'Countdown with Keith Olbermann' for July 18

Guests: Richard Wolffe, Lawrence Korb, Tom O'Neil

KEITH OLBERMANN, HOST: Which of these stories will you be talking about tomorrow?

Cease the assumption of a cease-fire. Hezbollah rockets hit Haifa and Nahariya, one dead. But Hezbollah rockets seem to be coming fewer and farther between now.

The Israeli air force batters Lebanon. Thirty-one dead there. Its deputy army chief says Israel's offensive will not take months, but weeks.

Israel accuses Iran of involvement in the capture of two soldiers last week, as an attempt to divert attention from Iran's nuclear program.

The confused evacuation of Americans from Beirut to Cyprus. More than 300 U.S. nationals removed by sea and air today, 1,000 more by tomorrow.

Full coverage of day seven from Haifa, from Beirut, from Cyprus, from Washington.

And at home, are the neocons drooling? Is this seen as an opportunity to make American political hay out of Middle East reality chaos?

A perfect day, then, to bury the Senate Judiciary Committee hearing on warrant-free domestic spying by the Bush administration. A perfect day, then, for the attorney general to reveal that the Justice Department was blocked from reviewing the legalities on the personal instructions of the president.

There is good news tonight about our old friend Buck O'Neill, batting leadoff.

Weird news about Oprah Winfrey and Gayle King, who suddenly announce they are just friends. Just friends?

And Paris Hilton, who suddenly announces she's really not dumb. Not dumb?

All that and more, now on Countdown.

(BEGIN VIDEO CLIP)

OPRAH WINFREY: Love is in the details.

(END VIDEO CLIP)

OLBERMANN: Good evening.

Rarely, even with the embedded reporters of the Iraq War, have television cameras been present for the moment, one image that could serve as the microcosm of conflict.

Tonight, in our fifth story on the Countdown, the headlines of day seven, Israel versus Hezbollah, of Israeli air attacks renewed at this hour on Beirut itself and at its airport, of evacuations of Americans for a price, and wars of words targeted at Iran and Syria. They will have to wait.

For we have one of those rare and heartbreaking microcosms, war and ringing cell phone, a sound you might never forget, a sound that brings this all home, reported for us first tonight by our correspondent Martin Fletcher, who's now in Haifa.

Martin?

(BEGIN VIDEOTAPE)

MARTIN FLETCHER, MSNBC CORRESPONDENT: Keith, Hezbollah has fired more than 1,000 rockets at Israeli towns in a week, 65 of them just at the town of Nahariya, 14 rockets just today.

(voice-over): We started our day in a bomb shelter in Nahariya. I asked the kids, Do you know Hezbollah? "They want to kill us," 11-year-old Tal (ph) says. His sister, Michal (ph), feels safe here.

But as we left, panic. New rocket attacks all around us. "Katyushas," she shouts, "bombs! Where are my children?" she cries. A man points at the smoke, and we run there, half a mile, past another bomb shelter, more frightened people pointing the way.

When we get there, cars are destroyed, gasoline flowing down the street, burning embers.

UNIDENTIFIED MALE: Careful, careful, careful!

FLETCHER: Live electric cables on the ground, water mains broken, deadly combinations.

The Katyusha rocket, with its 50-pound warhead, made only a small hole in the ground, but spread terror.

A man is in shock. Then, close by, a second rocket, but nobody was wounded either time.

(on camera): The house here has been hit by a rocket, but everybody was inside the bomb shelter here.

(voice-over): And then a third rocket, terror on the home front. We run another half a mile. A quick response can save lives. But for all three bombs, we got there before the ambulances.

This man had no chance, a direct hit.

(on camera): They're just waiting for the ambulance to arrive.

Yet again, right next to a bomb shelter, most people were inside, and that's how they stayed safe. But this man clearly was in the wrong place at the wrong time.

(voice-over): At the shelter, this lady is desperate. "Where are you? Where are you?" she cries. A man explains, "She's lost her husband." The woman tries to call him.

Then everyone hears a phone ringing. It's by the dead body.

(on camera): Israel's key goal is to destroy Hezbollah as a military threat. But even after a week of bombing, Israeli generals say they've still got a long way to go, Keith.

(END VIDEOTAPE)

OLBERMANN: Martin Fletcher now at Haifa. Great thanks.

We'll go to Cyprus, where Americans are being offered a way out, and being reminded that nothing in life is free.

And first to Beirut, where death is no less real, and, at this hour, far more frequent. The headlines in Lebanon, Israeli warplanes bombarding targets in the southern part of the country, destroying one of Hezbollah's buildings, called the Compound of Martyrs Master, in a Beirut suburb.

To the east of the capital, Israeli bombs hit a Lebanese army barracks, killing 11 soldiers there. They are not supposed to be targets.

