updated 9/29/2005 11:43:20 AM ET 2005-09-29T15:43:20

Guests: Karen Tumulty, Michael Isikoff, Tom Davis, Christopher Shays, Cragg

Hines, Tom DeLay

CHRIS MATTHEWS, HOST:  House Republican Leader Tom DeLay indicted in Texas and forced to quit post.  A Democratic DA charges DeLay with laundering corporate campaign contributions.  How much will this hurt Republicans? 

Tom DeLay will join us tonight.  Let‘s play HARDBALL.

We‘re waiting here to have Tom DeLay join us live in the studio here on HARDBALL.  Good evening.  I‘m Chris Matthews. 

Today, a Texas grand jury indicted Congressman Tom DeLay with carrying out what he called a scheme to launder corporate money to Texas legislative races.  This afternoon, DeLay stepped down, as he had to, as House majority leader, while calling the district attorney who won the indictment a partisan fanatic.  Those were his words. 

Congressman Tom DeLay will be here in just a moment.  But let‘s take a look at his response today to that indictment. 

(BEGIN VIDEO CLIP)

REP. TOM DELAY (R-TX), MAJORITY LEADER:  This morning, in an act of blatant political partisanship, a rogue district attorney in Travis County, Texas, named Ronnie Earle charged me with one count of criminal conspiracy, a reckless charge wholly unsupported by the facts.

This is one of the weakest, most baseless indictments in American history.  It‘s a sham and Mr. Earle knows it.

It‘s a charge that cannot hold up even under the most glancing scrutiny.

This act is the product of a coordinated, premeditated campaign of political retribution; the all-too-predictable result of a vengeful investigation led by a partisan fanatic.

Mr. Earle is abusing the power of his office to exact personal revenge for the role I played in the Texas Republican legislative campaign in 2002 and my advocacy for a new, fair and constitutional congressional map for our state in 2003.

As it turned out, those efforts were successful.  Texas Republicans did, indeed, win a legislative majority.  A fair and representative congressional map was drawn and it was approved by the legislature.

And the Texas Congressional delegation Now, after the 2004 elections, fairly represents the values and attitudes of the people of the State of Texas.  Over the course of this long and bitter political battle, it became clear that the retribution for our success would be ferocious.  Today, that retribution is being exacted.

Mr. Earle, an unabashed partisan zealot, with a well documented history of launching baseless investigations and indictments against his political enemies, has been targeting a political action committee on whose advisory board I once served.

During his investigation, he has gone out of his way to give several media interviews in his office, the only days he actually comes to the office, I‘m told.  In which he has singled me out for personal attacks in direct violation of his public responsibility to conduct an impartial inquiry.  Despite his long-standing animosity toward me, and the abusive investigation that animosity has unfortunately rendered, as recently as two weeks ago, Mr. Earle, himself, publicly admitted I had never been a focus or target of his inquiry.

Soon, thereafter, Mr. Earle‘s hometown newspaper ran a biting editorial about his investigation, rhetorically asking what the point had been after all, if I wasn‘t to be indicted.  It was this renewed political pressure in the waning days of his hollow investigation that led to this morning‘s action, political pressure that also came from Democrat leaders.

In accordance with the rules of the House, -- in accordance with the rules of the House Republican Conference, I will temporarily step aside as fore leader in order to win exoneration from these baseless charges.

Now, let me be very, very clear.  I have done nothing wrong.  I have violated no—I have violated no law, no regulation, no rule of the House.  I have done nothing unlawful, unethical or, I might add, unprecedented, even in the political campaigns Mr. Earle himself. 

(END VIDEOTAPE)

MATTHEWS:  Tom DeLay, the majority leader of the House this afternoon. 

And here he is in the studio. 

Thank you, sir, for coming over. 

DELAY:  Sure, Chris. 

MATTHEWS:  A difficult day. 

MATTHEWS:  The charge from the prosecutor down there, which the grand jury acted on, was that a bunch of people got together, including you, and sent, had a bunch of corporate checks up to the RNC in Washington.  That‘s corporate contributions, illegal to use in Texas legislative races.

In exchange, you said, OK, you said, now send that same money down. 

You earmarked it for these legislative races, thereby circumventing the

spirit of the law, which is no corporate contributions,

Is that a fair estimate of the charge? 

DELAY:  I don‘t know.  It is not in the indictment.  I don‘t know what he‘s charging me with. 

MATTHEWS:  Well, I‘m reading it from it. 

DELAY:  And—you did not read that from it. 

MATTHEWS:  Well...

DELAY:  And what you just gave us...

MATTHEWS:  “Texans for a Republican Majority did tender cause to be delivered and delivered to the Republican National Committee a check in the amount of $190,000, the check being for the same bank...”

DELAY:  Wait.  Wait.  Chris, Chris, that‘s TRMPAC.  That‘s not me. 

MATTHEWS:  OK.  So, that‘s it.

DELAY:  TRMPAC—TRMPAC is a separate entity.  I had no fiduciary responsibilities.  I had no managerial responsibilities.  I had nothing to do with the day-to-day operation. 

I was simply, along with four other elected officials, on an advisory board.  They used my name as headliners for fund-raisers. 

MATTHEWS:  Right. 

DELAY:  And I had no idea what they were doing. 

MATTHEWS:  So, if corporate money was laundered through the Republican National Committee, you had nothing to do with it?

DELAY:  That‘s exactly right. 

But that—but that‘s not what they did.  And they did it all within the law.  They did—they—what they did—and I know what they did now.

MATTHEWS:  Right. 

DELAY:  They did it completely within the law. 

The Democrat parties and the Republican parties do the same thing over and over again.  You take soft money.  Those were the days of soft and hard money. 

MATTHEWS:  Sure.

DELAY:  You take soft money and use it for legal stuff.  And if you have more than you need, you send it to one of your friends.  It‘s like your brother-in-law sending you money to pay your rent.  And then you send back hard money that can be used in the races.  It is not a quid pro quo.  In fact, the amount of money you‘re talking about is different. 

MATTHEWS:  Yes. 

