updated 1/14/2015 11:37:43 AM ET 2015-01-14T16:37:43

Show: HARDBALL
Date: January 12, 2015
Guest: Robert Costa, Michael Schmidt, David Corn, Perry Bacon, Kasie Hunt,
Howard Fineman

CHRIS MATTHEWS, HOST: Is the free world free from fear?

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington.

Tonight, the eyes of America remain on far-off France, with the fear
that it`s not so far off after all. A decade ago, under W., we were told
to mock that proud and fine country for its opposition to the Iraq war. We
were told, like nitwits, to call our French fries "freedom fries," as if
that would make the French wrong and us right about the war.

Well, it didn`t work out that way, did it. I mean, in Iraq, that war
W. and Cheney and the neocons lured us into, it turned out to be just the
latest example of that old maxim, If the French think we`re wrong, as they
did before when we went whole hog into Vietnam, the smart thing is for us
to think again.

And now everything has shifted again, with our stars in Hollywood, the
smart ones at least, standing with the millions in the streets of Paris.
And our leaders -- well, here`s a good question. Wouldn`t it have been
great to pick up the newspaper today and see an American on the front line
of that huge rally for freedom on the streets of Paris? Wouldn`t it have
been downright exciting to see the leader of the free world out there
actually leading the free world?

But I don`t know. Maybe there were good security reasons for neither
the president nor the vice president to go. But what about John Kerry?
He`s our foreign minister, and he speaks French. Is this just another
example of the White House needing someone -- I mean a real chief of staff
-- to walk into the Oval Office and tell the president, Boss, you got to
go, this is bigger than you think?

NBC`s chief foreign affairs correspondent Richard Engel is in Paris
for us tonight. Unfortunately, he`s the only one in Paris for us tonight.
Richard, the president`s not there. Was he missed?

RICHARD ENGEL, NBC CORRESPONDENT: Well, this situation is not over.
There is a feeling that France is still on edge. There was an outpouring
of emotion yesterday with this enormous rally. They had talked about a
million people here, and then when they added it up with the rallies here
and in other cities around the country, we`re talking about 4 million
people coming out on the streets.

Now about 10,000 troops and soldiers have been deployed. That`s the
biggest deployment of security forces since World War II, since VE Day. So
this is becoming an event of historic proportions, the worst attack since
World War II, the biggest deployment since World War II, the biggest rally
since that same time period.

So for the U.S. not to take part I think was a missed opportunity,
certainly.

MATTHEWS: Missed opportunity. Well said. Let me ask you about what
the threat is right now. Seventeen people killed in those incidents at the
kosher market, and of course, at the magazine. How many more people do
they believe now were involved in that conspiracy?

ENGEL: Well, the problem is they don`t really know, and that`s why
there are so many security forces out. There are reports tonight that
French officials won`t confirm that they are still looking for -- that
police are still looking for six additional suspects.

But frankly, they don`t know. Just a few days ago, they were looking
very closely for a woman named Hayat Boumeddiene, and now Turkey says she
has not only showed up in Istanbul, but she has been there for -- in Turkey
for about 10 days and then traveled into Syria. So a few days ago, France
was looking for her and had an all-points bulletin.

So I think until they find more people, arrest more people, close in
even tighter around this terror cell that has clearly been activated here,
they won`t know how many people they`re dealing with.

MATTHEWS: One last question about protocol. Why didn`t Eric Holder,
when he was in Paris, show up at the rally?

ENGEL: That`s a good question, and he was here on related
counterterrorism business. He was here with a counterterrorism -- for a
counterterrorism conference -- a counterterrorism meeting, I should say,
and apparently it conflicted with his schedule.

But I don`t know the internal decisions that went on of who was
supposed to go, who wasn`t supposed to go. But clearly, a convincing
explanation hasn`t been given because you saw those statements coming out
of the White House today, people saying that they -- you know, someone more
senior should have come.

Another reason that I think people, at least in -- on this side of the
pond, I should say, are so -- a little bit annoyed by this is there is a
sense that the U.S. always champions itself as the leader of the fight
against terrorism, and then when a terrorist attack happens, that it
didn`t, let`s say, use every opportunity or every effort it could to
express solidarity.

MATTHEWS: It`s great to have you on, as always, Richard Engel. Thank
you for joining us.

Joining us right now from Washington is the "Washington Post"
columnist Eugene Robinson and the DailyBeast`s Christopher Dickey. Both
are MSNBC contributors.

Anyway, yesterday`s rally in Paris drew 1.5 million people in Paris
and more than 40 world leaders, actually prime ministers or presidents.
Absent from the rally for the free world against terrorism was, as we said,
any high-level American. Well, today, White House spokesman Josh Ernest
said missing that opportunity was a mistake. He`s very clear on this.
Here he is.

(BEGIN VIDEO CLIP)

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: Some have asked whether or
not the United States should have sent someone with a higher profile than
the ambassador to France, and I think it`s fair to say that we should have
sent someone with a higher profile to be there.

QUESTION: How much higher a profile do you think should have -- or
does the president think should have been there?

EARNEST: Had the circumstances been a little bit different, I think
the president himself would have liked to have had the opportunity to be
there. The security requirements around a presidential-level visit, or
even a vice president-level visit, are onerous and significant. And in a
situation like this, they typically have a pretty significant impact on the
other citizens who are trying to participate in a large public event like
this.

(END VIDEO CLIP)

MATTHEWS: Gene, husbands and wives have these fights all the time.
Why didn`t we do this? Hop come we did that? And it`s passed. The
galloping horse of history has passed. There is no chance to be in the
front of that rally on Sunday. It isn`t there anymore.

The question is, what does it tell us about the thinking? Because
optics -- it`s a word the president puts down. But one of the reasons he`s
president or is a popular president is because he succeeded a guy named
George W. Bush, who didn`t show up at Katrina.

EUGENE ROBINSON, "WASHINGTON POST," MSNBC POLITICAL ANALYST: Yes.

MATTHEWS: Not showing up is an issue!

ROBINSON: Not showing up makes a difference. And you know, President
Obama always says he doesn`t want to pay attention to optics, this is all
just theater, the substance is what`s really important. But give me a
break. He`s a great politician, and great politicians know instinctively
and by the book that optics do count.

