updated 4/13/2005 12:38:46 PM ET 2005-04-13T16:38:46

Guest: Ronald Kessler, Buck Revell, Wendy Sherman, Rick Francona, James Traub

CHRIS MATTHEWS, HOST:  The White House looks to quiet its critics after releasing a pre-September 11 briefing memo about al Qaeda.  President Bush gets ready for a prime-time news conference tomorrow. 

Let‘s play HARDBALL. 

Good evening, I‘m Chris Matthews. 

Facing critical questions about the war in Iraq and pre-9/11 intelligence, President Bush will hold a formal news conference tomorrow night at 8:30 Eastern Time, his first since last December. 

Our coverage tomorrow night will begin at 7 Eastern with a special 90-minute edition of HARDBALL. 

Over the weekend, the White House released one of the most talked about and perhaps crucial documents in the 9/11 investigation, the August 2001 presidential daily brief was a classified memo on al Qaeda that President Bush received five weeks before the terrorist attacks. 

The release of this document is a huge development historically and dramatic politically.  And while the White House says the PDB won‘t hurt President Bush, other Republicans say it‘s not going to help them either. 

With more on the PDB, here is HARDBALL correspondent David Shuster. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, NBC NEWS CORRESPONDENT (voice-over):  The page and a half memo is entitled “Bin Laden Determined to Strike in U.S.”  It cites evidence of all kinds of active al Qaeda cells in the United States, reports that suspected terrorists had recently surveyed federal buildings in New York, says al Qaeda could be preparing to stage hijackings and refers to threats from three months earlier. 

Nonetheless, the president on Sunday, and again today, said the report contained no new information. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  And I read it and obviously was discomfited by the fact that Osama bin Laden, you know, hated America.  But as I mentioned yesterday, we already knew that. 

And the fundamental question is, you know, what was—was there any actionable intelligence?  And by that, I mean, was there anything that the agency could tell me that would then cause me to have to do something to make a decision to protect America?  There was nothing in there that said, you know, there‘s an imminent attack.

(END VIDEO CLIP) 

SHUSTER:  The PDB contained no specifics about an attack on September 11.  But part of the document seems to undercut the testimony of National Security Adviser Condoleezza Rice. 

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER:  It did not warn of attacks inside the United States.  It was historical information, based on old reporting.  There was no new threat information and it did not, in fact, warn of any coming attacks inside the United States. 

SHUSTER:  But the briefing memo does reveal the, quote, “CIA and the FBI are investigating a call to our embassy in the United Arab Emirates in May saying that a group of bin Laden supporters was in the U.S. planning attacks with explosives.” 

And the PDB also warns that FBI information indicates, quote, “patterns of suspicious activity in this country consistent with preparations for hijackings or other types of attacks including recent surveillance of federal buildings in New York.” 

Republican John McCain. 

SEN. JOHN MCCAIN ®, ARIZONA:  Should it have raised more of an alarm bell—rang more of an alarm bell than it did?  I think in hindsight that‘s probably true. 

SHUSTER:  Last week, Condoleezza Rice also said the lack of any follow-up was not the administration‘s fault. 

RICE:  I don‘t remember the al Qaeda cells as being something that we were told we needed to do something about. 

UNIDENTIFIED MALE:  Isn‘t it...

JAMIE GORELICK, 9/11 COMMISSION MEMBER:  I don‘t think it‘s enough to say, “Well, we didn‘t think this was part of our job.”  I want to probe that issue.  I want to understand from both the leaders and from the people running individual unit what is they though they were supposed to be doing. 

SHUSTER (on camera):  And what the commission is now doing is asking for the public release of more presidential daily briefs.  Commission members say the public is entitled to make up its own mind about the Bush administration and whether more could have been done in the weeks before 9/11. 

I‘m David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  “Newsweek‘s” Howard Fineman is an NBC News political analyst. 

Howard, this isn‘t helping the president, is it, according your new poll?

HOWARD FINEMAN, “NEWSWEEK”:  No, it‘s not.  John Kerry has got a lead in the horse race.  People think the country is going in the wrong direction, and they‘re very skeptical about whether the war in Iraq is making us safer and whether the president is leading well on the war on terrorism, which had been his strongest suit, politically. 

MATTHEWS:  In your latest “Newsweek” poll, Senator Kerry leads President Bush 50-43.  That‘s a seven-point lead. 

And only 36 percent are satisfied, as you point out, with the way things are going in this country.  Well, that can‘t be because of Kerry‘s work, because he hasn‘t done anything in a month.  I haven‘t heard from him.  And he seems a little cold and distant. 

So what is it about the president that people don‘t like right now?

FINEMAN:  Well, they‘re disappointed as they learn more about his sense of command in the war on terror. 

I mean, one of the great things the president has had going for him, since he stood on the rubble with the bullhorn, is a sense of command.  That here‘s a guy who knew how to focus, who may not have been that curious, who hadn‘t read every book in the library, but who was a firm, commanding leader. 

MATTHEWS:  Right. 

FINEMAN:  Now there are questions about his judgment and in going to Iraq to begin with and, suddenly, questions about what he was doing as a war president before the war officially started. 

If Condi Rice was going to say, as she did, that we‘ve been at war for 20 years, then the question is what did he do before 9/11? 

Now it‘s still breaking down along partisan lines, Chris, for the most part.  Republicans very supportive of the president pre-9/11, but it‘s breaking down. 

MATTHEWS:  You know, I think most people—in fact, every night on this show, I think, ever since 9/11, there‘s been sort of a general recognition that what happened on 9/11 was so new, so phenomenal.  You can call it, in insurance terms—don‘t take me religiously here—an act of God, the way they say you can‘t expect something like this. 

