updated 10/7/2005 10:55:43 AM ET 2005-10-07T14:55:43

Guest: Ron Kaufman, Max Kellerman,  Fred Burton, Wayne Slater

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TUCKER CARLSON, HOST:  Welcome to another jam packed edition of THE SITUATION.  I'm Tucker Carlson. 

We'll have the latest news on Karl Rove's return to the witness stand.  Plus I'll speak with a member of the Republican National Committee about Harriet Miers.  Some Republicans are calling opposition to the nominee, quote, “sexist.”  We'll debate that and vigorously. 

We begin tonight with the looming terror threat to New York City's subway system.  New York City police and Mayor Michael Bloomberg said the threat originated overseas and was still being evaluated for its credibility.  However, they said it was specific enough about a target and a time to warrant advising subway riders to be vigilant in coming days. 

City officials have also told NBC News that an informant said attackers would try to smuggle explosives onto New York's train system, possibly in baby carriages, in an imitation of London and Madrid's attacks. 

Here's a piece of that news conference from earlier this evening.

(BEGIN VIDEO CLIP)

COMMISSIONER RAY KELLY, NEW YORK POLICE DEPARTMENT:  While the information that see not been fully corroborated, it has been deemed of sufficient concern for the police department to enhance its counter-terrorism coverage of the subway system and to advise the public of the threat and to ask its assistance in reporting immediately any suspicious individual or activities to police or transit personnel. 

MARK MERSHON, FBI ASSISTANT DIRECTOR:  The encouraging news is that classified operations have, in fact, partially disrupted this threat. 

(END VIDEO CLIP)

CARLSON:  And that is good news.  But homeland security officials in Washington are downplaying the threat tonight saying, it was, quote, “of doubtful credibility.” 

For the very latest from New York, we turn to NBC's Mike Taibbi, who's live in Manhattan—Mike. 

MIKE TAIBBI, NBC NEWS CORRESPONDENT:  We're hearing some of the same things, Tucker, from Washington, that is, that not so much the threat but the source of that threat, a single source has credibility questions, which some people in Washington, sources in Washington are saying raise some questions about how seriously we should take it. 

The mayor, as you saw standing to the left of the police commissioner, obviously thought that the information was detailed enough and the threat serious enough as a possibility to have to go public.  In fact, he said basically he didn't have a choice but to do that. 

And to that end, he's going to suggest a number of steps have been taken.  He did say that earlier today, an intensifying search, random searches of some of the small pieces of luggage or backpacks or even baby carriages that people bring to the subway stations in New York.  Increased vigilance, heightened visibility of both uniformed and plain clothes cops, more undercover cops on each of the trains. 

So here we are, at already a maximum heightened state of alert in New York City, and now million plus subway riders a day are going to have even more to think about and to see and to notice about increased security on their mass transit and subway system. 

Now how do New Yorkers feel about it, Tucker?  We talked to some people in Times Square.  They're New Yorkers, and they said pretty much what the mayor himself said, which is that he's not going to change his habits.  They're not going to change their habits. 

One guy said to us, “Listen, there's a playoff game up at Yankees stadium tomorrow.  How do you think I'm going to get there?  I'm going to take the subway.”

Mayor Bloomberg, our billionaire mayor in New York City, famous among other things for taking the subway, said he was taking the subway home from work tonight and was going to take it again back to work tomorrow morning. 

So how serious a threat?  Serious enough to go public.  Not serious enough that New Yorkers, at least, are changing their daily habits. 

CARLSON:  Good for Bloomberg.  Mike, have you seen more cops, bomb-sniffing dogs on the subway today?

TAIBBI:  We saw more cops positioned outside at 6th Avenue before, but, no, not more evidence of that, but down in the subway system, there is a greater visibility. 

I think one of the reasons we're going public in a situation like this is to let the bad guys know, assuming they're making themselves aware of what's being said, that every step that can be taken is being taken, that every element of vigilance or increased vigilance is in place throughout this system, that even though the terrible potential for an attack on a mass transit system, a real force multiplier, some of the guests on MS have said, you know, it's really a problem but the city is doing everything that it can do in this instance.  And the mayor and the FBI and the police commissioner wanted the public and the bad guys to know that. 

CARLSON:  All right.  NBC's Mike Taibbi in New York.  Thanks. 

TAIBBI:  All right.

CARLSON:  Well, for more on this threat, we bring in one of the world's leading counter-terrorism experts, Fred Burton of Stratfor, joining us live tonight from Austin, Texas. 

Fred, thanks for coming on. 

FRED BURTON, STRATFOR COUNTER TERRORISM EXPERT:  Thank you, Tucker. 

CARLSON:  We're getting conflicting reports on the sourcing of this threat.  Some reports say there are multiple sources.  Mike Taibbi just said that there was one.  Where do these threats come from, typically?  It seems they're shrouded in mystery.  Officials have learned.  Where did they learn?

BURTON:  Well, the difficulty with this kind of threat is part of the game of trying to vet this and trying to see where this may fit from a tactical analysis. 

It's our understanding that this threat surfaced in Iraq, and that the preliminary indications are that this was based upon very credible information, however that the plot has been disrupted.  And the indications are that there's nothing that's been moved into an operational phase that this was all in a planning phase from attack cycle perspective. 

CARLSON:  What kind of—this is kind of on a tangent, but I am interested.  What kind of intelligence are we getting from Iraq?  Are we getting a large quantity of intelligence, and has it been useful so far?

BURTON:  Well, we are getting a lot of localized intelligence when it comes to Zarqawi type of operations on the vehicle bombs.  However, this is the first time that I'm aware that we've had anything come out of Iraq that directly impacts upon the security of the continental United States. 

CARLSON:  Now, people have been worried about, obviously, the New York City subway system for a long time, 4.7 million people use it every single day, pretty much unguarded.  Is it possible to secure something like the New York subway?

