updated 7/21/2014 9:15:01 AM ET 2014-07-21T13:15:01

HARDBALL
July 18, 2014

Guest: Seth Kaplan, P.J. Crowley, Michael Weiss

STEVE KORNACKI, GUEST HOST: The day after.

Let`s play HARDBALL.

Good evening. I`m Steve Kornacki, filling in for Chris Matthews.

Leading off tonight, looking for answers into what happened to
Malaysian Air flight 17. Today, President, Obama said that the plane was
shot down by a missile fired from an area in eastern Ukraine that`s
controlled by Russian-backed separatists. The Ukrainian government has
released audio recordings of what it says are intercepted phone calls
between pro-Russian separatists talking about the attacks. NBC News has
not confirmed the authenticity of those recordings.

All 298 people on board the plane were killed. That makes it the
deadliest aviation incident since the 9/11 attacks. Among the victims were
reportedly 80 children. Also on board were a number of the world`s top
AIDS activists and researchers. They on their way to a conference in
Melbourne, Australia. At least one victim was American.

The majority, 189 passengers in all, came from the Netherlands. And
today, that country is reeling from the news. Friends and family
remembered their loved ones.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It`s a young funny couple, and always laughing
and always together, hard work. And now they`re gone.

(END VIDEO CLIP)

KORNACKI: President Obama also mourned the victims and called it,
quote, "an outrage of unspeakable proportions."

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Nearly 300 innocent
lives were taken, men, women, children, infants, who had nothing to do with
the crisis in Ukraine. Their deaths are an outrage of unspeakable
proportions.

(END VIDEO CLIP)

KORNACKI: The FBI and NTSB are sending investigators to help
international efforts. Today, at the site of the crash, investigators
reported being met with hostility by rebels who are in control there.
President Obama suggested those pro-Russian rebels were key suspects.
Let`s watch.

(BEGIN VIDEO CLIP)

OBAMA: Evidence indicates that the plane was shot down by a surface-
to-air missile that was launched from an area that is controlled by
Russian-backed separatists inside of Ukraine. We also know that this is
not the first time a plane has been shot down in eastern Ukraine. Over the
last several weeks, Russian-backed separatists have shot down a Ukrainian
transport plane and a Ukraine helicopter, and they claimed responsibility
for shooting down a Ukrainian fighter jet.

Moreover, we know that these separatists have received a steady flow
of support from Russia. This includes arms and training. It includes
heavy weapons. And it includes anti-aircraft weapons.

(END VIDEO CLIP)

KORNACKI: Tom Costello`s an NBC News correspondent and Steve Clemons
is Washington editor-at-large for "The Atlantic," also an MSNBC
contributor.

So Tom, let me start with you. The president right there, in what we
just listened to, laying out an awful lot of circumstantial evidence, you`d
say almost very persuasive circumstantial evidence, saying, you know, this
missile was launched inside Ukraine in the area controlled by the
separatists, separatists who have in recent days been shooting down non-
commercial flights, separatists that are backed by Russia. You heard all
of it there.

In terms of actually establishing this evidence on the ground, so it`s
more than circumstantial evidence, where does that process stand right now?

TOM COSTELLO, NBC CORRESPONDENT: I think that this is really going to
have to be solved, if you will, at the level of the military and
intelligence agencies. You mentioned that there are -- there is a small
team from the United States headed to Kiev. In fact, it`s about as small
as it gets. It`s one single NTSB investigator and two FBI agents, one of
whom is an expert on explosives. They are headed to Kiev essentially to
wait and find out if they can join some sort of an international group that
would go into the crash scene.

But most veteran crash investigators I`ve talked to say they don`t see
a whole lot that the NTSB can provide here because we know what happened to
this plane already. It was shot out of the sky by a missile.

They would like to get the black boxes. That`s really pro forma.
They might be able to learn, for example -- get nailed down exactly how
fast the plane was traveling and what was the altitude, what was the
heading. They can learn whether the plane broke apart in midair or whether
the explosion only ripped off a wing, for example, and so it remained
intact until it fell a good distance. All of that would come perhaps from
the flight data recorder.

But that`s not going to solve the main question. The main question is
who did this...

KORNACKI: Is it...

COSTELLO: ... and that`s going to be up to intelligence sources.

KORNACKI: It is, although, I wonder, too, if you are able to get sort
of a full, unfettered inspection of that site and that wreckage, would you
not be able to tell this is specifically the type of weapon, specifically
the type of missile that hit it? And wouldn`t there be some kind of
fingerprint there that you would be able to trace it back to the origin?

COSTELLO: Well, that`s -- yes, that`s going to require some
metallurgy work. It will require some forensics there at the scene to look
for any pieces of the missile that brought this plane down.

Keep in mind the actual crash is a good distance from where the plane
actually was hit by a missile. So the zone here that they`re looking
through is somewhere in the neighborhood six to nine square miles. You can
imagine that there would -- there might be missile fragments somewhere in
the fields in that eastern Ukrainian rebel-held territory.

