'Countdown with Keith Olbermann' for July 2

Guests: John Dean, Joseph Wilson, Dana Milbank, Paul F. Tompkins

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

The president gives Scooter Libby a get-out-of-jail-free card. Not a pardon, but a commutation of sentence. He has to pay the fine, he has to take the probation. He does not have to serve even one day in prison.

"I respect the jury's verdict," says the president, as he ignores it and ignores the judge's rulings, "but I have concluded that the prison sentence given to Mr. Libby is excessive. Therefore, I am commuting the portion of Mr. Libby's sentence that required him to spend 30 months in prison."

How can a president free one of his own former employees? How can a president ignore the courts? How can a president ignore public opinion, even among only those in his own party? And how can he be so gutless as to not even make his announcement on camera?

Reaction tonight from Nixon White House counsel John Dean. Reaction tonight from Ambassador Joseph Wilson.

The White House in crisis, indeed.

And it won't respond to congressional subpoenas on the U.S. attorneys scandal. The chairman of the Senate Judiciary says he wants to cite the president for criminal contempt.

(BEGIN VIDEO CLIP)

SEN. PATRICK LEAHY (D), VERMONT: In America, no one is above the law. The president and the vice president are not above the law any more than you and I are.

(END VIDEO CLIP)

OLBERMANN: After the Libby near-pardon, Senator, you might want to rethink that conclusion.

More arrests in Great Britain, and a report that police in Scotland were looking for one of the men connected to those who really didn't know how to attack Glasgow airport.

And this is Paris. The backlash against the Hilton story. "US Weekly" becomes us accept her, as our country becomes a nation of laws and not men, unless you used to work for the vice president.

Complete coverage of the president's commuting of the Scooter Libby's sentence and more, now on Countdown.

Good evening.

A president who lied us into a war and, in so doing, needlessly killed 3,584 of our family and friends and neighbors, a president whose administration initially tried to destroy the first man to nail that lie, a president whose henchmen then ruined the career of the intelligence asset that was his wife, when intelligence assets were never more essential to the viability of the Republic, a president like that has tonight freed from the prospect of prison the only man ever to come to trial for one of the component felonies in what may be the greatest crime of this young century.

Our fifth story on the Countdown, President George W. Bush has tonight, by a means of a matter-of-fact prepared statement, commuted the prison sentence of Lewis "Scooter" Libby, former chief of staff to the infamous vice president, Dick Cheney. Ambassador Joseph Wilson and John Dean will join us presently.

Mr. Bush issuing a virtual pardon without having to use that word that once sunk Gerald Ford's presidency, leaving intact the $250,000 fine for the former White House aide as well as two years' worth of probation, but erasing the 30-month prison sentence, the two and half years a judge determined Mr. Libby must spend behind bars, the startling announcement coming only hours after a federal appeals panel ruled Mr. Libby could not delay his prison term in the CIA leak case that had been expected to start sometime by the end of this summer, in a statement explaining his decision to grant this form of clemency, the president making clear he thinks he is the judicial branch of government as well.

Quoting, "I respect the jury's verdict, but I have concluded that the prison sentence given to Mr. Libby is excessive. Therefore, I am commuting the portion of Mr. Libby's sentence that required him to spend 30 months in prison. My decision to commute his prison sentence leaves in place a harsh punishment for Mr. Libby. The Constitution gives the president the power of clemency to be used when he deems it to be warranted. It is my judgment that a commutation of the prison term in Mr. Libby's case is an appropriate exercise of this power."

Let's turn first to our correspondent David Shuster in Washington.

David, good evening.

DAVID SHUSTER, MSNBC CORRESPONDENT: Good evening, Keith.

OLBERMANN: Many thought something might be coming in this area, but they probably were not expecting this. Would it be accurate to describe the president's decision to commute the sentence as a surprise?

SHUSTER: It's a surprise in the sense, Keith, that this wasn't done, say, on the Fourth of July or on a Friday night. There was every expectation among Scooter Libby's supporters that because he had been a good soldier to the vice president, that he had protected Vice President Cheney throughout this case, some would argue that he had muddled things, perhaps, by having no recollection of certain key crucial conversations, there was every expectation that Scooter Libby eventually, once all of his appeals played out, that he would not have to go to prison.

What triggered everything today, of course, was this appellate court, two Republicans on the appellate court who said that, no, there was no close call for Scooter Libby on his appeal, therefore there was no reason to keep him out of prison pending his appeal. So essentially, the clock had started. He had maybe two weeks before he was going to have to report to prison. And so I think the expectation was, the pressure was suddenly on President Bush to deliver to Vice President Cheney's top guy.

OLBERMANN: This quarter-of-a-million-dollar fine, David, is it safe to assume that the well-advertised Libby Legal Defense Fund will cover that, and then some?

