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updated 7/5/2007 2:54:10 PM ET 2007-07-05T18:54:10

Guest: Joe Wilson, Bob Bennett, Kate O'Beirne, Ryan Lizza, Pat Buchanan,

Norman Pearlstine, April Ryan

CHRIS MATTHEWS, HOST:  President Bush hints at a full pardon for Scooter Libby.

Let's play HARDBALL.

Good evening.  I'm Chris Matthews.  Welcome to HARDBALL.  Today, President Bush escalated the Scooter Libby matter by openly suggesting that he might pardon him, giving him a full pardon by the end of his term.  President Bush has now avoided any direct testimony by either his vice president or the vice president's chief of staff in that big federal case involving the nuclear case the president made for going to war with Iraq.  Scooter Libby refused to testify in that case.  The vice president refused a chance to defend his chief of staff in that case.  And now, having commuted Libby's sentence, the president and his people have refused to say what role the vice president played in that decision to commute the sentence.

Thanks to Mr. Libby's refusal to come clean, what the prosecutor called his decision to throw dirt in the umpire's face, she was charged with perjury and obstruction of justice.  But because of Libby's stonewalling, we didn't get the truth going into the trial, and now, thanks to the president's commutation of the prison sentence, we're not likely to get the truth coming out of that trial.

Thanks to the way things have turned out, the president now has a lockbox on how he and his vice president sold us into this war.

Former ambassador Joe Wilson, the man at the very center of it all, will be here.  But first, HARDBALL's David Shuster has the big report.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, HARDBALL CORRESPONDENT (voice-over):  Late Monday night, just hours after President Bush decided to keep Scooter Libby out of prison, Democrats took aim at the Bush White House and unloaded.

Sen. JOSEPH BIDEN (D-DE), PRESIDENTIAL CANDIDATE:  Look what he did today with Scooter Libby.  He commuted the sentence.  He commuted the sentence!  Now, you know, that is what you might call tone deaf, or brain dead.  One of the two.

SEN. CHUCK SCHUMER (D), NEW YORK:  One of the greatest principles in America which the Founding Fathers fought for was equal justice under the law.  And this evening, the president completely trampled on that principle.

WILSON:  Fueling the outrage is the evidence from Scooter Libby's perjury and obstruction trial that Libby took actions on the CIA leak case on behalf of Vice President Cheney.  Today, in an editorial called "Soft on Crime,” "The New York Times” stated that President Bush, quote, "sounded like a man worried about what a former loyalist might say when actually staring into a prison cell.”  Today, the president explained the Libby decision this way.

GEORGE WALKER BUSH, PRESIDENT OF THE UNITED STATES:  But I felt like the 30-month sentencing was severe and made a judgment, a considered judgment that I believe is the right decision to make in this case, and I stand by it.

WILSON:  The president also said that he is not ruling out giving Libby a pardon to wipe away the felony record.  At the White House press briefing today, spokesman Tony Snow was barraged with questions, and some of the sharpest exchanges were about the vice president.

QUESTION:  Did the vice president weigh in?

TONY SNOW, WHITE HOUSE PRESS SECRETARY:  I don't know—my guess is that—I don't have direct knowledge, Ed, but on the other hand, the president did consult with most senior officials.

KELLY O'DONNELL, NBC CORRESPONDENT:  Did he ask for the president to spare his friend?

SNOW:  You know, we never, as you know, Kelly, talk about internal deliberations.  Nice try.

WILSON:  Later, NBC's Kelly O'Donnell tried again.

SNOW:  ... plea that somebody may make.

O'DONNELL:  ... that the public deserves to know if the vice president asked the president to use his constitutional authority to spare his former aide and longtime friend (INAUDIBLE) prison.

SNOW:  Well, let me put it this way.  The president does not look upon this as granting a favor to anyone.

WILSON:  Ambassador Joe Wilson has declared the Libby action is part of a presidential cover-up.  Snow's reaction?

SNOW:  Well, number one, there is still considerable controversy about the facts of the case, including Joe Wilson's veracity.

SNOW:  Snow's veracity, though, came under fire as he kept repeating that Libby's 30-month sentence was excessive.

SNOW:  I think if you took a look at the trial record, at what the parole commission recommended, that what the parole commission recommended was highly consistent with what the president thought was an appropriate punishment here.

WILSON:  But reporters noted the parole commission actually recommended that Libby get at least 16 months.

SNOW:  There's a range of—what you're taking a look—this gets very complicated.

WILSON:  Snow appeared to lose his cool as reporters asked about convicted felons who want what Libby has now.

QUESTION:  There are more than 3,000 current petitions for commutation

not pardons but commutation—in the federal system under President Bush.

SNOW:  Right.

QUESTION:  Will all 3,000 of those be held to the same standard that the president applied to Scooter Libby?

SNOW:  I don't know.

WILSON:  Then Snow was pressed on whether the administration owes the American people an apology for blowing the cover of a covert CIA agent.

SNOW:  It's improper to be leaking those names.

QUESTION:  (INAUDIBLE) it's improper.  So you're saying someone—someone in this administration owes the American public an apology.

SNOW:  I'll apologize.

QUESTION:  Tony...