If the rebels shot this plane down, it would be in their interests to
find those pieces and get rid of them before international teams are
allowed in. And that`s important. So far, they are not allowing
international teams in, other than this small group of European observers
today. Those observers claim that they were threatened, and in fact, that
there were shots fired as they were in the vicinity.

And even rescue teams, government rescue teams, told NBC News directly
late this evening that they were ordered out of the area by the rebels
without explanation for the evening and told to come back at 6:00 in the
morning. And typically, when you`re involved in a major rescue or recovery
or crash investigation, you know, it is secured, and people work that scene
very often through the night with big floodlights.

Clearly, tonight, that`s not happening. The question is, is the
evidence being compromised because, in fact, the rebels are in control?

KORNACKI: Yes. Yes, no, that issue of access to the site --
obviously, that`s a crucial right now.

At the United Nations today, meanwhile, U.S. Ambassador Samantha Power
said we couldn`t rule out whether Russia provided, quote, "technical
assistance" to the rebels. Let`s watch.

(BEGIN VIDEO CLIP)

SAMANTHA POWER, U.S. AMBASSADOR TO THE U.N.: We assess Malaysian
Airlines flight 17, carrying these 298 people from Amsterdam to Kuala
Lumpur, was likely downed by a surface-to-air missile, an SA-11, operated
from a separatist-held location in eastern Ukraine.

Because of the technical complexity of the SA-11, it is unlikely that
the separatists could effectively operate the system without assistance
from knowledgeable personnel. Thus we cannot rule out technical assistance
from Russian personnel in operating the systems.

(END VIDEO CLIP)

KORNACKI: So Steve, what`s so striking there is she`s taking this
much farther than the president did. We talk about the circumstantial
evidence that the president laid out when he spoke. Now here`s Samantha
Power, from his administration, taking this a step farther and saying, Hey,
look, you know, these separatists -- they couldn`t have done them on their
own. This is something they`d need help on.

I mean, she`s basically pointing the finger at the Russians here,
isn`t she?

STEVE CLEMONS, "THE ATLANTIC," MSNBC CONTRIBUTOR: Look, I agree with
everything that Tom just said about all the factors that matter. But the
piece of intelligence that I really want to see drilled in on is the
signals intelligence that the Ukrainian government offered of listening in
to phone calls between an individual they`ve identified who`s both a leader
in the Donetsk region, but also a senior member of Russian intelligence,
talking to a senior intelligence officer of the Russian Federation`s armed
forces.

And that -- when they -- when they go through and you`ve listened to
this and you look at the transcript and look, one, at the fact that they
reported a plane had been shot down about 20 minutes after the -- this
incident, and then you hear the horror and shock of what they realize that
they`ve done and the anger that a commercial aircraft would have been in
that zone -- it`s very, very compelling.

That is the piece because what matters is the command and control of
that. And I think Samantha Power, Ambassador Power, began to intimate in
this tragedy that the Russians are not peripheral, that they`re central.

KORNACKI: Well, that`s -- that`s -- and I -- I think we should point
out, first of all, the recordings you`re talking about that the Ukrainian
government has put out, NBC News has not independently authenticated those
recordings.

CLEMONS: That`s right.

KORNACKI: That`s something that the Ukraine government`s put out.
And the Ukraine government -- obviously, this could be totally legit. The
Ukraine government also has its own motives here in how it`s addressing
this. But I think it does...

CLEMONS: Certainly.

KORNACKI: ... the question, Steve, about what is being said publicly
right now, whether it`s by Obama, whether it`s by Power. What`s being said
publicly -- is there intelligence? I mean, it seems likely to me there`s
intelligence there that we`re not seeing, that we may never see, that`s
informing their actions and that`s informing their thoughts and that they
may be a lot farther along in terms of where they think this came from and
exactly what happened here than they`re going to say publicly for the
foreseeable future.

CLEMONS: I think our folks that follow signals intelligence are
already drilling deeply into this. And then that raises the question of
what do you do. If you go back to the time when the Soviets shot down an
airliner with a congressman on board and hundreds of others -- Ronald
Reagan was president. Ronald Reagan spoke harshly about the Soviets, but
showed an awful lot of restraint because this is the kind of incident that
could take you down a very dangerous path leading to a very, very difficult
kind of conflict.

And I think that the -- that the real question here is -- is where is
Putin in this? And has Putin really created an uncontrollable monster now
in eastern Ukraine? And I think the implications for this, I mean, are
potentially game-changing in terms of the stakeholders, but it`s also a
very, very, very fragile moment.

KORNACKI: Well, so Tom, what about -- tell us more about what we know
about the area where this -- the missile was apparently launched from
because the implication there, obviously, from Samantha Power is these
separatists on their own wouldn`t have had the means, wouldn`t have had
knowhow to do this. There probably had to be help there.

It does also occur to me -- you know, is it possible this sort of area
that they`ve seized -- this is an area, you know, formerly controlled by
the government of Ukraine. Could there be old military installations, old
military equipment from -- you know, from Ukraine that they`ve seized
control of?

