'Countdown with Keith Olbermann' for August 31

Video via YouTube: Worst Persons

Guests: John Dean, Richard Wolffe

CHRIS MATTHEWS, MSNBC HOST: A wonderful way to spend your life. My father because doctor. The best kind of politician. Thank you. Thank you for joining us. Join us again Tuesday night at 5:00 and 7:00 eastern for more "Hardball."

KEITH OLBERMANN, MSNBC HOST (voice-over): Which of these stories will you be talking about tomorrow? Resignation day? Senator Larry Craig announces he will announce his future tomorrow. The Associated Press and the Idaho Statesman saying he will resign. This, while a recanted accusation by a congressional aide against the Senator is presented anew by the alleged victim's attorney.

And there was one farewell today.

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: This job has been a dream for me and a blast.

(END VIDEO CLIP)

OLBERMANN: Press secretary Snow will retire in two week's time. All insists is for monetary, not health reasons. And all give the hope he lives long and prospers.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's been a joy to watch him spar with you.

(END VIDEO CLIP)

OLBERMANN: Next and good luck to you, Mr. Perino. Chris Cillizza on the negotiations to get Senator Craig to go. They have apparently no longer been staled.

Dana Milbank on the White House is losing in the reported resignation.

And John Dean on a bad week full of farewells for the president.

And full of farewells, too, is London.

(BEGIN VIDEO CLIP)

PRINCE HARRY: She was the best mother in the world. We would say that, wouldn't we? But we miss her.

(END VIDEO CLIP)

OLBERMANN: From best persons to worst persons, Tom Delay picks his side in the great debate consuming the right - am I wearing a toupee.

And back from the popular demand from the transcript of the undercover officer's police report.

(BEGIN VIDEO CLIP)

DAVID KARSNIA, POLICE SERGEANT: It was Tuesday June 11, sunny and warm. I was assigned to the vice squad working out of the men's room out at the airport. My boss is Chief Dolan (ph). My name is Karsnia. I am a cop, a cop in a toilet.

(END VIDEO CLIP)

OLBERMANN: All that and the breaking news of Larry Craig's reported resignation on "Countdown."

(BEGIN VIDEO CLIP)

SEN. LARRY CRAIG, (R), IDAHO: You are a naughty boy.

(END VIDEO CLIP):

OLBERMANN: Good evening. If his arrest on lewd conduct did not prove to be the undoing of Republican Senator Larry Craig, perhaps the renewed allegation that 25 years ago, he had sex with a teen congressional page did. Our fifth story in the "Countdown," breaking news, Senator Craig's office saying he will address his future tomorrow. The Associated Press says that future is in the past. He will announce his resignation in Idaho. The Idaho Statesman newspaper with its own report that he will end turmoil by leaving office. And now NBC News reporting that he will announce his resignation in Boise.

All this after five days of public and private pressure of the most intense kind following the disclosure of his arrest in June in an undercover vice operation.

Mr. Craig apparently prepared to go. Republican officials saying that the Senator will announce future plans at 10:30 a.m. Mountain Time including his intention, while resigning, to stay in the Senate for another month, through September 30.

The Minneapolis police officer having alleged that the marriage, belligerent, far-right Republican had made a sexual advance in a bathroom in the Minneapolis-St. Paul airport. That allegation only the beginning of his problems. The lawyer of an Alexandria teen, while in 1982 while he was serving as a page, helped set off a sex scandal before recanting his charges. The lawyer saying he believes his client had been truthful in at least one respect of having had sex with then Congressman Larry Craig. His colleague eager to refer to him in the past tense.

The Republican leader of the Senate, Mitch McConnell, calling Craig's conduct unforgivable in an interview.

Time to all in Chris Cillizza who blogs The Fix for the WashingtonPost.com.

Chris, good evening.

CHRIS CILLIZZA, THE FIX BLOG, WASHINGTON POWER: Hi, Keith.

OLBERMANN: Is there a certain inevitability for the resignation?

Have we reached a critical mass for the Republican Party?

CILLIZZA: You know, I think we had to be honest, as soon as I heard and it hit, I sort of started a watch in my mine about how long he could survive. It was a question of if, not when. I am surprised that he has lasted as long as he has. This is a unique Washington scandal. And it happens in the summer when the news media is not doing much else that encapsulates and drives all coverage. Larry was at the center of that storm. His press conference maybe made it worse. We were looking at a resignation. He said in the press conference I want to announce next month whether I will retire or run again. That was never an option.

OLBERMANN: Did the 198w story, reappearing from South Carolina, fix into this because the prospect then arose that we might be dealing with not just evidence of an isolated incident but something that would stretch back literally a quarter century?

CILLIZZA: You mentioned Mark Foley and I was going mention him. That may be more problematic. The Republican leadership in the Senate knows they didn't handle the Foley thing as well as they should. You saw Mitch McConnell and John McCain get out front and say he needs to go. I believe this is an issue of Larry Craig being quietly pushed out. Because he was not ready to jump. We had reports that the RNC, the national party committee was going to put out a statement calling on him to resign. The Republican Party knew we need to act and quickly or the brand that is already very tarnished by the war in Iraq and President Bushes reputation is going get worse.

OLBERMANN: The other part over this that does not make sense, the expectation from Senator Craig in all three of these reports that the resignation will not be effective until September 30. Can he stick around that long? Would he not be advised to dress up as a pinata?

CILLIZZA: I would not pretend to know what his mind is but I do not think that is a possible. The longer he is there - they are coming back after Labor Day. Larry Craig voting every day is a nightmare scenario. They want him out of sight, out of mind as soon as humanly possible. I know he wants to set this time line. I am very skeptical that he will be able to do that.

OLBERMANN: And slightly larger context we hear that John Warner is going end his 30 years it will have been in the Senate. Does this set up a possibility of yet another one of these hair breath battles for the Senate?

CILLIZZA: You know, to be honest this sets up the likelihood that Democrats are looking at a good election in 2008. They started out with the 22 seats up for Republicans and 12 seats up for Democrats. This is not a good election cycle. The best Republicans can do is limit their losses at his point.

OLBERMANN: Chris Cillizza of The Fix at WashingtonPost.com. Thank you. We thought we had the weekend off but no luck there.

CILLIZZA: We'll keep working. Thanks, Keith.

OLBERMANN: Thanks, Chris.

Let's get a little bigger picture from Chris's colleague, Dana

Milbank, national political reporter of the Washington Post

Dana, good evening to you.

DANA MILBANK, NATIONAL POLITICAL REPORT, WASHINGTON POST: Good evening, Keith.

OLBERMANN: Is there another dark cloud in this silver lining that the GOP would see in lancing the Craig boil? Would not some people say what about David Vitters and those prostitutes? How is that less sleazy than Larry Craig?

MILBANK: Well, David Vitter decided that his particular offense was going involve women and the notion of girls in New Orleans plays better than boys in Boise. That is why that one died down quickly. We can talk about the media but it was the colleagues that did that. Once they heard arrest and men's room they said whatever the details it will not work.

OLBERMANN: Is there something self-defeating about getting Republicans getting Craig to quit and throwing him out here over a purported same-sex encounter? If the right did not devote some much emergency into injecting shame and criminality into sexual orientation, they might not have been roasting over this spit all week.

MILBANK: They probably would not be having the numbers that they do have in the Congress if not for the religious conservative. It's a cost benefit analyst. The decision is they are going to dance with the ones that brought them.

OLBERMANN: The assumption is Senator Craig has not been honest with himself about his sexual proclivities. I am not saying that the media has clean hands. We have mocked. Is there anybody in Washington worried about Larry Craig, confused human being?

MILBANK: Very few. And this is not Washington at its finest. This is a cold and bloodless town where people are not interested in human beings but their majorities and numbers. Allen Simpson, the old former Republican Senator, said one day you are toast of the town and the next day you are toast. That's just how it is.

OLBERMANN: Dana, stand by a second. We will return to the Craig story soon but I want to ask about a resignation that has already happened. The news is broke than Tony Snow will no longer be breaking news. He's stepping down as press secretary and sooner rather than the later Mr. Snow hinted at earlier this month.

(BEGIN VIDEO CLIP)

BUSH: Tony Snow informed me he is leaving. And I sadly accept his desire to leave the White House. And he will do so on September 14. It's been a joy to watch him spare with you. He is smart and capable and witty. He is able to talk about issues in a way that the American people can understand. And so, I accept. I love you. And I wish you all the best.

(END VIDEO CLIP)

OLBERMANN: And I love you from the president might lead one to think that Mr. Snow's battle has precipitated the resignation. No so, says the press secretary. He says he cannot support his family on a salary of $168,000.

(BEGIN VIDEO CLIP)

SNOW: I ran out of money. A lot of people said you make all this money. I made more money when I was in my previous career. And I made the decision not to say to my wife and kids, we finally saved up this money and you will have to give it away so daddy can work at the White House. We took out a loan to work here and that loan is now gone.

(END VIDEO CLIP)

OLBERMANN: Back to Dana Milbank. We can talk at another time about an idea of people having to take out loans to work for the federal government. But how huge will the loss of Tony Snow be to this White House?

MILBANK: One bit of good news for the White House is things are so slow ebb you could bring in Larry Craig to replace Tony Snow and things would not get worse based on where you are at the polls. Tony is about the best there is in this business and we wish him well making large speakers' fees. But the popularity has gone down the low 30s and high 20s. It is not the messenger, it's the message, is the problem.

OLBERMANN: In terms of the perception, if not necessarily poll numbers - maybe more importantly - I have never seen poll numbers on Tony Snow. But they probably rival or exceed anybody in the administration. You got have some of that or the administration would collapse. Why do they get that from if Tony Snow is gone?

MILBANK: You cannot really replace that. He had that rare combination. He was a showman but also highly regarded by people in the Press Corps. He is, in relation to earlier discussion, a fairly decent man in Washington and that is why everybody is rooting for him to make as much money as he can.

OLBERMANN: And spend it in good health as the old joke goes and meant very seriously here. A last question about your name sake the incoming press secretary, Dana Perino. She got herself into trouble about the misstatements in the White House use of RNCE e-mail accounts. Will she find herself overmatched?

MILBANK: She could. But then so would anybody. What she has a very good relationship off camera and stage with the press known as a straight shooter. She has a lot of good will built up. That will take her a long way. Who would you rather watch, her or Ari Fleischer?

OLBERMANN: OK. Dana Milbank of MSNBC and the Washington Post. And tonight, the memorable phrase boys in Boise. Thanks, Dana. Have a good weekend.

MILBANK: Thanks, Keith.

OLBERMANN: Back to Larry Craig. He gets the final word. Detective Dave Karsnia got the first word. Our recreation of the arrest as reported in the undercover officer's own report, reenacted by the "Countdown" players, now run on German television. On YouTube, with a special surprise Larry Craig naughty boy feature that will leave you flushed with excitement.

It has been an exciting and unbelievable week in Washington. The Alberto Gonzales resignation was the beginning of this week.

John Dean next to help put the White House and the Republicans in perspective and in connecting the dots from a disgraced Idaho Senator on the way out to a very troubled American president.

And theirs the war debate or lack thereof. The president, his top general on the ground forecasting there will be no changes in the surge when we get the official report in a few weeks.

That and more on Larry Craig. You are watching "Countdown" on MSNBC.

(COMMERCIAL BREAK)

OLBERMANN: One week ago, Attorney General Alberto Gonzales ran the Justice Department. White House Deputy Chief of Staff Karl Rove ran the president's political operation. White House Press Secretary Tony Snow ran his communications. And Idaho Senator Larry Craig could run into any men's room he wanted without notice. Our number four story tonight, the big picture on the breaking news. NBC News confirming reports from the Associated Press and the Idaho Statesman that, at a news conference he has scheduled for tomorrow morning. Senator Craig will resign just five days after the revelation that he was arrested and pleaded guilty.

And what a difference a week makes for a president and his party. Alberto Gonzales is gone. Rove punched the clock one last time this afternoon. Mr. Snow announced this morning he is leaving next month for more money. And Senator Craig sticking around until September 30, but not leaving before leaving a stain on his party. All of which leaves President Bush with a White House staffed by people whom he did not even consider first choice material for their posts.

