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'Hardball with Chris Matthews' for Nov. 14

Read the transcript to the Wednesday show

Guests: Fred Dicker, Rep. Peter King, Dominic Carter, Rachel Maddow, Matt Continetti, Joan Walsh, Bob Herbert

CHRIS MATTHEWS, HOST:  Quote, “As president, I will not support driver‘s licenses for undocumented people.”  Hillary Clinton does major league damage control.

Let‘s play HARDBALL.

Good evening.  I‘m Christopher Matthews.  Welcome to HARDBALL from San Francisco.  Tonight: Going into reverse.  Hillary Clinton has changed her position on giving illegal driver‘s licenses—sorry—driver‘s licenses to people in the country illegally today after New York governor Eliot Spitzer announced he is ditching his plan to do just that.

The Clinton campaign put out this statement.  Quote, “I support Governor Spitzer‘s decision today to withdraw his proposal.  As president, I will not support driver‘s licenses for undocumented people.”

Well, a new CBS/”New York Times” poll shows illegal immigration is a very hot topic for both Republicans and Democrats out in those key states of Iowa and New Hampshire.

Plus, countdown to Iowa tonight.  Just 50 days away, a new poll shows Mike Huckabee could win the Republican nomination fight out there.

And Rudy Giuliani‘s in the HARDBALL spotlight tonight.  He‘s launching his first TV ad.  And as a new lawsuit goes on from publisher Judith Regan, it claims that the News Corporation (SIC), which owns Fox Television, tried to pressure her, Judith Regan, not to divulge her relationship with former Giuliani partner Bernard Kerik.

But we begin tonight with Governor Eliot Spitzer‘s reversal on giving illegal immigrants driver‘s licenses.  Tonight we have Representative Peter King of New York, who‘s going to introduce legislation to make sure no other states do the same thing.  And we‘re also joined by Fred Dicker of “The New York Post,” who covers the state for that newspaper.  He‘s been covering that story from Albany.

First I want to go to Fred Dicker.  Fred, what is going on up there? 

Why did the governor switch?  Why did Hillary switch so fast afterwards? 

Was this coordinated?

FRED DICKER, “NEW YORK POST” ALBANY BUREAU CHIEF:  Well, we don‘t know if it‘s coordinated, Chris, but we know why the governor switched on this one.  He had lost virtually the entire support of the New York Democratic establishment.  He had lost New York voters on this one.  He had become politically radioactive to a point where Democrats were abandoning him less and less.  And in terms of Hillary Clinton, I think she probably, too, did some polling, as Governor Spitzer has done in New York, and found the overwhelming number of voters are against this plan.

MATTHEWS:  Well, Hillary Clinton moved awful quick, didn‘t she.  She moved so quick.  I mean, I got a statement from her tonight...

DICKER:  She sure did.

MATTHEWS:  ... that said not only does she go along with the governor‘s decision not to give illegal people—the people in this country illegally driver‘s licenses, quote, she adds this gratuitously, which tells me she was really ready to move here, “As president, I will not support driver‘s licenses for undocumented people.”  So she went beyond saying she agrees with Spitzer‘s switcheroo, his U-turn.  She took a big U-turn herself, Fred.

DICKER:  Chris, I think this points to the fact that a lot of politicians on the national scene and on the state scene are still underestimating how significant an issue this is with the voters.  Spitzer was caught by surprise by the reaction to his proposal.  And I think it‘s pretty clear that Senator Hillary Clinton was, as well.

MATTHEWS:  Let me go to—let me go to Congressman Peter King of New York state.  Peter—Congressman, you have a proposal.  What will you do with this issue?

REP. PETER KING ®, NEW YORK:  Chris, basically, it‘s very simple.  It would prohibit states from issuing driver‘s licenses to illegal immigrants.  Now, there‘s a lot of preambles and whereas clauses, but the bottom line is, it says states are prohibited from giving driver‘s licenses to illegal aliens.  It‘s very simple.  It‘s very clear.  And it‘s very necessary.  And I just—actually, it was drawn up yesterday.  I‘m introducing it tonight.  We have 145 original co-sponsors already.

MATTHEWS:  Did you know Hillary was going to move on a dime...


MATTHEWS:  Do you think she will?

KING:  I pretty much assumed that, you know, when she saw the way it was going, the reaction to the debate she had two weeks ago, that it was only a matter of time, and once Governor Spitzer decided to turn, that she was going to follow him.

MATTHEWS:  But she not only followed him, she said that if she gets elected president, she will not do it as president.  She will discourage this from happening as president.

Let me ask you, what are the consequences of a state like New York giving out driver‘s licenses?  I just remember one thing.  In your state, you‘re close to New York City, dozens of those driver‘s licenses, those phony driver‘s licenses—maybe the real ones, actually—in the hands of people in the country illegally, the killers of 9/11.  That tells me that they used them for bad reasons, and they shouldn‘t have had those driver‘s licenses.

KING:  There‘s no doubt about it.

DICKER:  What‘s so surprising about the reaction of Governor Spitzer -

I thought you were asking me, Chris.  I‘m sorry.

MATTHEWS:  Go ahead, Peter—Congressman.

KING:  Yes, I was going to say that, no, there‘s no doubt that the 19 hijackers, I think they had a total of 28 forms of driver‘s licenses, some of them illegal.  And also, these licenses can be used as metered (ph) documents to obtain other forms of identification.  No, this is definitely not just an immigration issue, not just a social issue, but it was also clearly a homeland security issue, which is why so many Democrats wanted to get away from this in a hurry and why it‘s bad politics, it‘s bad government.

And Eliot Spitzer, unfortunately, lives in this liberal echo chamber, where everyone he speaks to speaks the same language.  Unfortunately, real people on the street, real Democrats and Republicans, are totally against this.

