updated 2/17/2005 8:44:51 AM ET 2005-02-17T13:44:51

Guest: James Stewart, Tony Blankley, Amy Goodman, Joe Hagan, Farid Ghadry, Bill Harlow, Richard Ben-Veniste

CHRIS MATTHEWS, HOST:  The directors of the CIA and the FBI warn that terrorist sleeper cells could pull off another attack inside the U.S.  And under Democratic fire, is President Bush losing the battle over Social Security?  Plus, we go inside the media wars at CBS and at Disney. 

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  It has been a dramatic day. 

Iran and Syria announced they‘re forming a common front to face what they call foreign threats in an apparent reference to the United States and Israel.  And top intelligence officials testified that the al Qaeda organization here in the United States is far more dangerous right now than most Americans realize. 

HARDBALL correspondent David Shuster reports.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, NBC CORRESPONDENT (voice-over):  The testimony from the Bush administration today was startling.  CIA Director Porter Goss said that, despite gains made against al Qaeda, the organization has intensified its efforts to bypass U.S. security and terrorize the American homeland. 

PORTER GOSS, CIA DIRECTOR:  It may be only a matter of time before al Qaeda or other groups attempt to use chemical, biological, radiological or nuclear weapons. 

SHUSTER:  FBI Director Robert Mueller revealed there is a terrorist sleeper cell in the United States that has been in place for years and the FBI, said Mueller, is worried. 

ROBERT MUELLER, FBI DIRECTOR:  Finding them is the top priority for the FBI.  But it is also one of our most difficult challenges. 

SHUSTER:  The hearing was part of an annual briefing about threats from around the world.  The officials testified that America‘s intelligence community has not yet reached the end of the trail of the nuclear black market.  Who will receive the technology?  The administration doesn‘t know. 

But the head of the Defense Intelligence Agency said Iran has emerged as the leading threat to America‘s interests.  The testimony came as the government of Israel warned today that Iran was just six months from attaining all it needs for an atomic weapon; 24 years ago, when Israel feared Iraq‘s nuclear program, Israeli warplanes attacked, destroying he‘s Osirak Iraq nuclear reactor. 

Israel has threatened to take preemptive action against Iran.  And the Israeli Air Force is about to buy 500 bunker buster bombs capable of destroying facilities underground.  In the meantime, the Iranian government claims the United States has been flying intelligence drones like these over parts of the country.  And today, Iran‘s foreign minister said the country‘s air defenses were soon going to start shooting them down. 

The growing tensions in the Middle East were underscored this morning in the financial markets.  Stocks briefly tumbled and oil prices surged today when Iran‘s state-run television reported an explosion near a nuclear reactor.  That came after reports of a missile being fired from a plane, then clarification that a plane‘s engine may have fallen off. 

Back in Washington, Secretary of Defense Rumsfeld said the nervousness over Iran and al Qaeda here at home is justified. 

DONALD RUMSFELD, SECRETARY OF DEFENSE:  And just because we‘ve been fortunate in this country and not seen another attack since September 11 does not mean that it over.  It isn‘t over. 

SHUSTER (on camera):  The blunt language from the administration seemed deliberate.  Not only are budget requests under review by Congress, but the White House seems especially concerned about growing weariness of the administration‘s aggressive policy approach. 

I‘m David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  Richard Ben-Veniste served on the 9/11 Commission.  And he is famously—he is the one who famously forced then National Security Adviser Condoleezza Rice to disclose the title of that August 6 presidential daily briefing as “Bin Laden Determined to Strike in the U.S..”  And Bill Harlow served as the top spokesman for the CIA for seven years and worked closely when former CIA Director George Tenet.  He‘s now an NBC news analyst.

Let me start with you, Mr. Ben-Veniste, Richard.

You were the one got Condi Rice to hold that—make that kind of odd announcement that was so understated in the way she presented it.  As a student now of terrorism, do you see this threat growing or lessening since 9/11? 

RICHARD BEN-VENISTE, 9/11 COMMISSION:  Well, there are more terrorists being trained since 9/11.  And when you look at the CIA‘s brain trust and their analysis, they say that Iraq has replaced Afghanistan as a training ground for terrorists.  And so we have to be concerned about the multiplication in numbers of people who are trained as terrorists. 

With respect to today‘s statement, I have to reserve judgment on that.  With regard to Condoleezza Rice and the August 6 PDB, you know, at the time of that hearing, Chris, that memo was classified. 

MATTHEWS:  Right. 

BEN-VENISTE:  And so I couldn‘t say what the title was.  So I asked Dr. Rice if she might. 

MATTHEWS:  Well, don‘t step back.  It was a dramatic and educational moment for all of us to see that.  Headline—a guy said at the time, if that had been a “Daily News” headline in New York, we all would have acted. 

But let me ask you, Bill Harlow—thanks for joining us.

When you read that there‘s testimony today that—from the intelligence chiefs, by the FBI and CIA, that the al Qaeda organization is now trying to find ways to get around, to circumvent our defenses, what does that say to you? 

BILL HARLOW, FORMER CIA SPOKESMAN:  Well...

MATTHEWS:  The example of getting ships, using ships to come in, not airports, finding the ways that are not protected. 

HARLOW:  The terrorists are learning organizations.  They find out what we‘re doing and they try to find ways around it.  That‘s not a new development.  They have been trying to beat our defenses for a long while. 