But I think the way the president has begun to answer questions is almost self-defeating.  You know, when we went to war, he said there was no imminent threat, but we had to deal with it because it was a long-term threat. 

And then he‘s asked in the press conference today or in the interviews today with President Mubarak by the press, he said well, there was no imminent threat so I didn‘t feel like acting.  I couldn‘t have acted. 

FINEMAN:  Yes.

MATTHEWS:  It seemed odds for him to say since there was no imminent threat, don‘t blame me for not acting, whereas he went to war without an imminent threat. 

FINEMAN:  Well, of course, they argued at the time that it was an imminent threat.  It‘s the reporting and the exposes later...

MATTHEWS:  I‘m talking about his rules of engagement seem to be slighter when it comes to going to war with another country than defending this one, which seems odd. 

FINEMAN:  Well, the question that‘s going to be asked is—in all fairness the question‘s going to be asked, after you got the PDB, sir, on August 6, what did you do?

MATTHEWS:  Right. 

FINEMAN:  Now the way the president phrased it was interesting.  He said there was nothing in the memo that said I had to take action. 

MATTHEWS:  Right. 

FINEMAN:  But that‘s not a very proactive way to operate and, as you point out...

MATTHEWS:  President‘s don‘t get orders. 

FINEMAN:  Post-9/11, he was extremely proactive.  Why the elective surgery later and not before? 

MATTHEWS:  And let me ask you this about this press conference tomorrow night.  What do you make of it?  He doesn‘t like press conferences.  Most people wouldn‘t, except maybe Bill Clinton.  Most people don‘t like them.  Too much exposure, too many chances to mess up. 

Why is he taking the risk tomorrow night?

FINEMAN:  Well, Chris, he‘s given fewer full-blown press conferences than any modern president.  He doesn‘t like them.  He feels uncomfortable.  But this is important. 

MATTHEWS:  Prime-time. 

FINEMAN:  Prime-time.  If going to war in Iraq, the decision to do that was the biggest decision any president has made in decades, and I believe it was, this press conference is going to be, I think, the most important press conference of his presidency so far. 

Because he‘s got a lot of explaining to do for why the war hasn‘t gone as we hoped it would, why Iraq is the mess that it seems to be, at least as viewed on television, and specifically what else he may have done after the warnings that he got on August 6. 

It is not enough to say I didn‘t have to act.  The question will be, “Sir, did you follow up with the FBI?  Was your curiosity piqued?  Did you make phone calls?  What else did you do?” 

I think those are fair questions to ask and he‘ll be asked them. 

MATTHEWS:  Is this a reality?  Is this happening tomorrow night because Condi Rice couldn‘t play defense for the president?  He has to do it himself?

FINEMAN:  Well, Condi Rice did a pretty good job of playing defense except that her answer was bureaucratic.  It was, you know, the bureaucracy was the problem.  But when you‘re president of the United States, standing in front of the nation, indeed the world, that‘s where the Buck stops.  So he‘s going to have to...

MATTHEWS:  Well, what happens tomorrow night if a reporter does manage to get his hand in the air, or her hand in the air and ask the question, “You were briefed out there at the Crawford ranch, five weeks before we received the worst hit in our history as a country, almost like Pearl Harbor.  In fact, I think more people were killed. 

“And what did you do when you got that warning?  You say it is not a warning.  You say it was an historic come, you say it wasn‘t imminent.  You were told bin Laden determined to strike in U.S.  What did you do?”

FINEMAN:  Chris—Chris, I think in his defense, he‘ll say, first of all, I‘m the one who asked for that report, which is true.  It was the president who expressed curiosity about, wait a minute, you‘re telling me about these overseas threats.  What about the United States?

MATTHEWS:  OK. 

FINEMAN:  So, that begs the question if you were curious enough to ask about it, was this one and a half-page memo enough to satisfy your curiosity?  And if so, why?

MATTHEWS:  Do you think a reporter will be brazen enough to ask him tomorrow night, before all the American people, us and everybody, was that something handed to you?  Did you have any reaction to it?  Did you ask any questions?  Did you do anything?  Did you issue any orders?

FINEMAN:  Yes.  I think those questions will be asked.  But keep in mind, on the political equation, that‘s still the stronger sides of things for the president. 

MATTHEWS:  The best topic. 

FINEMAN:  The best topic.  Compared with Iraq, that‘s a good topic, because Iraq is a mess. 

MATTHEWS:  On Iraq, the American people would like to have the job over with and come home, even if they‘re for the war or against the war.  They want it to be over.  Nobody wants to be in Iraq who‘s an American. 

It‘s not in our nature to occupy for any long period of time. 

So, the question is, what hope can the president give us that we will not be there forever, that we‘ll not suffer any more casualties than absolutely necessary and that we have a plan in place to replace us?

FINEMAN:  Well, that‘s what he‘s got to say.  I think the polls show that people still, by an ever-narrowing margin, that people still think it was the right thing to do. 

SHUSTER:  Well, you know, that number stays at around 57 percent, remarkably, in your new poll. 

FINEMAN:  They still think—they still think that morally, and I assume geostrategically, it was a good idea to go there.  But they‘re begging the president, I think, to give a better explanation and rationale for the whole thing. 

It‘s not good enough for Paul Bremer to say over the weekend, as he did, “Well, we don‘t know precisely whom we‘re turning the thing over to on June 30.” 

MATTHEWS:  Suppose we final ourselves on June 30 with a turkey over there?  I don‘t mean the country, turkey, I mean some loser of a leader who‘s some fat burger from the—I hate to make it sound like—looks like some business guy who doesn‘t look like a leader, who‘s sort of going to meetings and sitting in front of meetings all the time while our guys are getting killed? 

