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'Hardball with Chris Matthews' for Tuesday, December 16, 2008

Read the transcript to the Tuesday show


Guests: Frank Gaffney, David Corn, Peter King, Al Sharpton, Willie Brown, Lois Romano, Jonathan Martin

CHRIS MATTHEWS, HOST: Caroline Kennedy and Dick Cheney. Sunrise, sunset.

Let's play HARDBALL.

Good evening. I'm Chris Matthews. Welcome to HARDBALL. Leading off tonight, the decision to go to war in Iraq. Did the Bush administration decide to invade Iraq whether or not Saddam Hussein had biological, chemical and nuclear weapons? Many have suspected for years that the answer to that question is yes, but we may now have gotten just the confirmation we've needed from Vice President Dick Cheney himself.

Here's part of his interview with Jonathan Karl of ABC News.


JONATHAN KARL, ABC NEWS: You probably saw Karl Rove last week said that if the intelligence had been correct, we probably would not have gone to war.



MATTHEWS: Wow. Cheney went on to say the following, quote, "I think as I look at the intelligence with respect to Iraq, what they got wrong was that there weren't any stockpiles. What they found was that Saddam Hussein still had the capability to produce weapons of mass destruction. He had the technology. He had the people. He had the basic feed stocks."

The way I hear that answer, it didn't matter to Cheney whether we found WMD or not. All that mattered was that Iraq had the capability, or as he went on to say, the intention to build those weapons. And if that's true, what was the point of all those inspections back in 2002? Were they all part of a charade? More on that in just a minute.

Plus, has Caroline Kennedy's decision to seek Hillary Clinton's New York Senate seat triggered a turf war between the Clintons and the Kennedys? Caroline certainly has the name and the money and the star power, but not everyone, certainly not some Clinton supporters, are so sure she's the most qualified candidate or that extending the living Kennedy legacy is the right thing to do.

Also, what exactly did Illinois governor Rod Blagojevich do wrong? Did he actually break the law, or is he just guilty of talking big and trying to make a back room political deal? We'll look at the case-the real legal case-against Blagojevich and whether what he did is really worse than what happens often in politics.

And getting back to living political legacies for a moment, get this. President Bush says his brother-his older brother, Jeb, should run for the Senate from Florida. And if that happens, can a White House run be far away? We'll have that in the "Politics Fix" tonight.

Plus, whether you were offended as an American by that shoe-throwing incident or not, was there ever a more perfect fodder for late-night TV?


DAVID LETTERMAN, "LATE NIGHT WITH DAVID LETTERMAN": I don't think Bush really has dodged anything like that, well, since the Vietnam war.


MATTHEWS: Well, that's just one of many. We're going to have a lot more of those shots in the HARDBALL "Sideshow" tonight.

But first, Vice President Cheney and that decision to go to war in Iraq. David Corn is the Washington bureau chief for "Mother Jones," and former assistant secretary of defense Frank Gaffney is the president of the Center for Security Policy.

Let's take a look again at the question put by Karl, the ABC correspondent, Jonathan Karl, to Vice President Cheney and his rather remarkable answer.


KARL: You probably saw Karl Rove last week said that if the intelligence had been correct, we probably would not have gone to war.

CHENEY: I disagree with that.


MATTHEWS: Well, what do we make of that? Frank Gaffney, does that surprise you? I know you're a hawk. You're on the show often. We like you on the show. We think a lot of your thinking. Is that surprising to you, that we didn't need to believe that there were weapons of mass destruction stockpiled in Iraq as a cause for war? We didn't need to believe that, we had other reasons to go to war, and they were justified?

FRANK GAFFNEY, CENTER FOR SECURITY POLICY: You know, Chris, the only thing I'm really surprised at is that you're surprised at that answer. The truth of the matter is, we went through in the run-up to the war a variety of different and compelling reasons why Saddam Hussein had to be put out of business, one of which was we believed he had the capability to marry up terrorism, which he actively supported, with weaponry of mass destruction, which he had.

And to the extent that we knew or we thought we knew exactly where he had stockpiles of the stuff was I think secondary to the danger, in particular in the aftermath of 9/11, where we had seen thousands of Americans killed by terrorists using a kind of weapon of mass destruction.


GAFFNEY: This was the kind of thing that I think the president had an obligation to put out of business. And let me just add one point. The Iraq Survey Group-you mentioned the inspections that were done...


GAFFNEY: ... the inspections that we do after we liberated the place found not only those feed stocks that Dick Cheney talked about but found plans to put the product, after sanctions were lifted, which was in perfume sprayers and aerosol cans for shipment to the United States and Europe, a clear act of terrorism that would have catastrophic consequences. And I, for one, am glad they took the action that they did on the basis of the information they had.

MATTHEWS: I know that. Let's take a look at what the president said at the time when he was building the case for war to the American people, how he sized up the need to go to war, because it very much varies, I believe, with what the vice president is now saying, that we didn't have to believe that there were weapons of mass destruction in Iraq to go to war against them, we simply had to believe they might produce them.

Here's the president making his case to us, the American people, back in '02.


GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES: America must not ignore the threat gathering against us. Facing clear evidence of peril, we cannot wait for the final proof, the smoking gun that could come in the form of a mushroom cloud.


MATTHEWS: And here's Dick Cheney laying it in clearly right before we went to war in March of 2003, saying that we're facing a country that possesses-that actually possesses-nuclear weapons.


CHENEY: And we know he's been absolutely devoted to trying to acquire nuclear weapons, and we believe he, in fact, has reconstituted nuclear weapons.