Well, let me ask you this.  Let me ask—because Tom Davis is going

to be on this show.  And the argument we‘re getting from other people is

that there‘s nothing wrong with you urging some corp or anybody that your -

your former PAC—putting the—the PAC you‘re on the board of—to give, say, give a bunch of money to the RNC.  They need money.  And it‘s a good Republican cause, and then calling up the Republican National Committee and say, why don‘t you give some money to these legislative candidates?  We‘d like them to win down there. 

That‘s legal. 

DELAY:  Yes.  It‘s totally legal.

MATTHEWS:  So, what is illegal here? 

DELAY:  And everything TRMPAC did—and I insisted on—to even be on their board of advisers.

Now, TRMPAC was my idea.  I wanted—I wanted the Texas House to be a Republican majority.  And I went down there and worked with them to do that.  And we were successful.  And from that, we redistricted Texas.  And the Republican Party better represented the values of the people of Texas, because we gained five seats.

MATTHEWS:  You‘re a Texan. 

Texas law says corporations can‘t give to legislative candidates. 

DELAY:  That‘s true.

MATTHEWS:  If anybody, not you or anybody—just, if anybody sends money, says, give the corporate maybe to the RNC or the DNC and, by the way, send some of that money back and pay for these races down there, that would maybe be legal.  Would it avoid—would that break the spirit of the law, which is no corporate contributions? 

DELAY:  No, it wouldn‘t, because—because, in Texas, you can raise corporate and union money for administrative purposes, to pay your rent, to pay your salaries...

MATTHEWS:  Right. 

DELAY:  ... and that kind of stuff. 

You just can‘t take that money and put it in somebody else‘s campaign.  That—everything TRMPAC did, they did it with lawyers‘ blessings and accountants‘ blessing.  This is not anything to do with money laundering.

MATTHEWS:  OK. 

(CROSSTALK)

DELAY:  This has everything to do with indicting me, so I have to step aside momentarily for...

MATTHEWS:  That could be the motive.  But let me ask you.  He does,  in fact, in the indictment here he brought before the grand jury identified Todd Baxter, Dwayne Bohac, Glenda Dawson, Dan Flynn, Rick Green, Jack Stick and Larry Taylor as recipients of this corporate money as it went through Washington back.... 

DELAY:  And I know very few of those people. 

MATTHEWS:  But they‘re legislative candidates. 

DELAY:  They‘re actually state reps now. 

MATTHEWS:  Right.  They were elected.

DELAY:  We won. 

MATTHEWS:  Well, you won.

These candidates benefited from money that came from the RNC.  The RNC benefited from corporate money coming from Texas. 

DELAY:  That‘s right. 

MATTHEWS:  Isn‘t that just a laundering process? 

(CROSSTALK)

DELAY:  No.  That‘s—Democrats do it.  Republicans do it, have done it for years. 

Lawyers—it has been tested in the courts. 

MATTHEWS:  Oh, I see.

DELAY:  Lawyers have been doing this for—I mean, have said we can do this forever and ever and ever. 

MATTHEWS:  Could this be a partisan prosecutor who has found a law and found a way to read it that has not been read before?

DELAY:  Oh, definitely.  He is trying to rewrite the law. 

He is criminalizing election—the election code.  That‘s what he‘s doing.  But he‘s done this over and over again.  He did it against his Democrat enemies early on.  He did it against Senator Kay Bailey Hutchison.  He‘s—and, by the way, he‘s had his head handed to him every time.  But that‘s not his modus operandi. 

He did to me what he did to them.  You drag this out as long as you can do it, so that the press make you seem like you‘re indicted.  I have actually been indicted for two years, if you read the press on this investigation. 

MATTHEWS:  Right.  But, in this case...

(CROSSTALK)

MATTHEWS:  ... forced you to relinquish your leadership.

DELAY:  Never talking to me.  Never talking to me. 

MATTHEWS:  Right. 

DELAY:  Never asking me to testify, never doing anything for two years.

And then, on the last day of his fourth or sixth grand jury, he indicts me.  Why?  Because his goal was to make me step down as majority leader. 

MATTHEWS:  Does he have a witness or somebody or a piece of paper that suggests there was a quid pro quo with the RNC here? 

DELAY:  No. 

MATTHEWS:  You don‘t think he has anything like that?

DELAY:  No, absolutely not.  He has nothing.  I‘m telling you, he has nothing.

MATTHEWS:  What do you think he showed the grand jury to convince them to indict? 

DELAY:  You don‘t have to—what do I know?  You know, grand juries, it‘s all one-sided.  It is all what he presents to the grand jury, how he spins, how he presents it.  Everybody says you can indict a ham sandwich with a grand jury. 

MATTHEWS:  Yes, I have heard that term.

DELAY:  This is a ham sandwich indictment without the ham. 

(CROSSTALK)

MATTHEWS:  Let‘s play practicality here. 

DELAY:  Yes. 

MATTHEWS:  Because innocent until proven guilty.  That‘s the American system. 

DELAY:  Not anymore. 

MATTHEWS:  Well, let me ask you...

DELAY:  Not—this is that...

MATTHEWS:  Well, you set up the House system whereby a leadership person who is indicted has to relinquish their leadership post. 

DELAY:  True.

MATTHEWS:  So, that is not exactly innocent until proven guilty under your own party standard. 

DELAY:  By the way, the Democrats haven‘t. 

MATTHEWS:  Yes, but you‘ve been tougher. 

DELAY:  Yes. 

MATTHEWS:  OK, let me ask you this.  Can you get a trial before the next election?  Can you clear yourself?

DELAY:  I hope so. 

We have speedy trial in Texas.  And I have a very good lawyer that represented Senator Kay Bailey Hutchison against Ronnie Earle and handed his head to him back then.  He didn‘t learn anything and here we are again.

MATTHEWS:  Do you think this prosecutor, Mr. Ronnie Earle, who is a Democrat—we pointed that out in the beginning of this show—who has gone after you, can he delay this trial until after the election next year and beat you? 

DELAY:  He‘ll try.  That‘s the way...

(CROSSTALK)

MATTHEWS:  So justice delayed will be justice denied here?

DELAY:  Absolutely. 

And I have already been punished, because I have had to step down from my.... 

MATTHEWS:  Right. 

DELAY:  And that‘s all he wants. 

(CROSSTALK)

MATTHEWS:  Well, you won by 10 points because you were so generous to the other Republicans in your state, because you gave them some of your Republican territory.  Everybody—do you regret doing that now that you have a smaller margin? 

