updated 7/12/2005 10:36:20 AM ET 2005-07-12T14:36:20

Guest: E.J. Dionne, Deborah Orin, Lowell Bergman, Michael Isikoff, Tom Ridge     

CHRIS MATTHEWS, HOST:  President Bush tells America that our war on

terrorism has disrupted several al Qaeda plots against U.S. targets.  Tonight, the former secretary of homeland security, Governor Tom Ridge; plus, the summer of not-so-secret sources, from Deep Throat to the architect, Karl Rove, an inside look at reporters and who is pushing the stories. 

Let's play HARDBALL. 

Good evening.  I'm Chris Matthews. 

British intelligence officials have few breaks and no suspects four days after the terrorist attacks that rocked London.  And they're asking counterterrorism officials in the U.S. and Europe to help in the investigation. 

We're joined now by former Homeland Security Secretary here in the United States Tom Ridge. 

When you first heard about the subway attacks, the three of them and the double-decker attacks over in London, your reaction. 

TOM RIDGE, FORMER HOMELAND SECURITY SECRETARY:  Well, actually, I heard about it when I got off the plane having left London about an hour-and-a-half before, when we were talking with some of their counterterrorism officials just the preceding day, saying, because everybody is paying attention to what's going on in Iraq, we still have to be mindful and vigilant back home. 

And my reaction was, as good as the MI5 is, and as good as the British domestic intelligence service is, obviously, this one escaped them. 

MATTHEWS:  Are you amazed that it is a clean getaway so far? 

RIDGE:  Yes, I am. 

But we're only four or five days into the investigation.  They have got forensic evidence they're pulling together.  This is a city that has got quite a few surveillance tapes, literally Hundreds of witnesses.  So, I think we have got to give a little bit more time. 

MATTHEWS:  What about the—how hard is it, having been homeland security secretary, for 10 or 20 guys to get together and buy some dynamite and set some watches?  That's all it comes down to, isn't it? 

RIDGE:  Well, I think this demonstrated that, as good as your intelligence gathering capability is in your own homeland—and Great Britain has a great domestic intelligence service, it can be done.  It can be done, particularly in a city that's as cosmopolitan and as sophisticated as London.

Even though they knew they had radical mosques and imams preaching their ideology of hate...

MATTHEWS:  Yes. 

RIDGE:  ... you can't keep your eyes on everybody.  And this can happen in a city of millions of people that is a very cosmopolitan...

(CROSSTALK)

MATTHEWS:  OK.  How do you stop these guys?  As I said, 20 guys get together. They plot. 

They say, who is going to get the dynamite?  We can get it for you?  At what step—if you were God and you could step in and say, we caught you, you're all going to jail, would you have to step in? 

(CROSSTALK)

MATTHEWS:  Could you step in ahead of time? 

RIDGE:  Well, Chris, I think, ultimately, in order to intervene, interdict and prevent something like that, you have to have on-the-ground and—some kind of either electronic intelligence that identifies a potential perpetrator or you have to have human intelligence who says this is a cell.  Be mindful of it. 

(CROSSTALK)

MATTHEWS:  You have to crack it. 

RIDGE:  You have to crack it.  The Brits have done that on a couple of previous occasions. 

But, obviously, I think it demonstrates, again, there are certain things you do in every country, in every community, to reduce the risk.  You cannot eliminate the risk, no matter what do you. 

MATTHEWS:  The president said today down in Quantico, at the Marine base, that we have been successful at interdicting a couple of these operations.  Do you know anything about that? 

RIDGE:  I think the president was referring to the FBI's involvement and the Department of Justice's involvement in several terror cells around the United States. 

MATTHEWS:  Well, have they been dangerous operations that we've cut off at the last minute or what? 

RIDGE:  Well, I think the president is referring to the fact that we knew these people were engaged and connected with al Qaeda, not necessarily getting them on the footstep of an operation, but serious enough to interdict and imprison. 

MATTHEWS:  Let's talk about defense and offense.  Let's talk defense, because it has come up. 

When we get on airplanes, it can be time-consuming.  You fly.  We all—a lot of us fly.  We get used to it.  You wait in line.  You get to the airport early and you have to take off your shoes and they look at your feet and they frisk and sometimes you get selected out.  And you say, OK.  That's part of the price I pay. 

Will people pay that price to get on a subway? 

RIDGE:  No. 

I mean, I think we have to be realistic about the notion that it has been and will be vulnerable because of the massive number of people that use it.  You and I have run down escalators, run through the turnstile, running to get that train in time.  And the notion that we could bring measures of defense, similar to airports, in order to reduce the vulnerability in the mass system will basically dissipate and undermine the entire system. 

So, there may be additional things we can do to minimize the risk somewhat more.  But we're in a risk-management business.  If you're going to have a mass transit system, with volumes of people heading to work at the last minute, you are not going to be able to put in the same kind of security protocols as you have in airports. 

MATTHEWS:  And everybody seems to have a strange package on the subway.

(CROSSTALK)

RIDGE:  Can you imagine...

(LAUGHTER)

(CROSSTALK)

MATTHEWS:  I mean, everybody is carrying bags from shopping, school bags, work bags, attache cases.  Every possible kind of possession, they carry on to subways.  You can't check them. 

RIDGE:  You can't do it. 

And, again, I think it's—it's—there are security officials that have taken great steps.  There's more surveillance.  There's more undercover.  There's more police, uniform police.  There are other things potentially we can do and maybe one of—there's more canine teams.  Maybe one of these days, there will be a miracle technological breakthrough and somebody can detect that you have got explosives as you're running to the train.

But, by and large, there are certain steps you can take.  They're taking them.  There may be lessons learned.  They will take them as well.  But this will always be a potential point of vulnerability, given the number of people and the kind of system that you're operating. 