FINEMAN:  Well, it seems increasingly clear that what‘s going to happen on June 30 is that the handover is going to be in name only. 

MATTHEWS:  To a committee?

FINEMAN:  To a committee.  It‘s not going to be that functionally different from what‘s happening now.  For legal reasons and political reasons in Iraq and in America, we have to say we‘ve turned something over. 

MATTHEWS:  Yes. 

FINEMAN:  But it‘s not going to be clear to who.  If Paul Bremer can‘t say who they are, that begs the question of why he either doesn‘t know or is afraid to say before that date.  And that‘s going to be something Americans will look at.

MATTHEWS:  You think—let me try to answer this journalistically.  Do you think most Americans will believe that, as long as we‘ve the Army over there and they don‘t, as long as we‘ve got the money and they don‘t, it will be the old role, Latin America—I used to say about Latin America, remember?  A Buck in the pocket and a kick in the ass and we‘ll run the show. 

Is it going to be like that, the Americans are basically calling the shots?

FINEMAN:  Well, as somebody else, I think Tucker Carlson, our friend, observed over the weekend, we‘d love a puppet government if only it would be a puppet. 

MATTHEWS:  A good puppet. 

FINEMAN:  A good puppet.  The problem is we‘re going to turn it over to some kind of client government that is apparently not going to be able to control the situation, and you have neutral observers, including Republicans, saying that we are going to need more troops there, certainly not fewer, over the next year. 

MATTHEWS:  You say astutely, I believe, that the war on terror is still a winner for the president politically, because it‘s the only game in town.  John Kerry isn‘t fighting terrorism.  He‘s running for president.  The president is fighting terrorism. 

Is the war in Iraq a net-plus for the president looking towards November?  The fact that he fought it, the fact that he‘s fighting it, the fact that he‘s there? 

FINEMAN:  Less of one than it was.  Less of one than it was.

MATTHEWS:  Plus or negative?

FINEMAN:  Well, I think it‘s right on the borderline right now. 

MATTHEWS:  Then it‘s going to be below that at some point. 

FINEMAN:  And I think in the people‘s mind, it‘s a unity between the war in Iraq and the war on terror.  It‘s that way.  We used to think that that was a net-plus for the president, but the linkage of all them together may end up being a problem for them. 

MATTHEWS:  Yes, thank you very much, Howard Fineman, as always. 

Our coverage of the president‘s press conference begins tomorrow night with a special 90-minute edition of HARDBALL starting at 7 Eastern. 

Coming up, a preview of tomorrow‘s hearings.  This is also going on.  The 9/11 commission.  Former attorney general Janet Reno and former FBI Director Louis Freeh are set to testify tomorrow.  The blame game goes on. 

And later, more Americans missing in Iraq.  Can the coalition get the insurgency under control?

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, we‘ll preview tomorrow‘s crucial hearings before the 9/11 commission and find out whether the FBI deserves to take the fall for not stopping 9/11.  HARDBALL, back in a minute. 

(COMMERCIAL BREAK)

MATTHEWS:  Tomorrow, the 9/11 commission is set to hear testimony from former FBI Director Louis Freeh, former Attorney General Janet Reno and current Attorney General John Ashcroft. 

For a preview, Ron Kessler is the author of “The Bureau: The Secret History of the FBI.”  And Buck Revell is a former FBI deputy director. 

The presidential daily brief from five weeks before 9/11 said that, quote, “FBI information since 1998 indicates patterns of suspicious activity in this country consistent with preparations for hijackings or other types of attacks, including recent surveillance of federal buildings in New York.” 

And here‘s what President Bush said about the hijack warnings yesterday. 

(BEGIN VIDEO CLIP)

BUSH:  You might recall the hijacking that was referred to in the PDB Is not hijacking of an airplane to fly into a building.  It was hijacking of airplanes in other to free somebody that was being held as a prisoner in the United States. 

(END VIDEO CLIP)

MATTHEWS:  So, Ron, the big question here is where does the responsibility lie?  With the FBI, to give the president more information, in other words perhaps the flight numbers?  I‘m kidding here.  But how much information should an agency be expected to give the leadership before the leadership acts?

RONALD KESSLER, AUTHOR, “THE CIA AT WAR”:  Well, the issue...

MATTHEWS:  Like a warning to the FAA, warning to pilots, warning to crew people.  Warning to airports. 

KESSLER:  At that point it‘s already too late.  What really needed to be done was that we needed an effective FBI, an effective CIA that could actually penetrate these plots.  It takes years to do that or intercept their communications. 

It‘s not a matter of, you know, the PDB said there‘s some little snippet of information, we should go pursue it.  And Richard Clarke‘s version, which is we should all have meetings at the NSC. 

MATTHEWS:  Right.

KESSLER:  That is not the way you solve a terrorist plot.

MATTHEWS:  But when you know that hijackings are coming—I‘m just being—and you know there‘s something involving buildings in downtown New York within two blocks of the World Trade Center.

KESSLER:  Every day...

MATTHEWS:  And you know bin Laden is involved and you know he‘s determined to attack inside the United States.  Isn‘t that a lot of information or isn‘t it?

KESSLER:  No.  No.  Because every day there were threats of all kinds.  Threats of hijackings, threats of bombings, all kinds of threats.  And unless you actually know what‘s going to happen, you can‘t...

MATTHEWS:  How do you get that information?

KESSLER:  You have an effective FBI and CIA

MATTHEWS:  Human intelligence? 

KESSLER:  Under the Clinton administration, both agencies were, in the case of the FBI, decimated by Louis Freeh.  He didn‘t believe in technology.  They didn‘t have computers.  If you did search in a computer for flight schools, you couldn‘t do it, because you had to search either for flight or for schools. 

