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updated 11/14/2012 10:39:53 AM ET 2012-11-14T15:39:53

HARDBALL
November 13, 2012

Guests: Sari Horwitz, David Wood, Dennis Van Roekel, Mack McLarty, Nia-Malika Henderson, Kiki McLean

CHRIS MATTHEWS, HOST: Night of the generals.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews up in Boston.

"Let Me Start" with this Petraeus sex story. Sex, sex, sex -- that`s
what it`s about, the testy, seamy search for something wild in the
buttoned-down world of spies, spooks, whatever they call themselves these
days, and the shined boots and chest medals of the combat elite.

A general has an affair with a young reporter. That young reporter
spies some competition, tells her to bug off. Meanwhile, that competition
becomes the target of tens of thousands of e-mails from yet another
general. What a soap opera.

But guess what? One of the generals, actually, he`s an ex-general, is
head of the CIA, or just was. The other general, the one sending the e-
mail by the bushel, is our commander in charge in Afghanistan.

If this were a British plot -- and it sure is kinky enough -- we`d be
calling it "Carry on Generals." But there are stakes, and one of them is
our country`s security. Let`s not forget that as we dig deeper, that fact
into this plot tonight.

Let me -- joining us right now is "Washington Post" reporter Sari
Horwitz. Also here is David Wood, senior military correspondent for the
HuffingtonPost.

Sari, give me a sense -- I don`t want people to get lost. Before we
start, let me take my own shot at this, at how the whole thing is put
together. Let`s watch.

(BEGIN VIDEOTAPE)

(voice-over): The messy and complex web begins with David Petraeus.
In 2006, Petraeus meets Paula Broadwell, a West Point graduate and doctoral
student, after giving a speech at Harvard.

Fast forward to May of this year. Another woman, Jill Kelley, a
friend of Petraeus and his wife, begins receiving harassing e-mails. She
asks a friend at the FBI to help launch an investigation. The e-mails, it
is eventually discovered, are being sent by Broadwell. The FBI also
discovers that Broadwell and Petraeus have been having an affair.

Meanwhile, the FBI agent who Kelley approached grows frustrated after
he`s kept off the case. His supervisors reportedly are concerned that he
has, quote, "grown obsessed" with the matter. It`s also uncovered that he
has sent shirtless photos of himself to Kelley.

That agent contacts Republican congressman David Reichert to air his
frustrations. Reichert then passes the information on to House Majority
Leader Eric Cantor, who speaks with the FBI whistleblower in late October.

It turns out that another major military figure, General John Allen,
the commander of U.S. and NATO troops in Afghanistan and Petraeus`s
successor in that position, has been having an e-mail relationship with
Jill Kelley. The FBI uncovers somewhere between 20,000 and 30,000 pages of
documents that contain, quote, "potentially inappropriate communication"
between Allen and Kelley, one senior U.S. defense official tells "The
Washington Post." "The Post" also reports that Allen received at least one
e-mail that talked about Kelley from an unidentified account that
eventually was traced to none other than Paula Broadwell.

(END VIDEOTAPE)

Well, there you have it. Sari, you`re investigating this. I`ve tried
to explain this and I`m trying not to be light-hearted, but there`s such an
aspect to this story -- above, or rather well below the importance of the
positions these men hold, one of them being, of course, our commander in
Afghanistan, the other one until recently, a few days ago, head of the CIA.

This aspect to it, it`s just -- well, I don`t know what to say. I`m
not used to covering these kinds of stories and wouldn`t be if these
weren`t the people involved. Your thoughts about how -- well, fill it in
as the reporter, what I`m missing here.

SARI HORWITZ, "WASHINGTON POST": Well, actually, Chris, you did a
very good job of pulling that together. I commend you. You really got the
high points.

But it`s fascinating that this big scandal affecting, you know, two
commanders, bringing down Petraeus, affecting General John Allen, started
really with the social scene in Tampa. Jill Kelley is a socialite there.
She`s sort of an ad hoc ambassador of sorts, a social ambassador to the
military base there. She`s known for throwing lavish parties, cigars,
champagne, string quartets, and socializes with these people.

She goes to an FBI agent she knows, again very politically well-
connected in Tampa, and says in June, I`m getting these strange e-mails.
What do I do? This agent takes them to the Tampa office of the FBI and
says, Investigate. Now, you know, the FBI doesn`t investigate all
harassing e-mails, but again, there`s a connection.

He`s never on the case. That`s an important thing to note. He`s
never on the case. But he does get frustrated after months and months and
months that nothing`s happening. And of course, he`s heard that this
investigation led to Paula Broadwell and to General Petraeus. And so he
contacts Eric Cantor and says, Hey, I`ve got this, you know, explosive
thing I know about. It could affect national security. And that`s how the
whole thing is blown open to the public.

MATTHEWS: Well, that`s where my friends in the blogosphere on the
left, I must say, begin to get suspicious. Why Eric Cantor, a man of the
hard right in the Republican Party, a very partisan figure? Why would an
FBI agent go to him?

HORWITZ: Well, he actually went -- a friend of this FBI agent`s went
to a representative from Washington state originally. There was some kind
of personal connection with the FBI agent`s friend, and he went to Eric
Cantor.

MATTHEWS: I see.

HORWITZ: And you know, one thing that`s important to say -- I mean,
you talked about the sex and the scandal and everything -- is that,
apparently, the national security concerns have all been knocked down. At
this point, there don`t appear to be, from the Justice Department or from
the FBI, any national security concerns.

