
GOP primary debate process if they don`t pull their Hillary films, even
though they haven`t been written or filmed yet.

Earlier today on "MORNING JOE," he dismissed the counterargument made by
NBC that its entertainment division has nothing to do with NBC`s news
division.

(BEGIN VIDEO CLIP)

REINCE PRIEBUS, RNC CHAIRMAN: The fact is, I cannot have companies that
are in the business, whether it be NBC Entertainment or whoever is making
the decisions -- I cannot have companies in the business of making what I
consider to be promotional movies about the life of Hillary Clinton, when
at the same time, we know that her people are gearing up for a presidential
run. And then I`m going to bring those people in to depose the candidates
running president on the Republican side of the aisle? It`s ridiculous!

(END VIDEO CLIP)

SMERCONISH: Priebus isn`t alone on this one, either. Liberal columnist
Maureen Dowd, even our own Chuck Todd, have conceded that his point has
some rationality to it. If you think rationality is what drives Priebus
and the party, think again.

Priebus is wading dangerously into an ideology which even he has warned
against. That would be party isolationism.

And here`s the proof. Speaking to conservative radio host Andrea Tantaros,
he endorsed an idea to let the far right control the debates, and this is
that plan.

(BEGIN AUDIO CLIP)

ANDREA TANTAROS, RADIO TALK SHOW HOST, FOX CONTRIBUTOR: Chairman, what do
you think about a talk radio debate, where maybe I get together with my
buddy, Sean Hannity, and maybe a Mark Levin, and we interview some of the
candidates?

PRIEBUS: Well, I actually think that...

TANTAROS: Because the base I think would like that.

PRIEBUS: Listen, I -- I don`t think that`s a -- I don`t -- I actually
think that`s a very good idea.

(END AUDIO CLIP)

SMERCONISH: Now, here`s the irony. Priebus led a massive GOP autopsy to
figure out why they got crushed in the last election. The results, the
party needs to, quote, "learn to appeal to more people." And this is how
you do it, by shutting out news outlets and retreating to your own Fox News
echo chamber? If he gets his way, it isn`t new voices that the party will
be hearing and reaching just their own.

Michael Steele was chairman of the RNC before Priebus, Joan Walsh is editor
of Salon, and both are MSNBC political analysts.

Michael, if this were still the Steele administration, would you be
pursuing this path?

MICHAEL STEELE, FMR. RNC CHAIR, MSNBC POLITICAL ANALYST: Yes, some form of
it, to be honest with you, in terms...

SMERCONISH: Why?

STEELE: Let me -- let me -- but let me break it down for you. I wouldn`t
be pursuing it now because there`s no body of evidence to prove your point,
and so there`s nothing to really -- beyond the base to rally the American
people and those in the media who, like Chuck Todd and others, would say,
yes, this does not smell necessarily correct.

To do it now sort of goes to your point about the trifecta, and I think it
really does set up an argument that may come back to bite, point one.

Point two, how do you enforce this with the candidates come 2015, when
they`re scrapping to get on the board and NBC offers a debate. They`re
going to turn it down? Or point three, they say, You know what? If you
hold a debate and you do your thing, that`s fine. We just won`t cover it.

So you`ve got to be -- they`ve got to be very smart, and I think this is a
little bit premature, even though I get what`s being done here and probably
would do some form of it, if I were still chairman, but not now.

SMERCONISH: Joan, I used the words "echo chamber."

JOAN WALSH, SALON.COM, MSNBC POLITICAL ANALYST: Yes.

SMERCONISH: And what I was thinking of when I said that was the Wednesday
morning after 2012`s election, when those who were paying attention only to
Drudge, only to talk radio and only to Fox, it was like a truck had hit
them. They didn`t see it coming. They really didn`t recognize that it`s a
big country out there.

WALSH: Because they were only talking to each other and they were only
watching Fox News and they were only listening to Rush...

SMERCONISH: Won`t this be more of that?

WALSH: I think it is more of that. And I think, you know, on the one
hand, you have this alleged autopsy and this desire to be -- to reach out
to more people, Michael, but then you also have this desire to go really
insular, talk to one another, control the terms of the debate. And sadly,
it seems like Mr. Priebus decided that the last long campaign with a lot of
debates was not good for his party, that people didn`t like what they saw.

But this time around, I would think a lot of these new candidates would
want to be talking to a larger audience. Certainly Chris Christie, if he
were to run, is not going to abide by a ditch CNN and a ditch NBC strategy.
So it`s crazy, but as you said, there`s no -- there`s no down side for him
right now.

SMERCONISH: Well, some in the Republican Party don`t see the media as just
liberal, but as a group that conspires with the White House against
Republicans.

This is Rand Paul during an interview yesterday on Geraldo Rivera`s radio
program.

(BEGIN AUDIO CLIP)

SEN. RAND PAUL (R), KENTUCKY: Well, you know, you can look back to the
last primary season and you wonder whether there was collusion between some
reporters. You know, Stephanopoulos asks an obscure question about
Griswold and birth control, when no Republicans were bringing up anything
about trying to have any limits on birth control. So you wonder if there
was a concerted action between a former Democrat operative, and basically,
the president`s campaign...

GERALDO RIVERA, RADIO TALK SHOW HOST: Well, so you`re -- you`re alleging -
- are you alleging that George Stephanopoulos was a Democrat plant during
the debate?

PAUL: I`m saying that there -- you -- it makes you wonder. And he`s also
said publicly that he has frequent correspondence with his friends who are
still involved with the White House.

