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updated 11/16/2012 11:12:25 AM ET 2012-11-16T16:12:25

HARDBALL
November 15, 2012

Guests: Willie Brown, Ashley Parker, Sari Horwitz, Barton Gellman, Charles Schumer

CHRIS MATTHEWS, HOST: Romney says Obama bought the election.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington.

"Let Me Start" tonight with this. You`d have thought that Mitt Romney
would have stopped this crap. During the campaign, he was out there
selling it that President Obama was buying black votes by dumping the work
requirement for welfare. Remember that little sugar plum? It had it all,
the accusation that minority voters could be scarfed up with a little chump
change. Throw them a little something, and the votes will come pouring
back.

Well, here he was yesterday, Romney, schmoozing with his donor base
about how the whole thing went wrong. It seems the president did some
wholesale purchasing, he said. He bought the minorities with health care
and bought the students by giving them interest-free student loans. Wow,
great work there, Mitt. You`re at it again with your double barrels. One,
claims that aren`t true, and two, that old dogwhistle of yours.

Fact. People in the income bracket you mention have to kick in to get
health care. Fact. Students still have to play interest on their college
loan. Nobody`s getting anything for free. And the sick thing is your
need, Mitt, to claim they do, to keep saying the president didn`t quite win
the election, it was all one big bribery case.

Question. Why is Mitt still doing this? The election`s over and
lost. All that`s left to save is his reputation. Why is he throwing that
away?

Former San Francisco mayor Willie Brown is here, along with Ashley
Parker of "The New York Times."

Mayor...

WILLIE BROWN (D), FMR. SAN FRANCISCO MAYOR: Yes?

MATTHEWS: ... you`re a pro. It seems that Romney is not a pro. Why
is he -- he had a good concussion speech. The president threw him a big
offer have something like a new Hoover commission, something really good
for him to do. He whips back with this accusation the president bought the
election.

BROWN: Total and complete bitterness, Chris. This man obviously is
wrong for the game. He has lost and he lost badly. He`s embarrassed and
he`s trying his best to minimize the victory. He`s trying his best in some
fashion to say to people, It was taken from me unfairly, that I should have
won, and that if there had been only my kind of people voting, I would have
won.

MATTHEWS: Wow.

BROWN: However, there were some other people voting, and they`re the
people that you and I don`t like. That`s what he`s saying to his people,
and that`s wrong.

MATTHEWS: Let`s take a look at the audio from the conference. Just
like that 47 percent, it was recorded. Let`s hear Romney talking to his
donors in which he says in this tape the president`s victory was basically
the result bribes to members of his base, political base. Portions of the
audio were posted on line, not the entire call. MSNBC is uncertain exactly
when this call took place, but let`s listen to it.

(BEGIN AUDIO CLIP)

MITT ROMNEY (R-MA), FMR. GOV., FMR. PRES. CANDIDATE: What the
president -- the president`s campaign did was focus on certain members of
his base coalition, give them extraordinary financial gifts from the
government, and then work very aggressively to turn them out to vote.

(END VIDEO CLIP)

MATTHEWS: Isn`t that cute? In other words, it`s not democracy,
Parker. It`s not any -- I mean, Ashley. This isn`t democracy, this isn`t
actually saying and doing things people like. It isn`t like voting
democratically. It`s like putting the money in the jukebox and out comes
the money (SIC), you do what you want. What kind of game is he proposing
here?

ASHLEY PARKER, "NEW YORK TIMES": Well, I think the thing you need to
keep in mind about Governor Romney is that he`s -- A, he`s shocked that he
lost. He mentioned that on the call, too. He really can`t quite get over
that he lost. He really thought he was going to win. And he`s a data-
driven guy, so he`s already sort of doing a postmortem, going back, trying
to figure out...

MATTHEWS: This is data mining?

PARKER: ... trying to figure out what went wrong. And this is one of
the things he believes...

MATTHEWS: Well, what`s...

(CROSSTALK)

MATTHEWS: Mayor, again, it`s interesting that a money guy -- I`ve
always noted the sort of symmetry of politics, the mutuality of -- people
that have a little problem with ethics always accuse the other person of
ethics problems. And here he is, a guy that`s basically bought everything
he ever got, including his highly paid staff in the campaign. Everybody
was happy with using money on that side. He assumes he must have been
outbid.

BROWN: That`s exactly what someone who thinks he can buy votes was,
in fact, doing. This guy`s a salesman, Chris. He doesn`t know anything
about making decisions based on whether or not it`s something you believe
in. He is of the opinion that money can generate belief. And in this
case, he doesn`t understand how money didn`t generate belief, how, in fact,
dedication and vision and love dedicated -- caused the movement in Obama`s
direction, not money.

MATTHEWS: Yes, it couldn`t be that people believe in Barack Obama.
It couldn`t be that many people are devoted to him. It couldn`t be that
people really see him, in many ways, as potentially one of our great
presidents. It must be a cash-and-carry situation.

Here`s Mitt Romney`s current comments about Obama`s gifts out there,
line with his earlier comments. By the way, Karl Rove must love this.
This is covering Karl Rove. It`s about the people -- the "takers," he
calls them. Remember that 47 percent? Here he is explaining how you buy
that 47 percent. They take, you give. Let`s listen.

(END VIDEO CLIP)

ROMNEY: There are 47 percent of the people who will vote for the
president, no matter what, all right? There are 47 percent who are with
him, who are -- depend upon government, who believe that they are victims,
who believe that government has a responsibility to care for them, who
believe they`re entitled to health care, to food, to housing, to you name
it! And so my job is not to worry about those people. I`ll never convince
them that they should take personal responsibility and care for their
lives.

(END VIDEO CLIP)

MATTHEWS: And Ashley, here he is again in "USA Today," the president
-- I mean, Romney in an interview. Romney defends the welfare ads which
erroneously say Obama waived the work requirement for welfare as accurate,
accusing Obama of offering state waivers as a political calculation
designed to, quote, "shore up his base" for the election.