MATTHEWS: Well, let me go to -- let me go to David Wood on that very
point. David, your sense of this, watching it from above, meaning from the
policy level, looking at the sordidness of this, what does it mean?

I mean, it looks to me like Petraeus`s career has ended. He did the
honorable thing, I think, in the end -- I think most of us agree -- by just
falling on his sword. That`s over with.

What about General Allen, our commander in Afghanistan? This would
seem to be somewhat distracting, to be sending something like 30,000 e-
mails or whatever out. I don`t even know how you do that.

(LAUGHTER)

MATTHEWS: I don`t e-mail that much, but when I do send them, they`re
short, they`re a couple lines to my wife or my kids.

What does this guy -- is he at the typewriter or at the computer all
day?

DAVID WOOD, HUFFINGTONPOST: Yes, Chris, it`s pretty astonishing to
contemplate a guy who`s got his hands full running a very, very difficult
war in Afghanistan sending off 20,000 to 30,000 e-mails or documents, or
whatever they were.

But look, one thing that`s really struck me about this -- I know it`s
said that there are no national security concerns raised by the scandal,
but in fact, this thing has detonated like a gigantic IED down in the
ranks, where the key ethic that holds this military together is that you do
the right thing when no one`s watching.

And boy, I talked to some drill sergeants this afternoon who were
saying, like, How are we supposed to teach young recruits to do the right
thing when no one`s looking when these guys at the top weren`t doing that?
It`s a real tragedy.

MATTHEWS: Yes, and I think -- isn`t -- tell me about the culture of
the military. I mean, I`m watching it from outside, and I`m thinking
generals and their wives spend a lot of time together socializing. They
have drinks. They have parties that go on for hours, I assume, because the
pressure of the military life and the danger of it. And so they become
pretty intimate across marriage lines. Not that they`re all messing
around, but the fact that they`re all hanging around together hours after
hours.

Love affairs could start. I mean, potentially, people could develop
fondnesses for each other. I can see it all happening in human terms.

WOOD: Well, look, Chris...

MATTHEWS: What is it about generals and generals` wives and all this
e-mailing? What is this thing about?

WOOD: Don`t forget...

MATTHEWS: Is it unique to the military?

WOOD: Don`t forget that generals are often deployed into a war zone
and their wives are not. The wives are at home. And I think when -- in
the case of General Allen, when he`s home and his wife gets an invitation
from Jill Kelley saying, Hey, we`re having this big extravaganza at my
mansion, please come -- wow, that`s terrific. She gets to go buy a new
dress. She gets to go show off with her husband and get some of the shared
glory.

So there`s a very, very strong attraction. And I think what you were
saying about how the military parties together -- you know, in wartime, not
really the case. You know, those guys, when they`re in Afghanistan, are
pretty much focused on the fight. You`ll recall that when Paula Broadwell
went to see General Petraeus in Afghanistan...

MATTHEWS: No, I meant in Tampa. That`s what I`m talking about.

WOOD: Yes, right, I mean...

MATTHEWS: I`m talking Tampa, where a lot of this happened.

WOOD: Well, that`s where the trouble begins, you`re absolutely right,
Chris. And it`s awfully easy for military people to fall into that trap of
being adored by high society and these glittering parties, and so forth.
It`s really a trap.

MATTHEWS: You know, I keep thinking about -- Sari, I keep thinking
about "Homeland," which I`m obsessed with. And I`m thinking about the guy
that went off and got captured in Afghanistan and had a miserable time. He
may have been brainwashed. Well, I`m not getting into the plot too much.
And meanwhile, his best buddy is messing around with his wife, and he cops
back and has a big fight with him at the barbecue. Remember that scene?

WOOD: Yes.

MATTHEWS: OK, well, that`s what I`m thinking here.

Anyway, the White House briefing today, Jay Carney said the president
still has faith in General Allen. He`s the top general in Afghanistan, of
course. He also expressed appreciation for General Petraeus`s service.
Let`s listen to the president.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: He has faith in General
Allen, believes he`s doing and has done an excellent job.

The president was certainly surprised when he was informed about the
situation regarding General Petraeus on Thursday. He greatly appreciates
General Petraeus`s remarkable service to his country both in uniform and at
the CIA.

QUESTION: Big picture, watching this, he`s not shaking his head,
saying, Guys, we need a more credible, confident sense of leadership here?

CARNEY: (INAUDIBLE) he`s not going to make grand pronouncements or
decisions about things based on, you know, two situations, two individual
cases. He`s focused on the missions that the military is tasked with.

(END VIDEO CLIP)

MATTHEWS: OK, let me go back to Sari on this, as you follow this
story, as you report this story. Why was the FBI agent who got this --
found out about this, was brought into the case -- why was he taken off the
case? What was that about?

HORWITZ: OK, let me explain something on the General Allen piece of
this, just before you go on, is that at this point, the FBI and the Justice
Department are not investigating Allen at all. There`s been no sort of...

MATTHEWS: OK.

HORWITZ: ... idea that he`s -- there`s criminal charges. The FBI
agent was never on the case. He brought the information to the FBI, but he
was never part of the original investigation because he was a friend of Ms.
Kelley`s.

MATTHEWS: So what is all this thing about him being frustrated
because he wasn`t on the case? What was that about?

HORWITZ: He was frustrated because he learned about the information
that was being gathered. He brought the original case. He was frustrated
that the information about Petraeus and Broadwell had not come out yet, and
he thought that the Justice Department and the FBI were dragging their
feet, so he -- that`s why he went to the Hill.