BURTON:  It's very difficult to do.  Let's face it, the New York City Police Department is probably the best police department in the nation to combat this type of threat.  So the traveling public should feel confident about that. 

However, if you look at the attacks on 3/11 in Madrid, the attacks in London, 7/7 and 7/21, and let's not forget that approximately 10 days ago, the French police busted a cell that were alleged planning attacks on the metro in Paris.  So I'm afraid that we're going to be faced with threats on public transportation in the foreseeable future. 

CARLSON:  So you are not confident that we could ever obviate the threat, we could ever really make the subway secure?  Is it possible to do that?  Has anybody done that?  Is there any subway system in the world that you're aware of that's truly secure?

BURTON:  No, it's not, I'm afraid, Tucker.  I'd like to give you better news, but I can't.  That is a vulnerability, and it's a vulnerability that we're going to face going forward. 

It's darn near impossible to screen that volume of passengers every day.  How are you going to do it?  And I think the New York City Police Department is doing the best things that they can do.  They're being proactive.  They're reacting.  And they're really in the gun sights on this. 

CARLSON:  To ask a ghoulish, horrible question, why haven't we seen an attack so far?

BURTON:  Well, I think that it more than likely has been thwarted in this case.  There's no doubt al Qaeda has looked at this as a vulnerability, and if you keep look from a threat progression perspective, you have the attacks in Madrid, you have the attacks in London.  You have a thwarted plot in Paris.  New York City and/or Washington, D.C., has got to be next. 

CARLSON:  Why tell the public about it?

BURTON:  Well, this is the difficulty when it comes with this kind of threat information.  I'm sure that many people would like to know about this.  I know I would.  If I was riding the subway every day, I would like to know how much information is out there, so I can make my own choice.  And I think the government is doing the right thing. 

And of course, anytime this happens, there's a lot of second-guessing, and there's a lot of questioning as to the credibility, but in this case, the system worked.  The federal government collected the intelligence.  They passed it to the local police department.  And the police department are making notifications and ratcheting up security. 

CARLSON:  You probably see as much intelligence on this kind of thing as anybody who doesn't work directly for the U.S. government.  Knowing what you know, would you ride the subways in New York every day?

BURTON:  I would.  However, I would also be very vigilant, and I would be on the lookout for any type of suspicious type behaviors. 

CARLSON:  Like what?

BURTON:  Well, I would be looking for individuals that were sweating profusely, that were wearing very bulky clothing.  I would look for individuals carrying backpacks with very obvious wires.  And I tell you, it comes down to a gut reaction a lot, being in law enforcement my entire career.  If it doesn't look right, for the most part, it probably isn't right. 

CARLSON:  So you're sitting on the subway, and there's a man wearing a bulky sweatshirt or carrying a bulky backpack, sweating profusely, speaking possibly a foreign language.  What do you do at that point?

BURTON:  At that point, you move as far as you can away from the individual and you wait until the next stop and you get off and let the train keep on going. 

CARLSON:  What about the other people on the train?

BURTON:  Well, I would certainly try to make a report of the incident either to the conductor in the station or if I see a uniformed police officer there and let them know. 

But I think what we have to look at now in America, and let's not forget that we just had an explosion of an individual in Norman, Oklahoma, in the heartland of America, that it's time for us to wake up and be vigilant. 

CARLSON:  So if you see a sweaty guy speaking Arabic with a bulky backpack, get the hell off the subway car.  That's the bottom line. 

BURTON:  Well, I think that you have to evaluate the circumstances based on the facts, but I know what I would be doing. 

CARLSON:  Yes, I would, too.  I'd be out of there.  I'd be hailing a cab in about 30 seconds.  Fred Burton, Stratfor, joining us from Boston.  Thanks for joining us. 

BURTON:  Thank you, Tucker. 

Coming up, the president's close advisor, Karl Rove, in danger of being indicted tonight.  Can the architect maneuver his way out of this growing mess?

Plus, Harriet Miers is proving to be pretty hard sell to conservatives.  We'll ask a member of the Republican National Committee what it will take to get her confirmed to the Supreme Court, when we come back. 

(COMMERCIAL BREAK)

CARLSON:  Coming up, Martha Stewart's ex-con status puts her at risk of missing a pumpkin festival in Canada.  Plus, a jilted suitor decides to sue the dating service that set them up.  The rocky romance is about to get even rougher, next.

(COMMERCIAL BREAK)

CARLSON:  Welcome back. 

It could be make or break time for presidential advisor Karl Rove.  The man sometimes referred to as Bush's brain will face a grand jury for the fourth time as a prosecutor looks into the leak of CIA officer's Valerie Plame's identity. 

Rove offered federal prosecutors his 11th hour testimony but has been told there is no guarantee he will not be indicted.  For more on Rove's dilemma, let's bring in the coauthor of the best selling book, “Bush's Brain,” Wayne Slater.  Wayne, thanks for coming on. 

WAYNE SLATER, CO-AUTHOR, “BUSH'S BRAIN”:  Sure, Tucker, good to be with you. 

CARLSON:  Now, Rove's—Rove's attorney is describing this as Rove volunteering to go before the grand jury for the fourth time.  Why in the world would anybody volunteer to go to a grand jury, much less for the fourth time?

SLATER:  Yes.  Usually lawyers say stay away from these places.  This is where you get in trouble. 

There are only a couple of possibilities.  One is, that he has an opportunity to clear up some kind of problem with respect to somebody else at the White House. 

The other problem is—the other possibility is the lawyer is involved with Fitzgerald's office and fears that Rove may be the target of an indictment against his client, and he's going to trying to talk his way out of it. 