You had all these fiascos, Wen Ho Lee, Richard Hanssen, the Jewel case.  These things were happening every six months because Louis Freeh‘s management was so poor.  He didn‘t want to hear bad news, and he didn‘t want to hear dissenting opinions. 

MATTHEWS:  Let‘s go to Buck.  Buck, you worked as deputy director of the FBI.  All I know is the anecdotal information most of us have, is that the morning of 9/11, and I‘ve said this so many times, I‘ll probably say it 10 more times on this program, the director of the CIA, George Tenet, knew that this guy, Moussaoui, had been picked up in Minneapolis. 

He was being held for having the weirdness to want to take flight training and how to fly a big 747 or whatever it was while it‘s already in the air, not how to take off, not how to land, simply in effect how to hijack.  And he said, “I hope it‘s not guy that wanted the flight training.” 

So there was some communication, in a basic sense, from the FBI to the CIA director.  So some part of the system was getting through, the intelligence that the president needed to have.  Wasn‘t it?

BUCK REVELL, FORMER FBI DEPUTY DIRECTOR:  Well, yes, there was always the sharing of certain types of intelligence. 

The difficulty is that the FBI Was not allowed to be an intelligence collection agency, per se, and before 9/11, before the Patriot Act, there were many types of information and intelligence that even if the FBI had it, it couldn‘t be shared, particularly if it involved a U.S. person and it came through a FISA, a foreign intelligence surveillance intercept. 

The difficulty...

MATTHEWS:  Well, the problem here, let‘s be honest here.  Let‘s stop with that.  The people that attacked us on 9/11 were not Americans.  The guy that was picked up, and many call him the 20th hijacker, Moussaoui, who‘s still in custody, was not—is not an American. 

Somehow that information did get through to the CIA director.  Didn‘t that show something was working?  Or what happened here?

REVELL:  Well, you had FBI Agents and CIA And the CTC.  You had CIA personnel and the FBI.  There was an ongoing exchange of information.  And certainly in that presidential briefing, there was FBI information that had been put in that briefing by the CIA.

There is a committee that meets in the—at the White House called the CSG, the coordination subcommittee, of which the CIA and FBI both participate. 

I led a number of joint operations with the CIA during my time.  But the fact of it is, there were still areas that by law—by law, not by individual determination, could not be shared.  And that situation could have been corrected, but wasn‘t until after 9/11. 

MATTHEWS:  The presidential daily brief also said that, quote, “The FBI is conducting approximately 70 full field investigations throughout the U.S. that it considers bin Laden-related.  CIA and the FBI are investigating a call to our embassy in the United Arab Emirates in May saying that a group of bin Laden supporters was in the United States planning attacks with explosives. 

And here‘s what President Bush said about those 70 FBI field investigations today.  Let‘s take a look. 

(BEGIN VIDEO CLIP)

BUSH:  You‘re right.  There was—they included the fact that the FBI was conducting fields investigations, which comforted me.  You see, it meant the FBI was doing its job.  The FBI was running down any lead. 

(END VIDEO CLIP)

MATTHEWS:  The big question is should the president have been comforted by the fact that the FBI was, in fact, conducting 70 investigations around the country? 

More with Ron Kessler and Buck Revell when we return.

And still ahead, we‘ll get the latest on the insurgency in Iraq with former Assistant Secretary of State Wendy Sherman and Lieutenant Colonel Rick Francona. 

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with Ron Kessler and Buck Revell. 

Buck, I want to ask you the question—when the president of United States says as he did today, that he was confident to know that the FBI was on the case, and this was five weeks before 9-11.  Should he have been?

REVELL:  Well, obviously the FBI was giving a lot of attention to the al Qaeda and had been since the first World Trade Center bombing in 1993. 

But the fact is that the investigations don‘t ensure that the FBI knows everything that al Qaeda is doing or is about to do and, frankly, it never will.  Certainly, you can never hope to have all the knowledge that you would like to have to be able to prevent every possible act of terrorism.

But I think it certainly is comforting to the president to know that his principle counterterrorism agency in the United States, is, as you said, on the job, on the case.  But it certainly doesn‘t mean that everything is known that could or should be known. 

MATTHEWS:  The disturbing thing the president—it‘s too late to assign blame, but not too early to assign responsibility here. 

The FBI is the chief investigative agency in the United States in terms of this kind of activity in the country itself.  Yet we‘re now hearing from Louis Freeh, complaining he didn‘t have enough money, didn‘t have enough authority.  We heard it from Buck there, not enough authority in terms of getting intelligence over to the CIA and back and forth. 

All kinds of reasons why the FBI can‘t do what the president was comforted to know it was doing. 

KESSLER:  And the biggest problem was just a lack of focus.  There was not a real attention being paid to this. 

Louis Freeh was off acting as a case agent on the Khobar bombing case. 

He didn‘t like to hear bad news or disagreement. 

And then at the CIA, you had—you had major budget cuts there.  And there was a 25 percent decrease in clandestine officers. 

MATTHEWS:  Why is that?

KESSLER:  The Clinton administration didn‘t really believe in intelligence very much.  I mean, Bill Clinton did not...

MATTHEWS:  Is this like—do you remember how J. Edgar Hoover was so focused on the reds, he didn‘t focus on the mafia?  Is that like this?  It just wasn‘t a matter of taste here?  They didn‘t want to focus on Arab terrorists?

KESSLER:  It was—It was—I mean, the other side is that none of us were sensitive enough...

MATTHEWS:  I agree.  We‘re all guilty in that sense. 

Buck, was the FBI sensitive enough—was it focused enough on terrorism when you were there?

