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'Hardball with Chris Matthews' for March 29

Read the transcript to the Thursday show

Guests: Sen. Sheldon Whitehouse, Bob Bennett, Michael Isikoff, Margaret Carlson, Sharon Eubanks

CHRIS MATTHEWS, HOST:  Under oath and before Congress, the attorney general‘s top aide says that Gonzales did not tell the truth.  Does Gonzales have to resign?

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews.  And welcome to HARDBALL.  Was he or wasn‘t he?  Today Kyle Sampson, who until two weeks ago was the chief of staff for Attorney General Alberto Gonzales, told Congress that Gonzales was involved in discussions about the firings of U.S. attorneys, despite Gonzales‘s previous claim that he was not.

With leading Republicans questioning Gonzales‘s credibility and some calling for him to go, how long can Gonzales hang on?  In a moment, we‘ll talk with Democratic senator and former U.S. attorney Sheldon Whitehouse of Rhode Island.  And later, we‘ll talk with a former federal prosecutor who says there was more administration meddling at the Justice Department.

But first, HARDBALL‘s David Shuster on today‘s testimony from Kyle Sampson.


DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Even administration supporters said today that testimony by Kyle Sampson was devastating.  Under questioning from Democrats an Republicans about the firing of federal prosecutors, Sampson repeatedly undercut a series of public assertions by Attorney General Alberto Gonzales.

KYLE SAMPSON, FORMER GONZALES CHIEF OF STAFF:  I don‘t think the attorney general‘s statement that he was not involved in any discussions about U.S. attorney removals is accurate and...

SEN. ARLEN SPECTER ®, PENNSYLVANIA:  Is what?  Is accurate?

SAMPSON:  I don‘t think it‘s accurate.

SHUSTER:  Sampson chronicled a crucial meeting with the attorney general just 10 days before the prosecutors were dismissed.

SAMPSON:  I remember in my mind that it was in the attorney general‘s conference room.

SHUSTER:  And his sworn testimony prompted an influential Republican to openly rebuke Gonzales.

SEN. JEFF SESSIONS ®, ALABAMA:  Well, I don‘t think it was a small matter.  I think that the attorney general—I‘m disappointed that he didn‘t remember that in his statement.

SHUSTER:  But Sampson went on to say, under questioning from Democrats, there wasn‘t just one discussion about the eight prosecutors with the attorney general last fall, there were several discussions.

SEN. CHUCK SCHUMER (D), NEW YORK:  So were there at least five?

SAMPSON:  I don‘t remember specifically, but it would—I spoke with him every day, so I think at least five.

SHUSTER:  In the wake of allegations that Deputy Attorney General Paul McNulty misled Congress about the firings, Attorney General Gonzales has also said the reason for those mistakes rested with Sampson for failing to share crucial information with McNulty and other officials.

SCHUMER:  Did you share information with Mr. McNulty and Mr.


SAMPSON:  I did.

SCHUMER:  So the attorney general‘s statement is wrong.  It‘s false. 

How can it not be?

SHUSTER:  Then Sampson acknowledged that another denial was wrong just five days ago, this time by the attorney general‘s spokesman.

SCHUMER:  DoJ spokesman on March 24, Ms. Scolinos, said the attorney general did not participate in the selection of U.S. attorneys to be fired.  Was that an accurate statement?

SAMPSON:  I don‘t think that‘s an accurate statement.

SHUSTER:  In scrambling to try and hold onto his job, Attorney General Gonzales has pointed to his cooperation with the Senate probe and the thousands of pages of documents his department has produced for Congress.  In some of those documents, the prosecutor who were fired were referred to being “not loyal Bushies.”  Sampson said it was innocent.

SAMPSON:  In my e-mails by referring to “loyal Bushies” or loyalty to the president and the attorney general, what I meant was loyalty to their policies and to the priorities that they had laid out for U.S. attorneys.

SHUSTER:  Sampson testified that U.S. Attorney Carol Lam was fired because she wasn‘t aggressive enough in prosecuting immigration cases, but neither Sampson nor anybody else at the Justice Department ever told Lam there was a problem.  And throughout Sampson‘s testimony, Democrats had a field day, ridiculing Sampson‘s colleague, Monica Goodling, for refusing to testify and attacking the decisions by young lawyers with little experience to get rid of those who had extensive records of prosecuting cases.

SEN. SHELDON WHITEHOUSE (D), RHODE ISLAND:  And here their careers as U.S. attorneys are brought to an end, and in some cases, it appears that the make-or-break decision is being made by somebody who graduated from law school in 1999, who may or may not have ever tried a case.

SAMPSON:  Senator...

WHITEHOUSE:  This is pretty remarkable.

SAMPSON:  The decision makers in this case were the attorney general and the counsel to the president.

SHUSTER (on camera):  That counsel to the president is Harriet Miers.  She and Bush adviser Karl Rove are still fighting demands they testify publicly and under oath.  And as for Alberto Gonzales, the attorney general didn‘t exactly get a ringing endorsement today from the White House.  A presidential spokesperson, when asked about the contradictions between Gonzales and Sampson, said Gonzales will now have to speak for himself.

I‘m David Shuster for HARDBALL in Washington.


MATTHEWS:  Thank you, David Shuster.

Democratic senator Sheldon Whitehouse served as the U.S. attorney for Rhode Island from 1994 to 1998.  He‘s a member of the Senate Judiciary Committee.  In today‘s testimony today, do you have a sense now, Senator, that Gonzales, the attorney general, is not to be trusted?

WHITEHOUSE:  I think we certainly have a sense that the administration is not to be trusted.  I would—Gonzales is in a very deep hole with me, and at this point, I think he should resign.  But I want to have him have the chance to come and see if he can dig his way out of it before the committee.

MATTHEWS:  Kyle Sampson, his former—his recent chief of staff, today said that he was involved in many meetings, involved with the firing of these eight U.S. prosecutors.  That‘s in direct contradiction of what Gonzales told the Senate in a March statement, right?


MATTHEWS:  What‘s that tell you, that contradiction?

