updated 11/11/2004 10:52:51 AM ET 2004-11-11T15:52:51

Guest: Hanan Ashrawi, Dennis Ross, Pete Domenici, Jon Meacham, David Ignatius

CHRIS MATTHEWS, HOST:  President Bush picks White House Counsel Alberto Gonzalez to succeed Attorney General John Ashcroft today. 

What other changes might be coming in the new Bush administration? 

And as the Palestinian‘s prepare for the death of Yasser Arafat, does his passing pave the way for peace in the Middle East?

Lets play HARDBALL. 

MATTHEWS:  Good evening, I‘m Chris Matthews.  White House Counsel Alberto Gonzalez is President Bush‘s pick to fill the role of attorney general.  The announcement comes one day after John Ashcroft resigned the post as part of the cabinet‘s shake-up expected in the president‘s second term. 

For a look at Bush II, the new administration, we‘re joined by Jon Meacham, managing editor of “Newsweek” magazine. 

And David Ignatius, associate editor and columnist for the “Washington Post.”  Let‘s start with you, David.  The big question, is the president going to lean toward his culturally conservative base that helped him win this electric or is he going down the middle and try to win history? 

DAVID IGNATIUS, “THE WASHINGTON POST”:  I think the conventional pundit view is that he‘s now playing for history.  He doesn‘t to have run again.  Obviously, he has appealed to the base powerfully this election.  And I think he wants to be remembered as a president who succeed in the doing important things and maybe even bringing the country back together. 

You know, the area I look at the most, foreign policy, the job one for him is to find a way to create a national security process so he only has one foreign policy.  For much of the first term, he had two.  He had Powell and Rumsfeld at war, and he‘s got to figure out a way to end that. 

MATTHEWS:  We‘ll lets get back to that in a minute, because I want to talk to you about Condi Rice.  Is she up or out is my question?

Let me go to John Meacham right now, the new administration, I guess, owes itself to a strong Republican vote, 97 percent turnout by the party.  What a tremendous party unity. 

Number two, with the Hispanic vote, way up to 44 percent, which is a huge vote for a minority to vote Republican.  And third, of course, the Christian right.  The people of the evangelical background, conservative Catholic.  Was today a payoff to that Hispanic group, that voted 44 percent for the president, Alberto Gonzalez. 

JON MEACHAM, “NEWSWEEK” MANAGING EDITOR:  I don‘t think so.  I think Gonzalez has been close to Bush from the beginning.  I think that he will represent something that I believe the president‘s going to push to go to David‘s point for the rest of the term, which is, this is a man who ran and won, barely, as a compassionate conservative four years ago.  And I think was really radicalized by Florida.  We‘ve talked a lot about how the Democrats were radicalized by the recount in Florida in 2000.  I think President Bush was in a way, and had a kind of chip on his shoulder for four years. 

Now, having the majority, having what he thinks is a clear mandate, I do think he‘ll be playing for history.  He doesn‘t have to go back and face the voters again.  And he wants to build a governing majority.  And to do that, you have to keep the base happy but you don‘t have to kowtow to them. 

MATTHEWS:  Well, a friend of mine once said, in terms of his relationship with women I think it was, people don‘t mind being used but they mind being discarded.  I‘m serious.  You‘re laughing Ignatius, but the fact is do you think the cultural right having gone to the polls in unusual number are going to feel used and discarded by this president if he picks a middle of the road type for the court, for example? 

IGNATIUS:  I think the truth about this election is that the cultural right, the religious conservatives did not elect George Bush President again.  He had the majority of the country with him, the radical right is a small part of the country. 

MATTHEWS:  It was like selling the last newspaper though.  Didn‘t it take him over the top? 

IGNATIUS:  You know, certainly in Ohio they were crucial.  And you know the issues, the hot button issues that Rove pushed were important.  But I do think that Bush understands, he needs to be president for the whole country.  He doesn‘t off the worry about that base, they love him.  They‘ll love him almost no matter what.  I think court nominations, he wants to pick justices who can be confirmed.  He doesn‘t want...

MATTHEWS:  He doesn‘t want a three month fight like (UNINTELLIGIBLE)

IGNATIUS:  Three month fight, it will be year fight if he picks people...

MATTHEWS:  Do you agree with that?  Do you agree with that, Jon, he wants to get someone confirmed in a reasonable time? 

And not have a prolonged Borke type or Clarence Thomas type fight? 

MEACHAM:  Absolutely.  I think President Reagan is exactly the model here.  You know, the second terms always end either in triumph or tragedy.  You know, we‘ve had Watergate, we had the U-2 with Eisenhower.  Reagan managed to do both, he had Iran/Contra but he also stood in Red Square and put his arm around Mikhail Gorbachev.  I think...

MATTHEWS:  But why don‘t they get in the back room? 

I mean, I hate to sell old backroom politics, but why don‘t they go find a guy who is relatively strict constructionist in his view of the constitution, not some wild landmark seeking judge from Virginia or somewhere?  And get this guy up there and say Ted Kennedy, you‘re going to vote against him, but can we have vote on this guy, and try to get somebody who can get 60 votes and break filibuster and get it over with? 

Why don‘t they do that?  Cut a deal in the back room and get it over with.

MEACHAM:  I think they probably—I don‘t think they will do it in the back room, but I do think they want to have a quick confirmation when they have it.  I think it‘s possible that the president might try to elevate Justice O‘Connor to chief justice in order to get someone slightly more conservative in.  Remember that‘s what Reagan did with Rehnquist and Scalia.