MATTHEWS:  OK.  Explain the system between the British system and the American system.  People tell me that, in the British tube system down in the underground, they actually have surveillance cameras.  Do they? 

RIDGE:  Yes.  My understanding, they do.  They have surveillance cameras at certain parts of the metro.  But they have surveillance cameras throughout and around the city of London. 

(CROSSTALK)

MATTHEWS:  Can those match—can they match up pictures of suspects?  If they've got a guy who they know is on their watch list, are they susceptible—are they really that technologically state-of-the-art that they can spot a face and say, we got one of them on there? 

RIDGE:  I don't know.  It would be an interesting technological breakthrough, though, if you had a camera taking a digital photograph that could automatically refer it to a bank of digital photographs and say, we'd better be watching that person. 

MATTHEWS:  Right. 

(CROSSTALK)

MATTHEWS:  Or the other way around, go from the bank, look for the person. 

RIDGE:  Exactly.  I'm not sure they have...

(CROSSTALK)

MATTHEWS:  Would the American people put up with such a system, a Big Brother system? 

RIDGE:  I think it is unlikely unless there was some way you could demonstrate that there was some oversight board, that the only—the only database that you were working against were known terrorists, and that's the comparative piece that you were working on. 

MATTHEWS:  Or else people would be looking for their old girlfriend. 

RIDGE:  Yes. 

(LAUGHTER)

MATTHEWS:  They would be using it for all kinds of purposes. 

Let me ask you about the challenge of overseas.  We're fighting a war in Iraq now. We've lost a couple thousand people, our people, 20-some-thousand dead over there.  Apparently, there's a lot of people killed over there we can't even count.  We're making enemies all the time in Iraq, obviously.  We're killing people.  That comes with the war.

Are we reducing the terrorism threat here at home by going to war in Iraq? 

RIDGE:  I think, long term, that's the goal.  I think...

MATTHEWS:  Do you believe it, though? 

RIDGE:  Yes, I do. 

I believe that if you can create within the Middle East some form of democratic self-rule, not institutions that necessarily look like ours, but some form of expression of self-government, some form of democracy, ultimately, in that venue, that is a repudiation of the ideology of hate and evil that obviously... 

(CROSSTALK)

MATTHEWS:  You really believe this?

RIDGE:  Yes, I do. 

MATTHEWS:  This is the neoconservative argument, because, if that's true, how come we have elections in Iran that yield the most radical person as the victor? 

(CROSSTALK)

MATTHEWS:  Well, when you say democracy works, we have democracy over there that doesn't seem to produce moderate leaders. 

RIDGE:  Well, we could take a look at the kind of election that they held. 

MATTHEWS:  Yes. 

RIDGE:  And when you disqualified 100 or 200 or 1,000 candidates, and—there may not have been a real choice there.  We've also had elections in Iraq and you've elections in...

MATTHEWS:  Yes. 

RIDGE:  Elsewhere around the world that don't really qualify as a democratic...

MATTHEWS:  But you think it is an ideal—you think it is an ideal that can be achieved, that we can have elections that produce real results and moderate leaders?

RIDGE:  Well, I think it is—it is an ideal that we should pursue, that it is a worth aspiration.  We've made that commitment to get it done.  And the notion at some point in time, the Kurds and the Shia and the Sunnis, and I believe the majority of them would like to live in peace. 

MATTHEWS:  Right.  Would they like to live together? 

RIDGE:  Well, in order to live peacefully, they're going to have to. 

MATTHEWS:  Yes. 

(CROSSTALK)

RIDGE:  And the only way you can bring that together...

(CROSSTALK)

MATTHEWS:  The reason I raise this and push this with you, Governor, is because the secretary of defense said we can't count the number of enemies we're creating in this war in Iraq, compared to the number of enemies we're killing. 

RIDGE:  Well, I think...

MATTHEWS:  Like in London.  They're watching the newspaper.  They are reading the paper over there.  They're smoking whatever they smoke.  They're drinking coffee.  They're saying, those goddamn Americans over there, they're killing our people.  Let's go to war.  Let's blow up a subway here. 

RIDGE:  Well, but I think this—the—Iraq was not the first stage of the war.  The first was on September 11. 

And I think the radical Muslim community saw the impact of that and it was just a matter of time until others would follow the aspirational goals, perhaps the inspiration of bin Laden. 

MATTHEWS:  OK. 

RIDGE:  So, whether it was Iraq or someplace else, London ultimately was going to be hit and other parts of the world were going to be hit. 

MATTHEWS:  You played goalie for America.  For how many years? 

Three?

RIDGE:  About three, three-and-a-half. 

MATTHEWS:  All the three years that you were secretary of homeland security, and before that, when you were basically the executive in charge of that, what did you go to bed worrying about every night?  What were you glad to leave to someone else when you left that job? 

RIDGE:  I think the biggest concern that I had tactically was its unpredictable nature and the fact that we're still as open and as diverse as any country on the face of the Earth, and the fact that you have got 500 million people coming across the borders and God only knows how many illegally every year, but 500 million approximately. 

And you got to go to bed every night thinking, there are cells here.  What are they plotting?  What are they planning? 

(CROSSTALK)

RIDGE:  We operated every single day that they were here. 

MATTHEWS:  And a lot of them carrying phony I.D. 

RIDGE:  Exactly. 

MATTHEWS:  States are issuing phony driver's licenses to people every day of the week. 

RIDGE:  You know, at some point in time, we're going to get our head around this notion that there ought to be some basic form of—and, again, the legislation that created the Homeland Security Department said no national I.D. card. 

MATTHEWS:  That was a mistake, wasn't it?