DELAY:  Not at all. 

MATTHEWS:  OK.  You have a margin of about five points.  If it switches, you lose.  Do you think this—this indictment, just by itself, no evidence, just the indictment, could cost you the election? 

DELAY:  No, because what we‘re hearing from my district right now, as we speak, it is overwhelming.  My district...

(CROSSTALK)

MATTHEWS:  Do they think this is sleazy, this indictment? 

DELAY:  Yes.  They finally get it.

You know, this has been going on for 10 years.  I got my first ethics charges in 1993, then again in 1995.  Then they filed a racketeering suit against me.  And then they filed two more sets of ethics charges, all dismissed, all dismissed, but time, so that they dragged me through the mud.  They can‘t get me on via the election.  And so they‘re trying to get me by making me step down...

(CROSSTALK)

MATTHEWS:  Are they using the old trick of throwing everything they can against the wall and seeing what sticks? 

DELAY:  Oh, yes.  And they have announced it.  I mean, the DCCC...

(CROSSTALK)

MATTHEWS:  Here‘s your toughest charge.  Mr. Leader, your toughest charge tonight—and everybody is still going to keep calling you Mr.  Leader, I‘m sure.

The toughest charge, they coordinated an attack on you.  Who did the prosecutor, Ronnie Earle, coordinate with to nail you today in that grand jury?

DELAY:  Oh, Democrat leaders. 

MATTHEWS:  In the state or up here? 

DELAY:  Both. 

MATTHEWS:  Who is involved up here? 

DELAY:  You need—you need—you need to ask him that question. 

(CROSSTALK)

MATTHEWS:  No, but you have said that there‘s a coordinated attack on you involving the leadership of the House on the Democratic side now.  Is Pelosi involved? 

(CROSSTALK)

DELAY:  Yes. 

MATTHEWS:  What‘s her role in this? 

DELAY:  I don‘t know.  Ask her. 

But they announced it.  It is on their Web site that they were going to come after me.  And they—and it is in all their fund-raising mails, of how they‘re going to... 

(CROSSTALK)

MATTHEWS:  Oh, I know you‘re a target of all the fund-raising. 

(CROSSTALK)

MATTHEWS:  You‘re like Ted Kennedy from the other side.  They go after you. 

DELAY:  I‘m not complaining.  I‘m just saying, this is what they‘re doing. 

I guarantee you, people like Martin Frost, Lloyd Doggett...

MATTHEWS:  They‘re still mad at you, aren‘t they?

DELAY:   Pete Laney, the former speaker of the...

(CROSSTALK)

MATTHEWS:  These are the losers in your campaign to rebuild the Republican Party of Texas. 

DELAY:  That‘s exactly—exactly right.

MATTHEWS:  And those guys are those guys who all lost their seats because you managed to win the redistricting in the Texas legislature, because you managed to get so many Republicans elected in the legislature.  They‘re all out to get you.

DELAY:  That is right. 

MATTHEWS:  And this is part of it. 

DELAY:  This is—this is—this is the punishment for—for winning the Texas House and redistricting Texas. 

MATTHEWS:  Do you think there were meetings involving Nancy Pelosi or anyone else in the House leadership or these guys you mentioned who lost their seats and put together this charge against you; they cooked it up? 

DELAY:  Yes, I think so, but I—but I...

MATTHEWS:  It wasn‘t just his eager beaver prosecutors helping Ronnie Earle?  It was people from outside who involved themselves in this? 

(CROSSTALK)

DELAY:  I think so.  yes. 

MATTHEWS:  Is Ronnie Earle a straight prosecutor? 

DELAY:  Absolutely not.  He doesn‘t even go to his office.  He only goes to his office to hold press conferences.  He...

MATTHEWS:  What, is he a no-show? 

DELAY:  Yes. 

MATTHEWS:  Is that legal, to be a no-show in Texas? 

DELAY:  I guess it is.  He does it.  He‘s done it almost his entire career. 

MATTHEWS:  Well, how does he get reelected? 

DELAY:  He‘s a political animal. 

MATTHEWS:  So, he‘s good at the electoral process, but not the process of prosecuting?

DELAY:  Absolutely. 

MATTHEWS:  And you believe that this is a political vendetta?

DELAY:  Oh, I know it is. 

MATTHEWS:  A coordinated vendetta by the House Democratic leadership here in Washington?

DELAY:  And Democrat leadership in Texas and Ronnie Earle and, absolutely. 

MATTHEWS:  Do you believe that there was a heads-up to people like Nancy Pelosi before this thing today? 

DELAY:  Yes. 

MATTHEWS:  Do you believe that Nancy Pelosi and all the Democrats are keeping quiet...

(CROSSTALK)

MATTHEWS:  ... today in order to let the focus be completely on you? 

DELAY:  And you‘re probably one of them. 

The DCCC last—yesterday afternoon was shopping this story.  Nobody had this story. 

(CROSSTALK)

MATTHEWS:  But we didn‘t know about it.  We didn‘t know about it. 

DELAY:  And they were shopping this story.  So, they knew about it.

MATTHEWS:  Well, they skipped us. 

DELAY:  Well...

(LAUGHTER)

MATTHEWS:  Let me ask you this about this.  Do you believe that Nancy Pelosi is part of a coordinated attempt to fry you and then to step back and let the frying go on without any Democratic partisanship being evident?  We had a guest on today, Sheila Jackson Lee.  All of a sudden, she wasn‘t available.  We‘re wondering whether—what‘s going on here.  Are they telling the people to pull back and make it look like it‘s nonpartisan? 

DELAY:  I don‘t know about that. 

MATTHEWS:  Well, that would be very coordinated. 

DELAY:  Yes.  But...

MATTHEWS:  But you‘re—you stick to your argument here tonight that this is a coordinated attack by the national Democrats and the state Democrats, including the guys you beat, knocked out of their seats, to get even with Tom DeLay?

DELAY:  Absolutely.  It‘s on their Web site.

MATTHEWS:  Can you still be the Hammer without the gavel? 

DELAY:  Huh?

MATTHEWS:  Can you still be the Hammer without the gavel? 

DELAY:  I‘m still a member of the House and I‘m still aggressive.  And we have got a great agenda.  We‘re looking for to fix gas prices.  We‘re looking retirement security, fiscal responsibility, all these kinds of things. 