And finally, there`s Paul Ryan on the urban vote. Let`s listen to
Paul Ryan and his looking at this whole ethnic or urban vote, he calls it.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R-WI), FMR. VICE PRES. CANDIDATE: We were surprised
at the outcome. We knew this was going to be a close race. We thought we
had a very good chance of winning it. I think the surprise was some of the
turnout, some of the turnout in -- especially in urban areas, which
definitely gave President Obama the big margin to win this race.

(END VIDEO CLIP)

MATTHEWS: You know, Ashley, they got to get their accusations
straight. Somebody (INAUDIBLE) one of the leaders of the Republican Party
out there in Wisconsin said all the votes were fraudulent votes. They were
all stolen. And now he`s out there, the presidential candidate, saying
they were all bought. And now this guy is -- and I have to say to Paul
Ryan, he was just surprised they showed up. He hasn`t quite figured out
the motive yet.

PARKER: Well, I think the -- you know, the Romney campaign obviously
didn`t take into account the huge turnout that the president got. That was
one of the problems with their polling.

MATTHEWS: Is that why they`re looking for new explanations?

PARKER: I think they`re -- I think they`re truly struggling to
explain what happened, and they don`t really understand how they lost.
That`s not what their internal models told them. That`s not what they were
expecting. They weren`t expecting this huge turnout. And they`re sort of
searching for explanations.

MATTHEWS: Let`s talk turkey here, Mr. Mayor. You`ve worked with
donor base on the Democratic side. You have to, I guess, occasionally call
up contributors and say, Well, we were close but no cigar this time, but
stick with us, we`re on the right side of history.

Why would you call up your donor base -- and this was a conference
call -- why would Mitt Romney get on a conference call and come up with
this sort of odd explanation of everything, that they bought the -- you
know, this was stolen, we was robbed, basically? Why would you do that
politically?

BROWN: Well, I think because it`s over for him. He will not be
involved in running for office again. And let me tell you, other
Republicans who think they have a future must in one fashion or another
denounce Mitt Romney and everything he says post this election cycle.

If they don`t, the Republicans will be consigned to the scrap heap of
defeat in 2016 and even beyond. I don`t understand how anybody other than
Bobby Jindal would be the only one who`d step up to the plate. They all
should step up to the plate!

MATTHEWS: Well, well said. Here is Bobby Jindal, one of the people
who has distanced himself from this claim that the only reason Romney lost
the race to President Obama is because he was out-bought here. Here`s --
as you said, here`s Louisiana governor, Bobby Jindal. Let`s listen.

(BEGIN VIDEO CLIP)

GOV. BOBBY JINDAL (R), LOUISIANA: I absolutely reject that notion,
that description. I think that`s absolutely wrong. That is not -- I don`t
think that represents where we are as a party and where we`re going as a
party. And I think that -- that has got to be one of the most fundamental
takeaways from this election.

(END VIDEO CLIP)

MATTHEWS: That`s one good sign that a little Republican diversity
doesn`t hurt because some people can hear what this guy, Romney, can`t even
hear he sang (ph).

Anyway, Wisconsin governor Scott Walker backed up Jindal`s comments,
saying, quote, "The GOP isn`t just for people who are currently not
dependent on the government, it`s for all Americans." And today, by the
way, on "ANDREA MITCHELL REPORTS," Republican senator Kelly Ayotte from New
Hampshire distanced herself also from Romney`s "gifts" comment.

Let`s listen to the senator.

(BEGIN VIDEO CLIP)

ANDREA MITCHELL, HOST, "ANDREA MITCHELL REPORTS": So you`re not
comfortable with what you heard him say.

SEN. KELLY AYOTTE (R), NEW HAMPSHIRE: No. I don`t know the full
context of them, but I don`t agree with the comments, and my view is the
campaign is over.

(END VIDEO CLIP)

MATTHEWS: OK. And as of only -- not only her, former Mississippi
governor Haley Barbour, who I do think is smart when he`s briefing on
politics, described what the GOP needs to do right now. Let`s listen to
Haley Barbour.

(BEGIN VIDEO CLIP)

HALEY BARBOUR (R), FMR. MISSISSIPPI GOVERNOR: We`ve got to give our
political organizational activity, you know, a very serious proctology
exam. I think that`s the only...

(LAUGHTER)

BARBOUR: We need to look everywhere, is my point.

(END VIDEO CLIP)

(LAUGHTER)

MATTHEWS: You know, he`s deep South and he`s conservative, Mayor, but
I always listen to Haley for the truth, especially when he`s with some
other Republicans, trying to teach them politics. You know, there`s the
only guy to come out ahead in Katrina, by the way, because he knew how to
get the job done.

What do you think about that, they need a proctologist? When parties
get their butts kicked like Democrats did in `72, Republicans did in `64,
when they thought they had -- well, those races didn`t look good to begin
with. But right now, what do you do when you`re in a party leadership
position?

BROWN: Well, if they don`t adhere to what Bobby Jindal is talking
about, the senator from New Hampshire, if they don`t understand Haley
Barbour, I can assure you Democrats are really going to get that message.
And believe me, if Democrats organized the red state like they did in Ohio
this time around or like they did in Florida this time around or like they
did in one or two other states this time around, those red states would
send the numbers that Nancy Pelosi needs to become speaker again. And
that`s going to happen if the Republicans keep thinking like Mitt Romney.

MATTHEWS: You know, that`s the question, Ashley, and that is, as you
see the demographic changes -- younger voters tend to be more liberal. We
have a lot of Hispanic people moving into the country, having a lot of kids
and voting and becoming citizens and fitting into the political -- becoming
a part of the political process much more than ever. And you have African-
American voters, of course, in this case, have an African-American
president, but there are other factors that have led them to the Democratic
Party historically. So you see a lot of potential for the Democratic Party
to grow.