SHUSTER: Yes, I mean, I'm not entirely sure whether Scooter Libby will have to pay that out of pocket. But all of his legal fees - and we're talking about several million dollars - those are all taken care of.

And when you think about it, Keith, Scooter Libby, with all the context that he's had, with the number of people and the number of top Republicans in Washington who have contributed to Scooter Libby's defense, who will likely take care of Scooter Libby, Scooter Libby's not going to have, according to most analysts in this case, he's not going to have much of a financial trouble with his career, even if he's not practicing law.

And you would expect, of course, that Vice President Cheney, who has said nothing but nice things about Scooter Libby, that Vice President Cheney will also make sure that Scooter Libby is taken care of, essentially for the rest of his life.

OLBERMANN: Well, if they never give him a dime, they just took care of him big-time today.

The number of statements that are being released in reaction tonight from outraged Democrats, Joe Biden's campaign urged Americans to telephone the White House tomorrow, to flood it with phone calls, there are also the Republicans who are pleased as punch, Fred Thompson was one of the first to get a statement out, can we assume that the firestorm about this commutation has only started, it will (INAUDIBLE) echo for weeks, months, maybe years?

SHUSTER: Yes, and the thing that's going to fuel some of this is, of course, the wounds from the Clinton impeachment for Democrats are still pretty fresh. And so what Democrats have already started doing is going back and trying to find the Republican senators who voted to convict Bill Clinton on perjury and obstruction of justice.

And Fred Thompson, for example, Keith, he's the first victim. And you already Democrats who are calling Fred Thompson a hypocrite for voting to convict, for voting to convict Bill Clinton on obstruction of justice, but now being so happy that Scooter Libby, who was convicted of obstruction of justice, is not going to have to do any time. That's the political dilemma for Republicans.

The crucial question is whether Democrats can break this down into its simple terms, the idea that Scooter Libby was convicted by a jury for lying under oath, and that now he is somehow not having to pay the fine, as far as going to prison. If Democrats are able to make that clase - case pretty clearly and concisely, then the politics in this will play out.

But the moment that anybody in this case tries to get into complexities of who leaked whose name when, and whether Scooter Libby was the first leaker or not, I think that's where it's already bee proven that Americans are going to tune out.

OLBERMANN: The president may have made this a lot more simple than it was as of 12 hours ago. But you've covered this thing from start to finish. You've watched the special prosecutor, Mr. Fitzgerald, as closely as anyone has. Do we have any idea of what his reaction to this is, or can you estimate what his reaction is going to be?

SHUSTER: Keith, I think inside the special counsel's office, the U.S. attorney's office in Chicago, there's already (INAUDIBLE) has sort of been months of surprise that this hadn't been done sooner. There was every expectation, according to an aide of Patrick Fitzgerald, that the moment Scooter Libby was convicted, that Scooter Libby was going to get a pardon or a commutation.

There's a great deal of surprise, at least, that's been building up over the last couple of months. But there was every expectation in Patrick Fitzgerald's office that Scooter Libby, despite all of their efforts, and remember, Patrick Fitzgerald was appointed by President Bush as a U.S. attorney and was named by the Bush Justice Department to handle this case, there was every expectation that at the end of the day, Scooter Libby was not going to be serving in prison.

OLBERMANN: MSNBC's David Shuster covering the commutation of the Libby sentence in Washington for us. As always, David, great thanks.

SHUSTER: Thanks, Keith.

OLBERMANN: For more on the historical context of President Bush's commutation of the Libby sentence, we're fortunate to be joined once again by Richard Nixon White House counsel John Dean, author now of "Worse Than Watergate" and "Conservatives Without Conscience," and also a contributor to Findlaw.com.

John, good evening.

JOHN DEAN, FORMER NIXON WHITE HOUSE COUNSEL: Good evening, Keith.

OLBERMANN: The Justice Department guidelines say, let me read them exactly, "Requests for commutation generally are not accepted unless and until a person has begun serving that sentence, until all appeals have been exhausted, and that generally, commutation of a sentence is an extraordinary remedy that is rarely granted." White House admitted tonight Mr. Bush did not consult the Department of Justice in making this decision. If the president did not break the law tonight, did he break the spirit of the law?

DEAN: Well, it's certainly in just an internal regulation. It's totally within his power to do this. I've been thinking about the historical parallel of this, and it would be like if Richard Nixon, on his way out, or Gerald Ford on his way in, had commuted the sentence of Bob Haldeman, the former chief of staff, who was convicted of perjury and obstruction of justice, or John Ehrlichman, same convictions, or former attorney general John Mitchell. That's sort of the parallel.

And that shows the seriousness of it. But Nixon nor Ford was about to touch that.

OLBERMANN: I was going to ask you, history has proved time and time again that Americans don't like their president overruling the courts. The point David Shuster just made up - made, made, that just until now, this has been a question of, who leaked what, who lied, who couldn't remember, now it becomes a question of interfering with a court's ruling. Is that going to simplify this, in fact, for the American public?