MATTHEWS:  Well, let me show you the real number.  We‘ve been telling you the “Big Number” every night.  It‘s one of our features on HARDBALL, one of our franchises.  Well, tonight the “Big Numbers” couldn‘t be more relevant.  It‘s 88.  That‘s the percentage of Iowa Republicans who say illegal immigration is a serious problem.  According to the latest “New York Times”/CBS poll, that‘s 86 percent, I‘m wrong -- 86 percent of Iowa Republicans say that illegal immigration is a top issue.  By the way, it‘s the hottest single issue in that state among Republicans.  Also, 59 percent of Democrats, Fred, in Iowa say it‘s a huge issue, a very serious issue.  So it seems like that people are wrong about it.  You were right.

Politically, these guys are slow on the draw.  Now you‘ve got Fred Thompson out there coming out against amnesty.  You got Hillary Clinton doing a U-turn.  Why were they so slow on picking up on an issue that has made the career of people like Michael Savage on the radio?

DICKER:  Well, a lot of people would say that American politicians, to a considerable degree, are out of touch with the American people.  Certainly here in New York, Governor Spitzer was totally out of touch with the sentiment of New York voters.  And it may very well be that‘s why Mrs.  Clinton is doing this flip-flop today, where a few weeks ago, she was endorsing the governor‘s plan, and now she‘s saying, as president, she would sign Pete King‘s bill.

MATTHEWS:  Will she do that, Congressman?  You have that information that she will sign sure bill?


DICKER:  I‘m making a joke.

KING:  No, based on what she said today, she should, but we‘ll see.  You know, it‘s a long way from now until next November.  But you know, Fred Dicker was right, though.  Eliot Spitzer and too many other people in politics and in the media and in academia are just cut off from what real people are thinking.  And they try to write it off as being racism or bigotry.  It‘s just untrue.  These are real people having real concerns.  And unfortunately, Governor Spitzer didn‘t see it until it hit him right between the eyes, and even then, he had to be hit again.

MATTHEWS:  I‘d just like to know—and we‘re going to have a debate on this later in the show.  I‘d like to know anybody in the world that believes a country doesn‘t have the right to decide who comes into it.  I‘ve never heard of a philosophy—nobody wants to actually say that, but that is the implication of certain people, which is, Oh, you have a right to come into this country, if you want to.  If there‘s a job you can grab illegally, fine.  You have a right to do that.  Anybody who gets in your way is a bigot.  I mean, that attitude is unheard of in the world, but some reason, it‘s caught on here.

And the other thing is this notion of nationality.  I don‘t know why anybody wouldn‘t be offended by somebody moving into their country and not even thinking it‘s important to establish nationality, simply move in and live here and laugh at the whole notion of American nationality.  I think, at a time we‘re fighting overseas about protecting this country, it‘s a normal thing.

Let me go—let me go back to Fred.  Do you know if Hillary Clinton had anything to do with Governor Spitzer‘s decision to do his 180?

DICKER:  Yes, we believe she did.  We were told—I was told at a very high level in New York politics that Mrs. Clinton‘s campaign, some of her top people, signaled to Governor Spitzer‘s people that he had damaged her.  They were wondering what the heck was he up to, why did he bring it to the fore now, and made it clear that the governor was hurting her and that he ought to back down if he wanted to help her, which he says he wants to do.

MATTHEWS:  Is anybody in his office saying that, or are you getting that from a third party?

DICKER:  No...


DICKER:  ... very high level in New York...

MATTHEWS:  No, but is anybody in Spitzer‘s office saying that the governor got the word from Hillary to cut it?

DICKER:  In his camp, not his office.


DICKER:  The highest levels.

MATTHEWS:  OK, well, how does it work?  Did she send word to New York politicians that this was hurting her?

DICKER:  Well, first of all, Spitzer‘s a very smart guy and he‘s aware of what happened.  But secondly, they travel in similar circles.  High-level consultants talk with one another.


DICKER:  The governor‘s political consultants and advisers were advised as to the damage done here.  That‘s how it was relayed.

MATTHEWS:  Do you think Mandy Grunwald or Mark Penn called their colleagues in the media consultants‘ world up in Albany and told them—or New York City—and told them to tell the guy to get off the dime?  Can you report that?

DICKER:  Sure.

MATTHEWS:  OK, that‘s what...


MATTHEWS:  Congressman, you‘re laughing because...


DICKER:  ... I would report it.

MATTHEWS:  This grapevine...


MATTHEWS:  Peter, are you willing to say that Hillary Clinton was pushed around—was able to move the governor on this?

KING:  I don‘t know that for a fact.  I‘ve heard from people in Democratic circles that there was real anger among the Clinton people toward Governor Spitzer, and the message was being sent.  But you know, I‘m like Fred.  I‘m hearing it secondhand from Democratic operatives.

MATTHEWS:  Yes.  Well, I can tell you...


MATTHEWS:  ... saying Hillary‘s got to switch on this for a couple days now, and I‘ll tell you, she has finally switched, but she got the OK, she got the green light from Spitzer.  It looked like she had to have that happen before she made her move.

But I found it gratuitous, ladies and gentlemen, that Hillary didn‘t just go along with Spitzer.  Look what she said.  “As president, I will not support driver‘s licenses for undocumented people.”  She is off the dime.  She has made her move, the first big case of damage control by Hillary Clinton.  And I have to tell you, it‘s smart politics.  When you‘re in a hole, stop digging.

Anyway, thank you, U.S. Congressman Peter King, who‘s got the bill, and Fred Dicker, who‘s got the story.

Coming up: Rudy Giuliani hits the airwaves with his first TV ad.  Here it is.


RUDOLPH GIULIANI ®, FMR NYC MAYOR, PRESIDENTIAL CANDIDATE:  The American people can look to me.  They‘re not going to find perfection, but they‘re going to find somebody who‘s dealt with crisis almost on a regular basis and has had results, and in many cases exceptional results, results people thought weren‘t possible.


MATTHEWS:  Mayor Giuliani says he‘s tested, but he faces fresh criticism thanks to his former top cop, Bernard Kerik.  Will Kerik and the whole story surrounding him hurt his campaign?

You‘re watching HARDBALL, only on MSNBC.



GIULIANI:  I think that‘s a gossip column story, and the last thing in the world you want to do when you‘re running for president is respond to gossip column-type stories.