Elsewhere around that country, a family of nine was killed when a bomb hit their house, and 10 other people died in strikes on southern villages. All told, 31 killed in Lebanon today, being the total number killed in that country since the violence began to 235.

And Israel is apparently not precluding the possibility of invasion, the army's deputy chief of staff telling Israeli radio that it has not ruled out deploying, quote, "massive ground forces" into Lebanon.

Some in the Israeli government downplaying the suggestion of any invasion, although the Associated Press is now reporting that Israeli tanks tonight began moving into the refugee camp in central Gaza.

And there certainly are no suggestions that the air campaign against Lebanon will abate, while the capital Beirut was spared most of the bombing during the day, while U.S. citizens and other foreign nationals were evacuated. Once night fell, it started up again in earnest.

And the breaking news now, Beirut International Airport has been targeted once more at this hour, and, again, cameras were present at just the right, or just the wrong time, just as our Beirut bureau chief, Richard Engel, was attempting to file a taped report for MSNBC.

(BEGIN VIDEO CLIP)

RICHARD ENGEL, NBC BEIRUT BUREAU CHIEF: Three, two, one.

But it didn't stay quiet for long, Joe -

As you can see, just hours after Israel -

And as you can see, it didn't stay quiet for long. Just hours after Israel - after the last Americans left this city -

Ah, sorry.

(END VIDEO CLIP)

OLBERMANN: After those huge explosions, Richard Engel explained to a producer what he believed had just happened.

(BEGIN VIDEO CLIP)

ENGEL: Some very significant air strikes in a different area in Beirut. It sounded like another kind of weapon, some sort of missile, perhaps, that was coming down. It was quite a significant explosion, a different kind of explosion and different sound. We could hear the - what sounded like the whistle of an incoming rocket.

Twice, two very big air strikes that also created an enormous mushroom cloud in the sky, unlike anything we have seen so far. It was a different kind of munition, a huge, orange flash, and then it left this big gray mushroom cloud a few thousand feet in the - above the city.

(END VIDEO CLIP)

OLBERMANN: That was our bureau chief in Beirut, Richard Engel, speaking extemporaneously as bombing resumed there after midnight local time tonight.

The 100,000 Lebanese who may be trying to flee their country dwarf the thousands of Americans who are still stuck in the war zone. But they and their loved ones here are asking why the evacuation did not begin until the conflict reached the one-week mark, although we just have news of another significant development regarding the evacuations and their cost.

Only 350 Americans have managed to leave so far, most of them on evacuation ships organized by the Swedish and French governments. The U.S. State Department says it now has cruise ships ready to ferry more Americans to safety tomorrow, the hope is, 1,000 evacuees by Thursday.

All of them had been charged a fee, according to federal law, between $150 and $200 to get out of Lebanon. We're learning now that the administration plans to waive that fee, and henceforth, any evacuations of American nationals from Lebanon will be at - the (INAUDIBLE) cost will be assumed by the American government.

Their destination, along with hundreds of other foreign evacuees, the Mediterranean island of Cyprus.

And that is where we find our correspondent Dawn Fratangelo.

Dawn, good evening.

DAWN FRATANGELO, MSNBC CORRESPONDENT: Good evening, Keith. How are you?

OLBERMANN: People have been - in Lebanon have been hearing all these rumors that it costs $300 to - just to get to Cyprus. Once there, they'll have to sleep on the streets. Can you clear this up? And this late news that the evacuation fees are going to be assumed by the government?

FRATANGELO: Right. Condoleezza - NBC - or officials have told NBC News that Secretary of State Condoleezza Rice has ordered her staff to sign waivers, so that those promissory notes under that federal law you were talking about will not be needed. So people who are coming from Lebanon to Cyprus will not have to reimburse the U.S. government for transportation between Lebanon and Cyprus, and then transportation between Cyprus and wherever they may want to go back in the United States.

So that has come from the secretary of state.

It's - there's been a lot of frustration among the Americans who are still in Lebanon. They're seeing other citizens, French nationals, Italians, folks from Greece, making their way to Cyprus, and they've been very frustrated by the - what they believe is the slow pace of the evacuation.

Officials here are trying to pace this so that there's not this huge influx. And part of the problem is that a lot of task force teams from different countries, including the United States - in fact, we flew in from a team - with a team from Canada. And they were trying to come up with a plan to process all of these people. I mean, they really want to get them through the process, the immigration process, and onto where they want to go as soon as possible.

But dealing with thousands, perhaps tens of thousands at once, won't work. The Canadian team actually told me that they're thinking of getting on the ships, going to Lebanon, and ferrying back with the people who are evacuating to speed up that process.

This is the height of the summer season here in Cyprus. Hotel rooms, certainly, you know, are hard to come by. And a lot of countries are just now in the beginning process of figuring out if they need to charter planes out of Cyprus back to the various countries where people want to go.