MATTHEWS: Right.

ROBINSON: And so...

(CROSSTALK)

ROBINSON: It wasn`t just a missed opportunity, it was a mistake.

MATTHEWS: Didn`t he give a big speech at Berlin when he was running
for president...

(CROSSTALK)

ROBINSON: I seem to recall a big speech he gave in Cairo that was all
about the optics. So of course, it`s important. And you know, frankly, he
should have been there. I mean, it`s not easy to arrange a presidential
visit on such short notice.

MATTHEWS: But...

(CROSSTALK)

ROBINSON: It`s a hard thing to do. However, there are a lot of
people who get paid to work that sort of thing out.

MATTHEWS: You know, as somebody said the other day, that`s what vice
presidents are for. Certainly, Biden went down to -- Christopher Dickey,
Vice President Biden -- you may not have noticed this, but he went whizzing
all the way down to, I guess, Brasilia for the inauguration of Rousseff
recently. I mean, we get him around. He moves around the world, and he
didn`t make this stop.

Kerry is a find, maybe one of our best ever secretaries of state.
He`s a true foreign minister who`s fluent in many languages, especially
French. It would have been nice to have him on the front lines there.
Your thinks from over there, Mr. Dickey?

CHRISTOPHER DICKEY, DAILYBEAST, MSNBC CONTRIBUTOR: Well, I think
you`re exactly right, about Kerry particularly. You know, it was -- I was
out there, and it was a horrific situation from a security standpoint and
it would have been even more horrible if the president of the United States
was there. I think that he did the French security services, French
police, and probably the French people a service by not going.

But I don`t understand why John Kerry didn`t go. He would have been
the perfect man to represent the United States in that context. And I
really don`t understand -- it`s truly strange that you have the attorney
general of the United States, a man directly concerned with security issues
-- in fact, he`s at a security conference. He`s in Paris, and he doesn`t
show up at this rally.

I think the whole thing was so badly handled that it`s just appalling.
But I have to say there`s more talk about this in Washington than there is
here in Paris.

MATTHEWS: Well, we`re the ones accountable for this. Let me go back
to -- stay in there, Christopher Dickey. Let me go back to Gene on this
question. We`ve got this whole thing -- you know, when people hack into
the U.S. Army, as we`ve just learned, into Central Command -- now, what do
we make of that going on? I mean, I think there`s a little spookiness
going on, which there should be, because we don`t quite know how many
people were involved in this conspiracy to attack the magazine or the
secondary action with the kosher shop and all that killing. We don`t know
how large this is. But we also know that they`re seeping into every corner
of our life.

ROBINSON: Well, look, the atmospherics are spooky, as you said. Now,
they didn`t hack into CENTCOM. They hacked into YouTube. They hacked into
Twitter, right? And presumably, perhaps they used somebody`s password. So
maybe they hacked someplace to get a password to get into these other
sites.

CENTCOM, I believe, as far as I know right now, is correct in saying
they did not hack into U.S. Defense Department computer servers or
whatever. Nonetheless, it is flat-out embarrassing.

MATTHEWS: Yes. It`s the Army.

ROBINSON: Exactly. So if you`re U.S. Central Command and your
Twitter feed and your YouTube feed are -- you know, have this ISIS flag on
them, that`s a very bad thing. That`s really embarrassing. And you
shouldn`t have social media accounts if you can`t protect them better than
that.

MATTHEWS: You know, sometimes Hollywood -- although, you know, they
did the usual scantily clad women thing last night, which was the usual
parade they put on. But there were some serious things last night. I was
impressed, as I watched most of it last night, the Golden Globes --
(INAUDIBLE) yesterday, by the way, for the Globes, and the topic on a lot
of the people`s minds was France. Let`s watch and listen to some of the
thoughts expressed last night in primetime.

(BEGIN VIDEO CLIP)

GEORGE CLOONEY, ACTOR: Today was an extraordinary day. There were
millions of people that marched not just in Paris but around the world.

(APPLAUSE)

CLOONEY: And they were Christians and Jews and Muslims. They were
leaders of countries all over the world. And they didn`t march in protest,
they marched in support of the idea that we will not walk in fear. We
won`t do it. So je suis Charlie.

JARED LETO, ACTOR: To our brothers, sisters, friends, and family in
France, our thoughts, our prayers, our hearts are with you tonight.
(INAUDIBLE) je suis Charlie.

THEO KINGMA, PRES., HOLLYWOOD FOREIGN PRESS: Together, we will stand
united against anyone who will repress free speech anywhere from North
Korea to Paris.

(CHEERS AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Christopher Dickey over there in Paris, were the people of
France that you`ve met with in the last several hours aware of what a big
deal that was to us over here, even if we weren`t well represented
officially?

DICKEY: Oh, I think there`s that understanding. And I feel -- I
think generally, people feel that the United States is very much behind
them. You know, it did have a big effect here earlier on in the crisis
after the "Charlie Hebdo" massacre when President Obama went to the French
embassy and signed the book of condolences. That was something that the
French people really responded to very quickly.

And you know, President Obama is much more, traditionally, up to this
day, as far as I know -- is a much more popular figure in France than
almost any French politician is. So I think that there`s a lot of sympathy
with Obama and there`s also a lot of sympathy with the American people.

And I know that they liked to hear George Clooney say the kinds of
things he was saying at the Golden Globes because it speaks to -- not only
to sympathy, but to culture, to the arts, all the things that the French
love.

MATTHEWS: Yes, they do. I just want to remind everybody of
something. When John F. Kennedy was killed and -- it was a year after
Charles de Gaulle of France, the president and war hero Charles de Gaulle,
had been almost assassinated, many bullets shot into his car. His four
tires were shot at. The OAS, the generals mad about the giving away of
Algeria and were trying to kill him and almost got him.

And yet he came over here, and there he is marching along to the
entire parade -- not parade, but the funeral march for John F. Kennedy. De
Gaulle came, even when he had been threatened and almost assassinated, he
came and stood up in that crowd and was part of our honoring of our lost
president. That was a big deal for us, and I think we ought to reciprocate
now and then. Lafayette, we are here. We should say that more often.