WHITEHOUSE:  Well, at a minimum, it‘s unbelievably bad management. 

It‘s highly disrespectful of Congress and our oversight functions in terms of just bothering to get the story right before you send the letters over.  And I think it reveals a bit of a kind of partisan problem over there that cropped up in some of the other testimony today.

MATTHEWS:  Well, what do you think it tells us about the administration?  How does this fit together with the war in Iraq, with Katrina, with the energy program?  How does it all fit together, in your mind‘s eye?

WHITEHOUSE:  I see it as very high-handed, disrespectful of America‘s checks and balances, and simply wanting to go their way because they think they‘re better than everybody and know better.  I think on a very small scale, what this might well have been about in the Department of Justice was the leadership around Gonzales and Gonzales himself trying to run roughshod over the traditional independence of the U.S. attorneys because they don‘t want to brook any kind of dispute or any kind of quarrel or backtalk from anybody.

And so very small amounts of contests become a firing offense, to the point where, actually, the United States attorneys feel obliged to warn the deputy attorney general that they promise to be polite and respectful when they come in for a meeting and feel obliged to warn the department or reassure the department that they‘re still company men.  And that‘s not the way a U.S. attorney should be behaving.  That puts a real chill in my stomach.

MATTHEWS:  You know, everybody who grew up in the United States probably had some bad experience with local government, with either somebody who was corrupt or needed to be bounced or perhaps imprisoned, and they count on the feds, the U.S. attorneys like you were, to come in and clean things up, to be Marshal Dillon, if you will, and clean up Dodge City.  Is this about that?  Is this about whether we can trust this Justice Department to play that role?

WHITEHOUSE:  Yes, I think it is partly about that.  I mean, we heard from Kyle Sampson today that when he went over to the White House at one point, he actually suggested putting Patrick Fitzgerald, the Scooter Libby prosecutor, onto this list.  Now, that didn‘t take at the White House, but the very idea that that was discussed is disturbing.

He said also that when the list was finally brought before the attorney general for final approval, the deputy attorney general noticed that Senator Domenici would shall very pleased that U.S. Attorney Iglesias was on the list.  You know, that‘s just not a statement that should be made in that context, in that room, in this environment.  And so clearly, things are highly politicized in a way that I would like to see remedied.

MATTHEWS:  Let me ask you about Sampson‘s testimony.  He denied the charge made by people at the Justice Department that they had been underbriefed, that he hadn‘t done his job of briefing him, and that‘s why they gave bad testimony to Congress.

WHITEHOUSE:  Yes, that was his testimony, that they basically kind of came at it sideways and that he was willing and able to brief them but that they kind of missed the point.

MATTHEWS:  Well, yes, but he says he gave them a full briefing.  Does that tell you that the higher-ups, including the AG, Gonzales, and McNulty, the deputy AG, are not telling the truth here in previous statements?

WHITEHOUSE:  They‘ve admitted that what they said to us has been incorrect and that they have not told us the truth, and that‘s why this is so important.  As I said on the Senate floor the other day, you know, you cannot have a Department of Justice until it‘s first a department of truth.  And when people are shading the truth even a little bit in that particular department, in that particular province of our government, it is far worse than anyplace else and a matter, I think, of real concern.

MATTHEWS:  Would you advise Attorney General Gonzales to come to the Hill and testify in a couple of weeks or to resign in the meantime?

WHITEHOUSE:  I‘m not sure he‘s going to last a couple of weeks, so I think he should get here as soon as possible.  But as I said, where I am with him is that I think he should resign.  But he‘s said he wants to come and testify.  He says he thinks he can explain this.  If the time is short, I‘m willing to listen to him and give him that chance, but he‘s got a very deep hole to dig out of.

MATTHEWS:  What did you make of Senator Sessions, your Republican colleague on the committee, the senator from—I think he‘s from Alabama, saying that he was disappointed in the way Gonzales is coming across here?

WHITEHOUSE:  I think—I think he‘s being very candid and very truthful.  I think everybody‘s disappointed in the way Gonzales is coming across.  The administration of this has been horrific.  The extent to which politics has been allowed to intrude is a real shame.  The mismanagement and lack of attention to details in a department many where details really count is telling, and I think it‘s all adding up to a very, very bad posture for Attorney General Gonzales.

MATTHEWS:  OK.  Thank you very much, Senator Sheldon Whitehouse of Rhode Island.

WHITEHOUSE:  Thank you, Chris.

MATTHEWS:  Coming up, veteran attorney Bob Bennett on the legal issues in the U.S. attorney firings.  And later, “Newsweek‘s” Michael Isikoff on what we‘re learning about the role of Karl Rove in this matter.

You‘re watching HARDBALL on MSNBC.


MATTHEWS:  Welcome back to HARDBALL.  Attorney General Alberto Gonzales said he wasn‘t involved in the discussions about the firing of eight U.S. attorneys.  Today his former chief of staff—former by two weeks—said he was.  What does that all mean?  Attorney Bob Bennett is a former federal prosecutor.  Bob, what‘s it all mean?


MATTHEWS:  Is it all about lying and perjury, like the Scooter case, or is it going to be about something else besides that?

BENNETT:  Well, it looks like it‘s going in that direction once again.  I don‘t know what‘s worse, the attorney general saying that he doesn‘t know about the firing of eight U.S. attorneys or that he made statements which have turned out not to be true.  Either way, he‘s—I mean, I think not knowing...

MATTHEWS:  Either he‘s irrelevant or a liar.

BENNETT:  Yes.  I mean, the notion that he didn‘t know is just mind-boggling to me.  But it‘s not good for him.  It‘s very bad for him, and it has a look of incompetence about their operation over there.

MATTHEWS:  Tough question, Bob.  You know this city.  Is he, in fact, of the Justice Department or is he a cipher, just a nice appointment for the president to have, Hispanic, friend of his from Texas, but the real juice over at the Justice Department is coming from the White House?