Similar statements were made in similar hearings four, five, six years ago.  The difference is that the media and hopefully the Congress are now paying attention to them. 

MATTHEWS:  You know, we think in terms of this logic of four years.  We expect to be hit on Election Day in the quadrennium.  We expected it to come on ‘04, ‘08, ‘12, whatever.  And I was just thinking—I was looking at the dates of our attacks before, ‘93, 2001.  They don‘t operate on our calendar, do they? 

HARLOW:  No.  They do not at all operate on the calender that we do.  They have got their own timetable.  They strike us when they can, not when we‘re expecting it or not based on some timetable. 

MATTHEWS:  Is it a time of their choosing or opportunity? 

HARLOW:  A little of both.  I think they are very patient.  They wait for the opportunity to strike us and they do it when they think we‘ve dropped our guard. 

MATTHEWS:  There was talk today of once again about weapons of mass destruction, the phrase meant to cover, chemical, nuclear, and, of course, biological.  Is that the fear, that they will launch some major effort here?  I‘ve noticed, just to suggest the question and the answer, they don‘t seem to come in for 101 killings or spraying bullets.  It always seems to be something dramatic. 

Well...

MATTHEWS:  Al Qaeda.

BEN-VENISTE:  Have in mind, again, that we haven‘t seen an attack since 9/11.  So, there‘s good reason to be hopeful. 

MATTHEWS:  Except for Spain. 

BEN-VENISTE:  And—in our country. 

MATTHEWS:  Yes.  Right. 

BEN-VENISTE:  Yes.  Understood. 

And, yes, we‘re concerned about the existence of sleeper cells.  Richard Clarke five days after the inauguration of President Bush wrote a memorandum in which he warned Dr. Rice of the potentiality and the likely existence of sleeper cells.  That just means that we have to be more alert.  We have to be more aware.  We have to do our job better as intelligence and law enforcement agencies. 

But with respect to specifics, I didn‘t hear anything today that was different.  Sure, al Qaeda would like to hit us.  The question is whether they can and how smart we are in doing the job of protecting the United States. 

MATTHEWS:  Bill, let‘s try to put some pieces together.  You know that we‘ve been hit by al Qaeda, obviously, 9/11 and the Cole And the African embassies, the American embassies on East—on East—in East Africa. 

But Hezbollah has mainly targeted Israel.  That‘s the reason it exists.  It comes out of Lebanon.  It is supported by the Iranians.  Now, today, we saw an announcement that Syria and Iran are going to be operating together as a sort of soul brothers or whatever you want to call them.  They have Hezbollah at their disposal.  Do you think they may be aiming Hezbollah at us now? 

HARLOW:  I think they probably want to imply the threat that we are, because they‘ve heard all the rhetoric about the U.S. focusing on Iran.  And both Iran and Syria are...

MATTHEWS:  Yes.  We‘re telling them to change their acts.  Yes. 

HARLOW:  Are threatened by the presence of an emergent possible democracy in Iraq.  And so I think they want to imply to us that they are not going to accept threats from us lightly. 

MATTHEWS:  Isn‘t that a logical jump I‘ve just made, that if you are thinking about Syria and Iran getting together, you think about their terrorist arm? 

HARLOW:  Well, the policy-makers...

MATTHEWS:  Being used?

HARLOW:  The policy-makers very well ought to consider the potential, if you send messages to those countries, what their possible message in return might be? 

MATTHEWS:  They might spit right back at us with fire. 

HARLOW:  They may well. 

BEN-VENISTE:  No question about it.  You‘ve got to play defense as well as offense when you make these kinds of statements. 

MATTHEWS:  Why don‘t we have a national intelligence director at this point, Richard?  It was the big promise of reform.  The president was going to do it.  He got pushed into it by people like Joe Lieberman.  Why don‘t we do it?  Why don‘t we have a leader yet in fighting this war? 

BEN-VENISTE:  Well, it all depends on the president.  Unless the president takes on this responsibility—it is now the law.  He signed it into law.  He‘s got to find the right person to be the director of national intelligence. 

There are a lot of big dogs out there who are barking. 

MATTHEWS:  Right. 

BEN-VENISTE:  All the time.  And they don‘t want a director of national intelligence.  And the reason they don‘t want it is the same reason why we recommended it. 

And that is so that we have this continued stove-piping of agencies. 

And each one doesn‘t want to give up their jurisdiction. 

MATTHEWS:  Bill, is that a problem that you see, that we don‘t have a leader of our fight against terrorism? 

HARLOW:  No.

Actually, I think the problem is that the job as it was created was not a very good one.  And a lot of people who are qualified for the job are turning it down. 

MATTHEWS:  Because it‘s just a matter of liaison work?

HARLOW:  People like Bob Gates, former DCI, are saying, this is not a job I want a take.  It has all the authority—responsibility attached to it, but without the ability to control the agencies that they want.  They see that it is a job which is kind of toothless.  And they don‘t want to be the first one in line to get fired. 

MATTHEWS:  So why didn‘t we think about all this weakness and failure structurally when we created this job of national intelligence director? 

HARLOW:  There was an election going on. 

MATTHEWS:  It was for show. 

BEN-VENISTE:  But that‘s why we wanted to give the director of national intelligence budget authority and a degree of autonomy...

MATTHEWS:  Right. 

BEN-VENISTE:  In order to do the job. 