SNOW:  (INAUDIBLE)

QUESTION:  No, it's done.  And that's flippant.  That's a very flippant way of doing something.  It's a very serious matter.  That's very flippant.

WILSON:  Several years ago, former president Bush seemed deadly serious when he talks about the damage done to the CIA when agents are outed.

GEORGE HERBERT WALKER BUSH, FORMER PRESIDENT OF THE UNITED STATES:  I

have nothing but contempt and anger for those who betray the trust by exposing the name of our sources.  They are, in my view, the most insidious of traitors.

WILSON:  And complicating the CIA leak case for this President Bush is the statement he made early on in the investigation.

BUSH:  And if there's a leak out my administration, I want to know who it is.  And if the person has violated the law, the person will be taken care of.

SHUSTER (on camera):  Democrats argue Scooter Libby has been "taken care of,” all right, by not having to go to prison, and it has the Bush White House and the president's political party facing charges of cronyism and hypocrisy.

I'm David Shuster for HARDBALL in Washington.

(END VIDEOTAPE)

MATTHEWS:  Thank you, David.  By the way, later in the show, we're going to have that woman in the red dress who was so tough on Tony Snow.  Her name is April Ryan.  She'll be on the show in just a few minutes.

But earlier today, I spoke with Ambassador Joe Wilson about the decision to commute Scooter Libby's prison sentence.

(BEGIN VIDEOTAPE)

MATTHEWS:  Ambassador Wilson, Tony Snow, the president's spokesman, today said that you have a veracity problem.  They don't trust you.  What do you make of that?

JOE WILSON, HUSBAND OF EX-CIA OPERATIVE VALERIE WILSON:  Well, I certainly don't know what they're talking about.  After all, it was Mr.  Libby who was convicted of lying, perjury and obstruction of justice, and it's the president of the United States who's decided that he would commute his sentence, thereby raising the very real suspicion that he's participating in a cover-up and an ongoing obstruction of justice.  So I don't know what they're talking about.

But they have been trying to make this about me from the very beginning, when, in fact, it's about them.  It's about the lies they used to justify the war.  It's about the betrayal of national security and the leak of a covert CIA officer's identity to the press.

MATTHEWS:  OK, let's talk about those important things, then.  Let's talk about the war and how history is going to write this episode, which may conclude with this commutation of Scooter Libby's sentence today.  Start with this.  What  was the vice president—Dick Cheney—what was their role in selling the war, especially the nuclear piece of this war, of why we went to war?

WILSON:  Well, all I can do is speak from personal experience.  And when I went out to the CIA in February of 2002, at which the question was asked, How do we answer the question posed by the office of the vice president about allegations of uranium sales from the West African nation of Niger to Iraq.  I was asked during that meeting whether I would be willing to go out and look into that allegation in Niger.  I said, and the record bears this out, that I didn't see any particular reason to do so because we had a competent embassy there, but if I was asked by my government, I would be happy to do it.

MATTHEWS:  And so you determined, what, that there wasn't an effort by Saddam Hussein to buy uranium materials?

WILSON:  I spent eight days out there.  I spoke to everybody that I knew.  Mine was one of three reports that were submitted, all of which said there was nothing to this particular allegation.

MATTHEWS:  OK, let me ask you about this question.  When did you sense that the White House was trying to destroy your reputation?

WILSON:  Well, it was pretty clear to me shortly after I wrote my article, when Mr. Novak spoke to a friend of mine on the street and said that, Wilson's a "blank,” and his wife works for the CIA, that the nature of the smear campaign they were going to run against me was going to include the betrayal of her identity as a covert CIA officer.  And that would have been around July 8 or July 9.

MATTHEWS:  And so by your testimony here on this program and before in other arenas, you're making a case that the vice president basically used misinformation to sell the country on the war with Iraq, especially nuclear piece.  There wasn't a nuclear case, right?  You believe that?

WILSON:  Well, what I have said repeatedly is not—the vice president asked what I believe was a legitimate question.  If you're senior enough to ask a question, you're senior enough to get the answer.  That question was relayed to the CIA from the office of the vice president.  I was told it was the office of the vice president that asked the question.  It was only later that the vice president himself told Mr. Russert that, in fact, he did raise the question.

But what I have said repeatedly is it was the president of the United States who uttered the lie in the State of the Union address, the famous 16 words.  Now, presumably, that State of the Union would have been vetted not just by the respective agencies, who apparently did not do a very good job, but also by the national security adviser, the vice president and the president.

I will say this.  The assistant secretary for African affairs at the time Walter Kansteiner, subsequently told me that—he asked me, he said, Do you believe, rhetorically, that we would have actually allowed that language to get in the State of the Union Address had we seen the speech before it was delivered?

MATTHEWS:  And so you believe that the vice president and president put out false information, that they should have known better, based upon your report back from Niger.

WILSON:  Not just my report, but all the reporting that was done, including the reports to the Congress by the deputy director of central intelligence, and to the White House by the director of central intelligence, and a paper circulated in January of 2003.

MATTHEWS:  And so we have a case here—and I'm just trying to build this information—first of all, that the war was sold to us under false pretenses because you had given them better information, that they had, in fact, requested that the State Department and the CIA, rather, provide for them, and then, of course, they went after you.  Do you believe that they went after you because you were a war critic?

