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updated 1/30/2014 9:57:02 AM ET 2014-01-30T14:57:02

HARDBALL
January 29, 2014

Guests: Kendall Coffey, Richard Ben-Veniste, Chris Van Hollen, Michelle
Bernard, Dana Milbank

CHRIS MATTHEWS, HOST: Muscle from Trenton.

Let`s play HARDBALL.

Good evening. I`m Chris Matthews in Washington.

"Let Me Start" tonight with this. Mistaken identity? How else do you
describe the polar difference between the New Jersey governor described in
today`s "New York Times" from the man who said he didn`t know nuttin`?
Well, in today`s Times" piece, we read that Christie was intimately
involved in his crew`s town-by-town campaign of pressuring targeted mayors
to endorse his reelection. We`re told that Christie`s people sharpened
their attack on each mayor`s pressure points, their big-dollar contributors
who get them elected and reelected to office, and their big-dollar
development deals that give them economic sway locally.

And as we can see in this office layout in "The Times," the Christie
political operation was just across the press room from his own office, not
the huge distance he portrayed in that press conference he gave to
exonerate himself. That`s Bill Stepien, Christie`s one-time deputy chief
of staff and later his campaign manager, with an office in Governor
Christie`s suite, just outside the governor`s office. Then Bridget Kelly
took that same office when she succeeded Stepien as deputy chief of staff.

The "New York Times" story also pointedly reports that Governor
Christie made a practice of not using e-mails, but instead relying on
texting and his cell phone. The newspaper said that his reason for this
was his discovery as U.S. attorney that it`s easier for prosecutors to
collect e-mails.

Meanwhile, there are new accusations, including that Christie awarded
Hurricane Sandy disaster funds to a mayor who endorsed him, even though the
beneficiary in this case may not have even been a casualty of the disaster.

Bob Ingle writes about politics for "The Asbury Park Press" and is co-
author of "Chris Christie: The Inside Story of His Rise to Power." Kendall
Coffey is a former U.S. attorney, and of course, an MSNBC legal analyst.

Let`s start with this. Today`s great article in "The Times," as I
said, was about Governor Christie`s office operation. It shows a leader
both intimately involved yet cognizant of leaving no trace behind. Quote,
"A close look at his operation and how intimately he was involved in it,
described in interviews with dozens of people, Republican and Democrat,
including current and former Christie administration officials, elected
leaders and legislative aides, gives credence to the puzzlement expressed
by some Republicans and many Democrats in the state who question how a
detail-obsessed governor could have been unaware of the closings or the
effort over months to cover up the political motive at George Washington
Bridge.

``And as a former U.S. attorney, Christie knew how to operate below the
radar.`` Quote, "Mr. Christie himself tended to the smallest details. He
personally oversaw appointments to the state Board of Physical Therapy
Examiners, legislative leaders said. And when he wanted to discuss
something with lawmakers, he texted them himself. He told one top
legislator that he had learned from his experience as U.S. attorney not to
e-mail. Texts, he said, were harder to trace."

So let me go right now to Bob Ingle and this pattern here. A lot of
homework, a lot of reporting by "The New Times" today in a catchup piece
that basically literally paints a picture of the intimacy with which the
governor of New Jersey, Chris Christie, engaged in this statewide town-by-
town pressure on the mayors, using their big contributors and focusing on
their sweetheart deals that they really cared about, where they could
either bring money in or hold it up, either the money going to the mayor or
the money going out from the mayor, so they could stop his or her operation
in their tracks if they didn`t play ball, and then the governor saying in
his exonerating press conference, I don`t know nuttin`. It doesn`t square.
It looks like the reporting`s the hard fact.

Your thoughts?

BOB INGLE, "ASBURY PARK PRESS": I read "The Times" story this
morning, and I thought it was a very good article. I don`t think there`s
anybody in Trenton who covers this administration who thinks there was
anything going on the governor didn`t know about.

MATTHEWS: Let me go to -- let me go to Kendall Coffey. Thank you,
sir. And I`m looking at this, trying to look at it through your eyes. If
you see this trail of entanglement by the governor, where he seems to be in
charge of this very elaborate plan to hit 100 cities and towns in New
Jersey, put the pressure on the contributors, put the pressure on the local
project that`s important to that mayor, squeeze them and get an
endorsement, and then it turns out that one of the mayors he`s squeezing is
in Fort Lee, another one`s in Hoboken, another one`s in Harrison.

Can you tie all that together into a criminal matter if you`re a
prosecutor?

KENDALL COFFEY, FMR. U.S. ATTORNEY, MSNBC LEGAL ANALYST: Well, I
think what prosecutors -- prosecutors are going to find this fascinating
because it does suggest that there was a system in which some of the
allegations that we`ve been hearing about could very well be connected, if
true.

The other thing that you just described that`s very, very important is
that if, indeed, prosecutors are convinced that Christie was a micro-
manager -- micro-managers don`t do a great job of playing the card of "Hear
no evil, see no evil." In fact, from a prosecutor`s standpoint, if
somebody`s constantly getting down in the weeds, just maybe they`re also
getting down in the dirt.

MATTHEWS: So when you go around and you collect witnesses, as they`re
already doing, and collect e-mail, are you looking for a general pattern or
are you looking for specific information tying Christie to particular
deeds?

COFFEY: Well, ultimately, you`ve got to get specifics that make the
connection because even if there`s a moral or political or other kinds of
responsibilities for what your office does, if you`re going to get to the
top of the pyramid, you need a ladder that personally implicates whoever
might be the individual you`re focusing on with personal knowledge and
complicity. And that so far has not been reported, except for sort of the
double hearsay allegation that was made by the mayor of Hoboken.