BENNETT:  I don‘t know, Chris, but I‘m inclined to believe the latter, as you say.  He‘s certainly not a strong attorney general.  And you know, I was a federal prosecutor myself, and this must be a very tough time for them because they don‘t want to be perceived as just a pawn in a big political...

MATTHEWS:  Any of the 93 U.S. prosecutors.


MATTHEWS:  Well, let me ask you about—I grew up in the city of Philadelphia, where we‘ve had a history over the years of corruption once in a while.  As you know, big cities tend to have corrupt politicians.  And they brought in a guy named David Marston (ph), Carter did, and the minute Frank Moore (ph), who was handling congressional relations, got a call from the local congressman, who was number two in the political machine there, they fired the guy because they didn‘t want him investigating these local Democratic politician.  Is that an obstruction of justice, something—a case like that, when you stop a prosecution?

BENNETT:  I think you would need something more than that.  You have to remember that the U.S. attorney is a political appointee and can be removed for whatever reason the president wants them removed.  And if there‘s no real quid pro quo there, I don‘t think there‘s...

MATTHEWS:  So it‘s legal for the president to pull a guy out who‘s really doing a good job for the people, who‘s catching a bad guy?

BENNETT:  It‘s legal, but it is terrible.

MATTHEWS:  Sleazy.

BENNETT:  It‘s sleazy.  It‘s terrible policy.  It‘s terribly demoralizing to the Department of Justice and everybody in federal law enforcement.  But it is not a violation of the law.  Now, if an attorney general or his aides removed somebody, and there was a quid pro quo, you know, that would be different.

One of the interesting things in this case is I still don‘t know if any of these people were removed because they either were prosecuting someone that the politicians didn‘t want them to prosecute, or because they were not prosecuting people that...

MATTHEWS:  OK.  Pete Domenici, a respected senior senator from New Mexico, calls up Iglesias, who is the U.S. attorney there, and he said, Are you going to move on this case before election day?  This was a case that nailed some local Democrats for election fraud or whatever.  And he said no, and Domenici hangs up just at that split second.  Hangs up.

BENNETT:  Well, that‘s very troubling, Chris.  There‘s nothing wrong with a member of Congress asking for a status report from the Department of Justice.  That is OK.  But when they cross the line...

MATTHEWS:  Well, would you call that crossing the line, an abrupt hanging up on a guy after he gives you what you perceive or he might perceive to be the wrong answer, which is you‘re not moving by election day?

BENNETT:  I don‘t know.  I‘d have to know more.  I mean, don‘t forget, I was counsel to the Ethics Committee...


BENNETT:  ... in the Keating Five case.

MATTHEWS:  Another case—another case, a guy named McKay.  He‘s the U.S. attorney in Seattle.  He gets a call from Harriet Miers at the White House, the president‘s legal counsel, saying, Mr. McKay, why are you so unpopular with all the Republicans out there?  What‘s their beef against you?  Is that political interference?

BENNETT:  That is certainly political interference, but it wouldn‘t amount to a crime.  It would again be, in my judgment, bad policy and it would very demoralizing, but I do not believe it would be a violation.

Now, interestingly, Chris, I don‘t know what the Senate Ethics Committee is doing on any of this stuff because some of this stuff in the examples you give...


BENNETT:  ... might not be a violation of federal criminal law, but it might very well be conduct which holds the Senate into disrepute.  And of course, I‘ve been on your show before and I have pointed out several times that the enforcement mechanisms of the congressional Ethics Committee are a farce.

MATTHEWS:  OK.  Well, let‘s go where they might be enforcing.  That‘s contempt of Congress or perjury before Congress or giving false statements to Congress.  How strong a statute does Congress have at its disposal to imprison or punish otherwise, sanction someone who gives them a false statement?  Because we‘ve got a prima facie case of that, an accusation by Sampson today that his former boss two weeks ago gave a false statement when he said to Congress in his statement of March that he was not involved in the firing of these eight prosecutors.  Is that a criminal offense?

BENNETT:  Well, what has to happen—what has to happen is Congress has to refer the matter to the Department of Justice.

MATTHEWS:  But is lying to Congress in a non-under-oath situation, a non-situation like that—is that illegal?

BENNETT:  Yes.  I mean, yes.  You don‘t have to be under oath.  If you

give a false statement to Congress on a matter they‘re making—if I give

one of my clients goes to—is interviewed by staff, not under oath usually, and they lie, that can be a violation of...

MATTHEWS:  If you were representing Mr. Gonzales right now, would you have him hold on in time to give his testimony in two weeks or tell him to walk now?

BENNETT:  I would have to know—I would have to know more, Chris. 

But I think I would be inclined to tell him that he has got one more shot

to rehabilitate himself in the public‘s eye, and I would help him prepare a

hopefully, a dynamite statement...

MATTHEWS:  Murder (ph) boards (ph), right?

BENNETT:  ... to the American people.  But I can promise you, not one word would come out of his mouth which wasn‘t accurate, which wasn‘t tested and which was virtually immune from contradiction.

MATTHEWS:  Right.  Thank you.  We live in the age of post-Scooter right now, right?

BENNETT:  Yes.  It happened before Scooter and it happened with Scooter, and it, as is evidenced by what we‘re talking about, it will happen after Scooter.

MATTHEWS:  OK.  Great Washington attorney Bob Bennett.  Thank you, sir, for coming here.

Up next: “Newsweek‘s” Michael Isikoff, the best investigator around, on Karl Rove‘s role in this story.  And it‘s always intriguing—as Senator Specter says, any time Karl Rove‘s name comes up, so does intrigue.

You‘re watching HARDBALL on MSNBC.


MATTHEWS:  Welcome back to HARDBALL. 

What was Karl Rove‘s role in the firing of U.S. attorneys?  An e-mail from Senator Pete Domenici‘s chief of staff to the president‘s top adviser may shed some light on the matter.

And investigative reporter Michael Isikoff wrote about it “Newsweek.”

Michael, thank you very much.

This—what about this memo, what, thanks for helping us with this matter and all that?

MICHAEL ISIKOFF, “NEWSWEEK”:  Thanks for everything, yes.