WILSON:  I believe they went after me for three reasons.  One, I think they went after me to punish me.  Two, I think they wanted to send a signal to the foreign policy and intelligence community that, If you do to me—if you do to us what Wilson just did to us, we will do to you what we just did to his family.  And three, I think they made the assessment that I was a Democrat and therefore could be treated like a cockroach, even though I had served this president's father as the acting ambassador in Baghdad in the first Gulf war.

MATTHEWS:  Well, what about the fact of the trial?  You must have paid attention to the trial of Scooter Libby.  During the course of the trial, Scooter Libby obviously did not provide information to the state that the state wanted with regard to the vice president because at the end of the hearing, we discovered that the prosecutor, Patrick Fitzgerald, said in public that Scooter Libby was like a baseball player who throws dust in the face of the umpire so he can't render a verdict on the play.  In other words, Scooter Libby prevented special prosecutor Fitzgerald from determining the exact role he played with regard to his boss, the vice president.

What did you learn watching the trial?

WILSON:  First of all, the special prosecutor actually first said that at the time of the indictment.  After the conviction of Mr. Libby on four counts of lying, perjury and obstruction of justice, Mr. Fitzgerald repeated that.  He also said that Mr. Libby had light blatantly and repeatedly, and that as a consequence of his repeated lies and obstruction of justice, there remained a cloud over the office of the vice president.

MATTHEWS:  And now the question is, where did that cloud lead us now?  We have no, according to your testimony, about are four layers of cover-up, the cover-up in the case of selling the war, the cover-up in the attempt to try to shut you up, the cover-up during the course of the trial, which was pointed out as part of the investigation by special prosecutor Fitzgerald, and now this commutation.  Do you believe that the commutation is part of a cover-up?

WILSON:  This president is very stingy with pardons and commutations.  You may recall that when he was governor of Texas, he refused to commute the sentence of Karla Faye Tucker, despite the entreaties of the pope and Pat Robertson.  And so for him to commute the sentence of Scooter Libby, which was not an unduly harsh sentence, according to the justice system, really smacks of quid pro quo.  And the question that needs to be raised is whether or not the president was commuting Mr. Libby's sentence in order to protect the vice president of the United States and/or perhaps protect his own office and himself, as well.

MATTHEWS:  Do you believe that there was a deal here between the president, the vice president and Scooter Libby, that if he did not point the finger of blame at his boss, the man who he apparently worked hand in glove with—that would be Vice President Cheney—that he would get special treatment here in regard to either a pardon or a commutation?

WILSON:  I believe it stinks to high heaven, and the president owes the American public an explanation, beginning with releasing both his statement to the special prosecutor, as well as the vice president's statement to the special prosecutor.  And if he's not prepared to come clean with the American people, I believe the U.S. Congress should use all of its powers to force the issue.

MATTHEWS:  So the question now, Ambassador Wilson, is who is going to be the forum?  You have a legal case, a civil case moving forward.  Are you confident that's going to get standing and move ahead?

WILSON:  We have—continue to have great confidence in the American system of justice.  We believe our case got the appropriate hearing from Judge Bates, who's the justice in this matter.  We have every expectation that it will go forward, and we are prepared to fight to the bitter end on this because we want the truth to come out, we want those officials who engaged in this behavior to be held to account, and most particularly, we want to deter future generations of public servants from engaging in such despicable political vendettas and abuse of power.

MATTHEWS:  Ambassador Wilson, do you believe that the Congress has a role to play here?

WILSON:  Indeed, I do.  In the absence of the president coming clean with the American people, I believe the Congress has no option but to insist through hearings that the truth be brought out.

MATTHEWS:  What role do you think the political campaign for president is going to play in clearing the air here, especially the role of Hillary Clinton?

WILSON:  Well, I certainly have no idea.  I have great admiration for many of the candidates who are running on the Democratic side.  I think the Republicans, having sold their—those candidates who apparently sold their soul to this small sect of neo-conservatives will demonstrate the extent to which the Republican Party really is prepared to turn its back on the rule of law and the system of justice that has underpinned this country for 230 years.

MATTHEWS:  OK, thank you very much, Ambassador Joseph Wilson, who's out in Santa For example, New Mexico, for coming on HARDBALL on this big news-making night.  Thank you, Ambassador.

WILSON:  Thank you, Chris.

(END VIDEOTAPE)

MATTHEWS:  Coming up: Bob Bennett, attorney for former "New York Times” reporter Judy Miller.  She went to jail for 85 days for not testifying.  Scooter never testified.  Vice President Cheney never testified.  One woman went to jail.

And later: There was sharp questioning at today's White House press briefing.

(BEGIN VIDEO CLIP)

QUESTION:  You're trying to take the logic and change it around and make...

SNOW:  Well, no...

(CROSSTALK)

(END VIDEO CLIP)

MATTHEWS:  Later, you're going to meet that reporter, April Ryan of the National Urban Radio Network on our program tonight as part of our roundtable.

You're watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Well, today, as we said, President Bush left open the possibility of a full pardon of Scooter Libby somewhere down the road before the president leaves office.  For more on the president's intervention and the politics of his decision, we turn to attorney Bob Bennett, who represented former "New York Times” reporter Judy Miller in this case.