(END VIDEO CLIP)

SMERCONISH: Hey, Michael, I love the part "It makes you wonder."

STEELE: Yes!

(LAUGHTER)

SMERCONISH: It reminds me of in "House of Cards" with that line -- and I
saw in the original version, the Francis Underwood version, "You might
think so, but I couldn`t possibly comment."

STEELE: Right. Well, I`m no fan of the treatment that Republicans at the
national, even the local level receive by the media. Whether it`s in print
or on TV or radio, it doesn`t matter. We know how the deck is stacked, and
I appreciate people focusing just on Fox because that`s literally all we
have in terms of conservative TV, and then a handful of stations around the
country on conservative radio.

And I understand that, but I think we have to be very careful here and not
bite off more than there`s to chew. The reality of it is it`s a legitimate
point to raise concerns about whatever division in these operations doing
this type of self-promotional or promo on behalf of Hillary Clinton at the
beginning of what will be a hotly contested open seat for the presidency.
So I think it`s a legitimate point to be made. We just need to be smart
and more careful about how we talk about it.

SMERCONISH: Michael, I would understand it, more -- Joan, I`ll put this to
you.

WALSH: Right.

SMERCONISH: I would understand it more if the bad -- the negativity that
came out of those many debates was attributable to the questioning...

WALSH: Right.

SMERCONISH: ... by partisan members of the media. But it wasn`t! I`ve
gone back and reconstructed what transpired in those debates. Often, it
was the audience.

WALSH: Right.

SMERCONISH: Often it was questions from Fox News personalities that
elicited these...

(CROSSTALK)

WALSH: ... that brought out the crazy. Nobody -- no liberal media figure
made poor Rick Perry forget which agencies he was going to shut down.

And so I think there`s something really overly aggressive. I mean, Rand
Paul sounds paranoid. When the thing -- the big contraceptive issue that
came up, that was Rick Santorum talking to a Christian magazine, I believe,
about his views that contraception is doing something that`s not OK...

SMERCONISH: And contraception was a big part of the 2012 cycle...

STEELE: Yes.

WALSH: Right!

SMERCONISH: ... especially in those Senate races.

Let me show you both something, if I might. It wasn`t partisan questions
from the media that made the GOP debates the most memorable. This is one
famous moment. It`s when a gay soldier asked a question...

WALSH: Yes.

SMERCONISH: ... at a Fox News primary debate in 2011.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: In 2010, when I was deployed to Iraq, I had to lie
about who I was because I`m a gay soldier and I didn`t want to lose my job.
My question is, under one of your presidencies, do you intend to circumvent
the progress that`s been made for gay and lesbian soldiers in the military?

(BOOS)

RICK SANTORUM (R-PA), FMR. SEN., PRES. CANDIDATE: Yes. I would stay any
type of sexual activity has absolutely no place in the military. And
(INAUDIBLE) "Don`t ask, don`t tell," I think, tries to inject social policy
into the military, and the military`s job is to do one thing, and that is
to defend our country!

(APPLAUSE)

SANTORUM: We need to give the military, which is all volunteer, the
ability to do so in a way that is most efficient at protecting our men and
women in uniform!

(CHEERS AND APPLAUSE)

SANTORUM: And I believe this undermines that ability.

(END VIDEO CLIP)

SMERCONISH: And Michael Steele, similarly -- I`m not going to show this,
but it was another Fox debate. And I think this had a lingering
aftereffect. I`m sure you remember the 10 to 1 question...

STEELE: Oh, yes.

SMERCONISH: ... the 10 spending cuts, 1...

STEELE: Yes.

SMERCONISH: That was Bret Baier...

STEELE: Right.

SMERCONISH: ... who threw that into play. So you know, by wiping out
NBC`s role and CNN`s role, you`re not going to eradicate those sort of
tough questions.

STEELE: Well, and that`s the -- that`s the real kicker here and the irony
for me because I think a lot of people on the right were surprised at how
Bret and other Fox analysts and reporters really dogged these candidates in
2011 and 2012. So there is no -- there`s no sanctuary here when you`re
running for the presidency.

There should be balance. There should be openness for sure. There is no
sanctuary, so you`re going to get the tough questions. And I think the
candidates know that going into this, which again, this is more of a play,
in my estimation, that rallies the base. As Reince himself said this
morning on "MORNING JOE," he`s being approached by people saying, Well,
it`s about time that you do this. And that`s the effect that they`re going
for.

The problem is, I think it`s too soon. I think it`s premature in the sense
that you don`t know what the final product is going to be. And at the end
of the day, how much of this are you really going to control when you`ve
got seven, eight, nine candidates vying for the nomination? You`re not
going to tell them to shut up and sit down because they won`t.

SMERCONISH: Let me ask this question of Joan Walsh. Might it impact the
product? And I raise this thinking of "Zero Dark Thirty"...

WALSH: Right.

SMERCONISH: ... because you`ll remember, when we were approaching the
general election, there was a hue and cry that this was going to be a
Valentine to President Obama, the Kathryn Bigelow movie.

WALSH: Right.

SMERCONISH: It was delayed in its release. It ended up being released
post-election. And when it came out, President Obama was, like, a 10 or
20-second figment in a Steve Kroft interview on a television screen, and
that`s it.

In other words, I think the concerns had an impact. Might they have an
impact on the way that Hillary Clinton is treated by CNN and NBC?