But then when you throw insult to injury, the other party says, Oh,
you`re all bought, it seems to me that would just sort of fortify the
Democratic tendencies of the people we`ve been talking about here.

PARKER: Well, it`s unclear what wing of the Republican Party Mitt
Romney, you know, is going to be representing going forward. And I think
that`s one of the reasons you saw...

MATTHEWS: The Mayor says he`s out of business. So I`m not sure he
does have a future.

PARKER: Well, that`s why it was easy for these Republicans to come
out and criticize him today because they`re not alienating a Tea Party...

MATTHEWS: Oh.

PARKER: ... constituency. They`re not alienating the...

MATTHEWS: So you people think -- you said people like Jindal, by the
way, and Ayotte and people like that, and Haley Barbour, can say, The guy`s
wrong. He`s out to lunch.

PARKER: I think they did say that. I think they said they didn`t
agree with those comments, so...

MATTHEWS: Let me go back to this -- you know, I want to talk about
the president for a second, Mr. Mayor. And I -- I thought he -- I thought
Mitt Romney gave a wonderful concession speech. He said, I called the
president. He did it early in the night, didn`t string it out. It was
11:20 or so. We watched it here. You watched it.

He came out and basically said, you know -- he came out all alone like
-- didn`t bring the family with him, didn`t cry on anybody`s shoulder, took
it like a person of some kind of nobility. He also said, I just talked to
the president. I congratulated him. I`m praying for him. I`m here to
help him if he wants any help.

And then the president came back yesterday at that press conference
and out of nowhere said, I would like -- maybe he can do a -- he did a good
job with the Olympics. Maybe he can do a good job in helping us get
government more efficient. That`s his specialty, like he does in his
equity world.

And then he does this thing! Where do you think that relationship
stands between the two of them? Is the blood so bad, nothing`s going to
happen, nothing good will come out of this?

BROWN: Well, let me tell you, when you offend Barack Obama, you`ve
got to know that you`re in real trouble. This is a guy who appears to
forgive, but he never forgets.

Romney can forget any additional invitations coming from this
president. I think no matter how you put it, he now knows where Romney
really stands. It`s an affirmation of everything that occurred in the
campaign, all the bad things that were said about Barack Obama are still
obviously within the DNA of Mitt Romney. And I guarantee you Barack Obama
is not going to give at all on this issue. He`s going to move on.

MATTHEWS: Whoa! Look out. Look out, Mitt! Anyway, thank you,
Mayor. It`s always -- it`s always an incisive commentary I get from you.
And if this is the case, you`re right, he better move on. Anyway, thank
you, Mayor Brown of California -- San Francisco. Ashley, thanks for coming
on.

PARKER: Thanks for having me.

MATTHEWS: "The New York Times."

Coming up: It`s not business, it`s personal, that very public dispute
between John McCain, who also never forgives, and President Obama over
Susan Rice. Could it be that McCain simply hasn`t gotten over that 2008
election? We`re sort of stacking up revenge here on the other side. I got
nothing more to say about that!

Plus, Spyfall -- what we`re now learning about the affair that brought
down the CIA chief and perhaps derailed the promotion of the top general
and has been tabloid fodder now for almost a week.

And besides complaining about how President Obama won reelection by
giving away gifts to minorities and young voters, ever wonder what Mitt
Romney has done -- actually been doing since the election? Well, David
Letterman has an idea.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE": Today Mitt Romney drew a picture of the House of
Representatives chamber and gave a State of the Union address in front of
it.

ROMNEY: And the fourth new entitlement, "Obama care," we`d repeal
that one.

UNIDENTIFIED MALE: Message from Pretend President Romney.

(END VIDEO CLIP)

MATTHEWS: We`ve got a few more of those sugar plums in the
"Sideshow."

"Let Me Finish" tonight with a book about when we had a hero for a
president.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Well, it`s time to bust another 2012 election myth.
Throughout the campaign, the idea took hold that African-Americans would
not be as fired up to vote as they were four years ago. But here`s what
the NBC News political desk found in looking at the exit polls.

In the states with significant black populations, the black vote
increased in five states, Michigan, Mississippi, Missouri, Ohio and New
Jersey. It held firm in Pennsylvania, Virginia, North Carolina and
Florida. I`ve got to study that one. And it decreased in two states, New
York and Alabama. Neither case, by the way, was it even close. Anyway, so
much for flagging enthusiasm.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. John McCain and his allies have
been trying to turn the Benghazi attacks into a political scandal for the
president since September. Yesterday, his criticism of Susan Rice, the
ambassador to the U.N., went too far for the president. He hit back during
his press conference. Let`s listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If Senator McCain and
Senator graham and others want to go after somebody, they should go after
me. But for them to go after the U.N. ambassador, who had nothing to do
with Benghazi and was simply making a presentation based on intelligence
that she had received and to besmirch her reputation is outrageous.

(END VIDEO CLIP)

MATTHEWS: That`s the slow burn from the president, I`d say. This
morning, McCain, by the way, had some strong words for his former opponent,
the president. Let`s listen to McCain.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: I know people that don`t come to
spontaneous demonstrations with rockets and mortars. And for the president
of the United States for two weeks afterwards to deny that that was the
case is either a cover-up or it is incompetence.

(END VIDEO CLIP)

MATTHEWS: Well, one of McCain`s main allies, Senator Lindsey Graham
of South Carolina, also responded to the president. He said, quote, "Mr.
President, don`t think for one minute I`m not going to hold you -- you
ultimately responsible for Benghazi. I think you failed as commander-in-
chief before, during and after the attack."

What`s behind all this anger? Is it political or personal? And why
are they unleashing so much vitriol against Ambassador Susan Rice?

Jonathan Alter is a columnist for Bloomberg View and an MSNBC
political analyst and Ron Reagan is an MSNBC political analyst.