Bob, thank you for coming on.  It must be a source of some irony, to put it lightly, that your client went to jail for not testifying and Scooter Libby, who never testified, his boss never testified, and he's walking.

BOB BENNETT, JUDY MILLER'S ATTORNEY:  Yes, Chris, it is. 

I remember my first appearance before Chief Judge Hogan, after Judy has been found in contempt, and she hired me.  And I said, Judge, words to the effect is, I have an eerie feeling she may be the only person doing any time. 

And I guess I was prophetic at the time. 

(CROSSTALK)

BENNETT:  And she didn't even write a story either.  So...

MATTHEWS:  Well, she never wrote a story for "The Times” about the whole thing. 

BENNETT:  Right. 

MATTHEWS:  Let me ask you about this pardon. 

The fact that the president didn't go all the way and give him what a lot of the people on the right wanted him to get, Scooter Libby, I hear leaves open two legal possibilities, one, that Scooter never has to testify before the Congress, because he is still vulnerable—he still has an opportunity, I should say, for an appeal, and, therefore, he does not want to talk.  He doesn't have to.

And, secondly, the president has his big carrot to offer him, which is a full pardon if he doesn't say anything wrong in the next couple years. 

BENNETT:  Well, first, Chris, technically, it wasn't a pardon.  A pardon absolutely wipes out a conviction. 

MATTHEWS:  Right. 

BENNETT:  It doesn't exist.  You don't even have to put it down on a form when it says if you have ever been convicted.

What he did here was, he commuted the sentence, but he left intact the conviction and the other consequences of the conviction.  But, you know, I don't know.  I don't know if I am as cynical as that, as to what you just articulated. 

What I find strange...

(CROSSTALK)

MATTHEWS:  But isn't it a fact, Bob, that he can now avoid testimony before Congress on the grounds that it could incriminate him? 

BENNETT:  The answer to that is—is, yes, he can.  That is correct. 

MATTHEWS:  So, now Conyers and Henry Waxman and all those people on the Hill who are out there hungry to get his testimony don't have a shot as long as he can claim the Fifth? 

BENNETT:  And—and they could, for political reasons, call him there, just to have the spectacle of him actually asserting—asserting the Fifth. 

MATTHEWS:  What do you make of it?  Is there any precedent for a president giving this sort of three-quarter pardon, this commutation of the prison sentence, leaving intact the—the parole for two years and the $250,000 fine and all that goes with it, the felony on this record, and then, later on, giving him a full absolution, a full pardon?

BENNETT:  Chris, I haven't really researched it, so I don't know.

But one thing I am sure is, it is very, very unusual.  In fact, what I don't quite understand is, usually, when a president gives a reprieve or a pardon, or something of that ilk, he wants to get it behind him.  He wants it to be a one- or two- or three-day story. 

MATTHEWS:  Yes. 

BENNETT:  Here, he has left open the possibility of a full pardon.  So, he's kept this—this political issue alive for the indeterminable future, which makes absolutely no sense to me. 

MATTHEWS:  Yes, it is like he scored a triple, and he is waiting on third to steal home.  I mean, he sits out there at the hot corner, and we're all looking at him, though.  What's he is going to do now?  Isn't that it?

BENNETT:  Yes.  And the story is not going to die.  And you're going to see it in the—with all of the candidates using it to bash each other.

And he didn't put—he didn't put it to rest.  And I find that to be a very strange political, with a small P., approach to this thing. 

MATTHEWS:  What do you make of the—the history of the pardon in presidencies?  Do you think it's something that—and the commutation, the clemency here?  Do you think it's—it means—it is tougher on the president who does it, or—I mean, who wins in these cases, besides the defendant, I guess?

BENNETT:  Well, certainly, the winner is the defendant.  But it really depends on the facts and circumstances. 

As you know, I represented former Secretary of Defense Cap Weinberger, and was actually involved in trying to get him a pardon.  And we successfully did from the first President Bush.  And it was really just a two- or three-day story, and there was very little ramification to it, in a negative sense.

But I think the reason for that is the special prosecutor, Lawrence Walsh, was so outrageous in his conduct, that there was a general perception nationally that former Secretary Weinberger was innocent, and that Walsh...

MATTHEWS:  Yes. 

BENNETT:  ... was ignoring the evidence. 

MATTHEWS:  Well, isn't it interesting that the president basically accepted the judgment of the jury in this case?  He accepted the good work done by the prosecutor.  He almost paid credit—tribute to it all in a way that sort of legitimized it, if it needed legitimization. 

At the same time, he stepped back and said:  But I am not going to listen to that judge.  I'm not going to let that judge decree a two-and-a-half-year sentence. 

Is that unusual, to say, everybody is right, except the judge?

BENNETT:  Yes, I think that was very unusual. 

Judge Walton is a very careful judge and was particularly careful in this case.  He is a solid Republican, as far as I know.  And his sentence was within the federal sentencing guidelines. 

So, when the president said the sentence was excessive, I don't know what standard he is applying there or going—or going by.  And I—I think that—that was a mistake. 

MATTHEWS:  Yes. 

BENNETT:  I think, had I been advising him—and I guess that is presumptuous—is, I would have said, don't say that, you know.