RIDGE:  Well, but I think...

(CROSSTALK)

MATTHEWS:  Well, do you think that was a mistake?

RIDGE:  Well, I think we're going to evolve our way to one anyhow. 

MATTHEWS:  Why don't we? 

RIDGE:  Well, I...

MATTHEWS:  Who is stopping us? 

RIDGE:  Well, the Congress said no. 

But the bottom line is, is that the process is going to take us there, whether we want to be there or not, because you literally have millions of people in the defense industry.  You have these transportation worker identification cards. 

MATTHEWS:  Sure.

RIDGE:  That was in that legislation.  So, sooner or later, maybe it is just a common standard among the states' driver's license that's everybody buys into that becomes a verifiable document, a breeder document that can't be replicated. 

MATTHEWS:  Right. 

We'll be right back with former Homeland Security Secretary Tom Ridge. 

And, later, a closer look at terror cells throughout Europe with investigative reporter Lowell Bergman.

You're watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, are sleeper cells at work here at home?  We'll be back with former Homeland Security Secretary Tom Ridge, plus investigative reporter Lowell Bergman.

HARDBALL returns after this.

(COMMERCIAL BREAK)

(NEWS BREAK)

MATTHEWS:  Welcome back to HARDBALL.  We're back with former Homeland Security Secretary Tom Ridge. 

You're a Republican.  You've been a successful two-term governor of Pennsylvania, my home state.  You won big the last time you ran.  You're starting to smile, because I'm going to ask you a question.  Are you going to run for office again? 

RIDGE:  At this point, I have no plans to do that at all, Chris.   

MATTHEWS:  Well, Hillary could say that. 

RIDGE:  Yes. 

(CROSSTALK)

MATTHEWS:  But we all know she wants to be president.  Do you want to be president someday? 

RIDGE:  No, never been an aspiration of mine. 

MATTHEWS:  Do you want to be a United States senator from Pennsylvania? 

RIDGE:  No.

MATTHEWS:  Do you want to be governor again?

RIDGE:  That was a great job.  I had it for six years, nine months and five days.  And I loved every day of it. 

MATTHEWS:  Under the Pennsylvania Constitution—I just checked the statutes up there. 

(CROSSTALK)

MATTHEWS:  That you can serve two four-year terms.  Do you feel that, because you retired or resigned a year early, that opens the door to a second term? 

RIDGE:  Well, no it doesn't.  And I think that's part of—that's one chapter.  I'm writing another chapter down the road and maybe involve some form of public service.  But right now..

(CROSSTALK)

MATTHEWS:  But you don't want to run for president?

RIDGE:  No, I don't. 

MATTHEWS:  Really?

OK, let me ask you about your party and the kinds of people that could win the nomination next time around.  And I'm serious about this. 

(CROSSTALK)

RIDGE:  Right. 

MATTHEWS:  You have two wings to your party now, the more moderate, secular wing, mostly in the Northeast, the Midwest, maybe on the coast.  You have got the very religious Bible Belt people, very strong in their religious commitment on issues like abortion rights and things like that.  They're against them. 

You're a pro-choice Republican.  Is your wing of the party able to win the nomination next time?  Could it be Giuliani? 

RIDGE:  I think Rudy has a wonderful chance to win the nod. 

I think he is—he's worked hard on behalf of this president.  He's traveled around the country in support of dozens and dozens of congressmen.  I think we're going to have a very, very interesting primary.  And I think, if Rudy decides to run, a lot of indications are that he'll be a major factor. 

MATTHEWS:  So, the Bible belt doesn't have a hold on the Republican nomination in the future?

RIDGE:  Well, if Rudy runs, we'll find out. 

MATTHEWS:  Because they won't like him. 

RIDGE:  Well, but there are a lot of other people that do.

And I think, it's like anything else.  There may be—there may be an issue or two at which they're at loggerheads.  But there's a bigger issue, and that's winning in November. 

MATTHEWS:  Do you believe that this country...

(CROSSTALK)

RIDGE:  ... victories, you know...

(CROSSTALK)

MATTHEWS:  OK.  Let me ask you this about our president.  Do you think the president of the United States has done everything right so far in fighting terrorism? 

RIDGE:  Yes. 

MATTHEWS:  Do you think that he has—will go down in history as a great president for that reason? 

RIDGE:  I think has. 

I think the response, both from an offensive side, with the military, the Department of Homeland Security, the public diplomacy, which obviously is a much higher level of focus now in the second term, that package, particularly directing the rest of the world, it's a global scourge.  You need a global response.  And I think he'll go down as the global leader in that effort. 

MATTHEWS:  All right.  The polls back you up on the issue of terrorism.

RIDGE:  Yes. 

MATTHEWS:  The president still wins that one hands down. 

Thank you very much, former Governor of Pennsylvania Tom Ridge, former homeland security secretary. 

Up next, investigative reporter Lowell Bergman—he was the guy in “The Insider” that Al Pacino played—has been tracking terror cells in Europe.  He'll join us with a status report when we return.  Couldn't be hotter.

And tomorrow on HARDBALL, Senator Joe Biden is going to be here.

You're watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  While the investigation into the London terrorist attack continues, Prime Minister Tony Blair is promising a—quote—

“vigorous and intense”—close quote—hunt for those behind the bombings, which killed now 52 people.

For more on the attack in London and the risk we face in this country, we turn to “New York Times” reporter and front-line correspondent                  Lowell Bergman, who has been investigating al Qaeda.  His latest report, “Al Qaeda's New Front,” can be seen on PBS stations and online at PBS.org. 

Lowell, thank you for joining us.

I know you from, of course, your celebrated role in the film “The Insider,” where you broke open the tobacco industry.  Let me ask you about these al Qaeda people. 