MATTHEWS:  Welcome back to HARDBALL.  Rudy Giuliani‘s in the spotlight today.  His first television ad has just been released, and his friend and former employee, Bernard Kerik, is making headlines for the wrong reasons.

Here‘s HARDBALL‘s David Shuster.


GIULIANI:  So I believe I‘ve been tested in a way in which the American people can look to me...

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Rudy Giuliani‘s first television ad released today tries to reinforce his 9/11 image as a leader with the experience and best judgment to defend America.  But Giuliani‘s judgment is under fire because of his friend, business partner and indicted former police commissioner Bernie Kerik and thanks to new allegations by Kerik‘s former mistress, Judith Regan.

GIULIANI:  It sounds to me like a kind of a gossip column story, more than a real story.

SHUSTER:  A year ago, Regan, a book publisher, was fired by News Corp., the parent company of Fox News.  Late yesterday, Regan filed a $100 million lawsuit accusing the company of trying to destroy her reputation and trying to pressure her to lie to federal investigators.  Quote, “A senior executive in the News Corp. organization told Regan that he believed she had information about Kerik that, if disclosed, would harm Giuliani‘s presidential campaign.  This executive advised Regan to lie to and to withhold information from investigators concerning Kerik.”

Regan, who doesn‘t name the executive, has long faced credibility problems.  Still, her lawsuit and the front-page stories about it today bring more attention to Giuliani‘s friendship with Kerik and Kerik‘s alleged criminality.  Three years ago, at Giuliani‘s urging, President Bush nominated Kerik to be the nation‘s director of homeland security.

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES:  Bernie is a dedicated, innovative reformer who insists on getting results.

SHUSTER:  His innovations, though, included hiring an illegal nanny, and Kerik‘s nomination was quickly pulled.  Last week, Kerik was accused of hiding $500,000 from the IRS, accepting bribes from companies with alleged ties to the mob, and lying to federal agents conducting Kerik‘s background check.  All together, he was indicted on 16 criminal counts.

GIULIANI:  I made a mistake in not clearing him effectively enough.  I take the responsibility for that.

SHUSTER:  But the lawsuit filed by Regan raises other awkward issues, such as Kerik‘s use of this apartment.  The apartment was supposed to be for 9/11 rescue workers taking a break from the pit.  Kerik used the apartment for trysts with Regan.  Today, asked if he knew about the Kerik/Regan affair, Giuliani would only say...

GIULIANI:  Again, I think that‘s a gossip column story and...

SHUSTER:  Republican rivals of Giuliani say his judgment towards Kerik hearkens back to President Bush and his FEMA director, Michael Brown.

BUSH:  And Brownie, you‘re doing a heck of a job.

SHUSTER:  And to the extent voters see cronyism constricting Giuliani‘s judgment, that could be a problem.  Regan‘s lawsuit also raises problems for News Corp., the parent company of Fox News.  Regan alleges that Fox News programs were involved in the smear campaign against her.  According to the Regan lawsuit, quote,  “Defendants believed that they would be protecting Giuliani if they could preemptively discredit Regan in any way possible in the event that damaging information she possessed was ever disclosed.”

today, a News Corp. spokesman called the allegations about shielding Giuliani, quote, “preposterous.”

(on camera):  All of this comes just 50 days before the 2008 voting begins.  As it stands, Giuliani is behind in the early primary states, and now he must try to make inroads amidst the controversies over Bernie Kerik and in an atmosphere punctuated by Giuliani‘s rivals, who are eager to see the spotlight focus on Giuliani‘s mistakes.

I‘m David Shuster for HARDBALL in Washington.


MATTHEWS:  Thank you, David.  Dominic Carter is senior political reporter for NY1, a New York television station.  Mr. Carter, thank you very much for joining us.  Do you understand the case that Judith Regan is making here against the News Corporation, which owns Fox?

DOMINIC CARTER, SENIOR POLITICAL REPORTER, NY1:  Well, the bottom line here, Chris, is that it really doesn‘t matter as far as the details.  We know that News Corp. is saying that it‘s preposterous and it‘s not true.  But what does count here is every time an allegation comes up, it is a daily reminder of the character issue and the judgment surrounding Rudy Giuliani, and so that being Bernard Kerik as his police commissioner, and as you know, recommending him for Homeland Security.

So what‘s the important issue here, Chris, is that this is simply not going to go away.  And I want to make this very clear.  Mayor Giuliani, former mayor Giuliani, he can dismiss this as gossip all he wants.  Eventually, he is going to have to answer these questions.  And Mitt Romney...

MATTHEWS:  But what is the question, though, Dominic?  What is she asserting regarding Rudy Giuliani?  What did he do wrong?

CARTER:  Well, we don‘t know exactly as of right now what she is alleging.  That is still under wraps.

MATTHEWS:  Well, then why are we talking about it?  Why is it an issue if we don‘t even know what the hell she‘s saying?  Is this just—is she just holding them up for money?  What‘s she up to here?

CARTER:  No.  No.  The reason why this is legitimate is because it‘s alleged, as your piece just said, that they engaged in this affair, meaning Kerik and Judith Regan, at one of the apartments...


CARTER:  ... that was donated for 9/11 relief efforts.  It points to judgment and character.  It‘s not going to go away.  It‘s only going to get worse for Mr. Giuliani.

But Chris, it is important for me to say this.  Any neutral person has to admit Giuliani has done a good job of cleaning up New York City.  But these issues of character are simply not going to go away.

MATTHEWS:  Well, how does it show a problem with his character, this story?  Explain.

CARTER:  Simply because he selected a man who the federal government is alleging has committed—who was the former police commissioner of this city, the top law enforcement official of this city—has allegedly done some very bad things when it comes to finances...


CARTER:  ... when it turns to—when it comes to lying to federal investigators—again, allegedly.  And again, Giuliani was the guy pushing Kerik, and Giuliani is the guy that is still, even today as we speak, defending Kerik.  He is not backing off of him...


CARTER:  ... only saying that he‘s made a bad judgment in recommending him.