You don‘t have to have troops to do this job.  This is the job that the director of CIA was supposed to have when the CIA was created in 1947.  Central intelligence was supposed to be directed by this director. 

MATTHEWS:  So we have a situation again like 9/11, when in the morning of, George Tenet, your old boss, as CIA director, knows about a guy trying to get pilot lessons to fly big planes, but doesn‘t care about taking off or landing out in Minnesota and he knows it and the FBI director doesn‘t know it.  Are we still facing that kind of conundrum?

HARLOW:  Well, the FBI—it was an FBI operation, by the way.

MATTHEWS:  But for some reason...

HARLOW:  The CIA learned about it from the FBI, but...

MATTHEWS:  But the president never got in the middle of the loop. 

HARLOW:  The FBI never told the FBI about it. 

I think there are a number of changes that have been put in place now that make that less likely to happen, but... 

(CROSSTALK)

MATTHEWS:  Who gets blamed if we get hit again without warning? 

(CROSSTALK)

MATTHEWS:  Does the president personally have to take the hit?

BEN-VENISTE:  Look at the situation now where you can read about it, Chris. 

MATTHEWS:  Right. 

BEN-VENISTE:  They‘re still knocking heads over jurisdiction, over recruiting foreign agents in the United States, sending them back over.  There‘s got to be leadership in order to coordinate that. 

MATTHEWS:  OK, thank you very much, Richard Ben-Veniste.  And thank you very much, Bill Harlow, for joining us.

Coming up, Syria and Iran decide to form a common front.  Now, what does that mean?  I‘m going to talk to a Syrian opposition leader about whether the Bush administration should seek regime change in Damascus.

And, later, the battle over Social Security reforms.  Will President Bush‘s plan make Americans more secure?  They‘re getting nervous.

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, Syria and Iran join together to form a common front.  Does that make Syria a de facto member of the axis of evil?  I‘ll talk to a Syrian opposition leader about the prospects for regime change there when HARDBALL returns.

(COMMERCIAL BREAK)

(NEWS BREAK)  

MATTHEWS:  Welcome back to HARDBALL.

In the wake of the assassination of former Lebanese Prime Minister Rafik Hariri, Syria and Iran announced today their common front to face challenges and threats.  Is Syria joining Iran in pushing terrorism and opposing democracy in Iraq?

Farid Ghadry was born in Syria and has lived in the United States for the past 30 years.  He‘s the president of the Reform Party of Syria, a group that supports democratic and economic reform in that country.

Welcome, Farid.  Thank you. 

FARID GHADRY, PRESIDENT, REFORM PARTY OF SYRIA:  Thank you for having me.

MATTHEWS:  You‘re a pal of mine.  It‘s great to have you on. 

(CROSSTALK)

MATTHEWS:  Let me ask you this big question.  Let‘s talk America first.  If Syria gets together with Iran in a common front, obviously against us, perhaps as well against Israel, do we face a threat now from Hezbollah? 

GHADRY:  Yes, we do.  We‘ve always faced a threat from Hezbollah, but I think is going to will accentuate now with this announcement. 

And the public announcement was intended to send a signal to the United States that, watch out.  We are not going to be put in a corner.  And we‘re going to come out swinging.  And I think that‘s a very dangerous escalation by the Syrians. 

MATTHEWS:  Has our call for democracy in both those countries and our call to end participation in terrorism sort of stoked up their passions?  What has been the connection? 

GHADRY:  Well, if you will recall, when the whole issue of democracy and the axis of evil four or five years ago came up, we did not talk about Syria.  Syria was never on the map.  We never discussed Syria. 

And when we did, we went into Iraq.  And the first salvo that was thrown at us was Syria, because, as we were trying to help the Iraqis attain democracy, the Syrians started helping the insurgency.  So, the United States never intended in the first place to actually attack Syria or to get involved with Syria.  It was the Syrians who actually started the whole thing and now has played to this point today. 

MATTHEWS:  The Mideast is filled now with sons taking over for fathers.  You can call the country Baathist or monarchy or whatever.  It always ends up having the son of.

GHADRY:  Right. 

MATTHEWS:  And apparently Mubarak of Egypt wants his son to get the job. 

GHADRY:  Correct.

MATTHEWS:  Saif Gadhafi wants the job of his father, Moammar.  And Bashar has already taken over.  Is it pronounced Bashar?

GHADRY:  Bashar.

MATTHEWS:  Bashar has already taken over for his father, Hafez Assad.

GHADRY:  Correct.

MATTHEWS:  Is there any likelihood that their well-educated sons will be more moderate, including Assad? 

GHADRY:  It is unlikely that they—they will try and look moderate.  They will try and behave in a moderate way.  But it is unlikely that they‘ll be moderate for the simple reason, they are an autocracy.  They‘ve inherited the system.  They‘ve inherited the presidency. 

They don‘t feel responsibility towards the public.  All the institutions, the government institutions, are there to support their rule, not to help the people, not to save the people.  And so, from that perspective, they don‘t feel the obligation that they need to do anything for the people.  And that‘s why it autocracy is a very dangerous thing. 

MATTHEWS:  Why is Syria always the holdout?  Why are we always facing after Camp David with the Egyptians and the Israelis, after the Jordanians joined up as a front-line state...

GHADRY:  Yes. 

MATTHEWS:  After Palestinians even have begun to talk Israel, that Syria always says no?