(CROSSTALK)

DELAY:  We‘re focused. 

And, in fact, what the Democrats don‘t understand is, what they have done today is so unified the Republicans, at a time when we were kind of falling apart and fighting with each other, that we are now so focused on our agenda, we‘re going to drive it home and defeat the Democrats by accomplishing our agenda. 

MATTHEWS:  There will be no Republicans out there trimming you tonight, you don‘t think?  They won‘t be saying off camera or off record, without their names being used, this guy ought to go?  You‘re not going to read that tomorrow morning in the paper?

DELAY:  I don‘t know.  I don‘t know.  I know what I saw in that room when that caucus—the incredible support that I got. 

MATTHEWS:  Is Roy Blunt a good guy? 

DELAY:  And the unification of the other Republicans. 

Roy Blunt is a great guy.  He‘s very capable.

MATTHEWS:  Is he a DeLay guy? 

(LAUGHTER)

DELAY:  He is a Roy Blunt guy. 

MATTHEWS:  Hey, thank you.  You have got a lot of nerve coming on. 

DELAY:  Thank you. 

MATTHEWS:  Congressman, thank you for coming on.  It‘s a tough night.

Coming up, much more on Tom DeLay‘s indictment.  We will take a close look at Ronnie Earle, the prosecutor in the case.

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, Tom DeLay says that prosecutor Ronnie Earle is a partisan zealot.  We will take a closer look at Earle and some of the other indictments he‘s brought when HARDBALL returns.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

RONNIE EARLE, TRAVIS COUNTY  DISTRICT ATTORNEY:  Colyandro and Ellis have both previously been indicted for both conspiracy to violate the election code and money laundering.  The indictment charges DeLay with conspiring with Ellis and Colyandro to violate the Texas election code by contributing to corporate money to candidates for the Texas legislature.

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL.  That‘s Travis County District Attorney, DA, Ronnie Earle, a Democrat—let‘s point that out—announcing the indictment of House Republican Leader Tom DeLay, a Republican.  DeLay has called Earle a partisan fanatic.  He‘s had other words for him to use we will get to later.

For more on Earle‘s career, we‘re joined by Cragg Hines of “The Houston Chronicle,” who knows all about this. 

Cragg, this is so familiar to Texas politics, isn‘t it?

CRAGG HINES, “THE HOUSTON CHRONICLE”:  Yes. 

MATTHEWS:  A Democrat vs. Republican.  Everything is bitter partisanship, even the law.

HINES:  Well, in recent years, it used to be Democrat against Democrat, but now it‘s Democrat against Republican. 

MATTHEWS:  Are you surprised that the prosecutor in that case has been

it looks to me like he was bird-dogging this guy.  This is a hard case to come across accidentally. 

HINES:  Well, but it was at the center of how the Republicans operated, the allegation is.  So, it wasn‘t like he had to be looking very hard to find it. 

MATTHEWS:  This is part of the Republicans‘ successful effort of converting a longtime, 150-year Texas Democratic legislature into a Republican legislature, so that they could change the districts for Congress and get a much larger Republicans representation in Congress. 

HINES:  Yes, which was DeLay‘s purpose, because a lot of other leading Republicans didn‘t want to go back into redistricting in the middle of—between censuses. 

MATTHEWS:  Which is usually done every 10 years.

HINES:  Yes. 

MATTHEWS:  And it takes effect ended in a year that ends in a two, right, 1992, 2002?

HINES:  Yes. 

MATTHEWS:  And he said, no, let‘s not wait for the next turnaround of the government.  Let‘s go in and change that baby with lots of money in these campaigns. 

HINES:  Yes.  And he got his true believers in the legislature, House and Senate, to override basically the governor, lieutenant governor. 

MATTHEWS:  Pretend you‘re in the press box, which you are in a political sense, Cragg.  How good is Ronnie Earle as getting indictments, at getting prosecutions successful to conviction? 

HINES:  Little fish, he‘s fine.  He has a good record.  Big fish, Kay Bailey Hutchison, Jim Mattox, a Republican, a Democrat, not too good. 

MATTHEWS:  Here is a sampling for your review.  I know you know these cases of past prosecutions brought by this guy, Ronnie Earle, who has just indicted Tom DeLay.

In 1994, Republican Senator Kay Bailey Hutchison was acquitted of official misconduct and records tampering after Earle dropped the case he had brought.  Former State Representatives Betty and Lane Denton, both Democrats, were convicted in 1995, Betty for false campaign finance reports and Lane for theft and improperly funneling money to a Denton company. 

In 1992, Texas House Speaker Gib Lewis, a Democrat from Fort Worth, pled no contest to failing to disclose a business investment.  He retired that year.  In 1985, Democratic Attorney General Jim Mattox was acquitted on felony bribery charges.  State Representative Mike Martin, a Republican, pled guilty in 1982 to perjury after he lied in denying that he shot himself to gain publicity.  You got a lot of color down there in Texas. 

State Treasurer Warren Harding—there‘s a name—a Democrat in this case, pled no contest to official misconduct and gave up his reelection bid in 1982.  And Texas Supreme Court Justice  Don Yarbrough, another famous Texas name, a Democrat, was sentenced to five years for lying to a grand jury and forgery.  He gave up his seat.

It seems like, a lot of these cases, they don‘t end up in conviction by a jury.  They end up the guy giving up or quitting or saying, I can‘t take it anymore. 

HINES:  Well, That‘s how it works.  I mean, you know that.

And you have to remember that DeLay and Earle are both driven by what they think to be this moral sort of righteousness almost, coming from different places, of course.  But that‘s what sort of motivates them both. 

(CROSSTALK)

MATTHEWS:  What are your betting—can you bet now as a straight journalist on this simple question? 

(CROSSTALK)

HINES:  I‘m a columnist.  I have opinions. 

MATTHEWS:  Oh, you can have opinions.

MATTHEWS:  Will this go to trial or will Earle drop it because DeLay is giving uppercuts, or will he go all the way to a jury, this case?  That would be the fair thing to happen.

(CROSSTALK)

HINES:  I would think it would get to trial.  Whether it gets to beyond that, I don‘t know. 

MATTHEWS:  You don‘t think it could just be something to pressure him in? 