MATTHEWS:  What do you—what do you make of these kind of memos from one office to another? 

ISIKOFF:  Well, look, I mean, it‘s...


MATTHEWS:  Does that show that Karl Rove was playing ball here? 

ISIKOFF:  It‘s a bit cryptic, but you have to put it in context.

What we‘re talking about is a note that Domenici chief of staff sends a Rove on January 8, when he is forwarding the names of people he wants to replace, David Iglesias, the U.S. attorney in New Mexico who has just been fired.  And he forwards a fifth name, and then says, thanks for everything. 

Now, the context here is that, number one, we know that Domenici was -

appears to have been the prime mover in the sacking of David Iglesias. 

MATTHEWS:  Based upon that telephone call to Iglesias?

ISIKOFF:  Well, based on, actually, more than that.  We know that Domenici had complained a number of times to Gonzales, complained to Deputy Attorney General Paul McNulty, and, according to Iglesias, called him at home, called... 


MATTHEWS:  Why did he want this guy sacked?  What was his motive? 

ISIKOFF:  ... called him at home in October of last year...


ISIKOFF:  ... said, are you going to bring indictments in this local courthouse corruption case that implicates Democrats in New Mexico before the election?  This was right after Heather Wilson, the congresswoman, Republican, who is up for—in a tight reelection race, had also called Iglesias and said, are their sealed indictments in this case? 

So, clearly, New Mexico Republicans thought indictments in that case before the November elections would help Heather Wilson, who‘s in this tight reelection race.  Iglesias doesn‘t give Domenici the answer he wants to hear, and Domenici hangs up the phone.  The next thing he knows, six weeks later...

MATTHEWS:  Abruptly. 

ISIKOFF:  Abruptly. 

And what we do know now from the testimony today, that it was shortly after that, November 8, that Iglesias suddenly gets on the list of U.S.  attorneys who are going to be fired. 

One new element that was added...


MATTHEWS:  Who put him on the list?  Who put him on the chopping block?

ISIKOFF:  Well, Kyle Sampson, who is the—who is collecting the list, who is culling the names, puts him on the list. 

One new piece of testimony that was fairly significant just this afternoon is, Sampson says that, at some point, Attorney General Gonzales, his boss, tells him that Karl Rove has passed along complaints about Iglesias to him for not prosecuting voter-fraud cases.

And he also mentions two other attorneys.  So, that‘s the first we know that Rove—puts Rove talking to Gonzales about U.S. attorneys who should be fired.  Then, right after that, Gonzales mentions it to Kyle Sampson, who is collecting the list.  And Kyle Sampson puts Iglesias on the list. 

Then, after that, Domenici‘s chief of staff says, thanks for everything. 

Now, maybe he was just talking about thanks for help in the replacement of Iglesias, but, certainly, the full context here raises questions.

MATTHEWS:  OK.  Is this covered by—as you understand the law, would this be covered, this communication between Karl Rove and the Justice Department, be covered by executive privilege, or not? 

It‘s not about counsel to the president.


ISIKOFF:  No.  That‘s...


MATTHEWS:  It is an interdepartmental communication. 


ISIKOFF:  It‘s communication.


MATTHEWS:  So, he might have to testify on this? 

ISIKOFF:  Right. 

MATTHEWS:  The courts might rule that he has to testify? 

ISIKOFF:  Well, if the courts ever get to that—get that far.  We don‘t know. 

I mean, the White House has taken a position that Karl Rove‘s comments on this, deliberations, and what he learned about U.S. attorneys, and what he recommended about U.S. attorneys, is covered by privilege.  They are allow—they are agreeing to let Rove and Harriet Miers, the former White House counsel, talk to the Senate and the House, but not under oath, and not in public.  That‘s not acceptable to the Democrats on the Hill. 

I think the testimony today is going to raise the stakes a little further, I mean, and—and put a little more pressure on the White House to be more forthcoming here.  And, obviously, it‘s going to put more pressure on Gonzales, because a lot of what Sampson said today does seem to contradict what Attorney General Gonzales has said about his own involvement in this. 

MATTHEWS:  What do you make of this effort in every case—maybe I‘m generalizing.  But, if you go to Abu Ghraib, you go to the leak case, the CIA case, you go to Katrina, every time something goes wrong in the administration—and things always go wrong—but, in this case, every time the Bush administration screws up, they try to find the smallest person, Brownie, Scooter, and they give them a diminutive nickname, and then say, it‘s his fault. 

And here...


ISIKOFF:  Scooter wasn‘t so small.

MATTHEWS:  I know, but the deputy of staff.


MATTHEWS:  But it‘s always the chief of staff level they‘re going after, not the principal. 


MATTHEWS:  It is not Cheney.  It is not Gonzales.  Oh, blame this guy Sampson.


MATTHEWS:  Or blame Goodling, Monica Goodling, the—the counsel. 

ISIKOFF:  I don‘t think that‘s unique to this administration.  That‘s the first...

MATTHEWS:  What, blame the little guy?

ISIKOFF:  That‘s the first instinct of every bureaucracy, of every political organization.

MATTHEWS:  Screw down. 

ISIKOFF:  Sure.  Of course. 

MATTHEWS:  Right. 

ISIKOFF:  Protect the big guy, until the heat gets too hot.

And I think the heat is really getting—is turning up for Gonzales here. 

MATTHEWS:  Can they—can Congress put the heat—last question—can they put the heat on someone who seems like a regular person, not a politician, this guy Sampson?  Can they squeeze him to get him to turn over more about Gonzales than he has? 

ISIKOFF:  Well, he went—he underwent, like, several hours of questioning from the Senate today.  You know, he was—he was answering a lot of questions. 

There were some gaps in what he had to say.  Probably most spectacularly was his testimony that he had recommended that Patrick Fitzgerald be fired last year to Harriet Miers.  Didn‘t really explain how or why he made that recommendation, but it was pretty startling, given the context of what Fitzgerald was doing.


Last question:  Will Scooter Libby be allowed out of prison while he appeals?


MATTHEWS:  Or will he be put in prison before the appeals? 