MATTHEWS:  Will that jack up Norman Leer in the usual suspects or will he quiet down on that one? 

IGNATIUS:  No, I think Justice O‘Connor would be acceptable to everybody.  She has been the key defender of Roe v. Wade. 

MATTHEWS:  But she has been the critical to this delicate balance in the United States Supreme Court. 

IGNATIUS:  She has been critical.  She is—she is the symbolic figure of this court and there‘d be some justice in her being the chief justice.  But I think...

MATTHEWS:  Do you think they know that, David? 

Do you think the Republican political people like, I don‘t mean the true believers, but I mean people like Karl Rove who are basically professionals, do they know that Sandra Day O‘Connor has saved their bacon by preventing the court from outlawing Roe v. Wade and sort of thrown it—will throw it all back to the states?  And every Republican politician in the country is going to fight against abortion rights. 

IGNATIUS:  Well, lets for starters, I think that they know that owe the fact that they‘re in the White House to Justice O‘Connor, you know, in particular in terms of the Florida case that got them there in 2001.  You know, I think as they look at the court, they understand.  They have a divided country, they could go hard right, but they‘ll have terrible confirmation.  And more to the point, you know, Bush will lose the opportunity to be a uniter.  I have the sense, from what he said immediately after the election, he actually wants to be that person. 

MATTHEWS:  I think one thing we‘ve learned, is this true, Jon, that what I‘ve learned from the president is, take him at his word. 

MEACHAM:  Absolutely.

MATTHEWS:  If he says he‘s going to do something, he‘s going to do it and stop getting complicated about it.  Here‘s two things that might be heart warming for both of you follow up.  You both believe he‘s going to go to the center and try to be a effective leader and united.  He seem to have selected two negotiable issues.  You can‘t negotiate abortion very easily.  You can‘t negotiate gay marriage very easily.  I can‘t think of how to do it.  But you can negotiate tax rates, tax simplification, and saving social security. 

Jon, it seem me both those lend themselves to numerical solutions. 

Is that a good sign for a healthy government? 

MEACHAM:  Well, to stay in context here, if you go to the sermon on the mount, the two issues are God or Mammon, Bush is going for Mammon.  And you can cut a deal on those things.  He‘s pushed those hard.  One of the little noticed things in the last weeks of the campaign is that President Bush came out for gay civil unions.  So, in an interesting way, that sort of already settled. 

MATTHEWS:  I think he said it was up to the states to do it.  He took a little edge off it.  But you‘re right, by the way, 2/3 of the country is for something like that, even though only 26 percent are for gay marriage. 

They don‘t like the word marriage I don‘t think. 

MEACHAM:  Exactly.  And I just think, again, to go back to Ronald Reagan, the great icon of the right, he ran on school prayer.  He ran on a pro-life platform.  They put out a book under his name in the middle of the first term, and he never did a thing to really push those issues.  He spent his second term negotiating with the Soviet Union and helping bring about the end of the Cold War, not the end of the culture wars.  And really kind of ignored that part of the world as he pushed forward.  And Bush, I think, as we‘ve all pointed out from time to time, has a lot more in common with Ronald Reagan than he does with his own father.  And I think they‘ve study that had model. 

MATTHEWS:  You know, I think that‘s interesting.  I think Reagan was always smart to stand—he always addressed the Catholic that‘s came to town every year for the Right to Life Marches by public address.  He never actually showed up at the rallies, which was very metaphorical I think. 

Let me ask you, your specialty is foreign policy.  You write great novels about it, like firing a fence.  David, let me ask you this, how do you bring people together on Iraq? 

It is about 50/50.  Could he do something the present, like FDR did with Wendell Willkie, and then he sends him to Europe as his emissary? 

Is there anyway he could bring, Kerry aboard?

IGNATIUS:  Kerry, would absolutely be the wrong person to have do that.  You know it‘s interesting to speculate...

MATTHEWS:  How about Biden? 

IGNATIUS:  Well, Biden, I‘m not sure he‘d be the right person either. 

I keep wondering if Bush is going to figure out a way to use Bill Clinton.  I mean, if you wanted a Middle East peace emissary, Bill Clinton would be a fascinating choice.  If you wanted somebody to go to Europe, Europeans still love Clinton there.  They‘re nuts about the guy.  You know, I think that Bush...

MATTHEWS:  He may want to do it, because he seems to—you hear rumors—reports he may want to be secretary general of the U.N.  And he can always freshen up his resume by doing something wonderful. 

IGNATIUS:  Well, you know, it definitely polish is resume.  I think Bush has a fascinating problem with Iraq.  We‘re in the midst of the decisive battle of the war.  You know, it‘s going to go well in the limited sense that we‘ll sweep through Fallujah.  But the political problems are the same as always.  The same catch 22.  You stabilize Fallujah, but then the Sunnis who live there are driven away from the possibility of coalition. 

And I think that Bush is going to  struggle with that.  You know, Kerry, many days in the next couple months is going to be saying, I‘m glad I don‘t have to worry about.  I‘m glad this isn‘t my problem.  I don‘t think there‘s an easy way out of this one.  I think some point next year, you know, Bush is going to need the help of the United Nations and Europe to find a way basically to begin pulling America back from this commitment.  Lets not say pull us out, because I don‘t think he can do that easily, but pull us back. 