But obviously, prosecutors are now seeing perhaps a culture of friends
and enemies lists, a system for following up on it, and I think they`re
fascinated with what they`re learning.

MATTHEWS: Let me talk about the possibility -- I want to get back to
the -- to -- I`m sorry -- back to Bob in a minute. But I want to ask you
about this...

(LAUGHTER)

MATTHEWS: There`s so many names in this case. I`m sorry, Bob. You
are one of our stars. But let me ask you about this thing. If you -- I
always told that when you`re a kid -- you`re told -- I was told when I was
a kid, Don`t lend your car to somebody because if you lend your car to
somebody and they hit somebody, you`re civilly liable because it`s the use
of your car.

If there are people going around the state of New Jersey telling local
mayors, If you don`t do this, the governor`s going to come at you, they`re
using his authority, using his office, actually getting paid by him, using
his phones and e-mail saying, I`m here for the governor, you better do
this, is he civilly culpable for those behaviors?

Is it like borrowing a car, when you borrow the authority of the
governor himself to do something and pressure somebody, or is that a legal
theory that won`t hold up?

COFFEY: It`s not a legal theory that I think the prosecutors are
focusing on. Sure, there is everyday legal responsibility in some context
when people who are your representatives go out and do things acting on
your behalf.

But prosecutors are focused on the criminal law, and the criminal law
is going to require that there be personal knowledge implicating and
incriminating whoever might be the target. So all this interesting for
prosecutions, but what they`re especially interested in is some witnesses
or some e-mail, text message documentation that is directly and
specifically incriminating.

MATTHEWS: Let`s talk about the crew, it calls the people around
Christie. It calls them the Christie crew, the "New York Times" article.
In fact, apparently, they call that themselves. "The New York Times"
article points to two distinct groups among Governor Christie`s loyalists,
those from his time working as a U.S. attorney and the political people --
the word "political" is used here -- who generally came to Christie from
the offices of other politicians, including former New York mayor Rudy
Giuliani.

Among the trusted aides from his U.S. attorney days, Kevin O`Dowd, his
chief of staff -- there he is -- and Charles McKenna, who was Christie`s
chief counsel, another lawyer.

The political people included Bill Stepien, Christie`s former deputy
mayor with whom he severed ties -- well, deputy chief of staff and also
broke (ph) -- let`s see, Bridget Ann Kelly, of course, who was deputy chief
of staff after Stepien, and who Christie very publicly fired. And Maria
Comella, Christie`s director of communications, who used to work for Rudy
Giuliani.

So Bob Ingle, tell us about these -- is this second group sort of a
booster rocket, you can -- you can shut -- shun (ph) away and say, Well, I
only deal with the lawyers around me, and I have omerta, or whatever, with
those guys. I have a -- what he called a code of trust with them. But
these other people, I`m sort of cutting them off, comparmentalizing them
and letting them go adrift, in fact, calling them liars and stupid on the
way.

INGLE: I think both groups had a direct line to the governor`s
office. You notice that the first person to come out to defend the
governor when all this first hit was Rudolph Giuliani. That wasn`t a
coincidence because so many of the people who are working for Christie now
worked for Giuliani in the past. So I think they had -- I think they had
equal standing.

MATTHEWS: What`s your hunch? The people who know the law around
Christie would be the most averse to breaking it, or doesn`t that seem to
fit with your history? I`m want to go to -- I`m going to go to Kendall
with the same question. You got all these lawyers, all the work in the
U.S. attorney`s office, and yet all this questioning about whether what
they did or not was criminal. You would think they would know what was
criminal and try to avoid it.

First you, Bob, and then to Kendall.

INGLE: Well, one of the things that we have been amazed about is
because there were so many people who came from the U.S. attorney`s office,
and how anything like this could possibly happen. And the only thing that
those of us who follow it daily can come up with is maybe it`s the
arrogance of power. You get there, you think you can`t be defeated, you
have a lot of people following you, and they just do stupid, stupid things.

MATTHEWS: Let me go to Kendall on this. Are you surprised some of
these guys seem to be taking -- well, it looks like they`re taking the 5th,
they`re just not talking, all these guys around the Port Authority.
Apparently, the people around him are all lawyered up right now.

But how did they get in this mess if they`re all so familiar with
prosecution and what the law is?

COFFEY: Well, it remains to be seen just which individuals are going
to be implicated the most. But certainly, almost anybody that`s in close
proximity to this mess ought to be lawyered up and ought to be talking
about the 5th Amendment before they see how it plays out.

But I think what people that know the system from the inside, that
understand the criminal investigative and prosecution system, are going to
do, some of the things you`re going to see clearly, not a lot of e-mails,
not a lot of fingerprints from folks who truly understand the system.

MATTHEWS: And do you think those could have been removed since this
story broke? That`s legal, isn`t it? Are you allowed to -- are you
allowed to delete or -- I think (INAUDIBLE) more than delete, you have to
delete and then delete again. I don`t know if you can actually ever
permanently delete anything these days. But is that illegal to do that
before the subpoenas are issued?

COFFEY: I think people who understand the investigative system are
not going to get crazy enough to wander into the zone of obstruction
because right now, it`s not clear what the provable crimes would be against
who, with respect to the federal jurisdiction. You start deleting e-mails,
obstructing an investigation, you can be toast. And I think if there`s
anything that people that have been around the federal system understand
well, it`s the risk of obstructing.

MATTHEWS: Let me ask you to finish up this conversation on the basic
journalistic end of this. Bob Ingle, you read that story in "The Times"
today. And I recommend, by the way, everybody can get it on line, take a
look at it because it has great detail about those who`ve following this
matter. It shows how office is set up. It shows where the political
people sit. It shows you where the governor has his press conferences.
And he walks in one door, his political people would normally walk in the
other door, except on the day he had the big press conference, he fired
them all. But they all walked off into the same area. And it`s pretty
close proximity.