Gentlemen, I want you to start with this. It`s so unusual to see the
president respond at the human level of, I`m really mad, and you`ve gone
after a friend of mine. You`ve gone after my person at the U.N., and this
is you coming at me, and you`re going at my character. I`m not missing the
point.

JONATHAN ALTER, BLOOMBERG, MSNBC POLITICAL ANALYST: Well, I heard
from the White House yesterday that he had heard just before the press
conference that McCain was talking about filibustering, and he got...

MATTHEWS: If she were put up for secretary of state.

ALTER: Right, for secretary of state. And he got really angry at
that, you know, that his choice for secretary of state, which she`s not
yet, but that perspectively his choice would be filibustered and...

MATTHEWS: Why is he so ticked, the president?

ALTER: Well, because she`s completely innocent in this matter. You
know, the issue...

MATTHEWS: Well, not by the lights of the right. The right have been
pounding her for weeks.

ALTER: Well, but there are -- there are actual facts here, and the
facts are that she was saying what the CIA told her. So...

(CROSSTALK)

MATTHEWS: But that wasn`t the facts, unfortunately.

ALTER: McCain`s issue -- McCain`s issue is with Petraeus, but
Petraeus is in the club, despite the sex scandal.

MATTHEWS: Yes, that`s a great...

ALTER: He`s in the club.

MATTHEWS: So Petraeus...

ALTER: So he doesn`t want to go after Petraeus.

MATTHEWS: OK.

She`s not a spook. She doesn`t go out there and dig up information on
Benghazi. She`s the U.N. ambassador to New York. She has to go on "Meet
the Press." So what she does is she collects information. She gets the
best intel she can get from the intelligence agencies. She probably clears
it through the White House, goes on television, and I thought made a very
strong statement to David Gregory that weekend, and I thought she was very
impressive.

I thought she was doing what the White House wanted done. Whatever
she was doing, she was doing what the White House thought was the truth,
because why would you lie because two or three days later it would be clear
you were lying, right?

ALTER: Right.

(CROSSTALK)

MATTHEWS: There would be no motive for lying, and he keeps saying it
was lying.

(CROSSTALK)

ALTER: We have timelines. That was the 16th of September.

MATTHEWS: Yes.

ALTER: It wasn`t until the 22nd of September, according to the CIA,
that they told Rice and the White House that this was, you know, some kind
of a terrorist attack.

The information wasn`t available at the beginning.

MATTHEWS: Yes. OK.

ALTER: The whole thing is totally trumped up, Chris. It`s not just
political, it`s also personal. And...

MATTHEWS: OK. Before we get back to history, like Condi Rice, I want
to go to Ron Reagan on this.

You know, there`s something really deeply personal here. There`s
something personal on both sides. This guy, John McCain, does not forgive
when he loses to somebody. I don`t think he ever liked Romney. That`s why
he picked Sarah Palin. He doesn`t like the president.

And the way to get to him is to make sure that everybody thinks he`s a
bad guy, not stupid, not wrong, not too liberal, he`s evil. He`s bad.
He`s the kind of guy that would serve up a good-serving American ambassador
like Chris Stevens in order to do -- for a P.R. stunt or some other unclear
motive, but he wants to make the guy look like a bad guy.

What do you think is going on here? That`s what I think.

RON REAGAN, MSNBC CONTRIBUTOR: Well, yes. I think you`re right
basically. Republicans seem to be really bad losers.

Mitt Romney is apparently a bad loser. John McCain, as you said
earlier, I don`t think he`s ever gotten over 2008. So he`s looking for any
opportunity he has to stick a thumb in Barack Obama`s eye.

But Jonathan is completely right. He picked the wrong person here.
Susan Rice had nothing to do with Benghazi. But, look, the Republicans are
facing an electoral wipeout in the last election. They still want to
oppose Barack Obama any way they can, but what`s their excuse?

Because the American people have now chosen Barack Obama over the
Republican guy. So what do they do? They have to gin up a conspiracy, a
scandal of some sort, something they can attach the word gate to. So, now
it`s Benghazi-gate.

MATTHEWS: You got it!

REAGAN: Yes. Exactly.

MATTHEWS: Ron, you got it. They want it. This is the big
alternative universal view of their world view in which you don`t know what
color the sky is over there.

REAGAN: Exactly. Yes.

MATTHEWS: But they believe that this is as big as Watergate, and
although Nixon got reelected in `72, he will come down by `74. Even though
this guy won in `12, he will come down by `14 because of this big gate that
Ron just mentioned. They have it in their head that this is big time.

ALTER: In 1997, after Bill Clinton got reelected, but before
Lewinsky, the Republicans tried to do the same thing on Chinese fund-
raising.

MATTHEWS: Yes.

ALTER: Remember that?

MATTHEWS: Yes.

ALTER: They spent the better part of a year trying to turn this into
a huge scandal.

There was actually a little bit more to that one than there is to
this. This is just exploiting a tragedy for political purposes.

MATTHEWS: And here is the great irony.

John McCain, who seems like he`s the big whistle-blower, going after
Susan Rice yesterday, Well, compare what he said about Susan Rice yesterday
with what he said about another foreign policy expert, in this case
Condoleezza Rice, back in 2005. Here is McCain on Susan Rice. Take a
listen.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Susan Rice should have known better,
and if she didn`t know better, she`s not qualified. She should have known
better. I will do everything in my power to block her from being the
United States secretary of state.

(END VIDEO CLIP)

MATTHEWS: OK, mortal sin, deal breaker, end of her career because
John McCain said she had gotten the wrong brief and delivered the wrong
brief.

However, McCain had a very different reaction back in 2005, when
Condoleezza Rice was nominated for secretary of state. Despite her direct
involvement in the country`s Iraq policy, McCain chalked up opposition to
her nomination to bitterness over losing an election. Interesting. Let`s
watch.