MATTHEWS:  Your thoughts on that, Jon, how we can get out of there at the right time and having accomplished something? 

MEACHAM:  Well, I think David is right, I think it will be an international solution.  I think one of the little told stories of the last say eight months has been that President Bush has more or less moved toward the multilateral position after spending a year or so being very Churchillian, very unilateral, staring across the desert alone.  That appealed to his vision of himself and his vision of the country.  But I do think now reality has intruded and I think they understand that.  I think what you said a minute ago is exactly right. 

Bush says things and he means them.  And it perplexes his opponents in many ways.  Bush has done to the left what Clinton did to the right which is drive them bonkers in many ways.  And so the left has a very hard time giving Bush credit for anything.  I think one of those interesting stories that is going to come out of this election, and we‘ll be talking about it a lot in the next couple of months, is not red versus blue America but what people are now calling purple America.  The idea that we may disagree but we‘re not divided as much as we think.  We may be, have different opinions on important things but nobody really hates each other.  I think the extremes are driving this to a large extent. 

MATTHEWS:  Can I be tougher?  The Democrats believe what they said, they believe what the other guy said.  Too much of the Democrats‘ position in the last election was putting up positions they didn‘t firmly believe themselves simply to get past the election.  Is that tough enough? 

MEACHAM:  I think that Iraq, when it comes to Iraq, when you have lives on the line, it‘s a real thing.  It‘s not just some pop-off kind of issue.  People are going to have to cooperate and come together and I think Bush now has, let‘s use the M word.  I think he has a mandate to go up there, both to the hill, try to get them back on board and then to come up here to New York and do the same thing over on the east side. 

MATTHEWS:  Well, he has one thing going for him in his campaign.  I‘ll say this 100 times before inaugural day.  The best line—the worst line was “I voted for the $87 before I voted against it.”  The best line was that throwaway line in his acceptance speech, “well, you know where I stand.”  That was a great line.  We‘re coming right back with more for more with Jon Meacham and David Ignatius.  And later my interview with Anana Schwari (ph) of the Palestinian Legislative Council on the prospects for peace in the Middle East after Yasser Arafat.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with Jon Meacham, managing editor of “Newsweek” magazine and David Ignatius, associate editor and columnist for the “Washington Post.”  Let me to go Jon Meacham.  If you think about it, if you were George W. Bush‘s best friend and you were having a best drink with him, although he doesn‘t drink anymore, and you were advising him on the big pieces he has to put together to put his place in history and have a real shot at grandeur as a successful president and also helping the family name and succeeding in the long term, what would you say? 

MEACHAM:  I think what I would tell him to do, what I would suggest that he do is try to figure out a way to explain what he‘s undertaken in the war on terror and the war in Iraq in clearer and simpler terms than he has already.  I think that he has made an enormous historic bet that we won‘t know the result of for years to come.  And it is not a cowboy gesture out there just to show he could do it.  But a real attempt to remake, to transform a part of the world that frankly needs transforming and remaking.  And I think that someday, we may look back on what Bush did in the Middle East in the same way we look at what Franklin Roosevelt did with the United Nations or with Truman and containment.  I know the left hates that and will scoff at my saying that.  But it is possible.  We can‘t judge these things when we‘re in the middle of the storm.  Churchill once said, the future is unknowable but the past should give us hope.  And I think that‘s right.  So if I were the president, I would try to be as headmasterly, as schoolmasterly as possible and really explain the stakes of what he has undertaken there. 

MATTHEWS:  David Ignatius, at home what should he be trying to do? 

IGNATIUS:  I‘m going to shock you by saying, I don‘t think the president‘s biggest problem as he starts his second term is Iraq, although that is a huge problem.  His biggest problem is the U.S. economy and the international perceptions of that economy.  He is running huge deficits, both the budget deficit which is running well over $400 billion, and may balloon even more, and a trade deficit that has been running at record levels. 

And as the financial markets, the currency market, trading dollars, the bond market trading expectations about the macroeconomy look at these numbers, they‘re scared.  The most interesting thing that happened after the election, in terms of economics, is that the bond and currency markets both were very negative.  The dollar by last Friday hit an all-time low against the euro. 

What Bush has to do somehow is convince the markets that he‘s serious about putting the nation‘s fiscal house back in order.  I think that his announcement that he plans to create a commission to look at fundamental changes in tax policy conceivably, if the commissioners are people who the financial markets take seriously, could reassure them just enough to stave off the crisis that otherwise is just over the horizon.  If that happens, Chris, if you begin to have Chinese dumping dollars, the dollar goes from 1.30 to the euro up to 1.40, up to 1.45, and people look at U.S. stocks and say, I can‘t invest in the U.S. stock market.  It is losing money every week as the dollar goes down.  So they sell stocks.  And you have a serious financial crisis. 

MATTHEWS:  So he has to do something on strengthening our revenue sources. 

It‘s not just simplifying the tax system.  It is getting revenues. 

IGNATIUS:  Somehow he‘s got to get revenues up but I think the way to begin the process is to get a simpler system that looks to people fairer and then you begin to do something...

MATTHEWS:  I don‘t think we should have to hire accountants to do our taxes.  I think everybody is doing it now because it is getting so complicated. 

IGNATIUS:  It is complicated.  Everybody hates the tax system.  Bush has a huge opportunity to kind of roll the dice. 

MATTHEWS:  And if the Democrats were smart, they would join in.  Because the tax system is what is encouraging most people at the congressional level to keep a Congress that‘s Republican year after year. 

