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updated 4/2/2010 9:39:21 AM ET 2010-04-02T13:39:21

Guest: Steve McMahon, Todd Harris, Al Snyder, Sally Quinn

CHRIS MATTHEWS, HOST:  The mouse on the Republican floor.

Let‘s play HARDBALL.

Good evening.  I‘m Chris Matthews in Washington on this Holy Thursday. 

Leading off tonight: The elephant in the room.  Sometimes a mouse is enough

to scare an elephant.  Today, the mouse on the floor is the sex club

scandal, that little rodent of a story that‘s causing such a big scare in

the Republican Party.  It‘s got them running for the trees.  Tony Perkins‘s

Family Research Council, and of course, Sarah Palin are both running from

the Republican National Committee.  And now a group of big-name Republicans

are starting their own group to compete with the RNC, a group that could

starve Michael Steele‘s RNC of money.  How bad will this get for the Grand

Old Party?  That‘s our top story tonight.

Plus, all this embarrassment, confusion and running away comes at an

odd time for the Republicans.  Polls have them moving past the Democrats

now, who just got the lowest ratings ever recorded in a CNN Gallup poll. 

Is there anything the Democrats can do to keep 2010 from looking like 1994,

the year they lost both houses of Congress to the Republicans?

Also, remember that anti-gay church group that believes American war

deaths are God‘s punishment for the tolerance of gays here at home?  Well,

the father of a fallen Marine who‘s suing that group for protesting at his

son‘s funeral has been ordered by a federal appellate court to pay the

group‘s legal fees.  Talk about blind justice.  The father will be here

tonight.

And the GOP sex scandal gets a little sexier.  Check this out.  An RNC

fund-raising letter just went out directing people to a phone number of the

kind that young single men are sometimes known to be drawn to—you know,

that kind of phone number, the interactive kind.  You hear that on the

other end of the line—well, that‘s in the HARDBALL “Sideshow” tonight.

And “Let Me Finish” tonight with a question.  How much is too much? 

The top 25 hedge fund managers made $25 billion last year.  What kind of

society gives that kind of to money who create nothing?

We start with the trouble with the RNC, the Republican National

Committee.  “Newsweek‘s” Howard Fineman joins us.  He‘s an MSNBC political

analyst and a big wheel at “Newsweek” magazine.  And Clarence Page, as

always, writes for “The Chicago Tribune.”  Some things never change. 

You‘re one of the great old trees in the forest...

(CROSSTALK)

MATTHEWS:  In the world of media and interactive and online, you are

with a newspaper.

CLARENCE PAGE, “CHICAGO TRIBUNE”:  I was synergy before synergy was

cool, I want to tell you.

(LAUGHTER)

MATTHEWS:  From the Second City.

PAGE:  There you go.

MATTHEWS:  OK, let‘s talk about this thing.  Little things cause big

problems. but little things that are iconic, like spending a couple K on a

sex club—what‘s it, a lesbian bondage club?  I‘m not even sure what kind

of place—it‘s called the Voyeur.  The $2,000 check was approved by the

RNC, paid for by donors, until they got caught.

PAGE:  Right.

MATTHEWS:  Big problem...

(CROSSTALK)

MATTHEWS:  Now Tony Perkins...

PAGE:  Oh, yes.

MATTHEWS:  Remember the guy that knifed the girl in the shower?

(LAUGHTER)

PAGE:  Not that Tony Perkins.

MATTHEWS:  No, this is the other Tony Perkins.  I don‘t know why the

(INAUDIBLE) Let‘s call the kid Tony.  His name‘s Perkins.  What‘s going on

here?  He‘s running away from this.  Sarah Palin, in her pristine

greatness, she‘s running away from the RNC.  They‘re all saying, Don‘t give

a nickel to the RNC anymore.  How long is this going to go on?

PAGE:  That‘s the question.  I mean, I would not be surprised if we

see a Michael Steele Friday evening resignation.  But I don‘t know that

that‘s a fact.  The pressure on him has to be tremendous right now.  I

mean, he‘s already—if it was just this case of the strip club, it would

be a small story.  But this has been building over time because he‘s been

spending more money than he‘s taking in.

MATTHEWS:  Burning it.

PAGE:  Burning it at a faster rate...

MATTHEWS:  That is always the issue in politics.  You‘re supposed to

bring in more than you‘re spending.

PAGE:  That‘s his job.

MATTHEWS:  Well, here‘s what Family Research Council—the Tony

Perkins, not the one in “Psycho,” told MSNBC‘s David Shuster about the RNC. 

Let‘s listen to Tony Perkins.

(BEGIN VIDEOTAPE)

TONY PERKINS, FAMILY RESEARCH COUNCIL:  There‘s just been a string of

incidents that has made clear to me that the RNC is indifferent in, at

best, to the concerns of many social conservatives.

The RNC does not reflect the values of the folks that we represent

across the country.

(END VIDEO CLIP)

MATTHEWS:  Wow.  How big is this?

HOWARD FINEMAN, “NEWSWEEK,” MSNBC POLITICAL ANALYST:  Well, I think

it‘s big.  The Family Research Council is not the entire conservative base,

by any means, but Tony Perkins is a pretty sophisticated player.  Behind

the scenes, he says—because I talked to him about an hour ago.  He said,

Look, I‘ve been trying to help Michael Steele out for the last year, help

him survive, because Michael Steele only won narrowly to become chairman to

begin with.

MATTHEWS:  Right.

FINEMAN:  But then, two weeks ago, Michael Steele hired to represent

the RNC in a campaign finance case Ted Olson, who‘s a very well-

credentialed conservative lawyer.

MATTHEWS:  And his crime is...

FINEMAN:  But his crime is trying to overturn Prop 8 in California and

trying to end bans on gay marriage around the country.  Huge no-no for

Perkins and his crowd.  And then this thing happened today.  Now, I just

spoke to Perkins.  He said, I haven‘t heard from Steele.  I had the shot

across the bow to Steele this morning, and I still haven‘t heard from him. 

What does that mean?  To me it means that Steele is kind of hiding under

his desk here, trying to figure out what to do.