GHADRY:  Well, Syria—remember, Syria historically has been the flag bearer of the Pan-Arabism.  And because of that responsibility that they‘ve tried to take upon themselves, they have tried to remain within the realm of where Arab street is.  And if the Arab street was not for peace, they‘ve maintained that distance with the... 

(CROSSTALK)

MATTHEWS:  Right.  They‘re with the street.  But are they now thumbing their nose?  Is Mr. Assad, the leader of Syria, now saying to the United States, I‘m listening to all your radio transcripts; I‘m watching television; I‘m hearing all your talk about democracy?

GHADRY:  Correct.

MATTHEWS:  Here‘s my answer.  I‘m joining up with Iran.  We‘re facing you down. 

GHADRY:  Not only that, but I‘m also inviting Russia back into the foray, because they‘re striking a deal with Russia.  And Russia is very happy to be involved.

MATTHEWS:  So it‘s the old stand-off pre-Sadat now. 

GHADRY:  Correct. 

MATTHEWS:  We‘re facing the Middle East with the Russians on the other side. 

GHADRY:  The Russians on the other side and then an axis between—all the way from Iran to Lebanon, which the Syrians are telling the world    that we are in control and we‘re not going to let the—anybody push us around. 

MATTHEWS:  Do have the opposition strength in your party and others within Syria to overthrow Bashar Assad? 

GHADRY:  We do have a lot of members in our party.  And it is growing very rapidly. 

But—but unless the United States makes a decision that would enhance the dissidents, inside the country and outside the country, and called for a clearance about their policy.

MATTHEWS:  Right. 

GHADRY:  And I think—I think...

MATTHEWS:  Do you want a—do you want a Syrian liberation act, like we had an Iraqi Liberation Act several years back? 

GHADRY:  We would like to see a Syrian liberation act without the military component in it, because I think that would help the Syrians inside the country and the Syrians outside the country to come together. 

(CROSSTALK)

MATTHEWS:  The Iraqi Liberation Act also did not have the—that came later. 

GHADRY:  The component.  Well...

MATTHEWS:  That came later.

Anyway, thank you, bud.  Thank you very much for coming on, Farid Ghadry.

GHADRY:  Sure. 

(CROSSTALK)

MATTHEWS:  We‘ll have you on again. 

Should more heads roll over the CBS News memo scandal?  A new report says producers leaving the network as a result of the “60 Minutes” piece don‘t plan on going quietly.  The full story when we come back.

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  In January, CBS blamed four staffers for that fiercely disputed “60 Minutes Wednesday” story reported by Dan Rather on President Bush and his service in the National Guard.  Producer Mary Mapes was fired outright and three other producers.

Executive producer Josh Howard, his top deputy, Mary Murphy, and CBS News senior vice president Betsy West were all asked to resign.  To date, they‘re still on the CBS payroll and the story the network wants to go away is back in the news. 

Joe Hagan, TV reporter for “The New York Observer,” is here to tell why. 

Why can‘t CBS deliver on its own punishment? 

JOE HAGAN, “THE NEW YORK OBSERVER”:  Well, for one, they‘ve asked them to resign, but these guys have not tendered their resignations, so it is really up to them.  CBS probably presumed that they would take a severance package and just quietly go away. 

But these guys are very angry.  They‘ve got nothing left.  They have no reputations to continue their careers.  And so they are fighting, apparently, to restore their good names by refusing to resign. 

MATTHEWS:  So all four of them are radioactive.  They‘re not likely to get other jobs, is what you‘re saying.  They might as well stay where they are and fight out the law within their organization, within CBS. 

HAGAN:  That‘s right. 

I talked to a producer yesterday who suggested that the former executive producer of “60 Minutes Wednesday” might have to take job in local TV to get his foot back in the door.  So, this guy is not willing to go down easy.  So...

MATTHEWS:  Well, let me ask you, in your reporting—and it‘s a well-written piece—can you come to a conclusion as to whether CBS blamed the wrong people?  Did they blame people a bit lower on the food chain than they should have?  Should they had said something about—should Les Moonves, who is CEO, have admitted some responsibility?  Should Andrew Heyward, the president of CBS News, should he have taken some hit here? 

HAGAN:  Well, from what I‘ve gathered, I think there are some definite question marks about—in the aftermath of the airing of the report, 12 days, CBS basically denied, denied, denied that these were documents were false.  They were saying this was a true story. 

And, at some point, you have to ask, who is responsible for this strategy of stonewalling?  And what we do know is that Josh Howard, the former executive producer of “60 Minutes Wednesday,” two days afterwards, relays to his bosses that he is uneasy.  He thinks they should maybe concede that there‘s a possibility of a hoax.  He was ignored. 

And so his case is that the management above him ignored his pleas and yet they‘re blaming him. 

MATTHEWS:  When did he blow the whistle on things like the document which had the odd typewriting on it that suggested a more recent typewriter was used much more recently or questioned Bill Burkett as a reliable source, the man who has been on this program before and I don‘t think is all that reliable?

HAGAN:  Right. 

MATTHEWS:  Do you think that they ignored that before or after they put the story on the air? 

HAGAN:  Well, I definitely don‘t think they‘ve—I think there‘s a lot of guilt to go around, because none of them vetted this thing properly.  There was incredible mistakes made, for one, not talking to the White House until the morning before they are going to air the thing. 