IGNATIUS:  Robert Manuel, one of the smartest Democratic congressman on the Hill is introducing a fundamental reform of the tax code bill.  And he knows it is a winning issue. 

MATTHEWS:  It is a winning issue.  People are tired of it.  Thank you, Jon Meacham, thank you David Ignatius.  Lot of longheaded thinking here.  Up next, as the Palestinians plan for Yasser Arafat‘s funeral, HARDBALL‘s David Shuster takes a look at state funerals of past world leaders and how this one stands out.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Yasser Arafat remains in a Paris hospital.  And the Palestinian foreign minister says that Arafat has suffered both kidney and liver failure.  Arafat‘s death will put the United States and other western allies in an awkward position regarding his funeral.  Here‘s HARDBALL correspondent David Shuster. 

DAVID SHUSTER, MSNBC CORRESPONDENT:  Well Chris, even though it is still not clear what Arafat‘s condition really is, leaders across the Middle East are preparing for a send-off fit for a head of state. 

(BEGIN VIDEOTAPE)

SHUSTER (voice-over):  When you think of a funeral for a larger than life leader from the Middle East, you may think of the majestic gathering of the late King Hussein of Jordan.  In 1995, there were more than 100 dignitaries for the funeral of Israeli Prime Minister Yitzhak Rabin.  And who could forget the sadness the world expressed 23 years ago during the ceremony for Egypt‘s Anwar Sadat. 

On the world stage, Yasser Arafat is just as well known.  But he is not for making peace.  In fact, for much of Arafat‘s life, he helped Palestinians terrorize and try to destroy Israel.  11 years ago, the P.L.O.  Leader had a brief change of heart, shaking hands at the White House with Israel‘s Rabin.  But the hope from that day faded, as Arafat repeatedly rejected offers for a Palestinian state.  Arafat rejected the last offer, the most generous of all, during the Clinton administration because he didn‘t want to give up on an Arab right of return to Israel. 

In recent years, Arafat seemed to encourage attacks on Israeli civilians, including wave after wave of Palestinian suicide bombers.  And administration officials say Arafat personally lied to President Bush two years ago about the 50 tons of Iranian weapons intercepted by the Israeli Navy. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  I have been disappointed in Chairman Arafat.  I think he has let the Palestinian people down.  I think he has had an opportunity to lead to peace and he hasn‘t done so. 

SHUSTER:  So Arafat‘s funeral will be different. 

The White House is not going to send any high level dignitaries, perhaps only lower level representatives from the State Department. 

The funeral itself will be in Egypt.  Most Arab leaders still don‘t recognize Israel‘s right to exist, so the gathering near Cairo will enable them to attend without having to get permission to travel through Israeli air space.

Arafat‘s burial will take place the next day in the West Bank town of Ramallah.  Some European leaders are expected at the funeral, others are not.  Given their own frustrations in recent years with Arafat‘s intransigence. 

In the meantime, Israel‘s military is bracing for possible riots as the emotions of the Palestinian people intensify. 

(END VIDEOTAPE)

SHUSTER:  The Bush administration is being very cautious in how it talks about Arafat.  But at the same time, Chris, officials are privately thrilled with Arafat‘s demise.  They see this as a huge opportunity to try to improve relations now between the Israelis and Palestinian. 

MATTHEWS:  Let‘s hope so.  Thank you, David Shuster.

Up next, Palestinian legislative counsel member Hanana Shwari, on what is ahead for the Palestinian leadership after Yasser Arafat.  You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  This half hour on HARDBALL, peace in the Middle East after Yasser Arafat.  I‘ll talk to Hanana Shwari of the Palestinian Legislative Council.  And also, former U.S. envoy, Dennis Ross.  But first let‘s check with the MSNBC news desk. 

(NEWS BREAK)

MATTHEWS:  Welcome back to HARDBALL.

Palestinians are preparing for Yasser Arafat‘s death and the eventual power struggle that may take place in his absence. 

Earlier today, I spoke to Hanan Ashrawi of Palestinian Legislative Council.  I asked her to explain the relationship between Arafat‘s wife, Suha, and other Palestinian leaders. 

(BEGIN VIDEOTAPE)

HANAN ASHRAWI, PALESTINIAN NEGOTIATOR:  Well, Suha Arafat is a Palestinian.  She‘s the wife of the president. 

MATTHEWS:  Well, what authority—what authority does she have? 

ASHRAWI:  Oh, according to law, she doesn‘t have any political authority.  Like any wife of a head of state, she may engage in civil society activities and charitable activities, even in women‘s activities.  But, at the same time, she has no official political role within the Palestinian structure. 

MATTHEWS:  Does she have any fiduciary responsibilities for the Palestinian state, any financial authority at all over Palestinian funds? 

ASHRAWI:  No, no, she doesn‘t at all.  I mean, she probably will have an income or she has an income.  The president used to supply her with a very generous income.  But in terms of any type of responsibility or rights or powers in relation to the Palestinian state, the Palestinian Authority, no, she does have none. 

MATTHEWS:  As far as you know, does she have—is she holding any money for the Palestinian people, any public money in France in any of the banks over there? 

ASHRAWI:  I‘m afraid I have no idea, because I have not and I never intended to be—I have not been involved in any financial activities. 

But it is clear that President Arafat never had money in his own name.  He has held money in different people‘s name, different organizations‘ name.  And now the P.A. money itself, the budget is in the name of the, of course, Ministry of Finance and with the very clear regulatory procedures. 