You said it sounds like it was a good story. Now, my question is, is
anybody reading that today, saying, Oh, Chris Christie, he`s not involved
in the day-to-day politics? He`s way -- he`s sort of like Barack Obama or
somebody. He`s above it all. He`s a professor type. Is anybody going to
say that?

INGLE: I think some people will say that. What the newer polls are
showing is that Democrats and independents are starting to have grave
questions, Republicans are not so much. But the more of this that comes
out and the drip, drip, drip thing, I think the more people are going to
believe that that`s the case.

MATTHEWS: Well, you previewed our next segment so much (ph), Bob
Ingle. Thank you. And thank you, Kendall Coffey, for the legal advice.

Coming up: The drip, drip, drip -- you just previewed (ph) this -- of
stories that look bad for Chris Christie. The latest -- did the governor
use Hurricane Sandy money for political gain? Did he spend it elsewhere?

Plus, catch this lingo, "commandant-in-chief," "imperial presidency,"
"dictates from a king" -- well, those are just some of the incoherent
babblings of President Obama`s speech, or about it last night, from the
loony right. Step right up and let`s enjoy the folks in the clown car.
You wouldn`t believe -- that was a mild-mannered speech by the president
last night, I thought debonair, smoothing over the differences, trying to
bring a few new allies, not to rile up the enemy, and yet the enemy is
already riled up. Wait until you hear what they had to say.

And by now, by the way, you`ve surely seen this scene from last night
in D.C., in Washington. Let`s watch.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Why? It`s a valid question.

REP. MICHAEL GRIMM (R), NEW YORK: (INAUDIBLE) You`re not a man
(INAUDIBLE)

(END VIDEO CLIP)

MATTHEWS: Well, that was a bit off-camera, but we`ll get to what
happened there. That`s Michael Grimm, a Republican from New York City,
offering to give a local reporter a very quick trip to the ground floor of
the U.S. Capitol. Got a little tricky there. We`re going to bring you up
to date on the latest developments in that contretemps.

And "Let Me Finish" tonight with the president`s -- and this is what
we`re calling it and he`s calling it -- his opportunity agenda. It`s big
stuff. He talked about it last night. We`re going to talk about it now.

This is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Politico is reporting that House Republicans are giving up
on a serious fight over the debt limit. According to Politico, the most
senior figures in the House Republican conference are privately
acknowledging that they will almost certainly have to pass what`s called a
clean debt ceiling increase in the next few months, abandoning the central
fight that has defined their three-year majority.

Well, the reason for their apparent surrender, it`s not good politics
to hold the economy hostage during an election year. Treasury Secretary
Jack Lew says the debt ceiling will need to be raised next month -- that`s
February -- to avoid default.

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Welcome back to HARDBALL. Yesterday, we told you about how
Chris Christie`s appointee to run the Port Authority, David Samson,
approved a quarter-billion-dollar redevelopment project in Harrison, New
Jersey, that benefited a client of his law firm. Well, today, it looks
like Christie`s brother, Todd, may have benefited from that same deal.

"The Bergen Record`s" reporting that Chris Christie`s brother, Todd,
Todd Christie, loaded up on real estate near that station on the PATH rail
line before that huge renovation deal was approved. Todd and his business
partners then sold those homes for nearly triple what they originally paid.

In a statement to "The Bergen Record," Todd and his partners denied
any improper dealings, saying, quote, "Having done business in Harrison
most of our lives, we have been well aware for more than a decade of plans
not only to improve the PATH station but to grow and develop -- redevelop
many areas of our home town."

But it doesn`t end there. We`ve also told you about Hoboken mayor
Dawn Zimmer`s claims that Christie`s team used federal Hurricane Sandy
funds as leverage to win support for a real estate development deal there
in Hoboken. And now it looks as if Christie gave millions of that
hurricane money to a mayor that didn`t deserve it.

Anyway, "The Newark Star Ledger" is reporting that Christie personally
helped secure $6 million in Hurricane Sandy money to finance a development
deal that some say had very little to do with Sandy recovery and more to do
with securing an endorsement for his reelection from the town`s Democratic
mayor. Well, Christie officials and the mayor have denied their
allegations, both of them.

Steve Kornacki is the host of MSNBC`s "UP WITH STEVE KORNACKI" and
Richard Ben-Veniste was special prosecutor during Watergate. He`s
currently a partner with the law firm Mayer Brown (ph). Thank you so much.

RICHARD BEN-VENISTE, FORMER WATERGATE PROSECUTOR: Hey.

MATTHEWS: Let me go -- but let me go to Steve, who`s been at the
front of this story. Steve, if you could tie together this, what was in
"The Times" today -- and I`m sure it`s familiar territory (ph) to you, the
manner in which the governor is intimately involved in this campaign of
muscling or pressuring, whatever terms you want, hundreds some mayors -- a
hundred mayors, going around to them one at a time, finding out who`s their
big contributors, who are the big local projects, where can they squeeze
the money going in or coming out of the mayor`s office to get these men and
women to play ball with his reelection campaign, and then the stories
you`ve been working on, the one regarding Hoboken, of course, the one
regarding Harrison, and now the one in Belleville, with the senior citizens
whose home apparently benefits from -- benefits for hurricane relief where
there was never a hurricane.

Anyway, tell me how it all fits together into a coherent behavior
pattern, if you will.

STEVE KORNACKI, MSNBC: Well, let`s take -- let`s take Belleville.

So, if you`re not from New Jersey, if you don`t know what Belleville
is, Belleville is a -- it`s a blue-collar town about 35,000 people just
outside Newark. Like everything in North Jersey, it was touched by
Hurricane Sandy, but it wasn`t decimated the way that Hoboken was.