DEAN: Well, I think they've been very clever in the way they've spun it. They've said, Well, we think the sentence was excessive, therefore commutation is appropriate. We've not let him off the total hook yet. I say yet, because I think that there's a lot of movement still afoot to try to get him a pardon before Bush finally leaves on January 20 of '09.

So I - it may not be over yet, Keith, and I think there are a lot of people, it's a sort of cutting per the one the way people view politics. I happen to be an independent and kind of look at it right down the middle. And it's something of a travesty, actually.

OLBERMANN: In terms of the likely domestic political reaction, John, from that vantage point, is this likely to be judged to being closer to President Ford pardoning Richard Nixon, or what actually happened during the Nixon administration in its waning months, Nixon firing the special prosecutor, Archibald Cox? Is there a way to figure out which path this might go?

DEAN: Well, I think, you know, it's going to depend on how the public understands it. And I think if they see it as a disruption of the process, they may act more like what happened with Archibald Cox, where they see the process being cut short. The process had somewhat come to a conclusion. Really hadn't started with Nixon. There was no indictment outstanding at that point. In fact, there wasn't even a decision within the White House prosecutors - excuse me, the Watergate prosecutor's office as to whether they would proceed or not.

So I think this would be more akin to the Saturday night massacre, if

but not quite on that level, because I think they've spun it very effectively.

OLBERMANN: Does the special prosecutor, we asked David Shuster about Mr. Fitzgerald's reaction to this, does he have anything here to pursue an obstruction of justice investigation on the commutation issue?

DEAN: Well, Keith, he's the one who left the cloud over the vice president during the trial. I think he's left a cloud over himself if he doesn't try to clear that away. There is a very real potential, there's an ongoing obstruction of justice going on here, and this was part of the package. And until he satisfies himself that that isn't the case, I think there's some things to be looked at.

He could very easily put Libby in front of a grand jury and immunize him so he couldn't plead the Fifth, and see if he wants to lie again, and go through this again.

OLBERMANN: Could that actually be played out at this point? Could he, could, since there is no recourse here, I presume there is, there's no recourse from any further prosecution for Mr. Fitzgerald of Mr. Libby from what exists now. Could he actually do that? Could he immunize him and, as you suggest, bring him in front of a grand jury? Would Libby be able to go to the Fifth? Would he try for some form of executive privilege? Where would we go from there?

DEAN: Well, he could well plead the Fifth, but the prosecutor has the power to immunize him, so he can't rely on the Fifth, because he has no jeopardy from his own testimony at that point. Then it would become a question of executive privilege. We know from U.S. versus Nixon that the courts don't look very favorably on presidents declaring executive privilege in prosecution matters.

So there's not much there. I think that there's a good possibility, if Fitzgerald wants to pursue this and wants to remove the cloud, he's certainly got a lot of room to move, and probably would do so quickly.

OLBERMANN: Does Congress have any recourse, John?

DEAN: They do indeed. They have the same possibility. They could (INAUDIBLE) so-called use immunity statute they could use. So again, Libby couldn't proceed and take the Fifth, but they could indeed try to get to the bottom. They - can Libby claim executive privilege? No. Bush could, but that would only dig him a lot deeper into the hole he's already in.

OLBERMANN: We seem to think sometimes that we have been able to estimate how deep that hole is, and that it could not get any further. It sometimes resembles the bottomless pit. But if anybody has lived through and has seen tipping points in political histories of administrations, it's you. Is it conceivable that this would be something that would transcend and translate to the American public as one step too far on the part of the president overriding the courts, overriding the Constitution, and in this case, overriding the decision of a jury?

DEAN: Keith, the public's very savvy about this kind of issue. This isn't a question of who leaked what and why and what the statute said. This is a question of somebody who lied before a grand jury. The American public understands that. The right is trying to spin this that there was no underlying crime. The public gets it, though, that the man lied in front of a grand jury and was prosecuted and found guilty beyond a reasonable of a doubt.

The president has short-circuited that. He's tried to say that the sentence was too great. I don't think the public's going to buy it. So I think we've just heard a little bit of what's an ongoing story.

OLBERMANN: Is there, John, any sense that the chance that this president might be impeached grew tonight by virtue of his decision to commute this sentence?

DEAN: I don't think, because this is totally within his presidential powers. He has the power of clemency and grace. And the fact that he didn't follow procedures is totally within his prerogative to do so. He set up normal procedures for when he wants the - to follow them, but he can always do this. So this isn't a high crime and misdemeanor. It is, however, Keith, no question, a political issue that he's passing on for the 2008 campaign, as we've already seen.

And I think that the Democrats probably have a very good issue in this.

OLBERMANN: Yes, I think the term "albatross" comes to mind.

The former Nixon White House counsel John Dean. As always, John, great thanks for your perspective and your time tonight.

DEAN: Thank you, Keith.