WALSH: They might. I mean, one thing about CNN, that`s being directed by
Charles Ferguson, who did "Inside Job," who is kind of hostile to the kind
of corporate Democrat position that Hillary Clinton represents. So there`s
no evidence that either of these projects is biased in her favor.

But you know, Reince Priebus, he also -- I just want to say as a woman, I
thought that the way he treated Mika this morning was really kind of
disturbing, telling her personally, I would never let you personally
moderate a debate, Mika, coming onto a show where she`s the co-host and
really putting her down like that and challenging her objectivity.

I think he`s doing something that`s kind of mean and that has the potential
to backfire, especially when he makes it personal like that. There was
something off about it.

SMERCONISH: Appreciate both of your being here. Michael Steele, thank
you. Joan Walsh...

STEELE: Thank you, Michael.

SMERCONISH: ... nice to see you again.

STEELE: Good to see you, Joan.

SMERCONISH: Coming up: Things just got worse for Mitch McConnell. His
campaign chief, who used to work for Rand Paul, just got caught on tape
saying this. Quote, "Between you and me, I`m sort of holding my nose for
two years because what we`re doing here is going to be a big benefit to
Rand in 2016." That`s Rand as in Rand Paul, Kentucky`s other senator.

When your own campaign manager doesn`t like you, it`s no wonder that your
safe seat just got moved into the tossup column.

Also, with military veterans how among those accusing San Diego`s mayor Bob
Filner of sexual harassment, the calls for his removal from office are
growing even louder. We`ve got his former deputy campaign manager, who
counts herself among his victims.

Plus, one former Texas Republican official has come up with a new reason to
oppose "Obama care." It`s the work of Satan, and it signals the end of the
world.

And finally, "Let Me Finish" tonight with the important difference between
a crime and a hate crime.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

SMERCONISH: The New Hampshire primary is still more than two years away,
but we`ve got some new polling showing where the race stands. Let`s check
the HARDBALL "Scoreboard."

First to the Democrats, where Hillary Clinton maintains a mammoth lead over
the field. According to a new WMUR/University of New Hampshire poll, it`s
Clinton 62 and vice president Biden at 8 percent, Massachusetts governor
Deval Patrick at 5 percent.

And now to the Republicans, where it`s more of a race. Chris Christie, the
early favorite, at 21 percent. Rand Paul in second with 16 percent. And
Jeb Bush in third with 10. Marco Rubio`s lost the lead that he had earlier
in the year.

We`ll be right back.

(COMMERCIAL BREAK)

SMERCONISH: Welcome back to HARDBALL. What does Mitch McConnell`s own
campaign manager think about working for the McConnell campaign? An audio
recording was released today of a conversation between an ardent Ron Paul
activist and McConnell campaign manager Jesse Benton.

Now, Benton, who`s married to Ron Paul`s granddaughter, oversaw his
presidential campaign, Rand Paul`s election to the Senate in 2010 and is
widely expected to play a significant role in a potential presidential
campaign for Rand Paul in 2016 -- are you following all of this? -- which
Benton implies on the tape is imminent.

EconomicPolicyJournal.com has obtained a recording of the conversation in
which Benton in his own words describes how he feels about his current job.
Listen.

(BEGIN AUDIO CLIP)

JESSE BENTON, MCCONNELL CAMPAIGN MANAGER: Between you and me, I`m sort of
holding my nose for two years. And just what we`re doing here is going to
be a big benefit for Rand in `16. So that`s my long vision.

(END VIDEO CLIP)

SMERCONISH: Now, Benton responded with a statement today. He said, quote,
"It is truly sick that someone would record a private conversation I had
out of kindness and use it to try to hurt me. I believe in Senator
McConnell and I`m 100 percent committed to his reelection. Being selected
to lead his campaign is one of the great honors of my life, and I look
forward to victory in November of 2014."

If McConnell`s own campaign manager has to hold his nose to work for him in
an effort to benefit Rand Paul`s all but certain presidential ambitions,
what does that say about the McConnell operation?

Right now, the Senate`s Republican leader is in a statistical dead heat or
trails his Democratic opponent, Secretary of State Alison Lundergan Grimes.
But he`s also caught in the crosshairs of a serious challenge on his right
flank from wealthy Tea Party candidate Matt Bevin.

Joining me to discuss this revelation and the race are the HuffingtonPost`s
Sam Stein and Democratic strategist Margie Omero.

Margie, what`s the net-net of this? Might there be some blowback that
causes people to be sympathetic to this individual and hence to the
McConnell campaign?

MARGIE OMERO, DEMOCRATIC STRATEGIST: Well, I`m sympathetic for anybody who
has a private conversation turned into a national story. And you know,
that`s unfortunate for him and I feel badly that that happened.

I think, ultimately, voters, though, are going to be looking at this race
not through the lens of what happened to this campaign manager a year out,
but what do we know about Mitch McConnell? And he continues to be far to
the right of where most voters are. And not only that, he really
demonstrates what`s wrong with Washington -- the gridlock, the obstruction,
very clearly saying in his own words, Our number one goal is to try and
defeat President Obama. That was his stated policy goal.

And so I think a lot of voters have just had it with Washington as usual,
and there`s no one really who demonstrates was as usual as much as Mitch
McConnell. And the fact that his own campaign manager can`t get excited
about him is really a symptom rather than a cause of where his troubles are
going to be.

SMERCONISH: Sam Stein, you are Mitch McConnell -- I know this is a stretch
for you, but I want you to put...

SAM STEIN, HUFFINGTONPOST, MSNBC POLITICAL ANALYST: I am!