ISIKOFF:  Well, we will know that June 5, when his sentencing comes.

MATTHEWS:  Oh.  You don‘t know yet? 

ISIKOFF:  No.  Well, it‘s up to Judge Reggie Walton.   

MATTHEWS:  Because I hear there‘s going to be a major right-wing rebellion if he doesn‘t get an immediate pardon.  The world is going to turn upside-down in this town if the president doesn‘t give this guy his—his—his freedom. 

ISIKOFF:  Well, there are a lot of other factors that the president has to weigh, including his political standing, including what is going on in Iraq.  So, the fact that, you know, some conservatives may be making a big stink about Scooter Libby getting not a pardon may not be the biggest thing on his radar screen in June. 

MATTHEWS:  They will make it the biggest thing.  Read the papers. 



MATTHEWS:  ... thank you, Michael Isikoff.


MATTHEWS:  Read Bob Novak.

Up next:  A new poll finds, 70 percent of the people think that Bill Clinton will support and help Hillary Clinton, but they also say that he hasn‘t changed his ways.  A majority of the Americans believe, according to the Gallup poll, that Bill Clinton hasn‘t learned from previous scandals.  He will continue to be a problem. 

You‘re watching HARDBALL on MSNBC. 


MARGARET BRENNAN, CNBC CORRESPONDENT:  I‘m Margaret Brennan with your CNBC “Market Wrap.”

Stocks closed higher, after being down much of the trading down.  The Dow Jones industrial average gained more than 48 points.  The S&P 500 closed up more than five.  The Nasdaq gained, but just fractionally.

Stocks were helped today by a government report showing that the economy grew in the fourth quarter at a better-than-expected 2.5 percent annual rate.  Also helping stocks there, jobless claims fell unexpectedly this week.

Meantime, oil surged to a new six-month high, gaining $1.95 in the New York trading session, closing at $66.03 a barrel.  That put a little bit of pressure on stocks, though.

After the closing bell, computer maker Dell reported, an internal investigation found accounting errors and evidence of misconduct.  Dell is also being investigated by the Justice Department and Securities and Exchange Commission.

And 30-year mortgage rates holding steady this week at a nationwide average of 6.16 percent.

That‘s it from CNBC, first in business worldwide.



SEN. CHARLES SCHUMER (D), NEW YORK:  He said, OK, that the mistake that occurred here was that information you had—Kyle Sampson had—was not shared with individuals within the department.

Is that true or false?


GONZALES:  Senator, I shared—I shared information with anyone who wanted it.  I was very open and collaborative in the process, in the preparation for Mr. McNulty and Mr. Moschella‘s testimony.  I—I...

SCHUMER:  That‘s what I want to ask, is, did you share information with Mr. McNulty and Mr. Moschella?

SAMPSON:  I did.

SCHUMER:  So, the attorney general‘s statement is wrong.  It‘s false. 


MATTHEWS:  Welcome back to HARDBALL. 

Today, Alberto Gonzales‘ former chief of staff testified on Capitol Hill about the motivations for the firing of eight U.S. attorneys.  He said Gonzales was personally involved in the meetings.  He said Gonzales didn‘t tell the truth to Congress.

We go now to MSNBC political analyst Pat Buchanan and Bloomberg columnist Margaret Carlson. 

Pat, where are we at with this thing? 

PAT BUCHANAN, NBC POLITICAL ANALYST:  Oh, I think it‘s a real mess, Chris. 

I think there is a competence problem here for the attorney general.  There‘s a credibility problem.  He is going to have to testify.  He‘s hanging by a thread.  The thread is the support of the president of the United States.  He‘s going to have to clarify this. 

And, if he doesn‘t, I think his—any support he has—and he doesn‘t have very much on the Hill—will be gone. 

So, it‘s a mess.  It is—it‘s made out of whole cloth, frankly, but it‘s a complete mess.

MATTHEWS:  Why are they covering up nothing? 

BUCHANAN:  You got me, Chris.  Why don‘t they—they just—if they had come out and said:  A lot of these fellows were fired for our reasons.  They‘re gone.  And it‘s not your business.  They‘re our appointee.  They served at the pleasure of the president.  Go fly a kite. 

MATTHEWS:  Margaret, that—is already too late to do that.  They have sent statements up.  The attorney general has made claims that are being questioned.


I mean, once—once you have the attorney general unable to keep up with the conflicting evidence that‘s against what he just said, you know, he—he does look like he‘s hanging by a thread.  And he‘s going to have to come and explain himself.  And, by the time he does, maybe he will have his story straight, but maybe there‘s no way to straighten it out. 

I think why the—the stories are the way they are is because they do feel guilty about a couple of them.  They do feel that it wasn‘t just.  You can fire these guys for anything, except for not doing your bidding, when it‘s too either prosecute somebody or not prosecute them.  That, you can‘t do. 


MATTHEWS:  Well, you know, we just had Bob Bennett on.  And he said, they can do it.  It may not look right, but they...

BUCHANAN:  Right. 

MATTHEWS:  ... can do it.


MATTHEWS:  Legally. 

BUCHANAN:  And it is a phony, Chris, for this reason.

Look, the big problem is this guy Iglesias in New Mexico.  Why doesn‘t the Senate call Pete Domenici up and explain it, Pete?

MATTHEWS:  Their phone call.

BUCHANAN:  Why don‘t they call Heather Wilson? 

Come on over, Ms. Wilson.  Who did you call, and why? 

If there was any interference, it was there.  There is nothing wrong with Rove getting a lot of senators yelling at him, and calling the A.G.  and say, look, these guys are all over my case.  Can you find out if there is a real problem here or not?  Bam.

What is wrong with...

MATTHEWS:  Do you think they should have a roll call of U.S. senators in both parties, and say, how many of you have ever called a U.S. attorney and asked about a case?


BUCHANAN:  Well, maybe.  That‘s maybe—you ought to get—what Gonzales ought to do, here is the list of all the phone calls we have gotten from the Congress. 