OLBERMANN: The Libby case, of course, originates with Ambassador Joseph Wilson and the woman whose CIA career was ruined, his wife, Valerie Plame. Ambassador Wilson joins us next.

As the president meets with Mr. Putin of Russia, Mr. Bush's boat anchor got stuck in the mud off Maine. Metaphors for a million, Alex. Did the president just hand the White House to the Democrats next year? The political ramifications of today's remarkable decision.

You are watching Countdown on MSNBC.

(COMMERCIAL BREAK)

OLBERMANN: In Mr. Bush's statement this evening, he referred to the immense suffering of Mr. Libby's wife and children, and no doubt it was immense.

In our fourth story tonight, the president seems to have forgotten someone else's suffering, the victims and her family's and their country's. Mr. Libby was not convicted of leaking the identity of covert CIA operative Valerie Plame, but he was convicted of obstructing the investigation into who had. She was his victim. Her torpedoed career was a victim, and so too were members of her family. She was targeted in the first place because her husband, former ambassador Joe Wilson, dared expose disingenuous arguments for the war in Iraq.

We spoke to Ambassador Wilson shortly after Mr. Bush's commutation announcement.

Ambassador Wilson, thanks for joining us again tonight.

AMB. JOSEPH WILSON (on phone): Good to be with you, Keith.

OLBERMANN: First, can you share the reaction you and your wife had upon hearing this news this evening?

WILSON: Well, on the one hand, there's nothing that this administration does that surprises us anymore. It's corrupt from top to bottom, and I think most Americans should understand that beyond a reasonable doubt now.

On the other hand, of course, as American citizens, we're outraged that the president of the United States would short-circuit the rule of law and the system of justice and really just repudiate everything that we stand for as Americans, including the decision by a jury of Mr. Libby's peers, confirmed by the judge in the case, and reconfirmed by the court of appeals.

OLBERMANN: In many quarters, this is going to look like a quid pro quo, that Mr. Libby would have felt free to act as he did throughout this series of events because, perhaps, all along he'd been promised some sort of get-out-of-jail-free card. Do you place any credence to that theory?

WILSON: Absolutely, absolutely . The president himself acknowledged in his statement today that Mr. Libby was guilty of serious crimes, and then he makes himself an accessory to the obstruction of justice by the mere act of commuting the sentence, so that now Mr. Libby - there is under no incentive whatsoever to tell the truth to the prosecutor, to remove that sand that Fitzgerald said that he threw into his eyes, or to do anything to lift the cloud that Mr. Fitzgerald says continues to exist over the office of the vice president.

OLBERMANN: In a typical case of sentence commuting, a commutation case, the felon is supposed to cooperate with the authorities. No indication that that has happened. Where do we now turn for answers about how this all happened? To Patrick Fitzgerald? To Congress? To your civil suit against Mr. Libby?

WILSON: Well, I would add to all three of those, the necessity for the president now to come clean with the American people. He's been hiding behind this notion that he didn't want to get involved in an ongoing investigation until now. He has now short-circuited that investigation. He owes the American public some answers.

I would hope that he would instruct the special counsel to release all the information he collected during the course of his investigation, beginning with the president's own interview with Mr. Fitzgerald, and the vice president's interview with Mr. Fitzgerald.

And if he fails to do that - and I have no expectation that he will, because he is corrupt to the core - I believe that the Congress should begin to investigate this matter.

OLBERMANN: Obviously, the onus of this is going to fall, has fallen today already, on the president. He is the one who ultimately made the decision. He has described himself as The Decider. But as some of your answers so far have suggested, the role of the vice president cannot be underestimated in this.

Do you now, with, when we're seemingly at conclusion, although I

suppose Mr. Libby might still be pardoned at the end of the administration

to wipe the record completely clean of what he has done, do you have your -

in your mind a timeline of what happened and what the vice president's role was in all of this, including this commutation of sentence?

WILSON: Well, certainly there are people who've been looking at the possible vice president's role far more closely than I have. But I would insist, I think, that the vice president come clean on this. And certainly we expect to ask him some very pointed questions on the - in the civil suit. And by the way, people can get information on the civil suit at www.Wilsonsupport.org [link].

OLBERMANN: Ambassador, your wife's identity was considered fair game for this administration to sacrifice for political ends in hopes of ruining your reputation and by doing so, ruining the impact of your criticism of the start of the war in Iraq. It has been reported that she was working on the issue of weapons of mass destruction. And without commenting on anything classified about what her work was specifically, what message does this gesture today send to other CIA operatives about their expandability, their fungibility, within the Bush administration's scheme and vision of the world as it stands?

WILSON: Well, let me say this. There's a lot of questions about the underlying crime, et cetera, and a lot of this sort of sect of neoconservatives and their acolytes in the American political system who have sort of argued that Mr. Libby didn't really commit a crime. But if a government official had spent the morning with the Russian military attache for the express purpose of disclosing the identity of a covert CIA officer, what would Americans call that?