SMERCONISH: ... yourself into his mind and body. Must you now fire this
guy?

STEIN: No. You can`t fire this guy. Part of the reason that Jesse Benton
was brought over to run the Mitch McConnell campaign was to give him the
type of cachet with the Rand Paul/Ron Paul crowd. Keep in mind that he has
deep roots there, as you mentioned, as Ron Paul`s son-in-law.

So you know, this is not someone that you can just easily toss to the side
and dismiss because you will risk offending a great swathe of Republican
primary voters.

The reason this is damaging -- I don`t think this is the greatest
revelation or the most damaging thing to ever happen in politics. I`m not
going to blow it out of proportion.

But it is damaging to the extent that Matt Bevin, the Tea Party challenger,
can now just turn around and say, Listen, even conservatives on McConnell`s
own campaign, even the Paulites on McConnell`s own campaign admit that they
have to hold their nose to work for the guy. So why not just vote for the
true conservative in the race?

I think that`s where it becomes damaging. It increases that narrative that
Mitch McConnell`s more of an establishment guy than a Paul guy.

SMERCONISH: Margie, from a Democratic standpoint, what are you hoping for?
Who is the easier of the candidates to pick off? If you`re the D in this
race, do you want McConnell to survive a primary process, or do you want
the Tea Party candidate to be victorious?

OMERO: I think there are pros and cons to both, for sure. I mean,
certainly, you know -- you know, Mitch McConnell is a known brand, and that
known brand is one that`s weakened, is one that`s -- continues to be
unpopular and vulnerable. But he`s going to likely be better funded than a
Tea Party -- than Bevin, if Bevin should win the primary.

I think now Bevin has a clear opening, as Sam said, to really try to make
news of this and to try and keep this story -- story around.

And look, Grimes I think is strong. She is clearly strong. She wants it.
She has a lot of strong support. She has a lot of enthusiasm and charisma.
And I think she`s going to be strong against both candidates.

SMERCONISH: I think the real question, Sam Stein, at least in the short
term, is how do Republican primary voters react to this issue?

STEIN: I don`t know. You know, I hate to come on a show and say I just
don`t know things. But it`s really up to -- it remains to be seen.

My suspicion is that opinions of Mitch McConnell are basically baked in the
cake. You know, this guy has been around for quite a long time.

SMERCONISH: Right.

STEIN: People in Kentucky know who he is. Kentuckians like him because he
does bring back a lot of projects to the state, some money to the state.
He`s a very good local politician.

But if you had your mind set up that Mitch McConnell needed to be ousted
because he wasn`t conservative enough, this reinforces your theory. If you
thought Mitch McConnell was a good politician for the state of Kentucky, I
don`t know if this necessarily dissuades you.

SMERCONISH: You know, Margie, the strange thing to me, at least, listening
to this conversation, this surreptitiously recorded conversation, is that
it was not among friends over a beer, where you might be inclined to say,
oh, my God, I`m holding my nose for the next two years.

STEIN: Yes.

SMERCONISH: There was a certain underlying hostility in that discussion,
and then he drops this bomb. Like, play psychiatrist. What did you think
of it as you listened to it?

OMERO: I mean, it`s -- you`re -- it`s pretty standard practice that you
should never really say things like that if you don`t want them to get them
out. You shouldn`t really speak like that in any kind of real company,
except for maybe your mom, your therapist, your spouse, unless you want --
unless you`re ready for it to get out.

(LAUGHTER)

OMERO: Because political talk. And the political community in Kentucky
and around the country is ultimately pretty small, so it`s a mistake and it
probably means he`s said it to other people also.

SMERCONISH: Sam, did you read it the same way? Did you find it odd
listening to it. I heard you chuckle as I made that comment.

STEIN: Well, what`s odd is that this is the second time I believe that a
surreptitious recording involving the McConnell campaign has leaked.

SMERCONISH: Right.

STEIN: The first time was their strategy sessions for dealing with the
potential Ashley Judd candidacy. So, I`m really curious what is going on
here.

This is rare to happen once. It`s incredibly rare to happen twice. And it
suggests that there`s people in the Republican Party perhaps who are out to
get Mitch McConnell.

SMERCONISH: Yes.

And, Margie, I guess it`s a new way of doing business, where at all times
these candidates as well as their chief officials have got to believe that
which they`re saying is being recorded in some form or another.

OMERO: For better or worse, everybody, candidates, operatives, staff,
interns, just assume you`re on camera being miked at all times.

SMERCONISH: Sam, I don`t see in any...

STEIN: That`s a weird reality to live in, but yes.

(LAUGHTER)

SMERCONISH: Sam, I keep waiting for there to be B-roll that shows Mitch
McConnell smiling. I swear to you I don`t think I have ever seen an image
where the man is anything but, you know, frumpy in his appearance.

STEIN: Yes, he does tend to have the same facial expression throughout it
all.

The initial statement from the campaign was that they`re sticking by Jesse.
Again, like I said, there`s not many other options he has. So, he`s going
to try to turn bad lemons into bad lemonade, I guess.

SMERCONISH: Thank you both.

Thank you, Sam Stein.

Thank you, Margie Omero.

(CROSSTALK)

SMERCONISH: Hey, don`t forget, you can listen to my radio program weekday
mornings from 9:00 until noon Eastern SiriusXM POTUS channel, 124.

And coming up next, a former Republican official in Texas has a new reason
to oppose Obamacare. She says it`s the work of Satan.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

SMERCONISH: Back to HARDBALL. Time for the "Sideshow."