But a lot of the crime here, if there‘s a crime, is that the aftermath in which basically there‘s just—nobody is taking responsibility for investigating whether they made an error here.  And some people tried to actually wave the red flag and say, maybe we should actually concede that there could be a hoax here.  And the rest just continued to cling to the story.  And...

MATTHEWS:  Well, let me ask you a couple things.  First of all, speaking of red flag, do you think there was partisan behavior by any of these people, including Dan Rather, certainly Josh Howard?  Do you think they were playing politics in trying to screw the president basically with this National Guard story? 

HAGAN:  In terms of the people that—on the production side, the producers, I do not think they had any sort of partisan... 

MATTHEWS:  Mary Mapes didn‘t either, right, of them? 

HAGAN:  Well, you know, that‘s something that we—no one has actually figured out.  And that‘s one of the huge failures of the investigation that CBS commissioned, is that they never answered the question whether the documents were real. 

They never actually—it concludes that there are no partisan politics involve.  But until we find out where—what the—who the—what the source of the documents are, we can‘t really know ultimately whether.... 

MATTHEWS:  You know, I think most of the people watching right now believe—and I think quite reasonably—that there was politics involved in that story. 

They believe that anybody who believed Bill Burkett on the surface, just take him at his word, obviously wanted to make the point he wanted to make, which was Bush was no good as a National Guardsman.  And anybody who believed that that typewriter was available back in that period of 30-some years ago isn‘t quite rational.  Let‘s put it that way. 

Anyway, Joe Hagan, great reporter, “New York Observer.”

Later in the show, we‘ll go inside the civil war at another big media corporation, Disney. 

And coming up, Tony Blankley and Amy Goodman fight it out—and they really do—over Social Security and American foreign policy in the Mideast today.

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  This half-hour on HARDBALL, President Bush is back on the road selling his plan to revamp Social Security.  So, why is it not working?  And, later, the war inside Disney World.  Author James Stewart will tell us what is going on in that world. 

But, first, let‘s check in with the MSNBC News Desk. 

(NEWS BREAK)

MATTHEWS:  Welcome back to HARDBALL.

As tensions rise in the Middle East, Iran and Syria today announced a common front to face challenges and threats.  Both countries stress, however, this is not an anti-American alliance.  Does the Bush administration have the political backing to continue to engage in diplomatic brinkmanship in that region?  According to latest NBC News/”Wall Street Journal” poll, only 44 percent of Americans approve of President Bush‘s handling of foreign policy. 

Tony Blankley is editorial page editor of “The Washington Times.”  And Amy Goodman is the host of “Democracy Now‘ on Pacifica Radio. 

Amy, I want to start with you and ask you, is there any way around President Bush‘s approach to Syria and Iran, two authoritarian, dictatorial countries, then to say, we would like to see you stop engaging in terrorism, especially through Hezbollah, which attacks Israel generally, and we would also like to see you begin some democratic movement?  Is there any alternative to that in American policy? 

AMY GOODMAN, HOST, “DEMOCRACY NOW”:  Yes. 

I mean, I think the American people are telling President Bush what the alternative is.  That poll that you just cited talking about people not approving of, for example, Bush‘s policy in Iraq, you don‘t to have take a belligerent approach, threatening military action, to change a country—I mean, to change, to try to get a country to change a position. 

Right now, it is very difficult to find out what is going in Iran—what is going on in Iran, because the Bush administration is busy saying they are a nuclear threat, when many others look at the example of the E.U.  The European Union countries are negotiating with Iran and have gotten them to suspend nuclear activities. 

Meanwhile, what does the Bush administration do?  Saber-rattle.  That is not productive and the American people don‘t approve. 

MATTHEWS:  Tony, the defense minister in Israel said today that, six months from now, that Iran will have what it needs to put together a nuclear weapon. 

TONY BLANKLEY, EDITORIAL PAGE EDITOR, “THE WASHINGTON TIMES”:  They‘ll have the knowledge, he said, then. 

Yes, look, I mean, I disagree with our interlocutor on the question of there are peaceful ways to solve this.  We haven‘t had any solution to Syria or Iran for 25 years.  They have been—Iran has been breaking agreements and they‘ve been trying to develop nuclear technologies all through periods when we were not hostile to them. 

MATTHEWS:  And supporting Hezbollah. 

BLANKLEY:  And supporting Hezbollah, which then intervenes, making it impossible for the Palestinians and the Israelis to ever reach a peace agreement, which itself, that continues to breed more terrorist recruitment. 

So, it is a vicious circle that has to be broken.  And so far, peaceful means have not.  Now, I think, in Syria, we have this remarkable moment where both France and the United States agree on U.N. Resolution 1559, which tells the Syrians to get out of Beirut.  The bombing that happened this week has triggered a rare coalition between France and the United States. 

MATTHEWS:  Why does the United States face the continued, relentless hostility of those two countries?  What is in their DNA that makes the Syrians and the Iranians continue to hate us? 

(CROSSTALK)

MATTHEWS:  Is it history? 

BLANKLEY:  No.

(CROSSTALK)

MATTHEWS:  Did we do something? 

BLANKLEY:  It is not DNA.  It is not genetic.  It is the history of the two governments and ours.  Obviously, Iran intends to have a theocracy.  They intend to be violently anti-Israel.  They intend to drive Israel into the sea.

Syria is—initially was a secular, socialist/fascist regime. 