CARLSON:  You've been around, obviously, for a long time covering politics.  Have you ever seen an investigation with fewer leaks or an investigation where we the press know less about what's actually going on?

SLATER:  You've got to hand it to this guy, Fitzgerald.  This is extraordinary, how little we know, and I just fear that what we seem to know is probably wrong. 

Most of the leaks that we're getting, the information we're getting is from Rove's lawyers or from others in the administration, who may know something and may not really know something accurately. 

Something is going to happen in this case.  Somebody is going to be indicted, most likely.  The least possibility is that Fitzgerald comes back with a grand jury report, but I don't think anyone knows for sure what the end product will be. 

CARLSON:  Do you think that he could really do that?  I mean, it's been almost two years he's been looking into this case.  He spent a lot of money.  This grand jury has been impaneled a long time.  He's talked to a lot of people.  He sent one reporter to jail, shamefully, in my opinion.  Do you think he can really come back and say, “I'm not indicting”?

SLATER:  I just don't see how that's possible.  Two things: one, you mentioned Judy Miller, “New York Times,” went to jail.  The idea of being so serious that you're putting reporters in jail in order to get information suggests to me that he's going to indict somebody somewhere for doing something wrong. 

The other thing in this case is that you look at this guy's record.  He's gone after everybody.  He's gone after the Daly machine in Chicago.  He's gone after the White House here.  He's going after other forces, and there's a grand jury—there's actually a case going on right now, a trial in Chicago, that he was involved with at the beginning. 

This is a guy that doesn't just investigate.  He indicts, and he brings people to trial. 

CARLSON:  Yes, I noticed that.  Why is he always picking on the Daly machine?  They've done a pretty good job with that city.  I don't know if you've been there.  It looks great.  Why don't we leave the Dalys alone?

Look, is there a sense of betrayal in the White House?  I mean, this guy was reported to be, you know, a Republican, not any kind of wild-eyed left-winger.  He was, of course, given this case by the Justice Department. 

I don't imagine anyone in the White House expected this was what was going to happen when they handed it off to him.  Is there a feeling in the White House that this guy is out of control?  What does the White House think of this?

SLATER:  I think there's a feeling of surprise that this guy is so determined.  You've got a bachelor prosecutor who works 18 hours a day.  He's worked for two years like that.  He is very, very serious. 

I think about a year and a half ago, the White House didn't think that this guy was going to work with this kind of diligence.  So it's a big, big surprise.  Remember, Karl Rove is a guy, whether he gets indicted or not—we don't know that—but Karl Robe is a guy who's been involved in many scrapes in the past, lots of dirty tricks, hardball politics, a few leaks.  I've received a few over the years from Karl and others.  Maybe a few whisper campaigns and other matters that are similar to what we see here. 

The difference is in the past Rove has never left his fingerprints on anything that was untoward.  This may be different. 

CARLSON:  Yes, they were—I think they were absolute fools, the White House, not to just let the Justice Department handle this in the first place.  You've heard a lot of whispering in the last couple of weeks about Rove not being present at White House events.  Apparently, he was not out on the lawn with the president the other day.  He's typically there. 

Is this signaling—the White House, by the way, says he's on a college trip with his son and wife.  What's the truth about it?  Is he being sidelined or not?

SLATER:  Tucker, you've been around enough to know, around this White House, these campaigns, you know things don't happen by accident. 

CARLSON:  No. 

SLATER:  This is by design.  Rove is trying to distance himself from the Bush administration, from the president.  He's trying to low-profile himself as they prepare to see what the heck is coming up ahead. 

So this is not just a college trip.  In fact, Rove was in Dallas last night making a fundraising appearance.  This is something more serious than that.  The Rove people, I suspect, aren't sure what's going to happen from this grand jury, but they can suspect the possibility of the worst, and are preparing for it. 

CARLSON:  This is—finally, this—maybe people who don't live in Washington may not have a sense of what a big deal Karl Rove is in the White House, from the executive branch of the federal government, for that matter.  Sketch out quickly for us what Karl Rove does day to day. 

SLATER:  Everything, Tucker.  He does everything.  This is a guy who's known Bush for the beginning of his political career, actually launched his political career in many ways.  He's a Bush confidante.  He's a genius.  He's extraordinary.  He was the political guru, and subsequently for the re-election, political architect of Bush's re-election. 

And now in this second term, has expanded his portfolio to include not just political matters but policy matters.  There's very little on the domestic policy of the Bush administration that Karl Rove doesn't have his finger in, and though he denies it, there's very little on the foreign policy, at least the political side of foreign policy, that he's not an advisor on, as well. 

He is the single, closest, most important confidante to the president of the United States, and has been that way for George Bush for years.  If he's forced out, it is a big blow to George Bush. 

CARLSON:  It is just huge.  It's going to affect the way the government runs.  That's amazing.  Wayne Slater, “Dallas Morning News.”  Thanks. 

SLATER:  Sure. 

CARLSON:  Well, for more on Karl Rove's fourth appearance in front of the grand jury, let's turn to the president of his fan club, Air America Radio's Rachel Maddow. 

RACHEL MADDOW, AIR AMERICA RADIO TALK SHOW HOST:  It's a big club.  It's me and my dog.  Love him. 

CARLSON:  I think—it looks like Karl Rove is in trouble.  He is in trouble, by definition.  Going in front of the grand jury, that's trouble.  That's a problem.  But I just can't help but pull back a little bit, and remember what this is all about.  Not much.  In the end. 

MADDOW:  Why?  Why do you think it's not much?

CARLSON:  Because I don't actually think the crime was a crime at all.  I think it's completely legitimate to point out that without getting it into the weeds and the details of this case, but Joe Wilson was sent to Africa, likely because he was recommended by his wife, who worked at CIA, and that it was an example of cronyism, and really shoddy intelligence gathering, it seems to me. 