How many people can afford to - their own commercial airline ticket? So there are a lot of kinks to be worked out, but I think what officials were trying to do was to really stage this evacuation so that there wasn't this mass influx of people here in Cyprus, so that they could really handle this.

OLBERMANN: We've heard a lot of detail, Dawn, obviously, on these - on this first stage of the evacuation, of bringing the Americans out of Lebanon to Cyprus. But do we have any more information about the physical process of getting them out of Cyprus to destinations back here, or to Europe, or anywhere else, at significant length from harm's way?

FRATANGELO: Well, I mean, when they are - when they leave Lebanon, the hope, certainly, among American officials, is that those cruise ships, that one cruise ship in particular, will be escorted by U.S. warships, the U.S.S. "Gonzalez," the U.S.S. "Quippy (ph) Island," the "Iwo Jima." They're making their way to the port of Beirut to ensure the safety of that cruise ship that can carry 750 people at a time.

So on that one point, that's the safety issue. When they get here to be processed, that could take a while. If there's an immigration problem, if they're traveling with someone who may not have a U.S. passport, if there's a family member who is perhaps from another country, but they all want to travel together, there may be security issues. That's going to take some time for some people. They're not going to breeze through Cyprus and be on their way to where they want to go. So it may take weeks for some folks.

OLBERMANN: Dawn Fratangelo at Larnaca in Cyprus, as the effort to evacuate, to - evacuating Americans continue there. Great thanks, Dawn.

Let's recap the breaking news here as we reported to you at the beginning of the hour.

The bombing has resumed after a quiet day in Beirut, with the international airport there one of the targets. And as Dawn Fratangelo just reported, and Andrea Mitchell is confirming from Washington, NBC News has learned that evacuees, Americans, or U.S. nationals, heading now to Cyprus, and then to other places out of Lebanon, will not have to sign the promissory notes that would have required them to pay for their own evacuation, $100 to $150 to $200, depending on the circumstances, that the secretary of state's office has directed her staff to sign waivers so that the notes will not be needed.

Apparently, this came up at a meeting of the National Security Council, and also came up during consultations between the State Department and those on - leaders on Capitol Hill.

So again, that extraordinary - not necessarily fatal element to the evacuations, that there would have to be payments by the part, or on the part of those evacuated, has now - that cross - that bridge, at least, has been crossed at this hour.

Also tonight, as we continue, the president now accusing Syria of trying to get back into Lebanon using this entire event as a reason. Richard Wolffe with the politics behind all the positioning.

And there are some who position this country very differently if they had final say. Why some neoconservatives in this country say it's time for the U.S. to join in the fighting against Hezbollah by hitting Syria and Iran. Hope they have their own troops.

You are watching Countdown on MSNBC.

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OLBERMANN: Beyond the question of how much and how fast the Bush administration really wants to halt the spiraling violence in the Middle East is the more fundamental query of whether or not anyone is capable of intervening in a conflict that is, at this point, Israel's issue.

More on the former question presently.

But first, in our fourth story in the Countdown, the latter, the diplomatic dilemma now facing 1600 Pennsylvania Avenue.

So far, the president appearing reluctant to influence America's closest friend in the region in any way, shape, or form, getting his top diplomat to the region apparently not the priority we were led to believe it was, State Department officials knocking down reports that Secretary of State Rice would be departing for the Middle East on Friday evening, three whole days from now. Any such trip merely in the ether.

A visit to the United Nations, however, seemingly more likely, Secretary General Kofi Annan today proposing that a new international peacekeeping force be sent to the region to bolster the 2,000-member force the U.N. already had in southern Lebanon.

Meanwhile, more reluctance from the White House on the question of a cease-fire, press secretary Snow making it clear that a return to the status quo would not be the president's preferred outcome.

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: A cease-fire that would leave intact a terrorist infrastructure is unacceptable. So what we're trying to do is work as best we can toward a cease-fire that is going to create not only the conditions but the institutions for peace and democracy in the region.

(END VIDEO CLIP)

OLBERMANN: Let's call in our own Richard Wolffe, the senior White House correspondent for "Newsweek" magazine, who's just returned to Washington from the G8 summit, where he was the only member of the media corps to snag an interview with President Bush.

Richard, good evening.

RICHARD WOLFFE, SENIOR WHITE HOUSE CORRESPONDENT, "NEWSWEEK" MAGAZINE:

Good to be with you, Keith.

OLBERMANN: Do we know why the administration appears reluctant to intervene at this point?

WOLFFE: Well, what they'd say is, they're intervening very heavily on the diplomatic front. But they're quite rightly cautious about intervening on the military side of things.

And, you know, American forces, international forces, have not got a happy history in Lebanon. This is obviously a very difficult situation. And, you know, I think what they're trying to do here is actually not appear to be as active as they really are, because they want to make this look like a U.N. operation. The U.N. has been heavily involved already in Lebanon, in getting the Syrians out of there.