But, other funds, I have no idea about.  And some of his financial advisers have stated clearly that he didn‘t have any money privately registered in President Arafat‘s names.  He may have had accounts in other people‘s name. 

MATTHEWS:  Are the Palestinian people concerned that some of the moneys that were coming to the Palestinian Authority, either from governments or private organizations, has found its way into banks in France or elsewhere that only Arafat knows about, that only his wife, Suha, knows about, and may be lost by the Palestinian people? 

ASHRAWI:  Well, right now, this is not the main concern of the Palestinian people.  Everybody is concerned about President Arafat‘s health. 

MATTHEWS:  Right. 

ASHRAWI:  I mean, everybody here is concerned also about succession and maintaining institutional and constitutional work. 

There will be moneys who will be lost, I‘m sure.  I‘m sure.  But, recently, there has been a strong reform movement to try to make all the institutions transparent and to try to have a foolproof system of accountability s.   the recent funds are accounted for.  But if there are private funds and private investments and so on and moneys that were earlier on placed in other accounts, we do not know.  His financial advisers will be looking into this. 

(CROSSTALK)

MATTHEWS:  All right. 

What sort of constitutional reforms would make that possible, would make transparency required by the Palestinian Authority? 

ASHRAWI:  Well, our constitution, the basic law, does demand transparency.  We do have a three-tiered system of reform now, whether at the national level, dealing with the administrative and financial reform, or at the legislative level, dealing with legal and constitutional reform, or even at civil society, where we have a coalition for accountability and integrity.  And I‘m a member of all three. 

So there is an active and vibrant reform movement.  The thing is, we need adhere to the existing laws.  We need to respect the basic laws.  Recently, there was an attempt to try to change or amend the basic law, and particularly on the issue of the speaker taking over for 60 days as president of the P.A. until we have elections.  Some people started talking about the difficulty of having elections under occupation. 

This move has been defeated, fortunately.  The basic law will not be changed.  We will adhere to the provisions of the law.  We will have the transition when President Arafat passes away.  And that transition will be headed by the speaker of the legislative council.  And we need to have free and fair elections for the president. 

This means we need third-party assistance to ensure this freedom and to make sure that the Israeli occupation will not interfere with or distort the results of the elections. 

MATTHEWS:  Do you have any hope or confidence that the prime minister of Israel, Mr. Sharon, will be helpful to this transition? 

ASHRAWI:  I think, so far, our experience with Prime Minister Ariel Sharon and the Israeli occupation as a whole has been disastrous. 

We have seen nothing but an escalation of violence, lack of cooperation, a total withholding of any type of cooperation, be it political negotiations or even human consideration, even the president‘s ill health and frailty and so on.  There were some really cruel and heartless statements made. 

And even with his funeral, they‘re not going to allow him to be buried in Jerusalem, and Jerusalem is—Jerusalem is Palestinian territory.  It is Israeli occupied territory.  So even that, we haven‘t seen any cooperation.  Hopefully, the international community, the U.S. and Israel will understand that there is a need, not just for human and humane consideration, but for very responsible and wise political decisions pertaining to the launching of a genuine and substantive peace process and for curbing Israeli violations and excesses when it comes to the siege, the fragmentation, the assassinations and the incursions. 

MATTHEWS:  When Yasser Arafat passes away, are you confident that the Israelis will let the Palestinian people bury their leader in Ramallah, at least temporarily?  

ASHRAWI:  We have had that assurance.  As it stands now, there will be two sort of services.

One that will be under Arab auspices, so to speak, the Arab League and so on, will be held in Egypt in Cairo.  The Egyptians have announced this, so that President Arafat will be lying in state in Egypt and all heads of state and all officials, Arabs and so on, will be able to see him there.  He sort of will be embraced by the Arabs. 

Then he will be brought in and he will be—there will be a lying in state at the Muqata just behind me at his ruined headquarters, where the people, the Palestinians, will be able to come and see him.  We are worried that they will impose a closure, so that not all the people from outside Ramallah will come, because we are fragmented and we are in a state of siege. 

But they have agreed that they will allow him to come back.  There will be a public viewing, a public farewell.  And he will be buried right here in the Muqata, but only temporary, because, ultimately, and when we have final peace agreement and East Jerusalem is no longer under occupation, he will be buried at the Haram al-Sharif, which was his only wish, actually. 

MATTHEWS:  Hanan, thank you very much for your time today.  It is great to have you on HARDBALL, Hanan Ashrawi from Ramallah.  Thank you for joining us today. 

ASHRAWI:  Thank you, Chris.  It‘s my pleasure.  Thank you. 

(END VIDEOTAPE)

MATTHEWS:  When we come back, former U.S. envoy to the Middle East Dennis Ross on what the Bush administration can do now to help bring peace to the region. 

And don‘t forget, sign up for HARDBALL‘s daily e-mail briefing.  Just log on to our Web site, HARDBALL.MSNBC.com.

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, former U.S. Mideast envoy Dennis Ross on what the Bush administration can do now to help bring peace to the Middle East - - when HARDBALL returns.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

For 12 turbulent years, as the U.S. envoy to the Middle East, Dennis Ross was at the heart of the Israeli-Palestinian negotiations.  And he personally met with Yasser Arafat more time than anyone outside the Palestinian leader‘s inner circle.  He has chronicled his experience an historical book entitled “The Missing Peace: The Inside Story of the Fight For Middle East Peace.”