MATTHEWS: OK, let me get back to David on this, on the military end
of this thing. Why was Petraeus basically forced to resign? Why did the
matter come to his superior, Mr. Clapper, who`s head of intelligence, all
the intelligence services? Why was it (ph) gone (ph) through channels?
Why did he get confronted with, basically, a request to resign? How did
that happen, if this wasn`t criminal, what he was doing?

WOOD: Well, because he wasn`t on active duty. Of course, in the
military, under the Uniform Code of Military Justice, marital infidelity is
a criminal offense. Not so in...

MATTHEWS: Even for retirees, I understand.

WOOD: Well, not if you`re retired. You`re no longer under the code
of military justice, but the bigger...

MATTHEWS: Well, I just got a different reading on that. I just got a
different reading on that 10 minutes ago, but maybe you`re...

(CROSSTALK)

WOOD: The lawyers can fight over this, Chris, you`re right. But the
larger point is that the shame that he feels he`s brought upon himself and
his service trumps any, you know, legal niceties. And he, I`m sure, felt
that he had to resign because he`d really violated the trust that, you
know, everyone in the military had in him, even though he was retired.

Don`t forget that he was...

MATTHEWS: OK...

WOOD: Go ahead, Chris, I`m listening.

MATTHEWS: OK, the other -- the other general, Allen, is now leading
our services, is a more live question. How does he explain to the
president sending 30,000 e-mails to this attractive hostess down in Tampa?
I mean, does he have to explain that to the president?

HORWITZ: Well, first of all...

WOOD: I`m sure he has to explain that to the president. But the
president`s got to be hoping that Allen comes out of this cleanly because,
you know, General Allen has got -- you know, he`s got two big jobs he`s
doing for the White House. One is that he`s finishing off, you know, the
reorganizing the forces in Afghanistan. And then he`s supposed to go to
NATO and hold together the alliance to keep the focus on Afghanistan and to
keep people from dribbling away.

So those are two huge things that the White House has been depending
on him, and they`ve got to be hoping, boy, he comes out of this clean.

HORWITZ: And you know, the interesting thing...

MATTHEWS: OK, Sari -- we`ll have you on later, Sari, again to get
more of this.

HORWITZ: OK.

MATTHEWS: We have to break. We`ve got to get back to politics, OK?
That`s what I do for a living. We`re going to get away from sex in about
10 seconds now and get back to -- you`re been great reporting this. Thank
you very much, Sari Horwitz of "The Washington Post" and David Wood of the
HuffingtonPost.

Coming up: Louisiana governor Bobby Jindal says it`s time for his
party to stop, quote, "being the stupid party." He`s urging Republicans to
reject anti-intellectualism. Well, that`d be a good idea, except Jindal`s
out there selling teaching creationism in his public schools. Not exactly
intellectual front there.

Also, the fiscal cliff. How much room is the left willing to give
President Obama on entitlement reform? What`s their breaking point on
issues like Social Security and Medicare? Well, the president may have
found out today when he met with them, with labor and also some progressive
leaders. We`re going to talk to one of the people who was in that room.
Fascinating stuff coming up here.

And yes, people are already looking forward to 2016, and the name on
everybody`s list and lips, at the top of their list and now on their lips,
is Hillary Clinton. The nomination will be hers if she wants it. Well,
who doesn`t know that?

Finally, think we`re all coming together after the election? Not in
Texas, where 60,000 people have signed a petition to secede from the union.
What else is new? One GOP official down there even wrote a column asking
for an amicable divorce from what he called "the maggots" -- I love the
word -- who elected President Obama. They won`t quit. Read my lips, by
the way, no new Texas. That republic ain`t -- that republic`s not coming
back.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Well, how`s this for a new definition of landslide? We now
know that all the Democrats dominate -- how they dominate voting in the big
cities, but get this. In 2012, in 59 voting divisions in my city of
Philadelphia, where I grew up, Mitt Romney got zero votes -- 59 divisions.
Not one person in those 59 divisions voted for Romney. Not one. And the
score in those 59 divisions was an astounding 19,605 to nada. (INAUDIBLE)
President Obama beat the spread in those divisions. Anyway, the
neighborhoods were primarily African-American.

In 2008, some precincts in Chicago and in Atlanta didn`t give one vote
to John McCain.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. So now they tell us.
Republicans are becoming brutally honest in the wake of their defeat last
week, so the party that spent much of the campaign telling us that
evolution is a lie, global warming a hoax, tax cuts pay for themselves, and
pollsters were conspiring against the winning Romney campaign, is now
apparently making an effort to join the reality-based community.

The latest, Louisiana governor Bobby Jindal, who told Politico it`s
time for Republicans to, quote, "stop being the stupid party." Well, it
sounds promising until you remember Jindal signed into law a measure that
allows for teaching creationism in public schools.

Well, with me tonight are two MSNBC political hotshots. Howard
Fineman is the HuffingtonPost boss and John Heilemann is with "New York"
magazine, both great guys and brilliant.

Let me ask you two about this Republican Party. As someone once said,
in the communist world, as things were changing over in Budapest, the road
to Damascus is very crowded these days. There are a lot of, what do you
call them, a lot of converts out there.

(LAUGHTER)

MATTHEWS: And I was thinking, Howard, in a non-religious, in a
secular sense, boy, are there a lot of them coming out. Kristol`s out
there. Some of the really smart guys are saying -- and women are saying,
You know, we blew it, let`s think. Let`s think.