REVELL:  We sure went after it tooth and nail and we stop a lot of terrorists acts.  So I think it was. 

MATTHEWS:  You did a good job on tracking down the people that did it in ‘93. 

Anyway, thank you, Ron Kessler.

Thank you, Buck Revell. 

Up next, two U.S. soldiers and seven American civilians are missing right now in Iraq after two separate attacks on Friday.  We‘ll get the latest when we come back. 

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  This half-hour on HARDBALL, two U.S. troops and seven American civilians are missing inside Iraq, while Iraqis freed seven Chinese hostages today.  We‘ll get the latest from Baghdad.  Plus, how will the escalating violence in Iraq change the race for the White House? 

But, first, the latest headlines right now.

(NEWS BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

In Iraq today, the military announced that two American soldiers and seven U.S. contractors have gone missing after their convoy was ambushed by Iraqi insurgents. 

NBC‘s Carl Rochelle is in Baghdad with the latest—Carl.

CARL ROCHELLE, NBC CORRESPONDENT:  Chris, late word tonight from the Chinese News Agency, quoting a senior diplomat in Iraq, saying those seven Chinese who were taken hostage yesterday in the area around Fallujah have now been freed.  They were on that road that runs from Jordan into Baghdad.  They had a lot of trouble getting down that road, taken hostage on Sunday. 

According the Chinese News Agency, they are now free. 

However, there are still nine U.S. individuals who are missing and possibly kidnapped.  We don‘t know their absolute fate.  Two of them are military.  Seven of them are employees of Kellogg, Brown & Root, the Halliburton subsidiary, which conducts a lot of operations here in this area. 

Some of them likely came from that convoy that was attacked last Friday.  Now, according to the military, they found one body at the site of the convoy attack, which is near the area Abu Ghraib, which is west of Baghdad, found one bodied in a shallow grave there today.  We do know that Thomas Hamill, 43-year-old of Macon, Mississippi, was also in that convoy.  At least we believe he was in that. 

We do know that he is alive.  We have seen him, pictures on Al-Jazeera yesterday and the day before pictures from an Australian Broadcasting Corporation cameraman showing Thomas Hamill alive and well at the present time.  We do not know the fate of the three Japanese who were held hostage.  Some word yesterday that they might have been released.  They have not been released.  Japanese officials are losing hope on that, although Vice President Cheney has offered to try to help them out in finding those individuals. 

Three Czech journalists have gone missing this week.  They are possibly being held hostage.  In Fallujah, fighting tonight.  This tenuous cease-fire does hold in the area.  It‘s a unilateral cease-fire.  Negotiations carried out today.  But the Marines are not going on the offensive, but they were being fired on tonight.  We understand that five Marines were wounded, none fatally.  But they don‘t continue to hold those positions.  The cease-fire does stay in effect for now, and the talks continue—Chris.

MATTHEWS:  Thank you.  That‘s NBC‘s Carl Rochelle, who is in Baghdad. 

Wendy Sherman served as counselor of the State Department under the Clinton administration.  And retired Lieutenant Colonel Rick Francona is an MSNBC military analyst. 

Let me start with Colonel Francona.

How do you protect civilian contractors from hostage taking if you want to go out and meet and work with the people? 

RET. LT. COL. RICK FRANCONA, NBC MILITARY ANALYST:  Well, you have to treat them just like you do the military. 

These drivers were taken as part of military convoys.  They were hauling military equipment, military supplies and should have been under military protection.  In fact, they were, but obviously not enough. 

MATTHEWS:  But don‘t you have to let them mix and jive with the locals?  Basically, you can‘t keep a guy within a cocoon of military control and expect him or her to do their jobs of working with the Iraqis, can you? 

FRANCONA:  Well, if you‘re talking about the civil administration...

MATTHEWS:  Right. 

FRANCONA:  ... they‘re going to have to get out there.  And those people are going to be very, very susceptible to this hostage taking, this kidnapping.  How do you protect them? 

You can assign them bodyguards, but that kind of defeats the purpose of it all.  We‘re entering a very, very dangerous time. 

MATTHEWS:  Let me ask you, Wendy, about this thing, this diplomatic terminology.  You and I went through the hostage crisis in ‘79.  That‘s where an entire embassy was grabbed.  But we sort of knew they weren‘t going to kill them, at least we hoped they wouldn‘t, because it was almost an official act of the Iranian—the new government there.  But what do you do in these cases? 

WENDY SHERMAN, FORMER STATE DEPARTMENT ADVISER:  I think we have a terrible situation.  It goes back to the underlying principles here, which is, we didn‘t go in with a force large enough.  We don‘t have a force large enough there now. 

We have an American face on this occupation.  And the real pain of the

last few days is that America is becoming the enemy.  We have Sunni and

Shia working together against America.  So we have brought the country of

Iraq together.  Perhaps we have done that.  Perhaps they feel like a

sovereign country, but we‘re the enemy and the enemy

(CROSSTALK) 

MATTHEWS:  But how we do we—I give you a lot of credence on your argument, because I think nationalism is something we should have expected when we went in there.  We‘re nationalistic.  We call it patriotism. 

SHERMAN:  Absolutely. 

MATTHEWS:  Good guys or bad guys, everybody loves their country, I think. 

SHERMAN:  Absolutely. 

MATTHEWS:  And so the question is, what do we do when we get in this situation?  Does the United States negotiate with terrorists or is that just something we say we don‘t do, but we do? 

SHERMAN:  We do not negotiate with terrorists.  That doesn‘t mean we don‘t have conversation with terrorists.  That doesn‘t mean that we don‘t use third-party intermediaries with terrorists.  And my guess is, there is a lot of that going on and I think we all hope there is some of that going on, because we want to see these people free and safe with their families. 