(LAUGHTER)

(BEGIN VIDEO CLIP, 2005)

MCCAIN: I wonder why we`re starting this new Congress with a
protracted debate about a foregone conclusion. I can only conclude we`re
doing this for no other reason than because of lingering bitterness at the
outcome of the elections.

(END VIDEO CLIP)

MATTHEWS: Talk about a self-indictment.

Anyway, McCain was asked about the contradiction this morning on "The
Today Show." Let`s listen to him now today.

(BEGIN VIDEO CLIP, "THE TODAY SHOW")

MATT LAUER, CO-HOST, "THE TODAY SHOW": You said opponents of
Condoleezza Rice were expressing sour grapes after an election loss. Why
is this different?

MCCAIN: Because every intelligence agency in the world, including the
British, believed that Iraq had weapons of mass destruction. That was an -
- it`s an entirely different situation. Four Americans died that didn`t
have to die.

(END VIDEO CLIP)

MATTHEWS: OK. Two points. I must never let that go past, what he
just said there.

First of all, thousands of people were killed in Iraq because of a war
that was never justified, thousands. And he said four, as if nothing
happened in Iraq, all those dead Iraqis, all those dead Americans, all
those dead every -- the hell that went loose over there because of that bad
policy.

And what was the other thing? Oh, yes, WMD. What a clever phrase
that was, WMD. It covers all matter of things, biological, chemical.
Condoleezza Rice said nuclear. She said that country had a nuclear weapon,
a nuclear weapon. That`s why we went to war.

Don`t wait for the -- what is it? Don`t wait for the smoking gun to
be a mushroom cloud.

ALTER: Mushroom cloud.

MATTHEWS: It was her.

Why does he keep getting -- he thinks -- who does he talk to? An echo
chamber? He can keep getting away with that mouthwash they sold us into
the war with, WMD, not nuclear. All the intelligence agencies in the world
didn`t disagree -- didn`t agree. And, by the way, even our own
intelligence agency never believed we had -- they had nuclear weapons.

ALTER: So, why does Washington treat him as this great sage...

MATTHEWS: That`s what I want to know.

ALTER: ... on national security policy?

MATTHEWS: When is that going to stop?

ALTER: He`s been the most frequent guest on Sunday shows, what Calvin
Trillin called the Sabbath gas bags on Sunday.

(LAUGHTER)

ALTER: He`s the most frequent guest because everybody assumes he`s
such a knowledgeable man full of such integrity on foreign policy and
national security.

Yes, he was -- endured great hardship when he was imprisoned during
Vietnam.

MATTHEWS: No, he had a longer period of greatness. He stood up for
McCain-Feingold and stood up against those terrible people in the W.
campaign in South Carolina.

(CROSSTALK)

ALTER: He did a number of great things, but in the last three years,
Chris, he`s turned into a cranky and unreliable analyst of American foreign
policy.

MATTHEWS: OK. Well, that`s your -- I have a more of an explanation,
which is he`s just going over to the hard right where all the safety valves
are in the Republican Party.

Ron, your last thought, quickly. Why has John McCain become this John
McCain? He`s like the Joker in "Batman." You know, life has been good to
me. What happened to that guy?

REAGAN: Well, he is. I think it`s personal peak. I think he never
got over 2008.

He`s got a double standard going on between the two Rices here, and
it`s apples and oranges. Susan Rice had nothing to do with Benghazi.
Condoleezza Rice had a lot to do with the war in Iraq and the intelligence
there. The comparison is specious on any level.

MATTHEWS: And here we do incisive thinking. I don`t know what is he
doing.

ALTER: One quick thing. Why doesn`t he ever talk about all the
Republicans who voted against $300 million that Hillary Clinton wanted to
beef up embassy and consulate security?

There are some questions that those Republicans who opposed that need
to answer. That`s one of the reasons that those people lost their lives in
Benghazi.

MATTHEWS: Oh, it`s sad. It`s sad to see this deterioration.

Anyway, thank you, Ron Reagan. And thank you, Jonathan Alter. You
guys are incisive tonight.

Coming up, there are dog whistles and then there are bullhorns and
another Republican official is blowing his next. And this is HARDBALL, the
place for politics.

(COMMERCIAL BREAK)

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

How is Mitt Romney dealing with his election loss? Well, David
Letterman has been compiling some coping mechanisms all involving a so-
called pretend President Romney.

(BEGIN VIDEO CLIP, "LATE SHOW WITH DAVID LETTERMAN")

NARRATOR: Today, Mitt Romney bought the building at 1602 Pennsylvania
Avenue, demolished it, and built an even bigger White House.

(LAUGHTER)

NARRATOR: Today, Mitt Romney sent his goons to rough up a guy who
kind of looks like Mahmoud Ahmadinejad.

(LAUGHTER)

UNIDENTIFIED ACTOR: How is it going?

NARRATOR: Today, Mitt Romney paid a phone sex operator $500 to call
him President Romney.

(LAUGHTER)

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: So, what I do is I
bring down the tax rates.

UNIDENTIFIED ACTRESS: Yes, President Romney, lower tax rates.

NARRATOR: Today, Mitt Romney drew a picture of the House of
Representatives chamber and gave a State of the Union address in front of
it.

ROMNEY: And the fourth new entitlement, Obamacare, we`d repeal that
one, and finally get our balance sheet right.

(CHEERING AND APPLAUSE)

NARRATOR: A message from pretend President Romney.

(END VIDEO CLIP)

MATTHEWS: I love that guy`s voice.

Anyway, the real Romney has gotten back into the problem area, you
could say, with his post-election comments that the president won the
election -- or reelection -- because of gifts he gave minority people and
younger voters.

Also, mystery voters head to Maine? It appears there`s company up
there for Alberta Darling, that Wisconsin state senator who said the other
day that lack of voter I.D. cards and voter I.D. laws were largely to blame
for Mitt Romney`s loss of Wisconsin.