Whatever.  I think it's a fair thing to point out.  But of all the things you could attack this administration for, Iraq, starting with, response to 9/11, ending with, right, there are a lot of substantive issues I think you could take issue with.  This is small potatoes. 

MADDOW:  Do you think that that it should be against the law to out a covert CIA operative, just in principle?

CARLSON:  In principle, I don't think you should do damage to, you know, America's ability to defend itself from her enemies. 

CARLSON:  Right period. 

MADDOW:  And the CIA says she's a covert operative. 

CARLSON:  I have not seen one person demonstrate, or even frankly attempt to demonstrate how naming Valerie Wilson hurt America. 

MADDOW:  No, wait, wait.  If you steal from a rich guy, it doesn't hurt the rich guy.  He's really, really rich.  He doesn't notice the 10 bucks.  It's still stealing, whether or not it hurts that guy.  If it's in principle, illegal, and ought to be illegal, to out CIA operative.

And she was outed for political reasons.  The person who did that committed a crime and in my view is a traitor.  I mean, in my view, that is absolutely...

CARLSON:  Well, hold on.  If you want to get legal—if you want to get legal about it you know perfectly well the law requires you to know.

MADDOW:  Knowingly you did it.

CARLSON:  It's breaking the law.  The law requires to know that you're doing it. 

MADDOW:  Yes. 

CARLSON:  And that has certainly not been demonstrated. 

But I just think, look, in this individual case, easier to get upset about abstractions, but let's guy specifics.  In this case, you know, I think it's understandable why the question of how Joe Wilson got to Africa in the first place would be raised. 

And I think the answer is quite interesting.  His wife worked at CIA, guess what, right, and I don't think it hurt America.  The point is, this is going to have—this has accomplished, this apparently Republican prosecutor has accomplished what the left, for all its George Soros supplied millions, has not been able to do.  I'm serious.  You're taking down Karl Rove.  Big deal.

MADDOW:  We're not taking down Karl Rove.  Karl Rove is taking himself down by having done that's something illegal and that is against the national security interests of the United States. 

I mean, to do something like this, like this specific crime for political gain is outrageous to left and right.  This is not something that you hate because he's Karl Rove.  You hate anybody who would do this.  And if it's Scooter Libby, if it's Bob Novak, you hate them, too. 

CARLSON:  Come on. 

MADDOW:  Out covert CIA operatives for political reasons. 

CARLSON:  Come on.  The more about—I'm so sorry we're out of time, because let me just say the more you know about the details of this case, the less outrageous it is. 

MADDOW:  No.  If you decide to out somebody who's a covert CIA operative for political means, you're a traitor.  You ought to be run out of the country on a rail. 

CARLSON:  Oh, my God.

MADDOW:  Every time you have me talk about this. 

CARLSON:  The hyperbole machine is full force. 

MADDOW:  You cannot deny.  You can't say you agree in principle, and then you disagree with this case.  You can't—even you are not that. 

CARLSON:  First of all, I wouldn't describe her as covert CIA operative. 

MADDOW:  The CIA does.

CARLSON:  She went to work—whatever.  The CIA...

MADDOW:  Whatever.  The CIA.

CARLSON:  The CIA is in the business of lying.  That's what they do.  The fact is she went to Langley.  She went to headquarters in suburban Virginia every day.  There are no covert operatives who go to work there every day.  That's ridiculous.

MADDOW:  If I need to decide who's a covert CIA operative in this country, I will ask the CIA, and not Tucker Carlson. 

CARLSON:  OK.  Well, that would be mistake No. 1, because they never tell the truth about their own operatives.  We in journalism do. 

Rachel Maddow, thank you.

MADDOW:  You're ridiculous. 

CARLSON:  No, I'm truthful, as always. 

Still to come, a group of Native American Indians say they'll cal off protest over Denver's Columbus Day parade if the city gives them money.  An offer you won't want to miss, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. SAM BROWNBACK ®, KANSAS:  I do have concerns.  And—but the biggest part of it for me is the—the frustration of not being able to know where a person takes a stance on the key issues of the day. 

(END VIDEO CLIP)

CARLSON:  That was a Republican member of the Senate Judiciary Committee, Senator Sam Brownback of Kansas, speaking shortly after his meeting with Supreme Court nominee, Harriet Miers.  Brownback is one of the many conservatives going public about their reservations about the nominee. 

Here to tell us about the White House plan to overcome those reservations, Ron Kaufman is a former White House director and member of the Republican National Committee. 

Ron Kaufman, thanks a lot. 

RON KAUFMAN, FORMER WHITE HOUSE DIRECTOR:  Any time, Tucker.  Glad to be here. 

CARLSON:  I was just telling you in the commercial break that my breakfast was totally wrecked this morning by a quote I read in the “Washington Post.”  Ed Gillespie, very good guy, I like him a lot personally, former head of the RNC, is quoted, however, in the “Washington Post” this morning saying that people who are opposed to Harriet Miers becoming a member of the Supreme Court are sexist and elitist. 

This is the kind of thing liberals—this is the kind of charge liberals throw out.  In other words, you don't have—you must be motivated by some deep animus, not by legitimate concerns.  Why are Republicans calling people sexist for not approving of this nomination?

KAUFMAN:  Well, I think, Tucker, there are some who question her because she's a woman and because she didn't go to an Ivy League school. 

CARLSON:  Who?

KAUFMAN:  ... Texas.  And the truth is, the reason she's going to be confirmed, in my opinion, is she's a bright, articulate leader, who's been a respected member of the bar, in Texas, but a leader who has been a role model for a lot of folks.  And she happens to be a woman.  And she happens to be a very conservative person. 

CARLSON:  Hold on.  First of all, she doesn't happen to be a woman.  She was nominated because she's a woman, partly.  The president has all but said that.  Second, who are these people that don't like her because she's a woman?

