updated 8/4/2014 9:19:00 AM ET 2014-08-04T13:19:00

HARDBALL
August 1, 2014

Guest: Rep. Donna Edwards, Rep. Barbara Lee, Paul Singer, Robert
McCartney, John Dean

CHRIS MATTHEWS, HOST: Friday night bites.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington.

"Let Me Start" tonight with the theater of the absurd now known as the
Republican-led U.S. Congress. You thought "House of Cards" was bad. At
least on that show, they get things done. Here in the nation`s capital on
August 1st, 2014, they stay up late. They stay up late on a Friday evening
for the most ridiculous of reasons. Start with making it look like they`re
working. They`re here showing that they`re here -- got it -- so I and
other commentators can`t attack them for truancy.

Next reason, call it feeding time at the zoo. Some on the hard,
vicious right need to have votes they can call their own -- in other words,
votes that cast scorn on the president, cast them in the safe position of
having done nothing to help Barack Obama, only to keep him from doing
anything. Why? Because any and every action by this president serves to
upstage them and their refusal to do anything at all.

It`s a sorry performance we`re watching tonight as the U.S. House of
Representatives prepares to vote on an urgent so-called measure to help
those kids at the border, a measure that will never get to the Senate, much
less to the president`s desk. It`s a waste of time. It will be a waste of
paper, and a waste of representative government, and that matters.

But don`t give up. The president made clear this afternoon that if
the Congress fails to act on those 58,000 young people at the border, he
will.

David Corn`s the Washington bureau chief for "Mother Jones" magazine
and an MSNBC political analyst. And this afternoon, President Obama
slammed House Republicans for catering to the far right in order to pass
what he called "extreme and unworkable" legislation. Well, let`s watch.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Instead of working
together, instead of focusing on the 80 percent where there is agreement
between Democrats and Republicans, between the administration and Congress,
House Republicans as we speak are trying to pass the most extreme and
unworkable versions of a bill that they already know is going nowhere, that
can`t pass the Senate, and that if it were to pass the Senate, I would
veto.

They know it. They`re not even trying to actually solve the problem.
This is a message bill that they couldn`t quite pull off yesterday, so they
made it a little more extreme so maybe they can pass it today, just so they
can check a box before they`re leaving town for a month.

(END VIDEO CLIP)

MATTHEWS: I`m not sure the president`s entirely sad, by the way, that
the House of Representatives, led by Republicans, is making fools of
themselves. The president also said that while Congress is out on
vacation, he put it, putting in the knife, he`s going have to act on his
own in resolving the crisis at the border.

So what are House Republicans proposing today after failing to get
enough votes yesterday to pass something? Well, the new version would
provide the same $659 million funding as yesterday`s bill did, but would
also give $35 million to border state governors to pay for National Guard
troops. In addition, it would tweak language in that 2008 anti-trafficking
law that would make it easier to quickly deport unaccompanied minors from
Central America back to their country.

And Republicans plan to take a separate vote aimed at curtailing the
president`s program that defers deportation for children who were brought
to the United States illegally by their parents.

Well, one person happy, actually, with the new version is the far-
right Tea Partier Steve King. He told "Roll Call," quote, "The changes
brought into this are ones I`ve developed and advocated for over the past
two years. It`s like I ordered it off the menu."

David, I think we have a problem here. The House of Representatives,
which I used to work for up there, used to get things done that mattered.
They passed a Civil Rights in the `60s. They`re capable of doing
something. What are they doing?

DAVID CORN, "MOTHER JONES," MSNBC POLITICAL ANALYST: Well...

MATTHEWS: This is a joke. It`s Friday night. They`re here for show.

CORN: The question is whether you`re doing this for governance or
you`re doing it for show, for politics. If you`re doing it for your
governance, you pass a bill, even if you know the president might veto it,
but you go into conference with the Senate. You bring the president`s
representatives in, and you get a compromise.

But as we know, in the House GOP, "compromise" is a dirty word. So as
far away from any compromise position as the GOP bill was yesterday that
Boehner couldn`t pass, he had to make it even further away from a
compromise position to get the House -- his own people and the Tea Party
folks to support it.

The most frightening thing I saw today, on Twitter about an hour or
two ago, someone tweeted out a picture, Steve King and Representative
Michele Bachmann sitting at a table, looking over the final version of the
legislation, as if to approve it.

So we go from yesterday, Ted Cruz is speaker of the House, to today,
Steve King and Michele Bachmann, king and queen for the day. John Boehner
has to kiss their rings!

MATTHEWS: What`s scary is that this is a recognized national problem.

CORN: Yes.

MATTHEWS: Now, maybe it`ll be tragic for everybody, it is for most
people, to see those young people sitting down at the border, who were
basically sent up here by other people -- they didn`t make a big decision
in life -- from a scary place to a place they thought might be heavenly,
even. And yet nobody seems to want to take responsibility entirely for
what to do.

The president should have offered, I believe, some modification of the
previous law that was a magnet for all these people coming up here. He
doesn`t want to do that. The Congress, worse than him, doesn`t want to do
anything. This bill, as you pointed -- it was not meant for passage.

CORN: Well, the thing...

MATTHEWS: It wasn`t.

CORN: What the House GOP wants to do here is in order to give some
money, not enough but some money for border security, they want to take
away the right of half a million youngsters, who would otherwise be
deported, to stay in this country, people who were brought here through no
fault of their own, the dreamers as we like to call them. So in order to
help...

MATTHEWS: Why are they doing that?

CORN: Because...

MATTHEWS: Explain?