Now, where is Belleville sort of in the political geography of the
state? Well, it`s part of Essex County. And what is Essex County? Essex
County is Newark and its surroundings. The top political player in Essex
County is a guy named Joe DiVincenzo. He`s the county executive. He`s a
Democrat. He`s the product of the sort of old North Ward of Newark
political machine.

And that North Ward of Newark political machine and that man, Joe
DiVincenzo, are and have been two of Chris Christie`s top Democratic
allies. They have been a huge reason he`s been able to get things through
the legislature. Joe DiVincenzo endorsed Chris Christie for reelection
last year, probably one of his most, if not the most prominent Democratic
allies for Chris Christie in the state.

And Belleville is in his county. So, this is a about -- you could
look at a mayor of Belleville, a town of 35,000, endorsing Christie in his
town getting the senior project, but you`re looking at something I think
bigger at work potentially here, which is that this town sits at sort of
the epicenter of the Christie-crats, if you will, of North Jersey.

This town is in Joe D.`s backyard close. This town is close to the
North Ward political machine. All of that is right around here. You`re
talking about $6 million in Sandy money getting steered towards a long-
planned project. The key to understanding this senior project is...

(CROSSTALK)

MATTHEWS: Well, what`s your understanding? Is it a proper use of
money which people from the federal government and other forces are giving
to people in a disaster area? Is it disaster relief or not?

KORNACKI: Well, you can make a case.

Look, there was damage to -- I think the case here is what this
illustrates is how much discretion the administration has. The
administration can make a case that this project was worthy of funding,
it`s shovel-ready. It`s all of things. It wasn`t untouched by Hurricane
Sandy.

But when you compare Belleville and when you compare this particular
facility in Belleville to the images you see coming out of Hoboken, to the
city that`s submerged underwater, the PATH station damage, all of this
stuff you saw out of Hoboken, it raises the questions of priorities. Why
was this was worth $6 million? Why was this worth -- and not just that.

When the governor appeared at the ground-breaking ceremony, the
ribbon-cutting ceremony for this, for the remodeling of this facility, he
talked how he was on the phone personally every day to top-level people in
his administration doling out the Sandy aid, telling them this project has
to be a priority. And it raises the question, why is $6 million for this
project such a priority and, for instance, something in Hoboken isn`t,
something in Hoboken doesn`t get that kind of...

(CROSSTALK)

MATTHEWS: OK.

Let me go -- let me go over to Richard Ben-Veniste.

You go around as a mayor -- as a governor. The guy is running for
reelection. He`s not counting on the polls that come in or the good TV ads
in New Jersey or New York or Philly that win him it or his personal
dynamism. He`s going around and pressuring people, saying I need local
swag. I need the mayor to come out for me. I`m going to squeeze you. I`m
going to squeeze you hard. I`m going to favor you, or I`m going to hurt
you. So let`s talk turkey.

Is that illegal?

RICHARD BEN-VENISTE, FORMER 9/11 COMMISSION MEMBER: It depends. The
devil`s in the details here, Chris. We have to separate politics as usual,
to the victor go the spoils, and putting somebody who`s a supporter at the
head of the line and putting somebody who`s a detractor or an opponent at
the bottom of the line.

But the question is, was there the use of some illegal method,
extortion, the threat, whether made good for not, of withholding
legitimately identified funds for the purpose of relief of Sandy hurricane
damage, or was this something else? And I think it`s important to make
that distinction. I don`t think this is an investigation, a criminal
investigation of politics. This is an investigation of misuse...

MATTHEWS: Well, let`s go to the sharpest case, Richard, the sharpest
-- and I will go back -- I will go back to Steve on this.

The sharpest case me watching and learning a lot from Steve`s
reporting is the mayor, Zimmer, Dawn Zimmer, comes out and says, I was in a
parking lot. Somebody calls me aside, the lieutenant governor, and says, I
know this sounds terrible -- if this is a true account of what happened --
I know this shouldn`t be the way it is, but the governor just told me last
night, if you don`t play ball with this real estate deal, you ain`t getting
the federal relief funds.

Is that criminal?

BEN-VENISTE: It could be. It could be. But I think a prosecutor who
is careful will not bring a case simply based on that.

Even though he`s now been corroborated by individuals to whom she made
prior consistent statements contemporaneous with the event, more or less, I
think you have got to look for actually pulling the trigger, not just a
threat, and see whether...

MATTHEWS: She didn`t get the money.

BEN-VENISTE: Well, we don`t know what money was allocated properly.
We need to know that. We need to know what the right was of the town or
city involved to get the money allocated.

And then you need to look at whether there was an intent to deprive of
legitimately authorized funds by the federal government to distribute them
to this city, Hoboken, or other places, and then, under the circumstances,
make that determination.

MATTHEWS: If you see a pattern here where you do have witnesses that
come forward -- and I will be back to you in a minute, Steve -- you have a
pattern here of a mayor who comes off as a very credible witness, the mayor
of Hoboken. She comes out and talks about this threat.

BEN-VENISTE: I agree.

MATTHEWS: And then you look at the e-mail from Bridget Kelly that
says time for some traffic problems in Fort Lee. And you have got a lot of
evidence.

How do you walk away from that as a prosecutor and say, isn`t there a
pattern of something worse than hardball politically, something like
muscle?

BEN-VENISTE: Absolutely you don`t walk away from it. And, in fact, I
expect over the next few months that e-mails, witnesses will be questioned
under oath. Some may be immunized...

MATTHEWS: Right.

BEN-VENISTE: ... and compelled to testify. Those who have asserted
the Fifth Amendment privilege, which is their right to do, may be
immunized. There may be further documents that come forward to spell out
improper use of power of the government`s office.