Here is Charlie Webster, the Republican chairman in Maine, on the
issue of voter fraud in his state.

(BEGIN VIDEO CLIP)

CHARLIE WEBSTER, MAINE REPUBLICAN CHAIRMAN: For example, in some
parts of rural Maine, there were dozens, dozens of black people who came in
and voted Election Day. Everybody has the right to vote, but nobody in
town knows anybody that is black. How did it happen? I don`t know. We`re
going to find out.

(END VIDEO CLIP)

MATTHEWS: Anyway, two questions for Mr. Webster there. One, if all
these African-Americans were voting where they weren`t registered, why
didn`t anyone stop them? Election officials in Maine say they`re unaware
of any cheating up there. Wow.

Two, if Democrats were trying to steal a state, why would they go to
one with just four electoral votes that hasn`t voted Republican since back
in `88? Anyway, Webster will not be returning for another term as chairman
of that party up there.

Next, John Boehner was reelected yesterday for a second term as
speaker of the House, but Georgia Congressman Louie Gohmert, an original
member, a charter member of the birther crowd, had a different candidate in
mind. Who do you think he nominated? Newt Gingrich for speaker right now.
You don`t technically actually have to be a House member to be speaker of
the House, but it`s been the rule historically.

By the way, Boehner`s word to Gohmert after the word, "Louie, I love
you, too."

Finally, remember this one? Before the election, we heard that
certain CEOs were threatening to fire employees if President Obama won the
election. Well, some are coming through with it. They`re going through
with it. Robert Murray, CEO of the coal company who ordered employees to
attend a rally with Mitt Romney, laid off over 150 employees the day after
the election. Nice guy.

And John Schnatter, who is CEO of Papa John`s pizza, says -- chain --
says he will be cutting employees` hours to avoid costs associated with
Obamacare.

Finally, John Metz, CEO of several Denny`s franchises, says he will
add a 5 percent surcharge to customers` bills to offset the cost of
Obamacare. You don`t want to pay extra? He suggest you simply tip the
server less to offset the cost. What a sweetheart.

Up next: new information on the affair that brought down CIA Director
David Petraeus.

You`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

HAMPTON PEARSON, CNBC CORRESPONDENT: I`m Hampton Pearson with your
CNBC "Market Wrap."

Stocks move lower amid continued worries about the fiscal cliff. The
Dow falls 28 points. The S&P loses two, the Nasdaq lower by 10 points.
Wal-Mart shares lost more than 3 percent. Its earnings beat estimates, but
revenue fell short. Apple shares continue to slide. They`re off another 2
percent today, hitting a six-month low.

And weekly jobless claims jumped by 78,000 to 439,000, an 18-month
high, due to Hurricane Sandy.

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

MATTHEWS: Back to HARDBALL.

We now know the identity of that FBI agent that Tampa socialite Jill
Kelley reached out to after receiving suspicious e-mails harassing her
earlier this year, e-mails the FBI tracked back to biographer Paula
Broadwell. Well, Frederick Humphries is the guy`s name and who you can see
there on the screen. He`s a counterterrorism agent who had worked in the
case of the bomb plot at LAX airport back in `99.

And the man at the center of this scandal, David Petraeus, is set to
testify tomorrow morning before closed hearings before the House and Senate
Intelligence Committees regarding the attack on Benghazi. This comes as
the CIA inspector general has begun investigating whether any government
resources were improperly used in the affair between Petraeus and
Broadwell.

"The Washington Post"`s Sari Horwitz is reporting on this story, as is
Bart Gellman, who wrote the cover story on the new edition of "TIME"
magazine there.

This is a huge story.

I want Sari to give us a feel. Since the last time you were on, give
me a sense or give us a sense of the public impact of this thing. I mean,
it`s getting more like, I guess, the Kardashian story, I mean, just life
among these people, with Mrs. Kelley here, who, you know, has become the
interest of General Allen. And, of course, she`s somehow disturbing the
world view of Broadwell, who seems to be having an affair with General
Petraeus.

All this sort of back and forth intrigue, it`s what you build a soap
opera out of because it never stops growing.

But what`s it matter right now? Where are we at in the matter
department?

SARI HORWITZ, "THE WASHINGTON POST": Hi, Chris.

Hi, Bart.

It`s a soap opera. There have been jokes that it`s not a love
triangle. It`s a love Pentagon.

Here is what`s important on the public interest level. Attorney
General Eric Holder at a press conference today in New Orleans to announce
the biggest criminal settlement, the biggest criminal fines and resolution
ever in American history, against BP, is asked about the soap opera in
Tampa regarding Petraeus.

MATTHEWS: Yes.

HORWITZ: And what he said is, look, there are a lot of things going
on right now, but the important thing is, there was no breach of national
security. If there had been a breach of national security, we would have
taken this to the FBI -- the FBI would have taken this to the White House.
They would have taken it to Capitol Hill. But since there was none, we
didn`t feel like we had to share a criminal investigation.

That`s an important development. It`s the first time he`s spoken out
on this.

MATTHEWS: So there`s nothing really there in terms of impact on the
country`s security.

Let me go to Bart on that same question regarding the relationship
between General Petraeus, the very recent CIA director, and the reporter
Broadwell. You know, often times, and I guess in movies or in melodrama,
you`re used to the fact that some reporter is using a romantic
relationship, sort of Mata Hari style, to get information -- or a male
could be doing it -- to get information out of a source.

Was this woman, Broadwell, getting anything of intelligence or
security matters or classified away from the general?

BARTON GELLMAN, TIME CONTRIBUTING EDITOR AT LARGE: Well, everyone
denies it, and I`m aware of no evidence otherwise. And, by the way, nobody
ever asks me to exchange sex for information so -- although if someone did
ask me that on Twitter today.

But the serious point about Eric Holder`s point and Sari`s point I
think is that the Justice Department and FBI made the judgment that the
fact that the CIA director had a secret that could expose him to blackmail
was not in itself inherently and incurably a risk to national security.
They found out something or took some steps that persuaded them that it was
OK.