CORN: Because they don`t like, you know, immigration reform. This is
a version -- this is a backdoor version of immigration reform that gives
people the right to sort of find a pathway here, kids who are brought here,
maybe have been here for 10 years, have nobody to go home to, and yet they
still want to send these kids back.

MATTHEWS: Let`s bring in U.S. Congressman -- Congresswoman Donna
Edwards. She`s a Maryland Democrat. Congresswoman, thank you for joining
us. This is a bizarre night. Explain to the people out there, not just
your constituents but all the people in this country who are Democrats or
whatever, what in the world is going on in the Republican-led House of
Representatives this Friday night?

REP. DONNA EDWARDS (D), MARYLAND: Well, I wish I could explain what
was going on. What I will tell you is that House Republicans have decided
to do the most inhumane and really the most inefficient thing ever, not
really dealing with the difficulty of unaccompanied minor children, not
affording them due process, and then saying to 700,000 or so young people
that we said, You`ve lived here, you`re going to school, we want you to
stay, that, We`re going to come after you and really encourage deportations
and the most harsh treatment for our immigrants, for our children.

And think it`s really unfortunate. There has been a complete
breakdown in the Republican Party. We thought that what they put -- tried
to put on the floor yesterday was bad, but what they have done today, what
they`re doing today is even worse.

MATTHEWS: Will any Democrats vote for this thing tonight when it
comes to a vote?

EDWARDS: Well, I think our Democratic Party really has been for the
most part unified, frankly, on the humane treatment of children, of making
sure that our borders are secure, and really calling for a comprehensive
solution, and that means a comprehensive solution for immigration reform.

I mean, the fact is that Republicans have left on the table for more
than a year now a bipartisan bill that passed out of the Senate, bipartisan
support in the House, and they refuse to do it. And then they want to
blame the president for their failure. This is a classic, colossal GOP,
Republican failure, and I think the American people are going to hold the
Republican Party responsible.

MATTHEWS: Well, after yesterday`s vote, Congresswoman, failed, the
Republican leadership put out a head-scratcher of a statement. In it, they
had this message for the president. Quote, "There are numerous steps the
president can and should be taking right now without the need for
congressional action to secure our borders and ensure these children are
returned swiftly and safely to their countries."

Remember, by the way, this is the same House leadership,
Congresswoman, as you know, that voted to sue the president the day before
for his unilateral action on health care. Certainly, an irony here, isn`t
it, that the conservatives seem to want the president to make decisions,
even though they`re telling him, We`ll get you if you do.

Here`s, by the way, Oklahoma congressman Tom Cole pointing to the
absurdity of this situation.

(BEGIN VIDEO CLIP)

REP. TOM COLE (R), OKLAHOMA: Look, you can`t say, on the one hand,
that the president`s overreaching by acting without legislative authority
and direction, and then refuse to give him legislative authority and
direction in another area.

(END VIDEO CLIP)

MATTHEWS: Well, damned if you don`t, damned if you do, apparently.
Even conservative columnist Charles Krauthammer yesterday point out this
absurdity.

(BEGIN VIDEO CLIP)

CHARLES KRAUTHAMMER, FOX CONTRIBUTOR: It is ridiculous to sue the
president on a Wednesday because he oversteps the law, as he has done a
dozen times illegally and unconstitutionally, and then on a Thursday, say
that he should overstep the law, contradict the law that passed in 2008 and
deal with this himself.

(END VIDEO CLIP)

MATTHEWS: Well, the president today also hammered out that point. He
hammered it home. Let`s watch.

(BEGIN VIDEO CLIP)

OBAMA: Yesterday, even though they`ve been sitting on a bipartisan
immigration bill for over a year, House Republicans suggested that since
they don`t expect to actually pass a bill that I can sign, that I actually
should go ahead and act on my own to solve the problem. Keep in mind that
just a few days earlier, they voted to sue me for acting on my own. And
then when they couldn`t pass a bill yesterday, they put out a statement
suggesting I should act on my own.

(END VIDEO CLIP)

MATTHEWS: Congresswoman, sometimes I wonder about the president being
a bit too aloof, and then when I watch him today, say maybe aloof is the
only way to behave when you`re against these caged animals, these
Republicans, on this issue, because they`re basically telling him, Go break
the law, then we`ll grab you. I mean, it`s so absurd, what they`re doing
now. They want him to make the decision about those 58,000 kids, and we
all know that whatever he decides, if it`s lenient in any way, they`ll be
talking impeachment again.

EDWARDS: I don`t think the president is aloof, I think he`s baffled
by the ridiculousness of the Republicans` position, suing him -- voting to
sue him a couple of days ago, now saying he needs to act without their
authority. They can`t figure out what they want to do. And as a result,
they`ve left the American people sitting, waiting -- waiting in the
balance.

It really is incredibly irresponsible, and I hope the American people
are going to take note. This is the same party that shut down the
government. This is the same party that refuses to fund transportation.
And this is the same party...

MATTHEWS: Right.

EDWARDS: ... that refuses to deal with immigration. They are a
colossal failure, hashtag #colossalfailure.

MATTHEWS: Tell me if I`m wrong, but this basically means, the passage
of this measure tonight, which nobody`s going to vote for who`s a Democrat
-- it`s not going to go to the Senate, there`s not going to be any
compromise, there`s not going to be any bill -- the president will be left
this weekend and the weeks ahead with dealing with this crisis at the
border single-handedly? Isn`t that the basis of (INAUDIBLE) decision-
making?