MATTHEWS: Reporting on this Steve -- and you`re doing the best work -
- where are we on this case in terms of that process, in terms of
collecting e-mails, collecting texts, if we can, collecting all kinds of
memorandum -- memoranda from all these people around the governor and
eventually I guess going to him?

Where are they in terms of getting to something that might leak that
you can use and get on the air? How close are we getting to something?

KORNACKI: Well, that`s -- that`s -- that`s the big question right
now, because the date that looms is next week. It`s February 3. And
that`s when the subpoenas -- the subpoenas have gone out. Those 20
subpoenas, they are due back February 3.

And the question that hangs over all of this now -- those are
subpoenas from the legislative committee. The question that hangs over all
of this is, is there going to be or there been some kind of communication
between the special counsel on that legislative committee and the United
States attorney`s office, where the United States attorney`s office -- has
the attorney`s office told them, hey, wait a minute, we`re not going to
have a mass dump of all the information? You`re only going to leak this
certain amount. You`re not going to leak anything.

So the question is, all of this information is due back next week from
these 20 subpoenas that went out. It`s an open question how much of that
we`re actually going to get to see. And then, beyond that, right now, we
know that the U.S. attorney`s office has subpoenaed records from Christie`s
reelection campaign, from the Republican state committee.

MATTHEWS: Yes.

KORNACKI: How many more of those subpoenas go out? Because I think,
at this point, now that the U.S. attorney is involved, nobody expects that
any of the people who are subpoenaed are actually going to testify before
that committee. They will respond to the document requests. Nobody
expects that any of them are going to testify.

(CROSSTALK)

MATTHEWS: Right.

Well, I`m waiting for it to get to the governor himself. I`m waiting
to see him subpoenaed under oath.

Thank you, Steve Kornacki and Richard Ben-Veniste.

It turns out you didn`t need to watch the State of the Union last
night to have an opinion about it. And that`s next in the "Sideshow."

And this is HARDBALL, the place for politics.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL and time for the "Sideshow."

Everyone has their own reaction of course to President Obama`s State
of the Union last night. I liked it. But as Jimmy Kimmel pointed out, you
didn`t need to see the speech to have an opinion about it. Kimmel`s crew
hit the streets of Los Angeles to ask pedestrians what they thought about
the president`s address yesterday, well before the speech happened.

(BEGIN VIDEO CLIP, "JIMMY KIMMEL LIVE")

UNIDENTIFIED FEMALE: What did you think of President Obama`s State of
the Union address last night?

UNIDENTIFIED MALE: It had different effects on different people.

(LAUGHTER)

UNIDENTIFIED MALE: And, you know, I just feel those effects affect
everybody.

(LAUGHTER)

UNIDENTIFIED MALE: You know, like you have got to stay positive. You
got to not focus on the negative.

UNIDENTIFIED MALE: He was addressing what everybody was talking
about.

(LAUGHTER)

UNIDENTIFIED FEMALE: Which is what?

UNIDENTIFIED MALE: Actually, I don`t know.

(LAUGHTER)

UNIDENTIFIED FEMALE: Did you think that there was too much product
placement in the State of the Union?

UNIDENTIFIED MALE: Yes, that kind of surprises me.

(LAUGHTER)

UNIDENTIFIED MALE: Kind of cheapens politics a little bit.

(LAUGHTER)

UNIDENTIFIED FEMALE: Do you think that Joe Biden embarrassed himself
last night?

UNIDENTIFIED MALE: Very much so.

(LAUGHTER)

UNIDENTIFIED FEMALE: So what did you think about Obama faking the
heart attack at the end?

UNIDENTIFIED MALE: I think that was more for shock value, not you
know, sympathy or what have you.

(LAUGHTER)

(END VIDEO CLIP)

MATTHEWS: As Gore Vidal said, nobody says no to sex or being on
television. Those people just wanted to be on television.

Next up: Hillary Clinton revealed Monday that she hasn`t driven a car
since 1996. And of course that`s because the Secret Service provided her
transportation when she needed it during her time as first lady and as
senator and diplomatic security provided while she was secretary of state.

Well, Jimmy Fallon had a lot of fun with that last night.

(BEGIN VIDEO CLIP, "LATE NIGHT WITH JIMMY FALLON")

JIMMY FALLON, HOST, "LATE NIGHT WITH JIMMY FALLON": Speaking of
Hillary, though, she said that she hasn`t driven a car since 1996.

(LAUGHTER)

FALLON: That`s pretty incredible if you think about that, but she`s
found some alternative ways to get into work. For instance, she`s been
spotted E.T. basketing.

(LAUGHTER)

(APPLAUSE)

FALLON: Very interesting.

She`s also been seen Knieveling, which is very dangerous.

(LAUGHTER)

FALLON: People have seen Hillary hipstering, which I don`t even know
what that is.

(LAUGHTER)

FALLON: But this last one is probably her most common way of getting
to work. She`s been teen wolfing, which is very interesting.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Teen wolfing, Michael J. Fox.

Up next, that other State of the Union last night, not the one
President Obama gave, but the one the far right swears they heard him give.
They`re in another universe, some of these people.

And you`re watching HARDBALL, the place for politics.

(COMMERCIAL BREAK)

VERONICA DE LA CRUZ, MSNBC CORRESPONDENT: Hey there. I`m Veronica De
La Cruz. And here`s what`s happening.

The winter storm that stranded thousands on Atlanta highways is over,
but a state of emergency remains in effect as the area struggles to cope
with the aftermath. Authorities are under fire for their response to the
storm.

Passengers on a cruise ship where hundreds of people fell ill are
finally back on dry land two days early.

And the House passed a five-year farm bill earlier. It provides
nearly $1 trillion in spending on farm subsides and nutrition programs.