HINES:  Could be. 

MATTHEWS:  He won‘t quit though, will he, Tom DeLay?  He will never quit.

HINES:  I don‘t see that. 

MATTHEWS:  He is staying in House?  Will get reelected?  Will this affect his reelection? 

HINES:  It could, because, I mean, he‘s at, what, 55 percent. 

MATTHEWS:  Yes, it‘s close. 

(CROSSTALK)

MATTHEWS:  It‘s only 10 points.

HINES:  So, a 5.1 turnaround. 

MATTHEWS:  This could cost him five points maybe. 

HINES:  We have to see. 

MATTHEWS:  Or it could toughen up the Republicans.  But in the sixth year of a Republican...

(CROSSTALK)

HINES:  He is playing close attention to his district right now. 

MATTHEWS:  So, you would expect that Tom DeLay‘s way of responding to this is get lawyered up and spend his time at home? 

HINES:  Absolutely. 

MATTHEWS:  All right, Cragg Hines, you‘re right.  Thank you, “The Houston Chronicle,” a former colleague of mine.  Thank you. 

When we return, White House reaction to Tom DeLay‘s indictment today. 

What does it mean for President Bush? 

You‘re watching HARDBALL on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Now let‘s get reaction from the White House to Tom DeLay‘s indictment today on charges of criminal conspiracy. 

MSNBC‘s chief Washington correspondent, Norah O‘Donnell, is with us. 

Norah, he has been charged with money laundering involving a Texas—a set of Texas legislative races down there.  He had to quit his leadership post today.  And he will probably be out of action for a year perhaps in terms of leadership. 

What does it mean to the White House? 

NORAH O‘DONNELL, NBC CHIEF WASHINGTON CORRESPONDENT:  Well, today, the White House said that the president still considers Tom DeLay a friend and an effective leader in Congress, even though Tom DeLay won‘t be maintaining any of his leadership roles. 

Scott McClellan also saying that DeLay is a good ally, a leader who we have worked with closely in the past who can get things done for the American people.  So, for now, the White House is standing by Tom DeLay.  But, certainly, today at the White House briefing, the president‘s press secretary, Scott McClellan, got some tough questions. 

In particular, one reporter asked Scott McClellan whether the president is concerned about a stink of corruption surrounding the Republican Party, specifically referring to the investigation into the sale of stock of HCA by the Senate majority leader, Bill Frist, questions about Jack Abramoff, a Republican lobbyist with close ties to Tom DeLay, and other charges. 

The White House said no and sort of rejected that.  But, clearly, there are many political analysts and other observers who are saying this is an issue for the president, who is facing the lowest approval ratings of his presidency and needs to get a Congress and a Republican Party to move forward on his agenda, when there‘s a lot on the plate. 

MATTHEWS:  Yes.  It‘s a question, Norah, I think you probably have to ponder as you cover up there, as well as everywhere else, whether a man without a gavel has a hammer. 

(LAUGHTER)

O‘DONNELL:  And the man without his two whips in his office, yes.

I don‘t—listen, DeLay may be down, but he is certainly not out.  And today when he emerged from the Republican caucus with many other Republicans, the word from the speaker of House and on down was, this is temporary, the people that are taking his spot, including Roy Blunt, who will become the new House majority leader.  He says, this is temporary.  We expect Tom DeLay to be back. 

So, they‘re trying to close ranks behind this and say, he will be back.  He will beat this, Tom DeLay calling it a political witch-hunt, saying that the charges are outrageous and untrue and that he has nothing to hide. 

Nevertheless, it does become a problem for the Republican Party, and they lose the man that is so good at rallying them together and arm-twisting and pushing them on very difficult votes.  I mean, it‘s probably a good thing that Social Security won‘t happen this year.  They would have needed Tom DeLay in order to get it done. 

MATTHEWS:  Well thought.  He also has to face that Abramoff case that keeps percolating outside there, too, involving his former aide.  That one could get dicey as well. 

Anyway, thank you very much, Norah O‘Donnell, our chief correspondent in Washington for MSNBC. 

When we return, we are going to get reaction from Capitol Hill and talk to Republican Congressman Tom Davis, Chris Shays, who is a Republican, and Democratic Congressman Gene Taylor.  He‘s a conservative Democrat.

And you‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

(NEWS BREAK)

MATTHEWS:  Welcome back to HARDBALL.

We‘re continuing to discuss the indictment of House Majority Leader Tom DeLay.  Republican Congressman Chris Shays of Connecticut is a member of both the Government Reform Committee and Homeland Security Committee. 

And Republican Congressman Tom Davis of Virginia is chairman of the Government Reform Committee.  That‘s the big job.

Let me go to Tom Davis fist.

You are a member of the leadership, in effect.  Is the leadership going to stand behind Tom DeLay? 

REP. TOM DAVIS ®, VIRGINIA:  Well, I mean the courts will make the ultimate call on this, but he has taken a leave of absence as the majority leader.  He‘s been replaced on an interim basis by Roy Blunt.  And we will have to wait to see what happens in Texas. 

MATTHEWS:  Is this a real charge or a Mickey Mouse charge? 

DAVIS:  I think that remains to be seen.

Obviously, Ronnie Earle, the prosecutor down there, indicted Kay Bailey Hutchison before and dropped the charges before trial.  So, that really remains to be seen at this point.  It‘s a charge that is not illegal in a lot of states, in terms of the way the money went.  But, under Texas law, if they can prove it, they‘re going to have a case, but a long way to go on this. 

MATTHEWS:  Tom, you were chairman of your campaign committee for your party.  And you know the law.  Here is a case where a guy, your leader, Tom DeLay, was charged with encouraging corporations in Texas to give to the RNC, the Republican National Committee, corporate transactions, which are illegal to give directly to Texas legislative candidates.

And then, as part of this sort of scheme, the prosecutor called it, the RNC, the Republican National Committee, then funneled the same amount of money directly to three candidates for the legislature at the direct behest and order of Tom DeLay.  Is that a crime? 

DAVIS:  It just depends if you can prove intent. 

You have got to remember, the RNC had the ability to do whatever they wanted to with that money under the law.  He is entitled to make a recommendation.  So, it will really be up to a jury sitting there to decide if there‘s a direct tie-in or if these were in fact independent transactions.  Tom is entitled...