Former presidential candidate Mitt Romney reemerged this week with some
unsolicited advice for Republican voters in 2016. But will HIS fellow
Republicans listen?

Here was Jimmy Fallon`s take on that last night.

(BEGIN VIDEO CLIP, "LATE NIGHT WITH JIMMY FALLON")

JIMMY FALLON, HOST, "LATE NIGHT WITH JIMMY FALLON": Mitt Romney told
Republicans that they need to pick a candidate for 2016 who can actually
win.

(LAUGHTER)

FALLON: Then Republicans said, yes, I wish he had told us that last year.

(LAUGHTER)

(END VIDEO CLIP)

SMERCONISH: Next up, the former chair of the Texas Republican Party is
coming out against the Senate`s immigration bill. Why? Because she thinks
it`s demonic. Here was Cathie Adams speaking about that on End Time Talk
Radio.

(BEGIN AUDIO CLIP)

CATHIE ADAMS, FORMER TEXAS REPUBLICAN PARTY CHAIR: I think the latest
nonsense I saw from the Homeland Security Department was something like a
million people that have come here on visas that we have no idea where they
are.

UNIDENTIFIED MALE: Do you know where they`re taking us with this? Because
they said the solution to all these lost foreigners in the country, the
solution is biometric scanning.

ADAMS: I do understand that. I have seen it. I have heard it.

And, of course, we know in biblical prophecy that that is the end time.
That is going to be the brand either on our foreheads or on the back of our
hands. That is demonic through and through. That is the end times
prophecy. There`s no question about that.

(END AUDIO CLIP)

SMERCONISH: In case you were wondering, the Senate immigration bill
doesn`t include the branding of immigrants.

New York Mayor Michael Bloomberg is taking the lessons of Detroit`s
bankruptcy to heart. He cautioned that New York City could suffer a
similar fate if it takes its financial well-being for granted. His warning
comes, coincidentally, on an anniversary of New York`s own fiscal crises in
the `70s.

Here`s a flashback to the last federal bailout, which was signed 35 years
ago on this day in 1978.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: On the steps of City Hall in New York this afternoon,
President Carter signed into law a bill to keep the city from going
bankrupt.

With this law, the federal government guarantees more than $1.5 billion of
loans to the city over the next four years. The White House decided it
should be done outside where it would draw a large crowd, an effort, said
White House aides, to portray firm presidential action.

(END VIDEO CLIP)

SMERCONISH: We have come a long way.

Up next: Thirteen women have now accused San Diego Mayor Bob Filner of
sexual harassment. When we return, we will meet one of his accusers.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

JULIA BOORSTIN, CNBC CORRESPONDENT: I`m Julia Boorstin with your CNBC
"Market Wrap."

The Dow jumped 27 points, the S&P 500 added six, and the Nasdaq ended
higher by 15 points. More Americans filed new claims for unemployment
benefits last week. Jobless claims rose by 5,000.

Groupon shares soared 21 percent after a better-than-expected earnings
report, and naming co-founder Eric Lefkofsky as the company`s new CEO.

CBS stock ticked up after it resumed talks with Time Warner Cable. The CBS
blackout is now in its seventh day.

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

SMERCONISH: We`re back.

Thirteen women have now come forward with allegations of sexual harassment,
groping, and other charges of inappropriate behavior against San Diego
Mayor Bob Filner, but the newest charges may be the most disturbing
yesterday.

This week, two female veterans said that Filner made sexual advances at
them last year. The truly shocking thing is where exactly Filner met them
-- at an event for victims of sexual assault in the military.

The two women were themselves victims of rape.

This morning, one of the women, Eldonna Fernandez, spoke with MSNBC`s Chris
Jansing.

(BEGIN VIDEO CLIP)

MASTER SGT. ELDONNA LEWIS FERNANDEZ (RET.), U.S. AIR FORCE: This is an
organization that helps women and an organization of women who have all
been victims of sexual assault, sexual trauma in the military.

We trusted him. And, apparently, he hit on about seven or eight of us
within the organization, which to me is very egregious, because to come
into an organization like that, it is supposed to be a safe space for us to
heal. That`s why it was called a healing and hiring fair.

(END VIDEO CLIP)

SMERCONISH: The latest news just adds to a list of shocking allegations of
behavior by the San Diego Democrat.

(BEGIN VIDEO CLIP)

PATTI ROSCOE, BUSINESSWOMAN: He would come in and try and kiss me on the
lips, and I would have to squirm to get away.

And just as recently as a few months ago, this happened. And I turned, and
-- and he just slobbered down my chin. And I was so violated and I was so
offended.

REAR ADM. RONNE FROMAN (RET.), U.S. NAVY: As we were leaving the office,
all the guys left. I was the last one in the room, and Bob stepped between
me and the doorway. And he stopped me, and he got very close to me, and he
ran his finger up my cheek, like this. And he whispered to me, "Do you
want a man in your life? "

IRENE MCCORMACK JACKSON, FORMER FILNER FORMER COMMUNICATION DIRECTOR: I
was placed in the Filner headlock and moved around as a rag doll while he
whispered sexual comments in my ear.

Mayor Filner challenged me to give him one example of how his behavior
towards me was improper. I pointed out that he had asked me to work
without my underwear on. He had no comeback.

(END VIDEO CLIP)

SMERCONISH: The embattled mayor has entered a two-week behavior treatment
program, but has refused to step down from office, leaving his opponents
with only one option, a costly and time-consuming recall process.