MATTHEWS:  Let‘s talk about this case of Tom Hamill.  He‘s a very calm, courageous guy. 

Colonel, he is over there.  They‘re saying that they‘re going to do damage to this poor guy if we don‘t leave—what is it, leave Fallujah. 

FRANCONA:  Right. 

MATTHEWS:  That is a very tactical kind of use of a person‘s life, isn‘t it? 

FRANCONA:  Yes.  It is also nonstarter. 

I think the people who have taken him know that that is not going to happen.  So there‘s got to be a longer-term goal here.  They‘re showing that they can take the hostages.  We know that.  But if they believe for an instant that this is going to get them anything in Fallujah, I think they‘re mistaken. 

Now, the ambassador, I think her point is extremely well taken.  We are talking to the people in Fallujah.  But I don‘t think there is any negotiating going on. 

MATTHEWS:  So where does this end? 

SHERMAN:  Well, one hopes it ends well.  But I think it can only end well if we have got some of the clerics in Iraq that are having conversations, that are trying to take a long-term view of this.  If the president comes on tomorrow night and he says to the American people, look, here‘s my plan, here‘s how we‘re going to turn this over to the Iraqi people, we‘re going to listen to what Brahimi, the U.N. envoy, has to say, and if he gets the agreement of Iraqi leaders for a plan to turn over sovereignty, we‘re going there because Iraq belongs to the Iraqi people.

And that‘s what the Iraqi people need to know, that it is their future, not America‘s future.  It is not Vietnam, Chris.  And it‘s not Lebanon.  But there are some similarity and lessons around nationalism and around making sure that we understand what freedom and democracy means to the people in Iraq, not just our vision of freedom and democracy. 

MATTHEWS:  Well, Colonel, the question is, do people who feel that they‘ve been invaded have this sort of big world sort of generous view of the world, where they may well be feeling so invaded and so angry that they believe the rules of war don‘t really apply to them? 

FRANCONA:  Well, these people that are doing these acts certainly do. 

Chris, the Iraqis traditionally have been a xenophobic people.  They want

no occupation.  A lot of

(CROSSTALK)

MATTHEWS:  Well, why didn‘t somebody tell the president and the neocons around him that this would be an unlikely target for American nation building?  They don‘t like foreigners. 

FRANCONA:  I think a lot of people were saying that.  The Iraqis have traditionally resisted any kind of foreign troops on their soil. 

They don‘t—they don‘t care if they‘re British, they‘re American, they‘re Jordanian, they‘re Turks.  They don‘t want any foreigners there. 

MATTHEWS:  What country likes foreigners in their country? 

FRANCONA:  Well, a lot of European countries have tolerated American troop presence for years. 

MATTHEWS:  Yes. 

FRANCONA:  But the Iraqis would never have that.  And I think once we appeal to their nationalism, and if it‘s possible, and get an Iraqi face on this and let them solve this problem, that might work. 

Now, if the goal of the administration is to keep American troop presence past the sovereignty date, whenever that is, seven months after the turnover, I think that is going to be very, very difficult. 

MATTHEWS:  But isn‘t there going to be, as Richard Cheney warned us back in ‘91, a deep suspicion of any government put up by—stood up, as we like to say—by the United States? 

SHERMAN:  I think it cannot be a government that is stood up by the United States.  I think it is why many people have called for the United Nations to be a partner in this with the United States, to internationalize this, to get the American face off.  And we are way behind the curve in getting that job done.

MATTHEWS:  When we put somebody in like Ahmad Chalabi, who left Iraq back when the Brooklyn Dodgers left Brooklyn and went to L.A.—that‘s when I was a kid—to be away from your country since you were below 10 or something like—he was nine or 10 years old—to come back to your country and be all of a sudden part of the ruling government of that country, isn‘t that almost unbelievable for a country to accept, a guy who‘s probably developed an American accent, he dresses like a Westerner, he is loaded with money, and he hasn‘t been around since the 1950s?  What normal government would accept him as a leader? 

FRANCONA:  Well, that‘s always been the problem.

And, you know, we were warned about that and we—a lot of us warned the government about that, said, you cannot bring these outsiders in.  And the Iraqis have resented that from day one.  It smacks of like the carpetbaggers. 

MATTHEWS:  Well, that‘s the question. 

Let me go back to this whole question of dealing for hostages, which is the problem tonight.  Wendy, if you were secretary of state, if you were Colin Powell right now, what would you be doing to get Mr. Hamill out? 

SHERMAN:  I would be talking not only to the clerics and to the people in the Governing Council, but I would be talking to any third party who had relationships, who had a way in to say that this is not going to win the war, because we are in a war.  This is not going to get Iraq returned to Iraq faster, because, in fact, the more insecure the situation, the less we‘re going to get the Americans out of it. 

And I would use all those intermediaries I could.  I might even use a secret channel through Iran to some of the insurgents.  I would use any channel I could to get the message that you are not going to win.  There is not going to be a negotiation.  There is not going to be a payoff here for you unless you get out of this. 

MATTHEWS:  We‘ll be back with Ambassador Wendy Sherman and Colonel Rick Francona with more on this question, what do we do with the hostages right now and what lessons are we getting in this nation-building in Iraq.  That‘s coming later in the program. 

You‘re watching HARDBALL on MSNBC. 

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(COMMERCIAL BREAK)

MATTHEWS:  Coming up, the challenges of nation building in Iraq.

HARDBALL back in a minute.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back with former Assistant Secretary of State Wendy Sherman and MSNBC military analyst Rick Francona. 