David Vitter, apologized for having his phone number show up in escort

services records and Senator Ted Stevens getting an unwelcome visit and

inspection from the FBI,

Joining us now, a veteran of governmental bad weeks, former Nixon White House Counsel John Dean, author of "Worse than Watergate" and the upcoming book "Broken Government."

Welcome and thank you for your time.

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

OLBERMANN: If you look at this from way outside, you might say, well, it is an Idaho Senator. What practical impact could it have on a White House, even a White House in crisis? How would you answer that logical question, from your perspective?

DEAN: Well, I think what actually - if it happens tomorrow and he resigns that will help the White House and keep this problem from spilling over on to the party and causing more problems. The Warner decision to not run for reelection probably had more practical effect, short term, on the White House, given his independence and his strong credentials on defense and his current position on the war than, say, the Craig vote was very solid and looks like it will be replaced by a similar vote.

OLBERMANN: Let's talk about Warner - 6 percent of those 49 Republican Senators have pleaded guilty or apologized or had their homes searched with connection of a crime. Two of those seats among the 22 must defend next year. Do we have something now of a lame duck Republican Senate? How does it affect the remainder of Mr. Bush's tenure?

DEAN: It does - it is a lame duck in a very classic kind of way. But it also is not quite so lame as to be crippled and unable to do anything. That is because the Democrats still don't have that magic number of 60 votes with which they can block a filibuster. And the Republicans have been using that or the threat of it to tie up the Senate.

OLBERMANN: The Justice Department is investigating the ex-attorney general, Alberto Gonzales. The GAO felt the need to get the Iraq report out in advance of whatever the White House might do to alter it? In these things are we seeing a glimmer of reemergence of checks and balances?

DEAN: I think it is a glimmer but a glimmer of the more traditional type of oversight. It does not come close to the kind of oversight that was partisan during the time that Clinton was in the White House and the Democrats were helpless when the Republicans just went with no-holds bars with Clinton and beat up on him and used their power in an abuse manner. That hasn't happen. It's a rather legitimate oversight that's going on. It has not brought back the balance and separation of powers as fully contemplated by the Constitution.

OLBERMANN: Let me again, with Senator Craig, John. You have been in those crises, what-in-the-world-do-we-do-next meetings inside the White House. Are there phone calls going be made to Larry Craig to say what in the world do you mean you will resign, but you are going stay around and be in the Senator until September 30? Is that one of the least likely political predictions you have heard?

DEAN It is - he is a man who is determined, apparently not to concede he has done anything wrong. He is fighting against the pressure of the party now. He is posturing himself. I think that will hurt a little longer. I think the White House should call and say it is over.

OLBERMANN: Is there - what in the world happens if they don't convince him? Can they drag him beneath the Mexican border to get him out of town for the last 30 days?

DEAN: I don't think that is an option. That's an old Gordon Liddy trick. We will not go there. It is a nightmare if he does not leave and leave quickly. And just get out of the headlines. It is going hurt the Republicans for a long time.

OLBERMANN: John Dean author of the soon to be released book, "Broken Government." And that was before all this happened. Have a great weekend. Thank you.

DEAN: Thank you, Keith.

OLBERMANN: And that the serious take on the end game with Senator Larry Craig. We will also dive back into the less serious start of this mess. First comes defeat, and then comes the waterworks. That is an interesting segue off the Larry Craig bathroom story, is it not? Ahead, on "Countdown."

(COMMERCIAL BREAK)

OLBERMANN: The legendary journalist Daniel Shore turn 91 years old today, breaking in with a tip to the Bronx Home News in 1928. A veteran of 23 years at CBS, six more on CNN and now 22 at NPR. He survived Nixon's enemies list and a later Republican push to black list him. And is still so unhip that he defines hip. In illustration of that, we worked congruently at CNN, and he his nightly political news cast once was scheduled to be interrupted by a breaking sports story. "I'm Daniel Shore," in intoned. "Tonight, the latest on a bombing of the Marine barracks at Beirut, but first, breaking news, the final poll of the college football season. Here is Keith Olbermann with the urgent details -

Keith?"

On that note, let's play "Oddball."

(BEGIN VIDEOTAPE)

OLBERMANN (voice-over): And we begin not in college football, but on the baseball diamond and a squeeze play gone horribly gone. Batter misses ball, runner on third gets hung up, and here comes the sprinklers. Holey cow. It is in the New York Pen league. The Tri-Valley Cats of Troy, New York were in the field. The batters were from the Vermont Lake Monsters. The runner expecting a bunt to be laid down was tagged out just before the ump called time.

]

So if you are scoring at home, or even if you're alone, the play goes two to six to eight to two.

To India, for the fourth year in a row Oddball brings you lousy distant video of the Champawa (ph) stone pelting festival. Wimpy camera guy. The stone pelting is part of the Debi Drura (ph) Festival, in which village youth divide into two groups, chucking rocks at one another, and occasionally protecting themselves with wooden shields. It is not very effective.

The violent ritual performed to celebrate victory over a great demon.

Coincidentally, many Americans were happy to see Karl Rove go as well.

(END VIDEOTAPE)

OLBERMANN: Controversy over the way forward in Iraq? What controversy over the way forward in Iraq? President Bush assures the Australian media that this country is completely behind his strategy in Iraq. And this had such an impact that a German TV network asked us to let them run it. The dramatic reenactment of the arrest of the Larry Craig arrest on the eve of his reported resignation, in the words of Officer Dave Karsnia (ph). These stories ahead, but first Countdown's top three news makers of this day.

Number three, you, Mr. and Mrs. Countdown viewer, you made us number one last night in the Nielson ratings, as they say, live plus DVR, viewers aged 25 to 54. At 8:00 p.m. Eastern, Countdown, 318,000, John Kacich (ph) filling in for Bill-O over on Fox Noise, 224,000, CNN 190,000 and Nancy "I Know What You Did Last Summer" Grace 161,000. I am just looking through this. I think so. We had high score for all of prime time. Most watched show on cable news last night. Thank you very much. Thank you, come again.

Number two, Prince Yohan Friso (ph) of the Netherlands, and his wife Princess Mabel. You know the scandal where people have been editing the Wikipedia entries about themselves or their rivals, Fox Noise, "New York Times," et cetera, yes, the prince and princess of the Netherlands did it to, to clean up her past dating history with a slain drug lord.

And number one, an unnamed man in the Rayazan (ph) region of Russia, near Moscow. Police have arrested him for stealing a piece of public property, which he went up to, dismantled and then hauled off in a truck and sold for scrap metal. The object was a five meter long bridge. Authorities fear he may come back later to get the river.

(COMMERCIAL BREAK)

OLBERMANN: To recap the night's breaking news, NBC News has now confirmed earlier reports from the Associate Press and the newspaper the "Idaho Statesman" that the embattled Senator Larry Craig will resign his office tomorrow. More on the Craig exit in Boise tomorrow ahead. But in our third story on the Countdown, the saga of three of his soon to be erstwhile Senate colleagues. They were only in Iraq for 24 hours. But as Republican Senators James Inhoff of Oklahoma, Richard Shelby of Alabama, and Mel Martinez of Florida, along with Democratic Congressman Bud Kramer of Alabama, were leaving Baghdad in their military plane last night, they were nearly hit by what were believed to be rocket propelled grenades fired from the ground 6,000 feet below them.

And yet, according to those three Republican senators, and, of course, the president, the security situation in Iraq is improving thanks to the surge. Mr. Bush spending his afternoon listening to the individual opinions of his Defense secretary and the Joint Chiefs of Staff about the war, though by all appearances his mind has long since been made up to keep the 160,000 U.S. troops in Iraq, as he explained to a Japanese television network. Quote, the surge from a military perspective, from a security perspective, is successful.

And "I believe, one, we can succeed. Two, I know it's important that we do succeed. And I'm looking forward to our people on the ground coming back and charting a way forward, so that we can continue to be in that position to succeed."

General Petraeus echoing the president's rosy vision of the surge, telling an Australian newspaper, there has been a 75 percent drop in religious and ethnic killings since last year. His assessment coming as 52 people were killed and 200 more injured a religious festival in Karbala on Wednesday. Joining us now, our own Richard Wolffe, senior White House correspondent for "Newsweek Magazine". Richard, thanks for your time tonight.

RICHARD WOLFFE, "NEWSWEEK": Good to be with you, Keith.

OLBERMANN: A 75 percent reduction in what they called ethnic violence, but the Associated Press was reporting earlier this week that Iraqi deaths have doubled from last year. Are we cherry picking numbers here, General Petraeus and President Bush?

WOLFFE: Well, he's passing on definitions of ethno-sectarian killings. It seems that the Defense Department does not include a whole series of deaths actually, things like the unidentified bodies that turn up in Baghdad at the rate of about 400 a month, Shia on Shia violence, which is a big cause of instability in the south, never mind Sunni on Sunni violence.

So there are a number of things out there that he's ignoring. I don't want to be cynical here, but Petraeus made his comments in an interview with a Rupert Murdoch owned Australian newspaper at a time when Bush's friend down under, John Howard, is in some significant political trouble, against a leader who wants to pull all of his troops out of Australia - that's all 500 Australian troops. There is a lot of politics going on here.

OLBERMANN: Who is the whole September rigmarole (ph) about the Petraeus report that isn't actually by General Petraeus? Who is this all intended for? Is it for the benefit of the American public? Who is supposed to believe this?

WOLFFE: Well, this was a policy, a strategy, not the surge but political strategy that the Bush administration signed up for when it thought it was in trouble. And it thought that the Democrats stood a real chance of turning over Republican votes, and they thought the funding might come short.

That's all changed. As you saw from the president's remarks, he - if you haven't heard it already, he wants to succeed. He believes he can succeed, in spite of what we have seen on the ground in Iraq. He thinks he can at least succeed when it comes to fighting Democrats.

This is not about the reality on the ground. This is about politics, which the president has decided.

OLBERMANN: Reality on the ground versus politics; how far can politics take you if you have three Republican senators and a Democratic Congressman and you nearly get hit by rocket propelled grenades as a C-130 leaves Baghdad last night. And afterwards Senator Inhoff says this is proof that we need to be here, proof that we know what we're doing out here.

How can anybody - so many people who almost lost their lives last night claim the security situation is improving?

WOLFFE: They have been studying at the Cheney school of half glass full ideology. I can say from my experience in Baghdad with President Bush that the thought of rocket propelled grenades flying near me did not fill me with glee. It's a desperate tactic.

OLBERMANN: And lastly here, Richard, this "Washington Post" report that, as another group of Congressional delegates, including the Democratic representative Ellen Taucher and James Moran of Virginia, and Republican Representative Porter of Nevada met with national security advisor from Iraq, Mr. al-Rubiya (ph).

He was apparently distracted from their conversation by a large wide screen TV that was playing cartoons behind their heads. When they asked him to switch that TV off, he laughed and said it was his favorite program. That is the national security advisor of Iraq. Do we now have an answer to why only three of the benchmarks have been met?

WOLFFE: It fills me with confidence. It could have been the Simpsons, in which case it's forgivable. If it's Tom and Jerry, and he's trying to get ideas, not so good. You just scratch your head and wonder. That flat screen TV was probably paid for with American tax payers money, and was probably designed for things like video confrencing. You just hope that someone in Iraq and in the Iraqi government is actually doing some work.

OLBERMANN: Maybe it Futurama, Family Guy. Those are OK too. Richard Wolffe of "Newsweek" and MSNBC, thanks for your time and have a good weekend.

WOLFFE: Any time.

OLBERMANN: Their father's new wife conspicuously absent from the events. Princes William and Harry remember Princess Diana's life. And back by popular demand, our Dragnet inspired reenactment of Senator Larry Craig's apparently career ending bathroom escapade on the eve of his apparent retirement from the Senate, ahead here on Countdown.

(COMMERCIAL BREAK)

OLBERMANN: Let's update you on the latest on the breaking news from Idaho. NBC News has confirmed that Senator Larry Craig will resign his seat tomorrow, less than six full days after news first broke of his arrest in a Minneapolis airport men's room in June. We supposedly will stay on until September 30th in the Senate, unless someone in the Republican party talks him out of what seems at the face of it as an ill advised idea.