MATTHEWS:  And Sarah Palin, who gets—only takes about an hour off

from the news cycle...

(LAUGHTER)

MATTHEWS:  I‘m serious.  She‘s always in the news.  She said she‘s not

going to go to this big New Orleans fundraiser.  So she‘s...

PAGE:  Even though she‘s going to be in town.  Even though she‘ll be

in town at another event, but she‘s not going to go to this raiser and

doesn‘t want to have her name associated with it.

MATTHEWS:  Well, the interesting thing is—we‘re going to come up

with this in the next segment, which is the who question of the Democrats

are in big trouble right now in terms of the polling, the macro situation. 

But this situation, just at the time that the Republicans have a chance to

exploit the difficult problem the Democrats have in selling health care and

the economy, the Republicans are not institutionally capable of exploiting

it.

FINEMAN:  No, they‘re not, and...

MATTHEWS:  They‘ve got a leader they don‘t like.

FINEMAN:  Also, the RNC as an institution is a complete mess.  And you

have to remember, over the last generation, the Republican National

Committee has been the place that‘s the point of the lance for Republican

grass roots activity.  That‘s not the case anymore.  And even though you

can say that there are all these independent groups out there, which there

are, and the other committees are raising things, traditionally in the

Republican Party, the RNC has been the hub of the wheel.  That‘s not the

case anymore.  It‘s going to hurt them.

The other thing is Tony Perkins‘s people, the social conservatives,

are the bedrock of the Republican Party.  If Michael Steele stays in office

from now through November, I can see every parking lot in every mega-church

having a flyer on the windshield about the Voyeur Club.

MATTHEWS:  No!

FINEMAN:  Well, why not?  Why not?  Why not?  If he‘s still there.  If

he‘s still there.

PAGE:  Look, he‘s violating the first rule of politics, which is don‘t

divide your base.  And that is the Republican base, between Christian

conservatives, the evangelicals, Perkins‘s faction, the country club

conservatives and the blue collar Reagan Democrats.  That‘s the old

coalition.

MATTHEWS:  Well, what does he have to do, get this staffer that he

fired back and flog this person?  I mean, what—at this point, is there

anything he can do?

FINEMAN:  Well, it takes a two thirds vote of the Republican National

Committee to remove a chairman.  And as one member told me, he said, you

know, it‘s easier to get rid of the British prime minister than the head of

the RNC.  So it‘s unlikely that he can be forced out by a vote.

MATTHEWS:  What about Clarence‘s idea that he could walk under the

pressure?  But this guy is...

(CROSSTALK)

FINEMAN:  He‘s not known for self-awareness, either, I don‘t think.

(LAUGHTER)

PAGE:  They‘ve got to offer him something.  They‘ve got offer him

because he‘s already been under pressure to resign.

MATTHEWS:  What do you offer a fellow of his eminence...

PAGE:  And he himself has said...

MATTHEWS:  ... when you have no power?  What are they going to give

him, a clerk‘s job on Capitol Hill?

PAGE:  I know Republicans are a party of poverty, but maybe they can

scratch something together.

(CROSSTALK)

FINEMAN:  They‘re not going to do that.  They‘re not going to do that. 

They‘re going to work around him.  That‘s why Ed Gillespie, who‘s really a

power in town in the Republican Party, is spearheading this independent...

MATTHEWS:  Well, here‘s this group.  It‘s going to be run by Mike

Duncan, the previous RNC chair.

FINEMAN:  Right.

MATTHEWS:  It‘s got the backing of Karl Rove and Gillespie.

FINEMAN:  Those are the key figures.

MATTHEWS:  It‘s going to go out and raise $52 million from wealthy

Republicans, and of course, corporations, their new base under this new

Supreme Court ruling.

FINEMAN:  They‘re going to claim they‘re going to raise that much. 

Maybe they‘ll raise some.  Also, the Chamber of Commerce is going to spend

$50 million, and they don‘t have to go out and beg for it, they can take it

out of their dues and their treasury under the new Supreme Court statute. 

So the Republicans are going to work around the Republican National

Committee if Steele doesn‘t leave.

MATTHEWS:  We had Ken Blackwell on the other night.  He‘s been on the

show over the years.  He‘s a good guy.  He was secretary of state out in

Ohio.  He lost the governor‘s race.

PAGE:  He also lost the chairman‘s race.  He ran...

MATTHEWS:  Well, I had a sense—and I said so to him, so I won‘t

speak behind his back.  I had a sense that Ken is running for this job.

PAGE:  Well, he ran for it before...

MATTHEWS:  And he‘s still running for it.

PAGE:  ... and Michael Steele edged him out.

MATTHEWS:  He is—he‘s speaking very politely in a way of applying

for a job, basically, of how he would be running it, he‘s saying...

PAGE:  Well, the mouse under the table we haven‘t talked about is the

fact that one reason why Steele stayed in that job, according to insiders,

is that there‘s not a polite, easy way to fire the first African-American

chairman, especially...

MATTHEWS:  First ever.

PAGE:  ... in the age of Obama.  Yes.  And you know, I‘m sure Ken

Blackwell is probably saying, And by the way...

(LAUGHTER)

MATTHEWS:  I could qualify for that!  I could ease this guy out by

easing myself in.

PAGE:  Right.  But like Howard said, it takes 16 states to call a

meeting, it takes two thirds votes to kick him out...

MATTHEWS:  Is there a big—is there a big deal in the Republican

Party, a male or female boss from the old school, a Bob Strauss, for

example, from the Democratic Party, who could come forward and say, I want

to have dinner with you tonight, young fellow, and we‘re going to talk

about this, and then bring in somebody else?  Is there any higher authority

in the party than Michael Steele?

FINEMAN:  I don‘t think so.  The Bush family, father and son, have

chosen not to try to play that role.  They walked away from it.  And so no. 

I think the answer is no.  I used to think Haley Barbour might be one, but

Haley‘s running for president, so that sort of takes him out...

MATTHEWS:  Who‘s that guy, the wealthy Republican...

FINEMAN:  ... takes him...

MATTHEWS:  ... Fischer (ph) or whatever his name is, used to be a big

a big contributor...

FINEMAN:  Max Fischer from Detroit.