Anyway, thank you, Eugene Robinson, and thank you, Christopher Dickey.

And before we move on, I want to show you the latest cartoon, by the
way, by my friend, Chris Hammen (ph) over there. He was on the show on
Friday night. It shows, basically, the continued power of the pen over the
sword. Great picture there, and a great meaning.

Coming up -- Mitt Romney`s gearing up for another run. Perhaps this
is from the sublime to the ridiculous. But the Romney camp is taking pops
at Jeb Bush. The battle for the center of the Republican Party, such as it
is, appears to be on. I guess the Republican establishment thinks -- well,
I guess they think they can beat Hillary.

Also, federal prosecutors are recommending criminal charges against
America`s most famous general, General Petraeus. The question -- did
General Petraeus actually leak anything important?

Plus, President Obama`s calling for tuition-free community college.
House Democrats want a tax cut for the middle class paid for by the rich.
It looks like the Dems are finally getting into income inequality.

And I`m going to finish tonight with the case of Selma, voting rights
for all Americans.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Well, Paul Ryan says he`s not running for president in
2016. Ryan, who was Mitt Romney`s running mate, of course, in 2012, says
he`s at peace with his decision. I love the way people think. Anyway,
Ryan says he can make a big difference in his big new role as chairman of
the House Ways & Means Committee. This is the first time in history
anybody thought that was as important as being president.

Anyway, he also says he didn`t want to get ahead of Mitt Romney`s
decision making on his own potential presidential run. Nice courtesy
there.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. Well, we got a big story now.
Mitt Romney wants be president, and he`s saying so. The 2012 Republican
nominee shook up the 2016 race late on Friday when he told a group of party
contributors he`s actively weighing a third presidential bid. And today,
he`s almost certainly going to run, according to "The Washington Post."
He`s running.

Not only would Romney join an already crowded field of presidential
hopefuls, but it would pit him against another mainstream Republican and
rich guy, former Florida governor Jeb Bush, in a battle for the party`s
center. Jeb has already taken steps to differentiate his campaign from
Romney`s failed bid in 2012. He`s resigned from several corporate boards,
and he said he`s already prepared to disclose over 10 years of his personal
tax returns. Big deal there.

And in a subtle jab -- or not -- at Romney last month, Bush told a
local TV station that he wouldn`t succumb to pressure from the hard right
like Romney did in 2012. Let`s watch.

(BEGIN VIDEO CLIP)

JEB BUSH (R), FMR. FLORIDA GOVERNOR: He struggled in the primary
because the emphasis on subjects that he was uncomfortable with -- he got
off -- I think he got off message, and he got into -- sucked into the --
you know, to the...

UNIDENTIFIED FEMALE: Vortex.

BUSH: ... sucked into other people`s agendas, and I think it hurt him
a little bit. So winning with purpose, winning with meaning, winning with
your integrity is what I`m trying to talk about.

(END VIDEO CLIP)

MATTHEWS: Well, Romney`s people are returning the fire, of course,
saying Bush is too liberal for the party. In his article, "The Last
Temptation of Mitt," McKay Coppins of Buzzfeed reports that a former Romney
adviser said this of Bush.

"Look, Jeb`s a good guy. I think the governor likes Jeb," the adviser
said. "But Jeb is Common Core. Jeb is immigration. Jeb has been talking
about raising taxes recently. Can you imagine Jeb trying to get through a
Republican primary? Can you imagine what Ted Cruz is going to do to Jeb
Bush? I mean, that`s going to be ugly."

Anyway, with the barbs already flying, the first proving ground for
Romney and Bush will be the war to win the over the Republican donor base,
the money guys, the fat cats. And both candidates are able fund-raisers.
We know that.

Joining me right now is MSNBC political analyst David Corn of "Mother
Jones," looking at this from somewhat of an ideological distance...

(LAUGHTER)

MATTHEWS: ... and Robert Costa of "The Washington Post," who is
looking at it dead center.

Robert, I want to start with you, dead center. This guy, you
immediately are hearing Jeb is going to be centrist. He`s going to be for
respecting same-sex marriages. He`s going to be for immigration reform,
meaning people are allowed to come into the country to become citizens at
some point.

And what else? He`s for Common Core, he`s for educational standards.
And Romney immediately says, oh, you have principles? I`m going to screw
you. I`m going hard right on everything you stand for because I know you
really believe in it and I don`t believe in anything.

Is that what -- it sounds like that`s what Mitt`s saying. I don`t
believe in anything. I will go right across to the right.

ROBERT COSTA, "THE WASHINGTON POST": Look, calling around Romney
world, I get the sense that they see Jeb Bush as a possible entry. They`re
loving it. They think they can run to the right of Jeb Bush.

As you said...

MATTHEWS: On every issue.

COSTA: On every issue. And they like...

MATTHEWS: But what does Romney believe, though? Does he believe
there`s something wrong with common standards for education?

(CROSSTALK)

MATTHEWS: Does he believe gay people shouldn`t have unions of some
kind?

(CROSSTALK)

COSTA: He`s going to run as the conservative alternative, if he runs,
against Jeb Bush.

(LAUGHTER)

COSTA: Look, this is a -- remember...

(CROSSTALK)

MATTHEWS: You`re saying it so properly. It sounds like...

(CROSSTALK)

COSTA: Remember what Romney tried to do in 2008. Remember, Romney
tried to be that guy in 2008 who opposed John McCain?

(CROSSTALK)

MATTHEWS: What guy?

COSTA: The conservative alternative to McCain back in 2008.

DAVID CORN, MSNBC POLITICAL ANALYST: But then in 2012, he was
severely conservative. Remember?

MATTHEWS: Yes.

CORN: I think this is still, I think, to most people a fight between
two establishment-oriented candidates.

MATTHEWS: But one guy believes in something.

CORN: Yes, but they`re both kind of establishment-oriented when you
compare them to...

(CROSSTALK)

MATTHEWS: You don`t see a dime`s worth of difference. I do.