Colonel Francona, tell me your view about the military.  Now, it seems to me the strategy over there is almost like the World War II of the Atlantic or Pacific.  Everything is in a convoy and then you get back to safe harbor, these zones people are living in.  How can you deal with the people, the local people, in any kind of friendly or warm way if every night you are like a colonial power, rushing back to your safe areas, which are heavily fortified and during the day moving in convoy?  You wouldn‘t be too popular, I wouldn‘t think. 

FRANCONA:  No.  No.  And this is very similar to what we saw up in northern Iraq when the Iraqi army went after the Kurds.  They did the same thing.  They built these fortresses and they moved from fortress to fortress. 

We‘re doing pretty much the same thing.  We have got green zones and safe areas and we move between them.  The trouble with that is, that once you‘ve defined a perimeter, you never move beyond it.  We learned this the hard way in Vietnam.  If you build a fire base, you never get outside of it. 

MATTHEWS:  Well, that is also the problem we do in normal police work in the United States.  We have a tough neighborhood.  And if the cops stay in their squad cars, they never meet anybody and then they have got to investigate a crime or catch a bad guy, they are not going to get any help. 

SHERMAN:  Absolutely. 

What we need is a large enough force and really better trained Iraqi security forces, so people can be out in the street, they can be out in the neighborhoods.  But, right now, we‘re in I think eight base camps.  Rick may know.  And we rarely come out.  Paul Bremer was going to come out of the green zone to have a meeting, to interact with people. 

MATTHEWS:  Right. 

SHERMAN:  There was a suspicion of an unexploded bomb and he went right back into the hole.  It is a problem. 

MATTHEWS:  You say more troops.  And I wonder whether that isn‘t a cliche, because people like John McCain, Senator McCain, say that all the time.  But I think that‘s sometimes just to bother President Bush. 

But you say more troops.  That means more targets.  That means more of a foreign presence in your country, more Americanization of the operation.  Doesn‘t that make people say, there‘s too many of them in my country? 

SHERMAN:  I didn‘t necessarily say they would all be foreign troops or American troops.  I think we have to build more quickly a larger Iraqi security force.  We need to give them proper training. 

It is astonishing that a battalion refused to fight with the Americans the other day in Fallujah.  But they‘re worried about losing their own credibility with their own people to have Iraqis fight on Iraqis.  We have to get past that.  Part of the problem here is, we are so far behind the curve.  We didn‘t go in with enough force, as Army Secretary Shinseki had suggested and lost his job because of it. 

MATTHEWS:  He‘s the one that said we needed hundreds of thousands of troops. 

SHERMAN:  That‘s right. 

MATTHEWS:  Right. 

SHERMAN:  And no one listened to him.  He lost his job as a result of it. 

So we didn‘t start with enough troops.  We didn‘t keep the Iraqi army, for some legitimate reasons, but we had nothing to fill the vacuum.  And we had no vision.  The president has yet to present his plan, even to Republican Chairman, Senate Foreign Relations Committee, Dick Lugar, about what is going to happen on the 30th of June.  And that‘s a big power vacuum and there are a lot of people who want to fill it.

MATTHEWS:  Rick, what did you think on the cover of “Newsweek” this week, the idea of—I think it may be premature—I hope it is—shades of Vietnam, the Vietnam syndrome?  Do you think the military guys and women you know think that we‘re heading into that kind of quagmire? 

FRANCONA:  No, I don‘t think so. 

Surprisingly, the morale is still high of the people, you know, we talk to.  But it‘s—and I think the ambassador has got a good point, that you know, we needs more troops on the ground, not necessarily more American troops.  And that is how you get over this base camp syndrome, is, you have got to get out there with the people.  But you can‘t do it with the force structure that‘s there right now.  And the Iraqi army refusing to fight, that is a major problem. 

The disbandment of the army and also the refusal to decriminalize the Baath Party, it has left us wide open. 

MATTHEWS:  Well, you know, Rick, it is a well-intentioned argument you‘re giving.  But the problem is, they say, bring in the foreign nationals, well, they just grabbed some Chinese.  They grabbed some Japanese.  They‘re killing—chasing the Ukrainian army all over the place.  I mean, they don‘t seem to have any problem over there attacking non-Americans, do they? 

FRANCONA:  Well, they

(CROSSTALK)

MATTHEWS:  They like shooting non-Americans or grabbing them. 

FRANCONA:  Yes, but they only grabs the ones that they think are going to do them any good, and that‘s why they released the Chinese.  But if you get an international force in there and you get the rest of the world behind us, I think it would make a real big difference. 

MATTHEWS:  It doesn‘t look like a good destination resort right now. 

Anyway, thank you very much, Colonel Rick Francona.

Ambassador Wendy Sherman, thank you, dear. 

SHERMAN:  Thank you. 

MATTHEWS:  Coming up, what lessons are we learning about nation building in Iraq, and some tough ones, and what will the upcoming June 30 handover look like in Baghdad? 

You‘re watching HARDBALL on MSNBC.  That‘s coming up. 

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

James Traub is a contributing writer for “The New York Times” magazine. 

You‘ve written a great piece about nation building.  I have to ask you a couple questions, James, starting with I guess the most obvious one, given the hell that‘s been going on over there in Iraq, especially in Baghdad, but not just there.  What happened to the so-called happy Iraqi, the notion that we would be greeted by people who really wanted us there? 

JAMES TRAUB, “THE NEW YORK TIMES MAGAZINE”:  Well, I guess the question we should ask is, who exactly believed in the happy Iraqi? 