(CROSSTALK)

MATTHEWS:  ... country, yes.

BLANKLEY:  And, right now, we are trying to transform the Middle East.  And I think that we‘re more likely than not to see some level of military activity with Syria in this year.

MATTHEWS:  What does it say to, Amy...

GOODMAN:  I would say that we‘re not trying to transform the Middle East.  The Bush administration is trying to conquer the Middle East. 

And it has attempted to do that in Iraq.  And now it is—the question is, how—what is the most effective approach to take?  And,, well, I think that the Iranians, the Syrians, North Korea, they have very good hearing when President Bush says in his State of the Union address, they are the axis of evil. 

And then President Bush and his secretary of state, Condoleezza Rice, rattles those sabers.  Is this the effective way to approach what is going on?  We don‘t even know in Iran.  Mohamed ElBaradei, the head of the International Atomic Energy Agency, says there‘s no evidence over the last six months to suggest that Iran is developing, secretly developing a nuclear bomb. 

It is interesting to point out that, before the invasion of Iraq, it was Baradei who said that Iraq did not have weapons of mass destruction.  So, maybe we should pay some attention to the people who got it right the first time and not those who misled us. 

BLANKLEY:  Well, ElBaradei, what he said is not inconsistent with what the Bush administration is saying regarding Iran. 

He is saying there‘s no evidence in the last six months to prove that their intent is to develop nuclear weapon.  We‘re saying that they have the potentiality that they‘re developing and we believe they do have the intent, sitting on one of the largest oil supplies in the world.  There‘s no other plausible explanation for developing these kinds of resources into that kind of technology, other than to be able to have the dual use of nuclear weaponry. 

GOODMAN:  Well...

MATTHEWS:  Amy, I want to ask you this.  I have to ask you a question.  We only have a minute here on this segment.  I want to ask you about this new poll we‘ve got, an NBC poll, “Wall Street Journal” poll, that right now, 44 percent of the country believes that we were right to go to war in Iraq.  And only 49 percent say we weren‘t right.  What—it‘s a very close call.  Still more people, a plurality, say we should not have gone. 

GOODMAN:  Very significant that half the population—and I believe it was more than half before the invasion—very significant that they believe that George Bush has made a serious mistake. 

And I think, most important, what we have to remember today is who is paying for that mistake, over 1,400 U.S. service men and women who are district attorney, perhaps 100,000 Iraqis, according to the Johns Hopkins-Columbia University study, and about 20,000 U.S. service men and women who are seriously injured.  Yes, I think we have to look at that when we look at what exactly President Bush has accomplished in Iraq. 

BLANKLEY:  I think one has to guard against overinterpreting polling data. 

Roughly, the country has been split down the middle for a long time on this war.  The president won the election only a few months ago, in large part on the question of whether you agree with the president‘s foreign policy or not.  I think the country is split now, as it was split before.  But you can‘t claim on that basis that there‘s some shift against the president. 

In any event, it becomes less relevant.  The president is going to act out in his best judgment.  And I don‘t think these poll numbers going up or down two or three points is going to...

(CROSSTALK)

MATTHEWS:  OK.

Coming up, what do Americans think of President Bush‘s plan on Social Security?  More from an NBC News poll when we return.

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, it‘s Tony Blankley vs. Amy Goodman on President Bush‘s plan to revamp Social Security.

HARDBALL returns after this.

(COMMERCIAL BREAK)

(NEWS BREAK)

MATTHEWS:  We‘re back with “The Washington Time”‘s Tony Blankley and Pacifica Radio‘s Amy Goodman, author of the book “Exception to the Rulers.”

We have got another poll out which I find fascinating.

Amy, you start. 

Fifty-one percent of the country thinks the George Bush plan on Social Security to create these private accounts is a bad idea; 40 percent say it is a good idea, this after the president visiting 10 states, really out there barnstorming.  It doesn‘t seem to be working. 

GOODMAN:  Because he can‘t fool the people.  Most of the people in this country understand that the president is gambling with their life savings, something put into place by Franklin Delano Roosevelt that is about old people not being in the streets, but being protected by this society. 

What President Bush is trying to do is reward his corporate contributors.  Wall Street would benefit tremendously by the privatization of Social Security, not the American people.

MATTHEWS:  How would that work, Amy?  Explain that process, how this would be a windfall for Wall Street. 

GOODMAN:  Oh, what President Bush is encouraging people to do is to take their—what is their Social Security, taken out of our paychecks, and put it into private accounts.  And so that means that people‘s security in their sunset years is going to be based on how much they make in the market. 

That is very frightening.  We don‘t gamble on people‘s security.  And the same way we shouldn‘t be doing it on foreign policy, we shouldn‘t be doing it here at home.  And I think most people are very clear.  You know, the elders of our society, those who are 55 and older, they‘re really clear.  Overwhelmingly, they‘re opposed to President Bush.  It‘s encouraging to hear that more than half of the whole population is clear. 

(CROSSTALK)

MATTHEWS:  Thanks, Amy.

BLANKLEY:  Actually, there‘s one piece of what Ms. Goodman said that I agree with.  If you change the phrase Wall Street to productive investment in our economy, because this is an argument actually the Republicans and Democrats are having up on the Hill.  She‘s taking the Republican position, oddly.  She agrees with Alan Greenspan. 

If—one of the things the privatization...