EDWARDS: Well, that`s right. And we`re going to be here probably
until 10:00 o`clock tonight, wasting the time of the American people,
wasting taxpayers` money, and with Republicans knowing that they`re voting
on something that they want to have a message on, but the fact is, they
don`t have any message because they really failed the American people.

I think the president needs to go out and tell the American people
exactly what a failure these Republicans are that they aren`t dealing with
this. I mean, they`re going to blame him for it and then fail to act.

MATTHEWS: Thank you so much, Congresswoman Donna Edwards of Maryland.
Thank you for joining us this Friday night.

EDWARDS: Thank you.

(CROSSTALK)

MATTHEWS: I want to get back to you, David.

CORN: But there`s an important...

MATTHEWS: This bottom line -- nothing!

CORN: Yes.

MATTHEWS: So people watching understand, the purpose of all this is
nothing but message-sending, as the president said...

CORN: Right.

MATTHEWS: ... to the hard right.

CORN: And actually, you know, if they wanted to send a message
earlier that they were doing something that would help all Republicans,
that message has now become just a message of the hard right. And the real
thing to remember here is if John Boehner put the Senate bipartisan...

MATTHEWS: What`s his job exactly?

CORN: I don`t know. But it`s -- you know, he`s not acting like a
public servant. If he took the Senate bipartisan immigration reform bill
and put it on the House floor, it would pass with a bipartisan majority,
mainly Democrats but some Republicans would go for it, and the country
would move forward. He can`t do that because then he`s afraid of losing
control of his caucus. So this is really about being sort of controlled by
the tail, the Tea Party tail controlling government.

MATTHEWS: It`s -- the 60 votes in the Senate, you can`t get anything
done, and the new rule, you can`t get anything done that doesn`t have the
majority vote of the majority party. These new rules are killing the
workings of this government. Thank you, David Corn.

Coming up, the master of the House. Congressman Peter King said it
best. The House immigration bill died because of Ted Cruz, who elected
this -- who elected this bomb-throwing senator speaker of the House?

Anyway, the courtroom drama in Virginia, by the way, at play (ph), and
the spectacle of what happens to a politician after taking office. And
former governor Bob McDonnell knows (ph) gifts like Rolex watches were part
of a quid pro quo to help a wealthy businessman? Is that the situation
here?

And one more responsible question here about bringing down President
Nixon, when John Dean -- now John Dean himself comes on the show to reveal
who famously provided that hush money that silenced the Watergate burglars,
first ever we`re getting the information. John Dean just joins us tonight
with that.

Finally, "Let Me Finish" tonight with an inside look at Jack Kennedy
due (ph) to a pioneering documentary. What a movie that`s going to be.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: New polling on the 2016 presidential race from the key
battleground state of Ohio, and it may come as a surprise. Let`s check the
HARDBALL "Scoreboard."

According to a new Quinnipiac poll, Hillary Clinton leads Senator Rand
Paul of neighboring Kentucky by just 4 points -- close one there -- 46 for
Clinton, 42 for Paul. I told you to keep your eye on Rand Paul. The good
news for Clinton, she soundly defeats other potential Republican opponents.
Against New Jersey governor Chris Christie, Clinton by 9, 46-37. Against
Jeb Bush, Clinton`s lead swells to 11 points, Clinton 48, Bush 37.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. Senator Ted Cruz -- you know him
-- whose extreme tactics or antics have angered many of his Senate
colleagues, is the perverse Pied Piper now for a crew of fringe House
members who have rendered our government useless right now. Robert Costa
of "The Washington Post" described the Wednesday night gathering in Cruz`s
Senate office, where 13 House members ate pizza, drank Dr. Pepper and
decided to derail the immigration bill.

But as Costa reports, Cruz tried to hide his fingerprints. Quote,
"Careful not to be viewed as orchestrating action in the House, even though
he holds regular so-called fellowship meetings with members, Cruz listened
quietly and nodded along as his guests laid out their concerns and
discussed possible demands for Boehner. He agreed that Boehner was
distracted" -- I love this line -- "and said they should stick to their
principles."

"The freshman senator not also reminded them" -- the House members --
"to be skeptical of promises from House leaders, particularly of show
votes, legislative action designed to placate conservatives that carry
little, if any, weight. Well, that quiet assurance was enough to persuade
the conservatives to effectively topple Boehner`s plan."

Ted Cruz, a freshman senator, pulling the strings in the House, all
with an eye towards disrupting the government.

Joining me right now is Congresswoman Barbara Lee, Democrat of
California, and MSNBC contributor and "Washington Post" opinion writer
Jonathan Capehart.

Congresswoman Lee, I think there must be some lack of -- of what, oh,
pride? How about pride? When I worked on the Hill, the House members
referred to the Senate "another body." They didn`t even talk about it,
hardly, except in some vague reference.

Here you have this character, this, I don`t know, Count of Monte
Christo, whatever you call him -- he shows up, he starts orchestrating the
place like he`s the boss. I`ve never heard of that happen (sic). And he`s
a far right-winger. He`s so much like Joe McCarthy in his attacks on
people`s character, and now he`s bringing down the Republican speaker of
the House.

REP. BARBARA LEE (D), CALIFORNIA: But when you worked here, Chris,
you did not have a hard-core Tea Party Republican base, really, and that`s
what it is. And I suggest to you that if Senator Cruz really wants to
direct the House of Representatives, perhaps he should run for the House of
Representatives and then run for speaker.

I mean, this is outrageous. We do have three branches of government,
and we have the Congress comprised of the House and the Senate. He is a
member of the Senate. And they should develop their own agenda, we develop
ours.