MATTHEWS:  Max Fischer.  (INAUDIBLE) used to be somebody like that.

FINEMAN:  There‘s no one Max—there‘s no guy like that.

MATTHEWS:  Yes.

FINEMAN:  There just isn‘t.  There are to many—actually, it‘s

interesting.  There are too many bundlers around.

MATTHEWS:  Yes.

FINEMAN:  If you‘re talking about all the hedge fund guys, there are

too many bundlers around, too much money.  There‘s no one person...

(CROSSTALK)

MATTHEWS:  ... interested in the hedge fund guys, I‘ll be getting to

them tonight.

(CROSSTALK)

MATTHEWS:  We‘re going to talk about those...

(CROSSTALK)

MATTHEWS:  ... billionaires that I can‘t figure out what they do for a

living.  Anyway, thank you, Howard—I know what you guys do for a living.

(LAUGHTER)

MATTHEWS:  It‘s what I do.  Howard Fineman—and it‘s a very

important thing to be doing, ladies and gentlemen!  Anyway, thank you,

Clarence, and thank you, Howard.

Coming up: How can the Democrats avoid repeating the election disaster

of ‘94 when they lost both houses?  The strategists are warming up right

now to talk about it.  The big question is not 2012, 2010, right this year,

the Democrats are on the precipice of losing perhaps the ballgame,

everything but the White House.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Welcome back to HARDBALL.  There‘s a lot of political

energy out there in the country right now.  It‘s up to each party to grab

some of it.  Commenting on the current political environment, Democratic

pollster Stan Greenberg said, “If the election were now, we‘d have a change

election.  We‘d have a 1994,” and that‘s bad news for Democrats.  And

Stanley is a Democrat.

Joining me right now are the strategists, Democratic strategist Steve

McMahon and Republican strategist Todd Harris.  I want you to look at these

bunch of numbers.  The first set of numbers are very dangerous for

Democrats.  A new Gallup poll shows 47 percent of the country prefer the

Republicans in November in a congressional race.  That‘s just general

question, Who do you want to win, Republican or Democrat?  That‘s 47 for a

Republican, 44 the Democratic candidate.

This is, by the way, a big switch.  You can see the lines crossing

there, with the Democratic line going down, the Republican red line going

above it.  And the approval for the Democratic Party—and here‘s another

bit of bad news—is down to 41 percent, which is the lowest ever seen by

the Gallup poll for the Democratic Party, and they‘ve been taking these

polls since 1992.  So that‘s, you know, 18 years of polling, and it‘s the

lowest number ever for the Democrats.

I‘m going to take the defensive fellow, my friend Steve, before I go

to my friend Todd.  How do you defend when it looks like your number, the

generic, “Are you likely to vote Democrat or Republican,” has dropped now

below the other party‘s?

STEVE MCMAHON, DEMOCRATIC STRATEGIST:  Well, first of all, that

number‘s been fairly close together for a long time, so the fact that

Democrats are behind right now is troubling, but it certainly is not

something that is surprising, given the fact that a very partisan bill just

passed.  I mean, the public was pretty deeply divided on this, largely

because the Republicans were able to demonize it and make it into something

it‘s not.

The president now has to go back and make the case to the country that

this is a good bill not just for the people who didn‘t have insurance, but

for the people who do because it will give them stability and it‘ll bring

down costs over the long term.  But there‘s no question that Democrats have

a challenge right now.

TODD HARRIS, REPUBLICAN STRATEGIST:  You know, there...

MATTHEWS:  Do you believe that if you had an election today, you‘d

lose?

MCMAHON:  I think if we had an election today...

MATTHEWS:  You‘d lose the House.

MCMAHON:  ... it would be a change election.  There‘s more Democrats,

so more Democrats...

MATTHEWS:  Would you lose the Senate, too?

MCMAHON:  I didn‘t say we‘d lose the House, I said that a lot of

Democrats would be defeated.  But you know, 23 defeats in a normal off-year

is what‘s to be expected.  It could be a little north of that.  But you

know, 40 seats is a lot.

MATTHEWS:  Well, I remember Reagan was in trouble in ‘82.  I don‘t

deny that parties often get in trouble their second year, especially during

a depression, or almost a depression.  We have a 10 percent unemployment

rate, basically.

HARRIS:  There have been three times in the last 60 years when Gallup

has asked which party—What is your congressional preference on political

party?  There have been three times that Republicans have polled higher

than Democrats -- 1950, 1994 and 2002.  This is the fourth time.  Now, this

election, between the health care bill...

MATTHEWS:  You mean party ID is higher now.

HARRIS:  It‘s not party ID, it‘s congressional preference, which—

you know, Republican or Democrat, generic ballot.  Between the stimulus,

between this health care bill, between all this talk of cap-and-trade and

just the daily drumbeat out of Washington about the expansion of

government, this is causing big problems for Democrats.

MATTHEWS:  Well, you don‘t say “between” when you have more than two. 

It‘s between one or the other and “among” all the others.  You misused your

English language there.

(CROSSTALK)

HARRIS:  We‘re going to lose!

(CROSSTALK)

MATTHEWS:  ... correct English here!  Let‘s go to the Gallup poll.  It

says 50 percent of Republicans are very—this is the one I like—are

very enthusiastic about going to the polls this coming November. 

Democrats, only 35 percent enthusiastic.

You know, Steve—and I know I‘m putting you basically in a barrel

here.  These are the worst situations to be in, but you‘ve got to face the

fact that people aren‘t so thrilled to go vote now who are Ds.

MCMAHON:  Well...

MATTHEWS:  And Republicans can‘t wait to get in there for bad news. 

They want to go in there and vote no, right?

HARRIS:  I wish it were tomorrow!

MATTHEWS:  You guys want to go in and just tear down the house, right?

HARRIS:  Well, look...

MATTHEWS:  You do.  You‘re angry voters.

HARRIS:  This...

MATTHEWS:  You guys aren‘t happy people.

HARRIS:  There‘s...

MCMAHON:  Todd‘s an angry white man.  I mean, look at him.

(CROSSTALK)

HARRIS:  ... and we‘re very happy about what‘s happening...