MATTHEWS: "He has, in fact, reconstituted nuclear weapons." He has nuclear weapons. That's a charge made by the vice president. We're facing a country that possesses nuclear weapons. We got to go get them, stop them. David Corn.

DAVID CORN, "MOTHER JONES": It wasn't true, and the Iraq survey report that Frank just referred to was put together by Charles Duelfer, who is a kind of a hawkish fellow picked by the Bush administration, said after the invasion, after being in Iraq, that the WMD program of Iraq had progressively decayed-and I'm quoting here-and there were-they found no evidence of, quote, "concerted efforts" to restart the program. At the time of the invasion, Saddam Hussein might have wanted to have weapons of mass destruction someday down the road, but he had no program at the time, and his capacity to produce nuclear weapons and other weapons of mass destruction had deteriorated to almost-to the extent that it was basically nil.

Now, compare that with what you just heard Cheney say in August of '02. Dick Cheney got up and said, Without doubt, Saddam Hussein is amassing stockpiles of weapons of mass destruction to use against us. All that was false. As you noted, we had an inspection program that was very robust...


CORN: ... that was ongoing in the months prior to the war, partly put in place because George Bush had threatened to go to war if there weren't inspections. But the inspections were working, and they were finding the right answer, the answer being that there was no pressing, dire WMD threat at the time, as it had been depicted by President Bush and Vice President Cheney.

MATTHEWS: Frank, that's the point that I wonder about, having lived through it and argued with it for you in all those months going to war. We went through a long period where there was a fight to get inspectors in there. We got the U.N. behind us on that. Senator Clinton and other Democrats supported that inspections regime. The whole idea was to go in there and see if they had any of these weapons.

That progressed for a bit, and then the president said, That's not good enough. We want to see a proactive program like the South African whites engaged in, where they brought out the weapons proactively and burned them in front of us so we knew they were destroying them. They couldn't just lay back and wait for us to find them in kind of a cat and mouse game.

We went through all that under the premise that we were trying to find out if a country had weapons of mass destruction. Now the vice president says yesterday to ABC, it didn't matter whether they had stockpiles of weapons of mass destruction, we were going to go to war anyway.

And my question to you, is there any way Saddam Hussein could have stopped that war once we issued that ultimatum to present the weapons? Was there any way he could have ended that war, prevented it?

GAFFNEY: Well, Chris, the conclusion of the last war we had had with Saddam Hussein was supposed to involve making a clean breast of all of their capabilities and completely eliminating them. It absolutely was not incumbent upon us to catch them out. It was incumbent upon him to demonstrate that he had, in fact, gone out of the business.

And I think David is conflating a bit the chemical program...

MATTHEWS: Well, then we...


GAFFNEY: ... the biological program, the nuclear program. Just let me finish this point, if I may...

MATTHEWS: OK, but why...

GAFFNEY: There's a conflation here, though, Chris...

MATTHEWS: ... the long inspections debate if they didn't matter?

GAFFNEY: There's a conflation of...

MATTHEWS: If they didn't matter, why did we have inspections?

GAFFNEY: There's a conflation here between the chemical, the biological and the nuclear. Where it matters, I believe, is that you had in the chemical and biological program the capacity to kill thousands of Americans, had that plan that I just mentioned that was in the Iraq Survey Group that Charles Duelfer led, been carried out, which was, I believe, imminent, had we seen the sanctions lifted.

And that's what the president was contending with, a situation that was not static but one that was moving inexorably in the direction of allowing this guy, Saddam Hussein, to get access to all kinds of technology to use not just the oil for food funds to scam everybody, but actually to tap into the mother lode that his oil revenues would enable to rebuild whatever he wanted to...


GAFFNEY: ... possibly nuclear, but certainly some of these other weapons of mass destruction programs.

CORN: You know, I don't-I go back to the facts. I mean, whatever he might have wanted to do, the Duelfer report said-I'm just quoting from "The Washington Post's" account of it-that Saddam Hussein's stockpiles had been destroyed and research stopped years before the United States led the invasion of Iraq.

GAFFNEY: That's simply wrong.

CORN: And the president-the president didn't come before...

GAFFNEY: We know that to have been wrong.

CORN: The president didn't come before the public and make the case that Frank just made-Well, he might want to do these sort of things down the road.


CORN: The president implied that he had nuclear weapons, that there were gigantic stockpiles. No, he said-on March 19, before he launched the invasion, he said there was no doubt...


CORN: ... no doubt about this. And that was just not the case. And they even knew internally that some of this intelligence...

MATTHEWS: Well, Frank, as you know...

CORN: ... was iffy.

MATTHEWS: ... I sat at this table for months as the build-up to war, criticizing the case for the war, believing it was never at all based upon the weapons of mass destruction case, and now the vice president has made my point. He said it didn't matter whether they had stockpiles of weapons of mass destruction, the war was still justified by his lights.

Do you believe, Frank-and you know the inside of the White House. Do you believe Dick Cheney supported a war resolution, supported the war in Iraq, which has cost us 4,000 troops and has costs us 30,000 wounded and tens of thousands of casualties over there-do you believe that the war had anything to do with his belief that that country had weapons of mass destruction stockpiled? Because he says it didn't. He's admitting that they didn't have to have stockpiles for him to believe the war was justified. That's what's astounding, and I'm surprised by it.

