updated 10/29/2005 4:52:21 PM ET 2005-10-29T20:52:21

Guests: Jonathan Karl, Richard Wolffe, Max Kellerman, Flavia Colgan

TUCKER CARLSON, HOST:  Thanks for joining us.  Huge day, epic, historic day in Washington.  For the first time in more than 100 years, a member of the White House senior staff charged with a felony, indicted this afternoon by independent prosecutor Patrick Fitzgerald, who gave an hour long press conference explaining why he believes Scooter Libby, chief of staff for the vice president of the United States, lied on repeated occasions both to the FBI and to the grand jury.  Those are both felonies.  He faces 30 years in prison, if convicted. 

But it doesn‘t end there.  The investigation is ongoing, and there are many, many, many unanswered questions about the indictments that were handed down today. 

To help answer some of those questions and predict what might happen in the future, we bring on Jonathan Karl, senior correspondent for ABC News in Washington, joining us once again, a man who‘s covered this from the very beginning. 

Were you surprised?

JONATHAN KARL, ABC NEWS CORRESPONDENT:  I was struck by how ordinary this was, Tucker.  I mean... 

CARLSON:  Me, too. 

KARL:  ... this was going to be a widespread, multiple indictments, multiple indictments in the vice president‘s office, getting into the Iraq group and the case for war.  And it turned out to be a basic case of a guy lying. 

CARLSON:  So you were hearing really grand conspiracy theories?

KARL:  Yes.  You know, I never really bought into them, but with this thing, there were so few—there was so little reliable information coming from the prosecutor, that you had to check into everything.  And at the end, it was just a guy lying to prosecutors. 

CARLSON:  Were you surprised that the core charge, the leak itself, was not a charge at all at the end?

KARL:  Well, you know, we really didn‘t think the identities act was going to be a charge. 

CARLSON:  Right.

KARL:  And this is what it was all about.

CARLSON:  Mishandling—I mean, there are statutes that apply to mishandling classified information. 

KARL:  Yes, yes.  It seems we were getting down to this, that it was looking into a perjury or obstruction of justice, false statements kind of a case, because even those other acts, the espionage acts, those are pretty tough, and so rarely prosecuted. 

But that‘s what this was all about.  And as always happens in Washington, right, so it seems, the cover-up is worse than the crime. 

CARLSON:  But I thought and said loudly last night and all week, this guy is not going to spend two years looking into this, overturning every stone, with all these high-powered FBI agents at his disposal, and come up with perjury or obstruction or sort of the conventional after the fact charges that these investigations come up with, but that‘s kind of what happened, huh?

KARL:  That is what happened. 

CARLSON:  What does the White House think of that?

KARL:  Well, the White House, you know, knows that they dodged the real bullet, because who is Scooter Libby?  You know and I know how important this guy is. 

CARLSON:  He‘s important. 

KARL:  He‘s important to the functioning of the White House, but in terms of a political loss, I mean, the general public has no idea who Scooter Libby is. 

CARLSON:  I don‘t think Scooter Libby involves himself necessarily with partisan politics.  He‘s the foreign policy guy. 

KARL:  Yes, yes.  He‘s clearly a policy guy.  He‘s a history buff, as you know.  You think he‘d be smart enough to know not to get into a mess like this. 

But if Karl Rove had been indicted, and I believe that that was a pretty close case here, I mean, I believe that they were very worried that he was going to be indicted.  He had been told under no uncertain terms by Fitzgerald that he was a target, not a target, but in legal jeopardy, and that, you know, that Fitzgerald was ready to indict him on perjury. 

And basically there‘s some very good lawyering that helped at least dodge that bullet for now, so it‘s a big sigh of relief at the White House. 

CARLSON:  Now I heard today from someone who I trust and who is very close to a number of people at the very center of this, that Fitzgerald, Patrick Fitzgerald, the prosecutor, allowed Rove to come back again and again to essentially correct misstatements of facts that he had come out with before the grand jury.  I think one of them was he forgot or said he forgot that he had talked to Matt Cooper from “TIME” magazine about Valerie Plame.  Is that true, do you think?

KARL:  That‘s the most important one.  Yes, it was basically an effort to allow Karl Rove to purge the perjury, to come back and say, “Look, I didn‘t recall that conversation.” 

You know, Rove himself apparently found an e-mail to Steve Hadley that reminded him that, oh, he had talked to Matt Cooper about this.  You know, it‘s pretty plausible that Karl Rove would forget a short phone conversation with a single reporter on a given day, you know, back in 2003.  And, you know, he had a chance to come in and make the case. 

But still, Fitzgerald was ready to go forward with an indictment.  And it really came down, there was a very critical meeting in Robert Luskin‘s office.  That‘s Rove‘s attorney, obviously—in his office on Tuesday, where basically Fitzgerald said this is the case.  This is the perjury case. 

CARLSON:  Right.  Because it is plausible to forget that.  I‘ll tell you what‘s not plausible, is that Scooter Libby would forget seven separate conversations about Valerie Plame...

KARL:  Yes.

CARLSON:  ... that he would have notes proving one, turn those notes over to the prosecutor in this case, and then lie about it, knowing that he had turned the notes over, proving his lie. 

KARL:  Yes. 

CARLSON:  That does not add up.  Those are the actions of a crazy person, and he is not a crazy person.  He‘s a smart, canny person.  Does that set off bells for you?

KARL:  He‘s a smart and very careful person.  The big unanswered question is what the hell was he doing?

CARLSON:  What‘s the answer?  What are people saying?  Because it‘s weird. 

KARL:  You know, there are, you know, a couple of theories out there.  Is he protecting the vice president?  How exactly he‘s protecting the vice president, I can‘t figure out. 

CARLSON:  Right. 

KARL:  But, you know, don‘t forget Scott McClellan, poor Scott McClellan, White House press secretary, going out, and saying categorically Scooter Libby and Karl Rove were not involved. 

CARLSON:  Can he stay in his job, by the way, after that?

KARL:  You know, he was misled, and he‘s quite bitter about it.  It‘s very obvious.  But once that happened it became a political thing. 