“The San Francisco Examiner” on Sunday wrote a piece which, on the front page, said, you know, they're recruiting people for these terrorist gangs right on the Internet.  It's—they're just building as we're watching them.  Is this something like McDonald's, where you have to get a franchise to be a terrorist like al Qaeda, or like hamburgers generally?  All you have to do is say, I think I would like to make a hamburger and sell it? 

LOWELL BERGMAN, INVESTIGATIVE JOURNALIST:  Well, I think what has developed and has been commented on before is that there is like a franchise operation going on now.  We're not talking about a hierarchical organization, where orders come from Afghanistan or wherever bin Laden may be hiding to people out on the field to do actions.  In fact, there may be no direct connection that's provable at all, which is what happened in the investigations of the Madrid bombing, for example. 

So, what you're seeing really is spread of really sort of an ideological, if you will, counterinsurgency against the West and against our influence. 

MATTHEWS:  Is it purposeful in terms of day-to-day politics?  In other words, is it meant to drive the United States away from its support for the Saudi regime?  Does it have particular goals? 

BERGMAN:  Well, no one seems to be sure. 

However, before the Madrid bombing, there was a long political analysis that a Norwegian think tank picked up on the Internet by someone who seemed to have studied the political science of Western Europe and suggests in that analysis that something done in Spain might knock Spain out of Iraq.  And, in fact, the bombings in Spain take place a couple of days before the election. 

Some people credit it with influencing the election, although no one has any proof of that. 

MATTHEWS:  In the case of Britain, it might have a countereffect, right? 

BERGMAN:  Well, I don't know.  I don't know what the countereffect could be in Britain, other than to get people a little bit more tense.

And—but we have the British and the Europeans some credit that I

don't think we can assume ourselves here.  I think the British and

French and others in Europe are much more used to violence on their own

·         on their own soil, random violence, terrorist violence.  So, it may not have that big effect in Britain, except to raise questions about the effectiveness of their counterterrorism operation. 

MATTHEWS:  A while back, someone asked the secretary of defense, Donald Rumsfeld, whether the war in Iraq was increasing the number of terrorists facing us or reducing the number because we're fighting them in the field.  And he said, rather oddly, he said, we don't have the metrics on that.  We don't know how to count that. 

Is it your sense that the antagonism that is brewing against because of Iraq has speeded up terrorist recruitment? 

BERGMAN:  Well, in the reporting that we did for the documentary back earlier this year, it was clear from talking to the heads of counterterrorism in Britain, in France, in Germany and in Spain that the Iraq war was not helping the situation.

It was providing a new motivation and, in fact, recruitment for the war in Iraq, can backfire, as did the Afghanistan war against the Soviets.  So, you can't separate the two.  And I think, even those who support our effort in Iraq would say that it has increased the danger in Europe in particular and probably here. 

MATTHEWS:  There seems to be, well, an odd, I shouldn't say pattern, because it is so erratic.  But these things happen every couple of years, every three years or so.  It isn't like you have got skirmishing in the field and people running up and, like they did in Israel for all those years, in the intifada, the second intifada, just sort of madly coming across the border wrapped in bombs. 

It seems more organized and more deliberate than that. 

BERGMAN:  Well, I don't know, Chris.  I mean, there's been bombings in Istanbul, in Casablanca, in Madrid and now in London.  There have been incidents in between that have been intercepted.  There were bombings in Tunisia. 

While we haven't had an incident here, it's—our demographics are different.  And we still do have an ocean that acts as sort of a moat between us and this problem with a much smaller Muslim or Islamic population that these people could hide in. 

MATTHEWS:  Yes. 

So, you don't buy that they set—they hold back and try to do it right and less frequently than they do, so they do less missions against us, less terrorist acts, so that they can all be these almost perfect jobs?

BERGMAN:  I think what we're seeing is really freelance operations, from what I understand and from talking to people who are involved directly in investigations.  And it is becoming more and more difficult to put a common thread together.

MATTHEWS:  Yes. 

BERGMAN:  Any central command.  There isn't a Khalid Shaikh Mohammed.  There isn't a bin Laden, who is saying go do this and go do that or wait. 

MATTHEWS:  And they're not all Islamists, are they?  Some of these people are a bit—according to the thing I read in your piece in your interviews for your program, for “FrontLine,” that some of them are just nationalists, Arab nationalists.  They're not particularly mosque-going Arabs. 

BERGMAN:  Well, there seems to be different—different individuals with different ideological motivations in operation, as well as some sect groups that in fact abandon all trappings of the Muslim religion outwardly in order to infiltrate. 

And then, on the other side, we have public proselytizing, particularly in Britain, that endorses acts like 9/11.  So, there's a lot of different things going on here in the European context that make it a very complex phenomenon. 

MATTHEWS:  I wish we had you here every night, Lowell Bergman. 

Thank you very much for that report on terrorism in Europe and here. 

BERGMAN:  Thanks, Chris.  

MATTHEWS:  “Newsweek” reports Karl Rove was a source for “TIME” magazine's Matt Cooper, who barely escaped jail time in the investigation into who outed a covert CIA operative.  In a moment, what, if anything, will happen to Rove? 

You're watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

(NEWS BREAK)

MATTHEWS:  Welcome back to HARDBALL.

For weeks, the air in Washington has been thick with speculation over the White House-CIA leaks investigation.  And now, thanks to news that Karl Rove has been identified as the source for “TIME” magazine reporter Matt Cooper, the question is, did Rove or anybody else in the White House do anything illegal? 

HARDBALL correspondent David Shuster reports. 