MATTHEWS: What`s his hold on these guys?

LEE: I`m not so sure what his hold is, except for the fact that he
really speaks to the fringe, to those who want to actually dismantle
government, who want to provide little or no safety net, who want to
provide no government protections. I`m not sure what it is.

But of course, you hear that he perhaps may be running for president.
I mean, my gosh, can you imagine? And so there`s, you know, a number of
people who really believe in that ideology. It`s strictly ideology. It`s
a far right-wing ideology. It really does not believe in government by the
people, of -- by the people, you know, and for the people.

MATTHEWS: Congresswoman, hold on for a minute.

I have got Jonathan Capehart of "The Post" here.

LEE: OK.

MATTHEWS: You know, Jonathan -- the irony is -- and I don`t like to
be ethnic with party -- you have a right to be whatever you want to be. I
don`t think people should be driven by identity politics.

But here`s an Hispanic guy, Cruz, and he`s making his name basically
right now going after immigrants.

JONATHAN CAPEHART, MSNBC CONTRIBUTOR: Right. And...

MATTHEWS: I mean, that`s what he`s doing. In this case, that`s what
he`s doing.

CAPEHART: Yes, that`s what he`s doing.

But to answer the question that you asked the congresswoman, why --
like, why is he able to do this and why are they -- why are they latching
onto him? Because he`s leading them. There`s a leadership vacuum in the
House -- that we have witnessed since 2011, since the Tea Party came in
there.

MATTHEWS: Yes.

CAPEHART: These folks are -- the folks that Ted Cruz is leading, that
he`s leading, they`re not fringe. They are powerful.

And so now you have got Ted Cruz, who comes in. He is elected -- he
was only elected in 2012, Chris.

MATTHEWS: I know. That`s hard to believe.

CAPEHART: He`s only been there since January. And so he goes over to
the House. He`s leading people who have been -- who have been causing
Speaker Boehner problems since 2011 and holding up legislation.

MATTHEWS: Yes.

LEE: Chris, I...

CAPEHART: And so now if -- if Ted Cruz were in the House and he were
speaker of the House, he would be effectively leading his caucus.

MATTHEWS: Let me go back to -- go ahead, Congresswoman.

LEE: Yes, Chris, and let me just say, I agree because when you
remember -- if you remember the shutdown, he actually was the one who led
this -- this terrible debacle of the government shutdown.

And so you`re right. He sees himself as a leader, and where there`s a
void, he`s trying to lead.

MATTHEWS: Well, he -- Cruz denied that, of course, that he told the
House Republican members to blow up the bill the other night, last night.

Indeed, he took offense, saying: "The suggestion by some that those
House members are unable to stand up and fight for their own conservative
principles is offensive and belittling to House conservatives. They know
what they believe and it would be absurd for anyone to try to tell them
what to think."

Congresswoman, that seems to be laying it on a bit paternalistically.
Like, I wouldn`t tell these young children how to vote. I just did. But
now I`m not going to say I did it, because that would embarrass them.

I wonder why they`re not embarrassed that they`re meeting with this
guy.

LEE: Well, I certainly would be.

But when -- you know, and I have to just say this moment is a very
serious moment. We have a huge humanitarian crises on our border. And we
have many, many children who need -- need our help. Actually, the United
Nations Commission on Refugees indicated that 60 percent of these children
fleeing these countries are fleeing violence and deserve international
protection.

So I don`t know why Senator Cruz is playing with this issue and why
he`s trying to make sure that the House Democrats follow a very, very hard-
core, non-humanitarian approach to this issue of the children, which is a
very grave and very important issue that we`re dealing with.

MATTHEWS: I want to go to Jonathan and then I will go back to the
congresswoman with the same last question.

Do you think the president`s going to go ahead and do this by
executive order, deal with this crisis during the next four weeks?

CAPEHART: He`s going to do something. He -- I mean, the last time I
was on this show, earlier this week, the AP story came out that the
president was looking at executive action on work permits.

Today in the Briefing Room, he made it very clear...

(CROSSTALK)

MATTHEWS: Yes, but this is for your the kids.

(CROSSTALK)

CAPEHART: No, no, for the kids, but he made it very clear today,
because they have not acted, I am forced to do something...

(CROSSTALK)

MATTHEWS: Well, Congresswoman Lee, I`m wondering whether the
Republicans are waiting like with a mousetrap. They`re saying, OK, we have
encouraged him to go fix the problem. The minute he fixes it, we`re going
to hit him.

LEE: You know, they`re trying to set him up.

But you know what? I`m very proud of the president. He has to do
what is right. He recognizes this is a humanitarian crisis. And he`s the
commander in chief and he`s the leader of our country and he needs to do
the right thing and make sure that this crisis and these children are
afforded due process and that we move forward and ensure that the resources
are there to provide the type of assistance that we need to provide.

And that does not mean we don`t care about border security or the drug
cartels, but what is important is that we look at this in a comprehensive
way, and understand the comprehensive that immigration reform is an issue
that we still haven`t addressed. We have the votes for it. And it`s
because of this speaker who once again is not leading on this that we have
not been able to vote on this, where we know we have the votes. And that`s
the issue.

MATTHEWS: Congresswoman Barbara Lee, thanks so much for joining us in
Northern California, a great member of Congress. Thank you on a Friday
night for joining us.

LEE: Thank you.

MATTHEWS: And thank you, of course, Jonathan -- Jonathan Capehart for
joining us from "The Washington Post."

Up next, the late-night comics take on the do-nothing Congress. How
could they miss with this one?

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL and time for the "Sideshow."