CORN: But I don`t think, on the basis of where they`re coming from
and where they stand in the party now, Romney may think he can run with Ted
Cruz and Rand Paul. I don`t think he can.

But it seems to me what they`re basically competing for, if you put
Romney up against Jeb Bush, is the right to make a salad at a cannibals
convention. They`re not -- he`s not going to be able to give the red meat.

MATTHEWS: But Romney is saying he will say what they want him to say.

(CROSSTALK)

COSTA: No, that`s not entirely true.

(CROSSTALK)

COSTA: Based on what I`m hearing in my reporting, Romney is actually
playing close attention to Jeb. When he`s talking to donors this weekend,
talking to a lot of senators, he`s talking about poverty. He`s talking
about economic empowerment. He is trying -- he knows he is going to have
to come to 2016 with a new message.

MATTHEWS: Yes, but that`s easy to talk like that, if you`re going to
hold the line on things like same-sex marriage, and not really letting
Hispanics become citizens and Common Core, all that right-wing stuff. If
you`re going to stick there, you can always say, of course I`m for the
little people, too, right?

(CROSSTALK)

COSTA: Romney knows he has to change to win a general election, to
not come across as the rich guy, the former Bain guy.

MATTHEWS: OK.

CORN: But when you have Rand Paul, and Ted Cruz, and Ben Carson, and
others in the race...

MATTHEWS: Rick Santorum is running.

CORN: ... running to the right of Jeb Bush...

(CROSSTALK)

COSTA: The Romney people think that is...

(CROSSTALK)

CORN: It won`t be so easy.

MATTHEWS: OK. Here`s what I think is going on, guys. I want to try
something by you both. Forget ideology for a second.

COSTA: Yes, sir.

MATTHEWS: Just forget it. They must think they want to get back into
the barrel again because they think they can beat Hillary, because if they
-- why would you want to get into that mess? Why would Jeb, who`s got
everything going for him -- he`s healthy. He`s a happy man. He`s a normal
person.

CORN: Yes.

MATTHEWS: Romney has got everything handed -- he`s got everything.
He`s earned it, but he`s got it. Why would they want to go back and get
the mud thrown in their face for two years, unless they think they can beat
Hillary?

CORN: Well, wait a second.

MATTHEWS: They must believe they can win this fight against Hillary.

CORN: Well, I think everybody gets -- and I think Rick Santorum
thinks he can become president.

MATTHEWS: No, no, no, no.

CORN: rMDNM_No, there`s a certain ego...

(CROSSTALK)

MATTHEWS: No, that`s a message candidate.

CORN: No, there`s an ego-driven quality that a lot of candidates
have. And it`s amazing how many people look in the mirror and believe they
can be the president.

MATTHEWS: No, they think Hillary -- they think Hillary, although
she`s very well-credentialed and smart and liked by a lot of people -- a
majority of the people like her -- they must think there`s a weakness
there.

CORN: They thought that Barack Obama...

MATTHEWS: They must think there`s a weakness there. I don`t know
what.

COSTA: The Romney people have told me they believe Hillary is very
weak on foreign policy. They think Romney could run as a heavyweight, even
though he doesn`t have the experience.

CORN: He`s never done anything with foreign policy.

(CROSSTALK)

COSTA: They think he can be a real rival to her.

MATTHEWS: I wonder whether they think that she might be part of the
bad Clinton past they can tag to her. Like, who was it that said the other
day she can`t run on the legacy of the `90s?

(CROSSTALK)

COSTA: That was Jeb Bush talking to donors in Greenwich.

MATTHEWS: And what`s that -- what did he mean by that?

COSTA: Well, Bush...

MATTHEWS: Is he going to smear her?

COSTA: Bush knows he has somewhat of a burden with his family name.

CORN: Yes.

COSTA: But he believes Clinton will be even more burdened by the
Clinton years and the Clinton reputation.

(CROSSTALK)

CORN: Yes. But that`s...

(CROSSTALK)

CORN: You`re putting the Iraq war against Whitewater. That`s not
something they win on.

(CROSSTALK)

CORN: They don`t win on that one.

MATTHEWS: That`s when we become soul brothers here. There`s no way
in the world that anybody can run and say we were right to go into Iraq, my
brother was right.

(CROSSTALK)

MATTHEWS: Take a look at this. An unnamed adviser for Mitt Romney
told BuzzFeed -- quote -- "Romney is not going to be intimidating by Bill
Clinton sitting in the front row of a debate looking at him."

This is the part that`s so legacy. "His dad ran for president. He`s
run before."

What a candy ass. Why would a guy say Mitt Romney can stand up to
Bill Clinton because his daddy ran for -- his daddy lasted about three
weeks in that race before he dropped out after he got -- he said that he
was brainwashed. He didn`t run for president.

(CROSSTALK)

COSTA: Romney`s driven a lot by his father`s legacy. And...

(CROSSTALK)

MATTHEWS: What was his legacy? How long -- how many weeks did he
last in that campaign?

COSTA: Not long.

(CROSSTALK)

COSTA: But when you talk to people -- when you talk to people who are
close to Romney...

MATTHEWS: He lost to Nixon.

CORN: Yes.

COSTA: ... they -- the Romney family considers themselves a major
family in American politics, not the stature of the house of Bush, but they
believe they can compete at that level.

This is a clan-vs.-clan battle.

(CROSSTALK)

MATTHEWS: OK. Here`s the question.

CORN: Yes.

MATTHEWS: Can anybody else really when it comes down to it -- we will
all be sitting here hopefully in October of 2016.

CORN: Yes.

MATTHEWS: We will be talking about the debates. We will be talking
about how close the election is probably going to be. And maybe the
Republicans are catching up to Hillary. Maybe not. Maybe she`s catching
back up to them.

Does anybody think somebody who`s not a mainstream person, like a
Romney or a Bush, can possibly be in that position with Hillary, running
head to head with her?

COSTA: Well, Cruz thinks he...

(CROSSTALK)

MATTHEWS: Head to head with her?

CORN: Well, you asking us or you asking the 12 other candidates
running?

MATTHEWS: I`m asking you.

Do you believe that anybody can run head to head with Hillary who`s
not a mainstream Republican like these two guys?