(BEGIN VIDEOTAPE)

DAVID SHUSTER, NBC CORRESPONDENT (voice-over):  It was a conversation that “TIME” magazine reporter Matthew Cooper had exactly two years ago.  According to e-mails obtained by “Newsweek” magazine, Cooper told his editors—quote—“Spoke to Rove on double super secret background for about two minutes before he went on vacation.”  Rove offered Cooper a—quote—“big warning” about Ambassador Joe Wilson.

Wilson had been sent to Africa to investigate allegations Iraq was to buy uranium, found no evidence to support such claims, and had just written a harsh “New York Times” op-ed saying he had reported the findings to top administration officials, only to have the president cite the Africa uranium deal in his State of the Union speech. 

Rove suggested Wilson deserved skepticism.  Here's how Cooper's e-mail put it.  “It was, K.R. said, Wilson's wife, who apparently works at the agency on WMD issues who authorized the trip.”

The Rove-Cooper conversation is significant because, three days later, columnist Robert Novak publicly identified and exposed Valerie Plame.  And for the last two years, federal prosecutors have been trying to determine if anybody in the White House broke federal laws. 

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  If somebody did leak classified information, I would like to know it.  And we'll take the appropriate action. 

SHUSTER:  For Karl Rove, though, there is nothing in Matt Cooper's e-mail that suggests the president's top adviser ever used Valerie Plame's name or knew she was a covert operative.  And the laws on revealing classified information are quite clear.  To charge a government official, you must show that the disclosure was deliberate, that the official knew the CIA officer was a covert agent, and that the official knew the government was actively concealing the agent's identity. 

In other words, if Rove never identified Valerie Plame or didn't know anything except that Joe Wilson's wife worked at the CIA, Rove could not be charged with violating federal law.  When prosecutors began their investigation, Rove signed a general waiver written by the Justice Department authorizing reporters to testify about conversations with him. 

Last Wednesday, Rove's attorney said that waiver applied to Matt Cooper and attorneys on both sides had a last-minute conversation. 

MATT COOPER, “TIME”:  In what can only be described as a stunning set of developments, that source agreed to give me a specific, personal and unambiguous waiver to speak before the grand jury. 

SHUSTER:  Still, there are some other questions left unanswered, such as who, was Judith Miller's source?  “The New York Times” reporter has been in jail on contempt since last week. 

And when the leak investigation began, what did Karl Rove tell President Bush and Press Secretary Scott McClellan? 

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY:  I've said that it is not true.  And I have spoken with Karl Rove. 

SHUSTER:  Now McClellan refuses to stand by his statement that Rove was not involved. 

MCCLELLAN:  We're not going to get into commenting on it.  That was something I stated back near that time as well. 

DAVID GREGORY, NBC WHITE HOUSE CORRESPONDENT:  This is ridiculous.  The notion that you're going to stand before us, after having commented with that level of detail and tell people watching this that somehow you've decided not to talk?  You've got a public record out there.  Do you stand by your remarks from that podium or not? 

MCCLELLAN:  And, again, David, I'm well aware, like you, of what was previously that.  And I will be glad to talk about it at the appropriate time.  The appropriate time is when the investigation...

GREGORY:  (OFF-MIKE) when it's appropriate and when it's inappropriate?

MCCLELLAN:  If you'll let me finish.

GREGORY:  No, you're not finishing.  You're not saying anything.

You stood at that podium and said that Karl Rove was not involved.  And now we find out that he spoke about Joseph Wilson's wife.  So don't you owe the American public a fuller explanation?  Was he involved or was he not?  Because contrary to what you told the American people, he did indeed talk about his wife, didn't he?

MCCLELLAN:  David, there will be a time to talk about this, but now is not the time to talk about it.

SHUSTER (on camera):  Misleading reporters intentionally or unintentionally is not a crime.  But misleading a grand jury is. 

But the biggest question is, two years ago, when Karl Rove was trying to protect Vice President Cheney against allegations he allowed a false claim into the State of the Union, was Karl Rove acting on his own? 

I'm David Shuster for HARDBALL in Washington. 

(END VIDEOTAPE)

MATTHEWS:  For the latest on this story, we turn to NBC White House correspondent David Gregory. 

But we begin tonight with “Newsweek” investigative reporter Michael Isikoff, who first reported Karl Rove was a source of Matt Cooper. 

How big a story is that in the White House now, to know that the president's top guy was the one who talked to Matt Cooper at “TIME” magazine?

MICHAEL ISIKOFF, “NEWSWEEK”:  Well, if you watched the White House briefing today, it was clear that what is probably getting the most traction here is, you look at the public statements that have been made by Scott McClellan and the president in the past and also Karl Rove's lawyer, and it is hard to square with the contents of the e-mail that we write about this week in “Newsweek,” in which Matt Cooper makes clear he is told by Karl Rove on double super secret background that Wilson's wife had been the one who had sent him to Africa. 

The—when all this erupted two years ago, the initial statements from Scott McClellan was, it was totally ridiculous that—to suggest that Karl Rove was involved in any way.  The president said, if he discovered that anybody was leaking classified information, he would take appropriate steps against them. 

I think that you stack up the public comments—now, when you look at them closely, each and every one, they could be defended in the most narrow, sort of Clintonesque terms.  What exactly was the question?  What exactly were they saying?  But, clearly, the impression was that was being given is that Karl Rove was not involved at all. 

MATTHEWS:  Right. 

ISIKOFF:  And, clearly, if you read the e-mail we disclosed this week in “Newsweek,” it is clear that he was on some level at least talking about Joe Wilson and his wife before the Robert Novak column to reporters. 

MATTHEWS:  David, isn't this what's called rolling disclosure, where an inside group, like the White House, knows something and puts it out very slowly and you begin to distrust them?