KAUFMAN:  A lot of folks, Tucker, on the left side—on the left side of the aisle, who look down on her because she's not a judge or she didn't go to an Ivy League school. 

CARLSON:  Right.  I believe that part, but I just don't understand the sexism part.  I don't understand who doesn't like Harriet Miers because she's a woman.  And I think it's an incredibly unfair thing to say, because it ignores legitimate questions people have about her qualifications. 

KAUFMAN:  Listen, the court desperately needs, in my opinion, diversity, and I don't just mean gender diversity, but there's too many people of a monastery of the judiciary on the court.  The court always is better when you have people who have come from different parts of our life, than just the courts.  And over time, there are 30 to 40 members of the Supreme Court who never served as a judge. 

CARLSON:  Right. 

KAUFMAN:  And we're really better off because of it.  Felix Frankfurter and Douglas and Warren and Rehnquist, the fact that they never served the court served the court well. 

CARLSON:  OK.  But conservatives have not necessarily been served well by this nomination, and they're very concerned, as you know, because we have a million examples, and you've been there to witness them, of Republican presidents putting forth nominees they claim are conservative, Harry Blackman, right, O'Connor herself, Tony Kennedy, David Souter, the list goes on and on and on.  Justices who turn out to be quite liberal once they get there. 

In other words, the assurances we got from Republican presidents were lies, right?  So why do we—why are we certain it's not going to be the case in this case?

KAUFMAN:  Good question.  Two reasons.  First of all, this president has appointed over 250 folks to courts across the country of all levels.  Every one of them has been a good solid conservative that conservatives like.  Why would this one be any different?  Point No. 1. 

Point No. 2, if my old boss, 41 as we call him now, had known David Souter as well and as thoroughly as his son knows Harriet, David Souter wouldn't be on the Supreme Court right now. 

This woman has not only given the president legal advice, but also policy advice.  In all due respect to talking heads, your buddies here in Washington, and my friends here in Washington, people around the country, conservatives that voted for President Bush trust him, and they believe he says he knows in his heart she is a good conservative.  She will be. 

CARLSON:  Right.  I hope he is right.  I mean, I voted for Bush the first time, too, and, you know, but he also has—you know he said Putin was a great guy.  I don't know.  I hope he is right this time.  If he is wrong and she turns out to be a bad justice, it's going to be a stain on his legacy.  And I hope you are absolutely right. 

Ron Kaufman, thanks for coming on.

KAUFMAN:  Enjoyed it, Tucker, be well. 

TUCKER:  Still ahead on THE SITUATION, Martha Stewart has paid her debts to society, but Canada says ex-cons, like her, not welcome north of the border.  Would you want Martha walking the streets of your peaceful nation?  With that question, “The Outsider,” Max Kellerman next.

(COMMERCIAL BREAK)

CARLSON:  Welcome back. 

When it comes to defending the indefensible, there's really only one man to call, devil's advocate and man about town, joining us live from Las Vegas tonight, ESPN Radio and HBO boxing host, Max Kellerman. 

MAX KELLERMAN, ESPN RADIO & HBO BOXING HOST:  How are you doing—Tucker?

CARLSON:  I'm doing great, Max, not as well as you, but I am not in Las Vegas. 

KELLERMAN:  Well that's true. 

CARLSON:  Everybody loves a parade.  Everyone, that is, except professional American Indian activists.  They are protesting Denver's Columbus Day Parade this year, saying the holiday is racist because it honors the conquest of Native Americans. 

But they are, apparently, willing to make a deal.  Activists have said they would cancel their protest if the city agreed to several demands, including turning over money saved on police protection to American Indian health and education projects.  Denver's Mayor Hickenlooper turned them down, and good for him. 

But, please, talk about in—I know you, defending, indefensible Max, but I mean, this is such an obvious out-in-the-open shakedown.  This is like if you planted a bug in Jesse Jackson's limousine, this is what you would hear, right?  These people are basically saying—this would be like if Martin Luther King on the Edmond Petis Bridge, right, said look, I will call off my protest if you just write me a check for 1,500 bucks.  It's unbelievable.  How can they—they have no moral authority after this, do they?

KELLERMAN:  Well, this is—as we have discussed many times on this show, who got it worse than Native Americans and the American Indians?  In American history, this is the greatest country in the history of the world.  But like any nation state, there are shameful parts of our history that we need to acknowledge.  Not in the World Trade Center Memorial, as some are crying, it should be—no, no, there's a time and a place, but certainly a Columbus Day Parade is the time and the place to bring these kind of issues up. 

CARLSON:  But wait a second, thereby attacking Columbus, they're attacking everyone who came after him, which is to say, all non-Indians, which is to say, you and me whose parents are born here.  It's outrageous. 

Second, it's 2005, none of these so-called activists, you know, got cholera from settlers.  They weren't the subject of massacres.  They're probably middle class people with tenure.  They haven't been—you know what I mean, they haven't suffered the sufferings of the American Indian of 200 years ago. 

KELLERMAN:  But the American Indian, to this day, high alcoholism rates and illiteracy rates, and you know are doing very badly.  And there's a reason for that, right?  And you are right, everyone who came after Columbus has benefited from it, you, me, everybody.  But as a result of that, we have a responsibility to be respectful towards their history. 

CARLSON:  OK.

KELLERMAN:  And if they feel that Columbus Day is disrespectful towards their history, we need to consider that. 

CARLSON:  Then we should give them money so they will be quiet? 

KELLERMAN:  I don't think so. 

CARLSON:  It's a shakedown, Max, of course it is.  It always is. 