I`m Veronica De La Cruz. Let`s get you back to HARDBALL.

MATTHEWS: Welcome back to HARDBALL.

Did you catch the State of the Union last night? Not the one in which
the president laid out a center-left agenda and avoid using red meat
language to rile up his rivals. No, the other State of the Union, the one
that Tea Partiers and right-wingers were apparently listening to, the one
where Congressman Paul Labrador heard the president`s -- quote --
"hostility toward our foundational principles" or where Michele Bachmann
believes the president may think he`s a king and declare himself king.

All that happened last night in their alternative universe.

U.S. Congressman Randy Weber didn`t even wait for the speech to start.
He tweeted as follows: "On floor of House, waiting on Kommandant-In-Chef,"
that "Kommandant" with a K. -- "the socialist dictator who has been feeding
U.S. a line, or is it a lying?"

Well, his colleague Tim Huelskamp tweeted about the new imperial
presidency doing everything without legislation to advance his radical
agenda.

Did you hear the radical agenda last night? Missed that one.

And -- quote -- "First release of Obama`s speech reads like dictates
from a king, all orders he will do to bypass Congress #lawless."

Well, after the speech, my colleague Rachel Maddow of course asked
that congressman, Huelskamp, about the tweet he put out.

(BEGIN VIDEO CLIP)

RACHEL MADDOW, HOST, "THE RACHEL MADDOW SHOW": "The release of the
speech reads like dictates from a king #lawless."

REP. TIM HUELSKAMP (R), KANSAS: It does.

MADDOW: What did he say in the speech that was lawless tonight?

HUELSKAMP: Fourteen different points where the president said I don`t
like the American people, who they elect. That`s what the president was
saying. He said, I don`t like Congress. I don`t like the American people
that sent these people up here. And so he listed 14 different dictates.

MADDOW: Dictates?

HUELSKAMP: Executive orders, yes, that he was going to take.

MADDOW: Are executive orders lawless?

HUELSKAMP: An executive action without authority is lawlessness.

(CROSSTALK)

MADDOW: Executive orders by presidents are lawless?

HUELSKAMP: If there is no authority.

(END VIDEO CLIP)

MATTHEWS: Well, perhaps not surprisingly, the most hysterical
reaction of all came from Texas Tea Party Congressman Steve Stockman, who
got up in the middle of the speech and very dramatically walked out.

He said in a statement -- quote -- "I could not bear to watch as he,
the president, continued to cross the clearly defined boundaries of the
constitutional separation of powers. Even worse, Obama was openly -- has
openly vowed to break his oath of office and begin enacting his own brand
of law through executive decree. This is a wholesale violation of his oath
of office and a disqualifying offense."

And so which speech did you see last night?

Chris Van Hollen was on the floor. He`s a congressman from Maryland.
I assume he saw the one we did.

Congressman, what is it about the water up there on the Hill, where
Republicans don`t talk like Republicans? They talk like crazy people,
some, not all of them. Peter King didn`t walk out in a huff. Some of the
normal ones didn`t walk out. But they`re talking about a left-wing radical
-- I thought that was the most mild-mannered -- it was certainly mild in
its presentation.

It was center-left. It was a reasonably pro-government agenda, do
some things to get some things done to add to opportunity, not a safety
net, nothing for poor people, just people that want to work. Where was the
radicalism in it last night? I don`t know where it was.

REP. CHRIS VAN HOLLEN (D), MARYLAND: Well, there wasn`t any, Chris.

And, look, this president could come before the House of
Representatives, before the Congress and say, let`s cheer for mom, apple
pie, and baseball, and House Republicans would say it was part of a
socialist conspiracy.

And the strange thing is the same people then turn around and say, why
won`t the president work with us, when anything the president proposes they
immediately oppose.

So, look, the president put forward a very straightforward agenda when
it comes to specific actions on jobs and the economy. And he said to
Congress, I`d like to work with you, but if you refuse, there are areas
where I do have executive authority where I`m going to take action. We`re
not going to have the country move as slow as the slowest boat. And that`s
appropriate.

MATTHEWS: Well, the president paid tribute the last night, as we all
saw, that dramatic moment when he paid tribute to Army Ranger Cory Remsburg
who was severely wounded by a roadside bomb over in Afghanistan. Let`s
watch that moment.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Cory is here tonight.
And like the Army he loves, like the America he serves, Sergeant First
Class Cory Remsburg never gives up and he does not quit.

(APPLAUSE)

(END VIDEO CLIP)

MATTHEWS: Well, that got a two-minute standing ovation as it should
have from the American people in that chamber. They were all Americans. I
think that was great.

And then Huelskamp -- anyway, the president went on to say men and
women like Cory remind us why we fight for the America we want for our
kids. That moment was widely viewed as one of the most inspiring of the
night, but in the alternative world speech of Tim Huelskamp, he was
watching, and the reality was much more cynical. He said he tweeted,
quote, "Obama politicizes the military to end his speech, totally expected,
Mr. President."

Now, this is a thing about politics that turns people off left, right
and center. Everyone knows that Huelskamp, a Republican, if a Republican
president`s done the exact same thing, he would have said it was great.

VAN HOLLEN: Well, that`s right. Look, there`s some people, Chris,
who just came into the chamber determined to tear the president down no
matter what. It`s a sad state of affairs. And it`s the reason it`s so
difficult for the president to work with Congress to get stuff done. And
there`s no wonder that the American Congress is at about 9 percent in
American public opinion down there with cockroaches and other creatures.

So, as long as they keep doing this, the problem is it tears down the
whole institution in so many ways. They don`t seem to care. That seems to
be the objective. They think if they make these statements, they`ll tear
down the whole of the government. And as you pointed out many times,
they`ve got an anti-government agenda to begin with.