So Scooter Libby can admit what he‘s done and not be in legal jeopardy.  He‘s a smart lawyer.  He would know that you can—you can beat these charges.  He didn‘t violate the identities act.  The espionage act will be very hard to prove, but it would have been a big political disaster, right, if he had admitted all that, so there you are. 

But I don‘t know.  It‘s hard to figure out.  I don‘t really buy any of those. 

CARLSON:  I don‘t either.  I think there‘s something strange going on.  When we find out, you‘ll have a better—I hope you‘ll come back on and explain it to us. 

KARL:  Good to be here. 

CARLSON:  Jonathan Karl, ABC News, thank you. 

According to White House press secretary Scott McClellan, the president watched 15 to 20 minutes of Fitzgerald‘s press conference in a private dining room near the Oval Office. 

Meanwhile, Scooter Libby turned in his hard pass, the one that gave him security clearance to the White House.  Libby later issued this statement, quote, “Earlier today I submitted my resignation to the president.  Obviously, today is a sad day for me and my family.  I have spent much of my career working on behalf of the American people and for the safety of our citizens.  It is with regret that I step aside from that service today.  I am confident that at the end of this process I will be completely and totally exonerated.” 

Here‘s what President Bush had to say about the matter. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  Scooter has worked tirelessly on behalf of the American people, and sacrificed much in the service to this country.  He served the vice president and me through extraordinary times in our nation‘s history. 

Special Counsel Fitzgerald‘s investigation and ongoing legal proceedings are serious, and now the proceedings—the process moves into a new phase.  In our system, each individual is presumed innocent and entitled to due process and a fair trial. 

(END VIDEO CLIP)

CARLSON:  Joining me now to discuss Libby‘s indictment, as well as the president‘s search for a new Supreme Court nominee, MSNBC political analyst, Pat Buchanan, and from air America, our old friend, Rachel Maddow. 

Thanks.

RACHEL MADDOW, AIR AMERICA RADIO HOST:  Hi, Tucker.

CARLSON:  Pat, you and I were saying to each other, this is less a big deal for the White House than maybe we had anticipated.  It could have been a lot worse.

But isn‘t it, on some blasting level, pretty bad, because it establishes in the minds of most people, anyway, that there‘s been lying in the White House.  And people already are confused about why we went to Iraq, and doesn‘t this allow enemies of the White House to always raise the flag, you know what, it‘s been proved they lied.  They are liars. 

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  Tucker, if the war had gone very well, nobody would care about the fact that maybe they didn‘t have weapons of mass destruction. 

But the war is going badly, and anytime that happens, people go back, why did we get into this war?  That‘s going to go on. 

But I think the administration really dodged a bullet today with this. 

I mean, Karl Rove—did not get indicted.  There‘s no conspiracy.  Fitzgerald, I think did an honorable thing in cutting Karl loose, cutting him slack, not indicting him.  He says he‘s about at the end of his game. 

I think the White House ought to consider itself lucky the way it got away with this today. 

CARLSON:  Rachel, I—it‘s been a pretty sober day.  I promised myself there will be no gloating on the part of me at all at any point.  But I‘m going to break my rule, and say, I was right; they did not indict on the leak. 

MADDOW:  Now, here‘s my question.  You said I would get your car, if they indicted on the leak. 

CARLSON:  Yes, yes.

MADDOW:  Did that only apply to today?  If they indict in three weeks, do I get the car?

CARLSON:  It does.  It applies—it applies—if they indict on this leak. 

MADDOW:  Yes.  I still get it. 

CARLSON:  You get my car. 

MADDOW:  Yes.  All right. 

(CROSS TALK)

MADDOW:  ... in anticipation, because I‘m so convinced it‘s going to happen. 

CARLSON:  We knew it was never going to happen.  It was always going to be crimes committed, supposed crimes committed after the investigation began.  Is that enough?  I mean, are you satisfied as an opponent of this administration?  Does this—do you feel vindicated?

MADDOW:  Well, I don‘t feel like the administration dodged a bullet today.  I feel like the administration fell down one flight of stairs, and they could have fallen down two.  So they‘re still there on the landing, ready to fall down the second flight of stairs. 

I mean, Karl Rove is still under investigation.  The investigation is ongoing.  I think the Libby indictment, the five felonies, looking at 30 years in prison, proving—they‘re alleging that he lied in the White House about a pretty significant thing. 

I think this looks really bad for the White House.  I think the week -

the fact that it happened the week that we had the 2,000th death in Iraq is a horrific coincidence.  And I think that things are pretty bad for them right now.  I‘m not satisfied to see things going so poorly in my country‘s government. 

CARLSON:  I agree.

MADDOW:  It‘s not about me.

CARLSON:  You know what irritates the hell out of me, really infuriates me?  Is all this talk about how the leak of Valerie Plame‘s name damaged our national security?  If it‘s true, that‘s a sobering thing and an upsetting thing to learn, but there‘s no evidence it‘s true. 

And don‘t you think people who make that allegation, and I‘m speaking specifically, the prosecutor today at that press conference who made that allegation, ought to back it up.  That‘s like saying, you know, you‘re a racist.  You beat your wife, and not providing the evidence. 

BUCHANAN:  Well, there is some proof of that.  Look, Valerie Plame traveled all over the world in a number of capacities before she, you know, came back home for good.  And any—any good intelligence agency abroad, has got Valerie Plame‘s contacts, all of them running through a computer and can got talk to those people she talked to. 

She was at Brewster Jennings, this outfit up there in Boston.  The cover of that thing has been blown. 

So I think it‘s objectively, if you blow an agent‘s identity, you‘re taking a real risk.  I don‘t know any—anybody got killed, and no one‘s ever suggested that, but look, her name should not have been blown.  And it was a bad thing to do.  And it was wrong to do, and it ought to have been investigated.  I mean, I really feel that. 

CARLSON:  Wait.  It‘s just that it seems to me, if that‘s true, and I must say, having seen the government, the federal government in Washington time and again invoke secrecy to cloak its own activities, that actually probably shouldn‘t be secret in the first place, I have trouble believing that.  But if it is true, why don‘t they indict someone for it?