MATTHEWS:  Before we go to break, Bob, I visited your client Judy Miller, a friend of mine, in prison while she was in D.C. jail.  As you know, it's a pretty horrendous place, pretty Dickensian, to put it lightly.  There she was in prison garb in an incredibly cold, if not frightening, place to be for all those weeks.

Have you talked to her since this clemency on part of the president for the man at the center of this case? 

BENNETT:  I have not talked to her.  I have not, Chris. 

She was in the—an Alexandria facility, which... 

MATTHEWS:  OH, yes, I know.

BENNETT:  ... you know, was better conditions than D.C. jail.  But they were still quite...

MATTHEWS:  Well, I thought it felt like D.C.

You know what I thought when I was over there?

BENNETT:  It was onerous.

MATTHEWS:  It's on Eisenhower Avenue, which I thought was amazing, a place...

(CROSSTALK)

BENNETT:  Yes, it was a very onerous, onerous place, no question about it.  And she was in for almost 85 days. 

MATTHEWS:  Well, it felt like a downtown jail. 

Anyway, we will be right back with Bob Bennett, attorney for Judy Miller, a man at—very much at the center of this whole case involving the now free Scooter Libby. 

And later:  Two weeks ago, Hillary Clinton had nothing to say about Scooter Libby.  Why did she change her tune?  I asked her.  She said, I don't want to talk about it. 

Last night, she's out there campaigning on the issue.  What has changing?  Hmm.

You're watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MATTHEWS:  We're back with Bob Bennett, who was the attorney for former "New York Times” reporter Judy Miller, who was very much involved—in fact, she was incarcerated as part of the Scooter Libby case. 

Bob, thanks for joining us. 

We only have a minute here, but I was just noticing that the—

Scooter Libby, the defendant, who has now been freed and won't have to face imprisonment, had already been given an inmate number, 28301016.  What does his clemency, the fact that he won't have to serve a minute in jail, say to 28301015 and 28301017, other prisoners who are now going inside?  What's their attitude going to be as part of the system? 

BENNETT:  Well, I think that, you know, they're going to feel that the privileged special, special treatment, particularly whereas, here, the president went out of his way to compliment everybody in the system, but for saying the punishment was excessive. 

You know, it's the old story.  The rich and powerful...

MATTHEWS:  Yes. 

BENNETT:  ... get special treatment.  And it's...

MATTHEWS:  I mean, he never really admitted that it was his guy.  I mean, Scooter Libby is not just chief of staff to the vice president all those months.  He's assistant to the president.  That's the title he held.

And the president acted like he was being somewhat antiseptic in granting clemency a deserving man, when he was—he never has to say, does he, that this is a pal of mine, this is a crony of mine, this guy worked for me? 

BENNETT:  No.

And don't forget, this is the president who, at the very beginning of the case, said, that, if people did something wrong, they would pay the consequences. 

Now, there's no question, which is sometimes forgotten, that Libby is facing some real consequences.  I mean, he has been disbarred.  His reputation is in shreds. 

MATTHEWS:  I know.

BENNETT:  But the fact of the matter is, as you so rightly point out, the prisoners before him and after him are saying, hey, what about me, you know? 

MATTHEWS:  If the president pardons him down the road, say, right before he leaves office, which may well be the time he does it, if he does it, does that allow him to rejoin the bar? 

BENNETT:  The answer to that is—is yes, I believe. 

A pardon absolutely extinguishes a conviction.  And my understanding is, even if you are filling out an employment form, although I don't know that Mr. Libby has to do that when he applies for a job, if there is a question that says, "Have you ever been convicted of a crime?” someone who has received a pardon can answer that no, I believe.

MATTHEWS:  I don't think that would disqualify him at the American Enterprise Institute.

BENNETT:  No.

MATTHEWS:  Anyway, thank you very much, Bob Bennett.

Up next, our HARDBALL debate tonight:  Should President Bush pardon Scooter Libby?

You're watching HARDBALL, only on MSNBC.  

(COMMERCIAL BREAK)

MILISSA REHBERGER, NBC CORRESPONDENT:  I'm Milissa Rehberger.  Here is what is happening. 

Top U.S. counterterrorism officials tell NBC News they're looking into a serious connection between the recent U.K. terror plots and al Qaeda in Iraq.  British officials now believe the two doctors who attacked the Glasgow Airport were the same people who parked the two explosive-laden cars in London. 

Airports in eight major U.S. cities will get increased security over the Fourth of July weekend.  The TSA has sent special teams to Baltimore, D.C., New York, Boston, Philly, Houston, L.A., and San Francisco.  Officials say the teams are meant to provide a visible deterrent.

Forty-two thousand gallons of oil released by severe flooding in Coffeyville, Kansas, has seeped into its water supply and could do the same for communities downstream in nearby Oklahoma. 

And the Atlanta attorney at the center of a tuberculosis scarce has a less serious form of the disease than previously believed.  The revelation by federal officials means Andrew Speaker can be treated.  And his impending surgery is on hold.  No one that Speaker came in contact with has tested positive for TB—now, back to HARDBALL. 

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  I thought that the jury verdict should stand.  I felt the punishment was severe.  So I made a decision that would commute his sentence, but leave in place a serious fine and probation. 