Dennis Ross, thank you. 

DENNIS ROSS, FORMER U.S. ENVOY TO MIDDLE EAST:  Nice to be here. 

MATTHEWS:  I think it was you that sort of isolated the bargaining position of Yasser Arafat.  And you did it here on this show, as well as in your great book, that he would never give away the prospect of eliminating Israel as a Jewish state.  Is that right?

ROSS:  That‘s right. 

Arafat could never live without his myths on the one hand, but also he could never close the door and foreclose options.  He could live with Israel for a while, but he never wanted to rule out the possibility that some day, there would be only one state.  And it would be a Palestinian state from the Mediterranean Sea to the Iraqi border.

MATTHEWS:  And the way he did that in the end was rejecting the Taba agreement, the Camp David agreement, because it didn‘t provide for a right of return by Arabs to Israel proper. 

ROSS:  That‘s right. 

That was the essential claim that he had to preserve.  When I say he could never close a door, he could never give up his claims, this is the way he kept the options open.  This is the way he always kept the cause alive.  And Arafat and the cause were one and the same in his mind. 

MATTHEWS:  Mahmoud Abbas, is he the comeback kid over there?  Because he was knocked over.  He was submarined by Arafat himself and now he seems to be reappearing as perhaps the heir apparent. 

ROSS:  You know, one of the interesting things about Mahmoud Abbas—

I‘ve always known him as Abu Mazen. 

One of the interesting things about is, he would get fed up with Arafat.  He was with Arafat since 1965. 

MATTHEWS:  Right. 

ROSS:  He would get fed up with Arafat and from time to time he would simply take himself out of the negotiations.  And I wouldn‘t see him for two or three months. 

And then Arafat would say, please come back, and he would come back.  When he resigned a year ago, and gave up the prime ministership, one of the things he told me was, look, Arafat subverted me every day.  And I wasn‘t going to put up with it.  But I‘ll wait.  At some point, there will be a time, because I still have something to offer the Palestinian people. 

MATTHEWS:  Let‘s talk about money. 

ROSS:  Yes. 

MATTHEWS:  When there‘s aid givers, when the world always—the European world is always being very openly sympathetic to the Palestinian cause, when they give them money, when nongovernmental agencies, organizations, give the Arafat crowd money, when we give them money, where does that money go?  It‘s a pretty primitive country in the West Bank.  Where is the cash going?

ROSS:  One of the things that we did, we never gave money directly to the Palestinian Authority.  We did it through nongovernmental organizations. 

MATTHEWS:  Right. 

ROSS:  The European Union for most of the Oslo period, really until 1999, 2000, did give it directly. 

Now, where it mainly went for Arafat was into a slush fund.  Arafat—to understand Arafat, Arafat was a fixer.  If someone was sick and needed an operation, you go to Arafat.  If someone needed a telephone, you go to Arafat.  You need a plane ticket, you go to Arafat. 

MATTHEWS:  Old-style politics. 

ROSS:  Old-style politics. 

MATTHEWS:  Totally discretionary and totally biased.

ROSS:  Absolutely.

MATTHEWS:  You help your friends. 

ROSS:  Absolutely. 

MATTHEWS:  Right. 

ROSS:  One time I went to him, and I was asked by our Treasury Department to tell him that, look, you are not going to survive if in fact you don‘t become transparent and accountable, so everyone can see what‘s happening with the money and where it goes. 

MATTHEWS:  Right. 

ROSS:  And as I was talking to him and I said this, he was looking at me and saying, what do you know about survival?  So I looked at him and I said, you know what?  I can‘t teach you anything about survival.  But I can tell you this.  You‘ll get no money from the United States if we can‘t in fact know where the money is going. 

For Arafat, given the choice between getting money from us and keeping doing business the way he had always done it, he would always opt for that. 

MATTHEWS:  Yes. 

ROSS:  Just like keeping his options open, he needed a slush fund in his mind.  He always needed to have money available because he never knew when he might need it.  Maybe he would need it to pay off some security people.

How did he provide money to his security organizations?  Cash. 

MATTHEWS:  Right. 

So where is the money now?  Suha, his wife, who has lived apart from him for three years now, does she have the keys and the codes to get that money? 

ROSS:  My guess is, she does not.  I don‘t think that he would ever entrust that to anybody.  He would have a number of different people knowing where a number of different assets might be.  No one person other than Arafat would know where all of it was.

MATTHEWS:  Is that why they‘re all trying to get together and trying to exchange information?  Why is Mahmoud Abbas so accommodating?  Why is Suha all of sudden so accommodating when they met in Paris the other day? 

ROSS:  I think, in her case—because of French law, she was in this unique position where she could control total access to Arafat. 

MATTHEWS:  Right. 

ROSS:  And information about him.

Now, for the Palestinian Authority that is going through this process of transition, and there‘s enormous uncertainty, what is happening, what isn‘t happening, how do they plan for the future, how do they plan for a transition, they had to be in a position where they knew.  She used her position, I think, to provide a certain guarantee for herself in the future. 

The rest of them are focused on one thing.  They will try to get as much of this money back as possible, because they realize there are two ways for people like Mahmoud Abbas and Abu Ala to build their credibility right now.  One is to show they can deliver for Palestinians.  Two is to show they‘re on top of fighting corruption. 