MADDOW:  Well, I think they‘re trying to.  I mean, I think they‘re still looking into that.

BUCHANAN:  Look, sand was thrown in my eyes.  He doesn‘t know for sure.  Went out deliberately to blow this woman‘s cover.  I don‘t think anybody in the White House, this White House, neocon or con or anybody would do that, Tucker. 

I think what happened is they got the call in.  They said this guy, Wilson, is running around.  He‘s saying this; he‘s saying that, saying the vice president and his wife got him the job, and she‘s over at the CIA.

And they went to knock it down.  They said, “Look, his wife got him the job.”  They weren‘t thinking of the fact that this is a covert agent, and if we blow this, something is going to happen.  The motive is not there.  Secondly, we find out she wasn‘t appear agent for five years.  The object wasn‘t there.  I think Fitzgerald did a good job on that. 

MADDOW:  I do think it‘s strange, though, if you look at specifically alleged in the indictment, what they said Scooter Libby lied about, and what the lies he told.  It‘s weird that he consistently tried to say, “I learned this from reporters.  I learned this from reporters.  I learned this from reporters.”

CARLSON:  right.

MADDOW:   And if the indictment is correct, he did not.  He learned it from CIA.  He learned it from...

CARLSON:  I agree.  I think it‘s very weird behavior.  Very weird.

MADDOW:  It seems like it was a deliberate attempt to try to direct the investigation away from the White House. 

BUCHANAN:  The only explanation I‘ve seen, here‘s a guy that goes into a grand jury and directly contradicts under oath the notes he has just turned over to the special prosecutor.  Now, unless you‘re building an insanity defense for yourself... 

CARLSON:  Right. 

BUCHANAN:  ... I mean, this is the most inexplicable in any of these scandals I‘ve ever seen. 

CARLSON:  It does not add up.  There is something going on. 

BUCHANAN:  Here‘s where I was, and then you go in and contradict it. 

CARLSON:  I mean, I—I would be shocked if we don‘t find a very large element of this that we didn‘t know, that we don‘t know now. 

MADDOW:  I will be shocked if Scooter Libby doesn‘t end up to be kind of the guy who‘s taking the fall for somebody else who‘s know going to be... 

CARLSON:  That may be so. 

MADDOW:  I think it has to be what it is. 

CARLSON:  Stay where you are, Rachel.

BUCHANAN:  Who could that be, Rachel?

CARLSON:  Still to come, is the downfall of Scooter Libby great news for Hillary Clinton‘s presidential campaign in 2008.  And how can Democrats take advantage of the indictment?  I‘ll ask Flavia Colgan in a minute.

Plus, now that Harriet Miers is out of the picture, what kind of Supreme Court nominee will President Bush pull out of his pocket this time?  The debate with Pat Buchanan and Rachel Maddow continues when we come back.

(COMMERCIAL BREAK)

CARLSON:  Still to come, elementary school officials call a time-out on Halloween parties.  Plus, a woman buys a lottery ticket with a stolen credit card and wins.  Should she be allowed to keep a million dollars?  We‘ll debate it next on THE SITUATION.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BUSH:  I got a job to do, so do the people that work in the White House.  Pretty soon, I‘ll be naming somebody to the Supreme Court. 

(END VIDEO CLIP)

CARLSON:  And pretty soon, he will.  And pretty soon, either conservatives or liberals will be up in arms over his choice.  Just so happened to be joined once again by Pat Buchanan and Rachel Maddow. 

Thanks, welcome. 

I heard the other day, recently, Michael McConnell‘s name is being batted around the White House, sitting judge, former law professor, and interesting choice, very conservative.  However, this is a guy who opposed both impeachment and the Supreme Court decision that awarded the presidential election of 2000 to President Bush.  Interesting.  Both on principle. 

BUCHANAN:  States rights?

CARLSON:  That‘s exactly right.

BUCHANAN:  Yes.

CARLSON:  And not a bad rationale, either, in my view.  So here‘s the question: if Bush nominates someone who is a pure judge, you know, who reaches conservative conclusions but has impeccable credentials and serious reason, like a Scalia, honestly, can he get him through?

BUCHANAN:  I think McConnell will go right through, I think he can get through Luttig.   He‘ll have a war on his hands.  But I think it will unite all of the conservatives.  And this threat of a gang of 14 or a gang of 7, I think it‘s a phony.  I think people like Graham and McCain, you can bust them.  If you get someone who‘s of outstanding credentials, impeccable credentials, and genuine conservative judicial philosophy, I think you can do it, Tucker.  But if not now, when?

CARLSON:  I agree. 

BUCHANAN:  President has 55 votes.  We‘re not going to have 55 votes after the election. 

CARLSON:  True. 

BUCHANAN:  We‘re not going to have 45. 

CARLSON:  You‘re right.

MADDOW:  Politics, it‘s not just about how many votes there are in the Senate. 

BUCHANAN:  Well, I totally believe that.

MADDOW:  The president is slightly less popular than toenail fungus right now in terms of his approval ratings.  I mean, the GOP and the president are really at a low ebb. 

BUCHANAN:  That‘s true.

MADDOW:  And the right, I feel like what‘s happening politically is flexing muscles, and feeling like, we got rid of a Supreme Court nominee.  We got rid of Bush‘s best friend in this case.  We can do whatever we want. 

And I think that puts a lot of pressure on the White House to put up somebody to please the base, who is miles to the right of the American people, and I think that that might be...

CARLSON:  Of course, I hope that happens.  But here‘s my question.  After criticizing Harriet Miers, I believe justly, from the left and right, as being unqualified, someone who‘s just not really ready to be an associate justice on the court, can liberals really attack someone whose credentials are impeccable for instance, who is, for instance, a sitting judge and a serious person, and a former law professor? 

BUCHANAN:  Why don‘t you ask Robert Bork that question? 

CARLSON:  I guess I‘m being naive. 