We will revisit this in a moment. First our brief number two story tonight, ten years after here death in Paris, Diana, the people's princess, still a formidable presence. There is no official memorial near the tunnel where she died along with her boyfriend, Dodi al Fayed, in 1997. Still people left flowers near the accident site this year, as they do every year.

Today's official memorial at the Guard's Chapel in Central London attended by her former husband, of course, Prince Charles, Queen Elizabeth and other members of the royal family. Music and psalms chosen by Diana's sons, Harry and William, who were only 12 and 15 respectively when she died.

The most emotional moment coming when the younger prince remember her life and theirs.

(BEGIN VIDEO CLIP)

PRINCE HARRY OF ENGLAND, SON OF DIANA: William and I can separate life into two parts. There were those years when we were blessed with the physical presence beside us with both our mother and father. And then there are the ten years since our mother's death. When she was alive, we completely took for granted her unrivaled love of life, laughter, fun and folly.

She was our guardian, friend and protector. She never once allowed her unfaltering love for us to go unspoken or un-demonstrated. She will always be remembered for her amazing public work. But behind the media glare, to us, just two loving children, she was quite simply the best mother the world.

What is far more important to us now and into the future is that we remember our mother as she would have wished to be remembered. As she was, fun loving, generous, down to earth and entirely genuine. We both think of her every day. We speak about her and laugh together at all the memories. But put simply, she made us and so many other people happy. May this be the way that she is remembered.

(END VIDEO CLIP)

OLBERMANN: Also during the memorial, the bishop of London called for the end of the media fury that, of course, still surrounds Diana. But that controversy won't die anytime soon. A new poll finding that 25 percent of Britains believe Diana was murdered.

Speaking of controversy, just the facts, ma'am, as we reprise our Dragnet edition of the Larry Craig arrest with a special Naughty Boy bonus. That's ahead, first here are Countdown's latest list of nominees for Worst Person in the World.

The bronze to Holly Schnobrick (ph) of Lafayette, Indiana. You heard about her. She was the mother too stoned and drunk to drive, so she let her son do it. Her son being five years old. She explained she had taken dozens of prescription pills in the preceding two days, mostly Percosat, quote, for when the kids are acting wild.

Her son says he was driving just fine, but he was having trouble reaching the pedal.

Our runners up tonight, whoever is censoring the military Internet in Baghdad, evidently honked off by an op-ed written by retired John Batiste about the war on the website ThinkProgress.org. Censors blocked members of the military in Iraq from reading ThinkProgress.org. What is it we are supposedly fighting for for the Iraqis? Democrat - freedom? Freeman? That's it. We are fighting for the actor Morgan Freeman.

But our winner, disgraced former House Majority Leader Tom Delay, complaining NBC will not run the pro-death ads produced by a front group called Freedom's Watch. He says the companies policies are inconsistent with our willingness or unwillingness to run ads from the American Medical Association and the Save Darfur Coalition.

Tom, those sponsors are principally about saving innocent people, not

killing them. There's one more point. Delay's online complaint includes

this pithy observation; quote, "These are also the same network execs who

find Keith Olbermann fit for public consumption, clearly putting their

political judgment into question," unquote

Tom, I hate to break it to you, I am still involved in politics. What are you doing these days? I mean, since your own party ran you out of Congress? Also, Tom, your schpeel links to an audio clip in which a clear and compelling intellectual argument is made against me.

It is some bald guy named Mark Levin (ph) repeatedly insisting that I am wearing a toupee. Hold on a second. Pull it. All harder than that. OK, that is enough. Tom Delay, today's Worst Person in the World.

(COMMERCIAL BREAK)

OLBERMANN: Repeating the breaking news that NBC News has confirmed reports tonight that Republican Senator Larry Craig will announce his resignation tomorrow, effective September 30th. This according to unnamed officials in the state party. Meantime, the staff here first realized we might truly be onto something about Craig, when a German television network called and asked for permission to run this thing, context unknown, but somewhere somebody's introducing his version of Oddball. The next thing his German viewers will here is my voice narrating the official police report of the arrest, while the Countdown players assume the roles of Craig and Dave Karsnia, a sergeant, Minneapolis Airport Police, under cover division, toilet squad.

Our number one story tonight, gather the family and call anyone just emerging from a coma. We're going to play this one again. But first, as added value, let's watch something you may not have seen before as a short, before our feature presentation. It's the highlights of Senator Craig's in retrospect bizarre and revealing appearance with Tim Russert on "Meet the Press" on Sunday, January 24, 1999.

He is talking about the impeachment of President Clinton. He sure as hell thought he was talking about the impeachment of President Clinton. In light of recent developments, maybe not so much.

(BEGIN VIDEO CLIP)

SEN. LARRY CRAIG (R), IDAHO: I don't know where the Senate's going to be on that issue of an up or down vote on impeachment. I will tell you that the Senate certainly can bring about a censure resolution. It's a slap on the wrist. It's a bad boy, Bill Clinton. You're a naughty boy.

The American people already know that Bill Clinton is a bad boy, a naughty boy. I'm going to speak out for the citizens of my states who, in the majority, think that Bill Clinton is probably even a nasty, bad, naughty boy. The question issued now is simply this, did he lie under oath? Did he perjure himself? And did he obstruct justice.

And that's where we're trying to go now in this truth seeking process. I hope we can get there. I'm going to have the chance to decide and vote up or down on those articles.

(END VIDEO CLIP)

OLBERMANN: And now, as promised, with only the dramatic introduction and conclusion added as writer's embellishments and the rest taken exclusively from Sargent Karsnia's report, here's Countdown's version - our, if you will, wide stance on the arrest of Senator Larry Craig.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The story you are about to see is true. The names have not been changed to protect anybody.

OLBERMANN (voice-over): This is the city, Minneapolis, Minnesota. I work here. I carry a badge. It was Tuesday, June 11. It was sunny and warm for Minneapolis. I was assigned to the vice squad, working in the men's room at the airport. My boss is Chief Dolan. My name is Karsnia. I'm a cop, a cop on the toilet.

At 1200 hours I was working a plain clothes detail involving lewd conduct in the main men's public restroom of the Northstar crossing of the Lenburg Terminal. From my seated position, I could observe the shoes and ankles of the person seated to the right of me. An unidentified person entered to the left of me. From my seated position I was able to see his shoes and ankles.

At 12:13 hours, I could see an older white male with gray hair standing outside my stall. He was standing about 3 feet away and had a roller bag with him. The male was later identified by driver's license as Larry Edwin Craig. I could see Craig look through the crack of the door from his position.

Craig would look down at his hands, fidget with his fingers, and then look through the crack into my stall again. Craig would repeat the cycle for about two minutes. I was able to see Craig's blue eyes as he looked into my stall. At 12:15 hours, the male in the stall to the left of me flushed the toilet and exited the stall. Craig entered the stall and placed his roller bag against the front of the stall door.

My experience has shown that individuals engaging in lewd conduct use their bags to block the view from the front of their stall. From my position, I could observe the shoes and ankles of Craig seated to the left of me. He was wearing dress pants with black dress shoes. At 12:16 hours, Craig tapped his feet. I recognized this is a signal used by persons wishing to engage in lewd conduct.

Craig tapped his toes several times, then moved his foot closer to my foot. I moved my foot up and down slowly. While this was occurring, the male in the stall to my right was still present. I could hear several unknown persons in the restroom that appeared to use the restroom for its intended use. The presence of others did not seem to deter Craig as he moved his right foot so that it touched the side of my left foot, which was within my stall area.

At 12:17 hours, I saw Craig swipe his hand under the stall divided for a few seconds. The swipe went from the direction from the front door side of the stall back towards the back wall. Craig swiped his hand again for a few seconds in the same motion to where I could see more of his fingers. Craig then swiped his hand in the same motion a third time for a few seconds.

I could see that it was Craig's left hand due to the position of his thumb. I could also see Craig had a gold ring on his ring finger as his hand was on my side of the stall divider. At about 12:19 hours, I held my police identification in my right hand down by the floor so that Craig could see it. With my left hand near the floor, I pointed to the exit.

Craig responded, no. I again pointed toward the exit. Craig exited the stall with his roller bags without flushing the toilet. Craig handed me a business card that identified him as a U.S. senator as he stated, what do you think about that. I responded by setting his business card down on the table and again asking him for his driver's license.

Later, in a recorded post-Miranda interview, Craig stated the following; he's a commuter. He went into the bathroom. He was standing outside the stall for one to two minutes, waiting for the stall. He has a wide stance when going to the bathroom and that is foot may have touched mine.

UNIDENTIFIED MALE: The story you have just seen is true. On August 8th, Larry Craig pleaded guilty to misdemeanor disorderly conduct in court number one for the County of Hennepin. He never told anybody about it. Not his family, not his constituents, not the U.S. Senate's, not until his conference on August 28th. In one moment, the results of that news conference.

(END VIDEOTAPE)

OLBERMANN: The first result of that news conference, of course, was that police in Minneapolis released the audio transcript of Sergeant Karsnia's official interview with Senator Craig in response to what he said. The final result comes tomorrow. NBC News confirming earlier reporting by the Associate Press and the Idaho newspaper the "Statesman" that tomorrow morning in Boise, Senator Craig will end all this by resigning.

It almost calls for some kind of dramatic - no we've done that already. That's Countdown for this the 1,584th day since the declaration of Mission Accomplished in Iraq. From New York, 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

'Countdown with Keith Olbermann' for August 30

Guests: Dana Milbank, Gen. Wesley Clark, Ana Marie Cox, Paul F. Tompkins

KEITH OLBERMANN, MSNBC HOST (voice-over): Which of these stories will you be talking about tomorrow?

(BEGIN VIDEO CLIP)

SEN. LARRY CRAIG, (D), IDAHO: I am not gay. I don't do these kinds of things.

(END VIDEO CLIP)

OLBERMANN: The bathroom tapes are released. The police interview moments after the arrest of Idaho Republican Senator Larry Craig, evoking a mental picture not of a senator trying to make it all go away, but of a senator demanding that police make it all go away.

(BEGIN VIDEO CLIP)

CRAIG: Your foot came towards mine, mine came towards yours, was that natural? I don't know.

(END VIDEO CLIP)

OLBERMANN: The drumbeat sound demanding Craig resign now has lyrics feet. Will he quit? If he won't will he sink the Republicans? If they force him to, will that sink the Republicans?

(BEGIN VIDEO CLIP)

DANA MILBANK, POLITICAL ANALYST, "THE WASHINGTON POST": The Democrats reelect the people with their problems. Republicans kick them out.

(END VIDEO CLIP)

OLBERMANN: Well, not the president, a man whose willingness to erase inconvenient facts so worries the Government Accountability Office that somebody there leaked the GAO draft assessment about Iraq, fearing the White House would neuter it before we, the people, saw it.

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: Let's wait and see what GAO has to report. It clearly has been leaked by some people who want to get some of the early thinking out.

OLBERMANN: While there's still some sign of thinking in it.

Thinking about Senator Clinton. Elizabeth Edwards says it's hard for her husband, even while leading in Iowa, to address the "Hillary rubs some people the wrong way" factor. How the Senator deals with that and why both Edwards are showing campaign bluntness so atypical.

It's certainly not present with Fred Thompson. Another announcement that he'll make another big announcement next week. Get a roll of stamps and mail it in.

A roll of stamps could have helped Britney Spears, anything that might have lengthened that outfit with the kids in the car.

Hey, Britney, you forgot your freaking pants.

All that and more on "Countdown."

(BEGIN VIDEO CLIP)

CRAIG: Nasty, bad, naughty boy.

(END VIDEO CLIP)

(on camera): Good evening from New York. As resident and visceral as the arrest of Republican Senator Larry Craig after alleged lewd advances in a Minneapolis Airport public bathroom might be, as much as a firestorm and a collective Republican butt-covering it might have been provoked, there seemed to be no way for the bizarre saga to have gotten any worse. Unless there was audio tape of Senator Craig's post arrest interview with the police, and unless that tape were to become public. Our fifth story in the "Countdown," ta da, there is a tape. It has been released. We will play it for you with captions. First, the other Larry Craig in the toilet headlines of this day.