MATTHEWS:  I can read you.  You are amazing.  You come in here, I can

always tell...

(CROSSTALK)

MATTHEWS:  You are a poll indicator.

(CROSSTALK)

MCMAHON:  He was so happy in the Green Room—Oh, we‘re going to talk

about the Gallup numbers!  This is going to be a great evening!

HARRIS:  The dirty secret in politics that—every political

campaign, I don‘t care whether you‘re a Republican or a Democrat, you don‘t

care what all Americans think, you don‘t even care what all voters think. 

The only people whose opinions campaigns really care about are likely

voters who are going to show up on election day.  And the way that you

gauge that is by enthusiasm, how enthused is your base versus how

enthused...

MATTHEWS:  These early polls, as early as eight months out, tell you

who‘s going to vote?

HARRIS:  Well, it certainly gives you a trend.  And as of right now—

obviously, a lot can change between now and November.  But as of right now,

our base is motivated and (INAUDIBLE)

MCMAHON:  Chris, there‘s something going on in the “Which party do you

favor.”  Largely, it‘s independent voters who are making that a Republican

choice right now, rather than a Democratic choice, and independent voters

have been a challenge for Democrats now for a little bit.  The enthusiasm

among both parties is up.  It‘s up about 40 percent among Democrats from

where it was a week-and-a-half ago, so President Obama being out there,

making the case, explaining to people...

MATTHEWS:  Yes.

MCMAHON:  ... the health care reform that they heard about from

Republicans isn‘t the health care reform that passed and letting people

know what‘s in that bill...

(CROSSTALK)

MATTHEWS:  ... take a look at this new poll.  This is more disturbing. 

A new “USA Today”/Gallup poll has the president with 50 percent of the

people saying he should not be reelected.  That‘s the highest it‘s been, I

believe, Todd.

HARRIS:  Well, you know, I don‘t think the president has much to worry

about right now because he‘s not on the ballot this year, but...

MATTHEWS:  His name‘s not on, but he is.

HARRIS:  Correct, and his policies.  It‘s going to be a referendum,

but it‘s going to be all...

MATTHEWS:  Here he is up in Maine tonight.  Today he‘s up there.

HARRIS:  It‘s going to be all of those vulnerable Democrats who are

going to be paying the price for the mistakes that the White House has

made.

MCMAHON:  Well, hold on a second, Todd...

MATTHEWS:  Here‘s my question, Steve.  I don‘t understand this.  The

president‘s out there campaigning like he‘s running for president again. 

He‘s been doing—he looks good (INAUDIBLE).  He‘s got the shirt on.  He‘s

got the style.  He‘s gung-ho.  He‘s alone.  I mean, the Democratic Party

has a lot of members.  You dominate the House and the Senate.  You‘ve got

governors all over the place.  Where are the surrogates?  Where are the

Democrats out there campaigning with him, showing the—where‘s the Obama

faction?  Is there an Obama faction, or is it just him and his wife?

MCMAHON:  No, no.  He‘s out there, and all the Democratic candidates

and elected officials are present.

MATTHEWS:  They are?

MCMAHON:  They‘re just not necessarily on the stage with him.  This is

something the White House advance team determines...

(CROSSTALK)

MATTHEWS:  No, but why aren‘t they out there on their own, talking to

TV, talking to talk shows?

MCMAHON:  Well, you know what?  They‘re out there having town meetings

this week.  They‘re all home and they‘re having town meetings.

And the town meetings this time are a lot different than they were in

August, because people are coming, and it‘s—it‘s a very partisan

conversation. 

(CROSSTALK)

MCMAHON:  ... conversation.

(CROSSTALK)

MATTHEWS:  Here‘s the president now.  I‘m not sure he‘s getting enough

help out there.

You disagree.

I think he needs a whole bunch of people out there saying what he‘s

saying.  Here he is up at Portland today in Maine.  Let‘s listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES:  What this reform does

is it builds on the system of private health insurance that we‘ve already

got, so that if you have insurance, this reform will make it more secure

and more affordable.  If you can‘t afford insurance or if you‘ve been

denied coverage, you‘re finally going to be able to get it, and over time

costs will come down for families, businesses and the federal government,

reducing our deficit by more than $1 trillion over the next two decades. 

That‘s what this reform will do. 

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

(CROSSTALK)

MATTHEWS:  Well, there‘s the president up before a very New England

crowd up there.  It looks like college kids. 

What—what...

HARRIS:  I think it‘s very telling that the one guy who‘s out there

during the spring recess talking about health care is the one guy whose

name is not on the ballot in 2010. 

Reuters just had a story out today.  All members of Congress have gone

home.  Harry Reid, not a single health care event planned back home in

Nevada for this whole...

MATTHEWS:  What does that tell you?

HARRIS:  ... for this whole recess. 

It—it means the Democrats don‘t want to be talking about it.  You

have got John McCain campaigning up and down Arizona on health care,

Republican members of Congress campaigning all across the country, talking

about health care.

Democrats, who just passed this bill with some fanfare, none of them

are talking about it. 

MCMAHON:  Democrats—Democrats have to talk about it.

HARRIS:  The fact that Harry Reid is not talking about it is telling. 

MATTHEWS:  What you guys have to talk about positively?  What do you

guys got in your barrel?  Have you got anything to sell?  Or are you just

running against this guy, just peel over Obama every day.  Have you got

anything to sell, and positively?  What?

HARRIS:  Well, of course.  Of course.

MATTHEWS:  What are your bills? 

HARRIS:  I mean, we have talked—we have talked—we have talked

before on this show about Republican proposals for health care reform that

we think would lower the costs of care and not do it in a way that blows up

the budget and costs jobs. 

But, look, we‘re the party out of power.  So, this is a referendum on

Barack Obama and what the Democrats have done.  You are absolutely right

that we have to have some kind of positive message, but... 

(CROSSTALK)

MATTHEWS:  No, you have just been around since the 1860s, and I have

never heard of a Republican health bill. 

MCMAHON:  No, and there never will be one. 

MATTHEWS:  The 1860s, and you never do Medicare or Medicaid.  The

Democrats do all this stuff.