CORN: I think it will be very hard for -- I think Ted Cruz, Rand
Paul, any of these other types have a good shot at the Republican
nomination...

(CROSSTALK)

MATTHEWS: But not at being head to head with her?

CORN: ... and have a bad time in the general population, because, you
know, people have moved away from a lot of these hard-core...

(CROSSTALK)

MATTHEWS: I think...

(CROSSTALK)

COSTA: But the heart of the party is still with people like Cruz.

CORN: That`s right. That`s exactly right.

COSTA: So, for Romney and Bush, you got to maybe think about putting
one of them on the ticket if you win the nomination.

MATTHEWS: Well, then that party is about 30 percent.

Anyway, thank you, David corn. Thank you, Robert Costa.

Up next: Federal prosecutors -- this is tough -- are recommending
charges, according to "The New York Times," against America`s best known
and maybe most respected general. That`s David Petraeus. There he is.
How serious are these charges? That`s the question I want to try to get to
if I can tonight with Mike Schmidt, who broke the story for "The Times."

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL.

Well, "The New York Times" has reported that FBI and Justice
Department officials have recommended to Attorney General Eric Holder that
he bring felony charges against Four-Star General and former CIA Director
David Petraeus.

According to "The New York Times," the officials believe that Petraeus
provided classified information to his former mistress and author of his
biography, Army Reserve officer Paula Broadwell. The report also said that
the FBI discovered classified documents on Ms. Broadwell`s computer in 2012
after Petraeus resigned from the CIA and their affair became public.

Attorney General Holder was asked if he, or his successor, Loretta
Lynch, would be making the decision to prosecute Petraeus. Here he is.

(BEGIN VIDEO CLIP)

ERIC HOLDER, U.S. ATTORNEY GENERAL: I would expect that to the extent
that there is a matter of this magnitude, that would be decided at the
highest levels of the Justice Department.

(END VIDEO CLIP)

MATTHEWS: Well, that would be him.

Anyway, the reporter who broke that story for "The New York Times,"
Michael Schmidt, is here with me now.

Michael, I want to know -- I guess we can`t go to sources here, but
let me ask you about, is there any way we can tell from you, tonight, about
the gravity of what was leaked by Petraeus to his mistress?

MICHAEL SCHMIDT, "THE NEW YORK TIMES": Look, was David Petraeus
taking, you know, information -- classified information and giving it to al
Qaeda, or was she? No.

But did she have access to things that she shouldn`t have? That`s
what the Justice Department said was going on here. Basically, he had an
e-mail account, she had a way of looking at it, and he didn`t really do
anything to stop it.

MATTHEWS: But was it like coloration or what we call the business
ticktock, that kind of color? Or was it something truly evasive into
national security information? Was it something an enemy could use against
us? Do you know or not know? Do you know?

SCHMIDT: Well, no, no, no. What I do know...

MATTHEWS: Well, do you know?

SCHMIDT: Whoa.

What I do know is that it was stuff that was held by probably less
than a dozen people in the government.

MATTHEWS: Do you know the contents?

SCHMIDT: We don`t know specifically what the contents were, but we
also know that she -- she took stuff herself. She may have taken stuff
from him as well.

She was in Afghanistan with him. She worked on the biography of him,
whatever. And when they went into her house, they found all sorts of stuff
dating back to that time, not just when he was CIA director, when he was in
Afghanistan fighting the...

MATTHEWS: Is there any way that your sources know whether this was
intentional or not? I guess it was intentional, the leaking?

SCHMIDT: Well...

MATTHEWS: Or is it something she may have picked up from pillow talk?

SCHMIDT: No, no, no, this is not -- this is not that.

This is -- they believe they have evidence that he was -- he knew what
she had...

(CROSSTALK)

MATTHEWS: He was willfully helping her in her work by betraying his
responsibilities?

(CROSSTALK)

SCHMIDT: Correct. Correct. This is -- I don`t think they would be
getting -- they would be this far along and taking it seriously...

MATTHEWS: OK.

OK. Let me ask you about that, because maybe you can tell me, because
it`s -- a lot of people like this guy. I don`t certainly dislike him. I
respect anybody who served his country as long as this guy has, and I think
nobly most of the time until he got involved in this mess.

But the question is, the people who have to prosecute cases like that,
I assume, are public servants. I assume they have a public concern. Do
they believe that he was a bad guy in doing this? In other words, did he
do something that is criminal, not just technical, but criminal? Do they
believe that?

SCHMIDT: Bad -- bad guy, they`re not going to answer that, but
criminal, yes.

MATTHEWS: Well, they`re about to charge him with a felony.

SCHMIDT: Yes, but criminal, yes, criminal, yes. They believe...

MATTHEWS: So, they believe he`s a criminal?

SCHMIDT: But they -- but some people...

MATTHEWS: They believe he`s a criminal?

SCHMIDT: Yes. And some people believe there`s a double standard
here, that if he had been anyone else, he already would have been indicted
at this point and we wouldn`t be this far out.

We`re almost three years since it happened.

MATTHEWS: Yes. The reason -- the only reason I`m being skeptical,
it`s my job. But, number two, I know people like Ted Sorensen, who when he
left the Kennedy administration, he was accused of taking some of the
papers, using them, you know?

SCHMIDT: Yes.

MATTHEWS: And Sandy Berger and all that stuff.

SCHMIDT: Yes.

MATTHEWS: And I just wanted to know whether it was truly something
that truly endangered us or is was something that was just -- well, went
against the law.

SCHMIDT: Well, Sandy Berger pled guilty to a misdemeanor.

Deutsch, the CIA director under Clinton, was pardoned at the last
minute while he was negotiating a plea deal.

MATTHEWS: OK. What`s your hunch? They are going to prosecute?

SCHMIDT: I -- I think that we`re pretty far along in this thing.

MATTHEWS: Yes. It sounds like it.

SCHMIDT: And they`re pretty serious.

MATTHEWS: Sounds like it. Thank you, Michael Schmidt.

You would get a lawyer if you were Petraeus?

SCHMIDT: Yes. Williams & Connolly.

MATTHEWS: OK. They`re a good law firm.