MATTHEWS:  Well, help me out on this because I‘m trying to figure this whole thing out.  I know all the problems with Bernie Kerik.  I know he faces judgment before the courts.  I know he‘s got a hearing right before super Tuesday.  I know it‘s going to be embarrassing as hell to Rudy Giuliani.  What I don‘t understand is Judith Regan and her claim that she was somehow, oh, I don‘t know, fired from News Corp., her publishing job at HarperCollins, because she knew about—or she had this affair with Bernie Kerik and that she was told it would hurt the Giuliani campaign.

If you wanted to shut her up, you wouldn‘t have fired her and kicked her out the door and humiliated her, because that guarantees a lawsuit.  You have got to figure that somebody like Judith Regan is litigious as hell.  Why would they set her up as a main enemy?  It makes no sense to me why they would do that. 

CARTER:  Well, Chris, you—you make a very good point there, when you look at the merits on paper. 

And, keep in mind, Judith Regan was a very colorful person here in the city of New York.  She still is.  Again, we know what she‘s alleging, but, as of right now, that‘s almost secondary to the fact—and she‘s well aware of this—that she‘s making the allegation against Giuliani. 

And, every time these issues come up—and they‘re going to come up over...


CARTER:  ... and over and over—it‘s just one bad mark on Giuliani, and which he‘s eventually going to have to answer—start answering these questions. 

MATTHEWS:  You know what it strikes me as?  A media echo chamber here.  You have got her lawyered up to the hilt suing for $100 million.  Whatever that means, it makes a headline.  You know, I could sue for a billion dollars. 

And, number two, then they come back with Howard Rubenstein, the number-one P.R. guy in New York, to say it‘s preposterous.  You know, it does seem like “Bonfire of the Vanities” to me, this whole thing. 

CARTER:  Well, it does appear to be shaky on the merits, when you look at it. 

But—but, again, the point is that—OK, here‘s my point.  It‘s been page-one news in almost every major newspaper around the country. 


CARTER:  And Judith Regan knew, by making these allegations, exactly what she was doing. 

MATTHEWS:  I know. 

CARTER:  And, so, Giuliani finds himself in a position—and he did this, Chris, quite a bit in New York City as mayor.  Again, I want to be very clear, cleaned up the city of New York.


CARTER:  But, on topics that he didn‘t feel comfortable with, like most politicians, he tried to defer and deflect and not answer the question. 

MATTHEWS:  Can I ask you really a New York City question? 

CARTER:  Go for it, Chris. 

MATTHEWS:  Does Rupert Murdoch have to write a big check to Judith Regan to shut this down? 

CARTER:  You know, only the lawyers can answer that, but I would imagine, at the end of the day, the answer is yes. 

MATTHEWS:  OK.  Thank you very much, Dominic Carter.  We know what we‘re talking about now.

Up next:  John McCain gets a dose of straight talk on the campaign trail.  Catch this line. 



UNIDENTIFIED FEMALE:  How do we beat the bitch?



MATTHEWS:  That‘s right.  You heard it.  Stick around for McCain‘s answer and the rest of what‘s new out there in politics. 

You‘re watching HARDBALL, only on MSNBC.  


MATTHEWS:  Welcome back to HARDBALL. 

So, what else is going out there in politics? 

Well, earlier this week, we showed you a Hillary Clinton ringer giving a subtle little wink apparently to a campaign worker after asking a prescribed question at a Hillary event. 

Here now is video of someone with a very different attitude towards Hillary Clinton.  It came at a John McCain event. 



UNIDENTIFIED FEMALE:  How do we beat the bitch?


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE:  May I give the—can I give the translation? 


MCCAIN:  The way that...

UNIDENTIFIED MALE:  Yes.  I thought she was talking about my ex-wife. 


MCCAIN:  But that‘s an excellent question. 


MCCAIN:  You might know that there was a—there was a poll yesterday, a Rasmussen poll, to identify it, that shows me three points ahead of Senator Clinton in a head-to-head matchup. 


MCCAIN:  I respect Senator Clinton.  I respect anyone who gets the nomination of the Democrat Party. 


MATTHEWS:  I think he said Democrat Party, obviously in a partisan audience.

By the way, politicians hear a lot of things like that out on the campaign trail.  And he handled that about middle-grade between defending Hillary and not. 

Anyway, speaking of Hillary Clinton, for most Iowa Democrats, Hillary has something important going for her.  They think she‘s got what it takes, at least in terms for readiness to serve as president.  The latest “New York Times”/CBS poll shows that 80 percent, four out of five, Iowa Democrats believe she‘s prepared to be president. 

That‘s double the number that think Obama is ready for the job.  That is a powerful advantage.  Two-to-one think she‘s ready for the job. 

Next up:  Bon Jovi for governor?  Page Six reports in “The New York Post” today that Bon Jovi is keeping his New York house, even though his family lives in New York City, so he can keep open the chance to run for governor of New Jersey. 

Bon Jovi performs regularly, by the way, for Democrats like Al Gore and John Kerry and keeps a high profile, hosting “Saturday Night Live” a few weeks ago. 

Finally, Rudy Giuliani is out, as I said, with his first commercial. 

Let‘s take a look at the whole thing. 


RUDOLPH GIULIANI ®, PRESIDENTIAL CANDIDATE:  New York City is the third or fourth largest government in the country.  It‘s one of the largest economies in the United States.  They used to call it unmanageable, ungovernable. 

A large majority of New Yorkers wanted to leave and live somewhere else.  It was a city that was in financial crisis, a city that was the crime capital of America, a city that was the welfare capital of America, a city that was in very, very difficult condition when I became the mayor.

By the time I left office, New York City was being proclaimed as the best example of conservative government in the country.  We turned it into the safest large city in America, the welfare-to-work capital of America. 

And, most importantly, the spirit of the people of the city had changed.  Instead of being hopeless, the large majority of people had hope. 

So, I believe I have been tested in a way in which the American people can look to me.  They‘re not going to find perfection, but they‘re going to find somebody who has dealt with crisis almost on a regular basis and has had results, and, in many cases, exceptional results, results people thought weren‘t possible. 

I‘m Rudy Giuliani, and I approve this message.


MATTHEWS:  Ah, debonair, windswept New York. 