As to the future, I, you know, rule nothing in and nothing out. 

(END VIDEO CLIP)

MATTHEWS:  Welcome back to HARDBALL.

Time now for the HARDBALL debate tonight:  Should President Bush have commuted Scooter Libby's sentence, and should he pardon him now?

Our debaters tonight:  Kate O'Beirne is Washington editor of "The National Review” magazine, and Ryan Lizza is a senior editor for "The New Republic” who will soon start his new job as the Washington correspondent for "The New Yorker” magazine.

Kate, do you agree with the president? 

KATE O'BEIRNE, WASHINGTON EDITOR, "THE NATIONAL REVIEW”:  I agree that it would have been a travesty to see Scooter Libby go to jail.  So, I certainly support the president's decision to commute the sentence. 

The magazine and myself—"National Review”—have also supported a full pardon for Scooter Libby.  But, in that clip, I think you just saw the president seemed more comfortable disagreeing with the judge, who, of course, was the one who imposed the sentence, than in disagreeing with the jury. 

MATTHEWS:  So, you want a pardon? 

O'BEIRNE:  Absolutely.  It was a—as you—we have been arguing, Chris, that it was a referral that never should have been made by the CIA.  It seemed to be payback for past disputes with the White House. 

DOJ should have ended the investigation when the question was answered, Richard Armitage, which they knew was the one who leaked to Bob Novak.  They should have never appointed a special counsel.  And the special counsel, who also knew who the original leaker was, had answered the question.  There should never have been the full-blown investigation or trial. 

MATTHEWS:  Ryan Lizza, s this guy have been commuted, his sentence commuted?  Should he walk? 

RYAN LIZZA, "THE NEW REPUBLIC”:  No, of course not. 

The logical conclusion of the president's argument is that anyone that has been convicted of obstruction of justice or perjury shouldn't serve multi-year sentences. 

And, you know, the reports out today are, you know, 400,000 people in this country in the last couple of years have been convicted of obstruction of justice.  The average prison sentence is over five years.  So, I think the president has sort of boxed himself in here.  If he had just given an out-and-out pardon, and said, this whole case, from A. to Z., was political, and I think it was wrong, and I think Scooter Libby is innocent, he could sort of make that argument. 

What he is saying is, the jury was right.  This man was guilty, but I think the punishment doesn't fit the crime. 

Well, the facts just don't support that.  In most cases that are similar to this, that is exactly the punishment you get.  So, I think he is sort of boxed in here. 

MATTHEWS:  The president seems to be saying here that more than one minute—in fact, one minute in prison would be excessive...

LIZZA:  Right. 

MATTHEWS:  ... Kate.

O'BEIRNE:  Well, let's not forget, the...

(CROSSTALK)

MATTHEWS:  Do you agree with that?  If he went to jail for one minute, that would be excessive, because the president said he shouldn't go at all?

O'BEIRNE:  Yes. 

I think, given this politicized case, yes, I do believe—and I also believe there was a diligent jury.  But I believe reasonable people can disagree.  It would be a travesty if Scooter Libby went to jail, spent, yes, even a day in jail.  But, Chris, he also has an appeal.  What if he had spent two years in jail and he wins on appeal?  I think that also weighed on the president's decision.

MATTHEWS:  Do you agree with the president completely, or simply the bottom line, Kate?  I can't tell whether you agree.  The president clearly implied that he thought the jury rendered a correct verdict.  he thought the prosecutor did his job.  But yet you seem to still be saying that Scooter is innocent, innocent on the merits. 

O'BEIRNE:  Yes, --

MATTHEWS:  Then you disagree with the president.

O'BEIRNE:  Yes, if that is what the president is specifically saying, I do disagree to that extent.  But let's not forget he's in a different—

LIZZA:  That is what he is saying. 

O'BEIRNE:  He is in a different position than his father was.  When his father pardoned Casper Weinberger and Robert McFarland, owing to Laurence Walsh, the independent counsel, having politicized basically a foreign policy dispute, he strongly criticized the independent counsel.  Bill Clinton pardoned everyone connected with the Mike Espy agriculture case.  He pardoned Henry Cisneros.  I didn't hear Chuck Schumer complain about those, I might add, about the rule of law.

They were criticizing the work of an independent counsel appointed by judges.  I think it is a little awkward for George Bush, he might think, to criticize his own CIA, his own Department of Justice, and his own U.S.  attorney. 

LIZZA:  Right, what Kate is saying is the problem is that Bush does not have a case that this case was politicized.  Nobody argues that Fitzgerald has acted political, and nobody can argue that—

(CROSS TALK)

LIZZA:  Nobody argues that the jury did not do its job, and nobody argues that Walton did not read the sentencing guidelines correctly.  So, the president does not have a case that this was politicized, and that is why the best he could do was to say Scooter should not go to jail for so long. 

O'BEIRNE:  If you listened to Patrick Fitzgerald's closing to the jury, it was completely politicized.  There's a cloud over the president.  None of that was an issue. 

(CROSS TALK)

LIZZA:  -- and making a tough case. 

O'BEIRNE:  And all of the people responding now—

(CROSS TALK)

O'BEIRNE:  Even when he announced the indictment, Ryan, it was way beyond what Scooter Libby was ever going to be charged with. 