Up next -- God, interesting. You already had the firm picked out.

Up next: between President Obama`s call for tuition-free community
college and the push for middle-class tax cuts, Democrats seem to be ready,
at least appear to be ready, to do something about the income inequality in
this country.

We will be right back. We`re going to get to that next with the
roundtable.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I`m announcing an
ambitious new plan to bring down the cost of community college tuition in
America. I want to bring it down to zero.

(CHEERING AND APPLAUSE)

OBAMA: I want to make it free. Community colleges should be free for
those willing to work for it.

(END VIDEO CLIP)

MATTHEWS: Free. That`s a magic word.

Welcome back to HARDBALL.

We have seen, by the way, a remarkable resurgence when it comes to the
energy of the Democratic Party since those midterm losses. They feel
liberated. Party leaders from President Obama to Elizabeth Warren have
tapped into the issue of inequality. That`s the big word now.

On Friday, President Obama unveiled a proposal that would make two
years of community college free for an estimated nine million students, no
tuition. And, today, the party unveiled a major piece of legislation to
combat income inequality and taxes that includes a $1.2 trillion tax cut
for the middle class, which could come directly from the pockets of Wall
Street high-rollers. At least that`s the plan.

Is this the new identity of the Democratic Party or the Democratic
wing of the Democratic Party? And how does this sound to the right? And
how are they going to respond?

The roundtable tonight, NBC News senior political reporter Perry
Bacon.

You`re too young to be senior.

(LAUGHTER)

MATTHEWS: MSNBC political correspondent Kasie Hunt, who is even
younger.

(LAUGHTER)

MATTHEWS: And MSNBC political analyst Howard Fineman of The
Huffington Post.

(CROSSTALK)

MATTHEWS: No more comments.

(CROSSTALK)

PERRY BACON, NBC NEWS SENIOR POLITICAL CORRESPONDENT: He can be
senior, right?

(LAUGHTER)

MATTHEWS: No. You are senior.

And let me ask you. We will start with you. You`re covering the
Hill. Is this for real, Chris Van Hollen, or is this just a precursor to
him taking off, knocking off Steny Hoyer in the battle for the succession?

(LAUGHTER)

KASIE HUNT, NBC CORRESPONDENT: I know that`s what you want it to be.

No. I actually...

MATTHEWS: No, I do. I do want a fight.

Go ahead.

HOWARD FINEMAN, NBC CHIEF POLITICAL CORRESPONDENT: This is called
HARDBALL after all.

HUNT: It is. It is.

MATTHEWS: I want a fight.

Is this about getting something done or posing?

HUNT: I think it`s about getting something done.

I also think that it`s about a realization that Democrats feel like
they didn`t go far enough this time around. They pushed forward policies
like pay equity for women, like the minimum wage. Everybody loves that
stuff. But the view, even among was that...

MATTHEWS: That`s point-of-purchase stuff. The big stuff in the
supermarket has got to be income inequality.

HUNT: Everybody is hurting. The middle class is shrinking. Wages
are going down. Everyone looks at that and said, you`re not doing enough.
And that`s I think what you`re seeing.

MATTHEWS: OK. With the economy rebounding a bit, is this a good time
to get on the team, the train, and say, look, it`s getting better, but
let`s divide it up a little?

FINEMAN: Yes. Yes, absolutely. And if I were a member of -- a
Democratic member of Congress who had lost in November, I would say, where
were you when I needed you?

MATTHEWS: Yes.

FINEMAN: I mean, where was this -- where was this tax plan before the
election? Where was the community college proposal before the election?

MATTHEWS: Well, where was it?

(CROSSTALK)

FINEMAN: It was buried by leaders in Congress who were afraid of
their own shadow.

MATTHEWS: Yes.

FINEMAN: And most of those are gone. What`s happening now is that
the Democratic Party on the Hill is -- and really I think almost...

(CROSSTALK)

FINEMAN: ... reduced to its essence.

MATTHEWS: I got a news flash. I got a news flash for you. The
Republicans are controlling the Hill now.

FINEMAN: Yes.

MATTHEWS: So, while they have had this -- this epiphany, to use a
literary term, and they now know that they should have been a bit more
left, a bit more populist, a bit more Elizabeth Warren...

BACON: Right.

MATTHEWS: ... guess who is calling the shots over there? Boehner and
the people

(CROSSTALK)

BACON: It is pie in the sky. We`re not going -- the Republicans are
not going to pass a $1 trillion tax increase. It`s a bit pie in the sky.

MATTHEWS: So, what`s going to come out of this?

BACON: This, I mean, I think you could see something, like tax
overhaul on the Democrats and the Republican sign unto that. Both parties
like tax cut, that`s different from --

MATTHEWS: OK. Republicans want to cut corporate taxes down to
nothing. Want to cut everybody`s taxes gown to nothing. Democrats want to
raise taxes for the rich. What`s the hybrid? What comes out of this as a
combination? Does anybody know? Is there a combination?

FINEMAN: Well, I think what -- Chris Van Hollen is not a radical, OK?
He`s -- the political scene in America has shifted so far to the right that
a Democrat proposing a middle class tax cut, that`s a tax cut, and talking
-- and the administration talking about college scholarships essentially,
that`s seen as a heavy duty populist message. I don`t think so.

MATTHEWS: Well, here`s Elizabeth Warren on the populist front now.
She`s been notched up another. Let`s take a look at her, another victory.

The president`s pick for a top job at treasury, Antonio Weiss, has
pulled his name from contention following a backlash from progressives like
her, Elizabeth Warren. She just took a trophy here. She knocked this guy
off.

KASIE HUNT, MSNBC POLITICAL REPORTER: She did, but don`t forget that
this is the only kind of thing she can pull off right now because of the
way everything else is set up with Republicans, because buried in the bills
that Obama has signed recently or is going to sign, this new terrorism bill
that was just passed, includes undoing some of those Wall Street reforms.
And that`s a second act from what we saw in the fall, with the big must-
pass spending bill included undoing a little bit of Dodd/Frank. That`s her
big thing. This is where she has the power --

MATTHEWS: Is she on the level -- I know everybody likes Elizabeth
Warren. I understand why. She`s saying something strong, in strong
language. When she went out against Citigroup, fine, that`s a smart move,
go after some big shot money group.