HOWARD FINEMAN, HUFFINGTON POST MEDIA GROUP, MSNBC POLITICAL ANALYST:
Yes, well -- yes, well, some people like David Brooks and Bill Kristol...

MATTHEWS: Yes.

FINEMAN: ... who are thoughtful conservatives, but they kind of
suspended their disbelief, I think, during the last days and weeks of the
campaign.

They were all on board with Romney. They were all saying the polls
were going to be wrong and Romney was going to get it and Romney was on the
right track and Romney had the right ideas, et cetera, et cetera.

They`re to be expected to be among the early changers, among the early
people on the road to Damascus, because they`re -- they`ve got one foot in
politics and the other in journalism.

But I think Jindal`s interesting. I think the real fight now, Chris,
is not whether people are getting on the road, it`s what they`re saying on
the road because they haven`t different theories about how to go forward.

MATTHEWS: Yes.

FINEMAN: One is economic. One is economics, one is cultural, and one
is immigration. I think there are basically three routes there.

MATTHEWS: Yes. I wonder whether they`re all agreeing to changes in
their party philosophy that don`t affect their central beliefs.

FINEMAN: Yes, exactly.

MATTHEWS: Anyway, let`s take a look at Jindal, who is a cultural
conservative. He`s acknowledging the Republicans must not be the party of
1 percent, the elite party, or of the 53 percent, if you take away the 47
percent.

Quote: "We have got to make sure that we`re not the party of big
business, big banks, big Wall Street bailouts, big corporate loopholes, big
anything. We cannot be. We must not be the party that simply protects the
rich, so they get to keep their toys."

Now, that`s a good Southern populist statement by a Southern
conservative Bobby Jindal, John Heilemann, but you will notice he doesn`t
give an inch on the cultural stuff, like, we have got to teach creationism
in our public schools. So, his idea of compromise, stay out there on the
far right on the cultural stuff, I`m sure abortion rights and same-sex, but
move in on the rich guy stuff.

JOHN HEILEMANN, MSNBC POLITICAL ANALYST: Well, yes.

Look, I mean, I`m not sure that we have got yet a comprehensive
statement from Bobby Jindal about what he thinks of modernization and
reform of the Republican Party would look like. But, Chris, you put your
finger right on the button. There is going to be a place in the Republican
Party for outsiders who are going to be not Washington figures,
particularly those who come from places where the Republican Party is still
strong, people in the South, so you think about people like Jeb Bush, you
think about people like Bobby Jindal who will bring a message of reform.

And it`s not surprising on some level that the economics will be
central. They need to be. There`s a big strain of Southern populist
conservatism in the Republican Party.

MATTHEWS: Yes.

HEILEMANN: Bobby Jindal is of course a Harvard-educated policy wonk
on things like health care reform. So, he`s an interesting marriage. He`s
not that different in that respect from -- in this mix of Southern elite
schooling and populist instincts to Bill Clinton back when he brought his
project of Southern populist moderation to the Democratic project back in
1989, 1990, 1991.

So there`s a road map here and Bobby Jindal I think is the first one
to jump on it, but he won`t be the last.

FINEMAN: Yes. But the thing is, though...

(CROSSTALK)

FINEMAN: Go ahead.

The thing is that Jindal is sticking with the cultural conservatism.
Yes, he`s a Brown-educated guy with a Rhodes Scholarship, but he`s still
for teaching creationism in the schools. And he`s also going pretty quiet
so far in immigration.

HEILEMANN: So far.

FINEMAN: Because a big part of the Tea Party thing -- so far -- a big
part of the Tea Party thing has been resistance to opening the doors on
immigration. That`s something he`s not dealing with at this point.

HEILEMANN: Right.

MATTHEWS: I wonder how many immigrant families that come to the
United States and want their kids to be doctors really want them to study
this creationism as premed. Do they want them to take organic chemistry or
do they want them to take this other thing, this -- religious thing, John
Heilemann?

Are they serious? Do they really want the doctors they go to not to
believe in science? It`s one thing to believe in your religion, which I
do, but to go transfer some biblical scripture into science and try to use
it for a different purpose than it was meant -- it`s meant for spiritual
and moral leadership. It`s not meant for scientific inquiry.

And for them to keep doing this like he does and claim that he`s going
to lead the country into the 21st -- through the 21st century? I think
that`s kind of not smart or dopey thinking. What do you think? How can
you claim to be a reformist and talk about creationism?

HEILEMANN: Well, again, I`m not sure that Bobby Jindal is talking
about creationism very much in the statements he made to Politico.

MATTHEWS: He hasn`t stopped.

HEILEMANN: He hasn`t stopped yet. Again, this is very early days.

And I`m not trying to make excuses for him. I think that there`s --
in any way. I`m pro-science. I think that we should be proud -- that if
you`re going to be a credible reformer in the Republican Party, you are
going to need to embrace the reality of things like climate change. And
you`re going to have propose conservative solutions to them.

MATTHEWS: Yes.

HEILEMANN: There`s no question about that. But, you know, I think
there is going to be -- this is where some of the cleavages are going to
come among various strains of reformism.

Howard pointed to one, the question of immigration. Someone like Jeb
Bush is going to very -- is going to be on the relatively liberal side of
creationism. Maybe Bobby Jindal is going to be more on the conservative
side, although because of the fact that he himself is a minority, he
carries -- he almost visually carries a kind of inclusiveness that some of
the other more white, more like standard brand Caucasian Republicans don`t
carry.