MATTHEWS:  By the way, she would be correct.  Even if we had a program where they changed Social Security so the government invested in the stock market, it would have still have the positive impact....

(CROSSTALK)

BLANKLEY:  The point is that the employee‘s share of the money, which currently just goes into an account and is lost in bookkeeping of the U.S.  government, would go in as equity investment in assets in America.  That creates more money going into productive activity, which increases productivity and therefore tends to strengthen the economy. 

MATTHEWS:  Good for business.  Is it good for the individual, Tony?

BLANKLEY:  Well, I mean,...

MATTHEWS:  Why aren‘t people rallying to this call? 

BLANKLEY:  Well...

MATTHEWS:  The president is doing his best. 

BLANKLEY:  No, he has got an uphill battle. 

Interestingly, “The Washington Post” did a very strong editorial in the last week endorsing the private investment scheme.  They‘re not—they haven‘t endorsed the whole package yet.  And there‘s a lot of different pieces to this puzzle.  But going to the politics of it, the president has got a real uphill battle even within the Republican Party. 

(CROSSTALK)

MATTHEWS:  How does he win the second battle, Tony?  Excuse me.

If he goes and does nice to win in the polling and get the bill started on the hill for private accounts, personal accounts, doesn‘t he then have to give the bad news to the public? 

You start with this, Amy—the bad news being, this isn‘t going to solve the problem.  We have to reduce benefits down the road. 

GOODMAN:  This is not only going to cost the American people in terms of our overall society $1 trillion to $2 trillion to make the change.  It is going to cost us individually.  I don‘t think President Bush can fool people. 

And Tony is right.  The Republicans—many Republicans are balking as well.  They are terrified that the constituents really do understand what‘s going on, that they can‘t side with Bush, that they have got to side with the people.  And Democrats, they also, some of them, have sided on the issue of privatizing.  But some of them now, led by Harry Reid, are coming out strong for a change. 

MATTHEWS:  OK. 

Do you think this country is more risk-averse than it had been before 9/11, and, therefore, chary of any decision that might jeopardize their savings? 

BLANKLEY:  I don‘t know how to judge that.  Americans have been reasonably risk-taking as a people historically.  I don‘t think that‘s changing.

One thing, though, about the politics of it.  In the short term, Bush has got some problems.  But I think a lot of the Republicans in Congress are misjudging where the electorate is going to be in two years.  This is not the old Roosevelt electorate.  It‘s a river that‘s flowing.  And...

MATTHEWS:  You keep telling them that, Tony.  But in a nonelection, nonpresidential year, the people that tend to vote are the regular voters.  And they tend to be older. 

BLANKLEY:  Well, look...

MATTHEWS:  Right?

BLANKLEY:  They may—they‘ll be a little bit older.  But how old?  After all, you can be about 60, 65 and not be a Roosevelt, not even be a Truman voter.  You‘re an Eisenhower voter.  So I don‘t think that these people born into the belief...

MATTHEWS:  Dare I quote the old line of my old boss?  All politics is local. 

BLANKLEY:  Yes, please.  But he was not always right. 

(LAUGHTER)

(CROSSTALK)

MATTHEWS:  I know.  But people think about their own situation. 

Anyway, thank you, Tony Blankley.  Thank you, Amy Goodman.

GOODMAN:  Thank you. 

MATTHEWS:  It‘s a good matchup.

Coming up, the civil war inside the Disney Corporation.  Best-selling author James Stewart will be here when HARDBALL returns.

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.

James Stewart is the author of “DisneyWar,” a behind-the-scenes look at the Disney empire.  And to hear him tell it, it is not the happiest place on Earth. 

Disney responded to his book with this quote: “We remain focused on excellent results, performance and a bright future, not on a one-sided depiction of past events largely told through the eyes of those with a clear bias and personal agendas.”

What‘s your response to that, James?

JAMES STEWART, AUTHOR, “DISNEYWAR”:  Well, I don‘t know who they would be talking about when two of the major sources were Michael Eisner, the chief executive, and Bob Iger, the president of the company, not to mention many other current Disney executives, including a few who were Disney executives when I started working on the book and then were fired or pushed out. 

And I don‘t understand at Disney, that these people are—they‘re great.  They‘re paragons of business skills.  And, suddenly, when they leave Disney, they turn into these Disney-hating, Eisner-hating crazy lunatics.  That‘s just not the way the world works.  I think it‘s a very balanced book.

(CROSSTALK)

MATTHEWS:  Let me talk about the world. 

Your book is now apparently already at the top of the best-selling list over at—best-seller list over—after a couple of hours of exposure. 

(LAUGHTER)

MATTHEWS:  Why are we fascinated about the Disney magic kingdom and what really goes on inside it? 

STEWART:  Well, the most starting thing to me is that—I took it at face value.  Disney is a great company.  It‘s a great brand.  And it stands for such—this idealistic triumph of morality and good over evil. 

And doing the reporting in this book was like a journey in the heart of darkness. 

MATTHEWS:  Yes. 

STEWART:  The reality is so divergent from the image of the brand and the company.  Eventually, that is going to—can become a serious problem. 

I think—I agree with Disney.  It has a bright future.  And I think it has a brighter future because the truth is finally coming out about the place. 

MATTHEWS:  You know, Michael Eisner has been this king of Disney for so long, the kingdom, for many years.  And you stun me in the book when you say that when he got the job of head of Disney—and we all grew up with Disney and Walt Disney, “Magical World of Disney,” the whole thing.  He got the job having never seen a Disney movie. 