GAFFNEY: Let's be clear, Chris. Let's be clear. The danger represented by vast quantities of aging VX or other chemical agents sitting in artillery shells, I think, was less of a problem than the kind of agent that was in those laboratories, that was being prepared to be put into aerosol cans to kill people here and in Europe. That's the sort of thing that we didn't know until after we liberated the place. We now know.

And I have to tell you that while the costs have been high, I believe the costs of inaction would have been inordinately higher and that would have made us all wish we had taken the step President Bush and Dick Cheney courageously did at a time-on the basis, by the way...

MATTHEWS: The American people...

GAFFNEY: ... of the same information that everybody else had, the Democrats had, the foreign intelligence services had and everybody agreed.


CORN: At the time of the invasion, they were not producing the sort of weaponry that Frank is describing here.

GAFFNEY: We didn't know that.

CORN: But wait a second. You didn't know that, but that's the truth. It wasn't happening. You can't say we invaded them because we didn't know what they were not doing.

GAFFNEY: We did it on the basis of the information available.


CORN: ... it doesn't matter. I mean...

MATTHEWS: Well, let me ask you, Frank, does it bother you that the American people now overwhelmingly, by about a three-quarters vote, now believe that the war was wrong, it wasn't justified?

GAFFNEY: Of course it bothers me.

MATTHEWS: And now it seems like their instincts seem to be correct and their wisdom, based upon this information we have now that the case made for war was really dishonest, that the real reason for war was not that we believed that we were fighting the war because of weapons of mass destruction in Iraq, we were against (SIC) the war because we didn't like the other guy and wanted to get him out of power. That was the real reason.

GAFFNEY: No, the real reason is we thought he constituted a mortal threat to the American people and prophylactic action...

MATTHEWS: Mortal threat to the United States?

GAFFNEY: ... was necessary.


MATTHEWS: You still use this strategic language.

GAFFNEY: ... delighted that that was done.

MATTHEWS: You believe a mortal threat to the United States, an existential or strategic threat to the United States. This guy over in Iraq is still a threat to the United States. Where do you get this from?

GAFFNEY: No, I didn't say-I didn't say...

MATTHEWS: We can't find the weapons. We can't find the rationale.

GAFFNEY: I didn't say existential.

CORN: Chris...

GAFFNEY: It could be a mortal threat...

MATTHEWS: What kind of a mortal threat-what do you mean? Where do you get these words from, mortal threat?

GAFFNEY: A mortal threat-you kill American people...

MATTHEWS: That means you're going to die.


GAFFNEY: You kill American people, that's a mortal threat to the people you're killing.



MATTHEWS: Let's go with the other words. What abut the mushroom cloud?

GAFFNEY: If you know anything about biological agents...

MATTHEWS: You guys...

GAFFNEY: ... you know that they can...

MATTHEWS: Oh, we're switching to biological.

GAFFNEY: ... inflict incalculable damage.

MATTHEWS: Let me tell you, guys sold the war as a nuclear threat to the United States. A nuclear weapon was going to be delivered by a nuclear delivery device. It was going to be a vehicle. It was going to take the weapon and drop it here. You sold every trick you could to get us in this war. And now you're back-pedaling. And I do find it astounding.

GAFFNEY: You know, how do you really feel, Chris?

MATTHEWS: The vice president of the United States is admitting-well, this is how I feel, Frank. And that's not very funny.

GAFFNEY: Yes. Well, let me just tell you, I think you're dead wrong.

MATTHEWS: Four thousand people are dead because of the way you feel,


GAFFNEY: There are 4,000 people...

MATTHEWS: And Frank Gaffney, you're wrong about this...

GAFFNEY: There are 4,000 people dead...

MATTHEWS: ... because you don't even seem to care that your facts were wrong.

GAFFNEY: Chris, there are 4,000 people...

MATTHEWS: You admit your facts were wrong, and it doesn't bother you.


MATTHEWS: I have to let Frank talk. I'm sorry.

GAFFNEY: May I just try to state my position, rather than you state it, Chris?

MATTHEWS: Go ahead, Frank.

GAFFNEY: May I do that?

MATTHEWS: No, you-go ahead.

GAFFNEY: My position is, it is regrettable that any Americans died.

It is regrettable that they had to die, but I believe they did have to die. The threat we did know about was the chemical capability that Saddam Hussein had used against his own people.

MATTHEWS: We knew that.

GAFFNEY: The potential for biological agents were real. There was evidence that there was an ongoing nuclear program. We had been surprised at how far advanced it was before. The danger was, inaction could have resulted...


GAFFNEY: ... in the death of a great many more Americans than 4,000.

MATTHEWS: Let's get the facts right. It's very important people don't get the facts wrong.

GAFFNEY: That's the reason I'm still delighted that we did what we did.

MATTHEWS: What happened between the danger and the genocidal act by Saddam Hussein against the Kurds occurred before the first Iraq war. We fought that war. We threw them out Kuwait. We ended that war. Now you're going back to a horrible incident that occurred before the first Iraq war to justify the second Iraq war. It makes no sense sequentially or logically, and the American people don't buy it, Frank.

GAFFNEY: Well, here's the-here's the...

MATTHEWS: And now the vice president has admitted...

GAFFNEY: Here's the logic, Chris...

MATTHEWS: ... that he would have fought the war...

GAFFNEY: Can I just explain the logic?

MATTHEWS: ... absent his main case...


MATTHEWS: ... absent his main case, which was nuclear weapons.


CORN: But wait a second. Wait a second, Frank. The nuclear weapons

it's important to remember there were, indeed, nuclear inspectors. And they had already said by the invasion started that they had found no evidence to back up the claim that there was even an ongoing nuclear program. In fact, the key issue, you might remember, were those aluminum tubes.