LIZZA:  You're saying that Fitzgerald acted politically in this case, that he was out to get the White House?  You think that Fitzgerald was acting that way? 

O'BEIRNE:  Yes, I think when he announced the indictments, I think certainly his closing to the jury.  He seemed to want Scooter Libby sentenced for something Scooter Libby hadn't been convicted of.  Yes, I think he was—

LIZZA:  I think when you lie and obstruct justice to a tough prosecutor, they go after you pretty hard. 

MATTHEWS:  Let's take a look at video 2008 for this week.  It has to do with Hillary Clinton. 

(BEGIN VIDEO CLIP)

MATTHEWS:  Would you have any problem or anything to say if President Bush were to pardon Scooter Libby? 

SEN. HILLARY CLINTON (D), NEW YORK:  I think there would be enough to be said about that without me adding to it. 

MATTHEWS:  That is such a political answer.  That is such a political answer.  Would you have a problem with Scooter Libby a getting pardon, getting to walk after being convicted of perjury and obstruction? 

Oh, a real question. 

CLINTON:  A question that's about the people in this audience, and not what goes on in Washington. 

MATTHEWS:  We'll leave that as a non-answer then.

(END VIDEO CLIP)

MATTHEWS:  Now let's take a look at what she said yesterday. 

(BEGIN VIDEO CLIP)

CLINTON:  What we saw today was elevating cronyism over the rule of law.  What we saw today was further evidence that this administration has no regard whatsoever for what needs to be held sacred. 

(END VIDEO CLIP)

MATTHEWS:  Kate O'Beirne, what a difference a day made. 

O'BEIRNE:  Look, her instinct initially, Chris, when you asked her that question, was the right one.  Who is Hillary Clinton to criticize a presidential pardon that winds up being controversial, given her husband's record on pardons?  And it wasn't just on the way out the door, those highly controversial pardons of people like Mark Rich. 

He pardoned his own political associates, those, as I said, caught up in the Mike Espy Agriculture Department scandal and also Henry Cisneros, his own cabinet secretary.  She did not carry on about the rule of law, nor did the Democrats on Capitol Hill. 

MATTHEWS:  Where you on President Clinton's perjury and obstruction of justice?  Did you support impeachment and conviction of him for those crimes? 

O'BEIRNE:  Yes, his self-confessed perjury. 

MATTHEWS:  It's a high crime if a Democrat does it, but if a Republican does it, it was what?  Prosecutorial over-reach?  

O'BEIRNE:  Chris, he admitted to committing perjury. 

MATTHEWS:  Right?  I'm just trying to find consistency here from Kate O'Beirne.  Perjury and obstruction of justice should throw a president and of office who has been elected twice, but it should not cause a day of damage to the life of Scooter Libby.

O'BEIRNE:  Right, we don't have an admission of perjury and obstruction of justice, like we do in Bill Clinton's case.

LIZZA:  We have a jury that convicted him of it, which means something still in this country.  Right?  I mean, we have a jury that convicted him of it, and a Bush appointed judge that sentenced him and said the case against Libby was overwhelming. 

O'BEIRNE:  And we have presidential pardon authority that is plenary in order to right injustices.

LIZZA:  So your argument is that anyone that was convicted of over three years for obstruction of justice, now their sentence should now be commuted by President Bush?  

O'BEIRNE:  I do think President Bush, just like President Clinton before him, prior to his pardons on the way out the door, should be far less stingy with the presidential pardon authority.

MATTHEWS:  I just remember, you know, Kate—Inconsistency is the world we look at here in Washington, but 50 Republican senators voted to remove Bill Clinton from office for perjury and obstruction of justice, to kick him out of the White House he had been elected to.  An entire U.S.  House of Representatives voted to impeach him on the grounds of perjury and obstruction of justice, what they called a high crimes. 

Now, when Scooter Libby, a Republican, is found guilty by a jury of his peers for those exact charges, you and your crowd stand up and say, cheer, great news, let him go?  It is unbelievably inconsistent. 

On the other hand, the Democrats who let Bill Clinton walk in their own hearts were equally inconsistent if they're out there calling for the head of Scooter Libby.  This is not a town of great consistency. 

LIZZA:  We live in a state of permanent amnesia in Washington I think Chris. 

MATTHEWS:  What was that old saying, what's good for the goose is good for the gander.  Remember that one?  We should remember that one.  Thank you, Kate, you are not the only one who is wrong here.  And thank you Ryan, you're not entirely right either.  Thank you both.  Congratulations, Ryan, for the big posting.  We'll be right back with more, in fact, with the round table.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  Let's bring in our round table tonight.  April Ryan is the White House correspondent and Washington bureau chief for American Urban Radio Networks.  Norman Pearlstine was editor in chief of "Time” when one of its reporters, Matt Cooper, testified before the Grand Jury in this CIA leak case.  Norman is also the author of the book "Off The Record, The Press, the Government and the War Over Anonymous Sources.”  And Patrick J. Buchanan is an MSNBC political analyst. 

April, let's take a look at—I've never met you before—let's take a look at your interesting exchange today with Tony Snow. 