The one thing that all Palestinians agree on across the board, no matter what their perspective is toward the Israeli, across the board, they all agree that there has to be an end to corruption.  And so one way that people like Mahmoud Abbas can build their credibility, even before you have elections, which is what I think are the key to creating a stable transition over time and a new leadership that is empowered, the one way you can build your credibility in advance of that is to show that you‘re fighting corruption, get money back and begin to provide it to the Palestinian people. 

MATTHEWS:  Let‘s talk about terrorism.  Is there any Palestinian that you know of through your extensive meetings over there who has the toughness to enforce a deal with Israel? 

ROSS:  I think that there are those.  People like, I think, Muhammad Dahlan is someone who could enforce it.  But to enforce it, he has got to also have credibility with the Palestinian public. 

Until you have Palestinians who are elected, no one is going to look like they‘re going to betray what Arafat‘s position was.  They have to build authority in their own right.  They have got to build authority that is from the Palestinian people.  Arafat never allowed anybody to emerge as an alternative to him.  And that‘s one of the reasons—the critical reasons why, once you create the circumstances for elections, you have got to hold them. 

MATTHEWS:  Do the Israelis want a strong negotiating partner?  Do they want a strong Palestinian leader to emerge who can held his people together, defeat Hamas, Islamic Jihad and cut basically defend any treaty he cuts with Israel?  Do they want a legitimate deal with a legitimate leader? 

ROSS:  I think so.  I think so.

I think what has happened in the last four years, they became—the Israeli public, because of a war, became convinced there was no Palestinian partner. 

MATTHEWS:  Right. 

ROSS:  And Arafat was the embodiment of someone who could never be a partner. 

Now there will be a sense of a possibility.  But, look, the measure in the end is not going to be what they say.  It is going to be what they do. 

MATTHEWS:  OK.  You‘re a great guy.  Thank you, Ambassador Dennis Ross.  The name of the book is “The Missing Peace.”  It will tell you everything you have to know right now about the succession in the Middle East.  If you care about Israel, you care about that part of the world, care about us in that part of the world, this is book. 

When we come back, New Mexico Senator Pete Domenici says the United States should rely on nuclear energy to wean itself off Middle East oil.  Everything is related.

And don‘t forget to check out Hardblogger, our political blog Web site.  Just go to HARDBALL.MSNBC.com.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.

Joining me now is a great guy, the Republican senator from New Mexico, Pete Domenici, whose new book is “A Brighter Tomorrow: Fulfilling the Promise of Nuclear Energy.”

Well, we don‘t get many people advocating nuclear energy.  I just want to ask you a couple of New Mexico questions first, Senator.

SEN. PETE DOMENICI ®, NEW MEXICO:  Sure. 

MATTHEWS:  You have got a very interesting state.  It voted for Al Gore last time and voted for the president this time.  What happened?

DOMENICI:  Well, remember, the last time it was only less than 400 votes.  And most people think that it‘s not a question of malfeasance.  I‘m not accusing anyone.  But it seems like, to us who look, that the president won that election. 

What happened is, in his strength area, they had an enormous blizzard and a lot of people didn‘t vote, just looking at the counties.  Those counties, part of the win is that those east side counties voted 75 percent, some of them, for Bush.  So he came out of a vote area with 10,000 voters and he got 7,500 to 2,500.  So it didn‘t take very many of those. 

But the big issue was, in spite of Bill Richardson, who you know is Hispanic...

MATTHEWS:  Right. 

DOMENICI:  ... speaks it.  Everybody knows he is.  In spite of him being on television, spending huge amounts of money, having his own 525, or 527...

MATTHEWS:  Five twenty-seven.

DOMENICI:  ... with huge amounts of money, we still won.  Now, with all that, 43 to 45 percent of the Hispanics voted for Bush.  Now, you can‘t win a democratic election...

MATTHEWS:  What do you think shifted the Hispanic voter, male and female, over to the Republican side this time?  Was it the cultural values questions of abortion rights and that kind of thing?

DOMENICI:  Well, I think two things...

MATTHEWS:  Because it matches up with the positions they took on those issues.  They are more culturally conservative.

DOMENICI:  Let me tell you, there‘s no doubt—I will just give you an anecdote. 

Within two or three days before the election, I happened to be in Albuquerque ready to go to another city.  And I ate—let me give you one, a Burger King, with a staffer.  As I walked down and went by some booths, two of them had Hispanic women.  One had a young boy.  She called me over.  And she said, this is my son, my grandson.  Tell Senator Domenici who is your friend.  The little boy said, President Bush.

MATTHEWS:  Really?

DOMENICI:  And she said, tell him what else.  He said, I don‘t want anybody to hurt President Bush. 

And, as she was leaving, she stopped over and said, like this, I said, why?  She said in Spanish, because of marriage, because of marriage. 

MATTHEWS:  Whoa.  Sanctity of marriage. 

DOMENICI:  Two or three told me that.  Now, you know, that‘s anecdotal.

But I think that issue is terrifically important among Hispanic people. 

MATTHEWS:  I think you‘re right.

(CROSSTALK)

MATTHEWS:  I think people who pushed it had no idea what country they were living in.  And they just—the people saw it and they showed up and said no. 

(CROSSTALK)

MATTHEWS:  I also—remember the president said, I want to protect the sanctity of marriage?  He never once did any gay bashing.  He never took any shots at the gay marriage.  He was always positive about protecting marriage as an institution for men and women.

I‘ll tell you, this was a bad coincidence of politics and culture for the Democrats. 