CORN: Cheney talked about them on "Meet the Press." The "mushroom cloud" was often done in reference to that. You know, you go back and read the book that I wrote with Mike Isikoff, "Hubris," and we go throughout, you know, A through Z. The tubes, the best experts in the government, the guys who worked in the Department of Energy and nuclear labs...


CORN: ... all said they're not for nuclear weapons. There was one analyst in the CIA. And Condi Rice and Dick Cheney, all they had to do was read the intelligence...


CORN: ... look at stories in "The Washington Post" to know that they had no case on the nuclear front.

GAFFNEY: There were disagreements at the time, David. And hindsight is 20/20. The difference that...

CORN: No, I'm talking about what was happening at the time, Frank.


GAFFNEY: No, but at the time-there were nuclear inspectors looking for Saddam Hussein's nuclear program before Desert Storm.


GAFFNEY: They didn't find anything then.

CORN: But before the invasion they didn't find anything.

GAFFNEY: They were surprised afterwards that he had a bomb that was a year away from being able to use.


GAFFNEY: That's the reality.

MATTHEWS: David Corn, thank you.

MATTHEWS: That's the logic of where this all fits together, Chris.

MATTHEWS: I don't think this debate is over, Frank. But thank you, and merry Christmas, buddy, and happy new year.


MATTHEWS: I do think it's stunning, what the vice president said the other day because many people supported the Iraq war, I mean people in the middle, supported this war because they believed that America was threatened by nuclear-a possible nuclear attack from Saddam Hussein. I believe that was the reason that sold the war to the middle of the country politically. And now to step back and say, Well, it didn't matter, they didn't have any nuclear weapons over there...

GAFFNEY: Nobody's saying it didn't matter, Chris.

MATTHEWS: ... they didn't have nuclear stockpiles. Yes...

GAFFNEY: No, they're not. They're saying that...

MATTHEWS: The vice president said...

GAFFNEY: ... the capability mattered.

MATTHEWS: ... he would have fought the war otherwise.

GAFFNEY: The capability mattered.

MATTHEWS: We would have fought the war-you know, capability is not the case that was made. It was presence of stockpiles of weapons of mass destruction. That was the case made by the leaders of this country.

GAFFNEY: Which we thought was the case at the time.

MATTHEWS: And you were wrong.

CORN: There was plenty of evidence...

MATTHEWS: And the fact is...


GAFFNEY: The capability was there. That's what we were right about.

MATTHEWS: The utter shamelessness of Dick Cheney, as our vice president, not to admit he made a major mistake that caused a war that wouldn't otherwise be justified by the lights of the American people is profound. That's why I brought it up tonight.

Anyway, we're going to get back to a lesser important issue. Will Governor David Paterson of New York name Caroline Kennedy to Hillary Clinton's Senate seat? And is there any danger of replacing one living political legacy with another?

You're watching HARDBALL, only on MSNBC.


MATTHEWS: Welcome back to HARDBALL.

New Yorkers are voicing their opinions, some of them loudly, about whether Caroline Kennedy should be their next U.S. senator, replacing Senator Hillary Clinton.

Joining us now is Republican Congressman Peter King, who may run for that seat himself in 2010, and the Reverend Al Sharpton, who endorsed Kennedy's bid on Monday.

Peter, it's great to have you on.

Congressman, what do you think of the Hillary Clinton-potential appointment for U.S. senator to replace Senator Clinton?


Listen, I have nothing Caroline Kennedy. But, to me, she's never been involved in government, in politics. She's never been in the arena.

She's, I assume, a very intelligent woman. But I would think that a senator from New York just to be appointed from nowhere, without any real prior experience, I-I think it's wrong. I think there's a lot of qualified Democrats. Obviously, I think there are some qualified Republicans. And, so, I-I don't think it's going to go over that well.


What do you think, Reverend Sharpton? Does Caroline Kennedy look good as a potential U.S. senator from New York, or not?

AL SHARPTON, CIVIL RIGHTS ACTIVIST: I mean, I think that-I talked to her yesterday, when she called. I have not said who I'm endorsing. I have said very loudly and clearly I think she's very qualified.

I remember, when Hillary Clinton came to the state, she came to our National Action Network headquarters in Harlem. People said the same things that Congressman King just said, that she never had held elective office, she hadn't been involved in government and politics directly. She wasn't qualified.

She not only proved to be a good senator. She won elections. She was reelected overwhelmingly, and got 18 million votes for president, even though I supported Senator Obama.

So, I think that we have gotten past that accusation of not having qualifications with Hillary Clinton. Caroline Kennedy has been involved in education in this city. She has done concrete things and has produced things in the-in the city of New York around education. She's brought more tangibles probably into the state and in the city than Senator Clinton had done before she ran.

So, I think that it's-in my judgment, I think it is absurd to act as though, if you-if you don't hold elective office, that you're not qualified for public service. That, to me, is not what the Constitution says. And I don't think that's what the people of New York will say.

MATTHEWS: Congressman King, I have to tell you, I'm stunned at what's going on here. I'm as much in the-the glow of the Kennedys as anyone, I suppose, but I'm amazed that there's a possibility that she will be appointed, rather well-rather quickly, perhaps, by Governor Paterson to fill that seat, without having really made a public case for that appointment, in other words, no speeches, no statement, no memorable lines, no quotable quotes.

She may be the most successful politician in history, because she hasn't said anything yet. Does that astound you?