Laura Fink is a political consultant and a former deputy campaign manager
for Mayor Filner. She too says he was harassed by him. And Karen Finney
is the host of "DISRUPT," which airs weekends here on MSNBC.

Laura, what exactly did he do to you?

LAURA FINK, FORMER FILNER DEPUTY CAMPAIGN MANAGER: In 2005, one of my
duties was to staff him at fund-raising functions.

And I was at a formal dinner where I was responsible for moving him from
table to table. When I stood next to him in order to do so, one of the
guests commented that I should really be appreciated for my efforts and
that I had worked my behind on for him.

He proceeded to tell me to turn around, which I did, and he patted me on
the behind and laughed and said, "Nope, it`s still there."

SMERCONISH: What was the reaction from those who were at the dinner?

FINK: I think that they, like I, were in shock, and they were just looking
for a way to get beyond that moment.

I found that the anger and the humiliation, what you might associate,
reactions you might association -- associate with the situation come later,
and so I would imagine that it was similar for the guests.

SMERCONISH: It seems like there`s strength in numbers, to use that old
expression, that so many women are now coming forward, 13 as of this
particular moment. Why didn`t you come forward sooner? What is it about
needing to see others who were similarly afflicted before everybody came
forward?

FINK: Well, I documented the incident, and I demanded an apology and I
asked that this not happen to other women at the time.

But it`s extraordinarily challenging to confront those in power, in
particular when you feel alone or you feel isolated. You`re not sure that
he`s doing this to other people when it happens to you. And furthermore
you`re not sure that you will be taken seriously if you come forward.

It`s extraordinarily intimidating. And the fact that we just heard a Navy
retired rear admiral and former Navy mayor of San Diego, a dean at San
Diego State, a prominent businesswoman assert the same thing, it speaks to
how difficult it is.

SMERCONISH: But was it nevertheless known among people who are close to
him, hey, this guy is creepy and you have got to be careful when you`re
around him?

FINK: You know, I don`t know that for sure.

I think that some of his behavior has devolved and it`s become more
pervasive and more intense over the years. So it`s hard to speak to that
issue in isolation. I don`t think this was a case where everyone knew and
wasn`t saying anything. I think everyone had a suspicion, but I don`t --
obviously we`re all finding out now.

SMERCONISH: Filner spent 20 years as a member of Congress. Last week,
Hilary Rosen, a well-known Democratic strategist in Washington, told CNN
that his behavior was no secret to some people in Congress.

(BEGIN VIDEO CLIP)

HILARY ROSEN, DEMOCRATIC STRATEGIST: I actually had dinner over the
weekend with some female members and former members who said that this guy
has kind of been this way all along, that everybody thought that he was a
little creepy.

(END VIDEO CLIP)

SMERCONISH: To that point, Slate`s David Weigel wrote -- quote --
"Filner`s ultra-slow-motion downfall tells us just how long you can get
away with being a creep in politics. The tolerance for mild creepiness is
quite high, because your victims don`t know how much of it they`re expected
to put up with."

Karen, as I have watched this unfold, I have been thinking about Sandusky,
because I said to myself there can`t be just -- if there are three victims,
there need to be 10 victims.

KAREN FINNEY, MSNBC CONTRIBUTOR: Of course.

SMERCONISH: It`s hard to believe that for 20 years in the House, he wasn`t
up to the same shenanigans.

FINNEY: And he probably was, and again, probably there people didn`t come
forward because they weren`t sure, well, how much of this do I put up with?
Is it just me?

This -- part of this makes me want to remind people is, this is why it`s so
important that we create ways for victims to come forward and know they
will be listened to and heard and believed, because that time and time and
time again, from the Sandusky case to military sexual assault cases that we
have been hearing more and more about, what do the victims say?

They were afraid to come forward. They were afraid because the person was
in power.

SMERCONISH: He`s the mayor.

FINNEY: They were afraid that...

SMERCONISH: Congressman.

FINNEY: ... they wouldn`t be believed, right?

And it`s interesting. As a woman, I can tell you that there`s a
conversation that I and many of my women friends, we girls get from our
parents before we go off into the work world, telling you this could happen
to you and to be prepared for it. And I was lucky that my parents always
said, if it does, we will believe you.

But I think we don`t have enough systems and enough, you know, attitudinal
changes to make sure that people know. This is zero tolerance. We cannot
tolerate this kind of behavior. It`s not cute. It`s not funny. It`s got
to be a zero tolerance policy.

SMERCONISH: Laura, to Karen`s point, how do we make it easier for those
who have been victimized such as yourself to come forward?

FINK: Well, I think that you give them a means to do so.

I mean, it`s a complicated issue. There are statutes of limitations on
lawsuits. Sometimes, people don`t want to file lawsuits. How do you
report this? How do you immediately address it? And how can you be --
promote a work environment where there doesn`t feel there will be a
consequence if you do so?

And part of the reason that I came out was because I wanted to encourage
women to come forward and to show them that, you know, you`re not going to
be vilified for this.

MICHAEL SMERCONISH, GUEST HOST: Last month, Mayor Filner apologized to the
women and announced that he was entering a two-week intensive therapy
program to address his behavior.

(BEGIN VIDEO CLIP)

MAYOR BOB FILNER (D), SAN DIEGO, CA: Let me be absolutely clear. The
behavior I have engaged in over many years is wrong. My failure to respect
women and the intimidating contact I engage in at times is excusable. This
intensive counseling will just be the first step in what will be a
continuing program that will involve ongoing regular counseling. I must
become a better person.