BUCHANAN:  Look, Tucker, this is a war for control of the last institution of government the left controls, which is unelected, and it has the power to impose a social revolution.  They‘re not giving it up without a war.  And we got to realize that, and they got to realize that, and there‘s no way to get around it.  You‘ve got to march and we‘ve got to do it. 

MADDOW:  There‘s been sold this idea, somehow when you get onto the court, you get the vapors, right?  You get this mistiness, and all of a sudden, you become controlled by the left.  What happens is you get onto the court...

CARLSON:  There‘s a lot of evidence that‘s true. 

MADDOW:  You get controlled because you get controlled by the Constitution. 

BUCHANAN:  Name five people. 

MADDOW:  You end up getting controlled by the Constitution, and you end up with a case where you—you have conservatives who want to do things that aren‘t allowed by the Constitution.  Judges rule against them, and then it gets blamed as if there‘s a leftist conspiracy on the Supreme Court. 

BUCHANAN:  No, no, no.  You send down people who‘ve got unformed judicial philosophies, and they run into all the pressures and the magnetism of this town, and they‘re pulled to the left.  Unless they‘re like s Scalia, or somebody of character, like Thomas, who‘s been beaten up, but you put Luttig on there, and you put Edith Jones, who have stood up their whole lives and already taken the heat and shown what they believe in, and you got 95 percent chance. 

Souter, what are you doing?  He was—a nothing.  And off he goes.

CARLSON:  The default position on the court, just like the default position in Congress or any position of power, is activism.  You have the power; the temptation is to use it.  And when you use it, you‘re almost—almost always going outside what the Constitution intended.  So it‘s liberal by definition.

MADDOW:  Judicial activism is becoming a name calling thing.  Judicial activism has become something that you describe any court decision that you disagree with.  If you look at the people who overturn precedent and most frequently vote to overturn the president, most frequently on the Supreme Court, it‘s Clarence Thomas.  Does that make him a judicial activist?  From my perspective, sure. 

BUCHANAN:  You overturn—you overturn precedent, because precedent for the last 50 years has imposed an unconstitutional revolution on the country.  What we need is justices who will go up there and say, precedent says this, but the Constitution says that.  We‘re overturning precedent, and we‘re going to go back to the Constitution. 

That‘s why a conservative in the sense of someone who will just go up there and say, you know, “What did the previous court rule,” it‘s no good.  You need Scalia; you need a Thomas. 

MADDOW:  But you need—your view is Scalia and Thomas is that he‘s interpreting Constitution as if it‘s direct from heaven to him on tablets.

BUCHANAN:  No, no.

(CROSS TALK)

MADDOW:  They‘re pushing for a right wing social conservative revolution.  To me, they are the activists. 

BUCHANAN:  Let me tell—let me tell you what right-wing activism would be.  If justice came down and said, “I read the Constitution that no abortion can be allowed anywhere in the United States.” 

The Constitution doesn‘t say that.  That would be activism. 

What the right thing to say, “Look, the Constitution doesn‘t speak to it.  Therefore, it is the providence of elected legislators, and not of judges, and it goes back to the elected legislators.  And then if we want to outlaw abortion, which some would like to, we‘ve got to convince the country with a constitutional amendment. 

CARLSON:  It actually becomes a democratic process. 

BUCHANAN:  It‘s the only thing that will keep this country together with this present cultural war, is the democratic process, that you beat them at the election, we get our way.  And if we lose, they get their way. 

MADDOW:  Right now, I feel like the right has defined the different branches of government in such a way that the courts are inherently suspect.  They can‘t be allowed, actually, to interpret the Constitution.  That is something that we can‘t allow that branch of government to do. 

It‘s an attack on the institution of the court. 

CARLSON:  It makes—to some extent, I think that you‘re right.  There‘s some hyperbole, but when you have a justice with a lifetime appointment, he‘s kind of beyond the reach of Rush Limbaugh, frankly.  There‘s really nothing activists can do about it.  He‘s got a lifetime appointment.  That‘s why...

(CROSS TALK)

BUCHANAN:  Why don‘t you—what does a democratic people do when the judges are wrong?

MADDOW:  When the judges are wrong, the Democrats—the people bring more cases that hopefully prove the case wrong. 

BUCHANAN:  All right.  Hold on. 

MADDOW:  That judge should be voted out of office.

BUCHANAN:  He shouldn‘t be making those decisions. 

CARLSON:  Exactly. 

BUCHANAN:  People who make those decision, you and I should go to the

go to the ballot box and throw them out if we don‘t like them. 

MADDOW:  No. 

CARLSON:  I‘ve got to stop this right here, because we are completely out of time, slave that we are to advertisements.  Thank you. 

MADDOW:  Pat and I will take this to the bar. 

CARLSON:  I hope you will.  Pat, Rachel, thank you. 

MADDOW:  Thank you, Tucker. 

BUCHANAN:  Delighted. 

CARLSON:  Up next, the president dodges a bullet.  His chief political advisor escapes indictment, but the White House still under the gun to find a Supreme Court nominee that brings Republicans together.  We‘ll talk about the growing strain on the Grand Old Party when THE SITUATION returns. 

(COMMERCIAL BREAK)

CARLSON:  Welcome back. 

Today‘s indictment of vice president Dick Cheney‘s top aide was described by one political analyst as the end of the worst week of the worst month of the worst year for the president. 

But my next guest says the president is not out of woods yet.  The pressure to find a Supreme Court nominee acceptable to all factions in his party.  Here to talk about the dilemma, senior White House correspondent for “Newsweek” magazine, Richard Wolffe. 

Richard Wolffe, thanks a lot for coming. 

RICHARD WOLFFE, WHITE HOUSE CORRESPONDENT (NEWSWEEK):  Good to be here. 

CARLSON:  You have been covering this White House for a long time, since the beginning.  What is their response?  I don‘t have a sense how they‘re responding to this   . 

WOLFFE:  Everyone in this town is talking about a big sigh of relief.  I didn‘t hear any sighs of relief at the White House today.  It was more like, we got run over by a bus.  And well, we‘ve got two broken legs.  We‘re not going to be happy that we weren‘t paralyzed.