And they're really looking to sort of maintain that approach that looks like it's in the name of the international community, as opposed just to being what Washington wants.

OLBERMANN: What a difference three years and 600 miles can make.

To your interview with the president, does he appear ready to connect dots from Hezbollah to Iran to Syria? Might that explain why a cease-fire seems to be still off in the distance, next week at the earliest?

WOLFFE: Is he ready? He's more than ready. He wants to do - he wants the world to see that there is this very real connection. And he was certainly very emphatic with me, and he's also made it clear in public, that he sees the hands of Syria and Iran here. And more than that, he has a - his own take on the sort of strategy behind that, the idea being, in his mind, that Iran wants to break up the consensus that there is against Iran's nuclear program and also to intimidate moderate Arab nations, make them feel weak, maybe even topple a couple here or there.

So he does see this as being part of a complete sort of ideological and strategic attack by these forces, being Iran, Syria, and Hezbollah together.

OLBERMANN: The Israeli idea floated today that all of this was, to some degree, to help Iran cover the developments in its nuclear program. Does that have any currency with the White House?

WOLFFE: Absolutely, yes, exactly. The president sees the timing as being very curious and suspicious. And so, yes, there is a link there, at least in the White House's mind.

But more importantly, not just about the nuclear program. They see there is, again, an attempt to shake the whole region in line with Iran's influence. In other words, Iran wants to exert more control over the whole region.

OLBERMANN: Should it want to intervene at some point, has the administration squandered any of its leverage in this region? Has Iraq made it less likely that Israel's neighbors would accept some sort of deal brokered by the U.S.? Is that one of the reasons that everything is below the radar from the American point of view?

WOLFFE: Well, the administration is adamant about this. They say that Iraq hasn't hampered them in any way, shape, or form, militarily, diplomatically. But you only have to look at - setting aside the military side of things for a second, you only have to look at the reaction of the Russians, for instance, at the G8, where they basically didn't want Iran and Syria to be named in a G8 statement as having a hand in all of this. And they said that they needed more evidence.

Well, you know, pretty much everyone know what Iran's involvement is with Hezbollah, but, yes, Iraq has an impact in what evidence people want to see.

OLBERMANN: Lastly, a quick reaction, an analysis in 30 seconds, of this news that we have tonight that the State Department is essentially going to pick up the freight for removing American citizens from Lebanon via various routes, but principally through Cyprus?

WOLFFE: My reaction is, you know, they've obviously come to this late. I suspect that they're going to move heaven and earth to make this look as smooth and as efficient as possible. You know, they'll be in there late, but with a lot of assets.

OLBERMANN: Richard Wolffe of "Newsweek" and MSNBC. As always, sir, great thanks.

WOLFFE: Any time.

OLBERMANN: Much more coverage of the crisis in the Middle East, including why some here want to use the current conflict to widen the U.S. military presence, perhaps offensive, in the region.

Also another big day of political developments for the president, the attorney general testifying on Capitol Hill that Mr. Bush himself stood in the way of the Department of Justice looking into the NSA eavesdropping program.

That, and the first presidential veto of the administration, is looming over stem cell research.

That's next. This is Countdown.

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OLBERMANN: We will skip the lighter video fare tonight to give you instead the day's headlines from outside the Middle East, beginning with the controversial Stem Cell Research Enhancement Act, which has now passed in the Senate, but appears headed towards the first veto in the presidency of George W. Bush.

The measure had strong bipartisan support, but passed just four votes short of the two-thirds margin needed to guarantee an override of a presidential negation. Despite late appeals from fellow Republicans such as Governor Schwarzenegger and former first lady Nancy Reagan, the president has left little doubt he will spike the bill, White house spokesman Tony Snow explaining today, quote, "The simple answer is, he thinks murder is wrong."

The bill is specific, of course, about which embryos would be funded, only those, quote, "that have been donated from in vitro fertilization clinics which are in excess of clinical need, would never be implanted in a woman, and would otherwise be discarded." In other words, clusters of cells which are currently being thrown in the garbage.

From New Orleans, it was a charge that leaped even from the background of the unrelenting coverage of the post-Katrina chaos into the pages first of a British newspaper, which told a very unlikely story using anonymous sources and quotes of mercy killings, euthanasia at a hospital there, during the worst of the crisis.

There have now been arrests. Dr. Anna Pou and two nurses who were on call at Memorial Medical Center when the hospital was utterly isolated by the floodwaters have been charged with being principals to second-degree murder. They are accused of giving lethal combinations of morphine and a sedative called Versed to four desperately ill patients three days after Hurricane Katrina hit last August.

Louisiana's attorney general says the patients would have lived through the storm's aftermath, which is easy for him to assess today, and that the three suspects pretended that they were - maybe they were God. Attorney General Charles Foti says there could be other arrests.

Also here tonight, those who are encouraging a escalation of the conflict in the Middle East. Israel says there are still weeks of attacks coming up. Neocons in this country think the U.S. should join in the offensive and hit Syria and Iran too.