Even before the tape emerged this afternoon, more Republicans had joined the growing chorus calling for the singing senator to resign. The party itself, the RNC, saying it will let the Senate Ethics Committee deal with the matter. And Senator Craig's news conference Tuesday raises new questions now because the protestation of innocence not only contradicts his signed statements of August 8th in which he agreed not to claim innocence and said he knew or should have known his conduct was inappropriate, but it also violates the terms of his plea, raising the prospect that the court or prosecutors might revisit the issue.

If there were any question whether Minneapolis law enforcement is unhappy with Senator Craig's statement, not 48 hours later, we have the entire tape of his June 11 interview with Sergeant Dave Karsnia just minutes after his arrest. Not all of it is clearly audible in the portions you're about to hear. The transcript originates with the police department. We made a handful of revelations to correct typographical errors.

(BEGIN VIDEOTAPE)

SEN. LARRY CRAIG: (R), IDAHO: Am I going to have to fight you in court?

DAVE KARSNIA, MINNEAPOLIS AIRPORT POLICE OFFICER: No. No. I'm not going to go to court unless you want me there.

CRAIG: Because I don't want to be in court, either.

KARSNIA: OK, I don't either. (INAUDIBLE)

KARSNIA: Here's the way it works. You'll be released today, OK?

CRAIG: OK.

KARSNIA: All right. I, I know I can bring you to jail, but that's not my goal here, OK? (INAUDIBLE)

CRAIG: Don't do that. You...

KARSNIA: I'm not going to bring you to jail.

CRAIG: You solicited me.

KARSNIA: OK. We're going to get - we're going to get into that.

(INAUDIBLE)

CRAIG: OK.

CRAIG: I sit down to go to the bathroom and you said our feet bumped. I believe they did, because I reached down and scooted over and the next thing I knew, under the bathroom divider comes a card that says "Police." Now, that's about as far as I can take it. I don't know of anything else. Your foot came toward mine; mine came towards yours. Was that natural? I don't know. Did we bump? Yes, I think we did. You said so. I don't disagree with that.

KARSNIA: OK. I don't want to get into a pissing match here.

CRAIG: We're not going to.

KARSNIA: Good.

CRAIG: I don't - I am not gay. I don't do these kinds of things and...

KARSNIA: It doesn't matter. I don't care about sexual preference or anything like that. Here's your stuff back, sir. I don't care about sexual preference.

CRAIG: I know you don't. You're out to enforce the law.

KARSNIA: Right.

CRAIG: But you shouldn't be out to entrap people, either.

KARSNIA: This isn't entrapment.

CRAIG: All right.

KARSNIA: You're skipping some parts here. But what about your hand?

CRAIG: What about it? I reached down, my foot like this. There was a piece of paper on the floor; I picked it up.

KARSNIA: OK, sir. We deal with people that lie to us everyday.

CRAIG: I'm sure you do.

KARSNIA: I'm sure you do too, sir.

CRAIG: And gentleman so do I.

KARSNIA: I'm sure you do. We deal with a lot of people that are very bad people. You're not a bad person.

CRAIG: No, I don't think I am.

KARSNIA: OK, so what I'm telling you, I don't want to be lied to.

CRAIG: OK.

KARSNIA: OK. So we'll start over, you're going to get out of here.

You're going to have to pay a fine and that will be it. OK. I don't call media. I don't do any of that type of crap.

CRAIG: Fine.

KARSNIA: OK.

CRAIG: Fine.

KARSNIA: All right, so let's start from the beginning. You went in the bathroom.

CRAIG: I went in the bathroom.

KARSNIA: OK. And when you went in the stalls, then what?

CRAIG: Sat down.

KARSNIA: OK. Did you do anything with your feet?

CRAIG: Positioned them, I don't know. I don't know at the time. I'm a fairly wide guy.

KARSNIA: I understand.

CRAIG: I had to spread my legs.

KARSNIA: OK.

CRAIG: When I lower my pants so they won't slide.

KARSNIA: OK.

CRAIG: Did I slide them too close to yours? Did I - I looked down once. Your foot was close to mine.

KARSNIA: OK, and then with the hand. How many times did you put your hand under the stall?

CRAIG: I don't recall. I remember reaching down once. There was a piece of toilet paper back behind me and picking it up.

KARSNIA: I saw there's a...

CRAIG: My right hand was next to you.

KARSNIA: I could tell it with my - I could tell it was your left hand because your thumb was positioned in a faceward motion. Your thumb was on this side, not on this side.

CRAIG: Well, we can dispute that. I'm not going to fight you in court, and I reached down with my right hand to pick up the paper.

KARSNIA: But I'm telling you that I could see that so I know that's your left hand. Also I could see a gold ring on this finger, so that's obvious it was the left hand.

CRAIG: Yeah, OK. My left hand was in the direct opposite of the stall from you.

KARSNIA: OK. You, you travel through here frequently correct?

CRAIG: I do, almost weekly.

KARSNIA: Have you been successful in these bathrooms here before?

CRAIG: I go to that bathroom regularly.

KARSNIA: I mean, for any type of other activities.

CRAIG: No. Absolutely not. I don't seek activity in bathrooms.

KARSNIA: It's embarrassing.

CRAIG: Well, it's embarrassing for both. I'm not going to fight you.

KARSNIA: I know you're not going to fight me. But that's not the point. I would respect you and I still respect you. I don't disrespect you but I'm disrespected right now and I'm not tying to act like I have all kinds of power or anything, but you're sitting here lying to a police officer.

KARSNIA: It's not a (INAUDIBLE) I'm getting from somebody else. I'm (INAUDIBLE)

CRAIG: (INAUDIBLE)

(CROSSTALK)

KARSNIA: I am trained in this and I know what I am doing. And I say you put your hand under there and you're going to sit there and...

CRAIG: I admit I put my hand down.

KARSNIA: You put your hand and rubbed it on the bottom of the stall with your left hand.

CRAIG: No. Wait a moment.

KARSNIA: And I'm not dumb. You can say I don't recall...

CRAIG: If I had turned sideways, that was the only way I could get my left hand over there.

KARSNIA: it's not that hard for me to reach. (INAUDIBLE) it's not that hard. I see it happen everyday out here now.

CRAIG: (INAUDIBLE) you do. All right.

KARSNIA: I just, I just, I guess, I guess I'm going to say I'm just disappointed in you sir. I'm just really am. I expect this from the guy that we get out of the hood. I mean, people vote for you.

CRAIG: Yes, they do. (INAUDIBLE)

KARSNIA: Unbelievable, unbelievable.

CRAIG: I'm a respectable person and I don't do these kinds of...

KARSNIA: And (INAUDIBLE) respect right now though.

CRAIG: But I didn't use my left hand.

KARSNIA: I thought that you...

CRAIG: I reached down with my right hand like this to pick up a piece of paper.

KARSNIA: Was your gold ring on your right hand at anytime today?

CRAIG: Of course not, try to get it off, look at it.

KARSNIA: OK. Then it was your left hand, I saw it with my own eyes.

CRAIG: All right, you saw something that didn't happen.

KARSNIA: Embarrassing, embarrassing. No wonder why we're going down the tubes. Anything to add?

NELSON: No.

KARSNIA: Embarrassing. Date is 6-11-07 at 1236. Interview is done.

CRAIG: OK.

(END VIDEOTAPE)

OLBERMANN: Let's turn to our political analyst Dana Milbank, also national political reporter for the Washington Post.

Thanks for your time tonight.

DANA MILBANK, POLITICAL ANALYST, WASHINGTON POST: Good evening, Keith.

OLBERMANN: How does this tape, the interchange in it, change the already rocky landscape for Senator Craig?

MILBANK: Well, I suppose in the exculpatory category, at least he didn't say the words "wide stance." Other than that it's hard to see how this could help him, although I suppose hurt is all relative here because this whole thing has sort of gone on the Mark Foley trajectory already. It's seemingly inevitable that he's going to be drummed out one way or the other. But for people who listen to this, they may well come to the same conclusion that we heard at the very end that the sergeant did, no wonder we're all heading down the tubes.

OLBERMANN: Does Senator Craig first claiming entrapment, that the officer solicited him, he used that phrase, does that suggest the Senator at some point viewed their interaction as at some point illicit?

MILBANK: He says entrapment, suggests that the officer was soliciting him. It seems he was working through his categories of the various defenses that he could make. The reaching for the toilet paper, sort of thinking on his feet there. Any of this could be plausible and you could argue you had a bad cop there. But, of course, that's what courts are for. All of that is made moot by the very fact that the senator already entered his guilty plea.

OLBERMANN: Why have so many Republicans jumped to call for his resignation when no one called for Senator David Vitter even to explain let alone pay any kind of price for his phone number turning up in the records of an escort service and the senator admitting that, but admitting that after he was confronted with evidence which, although it was extralegal in that case. A lot of the structure is very similar in these two cases.

MILBANK: There's no man more happy in Washington with the recent developments than David Vitter, you can be sure. What's happening here, I think you could call it the Foley hangover? The Republicans are in a panic, perhaps overstating the panic. It's a long time from the election, but this could all be turned against them and obviously the presence of a police report, an actual guilty plea, an actual arrest all very different from the Vitter case. The fear is this will be compounded. If you look at the people turning against the senator, it's Norm Coleman, Susan Collins, it's people who are in a vulnerable election next year. So those are the ones who are bailing on the senator right away.

OLBERMANN: You expect examine he's going to go. Do we know how that's going to happen and how quickly? Is he going to resign? If he doesn't resign, what happens then?

MILBANK: We understand that he is one stubborn individual. I think that's what's worry his colleagues. Many people would have given it up at this point. There's nothing the Senators can do short of following this lengthy ethics process through and that's the sort of thing that may hurt them next year.

OLBERMANN: Let me play something that the former Republican House Majority Leader Tom Delay said this morning, responding to this sequence of Republican scandals by suggesting that both parties are equally scandal prone but handle the scandals differently. Here's the tape first, Dana.

(BEGIN VIDEO CLIP)

REP. TOM DELAY, (R), FORMER HOUSE MAJORITY LEADER: The Democrats re-elect the people with their problems. Republicans kick them out. There are scandals that need to be addressed. Republicans address them, Democrats re-elect them.

OLBERMANN: That sounds really nice and tough, Dana, invoking Ted Kennedy as he did tonight on "Hardball." But isn't Mr. Delay skating past a fact that even Kennedy went to the cops within 36 hours. But with 10 years of terrible stories about him, Republicans re-elected Mark Foley five times to the House, 25 years since Craig had to deny he was part of the congressional page scandal of 1982, Republicans re-elected him four times to the House then elected him to the Senate then re-elected him twice to the Senate.

MILBANK: We could be grateful that we have Tom Delay to come back at important times like these in our nation's history. There are many ways to look at this, but another way to look at it would be to say guys like Congressman Duke Cunningham and Bob Ney could not go to the voters for re-election because they're in prison. This certainly works both ways. Neither party has some sort of moral high ground when it comes to these social issues or when it comes to financial issues.

OLBERMANN: Dana Milbank of the Washington Post and MSNBC. Thanks, Dana.

MILBANK: Thanks, Keith.

OLBERMANN: The White House complains that the Government Accountability Office is holding the Bush administration too accountable when it comes to Iraq. So somebody at the GAO leaks its draft report about Iraq before Mr. Bush can cherry pick from it.

First it was Karl Rove suggesting that Senator Clinton's high negativity numbers could demoralize the Republican Party. Now it's Elizabeth Edwards?

You are watching "Countdown" on MSNBC.

(COMMERCIAL BREAK)

OLBERMANN: Having already used his heavy hand to make changes to an interim progress report on Iraq, now preparing to deliver his final version to Congress last month while sticking the name of General Petraeus on it, President Bush, in our fourth story on the "Countdown," is also attempting to water down yet another government agency's strikingly negative account of where things stand on the ground. You don't like the report card give yourself a new grade or new teachers or a new school principal.

The Government Accountability Office concluding in a draft report that Iraq has failed to meet all but three of 18 benchmarks for political and military progress. Someone at the GAO leaked, fearful that President Bush and the White House would neuter the true nature of the assessment, as some claim it did with the national intelligence estimates earlier this month, leaked the draft report to the "Washington Post." There is a paper trail providing further cause for concern, an internal White House memo obtained by the Associated Press showing that the administration will argue that the GAO does not present a true picture of the situation in Iraq because the standards were, quote "designed to lock in failure."