We know in America the difference between right and wrong, even if this administration doesn't. And frankly, I think that for the CIA, its covert officers, and for the agents that are recruited by officers, those who would put their lives at risk in order to give us the intelligence we need, will think long and hard about it when they see that an administration with impunity will betray its covert officers, will engage in treason.

OLBERMANN: I would imagine, sir, in conclusion, that many watching this interview share your distress and your anger tonight. Do you have any guidance for your fellow citizens as to how to translate this feeling into some kind of production - productive action at this point?

WILSON: Well, Congress is on leave all week. They will be out in the districts, and I think citizens should make sure they take advantage of every opportunity to meet with their congressmen to share with them that America is a country that is governed by rule of law, and we have a system of justice that has been usurped in what I think is an arbitrary and capricious act by a chief executive who is corrupt to the core and an administration that has demonstrated that it has absolutely no regard for those values that have made this the greatest country on earth for the last 220 years.

OLBERMANN: Joseph C. Wilson IV, our former acting ambassador to Iraq, in the wake of the commutation tonight of the sentence of Lewis "Scooter" Libby. Great thanks once again for some of your time tonight, sir.

WILSON: Thanks very much, Keith. Good to be with you.

OLBERMANN: And earlier in this newshour, we asked David Shuster if he could estimate the reaction of the special prosecutor in this case, Patrick Fitzgerald, the U.S. attorney who was investigating the leaking of the Valerie Plame identity, and the subsequent issues that convicted Mr. Libby of obstruction of justice.

That statement has now come in from the statement of the special counsel, Patrick Fitzgerald, reading, and I'm quoting directly, "We fully recognize that the Constitution provides that commutation decisions are a matter of presidential prerogative, and we do not comment on the exercise of that prerogative."

Mr. Fitzgerald continues, "We comment only on the statement in which the president termed the sentence imposed by the judge as, quote, 'excessive,' unquote. The sentence in this case was imposed pursuant to the laws governing sentencings which occur every day throughout this country. In this case," Mr. Fitzgerald continues, "an experienced federal judge considered extensive argument from the parties and then imposed a sentence consistent with the applicable laws. It is fundamental to the rule of law that all citizens stand before the bar of justice as equals. That principle guided the judge during both the trial and the sentencing. Although the president's decision eliminates Mr. Libby's sentence of imprisonment," Mr. Fitzgerald concludes tonight, "Mr. Libby remains convicted by a jury of serious felonies, and we will continue to seek to preserve those convictions through the appeals process."

Patrick Fitzgerald, the special counsel, in be - what was described as the Plamegate case that resulted in the conviction of Scooter Libby, the trial sentence, the criminal sentence of which has been commuted by the president of the United States today, Mr. Fitzgerald saying that his office "will continue to seek to preserve those convictions" of Mr. Libby "through the appeals process."

More on this story as it continues to develop. The reaction of special counsel Patrick Fitzgerald.

If it was not before, then the White House is truly tonight in crisis. Apart from the fallout still to come on the Libby commutation, the chairman of the Senate Judiciary Committee now says he may seek a charge of criminal contempt of Congress against the administration. The political forests of George W. Bush have seemingly just caught fire. Dana Milbank will join us.

And new arrests in the failed terror attempts across Great Britain.

Countdown continues.

(COMMERCIAL BREAK)

OLBERMANN: Politically speaking, you know you are in trouble when the metaphors start writing riding themselves, metaphorically, that is. Which brings us to our third story on the Countdown this night, in the commuting this evening of Scooter Libby's prison sentence, there is the kind of political and personal favoritism that could sink a popular president. And this president is not popular.

Dana Milbank joins me in a moment to try to assess just how much of his political foot and the party's the president just shot off. But it is not as if this is his only problem. Even yesterday, Mr. Bush had failed to free his mired ship of state from the muck and the slime. We mean that literally in this case. He and his father got stuck in their boat, Felicity 3, when the anchor they had dropped refused to pull free, infelicitously.

A Secret Service Pat diver got them out after even the president tried and failed. But no diver in sight on "Meet the Press" yesterday. Senate Judiciary Chairman Pat Leahy was asked about Mr. Bush's immobility on the U.S. attorney scandal, the White House refusal to provide testimony or documents. In response, the senator fired a warning shot over the White House bow with his reminder that contempt of Congress can be more than just a way of life, it is also a crime.

(BEGIN VIDEO CLIP)

TIM RUSSERT, "MEET THE PRESS": Are you prepared to hold the Bush White House, the vice-president, the attorney general and his office under contempt of Congress?

SEN. PAT LEAHY (D), VERMONT: That is something that the whole Congress has to vote on it. In our case, in the Senate, we would have to vote on it. The House, they would have to vote on it.

RUSSERT: Would you go that far?