(CROSSTALK)

MATTHEWS:  They do Social Security.  You guys don‘t do this stuff. 

HARRIS:  I said...

MATTHEWS:  You do wars. 

HARRIS:  I said on the show—I said on this show last week that I

thought, when we controlled the White House and both chambers of Congress,

we probably—we should have passed a health care bill. 

MATTHEWS:  You agree?

MCMAHON:  Should have passed something.  But...

(CROSSTALK)

MATTHEWS:  OK.  Let me go on to a couple points here. 

This—this is the oil thing the other night, because I‘m always

fascinated by somebody who does something interesting.  Barack Obama has

doubled down in Afghanistan.  I think that‘s an American fight.  I don‘t

think it‘s a partisan fight.  And I don‘t think it‘s ever been a partisan

issue, Afghanistan.  Iraq was.

Oil drilling offshore has often been a Texas, you know, oil patch kind

of thing.  Let‘s go drill, drill, drill, very Republican.  Here‘s the

president saying, as part of his mix, let‘s do some drilling off of

Virginia, off of Florida, off of Alaska. 

MCMAHON:  Right. 

MATTHEWS:  What does that mean politically?  Why is he out there

saying, let‘s drill, drill? 

MCMAHON:  Because Democrats have been losing independent voters by 60

to 40 percent in the last two or three elections that we have—that we

have done exit polling in. 

And the president understands that 63 percent of Americans -- 63

percent—think that we need to do more to explore offshore reserves. 

It‘s not just oil that‘s going to be drilled for.  It‘s natural gas.  And,

you know...

MATTHEWS:  Which is clean. 

MCMAHON:  Which is clean.  And there—there‘s nobody in America who

thinks that fossil fuels are going to go away, even as we try to become...

(CROSSTALK)

MATTHEWS:  So, this is a smart down-the-middle thing?

MCMAHON:  It‘s a great down-the-middle thing.

MATTHEWS:  Do you agree? 

HARRIS:  Yes, absolutely.  This is a smart move politically, not only

for the reason that Steve laid out, but he needs to do this now if he has

any hope of picking up moderate Republicans to support his cap-and-trade

legislation.

MATTHEWS:  Yes. 

HARRIS:  And, also, as we head into summer, gas prices spike.  If he

wasn‘t doing something to show that he was alleviating the supply-and-

demand problem that causes the fluctuation, he would have a huge political

target around his... 

(CROSSTALK)

MATTHEWS:  And we all know these things don‘t go online for three or

four years.  No matter—when you start drilling now, you get the gas—

you get the gas in... 

HARRIS:  Right.  But he has the talking point.

MATTHEWS:  But, no, also—just be fair—someday, we may be a

society where our cars are driven by wind and solar and all that stuff. 

But there‘s going to be a midpoint between now and then where we‘re going

to run out of gas, right, and we‘re going to want to have this offshore

potential, right? 

HARRIS:  Yes, absolutely. 

(CROSSTALK)

MATTHEWS:  So, I think it‘s an American thing...

(CROSSTALK)

HARRIS:  I mean, I think most people want all energy solutions put on

the table. 

MATTHEWS:  I think he‘s been the Democratic leader as of last week.  I

think he‘s clearly the leader of the Democratic Party, thanks to health

care.  He‘s got to be leader of the country now.

MCMAHON:  That‘s right. 

MATTHEWS:  I think he‘s got to do things like Afghanistan and this and

debt relief and debt reduction, thinks that you like. 

HARRIS:  I would love it.

MATTHEWS:  And I‘m with him, too. 

Thank you—although Afghanistan, I don‘t know.

Anyway, thank you, Steve. 

If you like it, I‘m getting nervous. 

Thank you, Steve McMahon.

(LAUGHTER)

MATTHEWS:  And, thank you, Todd Harris. 

Up next: the top 2009 hedge fund incomes.  Guess how many zeros you

can fit into a paycheck?  By the way, would somebody tell me what these

guys do?  That‘s in the “Sideshow.”

You‘re watching HARDBALL—get ready for the billionaires—only on

MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Back to HARDBALL, and time for the “Sideshow.” 

First:  Those hits keep coming. 

The Republican National Committee is already facing criticism over

expensing a late-evening visit to a sex-themed nightclub.  So, screwups

like this next one don‘t help matters much. 

Here‘s an RNC fund-raising mailer that was sent out last month in

Minnesota.  The thing is, when you dial the number that‘s listed at the end

of the form, it doesn‘t lead to the RNC.  Check out where that 1-800

actually directs you to, almost too ironic to be true.  Let‘s listen. 

(BEGIN AUDIO CLIP)

UNIDENTIFIED FEMALE:  Hey there, sexy guy.  Welcome to an exciting new

way to go live, one-on-one, with hot, horny girls waiting right now to talk

to you.  Lie back, baby.  Relax. 

(END AUDIO CLIP)

MATTHEWS:  That‘s right, a phone sex line, no kidding.  A spokesman

for the RNC told Politico that the number was a typographical error. 

Now, the problem is, guys at the RNC—I‘m talking to you—that you

have to tell us it‘s a typographical error at this point. 

(LAUGHTER)

MATTHEWS:  Next, we have got priceless video of Georgia Congressman

Hank Wilson (sic) at a House Armed Services hearing last week.  He‘s here

questioning U.S. Admiral Robert Willard about plans to station 8,000

Marines and their families on the Western Pacific island of Guam.

Now, here‘s the congressman‘s concern.  The influx could cause the

island of Guam to capsize. 

Listen to this member of Congress talk now. 

(BEGIN VIDEO CLIP)

REP. HANK JOHNSON (D), GEORGIA:  Well, this is an island that, at its

widest level, is what, 12 miles from shore to shore? 

ADMIRAL ROBERT WILLARD, PACIFIC FLEET COMMANDER, U.S. NAVY:  I don‘t

have the exact dimensions.  But, to your point, sir, I think Guam is a

small island. 

JOHNSON:  Yes, my—my fear is that the whole island will become so

overly populated that it will tip over and capsize. 

WILLARD:  We don‘t anticipate that. 