GREGORY:  Well, they do have a political problem here.  And I think Mike has identified it here.  There's a legal strategy and a political strategy. 

And right now, for the White House, that political strategy is breaking down.  The reason for that is, if you go back to 2003, the early days of this investigation, Scott McClellan came before the American people from the White House podium and said, look, I have checked with the White House officials who are suspected here, who are under suspicion, Karl Rove, Elliott Abrams, Scooter Libby, who is the vice president's chief of staff.  They have all told me they were not involved. 

And now Mike Isikoff's reporting that in fact Rove was involved.  He spoke about Valerie Plame.  If not by name, he certainly spoke about Joe Wilson's wife in his conversation with Matt Cooper. 

So, now the White House is in the position of saying, well, so what happened here?  You said one thing.  Do you stand by what you said before?  And Scott McClellan is saying, I'm not going to talk about an ongoing investigation any longer because the special prosecutor told the White House back in 2003, stop talking about this publicly.  Just don't make any comments.  So now they're in kind of a tough spot. 

MATTHEWS:  Well, isn't this a—Mike, you're on top of this.  It seems to me that the White House people that did talk to the reporters about this have been just sitting there and sitting there watching Matt and Judy head to jail.  And it wasn't until the actual day they were going in practically that Matt finally got the guy to somehow release him from his confidentiality. 

ISIKOFF:  I think it would have been politically untenable if Matt Cooper had gone to jail last week and it had become clear—and I think it was becoming clear—that Karl Rove was the source he was protecting. 

And for Karl Rove to be sitting in the White House while the guy who he was speaking to is in jail for protecting him, you know, just think about that and how that would have played if this e-mail had—if we had gotten ahold of the e-mail and Karl Rove hadn't given that waiver. 

MATTHEWS:  OK.

(CROSSTALK)

MATTHEWS:  Let's calibrate the problems the president faces, David.  It seems to me the president faces the possibility—and this is an outside possibility—that somebody on his team may have broken the law.  We don't know that.  It is also more probable that somebody is going to deeply embarrass him by having denied involvement with this leak and it becomes clear they were involved. 

GREGORY:  Right. 

Well, and let's also talk about some of the follow-on questions here.  We know that Karl Rove testified before the grand jury.  We also know what the substance is of this e-mail that Matt Cooper will testify about, I'm told, Wednesday morning before the grand jury.  And that is this conversation, as Mike Isikoff reported it, summarizing his conversation with Karl Rove. 

Well, if Rove testified before the grand jury and the special prosecutor, Patrick Fitzgerald, knew that testimony, and then he gets the e-mail from Matt Cooper, why is it he kept pressing for Matt Cooper's testimony?  Is it because Karl Rove's testimony is not jibing here?  That's a possibility.  We don't know that to be the case. 

And so, there's various directions that Fitzgerald could be going in that we just don't know about, besides the narrow question of, who blew Valerie Plame's secret identity? 

MATTHEWS:  Do we know who was involved in the effort to try to destroy or debunk the argument by Joe Wilson that he went to Africa, proved there wasn't any deal with Niger with regard to uranium and the president should not have put it in his State of the Union? 

GREGORY:  Well, we know, really, administration-wide, at the highest levels.  I was in Africa when the secretary of state, Condoleezza Rice, first had to answer questions about both the Wilson op-ed and the question of whether or not the president said something in his State of the Union that was not true. 

And there was a back-and-forth.  And, ultimately, at the end of that day, it was Director Tenet at the CIA who said, look, I vetted the speech.  This got past me.  But there was a clear concern at the highest levels that they protected the vice president and others close to the president from the charge that they knew that the uranium charge was not accurate and that they let it get into the State of the Union anyway.  It had to all fall onto the shoulders of the CIA director. 

MATTHEWS:  Is Karl Rove in any less trouble because he was following guidance from the vice president's office? 

GREGORY:  Well, if he was following that guidance.  Rove may have acted on his own as well.

What we know from—and I don't want to speak from Mike—what we

know from Mike's reporting is that what was important to Rove and others

·         and I know this from the time as well—is that they sought to discredit Joe Wilson.  They didn't think he was a credible purveyor of information that was germane to this case. 

MATTHEWS:  OK.  We'll be right—thank you very much, David Gregory.

Thank you, Michael Isikoff.

When we return, we'll get reaction to Karl Rove's role in the leak investigation from syndicated columnist E.J. Dionne and “The New York Post”'s Deborah Orin.

You're watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, reaction to Karl Rove's role in the CIA leak investigation.  Plus, Senator Hillary Clinton compares President Bush to “Mad” magazine's Alfred E. Neuman.  Is this going too far?

More HARDBALL after this.

(COMMERCIAL BREAK)

(NEWS BREAK)

MATTHEWS:  Welcome back to HARDBALL.

E.J. Dionne is a syndicated columnist at “The Washington Post” and a senior fellow at the Brookings Institution.  Deborah Orin is the Washington bureau chief for “The New York Post.” 

So, the big buzz, E.J. and Deborah, in town, of course, today is the “Newsweek” piece that came out this week that fingered, more or less, Karl Rove as the person who at least talked to Matt Cooper of “TIME” magazine about Joe Wilson's wife being the one who got him the job to go to Africa to check out this uranium story and whether they were selling uranium to Saddam Hussein or not.  Where are we at on this? 

DEBORAH ORIN, WASHINGTON BUREAU CHIEF, “THE NEW YORK POST”:  Well, we know that Karl Rove was a source.  We don't know if he was the source.  And you can certainly say, looking at what has come out so far, you could argue that it is pretty clear that Karl Rove wasn't trying to get even with Joe Wilson.  He was trying to make it clear that Joe Wilson couldn't be trusted. 

MATTHEWS:  Right. 