LEAHY: If they do not cooperate, yes, I would go that far.

(END VIDEO CLIP)

OLBERMANN: As promised, let's bring in Dana Milbank, MSNBC analyst, national political reporter of the "Washington Post." Dana, good evening.

DANA MILBANK, "THE WASHINGTON POST": Good evening, Keith.

OLBERMANN: We will talk about what happened with Senator Leahy and that prospect in a moment, but regarding the Libby commutation, how much damage did George Bush do to his presidency tonight?

MILBANK: The question assumes that there is a presidency left to damage. I mean that quite seriously. For most presidents, this would be injurious. But if the president sitting at 25 percent or 28 percent in the polls, and he has already lost all but the hardcore of conservatives, this actually gains him a couple of percentage points. This could be the difference between the 27 and 29 percent presidency.

For the rest of the public, it will only sour their impression further. The only thing he might do to win them back is to have a commutation ceremony, perhaps, like they do for the turkey at Thanksgiving. They could get Scooter on the table in the Rose Garden and then send him off to a petting zoo for a few years.

OLBERMANN: I will make no height joke here. Between this today and the ignoring of the subpoenas from the House and the Senate, on the other side of this, there is an extraordinarily large percentage of those who are in opposition to this administration who do not think impeachment is a good idea or even a rational idea, or at least, did not until today. Do you think this might be impacting on them to some degree, that their opinions of whether or not to seriously consider that issue of impeachment could have been changed by this one action?

MILBANK: Well, it will probably increase the number somewhat. Dennis Kucinich is already up to 10 or 11 House members in his Cheney impeachment petition. But there is a limit to this. It is not so much that the Democrats disagree on the merits, but they disagree on the point of this. If there is 18 months left of the presidency, why raise someone else to the presidency or to the vice presidency?

This president, to put it in perspective, has been down lower longer even than Richard Nixon. It has been two and half years since he has had the support of even half the American public. Two and a half years, incidentally, was the same amount that Libby was supposed to spend in prison. But nobody is talking about commuting the president's sentence.

OLBERMANN: Did however - In terms of next year, did he just hang a big albatross around whoever gets the Republican nomination next year, or a big sign that reads, Kick Me, My Party Pardoned Scooter Libby? I mean, Giuliani tonight called this, quote, a reasonable decision and I believe this decision was correct.

MILBANK: You can call it an albatross. I like the turkey thing. But either way, it certainly does. The best hope for the Republicans is that this is still 18 months before the election, that it will be somewhat forgotten by then. So, in that sense, it made sense to get it out of the way politically. But remember, at one of these debates, these candidates, for the most part, went on record saying that they supported commuting or, in fact, pardoning Libby.

OLBERMANN: The timing of a story in your newspaper was pretty much perfect. It was suggesting that the president is fully aware of his image, his rankings in the polls, but is untroubled by any of that . Could whatever follows the Libby decision change that? Because I am sensing at the beginning of this things like Joe Biden saying that all Americans who don't agree with this should flood the White House with phone calls tomorrow. That is not your standard Democratic, we're not happy with this reaction.

That is a gurgle of anger that has not been heard previously, not even when it came to the subject of the war itself.

MILBANK: True, it's hard to imagine that having an affect on the president. What my colleague, Peter Baker, was writing about today was that no matter what goes wrong, he seems to - the president has this sense of serenity, that he is calm or resigned or determined. It is hard to see anything changing this.

We do get signs that something sort of breaking down inside of him. We saw that very awkward statement he made after the immigration legislation failed. He really seemed rattled. But, for the most part, if you think about it, if the unsuccessful war and all the other disasters have not gotten the president off of his serenity, it's hard to imagine what else really could.

OLBERMANN: Our own Dana Milbank, national political reporter of the "Washington Post." As always, great thanks for joining us, Dana.

There's more breaking news on this story. We gave you earlier Patrick Fitzgerald's reaction to the news of the commutation of the Libby jail sentence. Now one from Senator Hillary Clinton, "today's decision is yet another example of this - or that this administration considers itself above the law," said Senator Clinton.

"This case arose from the administration's politicization of national security intelligence and its efforts to punish those who spoke out against its policies. Four years into the Iraq war, Americans are still living with the consequences of this White House's efforts to quell dissent," she says. And ends with, "this commutation sends the clear signal that in this administration, cronyism and ideology trump competence and justice." The statement of Senator Hillary Clinton tonight.

Also, eight now under arrest for the failed attacks across Great Britain. Were the cops in pursuit of one of them when the vehicle plowed into Glasgow Airport?

And remember Michael Jackson's plan for a giant robotic version of him that would wander the desert around Las Vegas? Surprisingly enough, it has not been embraced by the local community. That's next. This is Countdown.