So, he can probably get away with a little bit more conservative on
the immigration front, but, Chris, I think you`re right. There are these
strains within the party that all these guys are going to be trying to
figure out how to work around.

And a guy by Bobby Jindal, who is actually by training a guy -- again
health care policy is his specialty, and he`s a guy of science. And yet
you point out correctly that right now at least so far he`s not going all
the way there on the question of cultural conservatism with relation to
creationism and other things.

MATTHEWS: Well, here he is this summer. This summer, Slate wrote
about the Louisiana Science Education Act of 2008 and its implications by
saying -- quote -- "The act allows so-called supplemental textbooks and
other instructional materials" to be brought into classrooms to support the
"open and objective discussion of certain scientific theories, including,
of course, evolution. As educators who have heard such coded language
before quickly realized the act was intended to promote creationism as
science."

Howard, let`s move on from that. It seems to me that everybody
understands that the elitism -- my dad, who was a Republican, used to say
the big problem with the Republican Party from his point of view was it
only cared about the big rich corporations. And he loved all the other
stuff, self-reliance, and low taxes and leave me alone.

But that part, he always -- it seems they do all agree that defending
the 1 percent was their worst mistake from the smart guys like Kristol to
all of them seem to be -- and Jindal, they all agree on that.

FINEMAN: Yes, Chris, and that`s one of the major puzzles and
challenges for the Republican Party now, as it was a generation ago.

Ronald Reagan, in part with the help of Jack Kemp, a generation ago,
found a way to sell supply-side economics as a blue-collar alternative, to
sell it to the common man. That`s what Reagan and Kemp were all about.

The Republicans lost the ability to do that. They lost the argument
once. They`re going to have to figure out how to make that argument again,
because if they`re going to say that unleashing the power of the free
market is the route forward for the middle class and the working people of
America, they need convincing arguments and convincing people to do it.

Mitt Romney, if you look at it from even the slightest distance, was
arguably the worst possible carrier of that message. They need somebody
else. They need that Southern populism or populism from somewhere, but
they also need the proof. They need the evidence. And lacking the
evidence last time in the election of a week ago, a week or two ago, people
went with the -- what they knew, which was the president`s belief in the
power of government to work well with the economy.

MATTHEWS: I think they realized during the campaign, thanks to some
extent to the advertising we have done on this show and other networks,
they learned that the Koch brothers exist, billionaires, they understood
that Sheldon Adelson makes a billion dollars a day, and they didn`t quite
feel they were in the same tax bracket as those characters.

FINEMAN: Exactly. Yes.

MATTHEWS: If they`re up to something with the tax brackets, maybe
it`s not in my interest and my family`s.

(LAUGHTER)

MATTHEWS: Anyway, we got to go.

Howard Fineman, thank you. It`s good to have you. I`m glad you`re
around after the election. John Heilemann.

I want this to go on. I wish the campaign was still going on.

(LAUGHTER)

MATTHEWS: Up next: Texas Governor Rick Perry became the butt of
late-night jokes when he suggested Texas secede from the union. Didn`t we
go through that with Lincoln? Anyway, three years later, others are
picking up on that talk again. I don`t get these people, but they`re there
and they`re part of our wonderful community, the seceders.

Anyway, this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL. Now to the "Sideshow."

During the GOP primaries, Steve Colbert started his own super PAC. It
was all a spoof, of course. Now, with Karl Rove facing backlash from his
donors who expected a vastly different return on their investment in Mitt
Romney and other Republicans, Colbert offered up a response to his own
donors.

(BEGIN VIDEO CLIP, "THE COLBERT REPORT")

STEPHEN COLBERT, HOST, "THE COLBERT REPORT": Karl is in big trouble.

(LAUGHTER)

COLBERT: They`re going to take his thumbs. And Karl is almost all
thumb.

(LAUGHTER)

COLBERT: I took a lot of money for my super PAC and my 501(c)(4)
Colbert Super PAC SHH, which stands for shh.

(LAUGHTER)

COLBERT: OK? Money from some anonymous scary donors. That`s not
pixelated. That`s his face.

(LAUGHTER)

COLBERT: Listen, fellows, I didn`t waste your money. Running a super
PAC is expensive. I mean, we had legitimate costs. We had handling costs
and we had legal fees, and the biggest expense, almost $90,000 of it, was
for the commercials the super PAC ran while I was kind of sort of running
for president of South Carolina.

(LAUGHTER)

COLBERT: I wasn`t even in charge of the super PAC then.

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS: In his home state of South Carolina, of course, Colbert was
at one point polling ahead of a legitimate candidate, Jon Huntsman.

Next, people in the other -- over 30 states have submitted petitions
to the White House asking that their states be allowed to secede from the
union on the heels of President Obama`s reelection. One petition from
Texas has 70,000 signatures last week.

And last week, by the way, Texas GOP official Peter Morrison wrote a
column asking for a -- quote -- "amicable divorce" from what he called the
maggots, his words, those who reelected President Obama.

We will hear -- well, how about the Texas Governor Rick Perry, by the
way, who said this on the issue of secession back in 2009?

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R), TEXAS: Texas is a unique place. When we came in
the union in 1845, one of the issues was that we would be able to leave if
we decided to do that.

We got a great union. There`s absolutely no reason to dissolve it,
but if Washington continues to thumb their nose at the American people, you
know, who knows what may come out of that.