And crisis never silenced the self-absorbed. A surprising announcement from Oprah Winfrey and Gayle King in the pages of Ms. Winfrey's own magazine.

That is ahead here on Countdown.

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OLBERMANN: There were those with considerable influence, not to mention jobs, within the Bush administration who promised removing Saddam Hussein from power would, among other things, stabilize the Middle East and all but destroy Hezbollah.

If you think having failed to deliver on any of those promises these radicals would currently be fleeing, chastened from the current crisis in the Middle East, you might want to think that one over again.

Our third story on the Countdown, the neo-cons back in business apparently viewing the showdown between Israel and Hezbollah less as the result their own failed policy and more as yet another golden opportunity.

Here we go again.

The violence in Lebanon may not yet be even a declared war between two nation states, let alone a regional or global conflict. Keeping it from becoming one, though, apparently not a priority for some former and current government officials. The former CIA director, James Woolsey having argued for war in Iraq now advocating air strikes against Syria and the Bush administration's soon to be envoy to the region - eventually to be envoy to the region, secretary of state Rice, who according to recent states, seems to view violence in the Middle East as a sign of progress.

Then there is the bible of American neoconservatives, the "Weekly Standard" and its prophet, Editor William Kristol. The magazine cover calling the showdown between Israel and Hezbollah "Iran's Proxy War." Mr. Kristol himself urging Americans to view it as our war, too, the air campaign starting early on the Sunday talk shows.

(BEGIN VIDEO CLIP)

WILLIAM KRISTOL, "WEEKLY STANDARD": Israel is fighting four of five enemies, in a sense, in the Middle East, Iran and Syria sponsors of terror, Hezbollah and Hamas. This is an opportunity to begin to reverse the unfortunate direction of the last six to nine months and get terrorists and jihaddist back on the defensive.

JUAN WILLIAM, NATIONAL. PUBLIC RADIO: Well, it just seems to me that you want, you know, to go back to the general Kristol analogy - you just want war, war, war and you want us in more. You wanted us in Iraq, now you wanted us in Iran, now you want us into the Middle East.

(END VIDEO CLIP)

OLBERMANN: For a reality check on this, time to call in Lawrence Korb, assistant secretary of defense during the Reagan administration and these days, a senior fellow at the Center for American Progress.

Mr. Korb, a pleasure to speak with you again.

LAWRENCE KORB, REAGAN PENTAGON OFFICIAL: Nice to be with you.

OLBERMANN: First from Iraq and now, from one point of view anyway, apparently Syria and Iran, should the fact we are still bogged down in Iraq be some sort of red flag for not going to war with two more of its neighbors?

KORB: Well, it certainly should. It shows you that going to war is not the answer to your problems. It creates more problems. And even if we wanted to, we just really don't have the military forces we need unless you want to go back to conscription.

OLBERMANN: I was going to ask that point, the fulminating on this subject from those who see this as possibly some sort of opportunity from widening conflict and the resulting fulminating by those who view that position with something that came to horror, is it all fulminating here, the case that it's all academic. You were the handler of manpower issues for the Pentagon during Mr. Reagan's administration. Are the realities here, troop strength, domestic political climate, are these things in such a state now that they make any argument of this almost academic?

KORB: Well, we would hope so. Unfortunately as long as you have people like Vice President Cheney around and some of the people working for him, they might be sympathetic to it. But there's no way you could get the American people to support a war in Iran after going to war in Iraq under false pretenses and saying how quick it would be that we'd would be greeted as liberators and you'd create this democratic tsunami that would go throughout the Middle East and solve all of our problems. And you just don't have the manpower, unless you want to break the volunteer military and, you know, just send people overseas indefinitely. And you really do not have enough; 130,000 troops in Iraq, you'd need at least twice as many in Iran if you wanted to take control of that country.

OLBERMANN: We heard from Mr. Woolsey, we've hear from Mr. Kristol, Newt Gingrich called this the third world war, said that at least that it should be described thus to the electorate. Are not these and other people who are involved in this point of view the same folks who told us Iraq would be a cakewalk and do they have remaining credibility?

KORB: They have no credibility around the world or with the American people. The real question is, do they have any credibility with the administration? I think the way the president has not only talked about this crisis, but also with North Korea, leads me to believe they do not have the credibility that they once had.

OLBERMANN: What course should the United States be taking in the Middle East and how close is this administration to that correct course right now?

KORB: Well, I think what we need to do is get a high-level envoy over there right away. I can't believe Secretary Rice is delaying her trip. If she doesn't want to go, bring back Secretary Powell or former Secretary of State Baker. Get them over there. Try to get a cease-fire. And also start to have direct one-on-one conversations with Iran. We have a whole host of issues with the Iranians. They wanted to talk back in 2003. This administration thought by talking to them, they in effect would be legitimating the regime and they thought the regime was on its last legs, which again, has proved not to be true.