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS:  So, what does a person make of that exchange?  The

congressman went on by the way, quite a while, asking about the size of the

island, before making that incredible statement.  He could have looked up

those facts.

But then he says he‘s worried, the congressman is worried that the

island might turn over, like it‘s a raft or something.  And this guy‘s

representing people in Congress.  I don‘t know what to make of this one. 

Time now for tonight‘s “Big Number.” 

You know business is back for Wall Street‘s big banks, but what about

these hedge funds, those exclusive risk-prone investment pools known for

reaping huge profits?  Well, “The New York Times” today highlights the top

2009 hedge fund incomes. 

Catch these.  You will get sick.  At number four, a guy named John

Paulson made $2.3 billion this past year.  He‘s best known for betting

against supreme—or subprime mortgages well before people realized they

were ticking time bombs. 

At number three, James Simons, a mathematician.  This guy got a Ph.D.

from U.C. Berkeley at age 23.  He‘s been called the world‘s smartest

billionaire.  He made it by mathematics, I guess.  The runner-up spot, a

familiar game, Mr. George Soros.  He‘s better known for his forays into

Democratic politics.  He‘s still got $3.3 billion in hedge fund income last

year.  That‘s $3 -- get these numbers right—billion. 

So, who has earned the top money?  A guy named David Tepper with $4

billion last year.  Yes, that‘s $4 billion with nine zeros.  He bet big in

fall 2008 that the government would prop up Wall Street with taxpayer

money.  That was his bet, David Tepper, the top hedge fund earner with $4

billion in income last year.  I‘m not sure it‘s earned, but he‘s got it. 

It‘s unreal, but it‘s big. 

I‘m going to have to something to say, by the way, about this kind of

money in our so-called free enterprise system, which we nicely call free

enterprise. 

Up next:  Get ready to be outraged.  The father of a fallen Marine who

sued a vulgar anti-gay church group that protested at his son‘s funeral,

he‘s been ordered to pay the church group‘s legal fees by an appellate

court.  I don‘t know how this kind of stuff happened.  We are going to talk

to the father who has been hit with this bill.  He‘s got to pay the bill

for these screamers that went out and distracted from his son‘s funeral,

having given his life for his country. 

You don‘t really know what to do in these situations.

You‘re watching HARDBALL on MSNBC.  

(COMMERCIAL BREAK)

JULIA BOORSTIN, CNBC CORRESPONDENT:  I‘m Julia Boorstin with your CNBC

“Market Wrap.”

Stocks accelerating towards the close, after tapping the brakes around

midday, the Dow Jones industrials finishing more than 70 points higher, the

S&P 500 adding eight, and the Nasdaq rebounding four points, after showing

some significant weakness this afternoon. 

The markets started off strong on some positive economic reports,

manufacturing activity showing stronger-than-expected improvement in March. 

Analysts say steady gains in that sector are the clearest sign the recovery

has legs. 

And a slight drop in the weekly jobless claims fueling enthusiasm

about tomorrow‘s monthly report from the Labor Department.  In stocks,

financials looking strong throughout the day, with Bank of America,

American Express, and J.P. Morgan finishing towards the top of the Dow. 

But Kindle creator Amazon taking a big hit today after cutting new

pricing deals with two major publishers.  Amazon agreed to begin charging

more for the publishers‘ e-book bestsellers. 

That‘s it from CNBC, first in business worldwide—now back to

HARDBALL. 

MATTHEWS:  Back to HARDBALL. 

Almost two weeks ago, Albert Snyder appeared on this show, when my

friend Michael Smerconish was hosting for me.  And he told the heart-

wrenching story of losing his son who served in the military in Iraq, and

the further anguish when a group of demonstrators showed up near the church

where the funeral service was being held for his son. 

And they were holding signs, as you can see them right now, that

things like “Thank God for dead soldiers,” horrible things like that.  The

group demonstrating at the funeral claims that the death—I don‘t even

like the word claims—says that the death of U.S. soldiers in Iraq and

Afghanistan is God‘s judgment for America‘s intolerance—or tolerance of

homosexuality here at home. 

Mr. Snyder took the protesters to court and won at the district level.

Then, at the appeals level, it was overturned.  Now the Supreme Court will

hear the case this fall.  But, on Friday, the appeals court—that‘s the

second level of justice—ordered Snyder to pay the legal fees of this

church group, $16,000, the group that demonstrated at his son‘s funeral. 

Albert Snyder joins me right now.

Also—he‘s in Baltimore—also, radio talk show host, our friend

Michael Smerconish.

Thank you, Michael for being back.  You were part of this first

interview. 

Mr. Snyder, thank you for your family‘s sacrifice.  And I don‘t even

know what to say further. 

AL SNYDER, FATHER OF KILLED U.S. SOLDIER:  Thank you, Chris. 

MATTHEWS:  But I don‘t know what it means to lose a son.  I have a

couple, and I don‘t know what it would be like.  And I don‘t—I just can

only—just, as a father, I just don‘t know what to say. 

To his credit, my colleague on that other network, FOX, Bill O‘Reilly,

is helping you out. 

What was your reaction when you were told by the court that you had to

pay the costs of going to court against this foul group? 

SNYDER:  Well, Chris, I think this decision, Chris, hit me harder than

any of them.  It was bad enough that they overturned the verdict, but then

to come out and tell me that I have to give them $16,000 more for them to

go do this to other soldiers, it—I—it‘s—it really hurts. 

MATTHEWS:  So, now they can do it for free.  They don‘t have to pay

anything.  They just go around and—and—have you ever figured out what

in their heads led them to go to somebody whose—whose life is

impeccable, has nothing to do with the lifestyle or the orientation they

don‘t like, or it has nothing to do with that?  It‘s just a soldier who

died for his country. 

Why—how do they justify going and—and distracting from this

religious experience and—and national service recognition?  How do they

justify it?  Do you know?  What are they—who are these people? 

SNYDER:  Chris, I don‘t know how they—well, they‘re a bunch of—

they‘re not even religious people, in my opinion, Chris.  In my—in my

opinion, Fred Phelps is nothing but a con artist. 

Unfortunately, I think his children and his family believe what he

says.  But this is a way he makes money. 