MATTHEWS:  There was a certain Luca Brasi aspect to that phone call. 

He calls up and says, are you going to do this by Election Day or not?

The guy says, no.


CARLSON:  Well, he says, that‘s...

MATTHEWS:  Well, that was...


CARLSON:  ... that‘s too bad, and hangs up. 

MATTHEWS:  Well, that‘s a pretty strong statement of...

BUCHANAN:  Well, so what? 


BUCHANAN:  So what?

CARLSON:  Well...


BUCHANAN:  The guy—the U.S. attorney is not a vestal virgin. 


BUCHANAN:  I mean, he is sitting over there and he—he would call—

I would call the attorney general.  I would say, look, I got a call from the senator.  Tell him to get off my case.  I‘m doing my job. 


MATTHEWS:  Well, why would...

CARLSON:  But...

MATTHEWS:  Why would Gonzales issue a statement in March, a month—this month—it‘s still March—saying that there was no—I never went to any of these meetings, and then it turns out that his guy, his chief of staff, who is his majordomo, says...


MATTHEWS:  ... he went to endless meetings almost every day?


MATTHEWS:  Why would a guy deny something that is so provable? 

BUCHANAN:  It is—it is—I can‘t—look, come on.  This is so dumb, I can‘t understand it. 

MATTHEWS:  Is this is a case like Watergate?  Nixon didn‘t order the break-in of the DNC...

BUCHANAN:  Right. 

MATTHEWS:  ... by any evidence we got, but, yet, he was involved in all kinds of machinations...

BUCHANAN:  Well...

MATTHEWS:  ... to avoid criminality. 

So, why do people—let me ask you the second question.  This is a stupid thing.  The Gonzales people are saying that this little person, you know, Sampson, didn‘t do enough job of briefing them before they made their claims.  That‘s why they made the false claims. 

CARLSON:  Well, if you‘re—if you‘re at the meetings, and if you‘re getting the memos, I guess you assume that the person knows.  I mean, he may have assumed knowledge that...


CARLSON:  ... they are now claiming they didn‘t have.  However, you...

MATTHEWS:  Well, what about Paul McNulty running over to Schumer‘s apartment over the weekend and saying, it was this Goodling woman that did it all?

You know, is that—is that going on here? 

CARLSON:  Well, blame goes down. 

BUCHANAN:  Well, you drop it on...

CARLSON:  Blame goes down.

MATTHEWS:  It always goes down.


BUCHANAN:  Well, why not blame it on Goodling?  She‘s going to take the Fifth. 




CARLSON:  Yes.  Let...


CARLSON:  Actually, she‘s—she‘s the perfect scapegoat now. 

BUCHANAN:  Sure.  Dump it all right on her. 



MATTHEWS:  And she is a classic true believer. 

BUCHANAN:  But, look, Chris, none of this...

MATTHEWS:  She went to Messiah College...


CARLSON:  ... College and Pat Robertson‘s university.

MATTHEWS:  ... Messiah in Pennsylvania.  Then she went to Regent. 



MATTHEWS:  She‘s a total true believer and they are hanging this woman out to dry. 

BUCHANAN:  And suppose everything was done that we‘ve heard was true.  We still don‘t have a crime.  What we‘ve got is a lot of conflict in who said what. 

MATTHEWS:  No, unfortunately, the fingernails are growing on this cadaver.  There are cases here that might lead to charges of lying to Congress. 

BUCHANAN:  Oh, yes, there may be.  Look, and this is why Ms. Goodling was wise to take the Fifth.  There are so many conflicts here. 

MATTHEWS:  How about being wise to tell the truth? 

BUCHANAN:  Why go up there when it is a perjury trap?  Come on.  This is an investigation.  There is no legislation that is going to come out of this.  They want to catch guys disagreeing, send it to the Justice Department, say, he will appoint a special prosecutor.  Somebody‘s committing perjury.

CARLSON:  Pat, you and I went to Catholic school.  If you don‘t lie, you are not guilty of perjury. 

BUCHANAN:  And if you don‘t say anything, you‘re not guilty either.  

CARLSON:  Right, but what a blot on this young girl‘s life. 

MATTHEWS:  OK, we‘re going to come back and talk about Bill Clinton, your favorite subject. 


MATTHEWS:  A majority of the American people, by a thin vote of 51 percent, just told the Gallup poll they don‘t think that Bill Clinton has learned from his past scandals, quote, he‘s still the same guy.  We‘ll be right back with Pat Buchanan and Margaret Carlson.

And later, did the Bush administration meddle in the Justice Department in this tobacco case we‘re going to talk about?  Apparently they‘re quite busy.  We will talk to former Federal Prosecutor Sharon Eubanks.  This is HARDBALL, only on MSNBC. 


MATTHEWS:  We‘re back with MSNBC political analyst Pat Buchanan and “Bloomberg” columnist Margaret Carlson.  I was looking at the polls the other day, and it‘s kind of interesting.  By the way, we‘ve got a new U.S.  poll showing that Hillary is leading Barack Obama by 19 points.  A few weeks ago she also led by 20 points.  And 71 percent think Bill Clinton was a good president. 

However, also people think that he has not learned from his past mistakes, that he is apparently still Bill.  You are hiding this full number here, Margaret.  Has Bill Clinton learned his lesson from past scandals?  Forty two percent say he has lessened, still say same person. 

Pat Buchanan, this is an uncomfortable, unsavory topic here.  Let me ask you, as a Gallop person here, has Bill Clinton learned his lessons from past scandals?  Citizen Buchanan, do you say still same person or he has learned his lesson? 

BUCHANAN:  I think Bill is pretty much the same fellow we used to know. 

MATTHEWS:  OK, what do you think Margaret?  Margaret, you‘re going to hate this question.  I‘m polling you.

CARLSON:  Only Hillary thinks he has changed his ways. 

MATTHEWS:  Let me ask you, as a citizen of this county: I‘m Gallop.  I‘m a pollster.  I‘ve got my clipboard here.  Has Bill Clinton learned his lessons from past scandals?  Has he learned his lesson or is he still the same person? 