Up next:  What is the best way to deal with immigrants who are in this country illegally? 

The HARDBALL debate coming up next.

You‘re watching HARDBALL, only on MSNBC.  


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

A late day sell-off in the final hour of the trading day weighed on the Dow Jones industrial average, to close off 76 points.  The broad-market S&P 500 lost about 10 ½ points.  And tech stocks saw a 1 percent drop, with the Nasdaq losing 29 points.

Oil prices on the rise again, as OPEC brushed off calls for it to increase production.  Crude oil gained $2.92 in New York‘s trading session, closing at $94.09 a barrel. 

Delta Airlines is now denying reports that it‘s talking to United about a merger—Delta‘s boss saying there have been no talks regarding any type of consolidation.  The rumors there had caused the stock to trade upward earlier in the day. 

And New York Stock Exchange CEO John Thain confirming to CNBC‘s Maria Bartiromo that he has been named to head up Merrill Lynch.  His appointment comes two weeks after the ouster of Stan O‘Neal, as Merrill reported steep third-quarter losses, an $8 billion loss because of exposure to the subprime market.

And CNBC has learned that NYSE‘s chief operating officer, Duncan Niederauer, will be named as head of the New York Stock Exchange to replace John Thain. 

That‘s it from CNBC, America‘s business channel—now back to


MATTHEWS:  Welcome back to HARDBALL. 

Just as San Francisco‘s Board of Supervisors voted to give municipal I.D. cards to all city residents the other day, the question, is it legal or not?  Should New York Governor Eliot Spitzer have done what he did?  He apparently had intended to give driver‘s licenses to people in the country illegally, and did a 180 on that today, followed by a 180 by Hillary Clinton. 

Let me go to Pat Buchanan and Rachel Maddow. 

And, first of all, Rachel, you first.  What you do you make of Hillary Clinton‘s decision to do a U-turn here? 

RACHEL MADDOW, RADIO TALK SHOW HOST:  Well, Hillary Clinton‘s decision, the thing that struck me strange about it is that, if she is president of the United States, she‘s not going to have the opportunity to decide who gets a driver‘s license or not.  That‘s a state‘s issue, so her saying that, as president, she would take this bold stand on it I thought struck a weird note. 

MATTHEWS:  Why do you think she took it? 

MADDOW:  I think she took it because I think she has realized this is a hot, emotive issue right now. 

Spitzer having to take this back off the table, it doesn‘t—isn‘t going to make illegal immigration any less of a problem in this country.  It isn‘t going to improve anything.  But it is a victory for those who would say that anybody who wants to do anything kind of rational and productive on the issue of immigration is going to be shouted down, because there‘s so much heat on the issue. 

MATTHEWS:  Pat Buchanan, your view of Hillary Clinton‘s U-turn today?  She not only—as Rachel pointed out, she not only went along with the Spitzer U-turn, saying he‘s not going do this, giving—to give people who are here illegally in the country I.D. cards, basically.  She said:  I will not support driver‘s licenses for documented people as president. 


Look, she‘s not going to be president of the United States if she didn‘t make a U-turn on that, Chris.  When you have got 70 percent or more of the people of New York are adamantly against this—I saw your numbers from Iowa—she‘s not going to be president of the United States if she runs on giving driver‘s licenses to illegal aliens. 

It killed John McCain.  It drove Spitzer down to 25 percent.  Forty-five percent of Republicans in South Carolina want another candidate than Lindsey Graham.  This is toxic.  This is third-rail stuff. 

MADDOW:  Third... 


MATTHEWS:  What I don‘t understand, Rachel, is every time I—I suggest what I think is a reasonable way to deal with this problem of illegal immigration, everybody in the country right now, you‘re fine.  Make them all citizens.  I don‘t care.  But, starting tomorrow, you have to have a checkable I.D. card to get in the country or you don‘t get in, you don‘t get a job in this country. 

Nobody seems to want to do something that will actually work.  They either want to have a continued flow of illegal immigrants into the country, or they want to kick 20 million people out of the country, both of which I oppose. 

Why don‘t people want to have an I.D. card?  You say you think giving a driver‘s license to somebody here illegally—why don‘t we give real I.D. to people who are really in the country by right or by a government decision?  Why don‘t we get legitimate ourselves? 

MADDOW:  Well, that‘s—you have—you have hit the nail on the head in terms of what the problem is here with moving forward, is that there‘s hot politics around this issue, and everybody is criticized whenever they do anything that can be construed by the right as amnesty or any sort of kindness toward immigrants.

But, when it comes to practical, practical policy issues, practical policy matters that will move stuff forward, that stuff gets shouted down, and it‘s impossible to make progress. 

MATTHEWS:  Well, when are the immigrant groups, the Latino groups, the business groups that want cheap labor, the labor unions that want new members, the Democrats and Republicans who want new party members, when are they going to come out for an I.D. card? 

You need an I.D. card to get on an airplane.  You need it to do banking.  You need everything.  But they say, no, don‘t ask people to actually identify themselves.  I don‘t get it. 

MADDOW:  I don‘t want...


MATTHEWS:  Pat, your thoughts on that. 

MADDOW:  I don‘t want a national I.D. card, because I...

MATTHEWS:  Why not? 

MADDOW:  Because I don‘t trust the government on privacy issues right now. 


MADDOW:  But...

MATTHEWS:  Well...


MATTHEWS:  Then you want more illegal immigration, then, because that‘s the effect of it. 

MADDOW:  No, I—No, I don‘t.  No, listen, what New York State is trying to do is, they‘re saying, listen, if you have got people who are here to work illegally, and you need to have a Social Security number in order to get a driver‘s license, then those people who need to drive in order to work, which is why they‘re here, they will drive illegally. 


BUCHANAN:  The point is...

MATTHEWS:  Why do we ask people if they have—don‘t you need a ticket to get on an airplane?  Don‘t you need money to buy food at a store? 


MATTHEWS:  Why is this the only country in the world where you don‘t need anything to come in the country illegally, because, once you‘re here, people will defend your right to be here?  I have never heard a country like this in the world.  There‘s never been a country like this.