Clearly, Ahmad Chalabi, who was the Iraqi who we listened to the most, at least the Pentagon, believed in it.  Most people didn‘t.  Most of the Iraqi nationals who we consulted beforehand didn‘t.  Most of the people who were an expert on Iraq didn‘t.  And I think especially what comes out in my article is that most people who knew something about these peacekeeping settings understood that whatever the case turns out to be, you have to be prepared for a setting which is going to be really adverse, which is why they say always go in with a big, big force.  It takes more people to pacify a country than it does to conquer its army. 

MATTHEWS:  How much of the limitation that we have on our military, the relatively small number of troops put in there for the occupation, was based upon an ideological notion that the people really would welcome with us open arms? 

TRAUB:  Well, two different notions. 

One, clearly a piece of this is Rumsfeld‘s own belief in a lighter, swifter, more lethal force.  That is, he wanted to go in with a small number of troops to make a point about the Army of the future.  But then the question is, why didn‘t they say, OK, right behind those guys, we‘re going to have squadrons of civil administrators, military police, constabulary forces, all sorts of folks?  Why didn‘t that happen? 

And the answer is, I think, as you say, Chris, there was an ideological belief that nation building in this case maybe was unnecessary and, in any case, is not a worthy act of a great army like ours. 

MATTHEWS:  But it seems like—I don‘t want to be sarcastic, because lives are at stake and they‘re being lost as we speak right now and they‘re people are being held captive right now—but it seems like people went in there with the idea this was going to be a Habitat For Humanity kind of project, that they were going to be there to greet us and to take instruction.  And we would bring the materials and we would all be singing “Kumbaya” together and building houses together...

(CROSSTALK)  

MATTHEWS:  ... and putting in electricity and putting up hospitals. 

In fact, we‘re facing what we all knew.  James, you‘re an intellectual guy.  And most people have this much information at hand.  There‘s such a thing as nationalism. 

TRAUB:  Right. 

MATTHEWS:  It is why the president puts a flag on his lapel.  It‘s why we all do and express our American patriotism.  Why didn‘t we expect to face Iraqi nationalism? 

TRAUB:  I have to give you a psychological explanation. 

I think these guys—and by these guys, I mean the chief figures in

the Pentagon and Cheney‘s office—are so convinced of the rightness of

their own goals that they simply cannot consider the possibility that

others aren‘t.  They just

(CROSSTALK)

MATTHEWS:  That said opinions differ. 

TRAUB:  Yes. 

But the point is, of course, we‘re right and therefore others will recognize that we‘re right.  I think it was, among many other things, that simplistic. 

MATTHEWS:  Well, let me ask you about how you see it on the ground in terms of nation building.  I guess the most famous case of a country being built by other country—I guess we were to some extent built by the English, I guess you could say, hundreds of years ago—is India, where you have a really steadfast democracy and a lot of sort of Anglo-traditions left over from the Raj. 

And I suppose—but that took 100 or so years of British people actually living there, loving India, getting along with the Indians at a distance, but definitely inputting their political input on the country.  How can we build a culture of democracy in a couple years? 

TRAUB:  Well, first of all, the India example, I think that‘s very well chosen. 

But the problem is, nobody is willing to be that patient anymore, because it is their country and they‘re not willing to let somebody else come in and run it for a couple generations until they‘re ready to take over all those nice railroads.  And so part of the difficulty is, how do you help these guys train police, train judges, train civil administrators, and so forth, while at the same time making them understand it is their country?

That‘s a very hard thing to do.  And come July 1, whoever it is we hand this government off to, we‘re going to have that problem.  So we‘re going to have to be there in very big numbers, both in terms of a military and a civilian operation.  And I think one of the reasons why maybe it is a good idea...

MATTHEWS:  Right. 

TRAUB:  ... to have it to be done by NATO and the U.N. is that it gets away from the just overtly colonial thing of the biggest power in the world telling these guys what to do. 

MATTHEWS:  You know, the irony is, James, that, back in 1991, when there had to be a rationale for not going to Baghdad, for simply liberating Kuwait and coming home, which was unsatisfactory to a lot of people, Richard Cheney, who was then the Pentagon chief, said that one reason not to stick around was that whatever government we put in power would be suspect as a puppet government. 

Why do you think Cheney‘s mind changed?  I know it‘s ironic and even funny, because he saw this hell coming and yet he came here.  What changed his mind?

TRAUB:  What I honestly don‘t get about Cheney is that I thought of him at that time as being kind of a Gerald Ford Republican.  Now he‘s emerged to be, I think, the most ideological of all these guys, clearly, the big sponsor of Chalabi, for example, and the one who insisted on this “We‘re going to be welcomed with flowers” nonsense.  I don‘t know how that happened.

MATTHEWS:  Well, you know what?  It could be, James—you and I agree.  A lot of people have thought he has been a moderate all these years because he wears button-down collars and he‘s so soft-spoken.

TRAUB:  Right.  Right. 

MATTHEWS:  And his wife is a writer and he lives in Washington.  It could be that he‘s always been an ideologue.  And I think that the question of our generation.  Why did Dick Cheney change from being what seemed to be an intellectual to being an ideologue?  Anyway, maybe they‘re the same thing.

Anyway, thank you very much, James Traub, great piece in “The New York Times Magazine,” contributing writer James Traub of “The New York Times Magazine.”

Join us again tomorrow for a big day of HARDBALL.  Our coverage of the 9/11 hearings featuring testimony from former FBI Director Louis Freeh begin at 9:00 a.m. Eastern, followed by a special edition of HARDBALL at 12:30.  That‘s afternoon tomorrow.  Then, at 7:00 Eastern, our regular time, it‘s a special expanded show, 90 minutes long, followed by the president‘s press conference at 8:30, then more at 11:00 tomorrow night.  We‘re here all day tomorrow. 

It‘s time for the “COUNTDOWN” now with Keith.

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