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OLBERMANN: Apart from the obvious conclusion that whoever tried to unleash car bombs in England and Scotland really, and fortunately, were not very good at it, comes news tonight, in our number two story, of more arrests, and a report from the British newspaper "The Guardian" that police were on the trail of the Glasgow Airport attackers in the hours before two of them drove into the main entrance and got out and tried to push the burning vehicle inside.

Several hours earlier, police had contacted the agency which had rented a home near the airport to one of the suspects. The news of the additional arrests, and the disturbing number of physicians among them, from our senior investigative correspondent Lisa Myers in London. Lisa, good evening.

LISA MYERS, NBC NEWS INVESTIGATIVE CORRESPONDENT: Keith, western counter-terror officials tell NBC News that two young doctors from Jordan and Iraq are now believe do have been the key players in this plot, a terror cell comprised of at least five doctors.

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MYERS (voice-over): This is the Iraqi doctor, Bilal Abdullah, being arrested minutes after he and another suspect rammed a flaming Jeep Cherokee into the Glasgow Airport. Abdullah is believed to have worked at the same hospital where this suspect, who set himself on fire and was then hosed down, remains in critical condition.

The other doctor, authorities allege, played a senior role in the plot is this Jordanian, photographed in better days with Jordan's Queen Nor. Police arrested 26-year-old Mohammed Asha and his wife on a highway this weekend. At the family home in Amman today, Asha's father said his son is no extremist.

MICHAEL SHEEHAN, NBC NEWS TERRORISM ANALYST: The level of education, medical training, and medical profession of the member of this cell is very troubling.

MYERS: Today, two more arrests. Authorities say they were doctors in training at this Scottish hospital. For all their brain power, experts say this cell was, quote, not ready for prime time. Police say the three car bombs were similar and relatively simple, gasoline, gas for barbecue grills, boxes of nails and a cell phone detonator. Yet, two failed to explode.

Authorities were closing in on the cell Saturday when they attacked again, in Scotland, but failed to get over a security barrier at the Glasgow Airport.

CASPIN BLACK, INTELLIGENCE EXPERT: The attack in Glasgow is difficult to explain. It can only be described, if it wasn't so horrific, the terms Mickey Mouse would be used about it.

MYERS: So far, none of those in custody fit the usual profile of the terror threat here, young, disillusioned British Muslims. Most, if not all, of those in custody are 20 something Muslims from the Middle East, successful professionals who came to Britain in the last few years.

BLACK: I think it is dangerous if the al Qaeda's virus world view is leaching into the highly educated elite.

MYERS: Was al Qaeda directly involved in these attacks? Some experts say their lack of expertise suggest otherwise.

SHEEHAN: They did not have the level of sophistication that an al Qaeda organization would bring to a cell. So, although they are part of the movement, it looks like the operational links were very thin at best.

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MYERS: Tonight, authorities tell NBC that the eighth suspect was arrested outside Britain, and that none of those in custody are talking. Police say still more suspects remain at large, Keith.

OLBERMANN: Lisa Myers in London for us tonight. Great thanks, Lisa. From the latest on terrorism in Great Britain, we make an extraordinary segue to the fantasy world of Las Vegas and a brief look at Keeping Tabs, our nightly round up of celebrity and entertainment news, starting and concluding with the king of pop, as in somebody just burst his bubble.

Michael Jackson is said to be leaving Sin City after planning to relaunch his career there, plans that reportedly included his own casino and a giant statue of him with laser beams piercing the skies over the Vegas strip. The "Las Vegas Review Journal" newspaper says the plans went nowhere, shocking. A Jackson spokesman telling the paper Jackson allowed his lease on a mansion there to expire because of security reasons, not because he is being evicted.

Jackson moved his family, Prince Michael the first, Prince Michael and Prince Michael the second to Las Vegas from Ireland last December. Persistent rumors say they will move back to Europe.

And first she becomes news even though there wasn't any news there. Now a tabloid's refusal to cover the non-news becomes news itself. That's ahead, but first time for Countdown's latest list of nominees for Worst Person in the World.

The bronze to Senator Joe Lieberman of Connecticut. On ABC yesterday, "I hope these terrorist attacks in London wake us up here in America to stop the petty partisan fighting, he said, a partisan gridlock over the question of whether the American government can listen in to conversations or follow e-mail trails of non-American citizens.

Actually, Senator, if you had been paying attention, the NSA spying program included surveillance of American citizens. And you're right, it is petty partisan fighting between people who support the United States constitution and people like you.

The silver tonight Sean Hannity of Fox noise, reminding us that the fourth annual Hannity Freedom Concert is coming up in September, an evening of patriotism and inspiration, featuring Hannity, Lee-Ann Rhymes, Lee Greenwood and Oliver North. A flag waving, all American, don't tread on me, love it or leave it, god bless the USA occasion, which is sponsored by the Hong Kong Tourism Board.