MATTHEWS: I mean, maybe-maybe we're used to this about the Kennedys. I find it wondrous.


MATTHEWS: Maybe it's a different thing.


MATTHEWS: Maybe it's almost sacramental that she's getting this job.

KING: Well, I hope not.

Listen, that's where I disagree with Al Sharpton. Al talks about Hillary Clinton. The fact is, Hillary Clinton had to campaign on the ground for a year-and-a-half before she was elected to the Senate. She spent all of 1999 on the listening tour, if you call it, and then a very tough campaign in 2000.

She wasn't appointed or anointed to anything. And I would think, the average New Yorker, when we face threats from terrorism, when we face severe economic issues, are they going to look at someone, how does she identify with their problems? You know, what mortgages has she paid? Did she ever work her way through school? Did she ever, again, have to do the things that ordinary New Yorkers, day-to-day New Yorkers, have had to do?

No, she's hasn't. And, yet, she's coming in on a name, which is a very good name. But I don't think that qualifies her to be president (sic). I don't say you have to be in elective office or even be a politician. You can be a business leader or a labor leader, a civil rights leader, like Al Sharpton.

But, again, I assume she's a very good mother. And she lives on the East Side of New York, on the Upper East Side, and she goes to society events. But I don't see how that qualifies her to be a United States senator.

MATTHEWS: This is shaping up, Congressman, as sort of bridge and tunnel guy against the Manhattan elite. That's the way you make it sound.


MATTHEWS: Is that the kind of a campaign it's going to be?

SHARPTON: I don't think that's going to be it at all.

MATTHEWS: A silk stocking candidate against one of the guys from the boroughs? Is that what it is going to be?


MATTHEWS: I mean, it might work for you. It might work.


KING: Yes, it may. Listen, I grew up in Queens. My father was a cop. I went to college and high school in Brooklyn. I lived in the same house for 40 years.

I mean, I have done the things that ordinary New Yorkers have done. And, you know, listen, I'm not into class warfare. You can be very rich and also know what goes on in the real world. I don't know what contact that Caroline Kennedy has ever had with the real world, other than be up on Park Avenue.

SHARPTON: Well, I don't think that's the race.

First of all, I'm not here speaking for Caroline Kennedy. I'm here saying she's qualified. But, if I was to answer that, I think that, if you look just today, Chris, President Obama said the most important thing in this country is education. He appointed the education secretary.

There's no one in this state that has been more involved in the trenches on this issue and has delivered on this than Caroline Kennedy. So, I don't know what he's talking about, about everyday life.


SHARPTON: There's nothing more important than what she's done in education.

And I think that, if there is a campaign with Caroline Kennedy-and that's up to the governor-and Peter King, it will not be about a tunnel and bridge guy against the East Side. It will be about a McCain Republican against an Obama Democrat...


SHARPTON: ... trying to deal with the future of how we recover the economy that Mr. King's party has put us into this kind of situation.


When Ted Kennedy ran for the Senate, Congressman-you remember this story, probably, because you study...


KING: Right. Very well, yes.

MATTHEWS: Remember the great story that Eddie McCormack was running against him, and the nephew of the speaker of the house said, if your name was Edward Moore, you wouldn't have a chance at this job.

What do you think of the idea of legacies? I don't like dynasties, because they're not running the country, but you have got legacies that Jerry Brown replaced Pat Brown out in California. Chris Dodd replaced Tom Dodd. You know, you got George W. Bush replacing George Sr.

It seems to me like we do tend to elect a lot of people simply because of their blood. Is that a good or bad thing in itself?

KING: Yes, I'm not in favor...


MATTHEWS: Your thoughts. As an Irish guy, do you think there's something basically wrong with this notion of election by blood?


MATTHEWS: I'm serious.

KING: Well, I don't like the idea of...

MATTHEWS: I think some people vote that way.

KING: No, I agree with you. No, they do.

Chris, listen, I have heard you the last few days say how you were in love with Caroline Kennedy and you wanted to marry her...




MATTHEWS: I said every kid-every kid of a certain-don't get me in that one again, Peter. You're just getting me in trouble again.


MATTHEWS: I said every kid of a certain age-oh, you're just looking for trouble.

Go ahead. Go ahead. Go ahead.


MATTHEWS: You tell me whether you were in love with her. Don't bring me into this thing.


KING: No. No, no.

As far as legacies, I have no problem with a son or a daughter of a famous politician running for office, if they run, if they have shown something along the way.

I mean, for instance, you mentioned-you mentioned Chris Dodd. Chris was in the Congress before he ran for the Senate. I mean, many people have followed their parents. Hopefully, my son or daughter may run for office some day.

But the fact is, you don't just come from being totally out of the system and jumping in. I mean, Al talks about education. Yes, she raised money. But, New Yorkers, yes, we have New Yorkers raising money for different causes. She wasn't out teaching in inner-city schools. She wasn't out working with the kids in the streets.

SHARPTON: She ran a program. She ran a program that trained young people, that trained principals. She more did more than just raise money, first of all.


KING: She didn't do it herself. She didn't do it.


SHARPTON: Second of all-second of all, let's be fair, Congressman King.


KING: Yes.

SHARPTON: And I think you will be a formidable candidate, if you run.

But let's be fair. The reason she's going to be selected, or whoever is selected, is because the seat is available. She didn't choose to just come in. We ended up with the governor having to retire-or resign.

MATTHEWS: OK. OK. Gentlemen...

SHARPTON: So, whoever gets this is going to be brought in.

MATTHEWS: Gentlemen...