DOMENICI:  Well, let me tell you, the people who are on the left on that issue are making it worse, because—not all of them, but some of them are talking like there‘s something satanical about those people who believe in the sanctity of marriage.  They‘re even making fun of Christians. 

MATTHEWS:  The word used is bigot. 

DOMENICI:  Yes. 

MATTHEWS:  That‘s a tough word.

DOMENICI:  They‘re not all bigots.  They‘re called Catholics.

You‘re Catholic, aren‘t you? 

MATTHEWS:  Right.  Yes. 

DOMENICI:  And to call you a bigot because you believe in certain things that are in your faith—you know, you believe in faith because you can‘t prove it, right?  That‘s the definition.  Well, they think anybody that does that—and then they name them anything, anything.

(CROSSTALK)

MATTHEWS:  I know.  It is getting very rough on both sides. 

Let me ask you this about your position on nuclear.

DOMENICI:  Yes. 

MATTHEWS:  The French have nuclear.  It works for them.  What did you say was the percentage of their nuclear...

DOMENICI:  Right now, it is approaching 85 percent. 

MATTHEWS:  Of their energy needs. 

DOMENICI:  Of all their electricity needs.

MATTHEWS:  So that takes all the pressure off the fuel that normally would go to cars, right?

DOMENICI:  Well, it also takes all the pressure off the environmental problems that come from producing electricity with coal. 

You can‘t clean it up enough.  So when you talk about the world‘s problems, global climate, of course the French can say, why doesn‘t America sign the treaty?  But they don‘t worry about the treaty because they don‘t produce any gases. 

MATTHEWS:  Well, what about the fears left over from Three Mile Island in Pennsylvania and Chernobyl? 

DOMENICI:  They‘re all very easily explained.  And I‘ll tell you right now, the polls would indicated that the people have begun to forget about those and they‘re really worried about our future. 

And nuclear is slipping right in and answering the issues. 

MATTHEWS:  OK, what about the danger—I have to move fast, Senator -

·         what about the dangers of a nuclear installation, a nuclear reactor being hit by a terrorist?  Does that spread the damage?

DOMENICI:  It‘s very, very minimal.  And the truth is...

MATTHEWS:  You mean if they had a direct hit or they blew one up, it wouldn‘t—what would it do? 

DOMENICI:  It wouldn‘t blow up.  It is too powerful, too strong.  You would have to have something enormous—you couldn‘t run one of these carts they‘re running around over there in Iraq. 

MATTHEWS:  Yes, the car bombs.

DOMENICI:  That wouldn‘t hurt it. 

MATTHEWS:  No.

DOMENICI:  So what we have in America is people spreading two fears. 

One is radiation. 

MATTHEWS:  Right. 

DOMENICI:  They don‘t know that the hospital up the street is using radiation every day to cure things.  But they‘re just frightened.  Radiation is—it scares them.  It can be proven that you‘re getting more radiation flying at the elevation that we fly planes from New York to Denver and Denver back than some of the standards we‘re requiring people to clean up to or clean beyond. 

MATTHEWS:  Yes.  So you‘re saying we could have cleaner air, we could have more energy and less pressure on buying stuff from the Middle East. 

DOMENICI:  Well, yes, because our energy—our electricity for the future will be supplied. 

And let me tell you.  The poor countries need our help. 

MATTHEWS:  Is President Bush with you on this? 

DOMENICI:  He is with us.  And he is very much for Yucca Mountain getting completed, so we can tell the industry you‘ve got a future.

And I believe, before too long, he is going to come out strongly in favor of the United States government moving ahead with a consortium. 

MATTHEWS:  And Yucca Mountain is the waste site.

DOMENICI:  Yucca Mountain is the waste disposal site in Nevada. 

MATTHEWS:  In Nevada.  And that sells with the people of Nevada, that they become.

DOMENICI:  No, no, no.  They‘re against it, but they lost in a referendum-type vote. 

MATTHEWS:  Yes. 

DOMENICI:  The people that were for Kerry were supposed to vote overwhelmingly because he was for closing down Yucca.  The president, strong like he is, said, no, I think we have got to finish it. 

MATTHEWS:  And that carried in Nevada?

DOMENICI:  He won. 

MATTHEWS:  So the people of Nevada said, OK, you can put the waste here?

DOMENICI:  They‘re still going to fight.  But, sooner or later, they‘re going to lose.  We‘re hoping this year they‘ll lose and we can complete the project. 

MATTHEWS:  OK.  OK.  Thank you, Pete Domenici.  I‘ve known you for years.  And thank you.

(CROSSTALK)

DOMENICI:  Did you show them your book? 

MATTHEWS:  We do it electronically.  But you can do it right like that. 

(LAUGHTER)

MATTHEWS:  It is called “A Brighter Tomorrow.” 

DOMENICI:  You‘re very nice.

MATTHEWS:  Anyway, join us again tomorrow night at 7:00 Eastern for more HARDBALL.  See you then.

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

END   

Copy: Content and programming copyright 2004 MSNBC.  ALL RIGHTS RESERVED.  Transcription Copyright 2004 FDCH e-Media Inc. (f/k/a/ Federal Document Clearing House Inc., eMediaMillWorks, Inc.), ALL RIGHTS  RESERVED. No license is granted to the user of this material other than for research. User may not reproduce or redistribute the material except for user‘s personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon MSNBC and FDCH e-Media, Inc.‘s copyright or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.

Discuss:

Discussion comments

,