STEWART:  Isn‘t that astounding? 

MATTHEWS:  It is truly astounding.

STEWART:  I was flabbergasted by that.

And he mentioned, both to me and in some work he was doing on an autobiography, that it was lucky nobody asked him about the Disney movies, because he would have had to admit he had never seen them and really knew virtually nothing about those characters. 

MATTHEWS:  How can you not have seen “Snow White”?  How can you not have seen—he‘s about my age.  How can you not have seen “20,000 Leagues Under the Sea,” one of the great movies ever made? 

STEWART:  Yes. 

MATTHEWS:  With James Mason and Kirk Douglas.  How can you not have seen that growing up?

STEWART:  Or “Pinocchio” was my first movie ever. 

But he said his mother didn‘t like them.  He went to Broadway shows, but he never saw—he never saw the animated films. 

MATTHEWS:  Let me ask you for—I think I‘m going to suggest a perfect metaphor, to quote Zell Miller here, a metaphor.

You know, they tell me that at Walt Disney World down in Florida, in Orlando, that what you see when you go there as a tourist is this beautiful place with all these great Disney characters walking around and these great sets.  And it‘s like a movie set and all the great places to eat and everything.  But below what you can‘t see, there‘s another Disney World, physically below it, like an underworld, where all the people work. 

They do all the business underground.  They put on their uniforms

underground.  They put on their costumes.  It seems like your book is about

·         to use that metaphor, the underworld. 

STEWART:  Well, yes.

MATTHEWS:  Of Disney World.

STEWART:  There is some truth to that. 

The Machiavellian reality of the corporate suite is so at odds with the image of the company that it was startling to me.  And, you know, I did get the opportunity—and I‘m grateful to Disney for this.  I got to appear as a character in Disney World, as Goofy.  So, I passed that line.  I went from the so-called backstage area into the magic public on-stage area as a character.  And I experience firsthand that sort of starting change from the real world into the so-called magic kingdom.  It was quite an experience.

MATTHEWS:  Well, the below-the-line people, to use a TV—a movie phrase, the people who work in those costume, who work down below, do they really mean it?  Do they really love the idea of being characters and being Disney characters?  Or is it just a job, like a lot of people‘s job are? 

STEWART:  No, it is not just a job.  It‘s something—for the ones I met, they love it, not everyone, of course, but they—it is a very special job. 

And I‘m telling you.  When you have those children coming up to you down there, I guarantee you the hardest heart would melt.  But it is a starting fact to me that I think it was over 75 percent of the employees of Disney voted to withhold their support for Eisner as CEO and the director at that election last year, which is a pretty amazing statistic. 

MATTHEWS:  Right. 

STEWART:  And I think speaks volumes.

MATTHEWS:  Let me ask you about savagery and friendship. 

I mean, people in business always surprise each other when they put business first and friendship second, especially when they get to know each other over the—you know, passing the buck, blaming something on somebody else.  And the other person can‘t believe you passed the buck to them.  How bad is that at Disney? 

STEWART:  Well, it‘s about as bad as I‘ve ever encountered.  In fact, it is the worst that I‘ve ever encountered. 

I mean, a seriously dangerous sign at Disney if you‘re working there under Eisner is to become too close of a friend of Eisner, because, at that point, I think your days are number.  I mean, Jeffrey Katzenberg, who he famously dispatched and then got into contentious litigation with, actually wrote a letter after his last contract negotiation and saying that he loved Eisner, that he viewed Eisner as a father figure.  They were so close.  They had spent 19 years together in intimate contact. 

Then he hired Michael Ovitz, then his so-called best friend, to become the Disney president.  And he destroyed him over the course of 18 months.  If this is friendship, what does he do to enemies? 

MATTHEWS:  Well, what happens when a movie comes out and it tanks?  They spend $50 million and it brings in 10 or 15.  Do they all like say, oh, he did it?  Was there a lot of finger-pointing then?  Is that what happens?

STEWART:  Oh, there‘s a tremendous—now, this is not unique to Disney, I must say.

Hollywood—obviously, success has many fathers.  And nobody want to take credit for failures.  But there are a startling numbers of examples of serious creative misjudgments.  I was startled to learn, for example, that, at Eisner‘s behest, Disney sold off all the rights to “The Sixth Sense” before it was released.  All Disney earned was the distribution fee on the film.  And it was the biggest grossest feature film in history.

MATTHEWS:  They chickened out.  They jumped ship.  And that was one of the best movies I ever saw in my life.  And it made a lot of money.  It made $300 million, didn‘t it?

(CROSSTALK)

STEWART:  And then they—yes.  It made more than $300 million.  It was—it‘s the highest grossing live-action feature film in Disney history.  Then they got rid of “CSI.”

MATTHEWS:  God, it reminds me of...

(CROSSTALK)

MATTHEWS:  They jumped the ship and the ship survived. 

Anyway, James Stewart, a great book.  I don‘t have to tell you to buy the book, because you‘re going to do it, “DisneyWar.”

STEWART:  Thanks, Chris.

MATTHEWS:  Tomorrow on HARDBALL, I‘ll be joined by Academy Award-nominated actor Don Cheadle, what a guy, the star of, what a movie, “Hotel Rwanda.”

Right now, it‘s time for the “COUNTDOWN” with Keith.

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