SHARPTON: And, in terms of legacy, I wish you had felt that way when George Bush was running. I wish you had said then we shouldn't be dealing with dynasties.


MATTHEWS: I-I think it's a great argument. It's an argument going on in the streets of New York.

KING: Well, actually, in 2000, I supported John McCain.

MATTHEWS: Thank you, sirs.

KING: Absolutely.

MATTHEWS: Thank you, New York Congressman Peter King of New York State.

And, Reverend Al Sharpton, thank you, with the Action-Urban Action Network.


KING: Thank you.

MATTHEWS: Up next: President Bush ducked when that Iraqi reporter-if that's what you call him-threw a shoe at him. And, no matter what you thought of that incident, the late-night comedians are having a field day. We have got the laughs from "Leno" and "Letterman" and the rest of them next in the "Sideshow."

You're watching HARDBALL, only on MSNBC.


MATTHEWS: Back to HARDBALL. Time for the "Sideshow."

First up: the shoe toss seen round the world. In case you missed it somehow, here's the original incident, followed by last night's late-night reaction.


JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": Did you see what President Bush did? Did you see what-did you see what he did, though, to keep from being hit, something he's never done before? Lean to the left.


LENO: He's never done that before.


LENO: Now, here's my question. Now, no offense here, but where was the Secret Service?


LENO: I mean, shouldn't they at least have jumped in front of the second shoe?


LENO: See, that's when Bush realized he was on his way out, when the Secret Service was going, yes, we're guarding the new guy now.





DAVID LETTERMAN, HOST, "THE LATE SHOW WITH DAVID LETTERMAN": But you have got to give Bush credit. I mean, the guy-the guy moved pretty quickly. He moved pretty quickly.


LETTERMAN: Too bad he didn't react that way with bin Laden, or Katrina, or...



LETTERMAN: ... bin Laden, or the mortgage crisis, or bin Laden, or...



LETTERMAN: ... or bin Laden, or Lehman Brothers.

I don't think Bush has really dodged anything like that-well, since the Vietnam War.





While President Bush emerged unscathed, it turns out his press secretary wasn't so lucky. You can see Dana Perino there sporting a black eye during this morning's White House briefing. She was hit by a microphone on Sunday when a Secret Service officer rushed to help the president.

Now to tonight's "Big Number."

According to the online betters over at the Ireland-based, what are Caroline Kennedy's real chances of getting Hillary Clinton's Senate seat from New York? Eighty-eight percent. That's the Irish betting odds. And it goes international. In this case, the Kennedy name goes a long way, especially in Dublin. The oddsmakers say Caroline has got nearly a nine-in-10 chance, 88 percent, of getting that New York Senate seat.

That's nothing's "Big Number," a pretty good number.

Up next: How strong is the case against Illinois Governor Rod Blagojevich-by the way, try to spell it-and, specifically, in the case of Obama's Senate seat? Did the governor actually commit a crime? And was it just-or was it just political deal-making? We want to be very specific when we come back. Did he break the law or just get caught talking really brutally about the deals he was cutting?

You're watching HARDBALL, only on MSNBC.


MARGARET BRENNAN, CNBC CORRESPONDENT: I'm Margaret Brennan with your CNBC "Market Wrap."

Stocks rallying after a historic interest rate by the Federal Reserve. The Dow Jones industrial average soared 359 points. The S&P 500 gained 44, and the Nasdaq up by 81-and-a-half.

The Fed cut a key interest rate to a target range of zero to a quarter-percent. That's a record low. In addition, the Fed says it expects interest rates to remain low for-quote-"some time." It's also going to expand its purchase of mortgage securities in order to boost the housing market. And it's considering other measures to help the economy.

The Fed action followed news that housing starts plunged in November by the largest amount in a quarter-century. It also followed more evidence of deflation, a disruptive drop in consumer prices. Those prices fell 1.7 percent last month. That's the steepest decline on record.

That's it from CNBC, first in business worldwide-now back to Chris and HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

Illinois Governor Rod Blagojevich talked about wanting something in return for the appointment of Barack Obama's Senate seat, but did he cross the line from political deal-making to actual criminality?

Pat Buchanan is an MSNBC political analyst. And Willie Brown is, of course, the former mayor of San Francisco and, much more illustriously, the former speaker of the California Assembly. Of course, both titles are high, indeed.

Mayor Brown, thank you, now that I have warmed you up.

What did you think when you watched Blagojevich, or learned the description and the complaint of his behavior by the U.S. attorney, Fitzgerald? Did you sense something clearly criminal in that behavior?


As a matter of fact, I thought it very odd and very strange that a U.S. attorney would do what was done on the air and in the way in which he made the presentation, including his comment about what he thought President-late President Lincoln would do.

I think it was all part of raising the bar level to force this guy out of office.

MATTHEWS: Pat, do you believe that he was caught in criminality? I raise a couple of cases. One is the evidence, whether it has to be verified in court or not, that he was going to shut down aid to a children's hospital because somebody didn't fork over some pay to play money, some campaign money he had committed to. Is that evidence? Is it evidence by saying I want my wife to get a job or I want a job in a labor union or a group set up by a labor union in a three-way deal? Is that illegal?

BUCHANAN: Look, let's just take the hospital thing. If he says, look, those people have never been friendly to us; why should we send money to those folks, no, I'm going to veto it. I think that's just normal political hardball, excuse me, Chris. As for what Blagojevich-first there was no act consummated here. Secondly, I think there was contemplation, frankly, of something pretty close to selling the Senate seat.