MATTHEWS:  You know, he is allowed to say, I have cooked up—I have got almost $200,000 from my corporate folks down here in Texas, say to the RNC, OK, give the money back to these people down there running for office at the state level?  As long as that is advice, it‘s legal? 

DAVIS:  Well, Chris, I can ask the RNC to give to anybody I want as well.  And I can raise money for the RNC.  They don‘t have to pay attention.  You are going to have to show dates and everything else. 

So, it‘s a tougher case to prove at this point, because, under the law, the RNC could do whatever they wanted to with that money.  They were not beholden to Tom DeLay.  The fact that they took his advice is not necessarily a crime. 

MATTHEWS:  So, the evidence could be exactly the same as the prosecutor presents it, but it is not a crime because what?

DAVIS:  You have got to show that the intent there was to funnel it, or they could be in fact independent transactions in there.  You have mixed cases on this.

MATTHEWS:  Let me go to Chris Shays up from Connecticut. 

Chris Shays, Congressman, you were very tough yesterday on Michael Brown.  This is not a good week for the Republican Party, to have this and then to have Senator Frist being probed right now for a stock sale.  What is going on? 

REP. CHRISTOPHER SHAYS ®, CONNECTICUT:  Well, better now than a year from now, I guess. 

You know, what is going on is that people need to make sure they play by the rules, that, when they get close to the edge, they give people excuses and maybe very legitimate ones to be critical of them.  So, time will sort this out.  But the important thing, I think, is, our rules are clear.  If you‘re an indicted leader, you need to step down from your leadership post.  Tom did what our rules require him to do. 

MATTHEWS:  Is there something you know about Tom DeLay that we don‘t?  His press is not great.  He is called the Hammer.  He is called a tough guy.  He pushes people around to get his way to keep the House Republican caucus together.  Is that the sum of him?  Is that what he is or is he nicer than that or better than that or different than that? 

SHAYS:  Who are you asking? 

MATTHEWS:  You, Congressman Chris Shays. 

SHAYS:  I think Tom—if I ever had a knife in me, it would be in my belly and not my back. 

MATTHEWS:  So, he is direct about it? 

SHAYS:  He is direct, absolutely. 

MATTHEWS:  Let me go to Congressman Tom Davis. 

The Republican Party has enjoyed majority rule on Capitol Hill since the big revolution of 1994.  Is it in jeopardy because of this case? 

DAVIS:  No, not because of this case.  It would take a series of things. 

I think the thing that, at this point, puts most of our—that would put seats in play, if anything, is the six-year itch, the fact this is the sixth year of a president‘s term.  In midterms, the party in power traditionally loses.

MATTHEWS:  That‘s true.

DAVIS:  You have gas prices.  You have got a war in Iraq.

I think that plays more than the corruption issues, but these clearly don‘t help. 

MATTHEWS:  The war in Iraq, is it for—is it helping or not helping the Republican majority in Congress right now? 

DAVIS:  It doesn‘t help.  I think an incumbency doesn‘t help anybody at this point. 

Even in most governors, whether they are Republicans or Democrats, you will find a lot of them will—what we call their numbers upside-down, higher unfavorable than favorable. 

MATTHEWS:  Right. 

(CROSSTALK)

DAVIS:  This is not a pretty political environment for incumbents. 

MATTHEWS:  Was the president‘s and the administration‘s handling of Katrina, from top to bottom, helpful or not helpful to the Republicans keeping power? 

DAVIS:  Well, it was not helpful at all. 

Usually, when you‘re in power and you get a storm or something like that, you have an opportunity to have your Giuliani moment.  That certainly didn‘t happen here.  If anything, it went the other way. 

It‘s one of the reasons we‘re looking at all of the things that went wrong in the initial response to Katrina.  Now, there‘s a long way to go on this issue, to play it out.

But, clearly, in the early hours, this was—it turned out very badly for everybody involved. 

MATTHEWS:  Thank you, Congressman. 

Stay with us.  We are going to look right now.

Both of you, Congressmen, Congressman Davis and Congressman Shays, took part in a hearing yesterday with former FEMA Director Michael Brown. 

Here is a very heated exchange between Mr. Brown and Congressman Shays.  Let‘s take a look.

(BEGIN VIDEO CLIP)

SHAYS:  If someone like Rudy Giuliani had been in your position instead of you, I think he would have done things differently and I think his answers to us would have been very different. 

MICHAEL BROWN, FORMER FEDERAL EMERGENCY MANAGEMENT AGENCY DIRECTOR:  I

never thought I‘d sit here and be berated because I‘m not Rudy Giuliani.

SHAYS:  I want to know how you coordinated the evacuation. 

BROWN:  By urging the governor and the mayor to order the mandatory evacuation. 

SHAYS:  And that‘s coordinating? 

BROWN:  What would you like for me to do, Congressman? 

SHAYS:  And that‘s why I‘m happy you left, because that kind of, you know, look in the lights like a deer tells me that you weren‘t capable to do the job.

BROWN:  I guess you want me to be this superhero that is going to step in there and suddenly take everybody out of New Orleans. 

SHAYS:  No, what I wanted you to do was do your job of coordinating. 

(END VIDEO CLIP)

MATTHEWS:  Congressman Shays, was that—do you think you were fair to that fellow, to Michael Brown? 

SHAYS:  Well, first off, he can‘t be the scapegoat.  I made it very clear in my questioning that I believe that 80 to 90 percent of the job is local—they‘re—and state.  They are the first-responders. 

I made it very clear, I thought the mayor and the governor were totally incompetent.  But what I didn‘t like hearing from my FEMA director was, when he saw that everything had fallen apart, he did nothing.  He basically felt he didn‘t have the power and he chose not to exercise power. 

MATTHEWS:  Right. 

SHAYS:  He needed to step in.  He needed to take action.  He needed to free those people from the Superdome.  He needed to free those folks in Charity Hospital and University Hospital.  He did a terrible job. 

MATTHEWS:  But don‘t we have a system of government in this country, which is a federal system, which leaves most of the authority at the local and the state level?  Governor Blanco did not ask for the big aid she needed from the federal government in terms of troops, federal, the National Guard, in terms of the real effort to rescue people. 