I think a strong case could be made that that`s a decision that
should be left to the president, that the president has to decide whether
he`s comfortable having a CIA director with that kind of potential
vulnerability. And I`m not sure that the president is going to want the
attorney general to substitute his judgment on that or the next guy.

MATTHEWS: Well said, but what about the president who`s told about
such a relationship. If you`re the president of the United States, you`re
commander-in-chief, the first officer on the deck, if you will, of this
country`s security, and you find out a guy or woman who is head of the CIA
has been having an affair with a reporter and you let them stay in office.
How do you defend that to the public when the public finds out you knew
about it and you OKed it basically? How do you deal with that politically?

GELLMAN: Well, it depends. I mean, politically, I can`t say.
Substantively, blackmail vulnerability depends usually on whether you`re
afraid of the secret leaking to your family or to your boss. If you`ve
told both, for example, but haven`t announced it to the whole world, that -
- a president might decide that that is adequate protection against
blackmail. But that`s a judgment call the commander-in-chief should make.

MATTHEWS: Yes. Also would give the president unusual hold over an
employee besides being able to fire him, he could out him.

GELLMAN: I guess there`s that.

MATTHEWS: No, I`m serious. I`m thinking of all the political
impacts.

Sari, let`s get back to this story as you`re looking at it. If
you`re a first class reporter like you, a top reporter, you`re looking at
this story as to where it`s heading. So, where is it heading? Where is it
going to be a week from now?

Are we going to -- Petraeus is going to testify certainly about
Benghazi, which I think is going to be a bigger story as it develops if
there is a story, I`m not sure there is. But, obviously, they`re going to
really hit that guy hard tomorrow. But this question of whether this
hanky-panky is going to lead anywhere, if you will.

HORWITZ: Well, you know, it`s interesting. Yesterday, when Obama
was asked about the FBI, which has now come under scrutiny -- he said,
look, I generally have confidence in the FBI. Not a ringing endorsement.
He said I generally have confidence but let me get all the facts about what
happened.

And, of course, the FBI, under Robert Mueller, who has so much
integrity and is highly respected, argues they were doing the right thing.

The FBI agent interestingly, this is what we found out today, the FBI
agent who brought this originally to Congress and to Eric Cantor who called
Mueller, says he never meant to be a whistle-blower. He was not trying to
make a big deal about this case. He just wanted to quietly get it moving
and he told a friend who went to a congressman from Washington state where
Frederick Humphries is from who went to Eric Cantor and that`s how it got
to Mueller.

MATTHEWS: OK, OK. Excuse me.

HORWITZ: He`s being incorrectly called a whistle-blower.

MATTHEWS: Sari, he goes to a congress person, going outside of his
agency, about a person who is being accuse -- somebody who is making
accusations of being harassed by e-mail. Is that important enough hearing
from some other woman jealous of her, that that`s worthy of congressional
attention?

HORWITZ: I think the FBI agent heard that General Petraeus was
involved in this and that there had possibly been a breach of his computer.
He didn`t have all the facts. He wasn`t the agent on the case. He just
knew bits and pieces. And because it had to do with Petraeus and because
he heard the words national security, he was concerned --

MATTHEWS: OK.

HORWITZ: -- and didn`t want the agency to slow walk --

GELLMAN: Chris --

MATTHEWS: Is Humphries a Republican or Democrat? I just want to
know. Is he pro or against the president?

HORWITZ: I really don`t know what political stance the agent is, no.

MATTHEWS: OK.

GELLMAN: Can I just cut in?

What Sari just said may be the only security breach in this case that
we know happened for a fact. This agent who brought the case to the Tampa
field office was not part of the case, had been told repeatedly as we
understand it, not to get involved in the case. And if they`ve picked up
in the course of it the fact that Paula Broadwell is involved with the CIA
director, how does he know that? He`s not supposed to know that.

HORWITZ: Well, Bart is exactly right. I mean, obviously, he`s
getting information from the investigators or from Ms. Kelley, but he`s not
part of the case. Exactly right, Bart.

MATTHEWS: OK. You know, I have been hearing from the liberal or
progressive blogs, they`re very suspicious about why he did what he did,
why he went to the Congress with this, to the Republican Congress people,
and going to Cantor ultimately makes people wonder what was his political
angle. I`m always curious about that.

HORWITZ: Well, you know, it`s interesting, Chris -- Chris, it`s
interesting, he sent a photo to Ms. Kelley of him and Jesse Jackson at a
political fund-raiser. That`s why I say it`s unclear what his political
affiliations are.

MATTHEWS: You`re right. That does murk it up a bit.

Anyway, thank you, Barton Gellman.

Thank you, Sari Horwitz. Thanks for ruining my theory.

Up next, President Obama toured some of the hardest hit parts of the
New York area as recovery continues after hurricane Sandy. Let`s watch him
up there. There`s Chuck Schumer right behind him.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Well, Mitt Romney failed to carry his home state of
Massachusetts in the Romney/Ryan ticket didn`t win Paul Ryan`s home state
of Wisconsin either. Twenty presidential tickets in American history have
lost both their home states, although Romney and Ryan are the first to
reach that level of futility since 1972 when George McGovern and Sargent
Shriver didn`t carry either of their home states, South Dakota or Maryland.

We`ll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I`m very proud of you,
New York. You guys are tough. You bounce back -- just as America always
bounces back. The same is going to be true this time out.

(END VIDEO CLIP)

MATTHEWS: We`re back.

That was President Obama this afternoon in Staten Island, New York,
after touring damage from Sandy. In addition to meeting with affected
families and relief workers, he also announced HUD Secretary Shaun Donovan
to lead the disaster recovery board, to oversee rebuilding efforts in the
region. They`re going to be a lot of work up there.