CARLSON:  Let me say this, some of those people in the polls—


MATTHEWS:  I think it‘s a fun question. 

CARLSON:  Some people are polling two things in their mind at the same time, which is he‘s still the same person, but it‘s not going to hurt him. 

MATTHEWS:  It‘s a funny story.  Let‘s get back to serious business here.  Fred Thompson, you worked with Reagan as communications director, and you know the power of celebrity, the power of Hollywood in American politics.  We love movie stars, I mean, the real actors.  What do you think?  Do you think he has enough magic, coming off of “Hunt For Red October,” the other movies he‘s been in, “Law and Order,” to go into this race at this point and get in the game? 

BUCHANAN:  The answer is yes.  I was up in New Hampshire at a—me and Gary Hart, they had a big political function.  Everybody was asking questions about Thompson.  People are interested in him.  The conservatives are looking for a hero to lead them. 

MATTHEWS:  He‘s taking the numbers away from Giuliani, is who he‘s taking the numbers away from in this latest polling. 

BUCHANAN:  I think he is the biggest threat to Romney, because Romney is a guy who could come through.  Let me say this, I think he could, but the question is:  Does Fred Thompson has any real fire in the belly, the ambition, the drive. 

MATTHEWS:  Does he need a lot of it at this point, or could this be one of the easiest tracks in the world to get on? 

BUCHANAN:  No, not when three guys are going to have 75, 100 million dollars.  They‘re going to bench drinks, Chris, so they can lose a race or two and come fighting back.  If he got in now, he might do it. 

MATTHEWS:  Let‘s talk about gritty New Hampshire.  I love New Hampshire.  I always brought my kids up there when they were young.  It is a state that looks for toughness.  You won up there.  It looks for grit.  It looks for the outsider a bit.  It‘s great American state.  It‘s really live for your guy. 

CARLSON:  The Granite State looks for granite. 

MATTHEWS:  They are looking for a tough guy who‘s got a little 5:00 shadow, like you.  They‘re looking for a guy like you, Pat. 


MATTHEWS:  Here is Fred Thompson going in there.  John McCain certainly deserves to be president, based on his contribution to this country over the years, but he ran once.  How many chances do you get?  And in comes Fred Thompson, looking like the daddy party, if there ever was  a guy that looked like the daddy party, the Republican.  Can he win this thing? 

CARLSON:  He does look like the dad.  He has everything that Pat says.  He‘s handsome, he‘s charming, he sounds like a president, he looks like a president, but Pat says he might not have the fire in the belly.  That could help him, not having the hunger, not being willing to do anything could help him. 


CARLSON:  It could help him.  And, you know, he‘s smart.  He‘s articulate.  He knows his lines.  He can hit his mark.  Few people could start—

MATTHEWS:  Let me ask you.  We‘re having debates.  MSNBC is going to have debates coming up within a month or so.  They‘re going to have debates around the country.  Is the season still open for him to get in, right now? 

BUCHANAN:  It is open right now.  But I think these guys that are saying they are going to wait until September and October may be waiting to long.  That‘s taking a big risk.

MATTHEWS:  You think his door is open now? 

BUCHANAN:  I think his door is open now, yes.

CARLSON:  The theme song of Republicans should be “Some Day My Prince Will Come,” and they‘re waiting and they‘re hoping.  And so Fred Thompson is not late at all.  His moment is here.

MATTHEWS:  Some day he will come along.  Do you think he‘s coming now? 

CARLSON:  I think he‘s coming soon. 

MATTHEWS:  I notice it used to be you had to look like an anchorman to

get the presidency.  You needed to have a big thick head of hair.  And he

and Giuliani and McCain -

BUCHANAN:  He looks like a big truck driver.

MATTHEWS:  With a semi behind him. 

BUCHANAN:  Looks like a teamster, sure, a southern guy, a teamster.  He‘s in from Tennessee.  He‘s perfectly positioned, I think, but the question is, does he get in and is he really ready to do battle?  Iowa, those things are very hard to do, Chris.

MATTHEWS:  OK, you put him up against Hillary in the general election, who wins? 

BUCHANAN:  He wins. 

CARLSON:  Agreed. 

MATTHEWS:  Margaret Carlson?  This is treason!  Margaret, the sisterhood‘s at stake here.  You said it so quick. 

BUCHANAN:  Al was on the phone. 

CARLSON:  I don‘t see anyone in the field now who can—

MATTHEWS:  Billie Jean is on the phone.  Billie Jean endorsed the other day.

CARLSON:  Oh, now that you have the tennis queen on, I‘m sure she‘ll win.  No, but the red pickup truck, the aura.  He‘s smart.  He has experience.  He did—

MATTHEWS:  You know what I like about him?  I interviewed him when he was running for the Senate.  He was the underdog out in Tennessee, in Nashville.  I said what hotel are you staying at.  He said what hotel are you staying at.  We were both at three-star hotels.  He comes over, meets me for breakfast, no entourage, not another single person with him.  This is when you fall in love with politicians.  Maybe it‘s rehearsed, but—

And I said—well, I‘m doing a column in those days.  I said what about your divorce?  You want me to write about that?  He said, I prefer you wouldn‘t.  I mean, I just like the fact that he has a little unhappiness in his past, maybe some misbehavior problems, but he just says, you know, I‘d rather you didn‘t. 

CARLSON:  For the press, he would be the new McCain, because he does seem honest and open. 

MATTHEWS:  John Leiber, are you watching?  Margaret Carlson said that. 

We don‘t need a new motto, we got McCain!

BUCHANAN:  But they love somebody fresh and new.  And he‘s suddenly getting interested.  The press would love it.

MATTHEWS:  Ronald Reagan was right.  All the other guys are wrong. 

Pat Brown was wrong.  Everybody was wrong.  People like real movie stars.  And even though he‘s not big time, he looks like a movie star.  He is not just some guy that gets his picture in the paper.  Thank you very much.  Maybe we will get Harrison Ford next time. 