ORIN:  And to undo the story, but not to get...

(CROSSTALK)

MATTHEWS:  ... the vice president was involved in getting him over to Africa and should have been able to tell the president there was no uranium deal, right?

But here's the question.  The president, in a blanket way, as he often does, black and white way, said, I'm going to make sure there's no leakers in the White House.  I'm going to turn them in.  Well, narrowly defined, doesn't Karl Rove got a problem for him here? 

E.J. DIONNE, “THE WASHINGTON POST”:  Right. 

Well, the Democrats today were having a field today.  And Harry Reid, the Democratic leader in the Senate, noted that the president said just that and said, all right if he believes that, shouldn't Karl Rove be out of here if these reports are true? 

I think there are—the—you're going to face a very interesting debate here, because you had just a few years back a lot of Republicans saying a president should be impeached if he was guilty of perjury or obstruction of justice.  This investigation seems, according to a lot of people, to be moving toward a perjury probe. 

What are people going to say now compared to what they said all those years ago?  And then the other thing is, you had Scott McClellan...

MATTHEWS:  Well, why wouldn't they say the same thing?  If you're a Democrat, you wanted to nail Nixon.  If you're a Democrat, you want to nail Bush. 

DIONNE:  Well, no.  But I'm saying, the Republicans were the ones saying obstruction of justice and perjury was a big deal for Clinton.  Is it going to be a big deal for this administration? 

MATTHEWS:  I see.

DIONNE:  Secondly, you had Scott McClellan running into a lot of tough questions today, where he basically said that he couldn't really defend what he said two years ago, not because he couldn't defend it, but because now he's been told by prosecutors that he couldn't say anything. 

This, too, is starting to sound like some questions and answers during the Clinton years. 

ORIN:  Oh, please.

DIONNE:  So, I think the Republicans have a real problem here now. 

ORIN:  Oh, please.  I mean, this is not Watergate.  Democrats are always dreaming that they have got a new Watergate.  This is not a new Watergate. 

What has come out pretty clearly so far, I think, is—there is an issue of whether Karl Rove told the truth and the whole truth.  But what's more important is, it is clear that Joe Wilson didn't tell the truth.  We have a bipartisan Senate Intelligence Committee report that says, on virtually every point that Joe Wilson made, starting from denying his wife had him sent on the trip, which turns out to be not true. 

MATTHEWS:  Right.  She did. 

ORIN:  She did.  And to claiming that he found that there was no ties with Iraq and that he reported that, which he did not report.  He reported, if anything, the opposite.

To claiming that he reported there were forged documents, which was not true, because he never even saw the documents.  So, Joe Wilson's credibility is seriously in question.  And what we now see is, what Karl Rove appears to have been doing was to be pointing out to “TIME” magazine that Joe Wilson could not be trusted, rather than trying to get even with Joe Wilson. 

And it is sort of fascinating, because, you know, for a year, the press reported Joe Wilson's charges.  And then, when the Senate Intelligence Committee said they were all false, it didn't. 

(CROSSTALK)

MATTHEWS:  You know, the old argument in politics is, if there's something—if there's a shot that's unfair against you, you'd better damn well correct it.  Why has it taken until now for the truth to come out from the other side, from the White House side, the explanation as to what these conversations—E.J., pick up here. 

It seems to me that there's either something really big here or not.  There's a mountain here or there's a molehill here.  If it is a mountain, it means that the president of the United States went to war on false pretenses and his vice president or whoever else had something to do with it.  The CIA had something to do with this, because they let the word out that there was a nuclear action going over in Iraq, and there was not.  And, in fact, they punished the person who put the word out. 

DIONNE:  Right.  Well, let's be clear.  Joe Wilson...

MATTHEWS:  If it is that serious—is it that serious? 

DIONNE:  Well, first, attacking Joe Wilson right now, Joe Wilson is not the guy under investigation.  The issue here is not what was true or false about what Joe Wilson may have said.  The issue here is, did somebody break the law and disclose the name of a CIA agent? 

MATTHEWS:  We don't know that.  You don't know that.

(CROSSTALK)

DIONNE:  No.  And I don't know the answer to that yet. 

(CROSSTALK)

DIONNE:  But that is what is under investigation.

MATTHEWS:  We certainly don't have evidence that Karl Rove has done that yet.  We don't have evidence that Karl Rove has done that, because, up to today's morning—the morning's “Newsweek” piece, which is the best thing on this so far, all he did was say, the guy's wife put him on the trip. 

DIONNE:  No, but all I'm saying is that, say this or that about Joe Wilson doesn't address the issue that the White House faces right now, which is, who said what under what circumstances? 

And I'm not going to prejudge the legal case.  But, as Dan Balz said on your network today, I mean, the political and the legal have fused in this case and that part of the issue here is, was the White House misleading, whether or it is criminal or not, about who leaked what on Joe Wilson's wife?

MATTHEWS:  Well, why have they been so mum about this whole thing?  They've allowed a guy like Joe Wilson, who you say isn't reliable, to make his case in public so easily.

We'll be back with E.J. Dionne and Deborah Orin.

This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  We're back on HARDBALL. 

Deborah Orin of “The New York Post” and syndicated columnist E.J.  Dionne, who appears here in “The Washington Post.”  And we read him twice a week. 

E.J., let me ask you this.  I know this is red meat for you, Deborah.  You write for “The New York Post.”  Hillary Clinton yesterday in Aspen, Colorado, at a think tank thing—I was at part of it last week—she came out and said that the president is Alfred E. Neuman, the guy in “Mad” comics, the idiot guy on the front page of the magazine all those years, “Mad” comics, and all he can say is, what, me worry?  She's apparently been using this as her stock and trade the last week on terrorism. 