This is—this is the worst period for them in, well, in the six years I‘ve covered them, worse than South Carolina.  Remember, South Carolina in 2000, they were on their backs there, but at least there was a plan B.  They knew where to go from here.

CARLSON:  That‘s right.

WOLFFE:  The question is, how do you get out of this, not just the indictments, but everything else that‘s happened?  And the mood is really about as bleak as it could be. 

CARLSON:  I was surprised, really surprised to get in my e-mail box today, statements from the RNC, defending Scooter Libby and attacking Democrats for attacking Scooter Libby.

I thought the posture would be much more one of distance. 

WOLFFE:  Right. 

CARLSON:  You know, we don‘t know what this guy is up to.  We didn‘t authorize it.  Who is this guy?  We thought we knew him, but we don‘t.  I thought they were going to throw him overboard.

WOLFFE:  And there is that disarray.  You don‘t hear people at the White House saying Libby is a great guy and he‘s going to come through.  There is that distance there. 

There‘s a huge disappointment, where they‘ve ended up with him, and there were complaints we were picking up from people on the Hill all day, really, saying where are our marching orders?  Where is the discipline?  What‘s our talking points?

You know, here you‘re seeing a case where not only has the politics of Washington changed, but some of the famed discipline of the whole machine has really ground to a halt. 

CARLSON:  You mean the press operation, which I‘ve always thought was really mediocre compared to the political operation, in my own view.  Editorial there.  But they haven‘t sent out talking points to their allies on Capitol Hill?

WOLFFE:  It is not a coordinated response. 

CARLSON:  You were here for Clinton, right?

WOLFFE:  Right. 

CARLSON:  I mean, you remember, there was a conference call every morning.  I snuck on it once, where everybody from lobbyists to congressmen to people for the White House would coordinate what they were going to say.  And that has not happened. 

WOLFFE:  No, it has not.  Part of it, to be fair, part of the problem is with coordination here, is the prosecutor himself.  He has told them, at least up to now, if they were in any meetings strategizing about how to deal with this, he would look very unfavorably on it.  He would consider it part of a conspiracy in and of itself.  So that has had, as they say, a chilling effect on the whole response to—to this situation.  That‘s why you‘ve not got a war room response.

CARLSON:  Right. 

WOLFFE:  This is not a White House fighting back Clinton style saying, “We‘re going to do what it takes now.”  Partly this isn‘t the president himself who‘s under attack, but it also tells you something about the mentality and the response here.  It has been slow; it‘s been paralyzed. 

CARLSON:  So you haven‘t heard anybody attack Fitzgerald?

WOLFFE:  Not from the White House. 

CARLSON:  What‘s the sense about future further indictments?  Are there more shoes?

WOLFFE:  This is the big cloud.  You know, it would have been in some ways easier if they‘d gotten a definitive end for Karl Rove about where it is, but this idea that there could be something else, they‘re not really sure, maybe it‘s the end, maybe it‘s not.  That leaves that whole uncertainty around it. 

Are there other officials who are going to get pulled in here?  Is Libby going to do a plea bargain and give some more information to prosecutors?

CARLSON:  Do you think he‘s being squeezed?

WOLFFE:  Oh, a 30-year prison sentence, and $1.2 million fine, you know, that sounds to me like he‘s getting the screws put on him. 

CARLSON:  Yes.  And he has small children. 

WOLFFE:  Right. 

CARLSON:  It‘s a tough place to be.  Finally, what are you hearing about the Supreme Court?  Do you think Bush has the political juice right now to push someone he wants?  Are they going to go conservative, center?  What are they going to do?

WOLFFE:  That‘s a very tough call.  I think they‘re very close to it.  I was told that they have people ready to go.  Of course, there were some rumors that it could have been today, but you know, I think within a very short space of time, we‘re going to see someone else. 

They have to do someone who is deliverable.  So yes, the conservatives want to see someone, one of their own come through here, but more than that, the White House needs a very clean and straightforward person. 

CARLSON:  They can‘t handle this again.  It‘s so much drama.  Richard Wolffe, covering every bit of it, thank you. 

WOLFFE:  Any time.  Appreciate it. 

CARLSON:  Still ahead on THE SITUATION, if you buy a winning million-dollar lottery ticket with a stolen credit card, should you get the cash?  That‘s an ethical question put to a man who has few ethics, “The Outsider,” Max Kellerman.  Stay with us.

(COMMERCIAL BREAK)

CARLSON:  Welcome back.  Democratic leaders, including Howard Dean and Senator Harry Reid of Nevada, insist the CIA leak probe raises questions about why the Bush administration led this country to war.  Joining me now from Los Angeles live to talk about whether Democrats can successfully take advantage of a wounded White House, former Democratic strategist and MSNBC contributor Flavia Colgan.  Flavia, welcome. 

FLAVIA COLGAN, MSNBC CONTRIBUTOR:  Thank you. 

CARLSON:  Now, Pat Buchanan, we just heard him laughing, he was saying that the White House better get his nominee through quickly, because after the midterms, they are not going to control Congress anymore.  I laughed back.  I agree.  On the other hand, if the Democrats can screw it up, I am sure they will.  How are they going to try to take advantage of this? 

COLGAN:  Tucker, you took the words right out of my mouth.  If anyone could miss this gimme, it would be the Democrats.  As incompetent as Bush is as the president, at running the country right now, that‘s how incompetent the Democrats are at running a political party. 

I‘ll tell you, if I were there, what I would tell them, one, is keep the pressure on this leak investigation.  This is certainly the tip of the iceberg.  Let‘s look into the Italian aspect of this case, Hadley, Rove.  Again, I do think it‘s a good idea to tie it overall to the potential manipulation of intelligence, and also to start asking the question, at some point, is it really possible that these two key people were just acting in a rogue fashion, and that their bosses knew nothing about it? 

In addition, I think that they also have to talk about the overall culture of corruption.  Everything from DeLay to Abramoff, to all of these things, and they have to do it, Tucker—and this is very important—in a tone that does not show glee.  I am really tired of Democrats doing some sort of endzone dance.  This is not good news for America.  I am not happy that these people are being indicted. 