Well, the House temporarily delayed its five-week August recess after
failing to pass an urgent immigration bill last night. The move certainly
didn`t delay late-night comedians from mocking the House for their
inability to get anything done.

Here was David Letterman`s reaction to their upcoming vacation last
night.

(BEGIN VIDEO CLIP, "LATE SHOW WITH DAVID LETTERMAN")

DAVID LETTERMAN, HOST, "LATE SHOW WITH DAVID LETTERMAN": Congress is
now getting ready to take a month off.

(LAUGHTER)

LETTERMAN: From what? Honest to God, from what?

(LAUGHTER)

LETTERMAN: I think it`s from C-SPAN.

PAUL SHAFFER, BAND LEADER: Oh, C-SPAN?

LETTERMAN: Yes. This was taken today in Congress. Take a look at
this, ladies and gentlemen.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: They have got them dropping the ball even.

Anyway, but Jon Stewart defended the do-nothing Congress last night on
"The Daily Show," sarcastically, of course.

(BEGIN VIDEO CLIP, "THE DAILY SHOW WITH JON STEWART")

JON STEWART, HOST, "THE DAILY SHOW WITH JON STEWART": When you guys
suck, it is not failure. It is just you living up to our extremely low
expectations of you.

(LAUGHTER)

STEWART: Congress is the "Sharknado 2" of government.

(LAUGHTER)

(CHEERING AND APPLAUSE)

STEWART: Of course. Of course it sucked. It was supposed to suck.

(LAUGHTER)

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS: Anyway, up next, if you ever wondered what happens to
politicians once they take office, look no further than what`s going on
with former Virginia Governor Bob McDonnell, powerful new friends, so-
called, giving lavish gifts. For what? Well, the question is, did the
governor know those gifts were part of a quid pro quo, you know, illegal?

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

PAGE HOPKINS, MSNBC CORRESPONDENT: I`m Page Hopkins. And here`s
what`s happening.

President Obama says the economy is getting stronger. More than
200,000 jobs were created in July, the sixth straight month of job growth
above the 200,000 mark.

Two American aid workers with Ebola will be evacuated from Liberia for
treatment at Emory University Hospital in Atlanta.

And a Mideast cease-fire was shattered today shortly after it began.
Two Israeli soldiers were killed in renewed fighting. And the fate of a
missing soldier is unknown. More than 60 people died in Gaza -- now back
to HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

Well, the corruption trial of former Virginia Governor Bob McDonnell
has dominated the news here in Washington because of the soap opera aspect
of the defense`s broken marriage strategy.

But it`s also instructive, I believe, for anyone who ever wonders what
happens to politicians who come to Washington or to a statehouse somewhere
and suddenly are privileged to get these perks of office. And also they`re
meeting a whole slew of new so-called friends all eager to help them with
little pleasures.

Anyway, for instance, the Rolex watch. This picture entered into
evidence today was texted to businessman Jonnie Williams showing the former
governor posing with his new Rolex watch, a gift from his wife supplied by
that businessman he was texting there or somebody was.

And the Ferrari, this picture of the former governor behind the wheel
of Williams` -- that`s the business guy`s Ferrari -- wearing wraparound
shades, very cool, and a very satisfied smile. And texts entered into
evidence today like this from the governor, "Jonnie, per voice-mail, we
would like to see if you could extend another 20-K if possible."

And Jonnie`s eager response: "Tell me who to might out to and address.
Will FedEx. Jonnie."

It`s a sea of temptation. Bottom line in this case, was there a quid
pro quo? In other words, did the governor know that Williams, the business
guy, expected something for all this generosity of his?

Joining me right now is "The Washington Post" metropolitan columnist
Robert McCartney and "USA Today"`s Paul Singer.

Fill me in. I do think this loan thing and the ease with which --
most people go for a bank loan, it`s a little harder than e-mailing a guy,
and saying, no problem, it`s coming in a minute from FedEx.

ROBERT MCCARTNEY, "THE WASHINGTON POST": Yes.

And this was one of three loans. There were a total of $120,000 in
loans given to a rental property company owned by Bob McDonnell and his
sister. And at one point -- and this is probably the most devastating bit
of documentary evidence that`s been entered in this trial or that we`re
going to see -- is this text message from Bob McDonnell asking for a
$20,000 loan from Jonnie Williams.

MATTHEWS: I once saw a poll Dick Gephardt toll me about, the former
leader of the Democratic side. He said, they asked people, do you think
congresspeople walk out of the office every night carrying machinery out of
their office like typewriters and then hock them somewhere?

(CROSSTALK)

MATTHEWS: Like, like this. So people have a pretty dim view. But I
think this is the more likely stuff that goes on. It`s gray stuff around
the edges. It`s not a million dollars, but it`s substantial money. And
the question is, why are they using e-mail if they thought it was illegal?

Why would the governor e-mail a request for money right in his
official e-mail?

PAUL SINGER, "USA TODAY": And they get used to getting the gifts.

MATTHEWS: Well, why did he do it?

SINGER: Because they think -- they stop thinking about it that way.
They just assume that everyone is doing them these favors, because they get
treated that way all their life in politics.

Every cup of coffee is free. Everybody is glad to give you a ride to
where you`re going. It stops -- at some point you stop realizing that
you`re trading on these favors.

MATTHEWS: But cash seems different.

SINGER: Cash seems different.

But again in this case, if you feel like, well, this was just sort of
a friendly favor the guy was doing something for my wife, someone I knew,
someone we were pals with...

MATTHEWS: OK.