Next up, Martha Stewart is about to row a giant pumpkin across a Canadian lake this weekend.  That sounds like something to see.  I'd love to see it, but it almost didn't happen.  Martha was invited to Windsor's Annual Pumpkin Regatta to film a segment for her TV show.  Unfortunately, convicted felons need special permission to enter Canada, even for a pumpkin regatta, and Stewart, famously, is an ex-con.  But today, Immigration officials issued a permit, so she is on her way north. 

OK, this is actually outrageous, this idea that Americans, who happen to have a criminal record, are somehow going to defile Canadian culture by crossing the border.  I mean, all—for decades, we have taken B-level movie actors and washed-up comedians and basically the refuse of Canada into our country without saying boo.  Really a pretty nice thing to do.

KELLERMAN:  Well, actually, a lot of those comedians...

CARLSON:  And here they go and hassle Martha Stewart.

KELLERMAN:  A lot of those comedians have been pretty good.  You've got to give them credit, like...

CARLSON:  Some of them are great.  I'm just saying we take all the comedians they have, basically,... 

KELLERMAN:  Well, a lot of them are good. 

Look, she is a convicted felon.  They don't want to be Australia.  You know they would like to keep the felons out.  I don't think there's anything wrong with that.  I agree it was a witch-hunt in Martha Stewart's case.  And it's kind of funny, because she sort of fits Canada really well, nice, homogenized, sanitized, you know kind of image she projects fits with Canada well.  So I am surprised they wouldn't want her in.  But in fact, ultimately, she got a permit to go in. 

CARLSON:  Yes, but not without some bureaucratic wrangling.  We took Nellie Furtado and Avril Levine from Canada.  Nobody complained.  There were no protests.  Nobody burned anything down.  There was no civil disobedience.  We just were quiet and let them sneak over the border and pollute our airways with their music.  I think the least Canada can do is graciously accept Martha Stewart without hassling her. 

KELLERMAN:  We also, essentially, got “Saturday Night Live” from them, right? 

CARLSON:  You're right.

KELLERMAN:  There wouldn't be a “SNL” if it wasn't for Canada.  So that's something—Tucker. 

CARLSON:  There is not one funny person left in the entire country of Canada.  It's very sad, actually.  We may do a segment on that some time. 

KELLERMAN:  Terrance and Phillip, yes, from “South Park.”

CARLSON:  Well they say all is fair in love and war, but not when lawyers get involved.  A man is suing the Jewish dating service JDate.com after a woman he met online dumped him.  She used the name Super Friendly Gal.  And he alleges that when he called her, after they chatted online, he got a taunting recorded turndown.  The plaintiff claims he was exposed to serious psychological injury. 

OK, dater beware, Max.  You respond to someone who advertises herself as—quote—“Super Friendly Gal.”

KELLERMAN:  Hey, now. 

CARLSON:  Hey, now, exactly.  And it turns out she is a little tapped, a little touched by the great spirit. 

KELLERMAN:  Yes.  Yes. 

CARLSON:  Turns out she is actually playing tricks on you and trying to punish you on her answering machine.  Can you really say you are surprised?

KELLERMAN:  Well, first of all, what's funny to me about this, this guy is—apparently his personality is so repugnant she didn't even have to meet him before she rejected him, right.  Usually at least they meet. 

But JDate is a Jewish dating service, Tucker.  And I don't know if you ever heard Jackie Mason's routine, you know a tornado can come through the middle of the country, and Gentile homes can be flying all around.  It's nothing.  They'd put up a new one.  A Jewish home gets a nick on it.  There are 14 lawyers and 16 accountants. 

It's a Jewish dating service.  You've got to expect some litigation along the way at some point, Tucker.  I can say that because I am Jewish.  As a Yiddish speaker, I'm allowed to get away with that.

CARLSON:  I am not, so I can't, and I am not going to. 

KELLERMAN:  No, you can't. 

CARLSON:  That's true.  I still think it's wrong.  I think it's wrong to sue the dating service.  I mean this guy, he is obviously some schmucky guy who she correctly decided was not worth dating.  And how is it the dating service's fault?  I mean this guy, he's appealing to a dating service in the first place because he strikes out in bars, right?

KELLERMAN:  Yes.

CARLSON:  They are doing a good turn, they're trying to help.  They're doing a public service for this guy.  And ungratefully, outrageously ungratefully, he sickened his lawyers on them.  I think he ought to go to jail for this. 

KELLERMAN:  Well I think JDate actually guarantees that you cut through the mess and only deal with serious people.  And the issue here is that she convinced him online to call her, because he wanted to go to sleep.  And then when he called her, she left a taunting message on her voice-mail, which is pretty funny, actually, but...

CARLSON:  She does sound pretty cool, actually. 

KELLERMAN:  Yes, but she might deserve to be sued for that, maybe not the dating service. 

CARLSON:  I like her the more I hear. 

Max Kellerman in Las Vegas. 

KELLERMAN:  Tucker. 

CARLSON:  Have a great weekend...

KELLERMAN:  See you tomorrow. 

CARLSON:  ... if the fight is good.  See you.

Stay tuned, still plenty more ahead on THE SITUATION. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  We will not tire or rest until the war on terror is won. 

(END VIDEO CLIP)

CARLSON:  But are we any closer to declaring victory?

(BEGIN VIDEO CLIP)

MAYOR MICHAEL BLOOMBERG ®, NEW YORK:  This is the first time that we have had a threat with this level of specificity. 

(END VIDEO CLIP)

CARLSON:  Plus.

(BEGIN VIDEO CLIP)

ALVIN, THE CHIPMUNK:  I want a hula hoop.

(END VIDEO CLIP)

CARLSON:  Just in time for the holidays, do you hear what I hear?  The Donald has got a new partner. 

(BEGIN VIDEO CLIP)

DONALD TRUMP, “THE APPRENTICE”:  You have to listen. 

(END VIDEO CLIP)

CARLSON:  And. 