(END VIDEO CLIP)

SMERCONISH: The hubris is astounding in the face of 13 women coming
forward.

KAREN FINNEY, MSNBC HOST: Right.

This is an arduous process, though, now to get rid of him if he won`t go.
I certainly hope people -- there are a number of different efforts. And I
-- this is also I should just say as a Democrat, I don`t care Democrat or
Republican, this guy has got to go.

SMERCONISH: Right.

FINNEY: And whether that means that the Democratic Party can help make
that happen, the people of San Diego, what help do they need to make that
happen. I know it`s an arduous process. I hope they get enough
signatures, because against, this unacceptable.

Did you believe anything he just said? I mean, he was reading from a
script and there was no sense of remorse, no sense of "I really screwed up
here". And two-week, are you kidding me? I mean, that is like the
Hollywood, oh, I went to rehab and now, I`m fixed. Nobody should buy that.

SMERCONISH: Well, if I can play armchair shrink for a moment, I get from
him what I get from Weiner, in the sense that this seems a personal that
would rather by drawing the limelight for negative reasons than not drawing
it at all.

FINNEY: But also just seems like this is a person who has no sense of what
is or is not appropriate. I mean, some of those women that you thought --
I mean, a rear admiral? My heavens (ph). A businesswoman? I mean,
there`s no mechanism in his brain that says, that`s inappropriate, I
shouldn`t do that. That is a sickness.

FINK: Karen --

SMERCONISH: Laura, go ahead, I`m sorry.

FINK: No, I was going to say, Karen, if I could interrupt. Just from my
experience with him. It`s even beyond that. I think he knows exactly what
he`s doing.

He laughs when he does it. He enjoys putting people in uncomfortable
situations. And ultimately, this is about power and the abuse of power.
And when you have -- I mean, whether you`re talking about politicians or
CEOs or --

FINNEY: That`s right.

FINK: -- other folks, it`s about abusing that power. So he knows that
he`s doing it.

FINNEY: Well -- and that`s a part of why I know it`s so important again as
we`re having they conversations, we know that some of this stuff is getting
out of the table, this issue about power, this issue about, again, people
feeling like they will be believed if they come forward, but also creating
a climate where it is absolutely nothing tolerated, because you get away
with stuff like that when you think you can.

SMERCONISH: Laura, knowing this personality the way that you have from
having worked with him in the past, I take it you`re not surprised that he
refuse to go silently into that night?

FINKY: I`m not surprised, not surprised at all. And the recall faces
significant challenges because of the structure and the timeline to get the
signatures. It`s going to require a herculean effort. I`m not confident
that it can succeed as a political strategist. It`s just the sad fact of
the matter. We do need him to resign as well.

And so, the ball is in his court, but I think there`s things we can do to
put pressure on him. I think that`s part of -- I think the lawsuit will
put pressure on him. I think the investigation by the sheriff`s office
will put pressure on him.

And my hope is, whether it`s because of, you know, whatever the rationale
or the reason, my hope is that he`s going to choose to resign. And that
might be because of the public shaming, it might be because of his
pocketbook, one can`t really say, but my hope is that he reaches that
tipping point.

SMERCONSH: Well, thank you both for being here. Thank you, Laura Fink.
Thank you, Karen Finney. Good to see you.

Up next, what do you think of when you see this flag? If it`s the Tea
Party, you`re not alone. Now, a New York man finds himself at the center
of a legal controversy, because he wanted to honor veterans by flying this
flag.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

SMERCONISH: Of the states that Barack Obama carried in both 2008 and 2012,
11 have Republican governors whose terms end this year or next. Three of
those governors stand out as the most vulnerable, Florida`s Rick Scott,
Maine`s Paul LePage, and Tom Corbett of my home state, Chris` home state of
Pennsylvania. Democrats have strong candidates in all three races and
those states may well present the best chances for Democrats to win back
governorships in 2014.

We`ll be right back.

(COMMERCIAL BREAK)

SMERCONISH: Welcome back to HARDBALL.

Symbolism is often in the eye of the beholder. And in New Rochelle, New
York, a veterans group has filed a federal lawsuit against the city partly
over the symbolism of the famous Gadsden flag. The yellow flag with its
rattlesnake and phrase "Don`t tread on me" was a symbol of the American
Revolution, but in recent years, the Gadsden has been flown by some
attendees at Tea Party rallies.

And although it`s certainly not a formal symbol, the flag has become
associated with the Tea Party in some quarters. But in March, shortly
after a local veterans group replaced the tattered American flag at a local
armory with a new American flag and a Gadsden flag flying underneath it,
city officials ordered it taken down.

In response, the United Veterans Memorial and Patriotic Association of New
Rochelle, filed a federal lawsuit.

Moises Valencia is a citizen volunteer with the Save Our Armory Committee.
He actually purchased and gave the Gadsden flag to the veteran`s group.

Peter Applebome is the "Our Town" columnist for "The New York Times" who
wrote about the conflict.

Moises, are you a Tea Party guy?

MOISES VALENCIA, GADSDEN FLAG SUPPORTER: No. I`ve never been a member of
the Tea Party. I`m not affiliated with any political group of this nature.

SMERCONISH: Why this flag? You shelled out, according to Peter`s account,
$16 of your own money to get a Gadsden flag where there hadn`t been one.
Why this flag?

VALENCIA: I always liked the Gadsden flag because me it symbolizes our
human unalienable rights that all of us as Americans and as humans possess.
And to me, it was something that always spoke to me as part of American
history that I`m very fond of. And I`m a historian of American history.
So that`s why.