But she went after the Treasury Department. It turns out the Treasury
Department opposed the very feature she was railing against and didn`t give
them credit for it. Jack Lew and those boys were against that thing and
she acted like they were all in bed with them. It`s just not true.

BACON: But this appointee is a person of Wall Street. Maybe it`s a
sign to Hillary Clinton, Elizabeth Warren is here and she`s going to be
really pushing hard.

MATTHEWS: Let`s give her credit, let`s give her credit. Here she is,
she`s railing here against the Weiss nomination last month. Let`s watch
what she did to bring this guy down.

(BEGIN VIDEO CLIP)

SEN. ELIZABETH WARREN (D), MASSACHUSETTS: Weiss defenders are all in,
loudly defending the revolving door and telling America how lucky we are
that Wall Street is willing to run the economy and the government. I hope
you will join me in saying enough is enough.

(END VIDEO CLIP)

MATTHEWS: What do you make about her? What do you think -- do you
think Senator Warren is strong like Ted Cruz from the other side? I think
a lot more respectable, obviously. But she`s definitely talking with a
heat and an iron --

FINEMAN: Yes, the content --

MATTHEWS: It means like she`s running for something besides a bill.

FINEMAN: Yes. Well, she kind of speaks like the librarian, but she
talks tough on these issues. And nobody`s asked her in the last few days
or weeks, I think, are you running for president? She hasn`t denied it
lately. Since she hasn`t denied it, everybody`s convinced that she`s
running. We have a knew feature --

MATTHEWS: Does anybody -- Secretary Clinton, she doesn`t need -- you
know, she`s not a trickster, but, you know, the most successful thing that
Bill Clinton did was put Al Gore on the ticket with him. He made it about
generation. He made it about the South. He made it about something that
seemed real and exciting to the country, two women.

Why not? Why not two women running?

HUNT: Well, you know, she may --

MATTHEWS: Will somebody give me a reason why they can`t do it that
way?

HUNT: Well, I mean, the Hillary -- the conventional wisdom in the
Hillary Clinton camp is they can`t do that. I do think you hit on
something. If you saw the focus group Peter Hart did this week and he
asked voters --

MATTHEWS: Hillary didn`t do well in that.

HUNT: Jeb Bush`s name did not do well. Hillary Clinton did not do
well. The one person that stood out --

MATTHEWS: Rand Paul.

HUNT: Well, and Elizabeth Warren. There`s this hunger for something
new.

MATTHEWS: You cover the Hill. What is she running for?

HUNT: Well, I think that she has the ability to play a role in the
Democratic Party that we haven`t seen as much lately because we haven`t
seen people in opposition, right? I mean, Democrats have controlled the
White House. They`ve controlled the Senate all this time. All of these --
I think that`s partly what you`re seeing in this Chris Van Hollen plan.

MATTHEWS: Yes.

HUNT: And I think that`s what you`re going to see as this campaign
evolves. If she decides not to do it, you`re still going to see her using
her platform in the Senate to push Hillary Clinton to the left.

MATTHEWS: It all ends up with perhaps legislation between now and
`16, likely or not, depending on who Republican Republicans run the show.
Big speech at the Democratic Convention in `16 you expect in primetime from
Elizabeth Warren?

HUNT: Certainly a possibility.

FINEMAN: If Hillary were smart, she`d be watching everything
Elizabeth Warren is doing and do more of it, herself.

MATTHEWS: Yes, is that her? Is that Hillary? Is Hillary Clinton the
left?

FINEMAN: There`s a lot of time for the heat to build up on the left
side of the Democratic Party. We`re seeing only the beginning of it. We
have a new chart that we`re running at "Huffington Post."

MATTHEWS: But I`m asking you, Howard, my friend -- is Hillary a
Democratic progressive on the left or is she a centrist like her husband?

FINEMAN: I think she`s a survivor who wants to win and I think she`s
going to have to move in that direction and she better start doing it soon.

BACON: No, she`s not a voice of the left. That`s why Warren is
trying to shove her in that direction.

FINEMAN: Both can be true. They are complimentary.

The roundtable is coming back when we return a little later. Subject,
the big winner in last night`s Golden Globe was free speech. It was very
impressive last night, the way the serious people of Hollywood stood out
last night.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Well, actually, Democrats have a shot to take back control
of the Senate in 2016. But here`s a wrinkle that could complicate it for
the Dems. "Politico" reports Joe Manchin and North Dakota`s Heidi Heitkamp
both have their eyes on running for governor, not Senator for reelection in
their home states next year. Both are up for re-election in the Senate in
2018. But if they run for governor and win, they could open up seats that
would otherwise favor -- well, they could end up favoring Republicans.

Earlier today, a third red state Democrat Claire McCaskill said she`ll
stay in the Senate and will not run for governor. Everybody wants to be
governor. All senators really want to be governors.

Anyway, we`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE CLOONEY, ACTOR: Today was an extraordinary day. There were
millions of people that march not just in Paris but around the world.

(APPLAUSE)

And they were Christians, and Jews and Muslims. They were leaders of
countries all over the world. They didn`t march in protest, they marched
in support of the idea that we will not walk in fear. We won`t do it. So,
je suis Charlie.

(END VIDEO CLIP)

MATTHEWS: Je suis Charlie.

Anyway, welcome back to HARDBALL.

A few hours after world leaders linked arms in solidarity in Paris,
Hollywood stars put on their own show of solidarity at the Golden Globes.
George Clooney there and Jared Leto and the president of the Hollywood
Foreign Press Association only used the occasion to show their support for
free speech. Here they are.

(BEGIN VIDEO CLIPS)

JARED LETO, ACTOR: To our brothers, sisters, friends, and family in
France, our thoughts, prayers, our hearts are with you tonight. On vous
aime. Je suis Charlie.

THEO KINGMA, PRES., HOLLYWOOD FOREIGN PRESS: Together, we will stand
united against anyone who would repress free speech, anywhere from North
Korea to Paris.