She asked for a few things, like counseling and some of this after-the-matter sorts of things.  She didn‘t really come through and make the direct request for the kind of aid that the FEMA people were capable of giving.  Isn‘t it more her fault than Michael Brown? 

(CROSSTALK)

SHAYS:  Well, when she comes before us, we will be asking those questions.  I think her performance was pathetic. 

And when you had the mayor basically say—they asked, what would you do differently, he said he would have yelled louder.  No, what he should have done is make sure people weren‘t sent to the Superdome without food, without water, without police protection and without a way to evacuate. 

MATTHEWS:  Are you going to call the president up and ask and decide how well he did his job? 

SHAYS:  Well, I think we are going to know a lot about the president and his people by the time we are done.

Tom Davis is doing a super job in running this hearing. 

MATTHEWS:  Right. 

SHAYS:  He is not being partisan.  He is going where the facts lead us.  And, in the end, whether or not the Democrats participate, we are going to get some very good answers. 

And, let me just say, it‘s all out in the open.  There‘s no closed hearings here.  People can see what we‘re doing. 

MATTHEWS:  Congressman Davis, I want to ask you just to follow up on that. 

DAVIS:  Chris...

(CROSSTALK)

MATTHEWS:  We‘re always concerned about Katrina and the aftermath here.  We covered a lot of it, like everyone else on television.  Do you think we are ever going to get a complete report on what happened and how things seem to be delayed in getting things done by all parties? 

DAVIS:  That is our goal. 

And I think you will find that there‘s blame, you know, to go around. 

But what you have to remember is, this was the most serious storm ever to hit the Gulf Coast. 

MATTHEWS:  Right. 

DAVIS:  You could not expect the state and local governments to have the resources to respond. 

The federal government, you could see by the size of this storm we were going to have to be heavily involved.  And we sat back and waited.  And, you know, in this case, time cost lives.  It caused a lot of damage. 

And there‘s a huge federal culpability in this. 

MATTHEWS:  You know, the federal government seems to be taking most of the heat.  Do you think it should have in the future most of the power? 

DAVIS:  I think it is going to depend on...

MATTHEWS:  Congressman Davis.

DAVIS:  It‘s going to depend on the storm. 

I think you always go with local officials where you can.  But the size of this storm was so overwhelming that, even if everything had gone right, it would have still been messy.  But it didn‘t go right. 

MATTHEWS:  Yes. 

DAVIS:  A lot of things went wrong. 

And the federal government had an opportunity to step in earlier than they did, and we did not. 

MATTHEWS:  You know who looked good?  The Coast Guard looked great.  They were—is that because they didn‘t have to work with any government level?  They just did their job? 

Congressmen, both of you. 

(CROSSTALK)

DAVIS:  The weather bureau—the Weather Service looked great, too. 

They hit this one right on. 

MATTHEWS:  Yes. 

DAVIS:  But everybody else, I think, as you look at this, are going to find mistakes were made across the line. 

MATTHEWS:  OK. 

DAVIS:  Some of them are systematic.  Some of them were just human errors. 

MATTHEWS:  OK, Congressman Davis, thank you very much.

Congressman Chris Shays of Connecticut as well. 

When we return, we will go back to Tom DeLay, the indictment question, and talk about the political fallout—it could be big—from Tom DeLay‘s indictment today with “Newsweek”‘s investigative reporter Michael Isikoff and “TIME” magazine‘s Karen Tumulty.

This is HARDBALL, only on MSNBC. 

(COMMERCIAL BREAK)

MATTHEWS:  Coming up, Tom DeLay says he will temporarily step aside as House majority leader following his indictment on conspiracy charges.  Is this the end of his political career?

HARDBALL returns after this.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL. 

Today, Republican leader Tom DeLay stood firm in the face of an

indictment for criminal conspiracy.  He called the district attorney who

brought the charges, Ronnie Earle, a party fanatic and denied the charges against him.  So, who is the district attorney who brought the charges and what is the political fallout of this indictment, guilty or innocent? 

I‘m with “TIME” magazine national political correspondent Michael Isikoff and he‘s—and “Newsweek”‘s—he‘s “Newsweek”‘s investigative reporter.  I‘m also with Karen Tumulty.

Thank you, dear.  Thank you. 

Michael, whatever happens here, this jury will finally be seated, probably a year from now.  Tom DeLay has been indicted an a criminal conspiracy matter involving a felony charge of laundering money, taking money from corporations in Texas, so he can take it through the RNC back to these candidates he preferred in state legislative races.  Does it matter whether he is innocent or guilty politically right now? 

MICHAEL ISIKOFF, “NEWSWEEK”:  Well, in the short term, politically, he has had to resign his position as majority leader.  Of course, it is going to matter a huge amount whether he keeps a seat in Congress and can come back as majority leader.

MATTHEWS:  Can he get a trial by jury before the next election, so he could prove his innocence, in effect?

(CROSSTALK)

MATTHEWS:  Escape guilt here?

ISIKOFF:  Hard—there‘s no sure thing.  He probably can get a jury trial before next year‘s election, right?

Now, then he also—whether he is going to be able to get that before he has to make a decision or Republicans in Texas make a decision whether he should run for reelection or not is another question. 

MATTHEWS:  Right. 

ISIKOFF:  I mean, does he want to run for reelection, this hanging over him, with a trial upcoming.  That‘s big question. 

MATTHEWS:  Yes. 

Karen, you know that, just because you‘re a leader in Congress doesn‘t mean you have an easy seat.  A lot of guys had tough seats.  Sam Rayburn had a tough seat.  Tom Foley lost his seat.  It‘s quite easy to lose a seat; 55-45, is that too close a margin for Tom DeLay to have something like this hit him?

(CROSSTALK)

KAREN TUMULTY, NATIONAL POLITICAL CORRESPONDENT, “TIME”:  That was the margin he won by last time.  And it shocked people how close that margin was in Texas, where Republicans routinely win with well over 60 percent, and especially Republicans as powerful and with the sort of resources that Tom DeLay has, for both marshaling powerful political interest groups and raising a lot of money. 

(CROSSTALK)

MATTHEWS:  Mike, why are the Democrats hiding today?  They‘re nowhere. 

It‘s very hard to get anybody to come on the show tonight.