SMERCONISH: To whom, if anyone were you trying to send the "don`t tread on
me" message?

VALENCIA: I was trying to send the message specifically to our mayor, Noam
Bramson. If there was any message to be sent, Mayor Bramson has had a long
history of disrespecting our veterans here in New Rochelle and also our
military history. He has leveled Fort Slocum that we had in New Rochelle.
That`s completely gone.

The armory in New Rochelle is our last remaining bit of history, and they
have not treated that place very fairly. It`s very bad condition. And
they have done everything that they could short of tearing it down to
actually make sure it`s in as poor shape as possible.

SMERCONISH: Peter, your piece which I shared with my radio audience really
struck a chord. All across the country, people calling and were passionate
on both sides of this issue.

What`s the big picture that you see?

PETER APPLEBOME, THE NEW YORK TIMES: The big picture is just how polarized
we have become as a country. Even five years ago, there would be no
dispute. But rightly or wrongly, you know, if you call up, if you Google
Tea Party flag, this is what comes up.

SMERCONISH: Right.

APPLEBOME: So, for a lot of people, there is a charge to this flag that
there wasn`t. It`s a conservative symbol. I think that`s what the city
was getting at.

SMERCONISH: A friend of mine who owns a tavern close to Independence Hall,
the Liberty Bell, Betsy Ross, used to fly it outside his establishment, and
then told me he felt obliged to take it down when it became this symbol
because he didn`t want to lose half of his audience there.

APPLEBOME: Right. They have been disputes all around the country, in
Arizona, in Connecticut, in Rhode Island, over this very same issue. And
again, this was an issue that -- a flag that a few years ago had no
connotation other than history and patriotism. But now, it`s part of the
American culture and political wars.

SMERCONISH: Moises, the armory is municipal space. It was deeded over
from the state. What would you say to someone who says I feel alienated by
that flag because of its association flying on public space?

VALENCIA: Well, what I would say to the person is that you have to look
into what the context of our ceremony we held was. You have to see what we
were trying to do, what the flag really symbolizes. And I believe that,
you know, we can all come together under that meaning of unalienable
rights. And that if we have a dialogue, we can see it`s not as partisan as
some people would like to make it.

SMERCONISH: And to your point, there was a 5-2 vote taken. Your point of
polarization, 5-2, along party lines. The D`s said, get rid of it, and the
R`s said, keep it.

APPLEBOME: Right. Right. And, you know, the legal question would really
come down to something that actually has very little do with the meaning of
the flag, which is, whether it`s government speech or whether it`s private
speech, it`s a city-owned armory and a city-owned flag pole. And the
veterans group is chartered by the city.

So, if a court concludes that this certainly government speech, and then,
they have very broad powers to say what they will allow and what they won`t
allow.

SMERCONISH: You obviously think there is an important principle at stake
here that necessitates litigation to resolve whether this flag can fly over
the armory.

VALENCIA: Yes, because of the fact that the veteran`s organization is
charted by the city and they have been in charge of doing things like this
in the past. And they`ve been allowed to choose what they have flown in
the past. Our city government has been at Memorial Day services where that
flag was flown. This has become a political issue, and it`s being made one
when there really isn`t one.

SMERCONISH: Peter, just 30 seconds or so left. What kind of reaction have
you gotten to your piece? Did you get the same sort of passion that I
heard on the airwaves?

APPLEBOME: You know, aside from the fact that we`re so polarized, this is
a symbol that goes back to the beginning of the country, and it has a huge
historical charge as well as the contemporary issues. So, yes, people are
very passionate about it.

SMERCONIH: Part of me says if you don`t like what the symbol has become,
you know, fight for the right to take it back.

APPLEBOME: Absolutely. There are a lot of aggrieved people in America.
And a lot of people feel don`t tread on me. It tends to be conservatives
that use the flag. Maybe liberals should too.

SMERCONISH: It`s a great issue.

Moises, thank you for being here.

Peter, thank you for writing about it.

APPLEBOME: OK, thanks so much.

SMERCONISH: When we return, allow me to finish with an important
distinction between a crime and a hate crime.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

SMERCONISH: Let me finish tonight with that horrific footage of a fight on
a Florida school bus that made news this week. I`m sure you`ve seen or
heard about the three 15-year-olds who beat a 13-year-old, gave him two
black eyes and a broken arm.

There is a debate now raging about the pictures you`re looking at, some
wondering if this was a hate crime because they watched three African-
American perpetrators beating a white teen. But the motivation here seems
to have been not race, but the 13-year-old snitched on one of the 15-year-
olds for drugs.

But there was a hate crime this week that was in news, and that came not on
a school bus, but in a baseball field. It happened at MCU Park in
Brooklyn, which is home to the Met-affiliated Brooklyn Cyclones. A statue
there depicts Jackie Robinson and Pee Wee Reese, both playing for the
Brooklyn Dodgers in 1947 on Cincinnati`s Crossley Field, a particularly
harsh day for Robinson.

The inscription reads in part, "Robinson endured racist taunts, jeers and
death threats that would have broken the spirit of a lesser man." Some
idiot added the N-word and a swastika and the world "heil".

I`m not a fan of calling something a hate crime. I think we open Pandora`s
Box when we ascribe punishment based on motivation, meaning what was in a
person`s head.

But this is a clear-cut case. The defacing of the Jackie Robinson statue
should be treated differently than say the arrest of a teen who tags or
spray paints his name on a subway.

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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