But there's a difference between a sin and a crime. And I think, A, they pulled the trigger too early. Now, if he had given someone that Senate seat, and two nights later, they're running fund raisers for him, and he calls up and says, you're 300,000 short, I think you might have something there in terms of selling an office. But I think he pulled the trigger too early. I don't think Blagojevich is ever going to be prosecuted or convicted. Maybe he'll be prosecuted, but convicted for this crime.

MATTHEWS: The federal crime, of course, is wire charge. It's conspiracy to deny the citizens of Illinois the rightful duties of a public servant. Another words, it's very vague, abstract language, but it says basically, you can't sell your office, mayor. Do you believe that a public official is entitled to cut a deal, regularly, in this case a series of events, whereby that official, a governor, says if you want to help get anything from me, including a Senate seat, fork over either big campaign money, personal gratuity to me in terms of a job for life of some kind in a labor union, a job for my wife, or whatever. Do you think that's legitimate?

BROWN: No, you can't do that.

MATTHEWS: That's what he's caught doing, isn't it?

BROWN: No. That's what's out there. You have to wait for the evidence. You can't condemn this man based on what Fitzgerald put out there, based upon what's been out there from other persons. This man is entitled to-before a criminal jury of however he chooses-to be heard and face his accusers. The business, however, of asking generically if he did these things for these reasons, would that be a crime: absolutely, they would be a crime. But you cannot say the evidenced shows that.

BUCHANAN: OK. I'm not sure. Suppose Blagojevich said, look, Rahm, I want to work with the president-elect on this Senate seat. You've got a lot of good folks. I've got some good folks. But look I want to continue public service, too. I think I'm cabinet material. I'd like to be ambassador to the Balkans, somewhere like that, where my ancestors are from. So can we work together? Is that criminality? No. That is deal-making, Chris. I just don't think that's criminality.

MATTHEWS: How about for 500 --

BUCHANAN: If you're talking about money for me-

MATTHEWS: He wants 500,000 bucks in what he calls tangible up front.

What does that mean to you, tangible up front?

BUCHANAN: If he means money in my pocket, that's bribery.

MATTHEWS: How about a million bucks in campaign contributions to get me elected.

BUCHANAN: Look, if the president-elect can help me raise some money to get me reelected-I'm going to need three or four million-we'd be happy to talk to you. I don't think you can convict on that basis, Chris. Now, maybe it is a crime in his heart. But, again, I don't think you can take that to a jury and convict, because we've got all these folks-How did Pearl Mesta (ph) get the ambassadorship?

MATTHEWS: Let me ask you-What I've discovered in talking to attorneys, Mr. Mayor-you're an attorney as well-that if you want to give money to a candidate and you're hoping to get a nice ambassadorship, fine. If you get the nice ambassadorship after giving a ton of money, fine. But you cannot sit in the room and say, I want Brussels or I want Beijing-I say it like Pat Moynihan, Brussels. If I want that, I'll give you this money. If you get caught doing that on tape, that's a crime, I'm told. It's illegal to purchase public office with campaign money. Is that your understanding, Mr. Mayor?

BROWN: It is illegal to purchase campaign office, period, or any other form of office when it has to do with public responsibility. It's totally illegal to do that. But this is not yet what has been established as facts. The kind of facts that's been established so far clearly raises questions about whether or not any illegal conduct took place.


BUCHANAN: They used to say Luxembourg is 250,000.

MATTHEWS: Well, let's not get into names here. Let me go-Mr. Mayor, let's ask this question, suppose you're in the legislature and you're sitting in that body where you sat in California, but you're sitting in Springfield, Illinois, and you've got a governor in this situation right now. Do you let him continue in office and make the appointment of a U.S. senator, or do you impeach him based upon-this is the evidenced you've got, what we've got here.

BROWN: The evidenced that's been presented, in my opinion, is not-cannot be used for impeachment purposes. You've got to get some facts that are more actionable than what's been stated on the tube.

MATTHEWS: The only trouble is he can send a certificate of appointment of the next senator of Illinois and no one can stop him right now. Isn't that a problem, Mr. Mayor? Pat, let me go to Pat on that. Is that a problem? Blagojevich could just go ahead and write down a note, I appoint blah blah blah, this person the next United States senator from Illinois, send it to the United States Senate. Who's to stop him?

BUCHANAN: No one is to stop him. He has the power. He is still governor of the state of Illinois. Look what Willie's talking about. Chris, we talked about the NAFTA vote. Clinton went in there, somebody got a C-5 -- build the C-5A in your district, that's the price of your vote. People do that all the time.

MATTHEWS: I know they do. Thank you, Pat Buchanan. Thank you, Willie Brown. We're trying to finally judge justice here.

Up next, what does Barack Obama know about his staff's dealings with Governor Blagojevich? We're going to check on that. Let's not assume anything here. But there are questions that are outstanding. Dozens of phone conversations between Rahm Emanuel and the governor's office. What happened in those conversations is going to be an issue in the next couple of weeks as we find out the answer to that question. The politics fix is next. This is HARDBALL, only on MSNBC.


MATTHEWS: We're back with the politics fix. With us tonight, "the Politico's" Jonathan Martin and Lois Romano, who writes for the "Washington Post." Lois, I know you're into this story, my buddy. This is one of the great stories that requires no score card. It is the Kennedys meeting some kind of head wind from the Clinton forces. It is not clear. But now Senator Clinton has sent word, we're told, to her peeps in New York, lay off Caroline. Give her a break. Don't get in her way. What are you hearing?