How certain can we be, just knowing this region, that this had to be -
- you know, there had to be some Russian assistance here?

COSTELLO: Listen, I suspect that the United States government, and
certainly the president of the United States and the ambassador to the
United Nations, is not going to go out in front of cameras and say, We
believe that this missile came from Ukrainian territory, rebel-held
territory, unless they know a heck of a lot more than they`re saying. I
suspect that they can pinpoint the exact street corner that this -- or the
field that this particular missile was fired from.

And they also know -- this appears to have been a Soviet-era Buk
missile -- B-U-K -- which was readily available to Ukrainian forces, but
more importantly, to Soviet and Russian forces. And independent reporters
have reported seeing that missile vehicle moving across the Russian border
in recent weeks into rebel-controlled territory.

So this is going to be -- you know, and many view -- many view this
all as kind of a composite smoking gun that paints the picture of, if not
direct Russian involvement, certainly Russian participation insofar as
they`re supplying the rebels with this equipment. And most experts say
they would have had to have taught them how to fire the weapon.

One important distinction, though. The point was made to me today
that if the Russian military had actually fired this weapon -- that seems
more unlikely because they have sophisticated radar systems that would tell
them it`s likely a commercial airliner that is on that track.

The suggestion was because it was fired from rebel-controlled
territory and it took out a commercial airliner that perhaps nobody wanted
to see happen -- that would suggest a level of unsophistication or somebody
who did not have available resources to determine that it was, in fact, a
commercial airliner.

KORNACKI: Right, no, that`s -- that`s the part -- it`s -- it`s -- you
know, you look at this from Russia`s standpoint, and if Russia was as
directly involved as, you know, we`re trying to figure out right now, it
would not be in their interest to be taking down a commercial airliner with
all these, you know, people on board it.

But anyway, thank you to Tom Costello, Steve Clemons. Really
appreciate it.

And coming up, the investigation. The wreckage is in rebel-held
territory, and already the rebels have interfered with the search. How do
you conduct an investigation when you`re in the middle of a war zone?

Also, the reaction. No matter who pulled the trigger, the world is
pointing its finger at Russian president Vladimir Putin. The fact that
victims were from so many countries will only increase the pressure on him,
and that may be just the beginning.

And plus, the politics. Speaking of pointing fingers, it was
inevitable, but some Republicans are now pointing theirs at President
Obama, implying that his policies are somehow to blame for this disaster.

And the victims. Scores on board of that doomed jetliner were headed
to an AIDS conference in Melbourne. As one researcher already in Australia
put it, the best and brightest were on that plane.

(COMMERCIAL BREAK)

KORNACKI: Last night, Chris Matthews noted how the Malaysian air
tragedy reminded many people of a similar incident from three decades ago.
That was the Soviet downing of Korean Airlines flight 007 in September of
1983.

Here`s how "NBC Nightly News" covered the story that evening.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The United States today accused the Soviet Union
of shooting down a Korean Airline jumbo jet carrying 269, including
Congressman Larry McDonald of Georgia, and perhaps 30 other Americans.
There are not thought to be any survivors.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KORNACKI: Welcome back to HARDBALL. More now on the investigation
into what happened to Malaysian Air flight 17. President Obama called for
an international inquiry, but that`s easier said than done since the site
of the crash is in the middle of a war zone.

International investigators trying to explore the site reportedly met
with hostility by the local rebels in charge today. They said they weren`t
granted the access they expected, nor did they have complete freedom of
movement. They said they would need to negotiate for more time at the site
tomorrow. How can the world find out what happened if investigators have
to negotiate with the very rebels who happen to be the prime suspects?

Robert Hager is a retired NBC News aviation correspondent and NBC News
contributor and Seth Kaplan is a managing partner at "Airline Weekly."

So Bob, let me -- let me start with you. I mean, we -- we talked in
the last segment about the possibility of evidence being compromised for
the issues we just raised in the intro. How serious of a concern is that
to you right now?

ROBERT HAGER, NBC CONTRIBUTOR: No, I think that is a serious concern.
You know, it`s -- it`s -- it may not be as much of a concern as it would be
in -- in some domestic airline accident here, where the wreckage is
supremely important and what`s on the black box is supremely important.

In this case, where everybody`s pretty certain it was a missile shoot-
down, the physical confirmation of that by examining the wreckage is
important, but it`s not as paramountly important as, say, spy satellite
pictures, infrared images of the missile being launched, those kinds of
things. Similarly with the black boxes. You want the black boxes. You
want them certainly before the rebels get them and take them gosh knows
where. But what`s on the black boxes may not be crucial.

In the case of the Soviet shootdown of the Korean airliner back in
1983 that you were talking about, that tape went on for only a minute and
45 seconds after it had been hit by a missile. And it really didn`t have
much important to say about what went on. So it is a factor, the fact that
the investigators can`t get in there, but it`s not -- it`s not the end of
the game.

KORNACKI: Well, "The Washington Post" today reported on some of the
problems the international investigators are facing in eastern Ukraine.
Quote, "The monitors were given access to the site for 75 minutes and are
negotiating on a day-to-day basis for time at the site."