At the White House today, Press Secretary Tony Snow pleading of the GAO report, pay no attention to the man behind the curtain.

(BEGIN VIDEO CLIP)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: You're asking me at this point to make detailed comment on a draft report. I'm not going to do it. Let's wait and see what GAO has to report. It clearly has been leaked by some people who want to get some of the early thinking out, but we'll get a report next Tuesday, I think.

(END VIDEO CLIP)

OLBERMANN: Wait until after the White House has finished watering down the report. Mr. Snow trying to buy time on the question of whether or not Mr. Bush will soon be requesting an additional $50 billion for the war in Iraq, which the Washington Post had reported yesterday.

(BEGIN VIDEO CLIP)

SNOW: It is premature to be talking figures at this juncture. Last year we came up with an emergency supplemental, which we thought was going to be our best estimate. You continually revise those estimates based on the realities on the ground and the requirements of the forces.

(END VIDEO CLIP)

OLBERMANN: Let's turn to General Wesley Clark, analyst for MSNBC and before that former supreme allied commander for NATO.

General Clark, great thanks for some of your time.

GEN. WESLEY CLARK, FORMER SUPREME ALLIED COMMANDER FOR NATO: Good to be with you, Keith.

In May, when the president agreed to the benchmarks, he praised them. He said, quote, "They are a clear road map to help the Iraqis secure their country and strengthen their young democracy." Does that not make it difficult for the White House to argue now that this GAO report will not present a true picture of the situation in Iraq because standards have been designed to lock in failure?

CLARK: Exactly right, Keith. They should not be able to squirm out from underneath these standards. The surge was portrayed to be a short-term effort starting in January. They've shifted the goal posts each time in an effort to prolong the surge and the judgment. The truth is that the American people are making the judgment every day as they see the results of the war. The benchmarks confirm that judgment and this is a huge problem for the White House.

OLBERMANN: Does there seem to be continuing, in this, a tried and true aspect of blaming of Congress in this new strategy? Hey, it's not our fault. Congress is being unfair by holding us to all or nothing standards? The GAO is doing the same thing. Is that not the gist here?

CLARK: It's a great strategy. It's worked many times in the past. But the difficulty is that although the leadership in Congress is Democratic, there's a very strong Republican minority in the House and in the Senate, because of Joe Lieberman. Actually the Senate seldom can put the pressure on the administration that's actually required to move the administration's policies in the right direction.

OLBERMANN: Should the president request another $50 billion for this war in Iraq? Does he still have the political capital to get it? There was such coverage of this in the last two days that suggested the Democrats were going to go along with this.

CLARK: I don't think it's a matter of whether or not the Democrats say no to this. I think it's a question of what's the price that the president should be made to pay for coming back in and asking for the other $50 billion.

I've argued for a long time that the problems we've had in Iraq are problems of excessive focus on troops and tactics and not enough attention to the strategy, the diplomacy, the policies, the politics of the region. In essence that's what the GAO report confirms. And hopefully the Congress can use the occasion of the $50 billion request to hammer the president and the administration again to come forward with a realistic strategy for success in the region. Stop hiding behind General Petraeus. Let's hear this administration lay out a success strategy in the region.

OLBERMANN: Speaking of the $50 billion, there is a report that comes from Brit Hume from FOX News, who, let's face it, should be in a position to know, that the defense secretary, Mr. Gates, has been so marginalized by the White House he was not informed of that funding request. He read it in the paper. Also there this report from the McClatchy newspapers that Bush will get more than one recommendation from the Pentagon about Iraq.

Does this now seem more likely that the military leadership can't agree on what's best for Iraq? Is it that or that the White House once again plans to ignore any voices with which it does not agree so it's asking for several different reports and is going to pick the one it likes?

CLARK: I think it's a little bit of both. I do think it's an important thing for the field commander to stand on his own. I don't think you have to have a unified report from the Joint Chiefs. You can't hold people in lock step on this as a critical national issue. I think the American people are going to want to hear what General Petraeus says. General Petraeus is not responsible for the strategy in the region. He's not responsible for the diplomacy in the region. That's the responsibility of the White House itself and they should be held accountable for this.

OLBERMANN: He may not be largely responsible for a report which the administration continues to try to stick his name on.

General Wesley Clark, former supreme allied NATO commander in Europe and MSNBC analyst. As always, sir, thanks for your time.

CLARK: Thank you, Keith.

OLBERMANN: As Great Britain pauses to remember Princess Diana on the 10th anniversary of her death, her successor, Camilla, so mad at being uninvited, she's leaving the country.

OK, here's the plan. You dance naked and while they're distracted, I'll steal the beer. No, that's not Britney Spears. That disturbing image comes in later on, here on "Countdown."

(COMMERCIAL BREAK)

OLBERMANN: On this date in 30 B.C., Cleopatra supposedly committed suicide by clutching a poisonous asp to her breast. The story needs to be taken with a large grain of salt, however, because we're also told by history that she was one of the most beautiful women in the world. In a recently discovered coin, produced in her honor in one of Marc Anthony's own mints, depicts a woman who looks less like a world-class beauty and more like Granny from "The Beverly Hillbillies."

On that note, let's play "Oddball."

We begin in Desoto, Missouri, where the criminals are desperate, naked and thirsty. Two thugs went into a convenient store with a plan. One guy pinches the beer, the other distracts employees by taking off his clothes. Would have worked if not for a pesky customer who chased the crooks out and got the license plate number of the getaway car. Now they can bring their nude review to the warden's talent night in the big house.

In Malaysia, if you're waiting for the 9:20 express, I suggest you start hoofing it. This is King Tooth, younger brother of the moppets' Dr. Tooth, attempting to break a record by pulling a train with his mouth. The crowd came out to the event and the king did not disappointment, giving a heroic yang and pulling the 327 ton choo-choo a whopping nine feet. Extra points for the safety vest too. You're a class act.

Finally to Washington, where after seven years of punking the nation, someone came around and punked Karl Rove. Yesterday someone vandalized the turd blossom's Jag, shrink wrapping it in cellophane, slapping an I Heart Obama sticker on the bumper and taping a few bald eagles to the trunk. Mr. Rove sent all suspects to CIA black sites interrogation, later determining that fellow White House staffer Al Hubbard was the prankster. He then cleaned off his car by melting the shrink wrap with laser beams coming out of his eyes. Then he bit the head off the eagles.

(END VIDEOTAPE)

OLBERMANN: Fred Thompson declares he will declare. Does anybody still care? And Elizabeth Edwards blunt about the perception that Hillary Clinton may be an unattractive candidate to many. Now this is unattractive. I see England, I see France. I see somebody stole Britney Spears' pants. These stories ahead but first here are Countdown's top three news makers of this day. Number three, an unnamed Scottish teen who posted a video of himself doing 140 miles per hour on the highway, on the Internets of course.

Cops caught the act on Youtube. They have arrested the teen for suspicion of speeding. The real headline buried in this, he was doing 140 miles per hour in a Ford Escort.

Number two, Cindy Fesgen, assistant principal at Discovery Canyon Campus school in Colorado Springs, Colorado. She is cracking down on schoolyard violence by banning tag. She says it, quote, causes a lot of conflict on the playground. The kids can run around the playground, they just can't chase each other. Yes, kids just running around causes no conflict at all.

And number one, Zamfira Sfara, the former housekeeper for the late Leona Helmsley, who tells the "New York Daily News" about the dog to whom Miss Helmsley left the largest single bequest in her will; quote, we had so much trouble with Trouble. I was bitten dozens of times. She then went on to describe the relationship between the so called queen of mean and Trouble the dog, quote, Helmsley would lick the dog tongue to tongue. It was unnatural. It was unhealthy.

Yes, but it explains the 12 million she left the dog in her will.

(COMMERCIAL BREAK)

OLBERMANN: Politics and comedy have at least this much in common - your timing had better be good lest you put the audience to sleep. With that in mind, Fred Thompson supporters can get up now. Your candidate is almost ready to deliver his punchline. Our third story tonight, the latest in the countdown to 2008.

After hirings and firings and shuffling of the campaign staff long before there was a campaign, the conservative Republican will officially get his campaign off the mark in a webcast on September 6th. On the Democratic side of events, the John Edwards' plan to concentrate on Iowa as a first in the nation launch pad may be showing results. After a month-long bus tour that hit every possible town hall, cafe and barnyard, "Time Magazine" asked likely Iowa caucus goers to choose among the top tier candidates. It gave Edwards a growing 32 to 24 percent lead over Hillary Clinton, with Barack Obama in third place at 22 percent, Bill Richardson at 13 percent.

The poll, taken after Senator Clinton has absorbed an increasing number of oblique attacks from the Edwards camp, hinting that she's competent, but dangerous to Democratic prospects because she'll rekindle hate attacks from the right wing fringe. Latest line on that coming from the candidate's wife, Elizabeth Edwards, in the magazine, quote, from "Time Magazine," I want to be perfectly clear, I don't not think the hatred the justified. I don't know where it comes from. I don't begin to understand it, she says, but you can't pretend it doesn't exist and will energize the Republican base. They're nominee won't energize them. Bush won't. But Hillary as the nominee will.

Mrs. Edwards adding, it's hard for John to talk about that, but it's the reality.

Ana Marie Cox is the Washington editor of Time.com, and this week the co-host of "Morning Joe" here on MSNBC. Welcome back.

ANA MARIE COX, TIME.COM: Good to be here.

OLBERMANN: First of all, why do you think Elizabeth Edwards is saying it's hard for John to talk about this? Karl Rove obviously said the same thing. The suspicion is that the Republican right can't wait for a Hillary nomination. It seems to be generally out there. Why is it taboo for her to have said it?

COX: I think it's enough for Karl to have said it. As badly as the Democrats would like to have their own Karl Rove, I think to be quoting the Karl Rove doesn't look good for anyone. They sort have Karl Rove doing their work for them now. The myth of Karl Rove is so familiar to most Democrats, that they know that if he says Hillary is going to win maybe that's not a good thing.

OLBERMANN: You and I have talked about this. Your analogy seems to be on the money, I think, between John and Elizabeth Edwards. The campaign seems to be collectively almost like the Warren Beatty character in the movie "Bulworth." What is going on here in the Edwards campaign?

COX: I think the two of them, between the experiences they've been through, and most recently Elizabeth - here cancer becoming inoperable -

I think they are look at the experience right now not as something they want to have a campaign that they're proud of, but rather a life that they're proud of. They're thinking long term and they're going for broke.

I think it's imbued their campaign with a lot of passion, some fearlessness and you might eve say recklessness. Some of Elizabeth and John's comments have gone to the edge of being things you wouldn't expect a politician to say unless they didn't care whether or not they won or not. They cared about the kind of campaign they're running, and not whether or not they actually win. I don't think that's true for both of them.

OLBERMANN: You and I talked about this too in that Chicago AFL-CIO forum, the non-debate debate; John Edwards, who usually colors within the lines in the coloring book, for the most part, several times went well over the time limit. I would try to reign him back in and he said I'm finishing this, as if don't mess with me, pal, come over there and punch you pal.

COX: Yes, he seems to be really moving forward with his own energy.

I think that some times can make him seem very passionate and energetic. It sometimes can be slightly reckless. In my colleague, Eric Pooley's (ph) article, which is the one you've been citing, there's a quote from their campaign manager about when Edwards asked Hillary to return the money from Rupert Murdoch. It turned out rather embarrassingly that Edwards had received money from one of Rupert Murdoch's companies for the book Elizabeth had written.

Eric said didn't that occur to you guys that we asked Hillary about this. This might be a problem? They said, no, it didn't occur to us. I think that's a sign of really just going forward with what you think is the right thing to do, and maybe not considering all the possible ramifications. It's a refreshing thing, and I think it does make their campaign interesting to watch, and energizing for voters. But I wonder what it's going to mean for them.

Those Iowa numbers speak to that. He's incredibly likable. He's incredibly popular in Iowa. But it's Hillary that gets the high marks for defending the nation against terrorism and being the most competent commander in chief.