MADDOW:  I don‘t want to live in a country where, the first time you -

the first thing you hear any time anybody official stops you for anything is, papers, please. 

MATTHEWS:  Well, wait a minute.


MADDOW:  At the same time, I don‘t want there to be people with no connection to the legal...


MATTHEWS:  Nobody is saying that.  Nobody is saying that.


MADDOW:  That‘s what a legal I.D. card would be.


MATTHEWS:  I‘m saying, if you want to get a job here, shouldn‘t you have to identify yourself, Rachel? 

BUCHANAN:  Eighty percent of the country has passed this argument by.

MATTHEWS:  No, wait a minute.  I want to stay on this, Pat.

Rachel, are you saying you shouldn‘t have to identify yourself to get a job in America? 

MADDOW:  I say you shouldn‘t have to identify yourself in order to do any official government function. 

MATTHEWS:  To get a job?

MADDOW:  In order to get a job in this country right now, you need to submit the paperwork to get paid. 

MATTHEWS:  Oh, come on. 

MADDOW:  That should be the case. 

MATTHEWS:  That‘s a joke.

MADDOW:  No, come on.  That should be the case.  You—that is the status right now. 


MATTHEWS:  Oh, OK.  That‘s why everybody is here illegally working, because that law is enforced.

Pat, your thoughts. 

BUCHANAN:  Well, my thoughts are these. 

Comprehensive reform, what Hillary calls comprehensive reform, is another word for amnesty.  She will have to get off that, too, Chris, also.  She‘s going to have to get off that.

And let me say in addition to that, look, we have got an identity card to work.  It‘s a Social Security card.  You got to make employers call up the Social Security Administration.  And, if they can‘t confirm it in 90 days, get rid of the workers.  You crack down on businesses.  You secure the borders. 

You start deporting people based on gang members, scofflaws...


BUCHANAN:  ... felons, and you can solve it in 10 years.  That‘s what the country wants.  People who are not there are not going to be in the White House. 

MADDOW:  But, Pat, what do you do if you‘re the...


MATTHEWS:  Well, why don‘t...


MATTHEWS:  The Republican Party, in which you were once a member, does not agree with you. 

BUCHANAN:  Yes, well, but don‘t—let me tell you something.  They will all—they have all moved to the position of a security fence.  They‘re all for cracking down now. 

Rudy has run away from sanctuary cities.  This will be the cutting issue of the Republicans domestically, and the Democrats are on the wrong side of it with George Bush. 

MATTHEWS:  Well, the Republicans are on the wrong side of it, because, no matter what you say, Pat, you can get a job in this country if you‘re here illegally, and you know it. 

BUCHANAN:  Well, they will—listen, they will have to say, we‘re going to crack down on businesses who are hiring illegals...


BUCHANAN:  ... or somebody‘s going to beat them. 

MATTHEWS:  Rachel, I don‘t think either one of you have a solution to the immigration problem. 

MADDOW:  I don‘t...


BUCHANAN:  I have got a whole book on it, Chris. 


MADDOW:  No, but if you—if you are the governor of New York State, what do you do with the fact that you have got a million illegal immigrants in your state? 

MATTHEWS:  Well, call the U.S. congressmen from your state and say, why don‘t you pass a bill that outlaws illegal immigration?

MADDOW:  Sure.  You try—you try to get the federal government to do what‘s right on illegal immigration and getting control of the borders.  That‘s what Eliot Spitzer said today when he took that off the table. 

MATTHEWS:  Forget the borders.  Every time I hear the word border, Rachel...

MADDOW:  Yes. 

MATTHEWS:  ... I know nobody‘s serious.  You would cross that border to get a job if you needed it. 

MADDOW:  Sure. 

MATTHEWS:  You would find a way to get around that fence.

MADDOW:  And if I was the New York State—if it was...

MATTHEWS:  Everybody who says borders is this issue. 

BUCHANAN:  Well, wait a minute, Chris.  That‘s what...

MATTHEWS:  There‘s only one way to stop people coming here:  Cut off the jobs. 

MADDOW:  Chris, if you...

BUCHANAN:  Let me tell you, Chris, if you say we can‘t secure our borders, that‘s the end of your country, because the whole world knows they can get in.  The president says six million have been stopped in his watch alone.  If you don‘t secure the border, as well as sending the people back home and removing the magnets, it is the end of your country. 

MATTHEWS:  Pat, unless you cut off the jobs, people will come to get them. 

BUCHANAN:  You‘ve got to do that too.   

MADDOW:  There is an elephant in the living room here, which is that illegal immigration has not changed very much over the course of my lifetime.  I‘m 34 years old.  It hasn‘t changed very much. 

MATTHEWS:  In other words, it‘s not a big issue with you?

MADDOW:  Listen, the politics have changed but the issue hasn‘t.  At the state level—wait, let me—Pat, at the state level—at the state level, what Governor Spitzer has to deal with right now is he‘s got about a million illegal immigrants in New York State.  If they can‘t drive legally, they will drive illegally.  He is proposing a solution that will be safer for New York state citizens. 


MATTHEWS:  Let me ask you, Rachel, does a country have a right to decide who enters it? 

MADDOW:  Absolutely, of course. 

MATTHEWS:  Why don‘t they enforce that right? 

MADDOW:  Why don‘t they enforce that right?  We‘ve never enforced that right effectively in this country. 

MATTHEWS:  Why not? 

MADDOW:  We‘ve never enforced it largely because there‘s a business incentive for not enforcing it. 

MATTHEWS:  You‘re laughing.  You think it is funny. 

MADDOW:  No, I‘m not laughing at this.  This is the reason that we haven‘t done it.  The thing that you guys aren‘t grasping is that this hasn‘t changed. 

MATTHEWS:  I want a national I.D. card. 

BUCHANAN:  Let me tell you something, you get the right person in charge in this president of the United States, you can do it the way Ike did it.  He sent back a million people by sending a general down there, saying get them out of our country.  And that‘s what they did.  You get the right man in the White House, it can be done, Chris.  What‘s missing is a lack of will, not ideas. 