(BEGIN VIDEO CLIP)

APRIL RYAN, AMERICAN URBAN RADIO NETWORKS:  Are the American people owed some kind of an apology from someone in this administration for the leaking of a CIA person's name. 

TONY SNOW, WHITE HOUSE SPOKESMAN:  It is improper to be leaking those names. 

RYAN:  So you're saying somebody in this administration owes the American public an apology. 

SNOW:  I'll apologize.  Done. 

RYAN:  No it's not and that is flippant.  That is a very flippant way of doing something very serious.  This is a very serious matter.  That was very flippant. 

(END VIDEO CLIP)

MATTHEWS:  April, back to you.  What did you make of that rather quickie response from Tony? 

RYAN:  He wanted to get out of it fast.  This is something they did not want to deal with.  And the president's hands were forced.  It is political.  It is a political hot potato that they wanted to run from today.  Tony did his best, and he fell in the trap. 

MATTHEWS:  In other words, Tony knew nothing about how the president decided to grant this clemency, but he only assumed it was politically necessary to keep the red hots happy?  

RYAN:  Something like that.  But, you know, it's interesting, Chris, the centrist Republicans are very upset about this.  The president basically—listening to some of my sources, and people who are close to this administration, close to the president, they are saying the president has totally gone away from what he intended when he first came to Washington.  So he was talking about clearing the air, changing the atmosphere.

And indeed, this is somewhat changing, going back to what he wanted to go away from.  So this is just a bad scenario all the way around. 

MATTHEWS:  You could say he's changing the atmosphere.  Scooter Libby is going to get 2.5 years of fresh air now.  Let's go to Norman Pearlstine.  Your assessment of this political situation right now with the president allowing his top intelligence guy for the vice president—vice president's chief of staff to walk? 

NORMAN PEARLSTINE, FMR TIME INC. EDITOR IN CHIEF:  It is a cover-up.  The important charge was obstruction of justice, and, as Patrick Fitzgerald indeed said in his summation to the jury, there is a cloud over the vice president, and that cloud exists there because of Libby's obstruction of justice.  That is why he was never able to really assess the seriousness of this case. 

As for commutation, while it means he is out of jail, it also gives Libby the ability to take the fifth in the civil case involving Valerie Plame. 

MATTHEWS:  Because?

PEARLSTINE:  Because he is still appealing the conviction, and as long as that appeal goes on, he does not need to testify in a civil case, because he can say that he would incriminate himself if he did so.   

MATTHEWS:  The president has got his hands on a big orange carrot as well.  Right, Norman?  He can give the guy a full pardon if he plays ball the next two years.   

PEARLSTINE:  That is absolutely right.  And if you believe that the obstruction of justice charge was part of a cover up, then the commutation is an extension of it.

MATTHEWS:  We will come right back with Pat Buchanan to join the round table.  I want to know whether he thinks that Scooter Libby deserves the G.  Gordon Liddy award for triumphing of the will.  You're watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We are back with April Ryan of the American Urban Radio Networks, Norman Pearlstine, former editor in chief of "Time Magazine,” and MSNBC political analyst Pat Buchanan.  Pat, it seems to me the big story for those of us who have covered politics for a long time, and been a part of it is the amazing silence of Scooter Libby? 

PAT BUCHANAN, MSNBC POLITICAL ANALYST:  That's part of it, and that's very interesting.  It raises—it goes right to the question.  Why did the president of the United States today interfere in a legal trial and do something he found deeply distasteful and hurtful?  Three explanations.  One, the war party, the neo-cons, demanded it as the price of staying behind him.  Two, the vice president of the United States went in and called in all of his chits for his buddy.  Three, the president or somebody in there feels that Scooter Libby behind bars is a walking time bomb. 

MATTHEWS:  And what do you lean towards as an assessment? 

BUCHANAN:  I lean towards one and two.  I think the vice president probably did say, Mr. President, this guy has gone to the wall for me for ten years, and for you.  He fought our battle on the war.  It's a rotten charge.  The prosecutor was after him.  He was out of control.  And I think the neo-cons and the "Wall Street Journal,” the "Weekly Standard,” have been hammering the president so bad that he stepped up and said, I don't want to do this.  It's going to hurt.  It goes against my image and my beliefs but I am going to do it. 

That's why you got that statement you did, where he hammered Liddy personally. 

MATTHEWS:  Norman, when the president is proud of something he goes to the Rose Garden.  He calls all the press.  He makes a statement in the beautiful sunshine.  When he is embarrassed by something, haunted by it, he sneaks it out at night like a leak.  What did you make of the way the president commuted the sentence of Scooter Libby?   

PEARLSTINE:  It was very late in the day, and it seemed to me that it was something he really wanted to get out and get behind him with as little damage as possible. 

MATTHEWS:  What is this going to do to press rights, this whole thing, Norman? 

PEARLSTINE:  Well, I think it just brings forward the need for a federal shield law to try and protect journalists, so that we don't have to get ourselves in a situation where a special prosecutor can come in and demand that we give up sources essential to our journalism. 

MATTHEWS:  Thank you very much for joining us Norman Pearlstine.  Thank you very much April Ryan and Pat Buchanan.  Join us again Thursday night for more HARDBALL.  Have a very safe and happy 4th of July.

END   

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