MATTHEWS:  Yes.  My hunch is, he just goes to where really good people

are meeting because he knows it‘s such an awful thing to be doing, that the

press can‘t avoid covering it, it‘s so awful.  Isn‘t that sick of the way

we live?  I guess we have to cover the most—sickest people. 

What do you think?  Should we just not cover these events? 

SNYDER:  Well—well, he makes—well, he makes sure that they‘re

covered by—by the announcements that he sends out to the media and to—

and to law enforcement. 

I mean, the—the announcement that he sent out on my son, it had

Matt‘s picture on it.  Underneath of it, it had a military coffin, and

underneath that, it said “burial of an ass.”  And then it went on to

proceed that they would be protesting St. John‘s Catholic Dog Kennel. 

So, you know, they invite the media. 

MATTHEWS:  Yes.  I guess it‘s the smell of these people that arouses

us.  I don‘t know what to say.  Let‘s go right now to Smerconish.  Michael,

you‘re an attorney.  What is it about the blindness of our appellate court

system that they would not exercise some discretion here and say, this was

not a frivolous suit.  It got past the district court, and therefore it‘s

not frivolous, prima faci.  It‘s gotten to the appellate level.  It‘s going

to the Supreme Court. 

There‘s nothing frivolous about this.  This was an legitimate and, I

would say, honorable lawsuit brought by Mr. Snyder against this group.  Why

would he get hit with this boomerang of court costs of 16,000?  Why would

the court do this?

SMERCONISH:  I‘m optimistic that Mr. Snyder is going to prevail in

front of the United States Supreme Court when they hear the case in

October.  There are other instances where the First Amendment has been

ruled to be something that can be regulated.  Look at defamation, look at

obscenity, look at fighting rules.  And if he‘s successful in the Supreme

Court, this will get wiped out. 

I would never defend this.  I think it‘s outrageous.  But the federal

rules of civil procedure—it‘s Rule 39 -- do permit some form of loser

pays in this country.  And I‘ve read the bill of costs.  It‘s printing

costs and it‘s a filing fee that total the 16,500 dollars. 

I think we‘d be mistaken if we looked at it and we said that the

Fourth Circuit was deliberately slapping the father of a fallen marine. 

It‘s part and parcel of our federal rules.  And they were exercising

something that, unfortunately, is available to a successful party.  We hope

it gets wiped out.  I‘ve done my party.  My listeners have done their part

to write a lot of checks to make sure that he has a lot, in terms of money

to fight this all the way to the Supreme Court. 

MATTHEWS:  Maybe we can do our small part here.  If you‘d like to help

Mr. Snyder‘s cause, and that‘s to pay the court costs of going to the

Supreme Court, and actually helping the effort that Bill O‘Reilly is

already helping here, go to MatthewSnyder.org.  MatthewSnyder.org. 

We‘ve never done this before on this show.  But it‘s certainly a

worthy cause.  Mr. Snyder, let me ask you about your son.  What was he

like?  Let‘s talk about a good guy now, your son and what he did for his

country. 

SNYDER:  He was a very good kid.  But, Chris, before I do that, can I

just thank Michael.  Michael has there for me the whole time.  Michael was

the one that I really leaned on when this all came down.  And Michael,

thank you, very, very much. 

As far as Matt goes, Matt was a good kid.  Matt was a really good kid. 

I think the one thing a lot of people remember most about Matt was his

ears.  He had really big ears and they stuck out.  But had the type of

personality and he truly lived by the phrase: if you don‘t have something

nice to say about somebody, then just don‘t say anything at all. 

He loved soccer.  He was—he was very good at soccer.  He liked

baseball.  And he was a very loyal brother and a very loyal friend and a

very loyal son. 

MATTHEWS:  What were his feelings about serving his country?  What

were his—

SNYDER:  He loved it. 

MATTHEWS:  As a father, he must have told you, what were his feelings

about going off and facing the horrors and dangers of war in Iraq? 

SNYDER:  We talked about—he came home the Christmas before he went

over there.  And we talked about it.  And you know I was very concerned. 

And he said, dad, I have a job to do and I‘ll get it done.  And he loved

being a Marine.  He wanted to be a Marine probably since the time he was

ten or 11 years old. 

MATTHEWS:  Wow.  Wow.  Thank you for your service and your family‘s

sacrifice, and thank you for his sacrifice, and I‘ll do it to you.  Thank

you, dad, for doing this.  Thank you very much.  My friend, Michael

Smerconish, once again, you have covered yourself with honor.

Up next, earlier today in Rome, Pope Benedict celebrated Holy Thursday

Mass.  He did not address the current sexual abuse reports in the church. 

But a top Vatican official, on behalf of the Pope, criticized “the New York

Times” for its coverage, calling it deficient by any reasonable standards

of fairness.  Well, that‘s coming up next on HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  We‘re back.  The Vatican is pushing back hard against “the

New York Times‘” coverage of sexual abuse incidents in the Catholic Church,

and what role the Pope may have had in handling some cases in the past. 

Here‘s part of what Cardinal William Levada, an American—he‘s from San

Francisco—who leads the Vatican‘s Congregation for the Doctrine of the

Faith.  He said, quote, “I am not proud of America‘s newspaper of record,

‘the New York Times.‘  As a paragon of fairness, I ask the ‘Times‘ to

reconsider the attack mode about Pope Benedict XVI.” 

For the latest, let‘s go now to NBC‘s Anne Thompson, who is over in

Rome.  It‘s late night over there.  Anne, Let me ask you about this—this

is really a big-picture question.  Does the Vatican know how deep the

trouble it‘s in?  We‘ve got a new poll out that shows the Pope—you don‘t

usually poll the Pope.  But he‘s down 20 points among everybody.  Your

thoughts?  Their thoughts? 

ANNE THOMPSON, NBC NEWS CORRESPONDENT:  Yeah, and it‘s not—it‘s not

just in the United States.  They‘re seeing similar declines in Germany. 

Yes, does the Vatican understand that this is a big serious issue? 

Absolutely.  Does it respond in the way that we are used to having

political organizations respond, or multinational corporations respond to a

crisis?  The answer is, absolutely not. 