(END VIDEO CLIP)

MATTHEWS: First of all, all that nonsense about Texas having the
option to leave when it wanted to is inaccurate.

And, by the way, here`s the statement from Perry`s spokesman as of
today: "Governor Perry believes in the greatness of our union and nothing
should be done to change it. He also shares the frustrations many
Americans have with their -- with our federal government. Now more than
ever, our country needs strong leadership from states like Texas."

Well, never forget Perry couldn`t even remember when he was running
for president the names of the federal agencies he wanted to eliminate, let
alone all the agencies. Didn`t know the ones he hated.

Hmm.

Next: job opening in the House Science Committee. The position of
chairman of that committee will be up for grabs when the current chairman
steps down from the post. Three Republicans have said they want the job.
But, based on the lineup, you might think they`re vying for a post on the
House anti-science committee.

The contenders are first Lamar Smith, who has accused the media of
skewing -- quote -- "in favor of global warming alarmists." Then there`s
Jim Sensenbrenner. He offered this nugget on the subject of global warming
back in 2009 -- quote -- "I personally believe that the solar flares are
more responsible for climatic cycles than anything that human beings do."
Scientists, by the way, disagree with the member.

Anyway, facing off against these two, there`s Dana Rohrabacher, who
asked this question at a U.N. hearing on climate change -- quote -- "Is
there some thought being given to subsidizing the clearing of rain forests
in order for some countries to eliminate that production of greenhouse
gases?"

Well, as we all learned in grammar school, younger people watching,
trees absorb carbon monoxide. What could be more counterproductive,
Congressman Rohrabacher, than chopping down entire rain forests?

Anyway, regardless of which of the bunch gets the chairmanship,
they`re evidently not looking for -- well, they`re not exactly looking up -
- things are not looking up for the Science Committee.

Up next: The president met with union leaders to get their -- get in
-- them on board as he prepares to deal with Republicans and see if he can
get a deal done on debt reduction.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

BERTHA COOMBS, CNBC CORRESPONDENT: I`m Bertha Coombs with your CNBC
"Market Wrap."

A down day for stocks, with investors worried about upcoming meetings
on the fiscal cliff in Washington, the Dow down 59 points, the S&P slips
five, while the Nasdaq was lower by 20. Home Depot managed to buck the
trend, ending nearly 4 percent higher. The retailer`s revenue and earnings
in ahead of expectations. It also raised its full-year outlook. And after
the closing bell, earnings from Cisco Systems beat estimates. Revenue was
also better than expected, sending shares up after-hours.

That`s it from CNBC. We`re first in business worldwide -- now back to
HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

Today, President Obama began another campaign to get both Democrats
and Republicans working together to avoid the economic mess that looms
ahead, the so-called fiscal cliff. Well, today, he met with labor leaders
and leaders in the progressive community to soften the ground for a deal
and found out just how much leeway they will give him on cutting
entitlement spending, for example.

Here is AFL-CIO president Richard Trumka immediately after the
meeting.

(BEGIN VIDEO CLIP)

RICHARD TRUMKA, PRESIDENT, AFL-CIO: We`re very, very committed to
making sure that the middle class and -- and workers don`t end up paying
the tab for a party that we didn`t get to go to.

And the president is committed to that as well. Are we going to
collectively stand up and make sure that workers get a fair shake in all of
this? Absolutely, we are. Do we believe that the president is committed
to that same thing? Absolutely, we do.

(END VIDEO CLIP)

MATTHEWS: But in a prior interview with "Salon," Trumka took a harder
line, saying -- quote -- "If any bipartisan deal includes cuts in Social
Security, Medicare, or Medicaid or extends the Bush cuts for the top 2
percent, we will oppose it. Whenever something is good for workers, we
will support it. If it`s bad for workers, it doesn`t matter to us who
proposes it. We won`t be on board. We won`t be taken for granted."

That doesn`t sound, by the way, listening to Trumka in that print
interview, as if he`s giving the president much room at all to negotiate.

Late this afternoon, Treasury Secretary Timothy Geithner, for example, made
his first comments about the fiscal crisis since Obama`s re-election.
"Reuters" reports the secretary says, "It`s not possible to cut deficit
without modest tax increases of some kind."

Well, there`s a big story coming up right now for us.

Mack McLarty was chief of staff to President Clinton. In a piece
published today in -- actually published yesterday in "The Washington
Post," he suggested enlisting Bill Clinton and Mitt Romney, who just lost
the election, to work together to get a tax deal done.

Dennis Van Roekel is president of the National Education Association
and he was in today`s meeting with the president.

Thank you very much, Dennis. And thank you very much, Mack, for
joining us.

Let me ask you about this deal, first of all. I want to ask you the
best part.

Let me go to Dennis.

What was in that meeting today? Did you get a sense there was give
on the left and the right?

DENNIS VAN ROEKEL, NATIONAL EDUCATION ASSOCIATION: I think this
meeting was a very important meeting. And it was one of three. He first
met with labor leaders and progressives. Tomorrow, he`s meeting with the
business community, and Friday, with members of Congress.

I think it`s a good start. We have to find what we`re all most
interested in, how to find a way through this very difficult task.

MATTHEWS: Well, most people looking at it from 30,000 feet say the
deal has got to include revenues, entitlements, defense, everything.
What`s your view? Everything or not some things?

VAN ROEKEL: Absolutely. We`ve got to look at the whole picture. I
mean, we came with this meeting very clearly wanted to talk about fairness
and taxes, talking about no cuts to Social Security, Medicare, and
Medicaid, but also about jobs. We`ve got to keep this economy going.