OLBERMANN: How does this administration deal with a reality that it seems to want to avoid, the big-picture policy issue in terms of this idea from the Bush administration that it's democracy at all costs and democracy alone will cure that region and yet, of course, it was a democracy that put Hamas in charge of the Palestinians?

KORB: Well, and you just - they don't understand there's a big difference between elections and democracy. You can have an election but really that doesn't solve anything. Getting democracy there takes a long, long period of time and not everyone wants the same thing we want in terms of separation of church and state, checks and balances. And in foreign policy you have to make some touch choices and you have to have security and stability has to be your first goal if you're going to have democracy later, that's great, but if you do not have security and stability, you don't have anything.

OLBERMANN: Lawrence Korb, formerly of the Reagan administration, now the Center for American Progress. Many thanks for some of your time tonight.

KORB: Thanks for having me.

OLBERMANN: Back to our war on terror, the efforts to eavesdrop on Americans. The attorney general testifying on Capitol Hill that President Bush himself blocked any efforts by the Justice Department to review the legality of the program.

And comic relief. Paris Hilton on Paris Hilton. With a surprising, perhaps unbelievable announcement. All I'm going to tell you right now. More ahead on Countdown.

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OLBERMANN: Mr. Bush and the NSA spying program. Why did the president block any sort of review of the domestic eavesdropping program? And no need to eavesdrop on Oprah Winfrey, choose an interview with her own magazine to make a rather unexpected announcement about her personal life. That's next, this is Countdown.

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OLBERMANN: It will, perhaps, be the enduring contribution to American political speak by the creators of the just concluded NBC series "The West Wing," take out the trash day. In the fictional Bartlett White House, the day, usually late or afternoon when bad or damaging is released by the press office to be lost amid the traditional diffusion of a weekend.

Our No. 2 story in the Countdown, take out the trash day could also be a Tuesday. If much of the news consuming public is monitoring a war afar from the halls of the capital, where a Senate committee happened to hear the reason there was no Justice Department review of the warrantless NSA domestic spy program is the president ordered that there not be one. Our justice correspondent, Pete Williams, has been good enough to state late with us tonight.

Good evening, Pete.

PETE WILLIAMS, NBC JUSTICE CORRESPONDENT: Keith, good evening to you.

This goes back to something that happened in January. Forty members of congress wrote to a unit in the Justice Department called OPR, the Office of Professional Responsibility, and they asked OPR to investigate whether Justice Department lawyers acted inappropriately when they approved the warrantless eavesdropping program but that investigation never went anywhere because OPR couldn't get the necessary security clearances and today in an exchange with Senator Arlen Specter, we found out why.

(BEGIN VIDEO CLIP)

ALBERTO GONZALES, ATTORNEY GENERAL: The terrorist surveillance program is a highly classified program. It's a very important program for the security of this country...

SPECTER: Many other lawyers in the Department of justice had clearance. why not OPR?

ALBERTO GONZALES, U.S. ATTORNEY GENERAL: And the president of the United States makes decisions about who is ultimately give access.

SPECTER: Did the president made the decision not to clear OPR?

GONZALES: As with all decisions that are non-operation, in terms of who has access to the program, the president of the United States makes the decision because this is such an important program...

SPECTER: I want to...

(END VIDEO CLIP)

WILLIAMS: OPR says this was the first time, Keith, that is was every prevented from perusing and investigation. And we found out from some internal memos today, that OPR complained that criminal division people at the Justice Department had given permission to do a leak investigation. Civil division people had clearance because they were defending the program from lawsuits, and somebody from the inspector general's office, three people there also had it and they were saying why not us? And now we know why.

OLBERMANN: Pete, do you think additional questions are going to be raised now about whether the president had authority to block that internal investigation by Justice, or will this be forgotten? And how likely is it the administration will voluntarily submit the spying program for review by federal courts if the legislation that's being drafted does not make a review like that a requirement?

WILLIAMS: Well, there may be questions about the propriety of what the president did, but I cannot imagine that anyone would ask about the authority, because he certainly has the legal authority to do what he did. On submitting this for review, the president has said if the bill passes, more or less as written, then he will submit the program for the court to review it and that was the essence of the deal that he worked out with Senator Specter.

OLBERMANN: There was a second element to this hearing today that did not get an extraordinary amount of attention. The attorney general suggested the Senate could resolve the Supreme Court ruling pertain to the prisoners, the detainees at Guantanamo Bay, very simply, by simply approving what had been the administration arrangements for those prisoners at Guantanamo Bay. How did that go?

WILLIAMS: Right. All along there have been three alternatives here.