(BEGIN VIDEO CLIP)

BLONDIE:  Call me anytime.  Call me.

(END VIDEO CLIP)

CARLSON:  Clothes that make the man and frighten away viewers. 

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE:  I was trying to watch your show tonight, but your clothing scared me away.

(END VIDEO CLIP)

CARLSON:  It's all ahead on THE SITUATION.

(BEGIN VIDEO CLIP)

TRUMP:  But to sell it, you have to get the public excited.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

VANESSA MCDONALD, “SITUATION” PRODUCER:  Coming up, the Tom Cruise-Katie Holmes saga takes another turn for the bizarre.  Plus, a caller gives Tucker some much-need fashion advice. 

CARLSON:  We'll be back in a minute, literally.  See you then.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BLOOMBERG:  This is the first time that we have had a threat with this level of specificity.  It was more specific as to target.  It was more specific as to timing.

(END VIDEO CLIP)

CARLSON:  That was Mayor Michael Bloomberg referring to the ominous threat against his city's subway system.  Ironically, the threat was made public on the very same day President Bush vowed to remain vigilant against terrorism in a speech before the National Endowment for Democracy. 

NBC's Kelly O'Donnell has more.

(BEGIN VIDEOTAPE)

KELLY O'DONNELL, NBC NEWS CORRESPONDENT (voice-over):  A flag-draped setting, but the far more vivid backdrop for today's speech is the politics. 

BUSH:  We will keep our nerve, and we will win that victory. 

O'DONNELL:  The president's approval rating down around 40 percent.  And public support for the war in Iraq has eroded.  So in his 24th speech on terror this year, today the president adjusted his argument to say that losing in Iraq would fuel the ambitions of Islamic radicals to—quote—“rally the masses.” 

BUSH:  Enabling them to overthrow all moderate governments in the region and establish a radical Islamic empire that spans from Spain to Indonesia. 

O'DONNELL:  Speaking to critics who argue U.S. presence in Iraq actually provokes more terrorism. 

BUSH:  No act of ours invited the rage of the killers. 

O'DONNELL:  As evidence, Mr. Bush pointed out that on September 11 the U.S. was not in Iraq.  Another example, Russia had opposed the invasion of Iraq. 

BUSH:  And yet militants killed more than 180 Russian school children in Beslan. 

O'DONNELL:  And he touted progress.  Planned attacks, he says, were stopped. 

BUSH:  At least 10 serious al Qaeda terrorist plots since September the 11th, including three al Qaeda plots to attack inside the United States. 

O'DONNELL (on camera):  But on that point, the president had essentially asked Americans to take his word on how many had been disrupted.  The White House said much of the information was classified, until this evening, when it released this memo giving some details on the foiled plots. 

REP. NANCY PELOSI (D-CA), HOUSE MINORITY LEADER:  I do not believe that the president's actions and his mismanagement on the war in Iraq have made America safer.

O'DONNELL (voice-over):  A deep divide as the president works to defend the continuing sacrifice in the war on terror. 

Kelly O'Donnell, NBC News, the White House.

(END VIDEOTAPE)

CARLSON:  Coming up on THE SITUATION, two of the great showmen of our time have teamed up to make your holiday season extra special this year.  Regis Philbin and The Donald make sweet music together on the “Cutting Room Floor.”  Stay with us. 

(COMMERCIAL BREAK)

CARLSON:  Welcome back.  Time for our “Voice-mail” segment.  We've set up a special phone line for our many disgruntled and, in fact, gruntled viewers to call in.  You do every day.  Let's listen. 

HEATHER, CHARLESTON, WEST VIRGINIA:  Heather of Charleston, West Virginia, why is it that candidates for Supreme Court nomination or even the major difference between Republicans and Democrats seems to be whether you are pro life or pro choice?  Is this hot button issue really our biggest issue or a problem in the U.S.?  Shouldn't human rights, especially the rights of minorities and the people that are oftentimes overlooked by the U.S. government, be a bigger issue?

CARLSON:  You mean like unborn children?  Yes.  I mean, look, this is, leaving aside its intrinsic importance, I mean, people who are against abortion think it's killing, kind of a big deal.  People who are for legal abortion think it is like a central human right that women have. 

Leaving all that aside, it is, really, one of the very few issues on which Republicans and Democrats have a genuine disagreement.  Right?  I mean everybody is for children.  Everyone believes children are our future.  When it comes right down to it, whether abortion should be legal or illegal divides the parties.  It's important, no way around it.  I don't make any apologies for calling it important, because it is. 

Next up.

GEORGEANNE KESLER (ph), MANSFIELD, OH:  My name is Georgeanne Kesler.  I'm calling from Mansfield, Ohio.  And my message is with the gas prices going up the way they are and the president keeps yelling at these car manufacturers to come up with more fuel efficient cars, but I don't hear anybody in the government talking about any way to get mass transit in this country. 

CARLSON:  Well we have mass transit in this country, people just don't like it.  It makes sense in New York.  But mostly people want to be in their own cars, change their radio station to their own channels, ride with their friends or not.  They don't want to ride with a bunch of sweaty strangers, sorry, people just don't like it.  That's why rich people don't take the bus, because they don't have to. 

Next up.

UNIDENTIFIED FEMALE:  Tucker, I'm appalled by your statement tonight that everybody has color TVs and microwaves now.  Open your eyes.  There is real poverty in America.  In Kentucky, where I live, many people don't have colored TV's and microwaves.  They also don't have jobs, health insurance or any hope for the future.  We can't even fall back on Wal-Mart.  We don't have one. 