OLBERMANN: Explain that one issue of that - within that poll from Time. This is about likely caucus parties. How does that skew the numbers? Maybe it makes it less than what the Edwards would like and perhaps more than what the Clintons would be seeing.

COX: In theory, it actually makes it more predictive of what's going to happen in the caucuses. The Time poll is unusual among a lot of the polls in that it really selects for people that are going to probably go to the caucuses. The further away you get from that sample, the more likely it his for Hillary to win.

That's - the more it looks like a national poll. People are voting based on name recognition and not based on their knowledge of the candidate. I think that Edwards has spent so much time in Iowa, people feel like they have a relationship with him. That's why you see the caucus goers really gravitating towards him.

OLBERMANN: Time.com's Washington editor Ana Marie Cox with another warm-up for tomorrow's big finale as co-host of "Morning Joe." Thanks for being with us.

Even in death, Princess Diana is still inadvertently causing trouble, engendering some marital strife, evidently, between her ex-husband and his new wife.

Speaking of strife, is Britney Spears trying to make us doubt her connection to reality, or did somebody simply steal her pants? Ahead on Countdown.

(COMMERCIAL BREAK)

OLBERMANN: Ten years after her death, even remembering Princess Diana's life is causing controversy. Her husband's new wife, who Diana detested, was originally scheduled to sit by Prince Charles' side throughout tomorrow's official memorial service. But on Sunday, somebody changed her mind for her. Now, in our number two story on the Countdown, the Duchess of Cornwall is reportedly royally miffed and planning a Caribbean vacation without her husband while he and his two sons remember Diana. Our correspondent in London is Dawna Friesen.

(BEGIN VIDEOTAPE)

DAWNA FRIESEN, NBC NEWS CORRESPONDENT (voice-over): Fans of Diana are already paying tribute to her.

UNIDENTIFIED MALE: She was special. More special than anyone else.

FRIESEN: It is just a trickle though, compared to the massive outpouring of grief after her death, when a sea of flowers engulfed the gates of Kensington palace.

UNIDENTIFIED MALE: I went and walked out and looked over the gardens, full of people.

NIGEL ARCH, DIRECTOR KENSINGTON PALACE: It was perhaps one of the most extraordinary times in my life.

FRIESEN: Ten years later, Diana's image still sells papers and the tabloids keep spinning theories. Even Friday's memorial service for Diana created a royal stir. First, Camilla, who Diana despised, said, yes, she'd go, then said no, she wouldn't, because she didn't want to divert attention from the focus of the service, Diana's life.

DICKIE ARBITER, FORMER PALACE SPOKESMAN: They just don't seem to get things right. You have to question the advisors. Somewhere along the line, they're either advising and it's not being listened to, or they're not advising correctly.

FRIESEN (on camera): The service will be held here at the Guard's Chapel in Wellington Barracks. Princes William and Harry played a big role in organizing it. About 500 people are invited, but whose on the guest list and whose off it is creating its own controversy.

(voice-over): Elton John will be there. So will Diana's brother, Charles Spencer. But Dodi's father, Mohammad Fayed, was not invited, nor was Paul Burrell, Diana's former butler. William and Harry already held a concert to celebrate their mother's life and said they wanted the memorial to be a service of conciliation. That may not be. A decade later Diana still divides opinion between those who miss her empathy and glamour and those who were never comfortable with the sentimentality her death unleashed.

Donna Friesen, NBC News, London.

(END VIDEOTAPE)

OLBERMANN: Time for our nightly round-up of tabloid and entertainment news about the living, Keeping Tabs. David Letterman boldly going where he's never gone before, "The Oprah Winfrey Show." Two years after their on-air reconciliation on his program, the late night host has agreed to make a rare appearance on somebody else's show, hers. On September 10, Letterman will tape an interview in New York at Madison Square Garden?

There's no boxing or basketball going on. Four years ago Winfrey said Letterman's jokes about her made her completely uncomfortable. Two years later, on his show, she said the feud was over. Now finally he will return the favor. Next, they will settle the middle east.

A sad confirmation tonight about Owen Wilson's incident last Sunday. An attorney for the actor telling "Access Hollywood" that Mr Wilson did, in fact, slit his wrists. A police log for Santa Monica, California listed the 911 call as attempted suicide. However, the attorney, who was not named, also claimed that Wilson did not overdose on drugs, as had been rumored. He said Wilson had been taking anti-depressants, but knew of no other drugs in the system.

As of Tuesday, the city's attorney rejected media requests to release the 911 call. Movie industry trade papers reported yesterday that Wilson has dropped out of his next project, a comedy to be called "Tropic Thunder."

Have you heard that NBC's got a new face on Sunday Night Football this season? That's right it's Keith - what? Faith Hill? Really. Fine, whatever, we've got plenty of chairs. Country star Faith Hill is stepping in as the singer of NBC's Sunday Night Football theme song. This is an annul change, apparently. Last year it was sung by Pink.

The song is actually called "Waiting All Day for Sunday Night," although the music is from Joan Jets' "I Hate Myself For Loving You," which come to think of it might have been more appropriate in its original form. Miss Hill says she's a big football fan and that her husband, Tim Mcgraw, has taught her the finer points of the game, like when to keep quiet during it. Yikes.

Sunday Night Football's Sunday premiere is Sunday, September 9th. It's hosted on Bob Costas, Chris Colonsworth, Jerome Bettis, Tiki Barber and Keith - what, we're out of time? This is unfair.

As the old commercial used to go, nice pants, and during a child abuse investigation she wears this? That's ahead, but first time for Countdown's latest list of nominees for worst person in the world.

The bronze to someone in the office of baseball commissioner Bud Selig, incorrectly identified today by the "New York Post" as Major League Baseball vice president Bob Watson. It was not he. The commissioner's office is obsessed with the fact that a lot of managers don't wear uniform tops during actual games, but turn to warm-up jackets or fleece pullovers.

During last night's Red Sox/Yankees game in New York, the baseball police came into the Red Sox dugout while the game was in progress, after Watson, as you see there, had come in before the game started - came in in progress and demanded to see Boston manager Terry Francona while he was trying to signal his fielders how to play the Yankee hitter then at the plate.

The guy wouldn't leave. He demanded Francona prove he was wearing a uniform top under his fleece pull over. During the game. Baseball's greatest record was just broken by a guy with enough illegal drugs in him to send Keith Richards into a coma and these morons are worried about what the managers are wearing.

Silver tonight to Fixed Noise; during a segment about Katie Couric's trip to Iraq for the CBS Evening News, producers of Neil Cavuto's show approved and used a graphic reading, single mother to anchor in the war zone, is this the right move? You let single mothers watch Fox Noise. That's far riskier than sending one to Iraq.

But our winner tonight, Nevada Congressman John Porter, returning from one of the administration's guided tours of Iraq. He met top U.S. and Iraqi officials. Porter then telling the newspaper the "Las Vegas Review Journal" that if the U.S. withdrew from Iraq prematurely, quote, to a person, they said there would be genocide, gas pries in the U.S. would rise to eight or nine dollars a gallon.

Does it bother anybody else that when we went into Iraq and protesters said this was a war about gas prices, the right wing fringe branded all of them as lunatics and traitors. Now the right wing fringe, including the president and this guy Porter, are using gas prices as a perfectly legitimate reason to get Americans killed in Iraq. Congressman John Porter of Nevada, today's Worst Person in the World!

(COMMERCIAL BREAK)

OLBERMANN: Normally, when a headline screams that a celebrity bears all, we expect some sort of heart-warming, tear jerking confessional. Of course, in our number one story on the Countdown, when that celebrity is Britney Spears we know to expect something more along the lines of nudity, partial nudity or mental nudity.

Or as this evidence from a moment from life's rich pageant in Beverly Hills, California suggests all three. You think it looks bad from that angle. Here is the view from behind. Hello. Think that's technically called a half moon. The paparazzi aren't the only ones who got to see the back side of Miss Spears. She was spotted driving around with her kids in the car earlier in the same day, wearing the same top, the same kids who are currently at the center of several legal issues.

Her ex, K-Fed now seeking full custody of Sean Preston and Jaiden James. And the Department of Children and Family Services in L.A. County is investigating allegations of poor dental hygiene and bad sleeping habits for the tots, to say nothing of the newest symptoms, repeated nightmares in which the kids believe their mother has turned into two large, under cooked baked hams.

As we often do when it come to celebrities who let it all hang out, let's turn to comedian Paul F. Tompkins, a regular contributor to VH-1's "Best Week Ever." Paul, thanks for your time tonight.

PAUL F. TOMPKINS, VH-1: Thank you, Keith.

OLBERMANN: So, was that a dress or did she just forget her pants?

Was there an armed robbery? What happened?

TOMPKINS: This is where I feel bad for women, because their clothing is made at such weird lengths. With men, a shirt is always a shirt. Do I have to wear pants with this? Yes, it's a shirt. It's clearly a shirt. I think that when it comes to women's clothing, you have to use the one percent doctrine. If you are only 99 percent sure that it's a dress, wear pants anyway.

OLBERMANN: I mean it could have been like a smock or a cover all of some sort? Is that what it was?

TOMPKINS: She might have been coming from a pottery class.

OLBERMANN: Color Me Mine or whatever the hell that's called. With this latest thing, has Miss Spears, as our graphic here insinuate, truly hit rock bottom?

TOMPKINS: It's hard to say because she started out so low. She has already shaved her head. You know, but my feeling is that Britney is the Beetles of insane and inappropriate behavior. We have yet to hear her "Sergeant Pepper."

OLBERMANN: She is going to go into the psychedelic era any month now. Listen, she's in this custody battle for these two boys. Would a judge ever hold a question of public dress, either bottom or frontal flashing, against her? Does nudity make you a bad parent?

TOMPKINS: Well it, depends on what kind of nudity. I think indoor nudity is healthy. Outdoor nudity is another three years of therapy for those children. This is not a European nation? We are not in Scandinavia. This is America and we are uptight about the human body.

OLBERMANN: Now, this is, perhaps, the most frightening thing of all, Paul. She has said she is planning something - the word is shocking that she used for the MTV Music Awards next month. Do we even dare speculate, contemplate what on Earth there is left that could shock us, I mean, other than apologize?

TOMPKINS: I think the most shocking thing she could do is actually show up to that awards show. She has been making a career out of backing out of things lately. It's amazing. She always has an exit strategy.

OLBERMANN: As we have seen here, backing out of it, in that dress, too. That's an exit strategy and a half right there. Apparently at the MTV thing she was going to sing "My Prerogative" while pictures of her ex-lovers such as Mr. Timberlake and Mr. Federline were projected behind her. Who would have talked her out of that bright idea? Was it one of the kids?

TOMPKINS: The real question might be who didn't talk her out of it? That's just a flat out bad idea, especially with what's going on in her life. I think social services might have a few idea on what a mother's prerogative might be. It also makes me think her troubles were traced back to when she initially covered that song. And given the kind of twists and turns that Bobby Brown's life has taken, maybe that song is haunted.

OLBERMANN: It's like one of those videos. Last thing Versace dress, the one that she wiped her chicken stained fingers at the bad photo shoot from "OK! Magazine" is now up for sale on eBay. "OK!" says it's going to send the proceeds to charity. But who wants that dress?

TOMPKINS: After Monica Lewinsky's dress, people were clamoring to buy that. I never thought years later this will be a trend. If you really want stained clothing, just do what everybody else does and go to the Salvation Army.

OLBERMANN: Comedian Paul F. Tompkins, contributor to VH-1's "Best Week Ever." As always, Paul, great thanks.

TOMPKINS: My pleasure, Keith.

OLBERMANN: That's Countdown for this is the 1,583rd day since the declaration of mission accomplished in Iraq. 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

'Countdown with Keith Olbermann' for August 29

Guests: Harry Shearer, E.J. Donne, Ana Marie Cox, Jonathan Alter

KEITH OLBERMANN, MSNBC HOST (voice-over): Which of these stories will you be talking about tomorrow? Two years to the day since this. Two years to the day since the storm that reconfigured the Gulf Coast. Two years to the day since it stripped away the administration's illusion of confidence, even today still symbolically battering New Orleans and leading a blissfully unaware president to batter himself.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This town is coming back.