(CROSSTALK)

MATTHEWS:  Have they gotten orders to cool it and let the Republicans kill themselves?

ISIKOFF:  I just think let the charges speak for themselves.  You don‘t need Democratic members piling on at this point.  You have got headlines, DeLay indicted.  That will be the headline in the papers tomorrow.

MATTHEWS:  And they want it to look like it‘s a pure judicial event.

ISIKOFF:  Well, sure.  Yes.  Yes. 

MATTHEWS:  They don‘t want Ronnie Earle surrounded by a team of Democrats saying, go on.  Keep going.  Right on.

(CROSSTALK)

TUMULTY:  Right. 

(CROSSTALK)

TUMULTY:  Especially when Tom DeLay, the first thing he did coming out of the box, was to come out and call Ronnie Earle a partisan hack.  So, they want to take as much of this tinge of partisanship...  

MATTHEWS:  Who called who a partisan hack?

TUMULTY:  Tom DeLay came right and essentially said this was purely partisan motivation.

MATTHEWS:  Is there anybody independent in Texas that is not a partisan bitter Democrat or partisan bitter Republican? 

(LAUGHTER)

(CROSSTALK)

TUMULTY:  Well, hey, Ronnie Earle has prosecuted 15 public officials in Texas; 12 of them were Democrats. 

MATTHEWS:  So, he is not partisan? 

TUMULTY:  Well, he is certainly a Democrat and a staunch Democrat.  But, again, his record isn‘t as partisan as the Republicans would like to make out. 

(CROSSTALK)

MATTHEWS:  We are going to back and talk about that bigger case, that big 800-pound gorilla sitting out there, the Abramoff case that is floating down the tracks here.

ISIKOFF:  Yes.  Right. 

MATTHEWS:  I‘m mixing my metaphors, but doesn‘t that pose a much bigger threat, perhaps, to the leadership? 

We will be right back with Mike Isikoff of “Newsweek” and Katrina of

“TIME.”

And a reminder, the political debate is ongoing on Hardblogger, our political blog Web site.  Follow all the action on the hottest political stories each day.  Just go to our Web site, HARDBALL.MSNBC.com. 

HARDBALL will be right back. 

(COMMERCIAL BREAK)

MATTHEWS:  We are back with Mike Isikoff from “Newsweek” and Karen Tumulty of “TIME” magazine.

Macy‘s is talking to Gimbels here tonight. 

And I want to ask if you sense that this is a—on the Category 5 scale.

Mike.

ISIKOFF:  The DeLay indictment?

MATTHEWS:  Yes. 

ISIKOFF:  It‘s pretty big, somewhere between a high three and a four, I would think.

MATTHEWS:  In hurricane language. 

Karen.

(CROSSTALK)

TUMULTY:  I think it‘s Katrina.  It‘s the one that people weren‘t preparing for.  This is the one that everybody thought was going to blow over, and it didn‘t. 

MATTHEWS:  The question of money-laundering and that. 

What about the Abramoff case, the one involving his very big-time lobbyist former aide?

ISIKOFF:  Well, that one seems to be moving along at a rather rapid pace and widening. 

I mean, we had the extraordinary development last week of the arrest of a senior OMB official, White House aide David Safavian. 

MATTHEWS:  From the executive office of the president.

ISIKOFF:  Yes.  Yes, who was arrested by the FBI.

MATTHEWS:  What for?

ISIKOFF:  For lying to the FBI about his dealings with Abramoff, actually.  Abramoff was using him.  At the time, he was at the General Services Administration.  Abramoff was trying to lease property from the General Services Administration.  He invites Safavian on this big golfing junket to Scotland, a $100,000 thing.

MATTHEWS:  What would be the big charge against a former aide to Tom DeLay that might bring some action, legal action against Tom DeLay himself? 

(CROSSTALK)

MATTHEWS:  Where is he exposed?

ISIKOFF:  There‘s no—there‘s no direct exposure in the stuff we have seen about Abramoff. 

I think the threat is that, if Abramoff and/or his former associate Michael Scanlon—Scanlon was DeLay‘s press secretary.  And he‘s highly exposed in this.  If either one of them flips, tries to cut a deal to save themselves, who is the first person they might give up?  And Tom DeLay is the big fish out there. 

(CROSSTALK)

MATTHEWS:  You know Scanlon, don‘t you?

ISIKOFF:  I know—yes, I have had dealings with him.

MATTHEWS:  He was a source for you, wasn‘t he? 

ISIKOFF:  Actually, no.  He was not.  No.  But I do know him. 

(CROSSTALK)

MATTHEWS:  He was a source for me.

(LAUGHTER)

(CROSSTALK)

ISIKOFF:  Yes, right.

TUMULTY:  There are a number of...

(CROSSTALK)

MATTHEWS:  He‘s a press guy. 

(CROSSTALK)

TUMULTY:  But there are a number of Tom DeLay aides who, upon leaving, had very close relationships with Abramoff when they worked for Tom DeLay, upon leaving the office, went the into business arrangements with Jack Abramoff. 

And if there‘s going to be any connection, I think that that‘s where the hottest speculation is. 

MATTHEWS:  Are the House members who are rallying behind Tom DeLay right now aware of these other pending problems for him? 

TUMULTY:  Tom DeLay has been going around and spent much of the summer privately reassuring everyone that this was all going to go away.

And I know I talked to a number of Republican members who were feeling a lot better about this in August.  They‘re not feeling that way right now.  And this is the middle of candidate recruitment season.  And a lot people may be thinking about running against these Republicans.

MATTHEWS:  Is this as bad as the House bank scandal, which really wasn‘t criminal, but it looked bad? 

Mike. 

(CROSSTALK)

ISIKOFF:  It certainly has the potential to get a lot worse.  I mean, the Abramoff investigation, it goes off on so many tentacles.  You have all these golfing...

(CROSSTALK)

MATTHEWS:  OK. 

ISIKOFF:  ... for other members of Congress. 

MATTHEWS:  Well, more are coming, maybe.

MATTHEWS:  Thank you, Mike Isikoff and Karen Tumulty. 

Join us again tomorrow night at 5:00 and 7:00 Eastern for more

HARDBALL.

“COUNTDOWN WITH KEITH OLBERMANN” starts right now.  And he‘s asking the biggest questions in news.

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