A spokesman for the investigators described on CNN what they saw
today.

(BEGIN VIDEO CLIP)

MICHAEL BOCIURKIW, OSCE SPOKESMAN: We saw a lot of debris. The
debris doesn`t look like it`s been manipulated in any way, but there`s lots
of it. The crash area is very, very big, but we were only given a very
small area to actually monitor. And we were greeted almost with hostility,
so it wasn`t a visit that was done under the best conditions, and we hope
to continue again tomorrow.

(END VIDEO CLIP)

KORNACKI: The U.S. ambassador to the United Nations, Samantha Power,
tweeted her annoyance today, quote, "Seeing reports OSCE monitors
investigating MH-17 were harassed by separatists. Russia must use
influence to ensure unimpeded investigation."

Well, so Seth, let me ask you about that. You know, Bob talked about
maybe the limited utility here of the black boxes. We always, when there`s
a plane crash, think the black box is going to be sort of the Rosetta
stone, it`s going to answer everything.

In the last segment, too, as well, Tom Costello was basically telling
us take the public statements that are being made, behind the public
statements are incredible intelligence that`s already, in his mind, you
know, allowed the U.S. potentially to pinpoint exactly where this thing was
fired from. Does it even matter who controls the evidence that`s on the
ground at this point or is that overridden by sort of the intelligence-
gathering that we have right now?

SETH KAPLAN, "AIRLINE WEEKLY": Yes, no question. To a degree, this
is not really an airline story. It`s a national security story, no
question.

As Bob said and as Tom said earlier, certainly you want to get those
black boxes. Bob just mentioned with the Korean airliner more than three
decades ago those black boxes that in the end did continue recording for a
little while after the incident, although they weren`t all that useful.

In that case, by the way, Soviet Union at the time held on to them for
years and didn`t release them. And in the end, they weren`t all that
helpful. In this case, they may or may not be. It`s possible that stopped
recording exactly when the incident happened, and that the pilots were
totally unaware of anything until the incident.

But it would be useful, for example, to know, did these pilots have
any concern about where they were flying? No evidence of that. Or, for
example, did they have any kind of unusual communication? It would be
useful to know that, although certainly no indication yet that that
happened.

(CROSSTALK)

KORNACKI: I wonder, too, Seth, just in terms of when you start
connecting the tragedy of this, just the humanitarian tragedy of this with
governments now looking for official responses and sort of what the long-
term sort of political, geopolitical effect of it could be.

If the black boxes are recovered and what is on them is sort of the
harrowing final moments of life for people, I imagine from almost of -- I
hate to see it, almost like a public relations perspective that becomes a
powerful tool for people trying to organize some kind of official response
to this.

KAPLAN: It does.

And that`s exactly what happened with that Korean airliner, you know,
Korean Airline Flight 7 when those recordings finally came out, first
transcripts and then the recordings. You know, you have got the sense of
what had happened in these moments where the pilots knew that things were
unlikely to turn out well for them, as indeed they didn`t.

So, yes, an emotional angle there certainly and by the way in terms of
who is to blame, there is little doubt that first and foremost whoever shot
the missile is to blame. But there are these questions about should this
aircraft have been flying where it was?

And it would be useful to know if, in fact, there was any kind of
chatter in the cockpit about that as well, just in terms of, you know, is
the airline, although certainly not primarily at fault, at least partly to
blame for flying in a place where at least some airlines were avoiding?

KORNACKI: Right. No, I think that`s a question a lot of people are
asking.

So, Bob, just on that issue though of Flight 007, the Korean air
flight 30 years ago, you say there is an interesting bit of history about
the search for the black box there sort of illustrating the international
tensions that spill into these things.

HAGER: Yes, it was incredible.

The Soviets knew very well if they had the black box in the run-up to
the incident that you wouldn`t here the Korean airline pilots talk about
being off course, that in fact they had mistakenly, innocently wandered off
course. And here the Soviets shot them down in cold blood.

There was this terrible race to find the black boxes. It`s out there
in the ocean not far from the farthest eastern-most reaches of the Soviet
Union. The Soviets are trying to get there first. They have 19 boats out
there looking for it. The U.S. is out there with boats, the South Koreans,
the Japanese.

And the Soviets even put fake pingers in the water to try to mislead
the U.S. investigators to looking in the wrong place. Finally, the Soviets
did find the black box and they spirited those suckers off to Moscow in a
big hurry. And the Western world didn`t find out what was on those black
boxes until 10 years later when the breakup of the Soviet Union occurred
and the boxes were turned over to the West.

KORNACKI: Wow. There are shades of that in the stories that we are
getting right now from the scene of that accident.

Thank you, Bob Hager and Seth Kaplan. Appreciate it.

Up next, the world is angry and fingers are being pointed at one man,
Vladimir Putin.

(COMMERCIAL BREAK)

KORNACKI: Welcome back to HARDBALL.