MATTHEWS: Yes, I know.

VAN HOLLEN: As you say, the cynical part about this is there was a
moment where everybody was rallied around and yet, there were some of those
people who were just determined to play a cynical card.

MATTHEWS: Thank you so much. U.S. Congressman Chris Van Hollen of
Maryland.

VAN HOLLEN: Thank you.

MATTHEWS: Michelle Bernard, president of Bernard Center for Women,
Politics and Policy.

Michelle, thanks for coming on.

I -- well, I`ll say what I said. It takes two seconds. I thought he
was mild mannered last night. I thought he was conciliatory. He said yes,
we disagree on things like minimum wage. We don`t want it but we do, and
continuing unemployment compensation and education policies, some of that
stuff and certainly health care, but we`re in this together.

MICHELLE BERNARD, BERNARD CENTER FOR WOMEN, POLITICS AND POLICY: Yes.

MATTHEWS: I don`t see how you can call that radical.

BERNARD: I don`t -- I really can`t fathom how they called it radical
or any of the things that we`ve heard. I frankly watched the president`s
speech. You know, I`m a big supporter of the president, big booster. I
felt it was almost too conciliatory.

I loved the ending of the speech. It was the most dramatic and
important part of the speech. But I personally was sitting there and
hoping for more when you talked about the dignity we all deserve and
equality and ignoring race, gender and, et cetera, et cetera, I had hoped
that the president would actually stand up at last night`s State of the
Union and say this is what America is supposed to be, but here`s -- this is
what it is not. And talk about how he personally as a black man has been
treated as president.

MATTHEWS: So, why do you think he didn`t? What you want to do,
because David Corn was on last night. He took the let`s rip the scab off.
Let`s point out what it is.

BERNARD: Yes.

MATTHEWS: My view was I`m trying to understand the politics of the
president. I think he`s mild mannered because that`s what he is.

BERNARD: Yes.

MATTHEWS: And also black men can`t yell and all that crap, whatever.
But I also think that he -- I also think he`s calculating. He`s saying,
look, I`m trying to get immigration through the next year or two, trying to
get minimum wage through, I`m trying to get unemployment through, these
things I care about.

I might be able to shake them loose --

BERNARD: Yes.

MATTHEWS: -- but if I go crazy at them and start attacking them
personally and saying they`re bad guys, like they are with voter
suppression, which they are bad --

BERNARD: Exactly.

MATTHEWS: -- I`ll never get any of them.

BERNARD: Well --

MATTHEWS: He`s still hopeful of getting something done.

BERNARD: I think he`s still hopeful. I think he is smart, he`s
shrewd, he`s calculating and hopefully, that`s what he`s thinking he`ll be
able to shake a little something out of the trees. But for the rest of us
that are sitting back and I say this really as an African-American woman
for the rest of us sitting bang and seeing how he`s been treated since day
one and I`ve always said he can`t be the angry black man, I wanted him to
say -- here`s a problem with voting rights. There`s a problem with how you
treat women. There is a problem with how we look at immigration and how we
treat Hispanics.

MATTHEWS: Yes.

BERNARD: All of this is a huge problem. We`re supposed to be the
shining light on the hill and we are the laughingstock of the world because
we treat our people horribly.

MATTHEWS: I know. You know, he`s never blamed his problems on race,
and yet they always do this to him.

BERNARD: Yes, absolutely.

MATTHEWS: Michelle, thank you.

BERNARD: Thank you.

MATTHEWS: Great to have you on.

Up next, if you don`t like the question, threaten to throw the
reporter over a balcony and break him in half. That`s what New York
Congressman -- is this New York way? Republican Michael Grimm did it last
night and it was all caught on tape at least at this bad angle we`re
looking at.

And this is HARDBALL, the place for -- that was hardball! Look at
that. That was the place for hardball!

We`ll be right back.

(COMMERCIAL BREAK)

MATTHEWS: Back to HARDBALL.

Republican Congressman Michael Grimm of New York is in hot water for
physically threatening a local New York City reporter in an interview after
the State of the Union last night. The Staten Island congressman initially
walked off when he was asked about an investigation into his campaign
donations. But what happened next was caught on camera.

(BEGIN VIDEDO CLIP)

MICHAEL SCOTTO, NY1 REPORTER: Since we have you here, we haven`t had
a chance to kind of talk about some of the --

REP. MICHAEL GRIMM (R), NEW YORK: We`re not talking about anything
that`s off topic. This is only about the president --

SCOTTO: Well, what about -- all right, so Congressman Michael Grimm
does not want to talk about the allegations concerning his campaign
finances. We wanted to get him on camera on that, but, as you saw, refused
to talk about that.

Back to you.

GRIMM: Let me be clear to you, you ever do that to me again, I`ll
throw you off this (EXPLETIVE DELETED) balcony.

SCOTTO: Why, why, I just wanted to ask you?

GRIMM: If you ever do that to me again.

SCOTT: Why, why, it`s a valid question.

(INAUDIBLE)

GRIMM: No, no, you`re not man enough, you`re not man enough. I`ll
break you in half. Like a boy.

(END VIDEO CLIP)

MATTHEWS: Well, later that night, Grimm blamed the reporter for
lacking, quote, "professionalism and respect", saying, quote, "I doubt that
I`m the first member of Congress to tell off a reporter and I`m sure I
won`t be the last."

Well, that has swag, too. Today, Grimm showed more contrition,
apologized to reporter Michael Scotto of New York 1. That is s a news
station up there.

Dana Milbank is a columnist with "The Washington Post", and Ed Rendell
is, of course, the former governor of Pennsylvania, who`s never did
anything like this.