(CROSSTALK)

MATTHEWS: Robert, you`re covering this as a reporter, but it seems to
me if you`re sitting on the jury, the O.J. case, any famous case, you have
got to go home to your peers. It`s not just you`re a peer of the guy
you`re trying.

It`s the peers you got to go home to. Your uncle or your brother-in-
law is ready to rag you on this. Right? How do you let the guy go once
you have seen him waving the Rolex watch, once you have seen him driving
the Ferrari, once you have seen him for 20-K just like that? You begin to
say, well, how could there not be a problem here?

MCCARTNEY: I think that the jury would have a very hard time
explaining to their peers as you say why the McDonnells were able to accept
so much from this businessman.

MATTHEWS: Yes.

MCCARTNEY: But if they do acquit them, if they let them walk, then
what they would go back to, you know, their friends, their peers and say
is, look, the law says that there has to be, you know, an overt official
act by the governor in order for it to be corrupt and we didn`t think...

(CROSSTALK)

MATTHEWS: OK. How many days left -- how many days left, Paul, is
that for us to await that magic moment? If I understand bribery or
something like it, you have to -- it`s like common law marriage. It can`t
just be you live together. You have to say to somebody we`re married or
say to each other you`re married.

Doesn`t there have to be a moment, as Robert says, when the governor
says, OK, if you give me another 20-K, I will do this?

SINGER: Yes. And there has to be evidence that there`s a deal, a
quid pro quo deal.

I believe if the prosecutors had that clear evidence, we would have
seen it already. That`s the problem with these kinds of deals. The laws
are written not to say did you do the right thing or the wrong thing, but
is there proof that you traded this favor for this money?

MATTHEWS: But that could get to a point of absurdity, though. When
you`re loading on the guy the Rolex watch for $6,000 or $7,000, a gift, an
outright gift, when you start loading these things on a politician who has
power, and a wife who is willing to sell your products for it, to the point
of going door to door with every doctor in the state, at some point when
does this become an obvious quid pro quo?

MCCARTNEY: Well, that`s certainly what the prosecution is counting
on.

The defense`s problem is that Jonnie Williams is saying there was an
arrangement, there was like a broad arrangement, where it was started by
Maureen, but Bob got involved with it. And the arrangement was that, you
know, he would help them with all these things.

(CROSSTALK)

MATTHEWS: But this guy`s squealing for his life.

MCCARTNEY: That`s the defense...

(CROSSTALK)

MATTHEWS: Jonnie Williams is a state`s witness because he was going
to get thrown away to prison himself.

MCCARTNEY: On securities fraud. And now basically he`s got immunity.

MATTHEWS: By the way, wouldn`t you be a little afraid of guy a who is
Sonny this and Jonnie that and...

(CROSSTALK)

MCCARTNEY: Sort of larger-than-life salesman type.

(CROSSTALK)

SINGER: The key witnesses in these cases are never the cleanest
characters. They`re out there for a reason.

(CROSSTALK)

MATTHEWS: Johnny B. Quick. I just wonder about this.

When are we going to get to this thing? When are you going to decide?

(CROSSTALK)

MCCARTNEY: I think five weeks they say it`s going to take, the whole
thing.

MATTHEWS: It`s going to be going on that long?

MCCARTNEY: That is what people are estimating. It seems to be moving
quite quickly. The judge is no-nonsense. He wants them moving along very
promptly.

MATTHEWS: Is this selling newspapers?

SINGER: Oh, sure. We love it.

MATTHEWS: "USA Today"?

SINGER: We have had video. We have had video down there.

We`re getting -- we have a reporter down there most of the time. We
feel this is something people...

(CROSSTALK)

MATTHEWS: I hope your publisher, Larry Kramer, appreciates your hard
work, Paul.

SINGER: We`re doing the best, yes.

MATTHEWS: Anyway, thank you.

Robert McCartney, a great man for the -- I love your writing.

Anyway, thank you both.

Up next, Watergate whistle-blower John Dean himself joins us right
here with new information about Richard Nixon`s role in getting that hush
money. How did he get all those millions of dollars to pay off the
burglars? We`re going to find out. "The Washington Post" doesn`t break
every story.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Up next, Watergate whistleblower John Dean himself joins us
right here with new information about Richard Nixon`s role in getting hush
money. How did he get those millions of dollars to pay off the burglars?
We`re going to find out. "The Washington Post" doesn`t break every story.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Well, Eric Cantor has given his farewell speech and now,
he`s leaving Congress early. The former majority leader who was beaten by
primary challenger David Brat announced today he will resign from Congress
August 18th. That`s pretty early. The move could give Brat an edge of
seniority, of course. If Virginia Governor Terry McAuliffe designates the
November election a special election, it would mean that Brat would be
seated immediately during the lame-duck session if he wins.

We`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)(

TV ANCHOR: John Wesley Dean III, fired last April by President Nixon
as White House counsel, told the Senate Watergate Committee today that the
president was involved in Watergate wrongdoing.

(END VIDEO CLIP)

MATTHEWS: When former White House counsel John Dean broke ranks with
the Nixon White House and testified before a Senate Judiciary Committee in
1973, he revealed how the president was involved in the Watergate cover-up.
Dean told them the administration`s efforts to protect the Watergate
burglars and pay them off for their silence, a conversation that was
famously recorded by Nixon`s secret taping system.

(BEGIN AUDIO CLIP)

RICHARD NIXON: How much money do you need?

JOHN DEAN: I would say these people are going to cost a million
dollars over the next two years.

NIXON: If you -- on the money, if you need the money, I mean, you
could get the money fairly easily.