CARLSON:  I never denied there's poverty in this country, but it's a much richer country than it was 20 years ago.  A color TV, by the way, is about 69 bucks at Wal-Mart.  For 100 bucks, you can get one with the VCR built in.  You can spend the day, you know, returning redeemable beer bottles and buy one.  So, look, yes, there are a lot of poor people in this country, not minimizing that at all, but, you know, there's a lot of bounty in this country, let's be honest.

Next. 

UNIDENTIFIED MALE:  Hey, Tucker, I was trying to watch your show tonight, but your clothing scared me away.  That tie didn't even come close to matching the shirt, and I'm not even gay. 

CARLSON:  You're not even gay.  You could have fooled me. 

My 3-year-old daughter picked out that tie.  And, I agree, it didn't match the shirt.  It was green, the shirt was purple, but it got your attention, didn't it?  It was kind of like a fishing lure, they're not always pretty, but they make the fish sit up and pay attention. 

Yes, I don't—you know, I agree, my taste is a little over the top.  I don't know who is putting these graphics up.  Yes, that's a little freakish.  But you know nothing I've ever worn on the air has been that bad, yet.  But you're inciting me to new heights of clashing clothing.

All right, call in any time about my clothes or anything else, 1-877-TCARLSON.  That's 877-822-7576.  Call any time.  Operators standing by.

Still ahead on THE SITUATION, just when you thought the ongoing spectacle of Tom and Katie couldn't get any stranger, a more interesting, a new twist, Katie gets a creepy gag order on the “Cutting Room Floor.”

(COMMERCIAL BREAK)

CARLSON:  Welcome back. 

It's that time again, time to take off your work clothes, put on your cardigan sweater, kick back and listen to Willie Geist with all the news we couldn't pack in—Willie. 

WILLIE GEIST, MSNBC PRODUCER:  How are you—Tucker?

CARLSON:  Excellent.

GEIST:  Good. 

The funny thing about the guy who criticized your wardrobe.

CARLSON:  Yes.

GEIST:  Before the show yesterday, you looked at me and said, does this match?  And I said, yes.  We clearly need more women on our staff, because... 

CARLSON:  Sadly, we're not gay. 

GEIST:  No, sadly.  I...

CARLSON:  Thank you—Willie.

GEIST:  Just here.

CARLSON:  Do you think Katie Holmes is starting to realize that dating your childhood movie star crush isn't all it's cracked up to be?  Holmes and Tom Cruise announced to the world yesterday they're expecting a child, but Katie won't be able to announce anything when she's giving birth. 

Scientology, the religion Cruise follows, requires something called silent birth.  That means Holmes cannot make a sound during the birth of her child.  Scientologists believe babies should not be subjected to any loud sounds, talking, stress or pain for the first seven days of their life. 

But, no, that's not weird, Willie, that's totally normal.

GEIST:  I hope...

CARLSON:  Don't make a sound during childbirth. 

GEIST:  I hope they're paying her well.  I mean this is getting out of hand.  The good news about this is Tommy's got to pipe down for a week, too, so no lectures on psychiatry or anything like that. 

CARLSON:  That's a good point.

GEIST:  So that's a week off for him.

CARLSON:  I mean, I'm all for the stiff upper lip and stoicism and all that, but...

GEIST:  This is getting weird. 

CARLSON:  Nothing says the holidays like Donald Trump.  In between moments of ruling over his real estate casino and reality television empire, The Donald somehow found time to lend his voice to a very special Christmas album.  He's teamed up with Regis Philbin for a stirring rendition of “Rudolph, the Red-Nosed Reindeer.”  The song appears on the new Regis Philbin Christmas album.  It's a must-have this holiday season. 

GEIST:  What can't Trump do?  You know what, this is actually a really savvy move by Reg, because it totally distracts us from the fact that Regis Philbin has a Christmas album.  You know what I mean?

CARLSON:  It is.

GEIST:  It's like I'll put Donald Trump on and then they won't notice that I'm a talk show host with a Christmas album. 

CARLSON:  I'm going to get it for my kids.  But, dad, I wanted a pony.  Sorry, son, you got the Regis Philbin Christmas album.

GEIST:  Take Reg.  Nice stocking stuffer.

CARLSON:  Exactly.

Well it's been said many times that Oprah changes lives.  Tonight we have proof of that.  A Glenwood Springs, Colorado woman said she would have been killed by a boulder that crashed into her house if she had been sitting in her living room watching Oprah as she usually does.  Angelic Fierelo (ph) was, luckily, at a neighbor's apartment and not in her Oprah watching seat when the massive rock barreled into her house. 

GEIST:  Wow!  Tucker, this is clearly the evil Oprah empire sending a message to the one woman on earth who wasn't watching her show.  She sent her goons out to throw a boulder into her apartment.  You miss Oprah at your own peril, my friends. 

CARLSON:  That's right, people have died for less. 

Now for the question on everyone's lips tonight, what the heck is Joey Buttafuco doing these days?  One of the many reputable celebrity gossip Web sites is reporting tonight that Buttafuco is in Hollywood operating an ice cream truck that serves the cast and crews of TV shows.  Buttafuco has been spotted dishing out soft serve on the set of the NBC hit “Crossing Jordan.”  Most recently, making milkshakes for the cast of “Desperate Housewives.”  But would you drink one is the question?

GEIST:  No.  So what you're saying is he's only the ice cream truck driver for the hottest show in television.  Sounds to me like he's doing pretty well, actually...

CARLSON:  You know in Hollywood that's huge.

GEIST:  I bet he's charming the pants off those gals. 

CARLSON:  That's like my cousin is Robert Redford's orthodontist. 

GEIST:  Right.  Right.

CARLSON:  It's massive, but bigger even.

GEIST:  Milkshakes and “Desperate Housewives,” he's doing better than he was.  Yum.

CARLSON:  Willie Geist.

That's SITUATION for tonight.  Thanks for watching.  We'll see you back here tomorrow night.

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

END   

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