Anyway, Pat Buchanan, thank you, Margaret Carlson.  Regular people.  Up next, former federal prosecutor Sharon Eubanks.  Did the Bush administration meddle in the case involving big tobacco?  You‘re watching HARDBALL, only on MSNBC.


MATTHEWS:  Welcome back to HARDBALL.  The firing of those eight U.S.  attorneys has shed light on the inner workings of this Justice Department and it has prompted a former Justice Department attorney to speak up about her experience there.  Sharon Eubanks says Bush administration political appointees injected politics into her work as lead attorney in the government‘s case against tobacco companies.  The Department of Justice denies the case was politicized. 

Sharon, thank you for joining us.  Tell us what happened?  What happened to your case?  Was it watered down by politics? 

SHARON EUBANKS, FORMER JUSTICE DEPT. PROSECUTOR:  Absolutely, and most of the watering down happened toward the end of the case, when it became very clear and evident to the political appointees that we were going to prevail in the case.  In fact, following a meeting where I told them we‘ve won this case at this point—

MATTHEWS:  With a big settlement, with a big win? 

EUBANKS:  Well, it looked like it was going that way.  We had all the evidence supporting it, and that‘s when they began their massive interference campaign, to ensure that the remedy that we sought for the people of the United States was slashed to almost nothing. 

MATTHEWS:  Well, tell me how they did this.  Tell me how you first sensed—I mean, a friend of mine who works in Congress, is a member of Congress, says you can tell when you look around the subcommittee during markup who‘s in the tank with the industry.  He said they‘re tanks.  When did you notice that the people around you were not on your side?  They were not on the good guys side, as you see it.

EUBANKS:  Well, actually, that was more of a gradual thing.  But it became evident.  You expect some type of supervision from those above you, and that was to be expected.  But when it came to a situation where we were about to ask the judge for a huge remedy, and had all of the evidence in to support it, I get a phone call.  And I was told, come down, we want to talk about getting the number down.  It was never in those initial discussions. 

MATTHEWS:  Was this your report, the person you reported to?

EUBANKS:  Yes, Dan Merrin (ph), Peter Keisler (ph), Robert McCallum, who‘s now the ambassador to Australia.  That was his gift of this whole incident.  But, at the end of the day, even the judge saw what happened. 

MATTHEWS:  Was he paid off by this? 

EUBANKS:  I don‘t know that he was paid off. 

MATTHEWS:  You said it was his gift. 

EUBANKS:  It was his gift.

MATTHEWS:  What do you mean by that? 

EUBANKS:  He was supportive of the administration—

MATTHEWS:  They paid him off for it? 

EUBANKS:  Well, it could be. 

MATTHEWS:  I‘m just cross-questioning here.  You said it was his gift. 

What do you mean? 

EUBANKS:  Let me point out what happened toward the end.  After the remedy was slashed, there was an investigation.  Congress writes and says to the I.G. at Justice, I want you to investigate.  The I.G. is independent, Chris.  

MATTHEWS:  The inspector general, right? 

EUBANKS:  That‘s right.  They shifted it over to the Office of Professional Responsibility.  That was a complete whitewash. 

MATTHEWS:  That‘s funny, because that‘s what Gonzales wants to do with this case, right now, with the attorney firings.  Did you notice that, turn it over to that office, OPR.  That‘s not going to work, is it? 

EUBANKS:  That‘s a joke.  It would be a bad move. 

MATTHEWS:  You point out they report directly to the A.G., right? 

EUBANKS:  That‘s right.  You can see it on the website.  They report directly to the A.G.  In our case, what happened was I was even interviewed on the record for eight hours.  And I was never asked about contacts with the White House, what happened?  I was never asked any of the details about the communications between the Justice Department—

MATTHEWS:  Did you think about quitting at this point, when they asked you to go in the tank, when they said, it‘s not your night, basically? 

EUBANKS:  No, I will tell you why.  If I would not have done it, they could have done it without me.  And if wouldn‘t have stayed, then I wouldn‘t—

MATTHEWS:  Did you complain? 

EUBANKS:  Oh, yes. 

MATTHEWS:  What did you say to the political people when they said drop the remedy here, reduce the penalty? 

EUBANKS:  Well, it‘s not only what I said.  I wrote it down in memos.  I told them that they didn‘t have the proper support, as a matter of law, for undertaking the actions that they were doing.  I suggested that politics would be seen as the motivating factor in what they were doing if they did what they did.  And they wrote the closing argument for me on this, made me stand up and read it verbatim.  They even gave me talking points. 

MATTHEWS:  By the way, we heard from them.  They said the Office of Professional Responsibilities has handled this matter and said that they are right and you are wrong? 

EUBANKS:  Yes, I have seen that.  They‘ve said that before.  But Robert McCallum was actually in a position to supervise that office.  I know because I made a phone call to him about a problem with it, and he handled it.  He talked to the head of that office.

MATTHEWS:  A lot of us have seen the film “The Insider,” right, about the guy who blew the whistle on the tobacco industry.  How does this fit into this?

EUBANKS:  Well, one of the witnesses—the guy that was featured in “The Insider”—

MATTHEWS:  That Russell Crowe played.

EUBANKS:  Yes, Jeff Wigand is his name.  He was a witness in our case.  Here the industry‘s misconduct was something that the judge found in her lengthy opinion, came through.  She found factually that all of those things, like in the movie, did happen and that the industry had behaved badly.  So when it was time to not punish them, but to award a remedy to the government, equitable relief for the misconduct, that‘s when the administration became involved and wanted to pull the rug out from under me. 

MATTHEWS:  Is this administration in bed with big tobacco?

EUBANKS:  Well, it seems that way.  I don‘t have any direct evidence of it. 

MATTHEWS:  Well, you have the experience you just gave us that they intervened on behalf of big tobacco. 

EUBANKS:  It certainly looks that way.  Doesn‘t it?

MATTHEWS:  Thank you Sharon.  Thanks for joining us.  Very topical right now.  Play HARDBALL with us again on Friday.  Guests include former Secretary of State Madeline Albright.  That‘s tomorrow night.  Good night. 



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