(APPLAUSE)

(END VIDEO CLIPS)

MATTHEWS: Well, Helen Mirren, by the way, showed support on the red
carpet with a sign actually, and Kathy Beats waved a message of support on
her cell phone. And Amal Clooney, George`s new wife, wore a "Je Suis
Charlie" pin on her purse.

Anyway, Hollywood did itself proud I think last night by being serious
about this.

And I`m back with the roundtable, Perry, Kasie, and Howard.

Howard, you first. You know, a lot of these things are basically beef
parades, as one of the great characters once said out there, they`re for
show and sex.

I thought last night, besides having all of that had some seriousness.
I was proud of the fact that Clooney could speak so well about something
and the way he did it. And we weren`t over there. The president wasn`t
there. Somebody has to speak out.

FINEMAN: Two things, first of all, that event in itself is the --
stands for everything that the dictators and the theocrats are afraid of.

MATTHEWS: The three-hour show last night.

FIENMAN: Creativity, freedom of expression. So, the event itself is
always an answer to what was going on in Paris.

But in addition to that, you have people who are global figures who
have, because of social media, I think they`re more important than ever and
more connected than ever to people around the world. You have George
Clooney.

Yes, I think it`s stand in a way, George -- we didn`t have the
president or the secretary of state over there, but at least we had George
Clooney.

MATTHEWS: Let me go the other way --

FINEMAN: And that`s not to be dismissive.

MATTHEWS: Well-said. Let me go the other way, did you watch last
night?

HUNT: I did.

MATTHEWS: What did you think of Margaret Cho playing the North
Korean? I mean, I thought it was Mickey Rooney at Breakfast at Tiffany. I
mean, just making fun Asian people in that way, in that cartoonist way, do
you think it`s OK?

HUNT: I mean, I thought, you know, it`s like anything else -- humor,
borderline, we`re talking about these cartoons. I mean, we`re trying to
say humor is free speech.

(CROSSTALK)

MATTHEWS: North Korea is safe apparently now. Go after them.

HUNT: I loved Tina Fey and Amy Poehler joking about how we all had to
pretend "The Interview" was the movie was the movie that we wanted to see.

MATTHEWS: Can I interrupt you for something really important?

On last night`s episode of "The Good Wife" --

(LAUGHTER)

MATTHEWS: I played myself as moderator of that big debate for state`s
attorney between Julianna Margulies character, Alicia Florrick, of course,
and her opponent for state`s attorney played by David Hyde Pierce.

Here I am announcing that the debate has been canceled for the night,
my big role.

(BEGIN VIDEO CLIP)

MATTHEWS: We`ve got a problem.

UNIDENTIFIED MALE: What`s wrong?

MATTHEWS: We`re calling the debate off tonight.

UNIDENTIFIED MALE: Really? Why?

MATTHEWS: Frank Prady, he wants to delay.

UNIDENTIFIED MALE: Did he say why?

UNIDENTIFIED MALE: Tonight is not a night for political posturing and
30-second canned responses to questions about racial stratification.

(END VIDEO CLIP)

MATTHEWS: Perry, you watched it?

BACON: I did, no Golden Globes, I loved "The Good Wife". And, Chris,
you did a great job playing yourself, of course.

(LAUGHTER)

BACON: But, seriously, a really great episode, it`s a great debate
about Ferguson and what happened in Staten Island that came through in the
show. There was some of that in your, you know, mocked debate. There was
also some afterwards where the two main characters are debating in the
kitchen.

(CROSSTALK)

MATTHEWS: I thought it was great, one guy said we`re going to end
racism in America. And they say, no, we`re just going to get a better
states attorney`s office. Let`s no over-large our role here.

Anyway, Perry -- yes, Kasie?

HUNT: I just was going to say. Julianna Marguiles wants strong women
on television. One of the other things that came out of the Globes last
night was Maggie Gyllenhaal who gave a quite lovely piece about the role of
women and Hollywood and how they`re showing more real women on the --

MATTHEWS: Who are both good and bad, and they`re not all -- they`re
not angels.

HUNT: Right, they`re real. Right.

MATTHEWS: Real people, and I agree because Marguiles plays someone
bad once in awhile as well.

Perry, my friend, my good friend.

Howard?

FINEMAN: I didn`t see it.

MATTHEWS: I know.

(LAUGHTER)

MATTHEWS: Thank you, Kasie Hunt. Thank you, Howard, for joining us
tonight.

When we come back, I`ll be back, let me finish with a powerful new
movie, "Selma." I criticized some of the history in this book, this movie.
What a powerful movie, what an important movie to go see.

I`ll be back after this.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with "Selma", that powerful new film
Kathleen and I saw over the weekend.

Look, I still have some real concerns with the way it portrays Lyndon
Johnson, what it says about his role, it`s simply not true. It didn`t
happen. Johnson was a committed fighter for civil and voting rights. And
as I said last week, anyone who doubts, he was a good guy in those fights,
should pay attention to what happen to his party afterwards. From the day
Johnson passed the civil rights bill in 1964, and just as he predicted, the
white South would kissed him and his party goodbye, and it sure it.

Whatever you think about politicians, or even white politicians of
that era, a good number of them got together and passed the Civil Rights
Act of `64, and the Voting Rights Act of `65. They did the right thing for
their time and for history.

But back to the power of this film, this wondrous portrayal of the
people, Martin and Coretta King, and Andrew Young and John Lewis, and all
the others who stuck their necks and lives out for voting rights, who led
their people to do the same.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: As long as I am unable to exercise my
constitutional right to vote, I don`t have command of my own life. I
cannot determine my own destiny, what is determined for me by people who
would rather see me suffer than succeed. Those that have gone before us
say no more. No more.

(END VIDEO CLIP)

MATTHEWS: If you can`t be moved by that, you can`t be moved. That
scene reminded me what it is so important to keep up that fight for voting
rights today, against all those and for whatever reasons are ready to
trample on the rights of their fellow citizens. As I see it, it is a fight
that needs to be fought today and tomorrow. And we`re going to cover that
fight with an open prejudice here toward those who believe all Americans
have a right to decide their country`s future. It is a matter which I`m
particularly proud to lean forward.

And 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.
END

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