LOIS ROMANO, "THE WASHINGTON POST": She has to do that. Yes, that's exactly right. I think, initially, Hillary was hoping to hand pick her successor. And this takes her out of that line right now. And I think that was a little disappointing to her and her people. They had a machine. They wanted to be deal makers. And basically, Caroline Kennedy has just leap-frogged over that and it has almost made Hillary Clinton irrelevant to this process.

MATTHEWS: I didn't know this, Lois, and you're ahead of me here. Did Senator Clinton have a name in mind? I remember Nita Lowey before had sort of stepped aside when she came in so dramatically back in 2000 for that seat. Did she have someone in mind as a successor?

ROMANO: Well, I don't know that for a fact. But I had heard that she had gone back to Governor Paterson and put a word in for Nita. Then I heard she had also made another phone call and talked about some other women. I think she was very interested in having a woman in the seat. What we don't know is if Caroline and Hillary Clinton talked. And I would be very surprised if they didn't. Caroline seemed like she did a blitz yesterday. She wanted-she's very smart that way. She probably crossed every T. And I'm sure she called Hillary Clinton yesterday.

MATTHEWS: I'm wondering. Hillary certainly earned that seat up there in New York, Jonathan. She went up there and campaigned in upstate New York and all that. We know that amazing story. The sense of ownership, I have seen any actual evidence that she felt she owned that seat and had a right to any kind of property rights on it. But there was that weird buzz out there, maybe out in the ether and totally irresponsibly, that President Clinton might want that seat. I don't there's any evidence of that either.

JONATHAN MARTIN, "THE POLITICO": She did like Nita Lowey, but the fact is Nita Lowey took herself out of the seat. Democrats recognize that they're going to have to spend a lot of cash to keep this seat. Consecutive elections, 2010 and 2012, and so who can do that? Well, Caroline Kennedy pretty much solves that problem right there, Chris. Not only can she sell fun, but she can raise money like almost nobody else in this country can. That makes her pretty attracted.

I've been shocked. Where is the resentment from the House delegation? If you're a Democrat in this House delegation, why aren't you more upset about the fact that Caroline Kennedy is waltzing in here and perhaps being given this seat? There is not that much out-burrow or sort of upstate resentment. I thought, Chris, at this point, it would be much more severe.

ROMANO: We don't know that they're not upset. Who is going to say it?

MARTIN: They're being quiet though.

ROMANO: But nobody is going to take on Caroline Kennedy.

MARTIN: Why not?

ROMANO: They're just not. The big thing for Caroline Kennedy is she has to show that she can run for the seat, not just be appointed to it. Her history has been that she has not liked campaigning. She has not liked being public. Hillary was a carpetbagger, but everybody knew she had sharp elbows and she could get in there with Rudy Giuliani. We have to see that with Caroline. She needs to get in front of the voters very soon.

MATTHEWS: Well, that's a great point. We'll pick up on this again tomorrow night. We'll be right back with Jonathan Martin and Lois Romano to talk more about the Bush family. Everyone thought they were out of it politically, with the president with such low esteem right now. But now Jeb looks like a sure shot for senator from Florida and maybe on to the White House after that. Times change quickly in this country. You're watching HARDBALL, only on MSNBC.


MATTHEWS: We're back with Jonathan Martin of "The Politico" and Lois Romano of the "Washington Post" for more of the politics. By the way, congratulations again to "The Politico." You guys are one of the winners in this election season. Here's what President Bush said to Real Clear Politics about his brother: "he would be an awesome U.S. senator. I think Florida would benefit a lot. I think the country would benefit a lot. I think the Republican party would benefit a lot. He's a proven leader who, when give responsibility, succeeded." Lois, your thoughts about Jeb Bush.

ROMANO: Well, let's all remember that Jeb was supposed to be president. He was the heir apparent and nobody thought the son they called Junior back then was going to run. So I think now Jeb needs a job. He needs to come back. He's been kind of out of it a little bit. And his brother was trying to take care of him.

MATTHEWS: You are so tough. Your thoughts, Jonathan. I think Jeb has real political appeal down there, the way he handled the hurricanes. He does have huge numbers. It's not like his brother.

MARTIN: Folks from Florida do separate the Bush brothers. He does have a strong political standing in that state. And the base of the Republican party in Florida loves Jeb Bush. There are a lot of folks, Chris, in Washington, D.C., who say, if his last name wasn't Bush, he would have been the obvious candidate this year and certainly would be an obvious candidate for 2012. I think he'll be a formidable candidate, will probably clear the field. But like with Kennedy, it raises the question, Chris-call it a dynasty, call it a legacy, but where does it end? Or does it end?

MATTHEWS: Well, I just don't know if it ends here in the near future. Lois, I can see Jeb Bush coming back in eight years. Anything is possible in this country. We're a very fickle country.

ROMANO: Absolutely. And there will be a Democrat in there in between. And people forget, when George Sr. left office, his popularity was not very high. And yet everybody remembers him very fondly now. And George W. got elected. I didn't mean to suggest that Jeb was not talented and a very good politician. Just the opposite, that he was the person that was supposed to become president. He was the politician. He was the intellect. He was the guy who did well. And so I think now it is just his time to come back again.

MATTHEWS: We never know why we like people. I've always liked Jeb Bush, so I can't quite explain it. Jonathan, thank you very much, Jonathan Martin and Lois Romano. Join us again tomorrow night at 5:00 and 7:00 Eastern for more HARDBALL. Right now it is time for "1600 PENNSYLVANIA AVENUE" with David Shuster.



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