One is just approve the military commissions as the president wrote them. On the other hand, is just put them before a court-martial and in the middle is something else - a military commission that borrows from the court-martial system. What the attorney general said today is, yeah, you can do the first thing. You can just codify the president's military commissions. But he signaled a willingness to go more for that middle course, to incorporate more rights from the military court system, though the administration made clear certainly not all of them.

OLBERMANN: Pete Williams in the Washington bureau. As always, Pete, our great thanks for staying with us.

WILLIAMS: My pleasure.

OLBERMANN: Happier fare in our nightly roundup of celebrity and entertainment news, "Keeping Tabs."

Now batting for the northern league baseball all-stars, Buck O'Neill. The baseball legend and eternal ambassador may have been overlooked when the game's Hall of Fame immortalized 17 figures from the old preintegration Negro leagues. But Buck O'Neill got a small honor when he broke the record for oldest player to appear in a professional game. At 94 years, seven months and 28 days, O'Neill stood in as the designated hitter for both sides in the All-Star game tonight, in the independent minor league, the Northern League. He got one at-bat each for each team. An 83-year-old player appeared at a northern league game last week. He, of course, now looks like a kid.

O'Neill was to be intentionally walked in both at-bats but before the game he had warned that he might not be able to resist the temptation to take a swing or two.

Buck O'Neill was signed to a contract by the Kansas City, Kansas City T-Bones to make him eligible for the appearance. You will recall that after being a two-time batting champ for the old Kansas City Monarchs and then later their manager, later first African-American to coach in the big leagues, later signing dozens of future big league stars as a scout, later still rocketing to fame in the principal voice on the PBS documentary on the history of baseball, Buck O'Neill was mysteriously and infuriatingly bypassed by a special Hall of Fame vote intended to be the last to honor stars who played the game before the game was integrated in 1947.

Buck, being Buck, will speak on behalf of the 17 men and women who were inducted or are to be inducted at the Hall of Fame induction at the end of the month. Northern league executives thought tonight's appearance in the all-star game might rekindle and reignite hopes of getting O'Neill himself elected by whatever means necessary.

Also here, Oprah Winfrey and Gayle King, best friends forever. What type of best friends? That's ahead, but first time for Countdown's latest list of nominees "Worst Person in the World."

The Bronze tonight goes to the college football conference, the Big Ten, it is withholding comment after one of its referees James Filson sued, claiming he was fired by the league because he only has one eye. Filson lost the other one in an accident nearly six years ago. He says he had gotten the full support of the Big Ten in the ensuing years and had even refereed without incident ever since. Then been assigned to referee the Orange Bowl game. So what happened here? He says he was told one of the league's coaches, Lloyd Carr of Michigan, learned that the controversial had a one-eyed referee and complained. Given the lackluster quality of football refereeing the last few years at all levels, it sounds like this guy should have gotten not a pink slip, but a raise.

Our runner-up tonight, Michael Savage. Now, the bar is higher for him because ordinarily we do not like to mock the insane. But get this from his radio show "The American left is cheering today. They'll probably break open the jug wine and cheer that Jews are dying. They can tear off their masks once and for all and show themselves to be what they really are, which is the Nazis of our time."

This just in from hell: Satan has chosen Michael Savage's show to broadcast over the P.A. system to torture the souls of the eternally damned.

And our winner, speaking of Coultergeist, who is now responding from an inquiry to a columnist at "Women's Wear Daily" who wondered if she might still think her comments about the "New York Times" were funny after the newspaper got sent another envelope full of suspicious powder, which fortunately turned out to be cornstarch.

Ann Coulter wrote back, "So glad to hear that the 'New York Times' got my letter." What do you think? Could she have really done it or does she just wish she had? That's the woman who once ran away screaming when she was attacked with a cream pie.

Coultergeist, today's "Worst Person in the World."

(COMMERCIAL BREAK)

OLBERMANN: As it all really came to this? Is our society such that three prominent women feel either impelled or compelled to announce that they are either not stupid or not gay. Our No. 1 story in the Countdown, do we need to expand this? Everybody who's not a lesbian and not stupid, raise your hand. That's right, I'm admitting it, I'm stupid stupid.

But like Oprah Winfrey and her best friend of over 30 years, Gayle King, I'd like to assert that I am not a lesbian. Ms. Winfrey in a exclusive interview with the magazine she owns, dispelling water cooler myth that is she and Ms. King are more than bestest buddies.

Quizzed by a columnist for "O" magazine, or is that perhaps now an ex-columnist. Ms. Winfrey answered, "I understand why people think we're gay. There isn't a definition in our culture for this kind of bond between women."

As for Ms. King who is a broadcaster, although if pressed, you might possibly identify her profession as friend of Oprah Winfrey, she remarks, "If we were gay, we would so tell you, because there's nothing wrong with being gay... I have to admit, if Oprah were a man, I would marry her."