MATTHEWS: Wait a minute. You just took all the entitlements off the
table in that quick line of yours. You said no cuts in any of that stuff.

VAN ROEKEL: Well, it`s really important we look at the benefits that
come to people. We`ve got to make sure that the middle class is not dumped
on again what they have been in the past.

MATTHEWS: I know you said -- I`m for you. I`m for you`re bargaining
position, but did you say it was on the table or off the table? The
entitlements?

VAN ROEKEL: Of course they`re going to be discussed within this
process. There`s no way they`re not.

MATTHEWS: Right.

VAN ROEKEL: But so will taxes, fair taxes, not only to eliminate the
taxes for the wealthiest 2 percent, but also looking at taxes that unfairly
determine your tax rates by whether you earn your income by work or by
wealth. Those ought to be equal --

MATTHEWS: I`m with you on that one, I`m with you.

VAN ROEKEL: And we need to look at corporations who make billions
who pay no taxes and get this offshore thing away so that every corporation
pays taxes on what they earn.

MATTHEWS: Well, let`s fight for that.

Let`s get to Mack McLarty -- and your interesting idea. You talk
about bringing Bill Clinton back in, the master of arithmetic. What did
President Obama call him -- the master of how to count things or whatever.
And then you got the loser who had some interesting ideas about getting rid
of deductions it seems.

Where do you see the real plus of these two fellows coming in on this
deal and helping the president cut a deal, Mack?

MACK MCLARTY, FMR. CLINTON WHITE HOUSE CHIEF OF STAFF: Well, Chris,
the real theme of the piece, my long time colleague Nelson Cunningham and I
wrote was we`ve got to have all hands on deck to solve these issues and
problems that are clearly before us. They`re solvable but not without a
sense of purpose and unity.

So, basically, you got President Clinton who has the credibility of
balancing the budget and then leaving a surplus. That`s a pretty strong
record to stand on and a lot of knowledge and experience.

Secondly, you hit it, he is -- he does do arithmetic well. He`s also
a pretty good salesman, pretty good persuader. So I think you have those
two great attributes with the former president.

And Governor Romney, he`s a problem solver, he`s a business person.
He knows how to read a balance sheet. He knows how to make numbers balance
in a good manner.

I was heartened this morning on the front page of the "New York
Times" when Senator Conrad talked about he was receptive to -- open-minded
about this capping of deductions at the higher income level. That`s one
way to go at it. So that was really the thought behind the piece.

MATTHEWS: Guys, did you ever have a tree stump on your lawn you just
had to get rid of so you got your neighbors all together and start hacking
away and finally you had to pull the damn thing out?

Well, think of Mitch McConnell as that tree stump. There he is in
the way of you cutting the lawn. He shouldn`t be there. He`s not growing.
He`s not getting any better.

Well, today, Mitch McConnell did not signal a big surprise he was
ready to compromise. The tree stump ain`t moving. Let`s listen.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: The time for the
president to lead is now, and that means offering a concrete plan that
takes into account the fact that half the Congress opposes tax hikes. Not
because we`re selfish, not because we`re stubborn, but we know it is the
wrong thing to do. We know it will hurt the economy, and we know it will
destroy jobs.

(END VIDEO CLIP)

MATTHEWS: You know, the nonsense behind that, guys, is that if you
go by who we elect to Congress deciding our national policy, then by that
standard, Heidi Heitkamp winning in North Dakota means North Dakota is a
liberal state, and Tester winning in Montana means that`s a Democratic
state or that McCaskill winning Missouri -- no, that`s not how we vote. We
vote nationally for the president and we have an Electoral College to
decide it.

Let me go back to Dennis. The NEA is filled with very literate, very
smart people with tremendous understandings of public policy. What is your
rank-and-file like to see get done to avoid this fiscal cliff? Do they
ever speak up from the ground up, from the teachers up to the union?

VAN ROEKEL: Absolutely. Well, you know, we have a $1.2 trillion
problem we have to solve. So when Mitt says he wants to take off the table
the elimination of the tax cuts for the wealthiest 2 percent, that`s $827
billion. You can`t take that off the table and find a solution that will
solve all of these problems. It`s just not possible.

But there are ways to get there. As I mentioned, fair taxes in terms
of whether you earn your wages through work or through wealth, that
generates over $500 billion. If you look at closing the loopholes in
corporations, that closes over $500 billion of problems. That makes it a
way to get to the $1.2 trillion pretty easily.

MATTHEWS: I wish you`d keep coming back, Mr. Van Roekel. Everybody
in (INAUDIBLE). Mr. Van Roekel, thank you. Dennis, please come back
again.

Mack, it`s great seeing you again. Keep building the headlines,
buddy. Keep them up there. Keep that balloon up in the air.

Anyway, up next -- it`s a good idea. Up next, Secretary of State
Hillary Clinton says she`s tired. Is a year or so enough rest before a
presidential run?

By the way, if you missed at least last night on Veterans Day, I
talked about that Staten Island group out there that`s doing such great
work relief for the victims of hurricane Sandy. You can help them by going
to their Web site. It`s a great group. It`s called dratlasfund, all one
word, foundation rather, dratlasfoudation.com. It`s a really good cause.

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: First the Boss, now Bono. On the last day of the
campaign, Bruce Springsteen campaigned with President Obama out there in
Ohio and Wisconsin. And now that the election is over and won, it`s Bono
with an appearance at the White House meeting with both the president and
the vice president.