In one horrific moment, the international spotlight has now turned on
Russian President Vladimir Putin. All the reliable intel out there paints
a pretty one-sided picture that what killed those passengers aboard
Malaysian Flight 17, including at least one American, was a Russian missile
fired from a Russian system in an area controlled by pro-Russian
separatists who have received arms and weapons training from Russia, all as
part of a conflict in Ukraine that Russia provoked.

The outrage from the international community has been swift. And
today the U.S. ratcheted up pressure on Putin on a number of fronts, with
President Obama leading the charge. Here is the president addressing
reporters earlier today.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: He and the Russian
government have to make a strategic decision. Are they going to continue
to support violent separatists whose intent is to undermine the government
of Ukraine, or are they prepared to work with the government of Ukraine to
arrive at a cease-fire and a peace that takes into account the interests of
all Ukrainians?

(END VIDEO CLIP)

KORNACKI: Meanwhile, Moscow remains defiant.

Yesterday, Putin laid the blame squarely on Ukraine, saying -- quote -
- "Without question, the state over whose territory this took place bears
responsibility for this awful tragedy."

And today the Russian ambassador to the U.N. escalated that rhetoric,
saying -- quote -- "Ukraine chose the wrong path and their Western
colleagues supported them. I`m talking about the United States. They
actually pushed them to escalate. Now they are trying to lay the blame on
Russia."

P.J. Crowley is a former secretary of state for public affairs. And
Michael Weiss is a columnist with "Foreign Policy," editor of "The
Interpreter"

P.J., to start with you, so no one right now really seems to suspect
that Vladimir Putin sat there and said, hey, let`s take out a commercial
jetliner. But certainly as we just said, the suspicion here is pretty
strong about, you know, a Russian weapon, pro-Russian area of Ukraine where
this happened, potentially, as Susan -- Power suggested, training from
Russians for this to happen.

So, let`s say that`s what is ultimately proven. Let`s say the United
States investigators, anybody looking at this are able to prove all of
that. What happens then?

P.J. CROWLEY, FORMER U.S. ASSISTANT SECRETARY OF STATE FOR PUBLIC
AFFAIRS: Well, I think it`s still an open question whether -- I think
there is no question that Russia`s policy is to destabilize Eastern Ukraine
to gain leverage over the new Ukrainian government.

How close Russian fingerprints get to the actual shoot-down I think
will be important in terms of how significant the reaction is, particularly
how significant in Europe. There is a disadvantage or an inequity built
into this relationship. Ukraine is far more important to Russia than it is
to the United States.

And to the extent that your challenge is to impose costs on Russia for
its foreign policy, for its actions to work with these separatists and
destabilize Ukraine, that burden will fall more -- most significantly on
Europe than on the United States.

So, I think getting at the strongest possible evidence, I think, will
be vitally important to crystallizing particularly European political
action to impose real costs and reevaluate Russia`s relationship with
Europe.

KORNACKI: Well, yes, Michael, so from that standpoint of just looking
at Europe, looking at Europe`s reliance from an energy standpoint on
Russia, what would it take?

What is that threshold for Europe? Because if you`re -- I would
imagine if you`re sitting there in Europe, you`re saying, you know, I`m
going to risk having our energy prices go through the roof. For what? For
some territory in Eastern Ukraine that nobody in my country cares about?

MICHAEL WEISS, "THE INTERPRETER": Well, it depends on what part of
Europe you are talking about.

Western Europe, I think, that more applies to, particularly Great
Britain, France, Germany. Angela Merkel has a very close relationship with
Mr. Putin. She always has done. Russia and Germany have grown closer. In
fact, I would say their relationship and alliances to some degree have been
stronger than that between Germany...

KORNACKI: What would it take to break them away from Putin?

WEISS: Well, that`s actually a very good question.

I mean, look, I think what Europe has done for itself -- and I lived
in the U.K. for three years. And I saw firsthand and I reported on the
influence of Russian money and Russian politics on the British political
and economic establishments.

Relying so much on what is essentially dirty money -- we have to
understand something here. The U.S. State Department in those WikiLeaks
cables referred to Russia as a -- quote -- "virtual mafia state." One-
third of Russia`s GDP is estimated to be stolen money, corrupt money.

Much of this money doesn`t stay in Russia. It pours into Europe. It
pours into banks, real estate, offshore shell companies. You name it.
Most of the Kremlin elite indeed keep their accounts outside of Russia,
because they understand that the Russian economy is so volatile it could go
up at any moment.

So, I think this is where the pressure lies. Now, look, the European
Union I think has made it very clear that they are far more reluctant to
impose sanctions on Russia, much less anything approaching sectoral
sanctions, which is to say hitting the financial and energy institutions.

We haven`t even done that, by the way. The last suite of sanctions
were very powerful, but they just -- they fell just short of sectoral
sanctions.

I think, look, the information that we have and the information that
we have already disclosed, remember, when we first issued sanctions against
Russia, the most important thing was the disclosure that Vladimir Putin
himself, the president of the Russian Federation, has assets in a Swiss
commodities trader called Gunvor.