Senator Chuck Schumer of New York was there this afternoon with the
president. We saw him in the picture.

Senator Schumer, you know, the more you read about it, "The New York
Times" has been very good at covering this and the other papers up there --
the sense that this isn`t just a bad week or two or a bad month.

SEN. CHARLES SCHUMER (D), NEW YORK: Oh, no.

MATTHEWS: This destruction of homes without any home left. The
homes that are lost, the homes have been destroyed, their electrical
systems destroyed. Talk about it if you can -- the public`s watching, the
whole country.

SCHUMER: Yes. This is --

MATTHEWS: How bad is it? It`s like Katrina.

SCHUMER: It is awful. It`s close to Katrina.

You know, the first day after the stormy, I flew in a helicopter with
the governor and mayor, and I saw how widespread it was, and in the last
two weeks, I`ve been going in all the communities. You see how deep it is.
And it`s a combination.

There are probably more than 100,000 people who -- 100,000 homes that
have been destroyed. That`s 300,000 people without homes. That`s the size
-- you know, that`s a middle-sized American city. We have lots of office
buildings downtown that can`t work.

NYU Hospital, one of the leading hospitals in the country, all their
machines were on the first floor in the basement, hundreds of millions of
dollars of MRIs and AMTs and axial tomography.

The damage is so varied in so many different ways and so deep.

I was up on the 16th -- I didn`t climb up that high, the 18th floor
of a housing project. Three elderly women had been there for two weeks.
They couldn`t get down. No electricity. No elevators.

And there they are. They don`t have water. They don`t have light.
They don`t have heat. They don`t have plumbing. Volunteers were bringing
them food and clothing.

It`s just awful. It`s just awful.

MATTHEWS: Well, tell us about this. I`ve been trying to bring
attention to some of the groups I`ve gotten to know in the last couple of
weeks. But tell me about the federal government.

If you lose a house, if you have your electrical system destroyed, if
everything around the house basically has to be rebuilt, can you get the
money from the federal government?

SCHUMER: No.

MATTHEWS: Or is this going to have to be private insurance or with
nothing, you get nothing?

SCHUMER: This is one of the problems. The most private insurance
doesn`t have -- is not flood insurance.

MATTHEWS: It`s only wind.

SCHUMER: Some people have flood insurance, and some people don`t.
And then FEMA will pay a maximum of $31,400. Well, you can have a
bungalow, a little tiny home in New York, and $31,400 isn`t going to bring
that back.

So, this is something we have to look at. They did after Katrina
figure out a way to use CDBG money for this and it`s something we`re going
to have to do. There are so many different things that have to be covered
here.

The storm was so great, 14 feet higher than we`ve ever seen it. The
Brooklyn Battery Tunnel had 100 million gallons of water from one end to
the other, totally full. It had to be pumped out.

But in addition to that, we have -- we have so many places where all
the barriers, the natural barriers are gone. And there are literally
hundreds of thousands of people who live close to the water.

MATTHEWS: Tell me about this -- what are we going to get? You`re a
powerful senator. You`ve been good at it. After 9/11, I remember you went
up to W, President W, and I think I overheard you say we need $20 billion.

SCHUMER: That`s true. And he did it.

(CROSSTALK)

SCHUMER: And, by the way, he stuck by it. I asked him privately in
the room with Senator Clinton and the two Virginia senators. He said yes.
Then we went outside.

He spoke. He didn`t announce it. So I was next to speak. And I
said, and the president`s been extremely generous. He`s promised $20
billion for New York to rebuild.

MATTHEWS: How are you going to get it this time for the people of
the boroughs especially? But I can`t believe the damage done in Manhattan
itself. The guy that died in his car in the basement, he was a garage
attendant. That`s a horrible story.

SCHUMER: Yes, it`s everywhere. It`s so widespread because we`re
such a large area and it hit over such a large area. And I`m just seeing
in New York, New Jersey has similar type damage.

How are we going to do it? It`s going to be harder because obviously
there`s a Republican House that has not been as friendly to disaster
relief. The disaster money for Irene was actually held up because these
folks said for every dollar you spend on disaster, you`ve got to find a
place to cut. That`s the way to make sure we don`t help in disaster.

MATTHEWS: Senator, I want to make a promise to you. You have a
place here to make noise about this. Keep coming back to us about this.

SCHUMER: I will. Thanks, Chris.

MATTHEWS: Anyway, Senator Chuck Schumer.

By the way, I told you yesterday about St. Francis de Sales church of
Belle Harbor section in Rockaway in Queens. They`ve set up a relief
center. It`s doing a huge service, helping people get --

SCHUMER: You bet.

MATTHEWS: -- access to generators and get back on their feet. If
you want to help this local relief effort you can send a contribution to
Saint Francis de Sales Parish, 129-16 Rockaway Beach Boulevard, Belle
Harbor, New York 11694. And write on the check "relief effort", making
clear that you`re watching it.

Anyway, you`re watching HARDBALL right now, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with this:

I spent a good deal of time pulling together the powerful unknown
story of the late president John F. Kennedy. I wrote the book in an
unusual way for a historic figure. I based it on people who knew him
personally, very personally -- guys who worked with him in politics, pals
from the Navy, prep school chums, people who served, as I said, as fellow
politicians.

Well, the book attempts to answer that question that Jack Kennedy
himself said was really the reason people read biography or even history in
the first place, to find out what`s he like. And searching for Jack
Kennedy, I found a fascinating man, a man of deeply hidden health problems,
an inveterate reader himself, especially of history, a true war hero. I
found a fighting prince never free from pain, never far from trouble, never
accepting the world he found, never wanting to be his father`s son. He was
a far greater hero than he ever wished us to know.

"Jack Kennedy: Elusive Hero" is now in paperback. Hope you get a
chance to get it, read it, and for the first time understand. It`s the
kind of book you want to read at this time of year especially.

We need heroes. We can give thanks that here we truly had one.

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.
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