DEAN: Well, I think that we`re --

NIXON: What I mean is, I could get a million dollars, and you could
get in cash, I know where it could be gotten.

(END AUDIO CLIP)

MATTHEWS: A million dollars.

Now, for first time, for the 40th anniversary of President Nixon`s
resignation, that`s coming next week, we`ve got the rest of the story. In
his new book, "The Nixon Defense", John Dean has uncovered new information
about Nixon`s personal role in the cover-up, including previously
unreported details about where the president obtained some of that White
House hush money.

In his research, Dean found that a Nixon campaign contributor a man by
the name of Tom Pappas was willing to give cash to the White House for the
Watergate defendants, provided that the president reappoint his current
ambassador to Greece, Henry Tasca, who was set to be removed from service
overseas.

Here`s the audio tape of President Nixon with his chief of staff Bob
Haldeman discussing the terms of that agreement, which was arranged by
Attorney General John Mitchell, to take money in exchange for the
ambassadorship.

(BEGIN AUDIO CLIP)

BOB HALDEMAN: One of the major problems on the -- on the business
John`s working on is the question financial, continuing financial activity
in order to keep those people on base, and the way he`s working on that is
via Mitchell to Tom Pappas.

Pappas is extremely anxious that Tasca stay in Greece.

NIXON: Let him stay.

HALDEMAN: And our plan, you know, was to move him and put someone
else in Greece, but Mitchell says it would be a very useful thing to just
not disrupt that.

NIXON: Good, let him stay. Pappas has handed the money trying for
this other activity or whatever it is.

(END AUDIO CLIP)

MATTHEWS: I just love the way. Anyway, joining me right now is
author John Dean, the former White House counsel to President Nixon.

What I`m -- first of all, Nixon is whatever you think of him, you know
better than I did, he is one of the most fascinating president, he and
Kennedy. The rest are a boring lot, but these two. Nixon, when he`s in
that room talking to Haldeman, his doppelganger, the guy that was like him,
why did they use that clever language what he was saying. Why didn`t they
say the hush money. Why didn`t they talk in English?

DEAN: Well, they had their own code they developed. They sort of
cleaned up their -- they don`t use harsh terms. In fact, when Haldeman is
explaining Watergate, he keeps talking about this vague other thing --

MATTHEWS: The problem area.

DEAN: The problem area, yes. And they -- they understand between
themselves what they`re saying without actually saying it.

MATTHEWS: OK, one man in the room surely knows he`s being taped.
And the other guy --

DEAN: Both of them.

MATTHEWS: So, they both knew they were being taped and yet they kept
banging away on a cover-up.

DEAN: Well, Chris, it`s clear 90 percent of the time they forget
they`re being recorded; 10 percent not often at the same time they remember
they`re being recorded and they`re being very careful and they`re setting a
record.

You know, at the end of the game -- because I transcribed all these
damn tapes. Haldeman is so clever he knows they haven`t taken the system
out, although he wanted it out and Nixon wanted it out. So, he says let`s
meet in the Lincoln sitting room where there`s no room recording.

MATTHEWS: I`m like you. I spent hours, days, weeks over at the
archives digging. We`re only allowed to use the pencil, remember? You
couldn`t use a pencil, you couldn`t use --

DEAN: That was my first book.

MATTHEWS: That was hard to do. You had to decipher by listening
going over it over and over again. But, Nixon, let`s go back to people who
are under our age now, why did Nixon cover up. We`re not for sure. Nobody
knows -- they never nailed him for ordering that particular break in the
Watergate. Why was he always covering up?

DEAN: Well, he`s covering up for multiple reasons than this. First
of all, he`s worried over the initial that he might have ordered the damn
break-in. He`s not sure. He thinks he might have told Colson something
that led Colson to do it.

So, when he get over that, he`s next worried about John Mitchell. He
had -- Haldeman once told me that Richard Nixon believed he was president
because of John Mitchell. When they were partners in New York, practicing
law --

MATTHEWS: Mitchell, Rose and Guthrie, yes.

DEAN: Yes. Mitchell left and helped him and used always his
political contacts around the country combined. It worked. So he never
forgave -- or he never forgot. In fact, Nixon brings Mitchell to
Washington when Mitchell really didn`t want to be attorney general. So --

MATTHEWS: So, he`s covering for Mitchell. But isn`t he also covering
for his misdeeds with Ellsberg office break-in.

DEAN: He doesn`t know about that, Chris, until March of `73 when I
tell him. He has no knowledge about that.

MATTHEWS: Does he know there are plumbers, so-called, burglars out
there?

DEAN: He knows there`s a unit that was set up but he doesn`t know
they`ve acted illegally until I told him about that. In fact, Haldeman all
but tells him, that`s where he says their strings will run out.

MATTHEWS: You make it sound like -- I know you`re not a Nixon fan
pure and simple. But you give him a chance here.

DEAN: No, no, what I did --

MATTHEWS: Are you saying he did this on a loyalty to a friend?

DEAN: That`s -- in the early stage, for sure. What I do is I just
trace the conversations that come out in the tapes. I start with the first
conversation. I go to until they pull the plug.

I let the story tell itself. I don`t try to make -- I give enough
information so the reader knows, you know, this is outright untrue, but I
really just let the story roll on its own without commentary.

MATTHEWS: Let`s listen to more of what you looked at here, just four
days after his conversation with Haldeman we just heard, Nixon met with
Pappas, that`s the guy offering the money, for the hush money and
acknowledge he knows Pappas has been providing the money, assuring Pappas
that those handling the transaction are in fact clean. Nixon then goes on
to mock the Watergate burglars as well.