What is he doing having assets in a Swiss commodities trader called
Gunvor? There was a disclosure two years ago by a whistle-blower in Russia
that -- who showed that he, Putin, was building a palace for himself
estimated at a cost of $1 billion on the Black Sea. I guarantee you the
construction materials and everything that was put into the palace all
didn`t all originate in Russia. It came from European firms.

This is where you go after the Russians. You hit them where it hurts
most, with the money.

(CROSSTALK)

KORNACKI: So, there`s where you hit them.

But, P.J., the flip side of it is there are some numbers out today
that say Vladimir Putin`s approval rating in Russia right now sits at 83
percent. This is the highest it`s been since 2008. It seems that every
time there is a confrontation with the West like this, every time he gets -
- the West is pointing its fingers at Vladimir Putin, he gets more and more
popular. He gets stronger and stronger in his country.

So, I understand the pressure that Michael just outlined there, but
the counter to that is, this makes him beloved in Russia.

CROWLEY: For the moment, yes.

And this is the challenge for the United States and the challenge for
Europe, is imposing real costs on not only Putin, but his inner circle, to
where it starts to hurt them where it counts. That`s going to be the
challenge. And I think just to add to what Michael just said, not just in
terms of money, but also the challenge for Europe is that while Western
Europe is OK, there are a number of -- a handful of countries in Europe
that get 100 percent of their energy from Russia.

So, this is the challenge when you`re -- it`s easy for the United
States to talk a strong game. And there are things the U.S. can do. But
when you`re working at 28, you have got to have that case be as strong as
possible to get the kind of political consensus that you need.

KORNACKI: All right, thank you to P.J. Crowley and Michael Weiss.
Appreciate the time tonight.

And up next, we used to say that politics stopped at the water`s edge.
Not anymore and not today.

(COMMERCIAL BREAK)

RICHARD LUI, MSNBC CORRESPONDENT: Hi. I`m Richard Lui. Here`s
what`s happening.

Earlier today, President Obama spoke with Israel`s prime minister
about the situation in Gaza. He expressed concern about the escalation of
the conflict with Hamas and the loss of civilian lives there. The
president is expected to meet with Central American leaders next week to
discuss the flood of children crossing the U.S. border alone.

And in Washington State, 2,000 firefighters are battling blazes that
burned more than 260 square miles. One has destroyed about 100 homes --
now back to HARDBALL.

KORNACKI: We are back.

And if you think politics is suspended in times of tragedy, well,
think again. Some Republican war hawks are using the tragedy of Malaysia
Airlines Flight 17 to attack President Obama and to call for an escalation
in American forces overseas.

Last night, Arizona Senator John McCain called the president -- quote
-- "cowardly" for, you guessed it, keeping the U.S. out of the war in
Ukraine.

Let`s watch.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: It`s just been cowardly. It`s a
cowardly administration that we have failed to give the Ukrainians weapons
with which to defend themselves. First, give the Ukrainians weapons to
defend themselves and regain their territory.

Second of all, move some of our troops into areas that are being
threatened by Vladimir Putin and other countries like the Baltics and
others. Move missile defense into the places where we got out of, like the
Czech Republic and Poland and other places. And impose the harshest
possible sanctions on Vladimir Putin and Russia. That`s just for openers.

(END VIDEO CLIP)

KORNACKI: Republicans have routinely criticized Obama in the past for
not taking a hard line in positions with countries like Iran, Syria, and
Russia. This crash is just the latest opportunity for more hawkish members
of the GOP to urge American intervention abroad.

David Corn is a Washington bureau chief for "Mother Jones" and an
MSNBC political analyst. Ryan Grim is Washington bureau chief for The
Huffington Post.

So, David, McCain is pretty much spelling it out there.

DAVID CORN, MSNBC POLITICAL ANALYST: Yes.

KORNACKI: But it sounds like, you know, he says, oh, this is all
solved if we just had some American troops on the ground over there.

CORN: Well, John McCain hasn`t seen a situation where he didn`t want
to make it more aggressive and send in troops and whether it`s in Syria,
Iraq, and now Ukraine.

I think what`s interesting about the Republican Party, you will see
not everybody has rushed out on the Republican side to join John McCain, is
that I think the Republicans saw with Syria ago, while they were not eager
to vote in favor of any military action there, they realized the president
can really pay a political price for not solving these problems that may
beyond remedy, that he can`t solve.

So, they are happy to throw brick bats at him and without putting
anything down about what they want to do. They saw his approval ratings
drop a little bit last summer out of the Syria business.

So, I think we are seeing the days ahead, a lot of people not calling
for Russian troops to the Ukraine but calling the president weak,
ineffective, feckless, without at all saying what should be done otherwise
in these very tough and nuanced foreign policy dilemmas.

KORNACKI: You know, Ryan, it does strike me. I wonder there`s --
part of this is what we have been seeing for -- basically six years which
is just the attempt by the McCain types in the party to tag the president
every time something happens overseas like David is saying. He`s a
failure, he`s too weak, and all of that.