MATTHEWS:  Pat, when you talk to business groups, do the business people you talk to agree with you about putting serious penalties on people who hire people illegally? 

BUCHANAN:  No, one of the guys said you‘re going to put me in jail.  I said that‘s right, if you hire illegals.  That is right. 

MATTHEWS:  Well, that cuts down on the lecture fees, I think, if you try to give a speech to a bunch of guys that know they‘re going to the can, if you get your way. 

BUCHANAN:  You‘ve already got your lecture fee, Chris, and then you tell them. 

MADDOW:  The reason the politics changed on this in the last few years is that the Republican party decided that they didn‘t have much to offer by way of a domestic agenda, stuff like schools and health care and stuff like that.  So they came up with a political plan—


MATTHEWS:  This is the hottest issue on the Republican side. 

MADDOW:  That‘s right. 

MATTHEWS:  It is growing as the hottest issue on the Democratic side.  Fifty—almost 60 percent of the Democrats in Iowa disagree with you, Rachel.  They think this is a serious problem, illegal immigration.  They don‘t think it‘s something that‘s just about the same as it‘s always been.  And they‘re increasingly angry about this, Rachel. 

BUCHANAN:  Let me talk for a second, Rachel. 

MATTHEWS:  Pat first for 30 seconds. 

BUCHANAN:  Let me talk for a second.  Rachel, we didn‘t invent this issue.  The Republicans plugged into an electric cord that is running all over this country.  They didn‘t create it.  It is out there.  They are now exploiting it and seizing it.  You‘re right.  But it is out there in middle America.  And Spitzer found out and McCain found out, and your lady found out, Mrs. Clinton. 

MADDOW:  My lady? 

MATTHEWS:  Rachel, your thoughts. 

MADDOW:  I will just say that five years ago there was not heat on this issue, not because this issue was any different, but because there was no strategy to uncork this xenophobic bottle and let this genie out and let it drive Republican politics.  You can uncork this bottle whenever you want and Americans will run with it every time.  It doesn‘t mean that it‘s right. 

MATTHEWS:  It doesn‘t mean it‘s cold either.  It‘s a hot issue.  It‘s going to get hotter.  And I don‘t think either party has the guts to take it on.  Anyway, thank you Pat.  Thank you Rachel. 

Up next, the round table on this fight over driver‘s licenses for illegal immigrants, only a small part of this fight, and the tightening race out in Iowa, where illegal immigration has become the hottest issue on the Republican side and one of the hot issues on the Democratic side.  This is HARDBALL, only on MSNBC.


MATTHEWS:  Welcome back to HARDBALL.  Let‘s bring in the round table, “New York Times” columnist Bob Herbert,‘s Joan Walsh, and the “Weekly Standard‘s” Matt Continetti.  I‘ve got to go to you, Bob.  I agree with you on most things.  We may disagree on this one.  Hillary Clinton‘s done a 180, a big u-turn, first one of the campaign.  She won‘t do it on Iraq; she won‘t do it on Iran.  But here she is with a 180 u-turn, saying I will not support driver‘s licenses for undocumented people, a 180 from Philly. 

BOB HERBERT, “NEW YORK TIMES”:  Well, she did what she had to do, I guess.  This is an indication of her actually taking a stand on an issue, and she actually got forced into it.  She‘ll find out that it‘s better to take your stands on an issue of your own volition without being forced. 

MATTHEWS:  Will she get dumped on for doing, I was for the driver‘s licenses before I was against them?  Is she going to get that now? 

HERBERT:  Sure she is.  But, you know, Chris, I‘m not even sure—the Republicans are going to beat up on her like crazy on this issue.  But they‘re probably going to beat up on the Democrats, period.  I do think this is an issue that‘s going to be demagogued in this campaign, and it‘s unfortunate, because it‘s overshadowing issues that I personally think are a lot more important. 

MATTHEWS:  Usually.  Let me go to Joan Walsh.  It seems if the Democrats and Republicans would actually have a meeting and decide—I know this would take a lot of guts—that we‘re going to stop illegal immigration in this country as a force of our culture, our demographics, whatever, stop it hence forth.  Everybody here is fine.  Henceforth, we‘re going to control who comes to this country and works here.  But they don‘t seem to want to do that, so it is going to be a hot issue. 

JOAN WALSH, SALON.COM:  Right, Chris.  The solution you‘re pointing to is what people like Pat Buchanan call amnesty.  And Fred Thompson has a big ad out today.  I‘m glad to see sign of life in his campaign.  But, you know, he‘s saying no amnesty.  No one is really talking amnesty.  The kind of solution that you talked about, it wasn‘t perfect, but we did have the McCain/Kennedy bill.  It could have been tweaked.  But people did absolutely demagogue that bill into the ground. 

You had Democrats and Republicans come together, try to make some tough decisions and it got defeated.  So, I think this issue, unfortunately, really is going to be with us to the detriment of other issues, as Bob says, that deserve attention. 

MATTHEWS:  You know, Matt, when I‘m losing money on some deal, I basically say, well, I have lost that money already.  It‘s the drainage.  It‘s the hemorrhaging you try to stop.  We have a hemorrhaging border situation, a hemorrhaging population situation.  Nobody seems to want to solve the problem tomorrow night.  NBC cameras can go down the border and watch coming in illegally every night of the week.  Nobody wants to talk about that.  They want to talk about amnesty for those here, or they don‘t like I.D. cards.  But nobody wants to solve the problem.  It seems to me neither party is being correct here. 

MATT CONTINETTI, “THE WEEKLY STANDARD”:  You have to do it in two steps, Chris.  You have to start with border enforcement, and then once the political pressure, in terms of the kind of anti-immigrants, the open borders type—once that political pressure is relieved because you‘re showing some results on the border, then you can move to a second item in this agenda, which is what you describe, which is, OK, what do we do with the people who are here, who are working, who aren‘t criminals, who—

MATTHEWS:  That‘s not my view.  My view is you can‘t work in this country illegally.  That‘s my view.  You just can‘t do it.  Now, if somebody wants to sign up tomorrow and say I‘m here, we‘ll let them go.  They‘re here.  But if you don‘t set a law that says you can‘t come in this country and work here illegally, it‘s a joke.  Anyway, let me ask you about Hillary Clinton and the politics of this.  Bob Herbert, Hillary Clinton, what does this tell you about her campaign, that she‘s able to get this thing done this way?  Is it a sign of tough ruthlessness that you need in a campaign, or wishy-washiness or what‘s the statement here? 