(END VIDEO CLIP)

OLBERMANN: Two years to the days since Katrina. What happened to the federal funding? Was Republican-controlled Mississippi treated better than Democratic-controlled Louisiana? Jonathan Alter on the unceasing politics of the unceasing storm.

Harry Shearer, New Orleans resident, with the most bitter of satirical observations. Maybe there was not enough destruction to keep the politician's attention.

The presidential blackmail continues. $50 billion more for Iraq or else. Why the administration thinks that General Petraeus' initials on the latest cooked books will get them our money?

If he wants $12 million, he can get that from the late Leona Helmsley's dog. That is the size of the dog's trust fund.

And Senator Larry Craig continued. Thrown under the bus by Mitt Romney, not Romney has backed up the bus to run him over again.

And for comedians, it's a fleet of buses running on two minute headways.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Senator Craig wants America to know that he is willing to accept punishment, stern punishment, preferably the firm hand of a police officer or another man in uniform.

(END VIDEO CLIP)

OLBERMANN: But nothing is more painfully funny then the actual police report. Our dramatic reenactment tonight of what reads like a script from Dragnet. "It Tuesday, June 11. It was sunny and warm. I was assigned to the vice squad working out of the men's room out at the airport. My boss is Chief Dolen (ph). My name is Karsnia. I'm a cop, a cop in the toilet."

All that and more now on "Countdown."

(BEGIN VIDEO CLIP)

SEN. LARRY CRAIG, (R), IDAHO: A nasty, bad, naughty boy.

(on camera): Good evening. President Bush, who did not even mention Hurricane Katrina in his most recent State of the Union address, declared in a visit to some of the few places in New Orleans which have been rebuilt, that better days are ahead for that city. In our fifth story on the "Countdown," given that independent studies reveal that only about one-fifth of the money supposed to be spent on the levees has been spent, just one-third of the money supposedly already spent on homes, it is notable that the president did not say how many years or decades away those better days are.

Two years to the day after the devastation of Hurricane Katrina, Mr. Bush seemingly determined to tread the anniversary as cause for celebration, not quite Mardi Gras, mind you, but beyond marking the occasion with a moment of silence. The president's outlook remaining decidedly upbeat.

(BEGIN VIDEO CLIP)

BUSH: My attitude is this - New Orleans, better days are ahead. It is sometimes hard for people to see progress when you live in the community all the time. Laura and I get to come - we do not live here. We come here on occasion. It is easy to think about what it was like when we first came here after the hurricane and what it's like today. And this town is coming back. This town is better today than it was yesterday. And it's going to better tomorrow than it was today.

(END VIDEO CLIP)

OLBERMANN: Mr. Bush also celebrated those he said had dedicated their lives to the renewal of New Orleans. Others in the region today putting the president's dedication and in the spotlight. An editorial of the New Orleans Times Picayune, titled, "Treat us Fairly, Mr. President," today chiding the Bush administration for giving Republican-dominated Mississippi, which Mr. Bush also visited, a share that was disproportionate to the damage done in that state and in largest Democratic Louisiana.

As for the more than $14 billion the White House claims has been spent on he rebuilding of the Gulf Coast, a study by the Robert F. Kennedy Center for Human Rights find that the majority of the money has not been disbursed. Less than $35 billion, only about one-third has been available for rebuilding. Even though failures in federal levee system caused the flooding in the first place, the U.S. Corps of Engineers has spent less than 20 percent of the funds available to protect New Orleans, admitting repairs will not be done for another four years.

Time now to turn to our own Jonathan Alter, senior editor at Newsweek.

John, good evening.

JONATHAN ALTER, SENIOR EDITOR, NEWSWEEK: Hi, Keith.

OLBERMANN: The president bragged about the $14 billion the governments provided for Katrina recovery efforts, staging this at a charter school, even though just two percent of the federal spending on Katrina relief has gone to education. At this point, who does he think he is fooling? And why is he bothering to do it?

ALTER: That's a great question. All he has now is photo opportunities. His administration is basically over. He's just playing out the string here. And he does need to show up for a basic sense of respectability. He's gone several times recently.

Meanwhile, the job is not getting done. In most of the other areas there are huge bottlenecks. They are not doing anything about the particular canal that caused the flooding in the first place, which has many in Louisiana outraged that the source of all the damage has not been dealt with by the government. There has been a disproportionate share of the money that has gone to Haley Barbour, the lobbyist-turned governor of Mississippi. He has grabbed twice as much proportionally as Louisiana, even though it was New Orleans that was basically wiped off the map.

OLBERMANN: You hate to see states being pitted against each other about funding in this way. As you mentioned there and as the editorial mentioned today, but is that really materially true, even in this, the administration has rewarded Republicans and punished Democrats as if the rebuilding of the Gulf Coast was handing out postmaster jobs and not helping Americans?

ALTER: Politics got involved in this very, very quickly with the finger-pointing at the beginning. Haley Barbour has some problems. Some of his relatives got the contracts improperly in Mississippi. Mississippi has done much better than Louisiana, which has a Democratic governor. It is the overall level of attention and the overall failure to execute. And if that sounds familiar it is. The same thing that has bedeviled us in Iraq has been happening in the Gulf States. They are not getting it done. They are not interested in government.

Even at the most symbolic level, the failure to mention Katrina in the State of the Union address less than a year and a half after the hurricane was just outrageous. I have talked to friends in Louisiana who said that they were stunned as they listened to that speech that when he got to the end he had not mentioned Katrina they actually broke down in tears. They felt that abandoned by their own government.

OLBERMANN: That is a rookie mistake, a stupid mistake on the president's part and for those who wrote the speech. Realistically, given the criticism made of President Bush on this program and in so many other quarters, what could he have done today other than to saying here is $130 billion I have my back pocket, you're going to spend it today? What could he have done? Could he go there and say I'm wishing everybody well and I'm not making any other comments? What could he have done today?

ALTER: In some ways, it is too late. I had a conversation with John Kerry after he lost the 2004 elections and he said that if he had become president after Katrina hit he would have spent huge amounts of time - he said he would have moved to Louisiana basically, to show that the country was committed to saving this city. There has been a lack of presidential attention. He has been there 15 times for a day or a half a day. Going back now, it is late.

I think that the only thing that he really could do would be to announce a series of initiatives. You saw the candidates, both on the Democratic and Republican side, who each had suggestions about things to do differently. If you come in with a package of reform measures for how the aid is being administered, that would have been welcome. But it also would have required him to admit that the clean up has not gone well. And admitting mistakes, admitting that he needs to make mid-course corrections we know is not this president's strong suit.

OLBERMANN: What a contrast, President Bush said he had a better view about recovery then the residents there because he has not been there compared to what your story was about Senator Kerry.

Jonathan Alter of MSNBC and Newsweek. As always, John, thank you.

ALTER: Thanks, Keith.

OLBERMANN: For more on the perspective, a unique perspective of a New Orleans resident. We are joined by Harry Shearer, who has written about the federal response to the storm for the HuffingtonPost.com and has sung about it in full George-Bush-make up for the website mydamnchannel.com.

Harry, good evening.

HARRY SHEARER, NEW ORLEANS RESIDENT: Good evening, Keith.

OLBERMANN: Is there a chance that we have been looking at this backwards? Instead of destroying too many homes, too many lives, the post Katrina flooding did not destroy enough to keep politicians' attentions?

SHEARER: I base that on the response to the subprime lending crisis where people were hornswoggled by TV commercials into getting loans even though they had no assets and no jobs. I contrasted that with what happened here, the number of homeowners who, through no fault of their own, were dispossessed and thrown to the wind and scattered to 40 or 50 states. Still 200,000 unable to come back. I hypothesized that the problem was we did not lose enough houses. We did not damage enough homeowners. And the other thing, we didn't do it in enough congressional districts to matter.

I will take the opportunity to answer the question that you asked, what President Bush could have done today. He could have announced two things that all the candidates have neglected to mention in their plans. Independent peer review for any further operations for the Army Corps of Engineers. They're at work right behind us today. Their accomplishment today is to kill a bunch of fish which are floating right behind me. I can smell them now. And the second thing is to embark on a serious program or rebuilding the coastal wetlands which have been a slow-motion disaster over the last 30 or 40 years as they eroded away. He could have done those things. Fortunately for all of us who welcome and treasure our sanity, he did not.

OLBERMANN: The mention of the other candidates, to what degree do the Democrats shares in the blame for Katrina apathy? We are not hearing a lot of Katrina outrage on the campaign trail.

SHEARER: You pointed to the absence of any mention of New Orleans in the president's State of the Union. I would mention that there is an absence in Nancy Pelosi's speech after the Democrats won control. No mention of it there either. It has been a non-priority for both parties at the national level despite the bipartisan efforts of the Louisiana Congressional delegation to move this along.

OLBERMANN: Do you agree with the president in this remarkable statement of his that perhaps you cannot see the progress that's taking place in New Orleans because you live in the committee and thus it is happening to incrementally to be seen?

SHEARER: You see it so much more clearly from 35,000 feet up. We are too close to the ground here. You fly from 35,000 feet up, you see it real clearly.

I split my time between here and Los Angeles. Every time I come back, I do see more progress. I think people who are here day in and day out are worn down by the day in and day outness of the problems they face. I can drive up the fields and see that somebody planted new trees. Finally, we don't have to look at the old brown trees any more. There is a nugget of truth in that.

OLBERMANN: What do we not know about New Orleans that only a resident

can tell us and how should know, Harry?? 

SHEARER: I think the main thing at this point is, beside the fact that New Orleans did not get destroyed by hurricane, it got destroyed by the design and construction flaws of levees that all of us paid taxes to build over the last 40 years.

The other thing I think is people somehow get the idea that people in New Orleans are whiney beggars. When you walk around the city and all of the progress that has been made, up to now, is being made by individuals who, whatever their resources, whether their own, their family, the wonderful volunteers who make us believe that there still such a place called the U.S., church groups, or every once in a while insurance companies paying off their claims, these people are doing it one store at a time, one house at a time, one bowling alley at a time. This is a city of bootstraps.

OLBERMANN: Harry Shearer, humorist, actor, writer, tonight simply resident of New Orleans. Always an honor to have you on the program, sir.

SHEARER: Thank you, Keith. If I can sell you any dead fish, let me know.

OLBERMANN: Keep them. Thanks, Harry.

The president has issued more demands about Iraq, $50 billion to do

whatever he thinks he is doing there. The expectation is that Democrats

will concur. 

As Republicans lined up for their turn to publicly flog their own Senate colleague Larry Craig, the joking goes wild. The funniest thing is the truth, the actual police report reenacted just for you.

You're watching "Countdown" on MSNBC.

(COMMERCIAL BREAK)

OLBERMANN: The U.S. strategy in Iraq hereafter shall be conditioned on the Iraqi government meeting benchmarks. That is the letter of law laid out in Congress in May and it gave President Bush an additional $120 billion for his troop escalation.

IN our fourth story on the "Countdown," despite the fact that the Iraqi national government has failed to meet any those benchmarks, the Bush administration is reportedly poised to ask for another $50 billion to keep the troop escalation going despite the lack of political progress here or there. Democrats are expected to give it to him. That is $50 billion extra on top of a pending $147 billion war supplemental funding bill, on top of the $120 billion already granted for extra war funding this year by Congress in May. All that is in addition to the regular Pentagon budget for next year, $460 billion. The extra war cash means that the cost of keeping American troops in Iraq just topped $3 billion per week.

Joining us now, E.J. Dionne of the Brookings Institution and a columnist at the Washington Post.

Welcome back, old friend.

E.J. DIONNE, BROOKINGS INSTITUTION AND WASHINGTON POST COLUMNIST:

Good to be with you. I think I am glad I am not in the Dragnet segment.

OLBERMANN: Many of us agree on your own point of view. Turning to the subject at hand, in January the president said the U.S. commitment was not open ended to Iraq. Don't these actions, constantly pouring huge amounts of money into this war, keeping the escalation going despite evidence that there is no progress from the government there, don't they belie those words?