By the way, this is amazing. I don`t know if everybody has good
eyesight. Mine isn`t good enough, it was interesting what he`s saying
there -- if you ever do that again. Why is this a valid question? No,
you`re not man enough, you`re not man enough. I`ll break you in half.
Like a boy.

(LAUGHTER)

MATTHEWS: Ha! What kind of language is that? It`s pretty primitive.

DANA MILBANK, THE WASHINGTON POST: Break him in half like a boy, and
throw him off the balcony, to which he added an expletive.

I think a general rule of politics is, if you are going to threaten
somebody, you probably don`t want to do if when the guy is miked and on
live television at the time.

MATTHEWS: Yes.

MILBANK: The result of all this, we were talking about there being
four Republican responses to the State of the Union last night. This was
the fifth and it wound up eclipsing all others and in some ways eclipsing
the State of the Union itself because it`s just such a horrific thing to
actually see.

MATTHEWS: Governor Rendell, when you consider, and you have a right
to consider -- a reporter breaking a ground rule, if they had a grounds
rule. We don`t know that, this was only going to be reaction to the State
of the Union. How do you deal with the fact that the reporter wants to get
on camera with you playing defense on a matter you don`t want to talk
about, which is campaign financing, in this case?

ED RENDELL (D), FORMER PA GOVERNOR: The congressman should have stuck
to his first answer and said, look, I`m only here to talk about the
president`s State of the Union speech, we can get to that some other day
and slap it off like that. And then if he continues to persist, he looks
like the unreasonable one.

And, Chris, it is true that I have yelled at some reporters over the
course of time. But I`ve never threatened bodily harm, no.

MATTHEWS: You`ve never threatened to break them in half like a boy?

RENDELL: No, no.

MATTHEWS: I just love the reference to the age thing here. Throw
them off the F-ing balcony?

RENDELL: No, I thought it was amusing. The congressman in his
apology today said he wants to schedule a lunch with the reporter. Well,
if that reporter goes to lunch with the congressman, he`s not as smart as I
think he is.

MATTHEWS: Well, he better no do it on a high building anywhere.

Anyway, New York 1 reporter Michael Scotto appeared on my colleague
Alex Wagner`s show today on MSNBC, of course, just a few hours ago. Let`s
watch what he had to say about that (INAUDIBLE).

(BEGIN VIDEO CLIP)

SCOTTO: I think what happened, you know, prior to that, is the
coverage was just terrible. I mean, you looked over Twitter and you would
see all these negative tweets toward his behavior, the coverage from
lawmakers who were weighing in on what he did was also unfavorable. I
think he realized that sticking with that stance of kind of blaming us for
asking that question was not going to work. And then he decided to come
out and apologize to us.

We have been trying to ask Grimm the questions about this in the city,
and here. And he really hadn`t been responsive. So, I saw it as an
opportunity. He was there talking to me, and I thought it was a perfect
opportunity to ask him a question that we wanted to ask him for the last
two or so weeks.

(END VIDEO CLIP)

MATTHEWS: Governor, it reminds me of the time that Zell Miller from
Georgia threatened to have a duel with me on television back in that
convention in New York. I wish we still lived in a time we could challenge
a man to a duel.

For a while there I thought he meant it. I told the producers, don`t
push this guy. We`ll be standing on the Hudson River in some bluff with
Confederate dueling pistols. But anyway, he`s a fine man.

But this one -- anyway, it`s over, right? This guy`s OK? Get
reelected, Grimm?

MILBANK: He`s fine, he`s out at a retreat on the eastern shores of
Maryland with all his colleagues. And they`d like to break him in half at
this moment for becoming the Republican message of the night.

MATTHEWS: But you know what, I think Staten Island is a tough
country.

Go ahead. Your thoughts, Governor. Will this help or hurt him in the
Staten Island and Bay Ridge?

RENDELL: I think he`ll still probably survive, but it`s going to make
it a lot more uncomfortable for him than before. But I think Dana is
right. What this really did was become the story of the night, and blew
away any of the Republican responses. And particularly when you juxtapose
this with what Governor Christie is accused of doing, bullying.

MATTHEWS: Muscle.

RENDELL: It looks we`ve got a lot of Republicans who are kind of
bullying people around.

MATTHEWS: I think Grimm is a big supporter of Christies and we can
see why.

Anyway, thank you, and thank you, Zell Miller, if you`re watching
tonight. Dana Miller -- Dana Milbank, and Ed Rendell, Governor -- thank
you for joining us.

We`ll be right back after this.

(COMMERCIAL BREAK)

MATTHEWS: Let me finish tonight with this.

I don`t know about you, but I greatly enjoyed last night. It was a
joy to see the president returning to the American narrative that brought
him to his place in the country`s contemporary history.

It sounds contradictory. But it`s, in fact, true. We do disagree in
this country on how to improve opportunity for people. But there is a
shared value that Americans do believe American people should be able to
rise up from their beginnings.

It sells to everyone, to put it roughly. The son of a bar keep can
become speaker of the U.S. House. The son of a single mother can become
president. What American doesn`t like that story, that true story as we
saw up on the podium last night.

People say that the president wasn`t tough enough on his rivals last
night. Fine, we can disagree on tactics.

My view is similar to the presidents. If you want some Republican
compliance on matters like minimum wage, immigration reform and
continuation of unemployment benefits, don`t spend the State of the Union
night dumping on them to their face. It just doesn`t work. People don`t
come around even grudgingly if you`re mocking them.

Anyway, so, let`s see if the president`s approach works. He needs to
get some things done this year for the American people. If he does, he can
hold the U.S. Senate this November. If he doesn`t, he probably can`t.

So, for all kinds of good American reasons, let`s give these efforts a
push.

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

"ALL IN WITH CHRIS HAYES" 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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