I wonder, though, if also what we are hearing about that battle that`s
taking place within the Republican Party. We are always hearing about the
Rand Paul and sort of his adherence versus John McCain, versus the old
neocons. If this is in a way an opportunity for McCain and for others to
basically say, (a), they are attacking the president for this, but they`re
also sort of telling Republicans, hey, this is the kind of failure you get
with Rand Paul`s foreign policy, too.

RYAN GRIM, HUFFINGTON POST: Right, McCain hears Rand Paul`s footsteps
here. He`s not going to miss the opportunity to reinforce the muscular
side of Republican foreign policy here. I believe McCain was actually on
TV, you know making these arguments within half an hour of the plane going
down, which is impressive if you consider what it takes to get behind the
camera. You have to book it, you got to get there, you go to get mic`d up
and then you have an idea.

And, apparently, you don`t need a lot of evidence before you go
through with that.

But I think you`re right. This shows a little bit of the intellectual
conflict going on within the Republican Party here. And McCain saying, no,
we are not going back to this isolationist policy that we`ve had in the
past.

KORNACKI: Where is -- David, I just wonder -- I mean, look, so there
is Crimea a few months, and Putin wants Crimea and they have the referendum
there. And, you know, the McCain position is basically the United States
sort of stood up right then. I guess maybe even put boots on the ground to
stop it. That doesn`t happen. Russia gets Crimea.

Now, it`s these small areas of Eastern Ukraine. A lot of these
Russian speaking areas of eastern Ukraine. In McCain`s mind, it`s always -
- this is the great appeasement, this is the great sellout that`s going to
lead to wider scale conquest by Putin. When -- how do you think about
this? And how do you define what`s a threat to move in that direction? It
always seems like he`s thinking about World War II.

What is a genuine threat for a world leader to move in that direction,
versus it`s just Crimea and it`s just a small area in eastern Ukraine?

CORN: Well, you know, there`s sort of a cost and benefit equation
here, Steve, right? What do you go to war for? Mentioning Rand Paul.
Rand Paul said, you know, in terms of Iraq, I don`t want to send my sons to
Iraq to fight ISIS on behalf of a corrupt government in Baghdad. So, he`s
very been clear.

When it comes to Putin, you know, the thing is McCain talks as if we
are in a bipolar world with just Russia and just the United States and
Russia is just evil. Now, no one wants to defend Putin, but at the same
time, when negotiating a treaty with Iran, on nuclear matters, we need
Russia`s involvement. We had Russia get involved in Syria, at least to get
rid of Assad`s chemical weapons.

And so, it`s not as if we have the luxury of just, you know, going to
war with Russia, for whatever reason, because we still want to engage them
in other parts of the world, particularly now, look at what`s happening
with the Israeli invasion of Gaza, U.S. credibility in the region and
influence is probably going to decrease because most people there are going
to see us as supporting this.

KORNACKI: All right. Thank you to David Corn and Ryan Grim.
Appreciate the time tonight.

And up next, the community hit hardest by all of yesterday`s tragedy.

(COMMERCIAL BREAK)

KORNACKI: In a few minutes, terror in the age of Twitter. We`ll be
right back.

(COMMERCIAL BREAK)

KORNACKI: Welcome back to HARDBALL.

It`s being called a major setback in the fight against AIDS. Of the
298 victims onboard Flight MH17, many were scientists, researchers and
activists who are headed to the 20th International AIDS Conference in
Melbourne, Australia.

Among them was Joep Lange, he`s distinguished HIV researcher and
former president of the International AIDS Society. He and his colleagues
dedicated their lives to finding a cure.

And today, President Obama paid tribute to their service and their
sacrifice.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: These were men and
women who dedicated their own lives to saving the lives of others. They
were taken from us in a senseless act of violence. In this world today, we
shouldn`t forget in the midst of conflict and killing there are people like
these -- people focused on what can be built rather than what can be
destroyed. People are focused on how they can help people that they have
never met. People who defined themselves not by what makes them different
from other people, but by the humanity we hold in common.

(END VIDEO CLIP)

KORNACKI: Joining me now is Dr. Kent Sepkowitz. He`s a "Daily Beast"
contributor, an infectious disease specialist.

So, Kent, it`s been 30 years. It`s been a little over 30 years since
this disease first emerged and there`s been so much progress made, still,
though, there`s no cure on it. Just in terms of that, you know, hunt, that
hunt for a cure, what does this tragedy do? How much does it set that
back?

DR. KENT SEPKOWITZ, THE DAILY BEAST: I think that Dr. Lange was a
leader in a couple very important things and his loss will set things back,
although I don`t think we will be totally without momentum here. He really
brought the community of AIDS researchers together which was a novel idea
at the time. He made people check their egos at the door and made this a
united front against a common enemy, not the usual disagreements that
sometimes happen around, in professional societies and with scientists.

The other thing he did, very importantly, was he defined AIDS as a
humanitarian crisis. It`s not really a medical crisis. It`s -- we have 35
million people with a treatable disease and we -- he focuses on the fact
that we are really duty-bound to take care of one another.