By the way, the Maury here is Maury Stans, who is his financial
campaign manager. Let`s watch.

(BEGIN AUDIO CLIP)

NIXON: I am aware of what you`re doing to help out on some of these
things that Maury`s people and others are involved in. I won`t say
anything further but it`s very seldom that you find a friend like that.
Believe me, and frankly let me say, Maury is as clean as he can be.

TOM PAPPAS: I know.

NIXON: But nobody in the White House is involved.

PAPPAS: It`s just stupid. It`s just stupid.

NIXON: We were so shocked. I was shocked to hear such a stupid
thing. Mainly because if you`re going to bug somebody -- well, first you
shouldn`t bug, but second, if you`re going to do it, don`t do it in the
national committee, they don`t know (EXPLETIVE DELETED) thing.

PAPPAS: That`s right.

NIXON: I always thought it was the most stupid thing. But you know,
a lot of them are amateurs. That`s what it is, amateurs, believe me.

(END AUDIO CLIP)

MATTHEWS: Except in Lawrence O`Donnell -- Larry O`Brian, rather, who
was a big Kennedy guy, and his nemesis was sitting over there and had the
Hughes money deal he was working on and Nixon was always angry about him
being caught for taking the Hughes money.

DEAN: He was, indeed, trying to have his taxes audited. That comes
up throughout the story as it unravels.

MATTHEWS: So, in history, what do you think of Nixon? Was he a fraud
most of the time? Was he a great man at some points? How do you mix it up
having thought of him all these years?

DEAN: Where I come away after particularly listening to all this is
that his character is the weakness. He -- there`s really no moral line for
him. The other thing is, his decision-making, Chris, I always thought, you
know, he was carefully considering option papers. He had his legal pad
where he`d write the pros and cons out.

It`s not true. It`s all seat of the pants and he makes decisions that
are, you know, deadly wrong and he tries to influence the facts after he
has made a bad decision and twists them to make them meet his bad decision.
I think it couldn`t be isolated. The other thing is he becomes literally
obsessive-compulsive about Watergate. He drops the rest of the presidency
to worry about it. And this had to go on for months and months and months.

MATTHEWS: Yes. He had his relationship, China`s relationship, with
Brezhnev, who was the toughest opponent we ever faced since Hitler and
interesting other parts to this story.

John Dean, thank you. I love reading this stuff. It`s called "The
Nixon Defense." Great read, especially for Watergate nuts like me. John
Dean -- by the way, if you want to understand American history, you got to
know this story.

We`ll be right back after this.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with the worthy testimonial to Robert
Drew, the pioneering documentarian who just died at age 90.

Drew created our first close-up look at U.S. politicians in action.
His portrait of the 1960 Wisconsin battle between John F. Kennedy and
Hubert Humphrey is a classic.

But let me show you something now something truly unique, a look at
Jack Kennedy in the Oval Office in the midst of a crisis. The June 1963
integration of the University of Alabama. Here`s speechwriter Ted Sorensen
talks about Kennedy giving a speech that night on national television. You
see, Kennedy, the president, resisting, but his brother, Robert Kennedy,
the attorney general pushing hard for that speech.

What I like here is for the only time I can recall, we catch a glimpse
of Jack Kennedy caught somewhat off guard.

(BEGIN VIDEO CLIP)

TED SORENSEN: The question, which we should take up now, if you want,
Mr. President, is whether or not you`re going to make a nationwide TV
address in connection with (INAUDIBLE).

JOHN F. KENNEDY, FORMER PRESIDENT: I didn`t think so. It really just
depends whether we have something (INAUDIBLE) on the university, then I do
it. But otherwise, I didn`t think we would at this point.

ROBERT KENNEDY: I think it would be helpful. I think if there`s a
reason to do it, I think you don`t talk about the legislation and talk
about employment and talk about education. To do it for 15 minutes I think
would alleviate a lot of problems.

JOHN F. KENNEDY: I hope we can do it there. I supposed you could do
it. I don`t think we want to do (INAUDIBLE).

ROBERT KENNEDY: I think we take away a lot of the problems we`re
having at the present time.

UNIDENTIFIED MALE: Palpable to legislate.

(END VIDEO CLIP)

MATTHEWS: Here`s another close-up look at history. Justice
Department official John Dour (ph) preparing the two students, Vivian
Malone, and James Hood, for the expected confrontation with Governor George
Wallace as they`re being admitted to the University of Alabama. Vivian, by
the way, is the sister of Sharon Malone, the wife of the current attorney
general, Eric Holder.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Meetings with the governor will be held in this
particular area. And you should dress as if you were going to church, for
example, modestly, neatly, or like you`re going to school the first day,
and you should remember that it`s a very dignified, orderly procedure, and
it won`t take very long, and (INAUDIBLE) will be there, and I`ll be there,
undoubtedly, the governor of the state will be there.

(END VIDEO CLIP)

MATTHEWS: Finally, here`s the nation-changing speech President
Kennedy gave on national television that very evening. A speech and a
moment many Americans, especially those still being denied their civil
rights, will never forget. A U.S. president putting his full moral
authority behind the cause.

(BEGIN VIDEO CLIP)

JOHN F. KENNEDY: We are confronted primarily with a moral issue. It
is as old as the Scriptures and it is clear as the American Constitution.

(END VIDEO CLIP)

MATTHEWS: Wow. It`s because of Robert Drew, the documentarian that
the story of this great event has become captured for all time.

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

"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.
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