Our winner by unanimous decision, the 43rd president of the United States who has tonight commuted the sentence of one of the key members of his own administration and has done it gutlessly by press release, who has buried it on the Monday of the longest fourth of July weekend possible, and who has, in so doing, forfeited his claim to being president of anything larger than a small, privileged, elitist, undemocratic, anti-constitutional cabal.

As Oliver Cromwell said to the infamous Rump Parliament in England more than 350 years ago, you have sat too long for any good you have been doing lately. Depart, I say, and let us have done with you. In the name of god, go. George Walker Bush, today's Worst Person in the World. As you may have suspected, tomorrow night here on Countdown, a special comment calling on this vice president and this president to resign. Tomorrow night on Countdown.

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OLBERMANN: In some parallel universe, Paris Hilton is known for her biting wit and cultural relevance. No one begrudges her notoriety, because she's just so dog gone interesting. But in this universe, the Hilton backlash is well underway, even though, just like Miss Hilton, it sometimes looks like posing. Our number one story on the Countdown, passing on Paris. Hilton fatigue surfacing in the latest issue of "US Weekly." The magazine cover was devoted to celebrity babies, because goodness knows, that's more important.

Any way, that upper left pink stamp promises that its glossy pages will be 100 percent Paris free. And yet, "US Weekly's" editor has admitted that part of the reason it was practical, Miss Hilton was being released from jail after the magazine's deadline. And unlike "People Magazine," it had no post-prison interview to flaunt. In other words, Paris Hilton is free, but we are 100 percent Paris free. Nice try.

Which leaves other celebrity newsmakers gasping to fill the void. Thus Britney Spears' fight with her mother escalates. Miss Spears reportedly saying, quote, I hope my mom gets the help she needs. Ask the president.

Let's turn now to comedian Paul F. Tompkins, also, of course, a regular contributor to VH1's "Best Week Ever." Paul, good evening.

PAUL F. TOMPKINS, VH1: Good evening, Keith.

OLBERMANN: You know, it's not like "US Weekly" is "Time Magazine" or "Newsweek." It's a celebrity glossy. So they excise all the Hilton news. They replaced it with 12 pages of Hollywood baby pictures. And then what, didn't they find themselves scrounging just fill out that issue without mentioning those two words?

TOMPKINS: I know, you almost feel sorry for these people. It's got to be a stressful job coming up with celebrity news to put in your magazines. You know, I'm sure they sit around the office saying, oh, if only Angelina Jolie would murder Jennifer Aniston, or something like that. But if you're filling your pages with celebrity baby pictures, keep in mind, these are not baby pictures. These are celebrities' babies.

That's pretty much just baby pictures. And who doesn't like that?

You're one step away from being the website Stuff on my cat.

OLBERMANN: What do these babies think of Scooter Libby. There's a real sentiment underneath this put on from "US Weekly." There are obviously people sick and tired of Paris Hilton. Is this because the nation has a habit of creating celebrities who are famous for just being famous, so can then tear them down without cause or consequence.

Or is it because whenever she's given the opportunity to speak, she has said absolutely nothing?

TOMPKINS: Yes, it's a tricky situation, because, on the one hand, you want to say, wow, even "US Weekly" is saying they're tired of Paris Hilton. But on the other hand, this is all their fault in the first place. This is like an arsonist taking a stand and saying, you know what? I'm not going to stick around and watch the house burn down anymore.

OLBERMANN: Or newscasts doing the same thing. No more Paris Hilton news. A little late. That ship sailed quite a while ago. This is something I found intriguing. Some people with absolutely nothing better to do have taken this Larry King interview with Paris Hilton, played it backwards like the Beatles albums.

There's a question about Britney Spears and the answer sounds something like snake, her soul is sick. This is the most interesting thing from that interview, in my opinion. Do you think she gave us any other nuggets backwards?

TOMPKINS: I don't know. I haven't yet had a chance to queue this up to "The Wizard of Oz." But, in a way, this whole interview was backwards, because she's telling Larry she's never drank; she's never done drugs. But I think there's actually video of her doing such things. So I don't know if she's got the memento syndrome and she needs to have tattoos in reverse on her body that say, if you can imagine it, I have done it.

OLBERMANN: Lastly then, if we're going to replace this Paris Hilton news with something else; Britney Spears hoping her mother gets the help she needs, reportedly angry that her mother sided with Federline over the children. Is this a classic family squabble or is there more to it?

TOMPKINS: Well look, I don't care who you are, imagine if you're in the middle of an argument and your own mother says to you, you know what? I think Kevin Federline is right.

OLBERMANN: And that sums it up. Comedian Paul F. Tompkins. As always, Paul, great thanks for joining us.

TOMPKINS: Thank you, Keith.

OLBERMANN: That is Countdown for this the 1,524th day since the declaration of mission accomplished in Iraq. A reminder that tomorrow night here my special comment in the wake of the Libby commutation, urging for the sake of our nation that Vice President Cheney and President Bush resign their offices. I'm Keith Olbermann, good night and good luck.

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