You‘ve got to remember that this is a big bureaucracy, an Italian-

dominated bureaucracy, and it moves extraordinarily slowly.  But I will

tell you, Chris, that if the Vatican were to put out talking points, the

first one would be this—because I have heard this from everyone I have

talked to here in Vatican City since I arrived over the weekend.  And that

is that Pope Benedict XVI is the right man to handle this crisis. 

Why, you ask?  Because they say as the head of the Congregation of the

Doctrine of Faith under Pope John Paul II, starting in 2001, he read every

one of those files on abusive priests, and he gets it and he understands

it.

The second talking point would be to point to the 2008 U.S. visit that

Pope Benedict made, and when he was in the United States, when he met

privately with those abuse victims from the Archdiocese in Boston.  It was

in a very pastoral manner.  He listened to those abuse victim.  He prayed

with those abuse victims.  And it‘s against something else that officials

point to as evidence that the Pope does get this.  

MATTHEWS:  One thing the Cardinal Levada seems to be missing is the

reality here.  In his letter, his comments to the “New York Times,” that

interview, he says “I think the evidence is clear from the documents that

Father Murphy”—he was the abusing priest—“was a serial abuser of

children, helpless children oftentimes.” 

Aren‘t they always helpless?  What is this careful oftentimes?  Is

there any time a children are not?  I‘m not picking a point here.  He‘s

supposed to be the communications guy here.  He‘s saying oftentimes—

well, oftentimes helpless—kids in the sacristy—I‘ve been there—are

helpless.  The priest is the boss.  He‘s God‘s representative.  You‘re

helpless.  

THOMPSON:  I think—further on, Cardinal Levada makes no excuses for

Father Murphy.  In that posting on the Vatican website, I believe he calls

what Father Murphy did egregious acts.  He‘s not trying to, in any way,

excuse Father Murphy.  But the point he makes is that the inference is that

then Cardinal Ratzinger, who is now Pope Benedict the XVI, somehow looked

the other way in this case.  Father Murphy wrote to Cardinal Ratzinger,

asked that he be allowed to die as a priest, that he not be defrocked. 

There is some implication that perhaps Cardinal Ratzinger tried to

stop that defrocking process.  And Levada say there‘s no evidence to that

fact.  And this is what he‘s trying to do in saying, look, you‘re making

supposition here, but there‘s no proof.  

MATTHEWS:  Well said.  Thanks for that great report.  Thanks for

staying up late over there.  Anne Thompson in beautiful Rome this time of

night.  I‘ve been there late myself. 

Anyway, with me now is the “Washington Post‘s” Sally Quinn, who is the

co-moderator of their online religious forum called “On Faith.”  Sally,

thanks for coming in tonight.

You‘re not a Catholic.  So let‘s look at the perspective you have on

this as a journalist.  What is the Pope‘s problem?  Can he deal with it?  

SALLY QUINN, “THE WASHINGTON POST”:  Well, it does remind me a lot

about Watergate, with the Catholic Church attacking the “New York Times,”

because that‘s exactly what happened when the White House started attacking

the “Washington Post.”  I think that one of the big problems is perception. 

I don‘t think that they understand how devastating the cover-up is.  I

think one of the whole situations that is most appalling is the idea

Cardinal Law, who was in Boston and who knew about all the cover-ups, is

now in an exalted position in Rome, right next to the Pope, as if nothing

had ever happened. 

When the Pope came here and apologized, it‘s what I would call—I

think in the religious world you call it a non-apology apology.  He said he

was sorry for those people who were hurt.  I think what you need is you

need people to say, this horrible thing happened you to; we apologize; we

ask for forgiveness; and then we do something to make it possible for

reconciliation, ie we open the doors, we root out all the evil-doers, and

we do something to make sure these people get punished and dealt with. 

They‘re not being open.  They‘re not being honest.  

MATTHEWS:  Sally, I agree with you on Cardinal Law.  He shouldn‘t be

in that exalted position.  He‘s a symbol of cover-up.  Thank you very much,

Sally Quinn.  When we return, I‘m going to have some thoughts about free

enterprise, you know, the sunny name we give to capitalism.  You‘re

watching HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS:  Let me finish tonight with a scary thought, especially for

those who believe in free enterprise, you know the sunny name for

capitalism.  What happens when we have huge numbers of people out of work,

and even more only in part-time jobs, or have given up looking for work,

like now?  What happens if we have more millions who work full time, get up

early, catch the bus, work all day, come home tired, and still can‘t pay

the bills, like now, the working poor?

What happens if we have even more millions of what you call the

struggling class, people who struggle basically live paycheck to paycheck,

and never seem to climb any higher, never seems to build up much wealth,

like now? 

What happens if all these people, these millions of people, the

unemployed, the under-employed, the working poor, the big struggling class

out there get up in the morning and read headlines that show a few people

making billions of dollars a year, people up in Wall Street, hedge fund

guys.  One made four billion this year.  Get up today and read the paper.

And what happens when all this money is being made by people who don‘t

seem to actually make anything, not steel, not cars, not computers, not

even movies.  They don‘t even tell us jokes, like Leno or Letterman or

Stewart or Colbert.  They just make money, billions of it, in a financial

system that‘s backed up by billions of dollars from us.  Billion dollar

socialism, whatever you want to call it. 

It all rides atop the sweat of the worker bees, and of course the

poor.  Didn‘t you read the paper this morning?  I wonder what‘s more scary,

that these people rise up some day, that people rise up some day, and

really raise hell about this and really cause some trouble for this deal,

or they don‘t bother and it gets worse, more billions at the top, more

millions of the unemployed at the bottom, more millions still crunched in

the middle, people work at making things watching people who don‘t make

anything at all except money. 

Anyway, there‘s a bill coming to the floor of the U.S. Congress that

may do something about this.  It‘s called Financial Reg, a boring name, but

let‘s hope it does it. 

That‘s HARDBALL for now.  Thanks for being with us.  Catch us again

tomorrow night at 5:00 and 7:00 Eastern.  Right now, it‘s time for “THE ED

SHOW” with Ed Schultz.  

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

BE UPDATED.

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