While we all try to get that sentence erased our minds, there's the other entry in celebrity-can-you-top-this tonight. Paris Hilton telling a British newspaper that she's not an idiot, she's acting. "I play dumb like Jessica Simpson plays dumb. But we know exactly what we're doing. We are smart blondes." She goes on to note, "There's nobody in the world like me. I think every decade has an iconic blonde like Marilyn Monroe or Princess Diana and right now, I'm that icon."

Joining me now is the icon of senior editor at "In Touch Weekly," Tom O'Neil.

Good evening, Tom.

TOM O'NEIL, "IN TOUCH WEEKLY": Good evening, Keith.

OLBERMANN: Firstly, do you want to take the opportunity here on national television to announce that you're not something?

O'NEIL: Yeah. I'm not as dumb as Paris Hilton.

OLBERMANN: OK good. All right, let's clear Miss Hilton out of the way first. For the first quote I was ready to give Irving G. Thalberg Award for live time achievement here from the Academy, but for the second one, I wondering if maybe she's not as not dumb as she thinks she is. She is the iconic blonde of the early 21st century?

O'NEIL: Come on, Keith. The parallels between Marilyn and Paris are obvious. First of all, Marilyn has been the star of many great movies on the big screen. Paris has been the star of many great movies on the little internet screen. On one hand, Marilyn won a Golden Globe as Best Actress for what the American Film Institute calls the "greatest comedy ever made," "Some Like it Hot." Paris, she won a Razzy award as Worst Actress in one of the comedies ever made, "The House of Wax," which unfortunately was made as a horror movie.

OLBERMANN: All right, she's not stupid and she is an icon. And Oprah Winfrey and Gayle King is not gay. When did we reach the place where celebrities feel the need to announce this. I mean this was not some hit-and-run interview job somewhere. This was in Oprah Winfrey's own magazine. She could have easily stopped its publication. What is behind this?

O'NEIL: Well actually, Oprah's magazine, Keith, really is all about dishing with the girls, being honest, and telling the truth, etc. And come on, the evidence, theoretically, for Oprah being gay is really strong. Let's be catty for a second.

Oprah is really butch. If you took a good drag queen - a good drag queen version of Oprah and put it next to Oprah, you would not be able to tell these two apart. No. 2, she and Steadman, they've never gotten married. Come on, we know what that's about. No. 3, her friendship with Gayle, she keeps saying, has been a "fun ride." Well, I think I know what it's about when two chicks say they are having a fun ride. Now, that's the evidence for. The evidence against is if they were, Oprah would tell us, of course, and she'd tell us and she'd tell us. So, she's not gay.

OLBERMANN: But is there a touch of the ladies doth protest too much

here? I mean, let me read you an exchanges from this interview. Oprah

Winfrey says, "We were just down in the Bahamas... I was giving a wedding

for my niece there and we're having a big party in my suite, and who comes

walking in..." and Gayle King say, "With my suitcase," and Oprah resumes,

"With her suit case! And I know that all the waiters, what everybody was

thinking: They're gay. This proves it. Has to be, because Stedman isn't

around." And then Gayle King adds, "And sure enough, tabloid headline was

'Oprah's Hideaway with Gal Pal.'"

Is this damage control disguised to look like some weird dishy interview? If it's that, why didn't they do it on Miss Winfrey's telephone show and by "do it" of course I mean, do an interview.

O'NEIL: Right, well this speculation, though, has been going on for years, so it really was time to address it publicly and the fact that they did it in Oprah's magazine is no coincidence because Gayle really is the editor of that. I was at "First" (ph) magazine when Oprah was launched, and I was in the development division and when Gayle was brought in, I can tell you, internally everyone was saying Oprah's bringing the girlfriend in here, but in fact, she's done a terrific job, not just on the editorial side, but being Oprah's voice internally. But that whisper is always there. And I think the bottom line is Oprah Winfrey challenges us all to have these extraordinary relationships. And when she has one, we shouldn't point back and say it's weird. That's what she wants us to have with our friends.

OLBERMANN: Why not put that on TV, though, rather than leaving that sort of juicy topic or least topical dish area for the rest of us? Why didn't she just preempt it and take over it like she takes over everything else in television?

O'NEIL: Well, you got to think multi multimedia, Keith. First you do the magazine, because that's her thing, then you go to TV, so stay tuned, as we say in TV. That's next.

OLBERMANN: I guess, we beat her on her own story. I don't understand. Tom O'Neil, senior editor of "In Touch Weekly," as always sir, great thanks.

O'NEIL: Same here, thanks.

OLBERMANN: That's Countdown, for this, the 1,174th day since the declaration of "Mission Accomplished" in Iraq. The headlines of the hour from the Mideast, the U.S. Department of state says it will now pick up the price for evacuating Americans from Lebanon via Cyprus and bombing has resumed in Beirut. One of the targets, as you may have seen earlier in this hour, Beirut International Airport.

Our MSNBC coverage continues now with "Scarborough Country."

I'm Keith Olbermann, goodnight and good luck.

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