So, as President Obama said, this is really about a huge humanitarian
being lost, really much more than a leading scientist.

KORNACKI: And what was he -- what was he sort of at the time of his
death here, what was he most focused on, and what was his sense of where
all the research and all the, you know, progress in this, where was it
heading? Was he optimistic we were getting close?

SEPKOWITZ: He was optimistic we were going to be able to provide care
to people. He started out as a research scientist looking at ways to
diagnose HIV and he moved quickly into therapies. But really for the last
20 years of his career, he focused on access to people who otherwise would
not have access, mostly the problem of enormous number of people infected
in sub-Saharan Africa.

So, his most recent big-time endeavor was called Pharm Access where he
was going to make drugs available to people who couldn`t afford them by
pressuring big pharma and others to bring costs down and make drugs
available.

So, again, he was about treating people with the stuff we have. He
was not really a visionary in terms of what the next therapy`s going to be,
test about making what we`ve got at hand from a practical perspective
available to those who desperately need it.

KORNACKI: And we should say -- I mean, he`s probably the most
prominent of the people going to this conference identified so far. But he
was not the only one who had given his time and given his life.

It`s such a loss to begin with, tragedy to begin with, this plane
going down, a double-barrel tragedy when there are so many people on there
were doing so much good.

But thank you to Kent Sepkowitz for taking a few minutes and telling
us about it. We appreciate that.

And when we return, terror in the age of Twitter.

(COMMERCIAL BREAK)

KORNACKI: In "The Washington Post" today, Paul Farhi reflected on the
use of social media in the aftermath of a tragedy like downing of Flight
MH-17. Farhi observed how graphic photographs of the victims made their
whey online almost instantly, ghastly images of smoldering bodies were
tweeted and retweeted appearing in the feeds of thousands of Titter uses.

His piece raised an age-old question that`s become complex in the
digital age. Quote, "News organizations have forever struggled with
determining the line where news value ends and shock value and
sensationalism begin. The graphic photo of video, after all, can pack an
emotional impact and be more truthful of depiction of the event and
sanitize images, or can be just revolting and insensitive."

Joining me now is the author of that piece, Paul Farhi.

So, Paul, I remember the debate that took place right after 9/11 about
some of the worst and most jarring and just horrific images that came out
of that, media outlets debating should we run it today, we`ll never run it
again. We made our point, we never want to be using this repeatedly.

I also wonder if that debate is out of date, it`s passe. It doesn`t
matter anymore, because it seems to me like anybody with their camera phone
at any scene, at any tragedy, can take a picture now, put it up on Twitter,
put it up on Facebook, put it out on social media. And whether "The New
York Times," broadcast networks say they want to put it on or not,
everybody in the world sees it anyway.

PAUL FARHI, THE WASHINGTON POST: Yes, well, that`s right. There`s
two tracks. There`s the edited kind of photo and image where editors are
standing around saying, should we show this to people or should we not?
And then there`s the free for all, where journalists, individuals, can post
anything they want. And they do.

And that`s what we saw yesterday both in the Ukraine and in Gaza with
the shelling of these children on the beach. It`s, you know, beyond the
ability of gatekeepers anymore. Everyone is their own gatekeeper.
Everyone`s their own publisher.

KORNACKI: But you think, too, about the history of these images, you
think of the protesters, you know, Vietnam war or something, some of these
are resting images in history in a lot of ways have really changed history.
The images have been so strong and provocative and reached people in such a
sort of visceral way. They`re images that literally changed history.

When those images are just so widespread, so easily attainable, does
it just have an overall desensitizing effect where we don`t respond the way
we used to, to some pretty chilling stuff?

FARHI: That`s right. The world is flooded with imagery now because
we can and we do and it`s cheap and it`s easy. So, no individual picture
stands out truly the way it once did when things were edited, when things
were mediated.

There really is no mediator anymore. We`re all our own photographers
and our own publishers. We can put these things out anywhere and any time
and reporters on the scene are seeing some of the worst of it. They want
to get that news out and that news is often not very pretty at all.

KORNACKI: So what, in your mind, given all the realities of sort of
social media today and the democratization of photography, I guess, if you
want to put it that way -- what does it take to reach an audience, to
really reach the audience the way they used to with a picture?

FARHI: Well, I mean, audiences are being reached in many ways now, in
thousands and millions of ways. Everybody has their own Twitter feed.
Everybody has their own Facebook.

You can reach your own discreet audience without having a newspaper,
without having a TV station. Again, there`s just endless ways to show
people things that they never could see before. YouTube as well, Vine, all
these social media, Instagram. There`s just no stopping it. It`s a flood.

That`s why we had editors. That`s why we had people to stand there
and make a decision for you. Should we or should we not show this to you?

KORNACKI: Yes. Now, everyone`s their own editor.

Anyway, that`s HARDBALL for tonight. Thanks for being with us. Thank
you for the time.

"ALL IN WITH CHRIS HAYES" starts right now.

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

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