Biden`s Twitter account sent out the word on tweet, quote, "V.P. met
with Bono today to discuss global development, AIDS, and fighting poverty."
He`s got an active account, the vice president.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL.

Secretary of State Hillary Clinton has made clear that after she
leaves the cabinet, first on her agenda is getting some rest. But it`s her
next move that will keep the political world and all the world really on
edge. Will she run for president next time in 2016?

Nia-Malika Henderson covers politics at "The Washington Post".

Kiki McLean is a Democratic strategist and was the senior adviser to
Hillary Clinton`s 2008 presidential campaign.

Thank you both for joining me. I think this is going to be in the
back of every -- certainly every Washington and Capitol and political
conversation that I`m a part of, or anybody`s a part of, for the next few
years because we know Barack Obama is president for the next four years,
which immediately opens up the mystery can, who`s going to be the nominee
for next time? It`s the way things work. We won`t drag on this story.

But, Nia-Malika, what can you tell us here? The Democratic field,
Andrew Cuomo, people like Martin O`Malley of Maryland, these are governors
of New York and Maryland. Clearly. they`re in the on-deck circle, in
baseball terminology, do they stand there not knowing how Hillary is going
to move?

NIA-MALIKA HENDERSON, THE WASHINGTON POST: Absolutely. I think
everyone is going to wait to see what Hillary will do. One big question I
think Democrats are doing, as they face this demographic shift, is it seems
a Democratic coalition or is it an Obama coalition?

I think one of the answers to that could certainly be Hillary
Clinton, who could most certainly hold that coalition together. She`s
widely favored among African-Americans, among Latinos. You remember that
Puerto Rican primary that she won handily in 2008. And certainly, she`s a
favorite of women.

So I think one of the questions, though -- if presidential elections
are always a referendum on the future and looking toward the future, I
think one of the questions she would have to answer is whether or not she
embodies the future or whether or not it`s sort of back to the past. If
she faces somebody like Marco Rubio, who is obviously younger, Cuban, that
might be a problem. You saw that Obama ran a very effective race against
her, tying her to the past. She`s are campaigns we`ve seen typically,
candidate run and run very successfully.

MATTHEWS: Kiki, the only challenge I could see facing her is the
tendency of the United States voters in general elections not to like to
see one party stay in office too long. Eight years is often like the
terminal date, but there are exceptions like George Bush Sr. getting
elected after Reagan. Do you see anything standing in her way if she does
decide to run, politically?

KIKI MCLEAN, DEMOCRATIC STRATEGIST: Well, I`ve always believed she`s
an absolutely qualified person to run for president, which is why I
supported her first time around. But I think she`s focused on running out
her tenure as secretary of state and letting this president actually go
through his first term. The question you asked though about a third term
is something that clearly, historically, political strategists look at. I
don`t think that`s something specific to an issue for her. I think it
would be an issue for any Democrat who`s going through the list of pros and
cons interested in running for office.

MATTHEWS: Well, let me ask you, you`re more political, an inside
politician, do you think this was her -- she will obviously -- I mean, I
don`t know her that well, but you know her well. She will obviously take
some months to consider and get her head clear from all the work she`s been
doing -- stay home for a while, read some novels, enjoy life.

But at some point, do you think the other candidates have to decide
whether to run or not to run, run -- assuming she won`t run or assuming she
will, like Cuomo, like Martin O`Malley, people -- Joe Biden?

MCLEAN: I have to tell you -- I have to tell you, as a veteran of
six presidential campaigns, I think that people who really want to be
president run, regardless of who else is in the field. They may have staff
or strategists who suggest not this year, not next year, but people who
truly have that fire in their belly, the passion to serve in that capacity,
they`re going to run regardless of who`s in the field.

MATTHEWS: Well said.

MCLEAN: Because as you well know, Chris, from your years of
coverage, rarely does it end up in the way it always looks on the front
end.

MATTHEWS: So wise. Kiki, so wise -- thank you, because you can`t
predict the future and you never know who`s going to be your opponent.

Nia-Malika Henderson, thank you for coming on, as always.

Thank you, Kiki.

HENDERSON: Thank you.

MATTHEWS: When we return, let me finish with Hillary with my own
thoughts. It`s not as smart as that maybe, but she does have a to-do list
that`s facing her unlike anybody else I know.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with this -- I love this Hillary
Clinton story. Just look at her resume. Valedictorian at Wellesley, Yale
law school, practicing attorney, first lady of Arkansas, first lady much
the United States, United States senator from New York, United States
secretary of state -- that would be enough to get anybody in the who`s who
list, don`t you think?

Look, I really wish, because I really like her, for this great
America to simply take a break like she wants to. Get away from all the
outside influences, read those novels you put off, see some movies with
your pals, have some fun with Bill. But see what comes to mind, see what
visions and purpose come into your long-term outlook.

There are few people in this planet or in the history of our country
to have the presidency of the United States in their possible to-do list.
There are few people with the historic role that Secretary Hillary Clinton
could play down the road.

The smart move, I think is for her not to make a move. Let us wait.
Let Big Bill wait.

See how the second Obama term starts off. Learn how the country`s
doing. Watch, listen, enjoy life in this country. You got four years
traveling the world. Kick back and enjoy this country.

I wish her well.

And that`s HARDBALL for now. Thanks for being with us.

"POLITICS NATION" with Al Sharpton starts right now.

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

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