ORIN:  I don't get it.  I honestly don't get it.  And she is starting to get some firing back.  I mean, this is not exactly appropriate stuff... 

MATTHEWS:  Why is she putting the shiv in the very week, weekend and weekday, right now, Monday, when the people are rallying around the president because of the latest terrorism? 

ORIN:  I don't know the answer to that.  I think it is dumb.  She is usually quite smart.  And I think it's dumb.

MATTHEWS:  OK.  Why did she accuse the president of—here's a smarter one, E.J.

She accused the president last Friday of cutting $50 million from subway security.  Right at the moment the attack on the subways in England, the underground, she's whacking the president for cutting defense money, security money for our own subways. 

DIONNE:  And that's true. 

I talked last Friday to Senator Susan Collins, a Republican of Maine, the chair of the Homeland Security Committee.  She didn't attack the president, but she made the same point, that we have underinvested in mass transit security.  We've underinvested in port security.  I think this is going to be a big issue in the coming days. 

So, I think it is a perfectly legitimate thing to say.  Are we spending our homeland security money right?  Are we safer now than we were a year ago? 

(CROSSTALK)

MATTHEWS:  And she is safe being this anti-Bush?

DIONNE:  She also said, like everybody else, that, of course, our hearts go out to the people in London.  You ought to be able to do a couple of things at the same time. 

(LAUGHTER)

MATTHEWS:  You think you can set two different tones at the same time, national solidarity and whack the president in the kneecaps the same day?

DIONNE:  Well, no, national solidarity and where do we go from here?  How do we protect ourselves?

MATTHEWS:  By the way, how do you—you're a subway rider.  I've done it a lot in my life.  How do you—how do you protect life on subways, when people come barrel-assing down the escalator or the stairs?  They go on the subway carrying every kind of package in the world, every ethnic group in the world.  How in the world do you stop people who want to blow up a subway?  How do you do it?

(CROSSTALK)

MATTHEWS:  Have dogs sniff them as they go by, make them go through X-rays?  How do you do this? 

ORIN:  Well, right now, what they're doing in New York is having a lot of police presence at the rail lines and around the subways and at bus... 

MATTHEWS:  How would that have stopped a person getting on a subway with a package and leaving them on? 

ORIN:  The answer is, you don't know, because you don't know whether that person would have said, on second thought, maybe not today. 

(CROSSTALK)

ORIN:  And, of course, even if—even if it works that way, then how do you know you're not just pushing it two weeks down the road?  And the answer is, you don't know. 

MATTHEWS:  Pushing it to another subway car.

ORIN:  Or to—well, to another subway car, to another week, whatever. 

MATTHEWS:  OK. 

ORIN:  I agree with you, Chris, and I disagree with E.J. 

I think that was not—it was tone-deaf.  It was a day of tragedy in London.  And that's not the day to immediately whack the president, you know, and “If it happens here, it will be your fault” sort of thing. 

(CROSSTALK)

MATTHEWS:  I hate to say this.  I'm not going to hate to say it. 

It's a fact.  You look more witchy when you're doing it like this. 

Let me ask you about this argument.

DIONNE:  By the way, Chuck Schumer was there with her saying...

MATTHEWS:  I know.  OK.  Well...

(CROSSTALK)

DIONNE:  ... there's a real problem with mass transit and security. 

And we don't call him a witch.

(CROSSTALK)

MATTHEWS:  Funny we only heard one of them. 

DIONNE:  Yes. 

MATTHEWS:  Let me ask you, the flypaper theory, I call it.  The president says, if we fight them over in Iraq, we wet have to fight them here, flypaper.  They will get stuck over there.  They will have to fight us over there.

But everything we're hearing about these cells—I love these words—that are growing up in London and Paris and everything else in the world, they're homegrown.  They're people that live in these—they're Islamic people or whatever, and they're just Arab nationalists.  And they live in these cities.  They're part of the culture of the city now.  And they don't like the West.  And they get ahold of some TNT and they blow up subway cars.  What in the world does fighting in Iraq do to stop that from happening?

ORIN:  Well, but...

MATTHEWS:  The flypaper theory.  We're going to catch them over there like flies. 

ORIN:  Yes, but, remember, we may be dealing with different sets of people. 

MATTHEWS:  Right. 

ORIN:  And this was horrible in...

MATTHEWS:  That's the point.

ORIN:  Yes, but this was horrible in London, but it wasn't 9/11.  I mean...

MATTHEWS:  But 9/11 wasn't Iraq either. 

(CROSSTALK)

ORIN:  I know, but the point is that a lot of the people who are over in Iraq are not over in London.  They can't do both at once. 

MATTHEWS:  Do  you buy the theory that we're safer in London and New York because we're fighting in Iraq. 

ORIN:  I think we probably are, yes.

MATTHEWS:  Probably are.  That's not very strong.

ORIN:  Most Americans do not, by the way.

MATTHEWS:  Not very strong for you, Deborah.  Usually, your analysis is much sharper than that.  You're much clearer-cut. 

Do you buy the fact that we're safer because we're fighting in Iraq? 

DIONNE:  No. 

I mean, you have got the problem that Iraq, as a intelligence report that was leaked last week showed, has become a haven for terrorists.  And I was astonished that the president repeated that line about, well, we are fighting them there, so we don't have to fight them here. 

Well, what does that say to Tony Blair?  He just got blown up. 

He's fighting them there. 

(CROSSTALK)

MATTHEWS:  It's like saying, we got a bad neighborhood in Detroit; we won't have them in New York.

Thank you, E.J. Dionne.

Thank you, Deborah Orin.

I'll be right back tomorrow night at 7:00 Eastern for more

HARDBALL.

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

END

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