HERBERT:  I think, given the sort of clobbering she‘s been getting recently, she really had no choice.  The thing that surprised me most was that during the debate she was not prepared for that question.  That really surprised me.  And it surprised me the way she and Bill have handled this thing since that debate, both the immigration issue and this whole idea of the guys piling on.  So, it‘s been a bad period for her, but she‘s smart.  She‘s tough.  She‘s got a strong organization.  And she‘ll probably straighten it out. 

MATTHEWS:  Fifty seven percent of Democrats in Iowa, according to the CBS/”New York Times” poll, say this is a serious problem, Joan, among Democrats.  Is she doing this for one reason, that she doesn‘t want to lose any votes at the margin to Edwards or to Obama on this issue? 

WALSH:  I don‘t think she‘s worried about Edwards or Obama on this issue.  I think that the driver‘s license proposal was actually very poorly thought out.  I don‘t believe that giving driver‘s licenses is suddenly going to make people come out of the shadows, as you say, and legalize their status, just so we can hold them responsible if they get in car accidents.  It was not a very good proposal.  Spitzer put it out there.  She fell on her sword and she supported it.  Now she‘s gotten him to do the right thing and pull it back. 

I think—you know, I wonder about the polls.  I know people care about this.  But when people say it‘s important; I think it‘s important, but we disagree over exactly what the solution is.  So I don‘t think this suddenly means that anybody who favors any kind of gradual citizenship process for illegal immigrants—

MATTHEWS:  Let‘s come right back and talk about Rudy Giuliani and his problems with Judith Regan and, of course, Bernie Kerik.  You‘re watching HARDBALL, only on MSNBC.



RUDY GIULIANI ®, PRESIDENTIAL CANDIDATE:  I think that‘s a gossip column story.  The last thing in the world you want to do when you‘re running for president is respond to gossip column-type stories. 


MATTHEWS:  We‘re back with the round table.  Bob Herbert of the “New York Times,” that gossip column story, of course, that the mayor is referring to is a news story that Judith Regan, the former publisher working for Harper Collins, is suing News Corp, which owns Fox News, for 100 million dollars.  She says that she was silenced, basically, because she had this affair with Bernie Kerik and she was going to blow the whistle, so to speak, on the whole Giuliani campaign.  What do you make of that case?  What do you make of the story? 

HERBERT:  Well, it‘s not a gossip column story, it‘s a page one story all across the country.  So Rudy‘s going to have to deal with it.  We don‘t know what was really going on.  She‘s made allegations in a suit.  We have no idea whether an executive asked her not, you know, to blow the whistle on whatever.  But what we do know is that she did have an affair with Bernie Kerik.  We do know that they used the apartment that was supposed to be—that was close to ground zero and was supposed to be used by exhausted workers. 

We do know that it was terrible lapse in judgment on Rudy‘s part to recommend Bernie Kerik to be the homeland security secretary, because Rudy‘s issue is the terror issue.  The single biggest recommendation that he had to make to the president of the United States on this issue was disastrous. 

MATTHEWS:  What is your smell tell you, Joan, is this a fortune cookie opportunity for Judith Regan, who lost her career as a publisher with Harper Collins, or is there real merit to the look of this thing? 

WALSH:  You know, I read the suit this morning.  She‘s a very angry woman.  She wants money.  She wants her reputation back.  She‘s willing to do a lot to get it.  There‘s an element to that, Chris.  But I would agree with Bob.  She has tapes allegedly.  She‘s angry enough to begin to tell some stories, and I think she has stories to tell.  This is very damaging to Giuliani.  This was his big homeland security pick.  And he blew it. 

MATTHEWS:  This is the big battle of New York, Matt, because News Core has hired Howard Rubenstein, the top PR guy in New York, to handle this.  I‘m sure that Judith Regan is lawyered up to the hilt here.  This does have all the aspects of a big media lawyer echo chamber.

CONTINETTI:  Yes, it does.  For me, anyway, Chris, there‘s no there there at the moment.  She won‘t say which executive made this threat to her.  She won‘t say what‘s on those tapes, if these tapes really exist.  On the other hand, it gives you a preview of what a Giuliani presidency may be like, because all of these characters are going to come out of the New York woodwork if he‘s president and it will be the soap opera that was New York while he was mayor, except transferred onto a national stage. 

MATTHEWS:  You mean he‘s consorting with the wrong types. 

CONTINETTI:  Well, those are the types that live in New York.  Only in New York.   

MATTHEWS:  Come on. 

WALSH:  I grew up in New York.  I‘m not going to let you do that. 

MATTHEWS:  You don‘t have to hang out to Bernie Kerik and Judith Regan. 

WALSH:  I didn‘t hang out with Bernie Kerik growing up.  There are a lot of good New Yorkers, Matt.  Come one. 

HERBERT:  Those are the types that consorted with Rudy Giuliani. 

WALSH:  I‘ll give you that. 

MATTHEWS:  Bob, is this going to be front page for several days in the Big Apple? 

HERBERT:  I don‘t know if it will be front—yes, definitely in the Big Apple it will be a big story for several days.  But it‘s not so much the lawsuit.  It‘s really the issue of Bernie Kerik, terror, homeland security and Rudy, and that will be an issue throughout the campaign. 

MATTHEWS:  And the fact that this is going to trial and the preliminary hearing right before super Tuesday, when Rudy stands to win all those big states.  He‘s got a lot of states on that table at the very moment Bernie Kerik is making all the bad noises.  Anyway, thank you Bob Herbert of the “New York Times,”  Joan Walsh of “Salon” and Matt Continetti of the “Weekly Standard.”  Join us again in one hour with a live edition tonight as a Nevada judge decides whether to put O.J. Simpson on trial.  Right now it‘s time for “TUCKER.”



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