CARLSON:  Right. 

COLGAN:  But the Democrats have to come out—it‘s not good news. 

It‘s not good for America in general. 

CARLSON:  Of course, but it‘s also—I mean, let‘s be honest, it‘s fair for the opposition party to take some pleasure in the difficulties of the party in power.  I mean, I think that‘s fair.  It‘s politics after all.

But isn‘t there a real risk here?  I saw it up close during the Clinton years, where Clinton had all these legal troubles and all these ethical stumbles.  The Republicans really took a lot of pleasure in it, and in the end, it helped the Democrats.  You could watch Clinton‘s approval level rising the more hay Republicans made out of his personal problems.  Don‘t you think Democrats could end up generating sympathy for Bush if they go over the top? 

COLGAN:  Well, two things.  Yes, I agree with you.  That‘s why the tone is so important.  And that‘s why I also think it‘s very critical, and the Democrats have not been great at doing this.  It‘s not enough to just attack Bush and what he is doing.  They are going to have to set out a vision for what type of nominee they want, for instance, on the Supreme Court, what type of America they would be.

But again, there‘s a very big difference between obstructing justice and perjuring and so forth when it comes to personal sexual relationships, as opposed to now we are coming up on 2,000 Americans dead, having sacrificed their life for a war in Iraq, which certainly the why of that war is in huge question now. 

CARLSON:  It certainly is. 

COLGAN:  And so, I think there‘s a very big difference.  I don‘t think it‘s analogous, and people like you and Pat Buchanan said from the beginning—and I commend you for that—that this was, you know, very ill-advised, and now it‘s becoming clearer and clearer that this, as they‘re now calling it cabal, was going to do everything they could to go into this war that was a war of choice. 

CARLSON:  Doesn‘t this leave Mrs. Clinton, Hillary Clinton, in a pretty tough spot, though?  Because of course she voted to authorize the war, and as recently as this year, in February, when she was over in Iraq, Mrs. Clinton said, you know, things are going pretty well in Iraq.  And actually—and this is not exact quote, but it‘s pretty close—suicide bombings are evidence that we are winning the war in Iraq. 

Now, this is not a White House spokesman saying this.  This is not Dan Senor in the green zone.  This is Hillary Rodham Clinton of New York, the liberal Democrat, saying the war in Iraq is going great, and suicide bombings are a good sign.  How can she attack the White House on the war if that‘s the position she has taken? 

COLGAN:  Well, first of all, it‘s very problematic, Tucker.  You are exactly right.  And the Democrats have got to stop putting their finger up in the air.  Even on Miers, I was disappointed.  Take a principled stand, come out.  If you want to stand next to Cindy Sheehan, do it.  If you are in favor of gay rights, say you are, and be proud of it. 

I am tired of Democrats worrying about political calculus.  Leadership and vision and strength is what the American people want.  They will follow you.  I think it‘s a problem for Clinton and for many others.  The Democrats need to speak in unison, and they need to start having a backbone. 

However, I do think that one of the things that Democrats should have on their lips every other moment is not that President Bush is a moron, not that he is not a great guy, because I am tired of that, and the American public does not agree.  They should keep bringing up one word, and that word is incompetence. 

You know, maybe I would have a beer with Bush, I am sure he is a nice guy, I‘m sure he thought what he was doing was right in Iraq; the point is, the man is incompetent on domestic policies, he‘s incompetent in waging the war in Iraq, incompetent in handling Katrina.  That has got to be the word that is repeated like an echo chamber over and over and over again. 

CARLSON:  Well, we will see if it works.  You may have a pot calling the kettle problem there, but who knows.  2006, we‘ll find out. 

Flavia Colgan, former Democratic strategist, thank you very much. 

Well, stay tuned.  There‘s still plenty more ahead on THE SITUATION. 

(BEGIN VIDEOTAPE)

ANNOUNCER:  A horse is a horse, of course of course. 

UNIDENTIFIED MALE:  It‘s the truth. 

ANNOUNCER:  But wait until you see what makes little Rusty a horse of a different color.

Plus, why one woman‘s million dollar lotto ticket might become her ticket to the joint. 

Then, you make the call.  One viewer‘s supreme judgment about qualified court nominees. 

UNIDENTIFIED MALE:  But the best one of them all, Judge Reinhold.  A man who was born for the job.   

ANNOUNCER:  And which of these newsmakers will be this week‘s recipients of the coveted human and non-human SITUATION awards? 

UNIDENTIFIED MALE:  It‘s just so disgusting. 

ANNOUNCER:  It‘s all ahead on THE SITUATION.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

CARLSON:  Welcome back.  An 18th century French philosopher once said, it is better to debate a question without settling it than to settle a question without debating it.  You can imagine the French saying something like that. 

Well, there is no danger of that here.  Joining me now, a man who never met an argument he didn‘t like, the Outsider.  Please welcome ESPN Radio and HBO boxing host, Max Kellerman, live tonight from Las Vegas—

Max. 

MAX KELLERMAN, ESPN RADIO:  Who digs up these quotes every day? 

That‘s a great quote. 

CARLSON:  Our producer, Susan Lay (ph), who is not only a terrific producer, but also something of a part-time philosophy student. 

KELLERMAN:  Tremendous, tremendous. 

CARLSON:  All right.  First up, proof that crime does not pay.  An Oregon woman who bought a winning Lottery ticket could come up empty handed.  She bought the winner ticket on October 9th.  Unfortunately, she used her late mother-in-law‘s credit card to pay for it.  Now she faces charges of theft, forgery and possession of methamphetamines.  Police say if she‘s convicted, she won‘t get the money. 

I think she should get the money, Max.  Do you know why? 

KELLERMAN:  Why? 

CARLSON:  Because yes, she pulled a scam, of course, she did.  But it‘s not as big a scam as the lottery itself is.  This woman won a million dollars, a million dollars in the lottery.  You know what she got in her first installment?  Thirty-three grand.  That‘s right, $33,000.  She thinks she wins a million—she gets 33 grand.  Because it turns out, oh, yes, they take almost half in taxes, and they cut it out over 20 years. 

KELLERMAN:  Well, no, first of all, that‘s exactly right.  The lottery is essentially a retrograde tax.  Right, because...

CARLSON:  It‘s totally—it‘s a scam. 

KELLERMAN:  And then, they say, first they tax you because the lottery itself is a tax.  Then it‘s false advertising, because if you want it in a lump sum—in other words, if you want your money, you get half of what it says on the ticket.  Then on that half, you have to pay taxes. 

CARLSON:  Exactly. 

KELLERMAN:  So, yes, I understand, it‘s a scam.  However, the idea of a credit card is that a company is extending a line of credit to someone.  Now, if it‘s your mother or even mother-in-law, I suppose, and they give you permission to use their card, and everything checks out, fine.  But in this case, she never actually bought the ticket, because her mother-in-law is deceased.  So she couldn‘t possibly have had permission to use it. 

CARLSON:  Yes. 

KELLERMAN:  And, therefore, never had the dollar to buy it the first place. 

CARLSON:  That is very, very true, but the flip side of that, which you conveniently neglected to mention, because the mother-in-law is deceased, she didn‘t hurt the mother-in-law.  You can‘t defraud a dead person.  OK?

KELLERMAN:  No, you can‘t, but you can—no, you can‘t, but you can defraud the credit card company. 

CARLSON:  Yes, I guess you can.  I still think she should get the money, just to prove that these are ridiculous fraud on the American people.  And let me just say and I know you‘ll agree, the Mafia does a much better job running lotteries. 

KELLERMAN:  I would like—if I ever hit Mega Millions, the first thing I am doing after I collect my money, I am suing the state for false advertising, Tucker! 

CARLSON:  I hope you do. 

Well, Massachusetts school officials are playing a nasty trick on some students, they are canceling Halloween.  The principle of Underwood Elementary School called off their usual celebration when a few parents objected on what they called religious grounds.  Others called it correctly PC run amok, and they plan to protest, by wearing costumes and standing in front of the school. 

You know, Max, this bugs me on so many levels.  Halloween is just a great holiday.  And kids like it, and candy is—you know, kids love candy.  But more to the point, first, they came for Halloween.  And it‘s going to be Christmas.  You know it is.  And Hanukkah, for that matter.  I mean, it really is.  This is part of a growing movement to take all the fun out of the public sphere, and just because a couple of disgruntled, angry people don‘t like it, ignore them. 

KELLERMAN:  You know, this is, of course, a politically correct debate. 

CARLSON:  Right. 

KELLERMAN:  And this is an issue that you love, you bring it up, and you hammer it.  Political correctness run amok! 

CARLSON:  It‘s true. 

KELLERMAN:  Which is redundant, because the term political correct, which was hijacked by the right 10 or 20 years ago, itself means political correctness run amok.  But really, that word was used by liberals, by the left, to make fun of people even farther to the left.

But the point is, all the name calling, as you always say, stops thinking.  So let‘s actually think about what‘s going on here.  Should they cancel Halloween, which is not actually a holiday?  I mean, I love it, you don‘t get school off, you don‘t get work off probably.  Should they do it?  Morally, is it a good thing?  That‘s debatable. 

Ethically, however, the school has every right to cancel it if they want to. 

CARLSON:  No, but it‘s not the school.  And you are absolutely right, I didn‘t go to the true level here.  I left it at name calling, and that was my fault. 

Here‘s the essence of the problem with this story.  It is, as I have said many times before, empowering the disgruntled few to control the lives of the gruntled many.  That is to say... 

KELLERMAN:  No, I understand that point perfectly, Tucker, but really, when you think about it, if one group is labeled politically correct, how powerful can they be?  No one wants to be politically correct.  It‘s a small minority of people who don‘t even have the platform to say, no, no, no, we want to call ourselves by some other name.  So people in the media, like you, like me, like whomever, say politically correct.  I don‘t think they are that powerful, a minority. 

CARLSON:  I will tell you how powerful they are.  They are powerful enough to keep 8-year-olds in Massachusetts from getting their little mini Butter Fingers on Halloween.  That‘s pretty powerful.  That‘s awesome powerful. 

KELLERMAN:  It‘s a rotten thing to do.  It‘s a rotten thing to do. 

CARLSON:  It is.

Max Kellerman, live tonight from Las Vegas.  We‘ll see you Monday. 

Have a great time out there. 

KELLERMAN:  Thank you.

CARLSON:  Coming up, it was not a good day for Scooter Libby, but for some reason, one caller thinks his indictment and resignation may be a good day for me.  We‘ll see what he means.  I have no clue, but we‘ll check THE SITUATION voicemail next.

(COMMERCIAL BREAK)

CARLSON:  Welcome back.  It‘s been a big news day, and you spared no expense calling us collect here at THE SITUATION and leaving your voicemails.  Let‘s listen to some.  Here we go.

(BEGIN VIDEO CLIP)

MIKE:  Hey, Tucker, this is Mike Jones calling from Eastland, West Virginia.  I‘ve just seen you on SCARBOROUGH.  You and Pat Buchanan, you guys are absolutely giddy over this Libby thing.  I think you guys are going to see a wet dream coming your way when it actually gets indictments all the way to the president.  What do you think, Tucker? 

(END VIDEO CLIP)

CARLSON:  I think you misread me completely.  I‘m not going to defend felonies, and if Scooter Libby committed felonies, I would never defend that.  I feel sorry for him.  I feel sorry for his family, but it gives me no pleasure at all.  And I do think it‘s weird.  Scooter Libby is probably the least political person at that level at the White House, indicted for what looks like crimes having to do with politics.  It‘s very odd.  I don‘t understand it, and there‘s more to this story.  But I‘m not giddy, I can tell you that. 

Next up.

(BEGIN VIDEO CLIP)

ERNIE:  Ernie Flem (ph), Yonkers, New York.  Here‘s my short list for George Bush.  First is Judge Judy, if he‘s looking for a Jewish American female.  Then there‘s Judge Milian (ph) of the people‘s court.  That‘s for the Hispanic American female.  Of course, there‘s Judge Hatchett if he‘s looking for an African-American female.

But the best one of them all, Judge Reinhold.  A man who was born for the job. 

Thanks very much.  Enjoy your show. 

(END VIDEO CLIP)

CARLSON:  Ernie, that is good.  And all of them incidentally more impressive than Judge Harriet Miers. 

We‘re going to get someone good, I bet you.  I bet we will.  That‘s my prediction.  I may be wrong.  I hope not.

Let me know what you‘re thinking.  Call 1-877-TCARLSON.  That‘s 877-822-7576.  You can also send us your questions on our Web site.  You can e-mail them to tucker@MSNBC.com, and I‘ll respond to anything you can come up with, no matter how crackpot or far out.  You can also log on to tucker@MSNBC.com to see the responses. 

Well, still ahead, wherever fecal crimes are being committed, THE SITUATION is there.  Who on earth would reward this man for his now infamous bakery dusting?  He ought to be executed.  We‘ll hand out some hardware on “The Cutting Room Floor.” 

(COMMERCIAL BREAK)

CARLSON:  Welcome back.  Time for the Friday edition of “The Cutting Room Floor.”  Willie Geist spending another evening alone back at MSNBC world headquarters.  Willie, you look lonely and sad. 

WILLIE GEIST, THE SITUATION:  Are you ever coming home, Tucker?  The kids are starting to ask questions.  Where is daddy? 

No, you should get back here. 

CARLSON:  I‘m going to.

GEIST:  I‘ve got some important news.  We told you a couple of weeks ago that Stallone was putting together “Rocky VI.”  Now another disconcerting piece of breaking news—“Rambo IV” in the works right now.  So I don‘t know.  I didn‘t know there was a “Rambo III,” quite frankly.  “Rambo I” was good, but “Rambo IV,” I‘m very, very concerned about what‘s happening. 

CARLSON:  Yeah, I missed all the “Rockies” between I guess II and VI. 

GEIST:  Yeah.  You know, I will take a “Tango and Cash” sequel.  Kurt Russell, get him on the horn. 

All right.  Take them away.

CARLSON:  All right.  The Hershey chocolate company is being protective of its brands, and it wants you to know, if you‘re thinking about starting a line of breastfeeding apparel, you better not name it after one of their products.  Hershey‘s has filed a complaint with the U.S.  Patent Office about a company called Milkdudz—spelled with a ‘z‘ at the end.  Milkdudz sells clothes for nursing mothers, but Hershey‘s is not amused by the play on their name of their delicious milk duds. 

GEIST:  Well, Tucker, there goes my idea for snug fitting men‘s briefs, called Almond Joy.  I‘m sorry.   

(CROSSTALK)

CARLSON:  That‘s the best line of the night.  It hasn‘t been a particularly amusing show, and you‘ve.... 

GEIST:  That was not amusing.  Don‘t give me credit. 

(CROSSTALK)

GEIST:  That was terrible.

CARLSON:  All right.  You‘ve heard of seeing eye dogs, but what you‘re looking at here now is a seeing-eye horse.  Rusty is a four-month-old miniature who is training to become a guide for people with disabilities.  Sadly, Rusty and his trainer received an eviction notice from their apartment complex in Texas this week.  Apparently, management frowns on its tenants having horses live inside the building.  Rusty‘s owner plans to fight that eviction. 

GEIST:  Tucker, I think we‘re supposed to feel sorry and be offended and outraged that this landlord is insensitive to the impaired, but I think it‘s reasonable to restrict livestock in an apartment complex, don‘t you?  It‘s sort of a slippery slope.  The next thing you know, they will have the Serengeti in the parking lot. 

(CROSSTALK)

CARLSON:  I agree with that.  Right, it‘s—seeing-eye iguanas are the next. 

GEIST:  Yeah, let‘s stop it here.

CARLSON:  Well, it‘s time to meet our human of the week.  Really, this guy could get the award every week, but on Monday Donald Trump turned in a performance for the ages on the NBC soap opera “Days of Our Lives.”

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  (INAUDIBLE), Mr. Trump, really, back on the market, and I was just thinking that possibly...

DONALD TRUMP, HOST, “THE APPRENTICE”:  Excuse me.  I‘m really very flattered, Mrs. Teriakis (ph)... 

UNIDENTIFIED FEMALE:  Walker, Walker, please.  Nicole. 

TRUMP:  Ms. Walker, I am a happily married man, and if it‘s a job you‘re looking for...

(END VIDEO CLIP)

CARLSON:  Wow. 

GEIST:  You can just start engraving the daytime Emmy right now. 

That‘s all I have to say about that.  Virtuoso performance. 

CARLSON:  It was quite amazing.  Virtuoso?  I‘ll leave that to your judgment, Willie. 

All right, our nonhuman of the week is technically a human, I guess.  But we‘re kicking him out of the species for the crime he committed.  He‘s of course the taxi driver who was caught by surveillance cameras sprinkling dried dung on bakery items in a Dallas grocery story.  Customers complained that the store‘s baked goods smelled and tasted like manure, so management went to the videotape.  The man was arrested and charged with tampering with consumer products. 

GEIST:  You know, Tucker, we‘ve had—done this story now for three straight nights ,and we‘ve gotten some e-mails that said they‘ve seen enough.  But as journalists, it‘s our job to advance the story, to advance the dialogue.  And I think that‘s what we‘re doing.  I think we have to keep this in the news.  It‘s an important story.  No apologies from this journalist.

CARLSON:  You know, I‘ve never called for vigilante justice and I‘m not going to call for it now, but I‘m pretty close, I have to say.  It‘s offensive.  Willie Geist.

GEIST:  I‘ll see you Monday.

CARLSON:  I can‘t wait.  See you then. 

Thanks.  That‘s THE SITUATION for the night.  Thanks for watching. 

Have a terrific weekend.

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

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