DIONNE: I think the answer is yes. The president is threatening to have a huge fight with Congress over the budget in general. He is saying that the Congress is overspending. The difference of the president and Congress is $22 billion. President Bush said in August, only in Washington is $22 billion called a small difference. Lo and behold, a month later, we are looking at this new $50 billion. We are going to have a huge fight over $22 billion for health care and other things. And we are not supposed to fight at all over $50 billion on top of all that other money in Iraq. When you think about it - what is it - seven weeks and a couple of days of this war equal the $22 billion that he is proposing to have a big fight over.

OLBERMANN: In your newspaper, the report that the White House believes that Democrats will not be able to refuse this, why? Why not?

DIONNE: I wonder what is going to happen with the additional $50 billion on top of everything else. What you have in the Congress is a nonexistent Democratic majority in the Senate. They do not really control the place. You have a small majority in the House. You have about 30 House Democrats, 40 sometimes, who do not want to cut off the funding for the troops. So that has kind of stalled things. As long as Bush is there and ready to veto proposals to withdraw troops, nothing will happen.

I wonder is if this additional $50 billion becomes a signal not only to the Democrats to say can this go on like this, but also to Republicans who have started to say, as Senator Warner has, we really think we should withdraw troops. I do not think this is going to end until a significant number of Republicans stand up and say we really think this was a mistake and we have to narrow our objectives and start pulling the troops out. And I'm not sure that's going to happen this fall.

OLBERMANN: The price right now is $330 billion and the congressional office reckons that, even if the rate were to fall to 30,000 by the year 2010, that means another $470 billion by that point. Is it still cynical, is it still out there at this point to suggest that maybe the point of this war, at heart, is to shovel as much taxpayer money possible into Dwight Eisenhower's military industrial complex?

DIONNE: I have not gotten that cynical yet, but I am starting to wonder why does this war have to continue in this fashion all the way until the end of President Bush's term? Is it really an effort to force the really difficult decisions on to the next president? It seems to me that we would be much better off to face the fact that, as of April, our military cannot sustain this level of troops. That is not some lefty blogger saying that. That is all of the military guys saying we can't keep this many troops there.

The question is what is this surge accomplishing? Let's acknowledge there been any some military successes. Has there been any political change in Iraq? It looks like there has been backward movement in Iraq. Where are we going to be in April when we have to start pulling off troops? That is the disturbing thing about the debate now as we're saying, well, we'll keep this going, but to what end? I do not think we know?

OLBERMANN: E.J. Dionne of the Washington Post and the Brookings Institution. I'm sorry it's on this topic. It's always a pleasure to speak with you?

DIONNE: It's great to be with you.

OLBERMANN: Talk about complexes, the will of Leona Helmsley, some of the grandchildren get nothing. Her dog? Her dog can now buy and sell you, buddy.

And in Tomatina, they make their ketchup the old fashioned way.

That's next. This is "Countdown."

(COMMERCIAL BREAK)

OLBERMANN: An extraordinary array of talent given to those born on August 29th, from film, Ingrid Bergman, Richard Attenborough and the unsung George McCready; from Jazz, Charlie Byrd Parker; and from literature, now an obscure Belgian, Maurice Maeterlinck, born on this date in 1862, who observed with singular clarity that, quote, "at every crossroads on the path that leads to the future, tradition has placed 10,000 men to guard the past."

Let's play "Oddball."

Speaking of tradition, we begin in Spain were once again 40,000 people decided to spend their summer vacation topless and covered in tomato goo. The festival began in the 1940's when unruly teenagers started throwing produce from a local vegetable stand at one another. The next year they turned and came up with plan B, pelting passers-by instead. Today, entire crates of tomatoes, 110 tons worth, get dumped in the town square for tourists to throw at each other. Then the locals sustain themselves through the long winter ahead by licking the tomato paste from the nurturing cracks in the pavement. I made that part up.

Let's go to Roger Center (ph) in Toronto. Early season highlights of Canadian Football League action between the Argonauts and the Saskatchewan rough riders because Wednesday night is football night in Canada. This is the halftime show. This is Ashley in the blindfold. She is blindfolded, spun around three times then she has to run through a banner halfway down the field. If she does, she wins a vacation. Now she needs a vacation. The announcer encourages the crowd to help guide her but to no avail. Not only does she miss the banner twice and nearly hit the players, but she fails to hear when her time has run out.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Come on Ashley. Help her out (ph). Run.

UNIDENTIFIED FEMALE: Ashley, take off your blindfold. Careful, Ashley. Stop.

OLBERMANN: Ashley, thus breaking not just the fence but also breaking the Toronto Argonaut season rushing yardage records set by Joe Theismann and Leon X-ray McCray.

King of like Mitt Romney throwing Larry Craig under the bus and then circling the block and driving over him again. And John McCain says quit and Norm Coleman says quit. The political folly, as analyzed for us by Ana Marie Cox, and the simpler folly that is the police report itself. Since it reads like an episode of Dragnet, we made it into an episode of Dragnet.

These stories ahead, but first here are Countdown's top three news makers of this day. Number three, the unnamed 58 year old Japanese bachelor arrested for calling the police and fire departments in Sai Etama (ph) Prefecture 388 times in 14 months. He said he was lonely and wanted the police and firemen to come and look after him. So he would call and say I have gasoline and kerosene and started a fire. One time, an ambulance, ten engines and 35 firemen went out there to take care of it.

Number two, Sloan Bashinksy, candidate for mayor of Key West, Florida. He and five others running for the job asked at a candidates forum there what their vision is for their city; Key West is a carnival, said Mr. Bashinksy. I think we can do wonderful things with the pirate theme. His pirate theme, dress up Key West's city workers or perhaps the homeless as pirates.

And number, James Mitchell of Mount Vernon, New York. Police say he held up a teenager at knife point there and demanded the younger man's money. The victim pulled out a 10 dollar bill, whereupon Mr. Mitchell said, I only want four bucks. Go into the pizza parlor and get change for that ten. I will wait.

Naturally, the victim goes in, gets change for the ten and gives Mr. Mitchell the four dollars. Mr. Mitchell then leaves. But what he could not possibly have known was that while inside the victim made arrangements to call the local police.

(COMMERCIAL BREAK)

OLBERMANN: Idaho Republican Senator Larry Craig last night endured a fate politically worse than becoming a convict. He became a punch line. We will play a sample of the comedy in just a bit. But in our third story tonight, while Senator Craig became a household name overnight, in the same time span, among his fellow Republicans, he became better known as senator who-from-the-what-now.

His fellow Republican senators, John McCain and Norm Coleman, today called for him to resign. So did a Republican congressman, echoing several conservative groups. And according to Survey USA, 45 percent of Idaho Republican voters familiar with the epic story also want Craig to resign. Senate Republicans called for an ethics probe.

Today they removed him from his position as ranking Republican on one committee and two subcommittees. Mitt Romney not only dumped Craig as his Senate liaison, his campaign falsified its online archives, to make it appear that old press releases never mentioned Senator Craig, while other Republicans reportedly wanted to know whether Craig tried to use his position as senator to evade arrest. Romney seemed fixated on the sexual nature of Craig's arrest.

Joining us now with her observations on Romney revisionism is Ana Marie Cox, Washington editor of Time.com. Welcome to the program. Great thanks for your time, tonight.

ANA MARIE COX, TIME.COM: Hey, Keith.

OLBERMANN: In your column today you pointed out how strenuously Governor Romney works to distance himself from anything that might taint his conservative credentials. What exactly is his history?

COX: Well, most famously for me, the most recent history, is when it turned out that his wife had donated 150 dollars to Planned Parenthood, he said something like that is her money. I had nothing to do with that, which is maybe true, and is probably healthy in a marriage, to not share the exact same political views, but it was also pushing her underneath the bus a little bit.

Then there is this whole history with his evolution on various views to coming more to the right, whether it be immigration, abortion, or stem cell research. The man is pretty clearly trying to erase the Google cache of his entire political history.

OLBERMANN: That never works. You also pointed out that an established conservative, perhaps distastefully sometimes conservative Sam Brownback seems a little more comfortable extending mercy or at least some sort of period of time, as several Democrats have suggested, a little time to get the facts together here. Should we start considering knee-jerk tough talk from Romney or Senator McCain or anybody else here as a symptom of someone who is trying to fake conservatism?

COX: I think you have to look at what they criticize about Larry Craig's behavior. Romney very specifically objected to the sexual component of what happened. He compared him to Bill Clinton, which may be an apt comparison in some ways, in that Bill Clinton tried to get away with something and Craig tried to get away with something, and wanted to use his electoral office to get away with it.

Someone like, McCain said look, you pled guilty to something, and that is why he should resign. There is a little bit of difference there with people coming out against him. What I find really distasteful about the whole thing personally is that Romney would sort of admit that he is a bad judge of character. Either the guy is the victim of a witch hut of some kind, which I find unlikely, and deserves our sympathy, or he is - believe Romney - some kind of Clinton character, and Romney should have known better than to hire him as his Senate liaison.

OLBERMANN: The camp, the Romney camp also removed this video of Larry Craig praising him from MittRomney.com. We understand that today. The rewriting of these old news releases, keeping the original dates on them to make it seem as if they had never mentioned Larry Craig in the first place; this seems like astonishingly blatant dishonesty for someone who is still seeking the public trust. Or are we missing the boat here? Is this not a bad thing, but really good Orwell; he who owns the past owns the future?

COX: The Commissar vanishes indeed. I think it is an attempt by Romney to own the past, but, as I was saying earlier, in the age of Google caches, you can't do that. Voters have longer memories than Google even, I think. Romney has got to be fighting against that. I'm sure he would like to erase his entire tenure as the Massachusetts governor, except for the fact that he was that. He likes to bring that up.

I really do think that he's making a mistake here. I think that politically savvy voters, and anyone who is just breathing and paying attention, is going to see through this behavior. Also, he has inserted himself into the story several times. I think the smart political thing to do would have been to get rid of the guy from the campaign staff, maybe take the video down. But why would you perpetuate the story? Why would you involve yourself in this? It really seems politically inept, in my opinion.

OLBERMANN: Are we missing something here? Is there some base that he is appealing by being cruel to somebody in trouble? I'm quite serious about his. Where the reaction is the reason he was doing something like this is that nobody ever stopped him before, I am going to be the one that shows him what the law is. Is there something to that?

COX: I think there may be. Although I think his understanding of even the conservative base is rather incomplete. I think that someone like Sam Brownback, you may disagree with him, but you really can't doubt his social conservative credentials, at least has the strength of character to extend Christian mercy. I know Mitt Romney is not himself Christian - or that's a point of debate.

But to show some kind of compassion for somebody who - at least their family is going through something really terrible. I think it smacks of opportunism for him to just throw the guy aside.

OLBERMANN: Ana Marie Cox of Time.com, also in the middle of a week of co-hosting "Morning Joe" right here on MSNBC, talk about strength of character, great thanks and go to sleep now.

COX: Thank you.

OLBERMANN: Now, as promised, we wade into the realm of the juvenile, without - and we promise you this - the fig leaf of offering this as some sort of cultural survey or political barometer. No, just goofy stuff about an old guy who went into a bathroom and allegedly tried to do some no-no with his what's-this. A little later, we will have the funniest and ironically enough the most truthful thing of all, the actual police report, word for word, with a little visual enhancements.

But right now a quick look at the fake stuff from last night; David Letterman's version of Senator Craig's ad pleading for mercy, kind of.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Recently, Senator Larry Craig was arrested for allegedly soliciting gay sex in an airport men's room. Obviously what he did was wrong. Senator Craig wants America to know that he is willing to accept punishment, stern, forceful punishment, probably at the firm hand of a police officer, or other man in uniform, a strict disciplinarian who can be tough, yet also tender, who knows exactly what a dirty, naughty senator really needs.

Larry Craig, compassionate conservative.

(END VIDEO CLIP)

OLBERMANN: That's all well and good, but in the Dragnet tradition, just the facts ma'am, we will also be reenacting the actual undercover policeman's report. Look at those shoes and that wig.

And more truth and probably more strange, the late Queen of Mean still getting meaner after death. In the will, two of the grand kids get nothing. The 12 million dollars goes to - you won't believe where 12 million dollars goes to next on Countdown.

(COMMERCIAL BREAK)

OLBERMANN: On the anniversary of the Katrina disaster, let it be noted that the late Leona Helmsley once gave five million dollars to hurricane relief and will end up giving billions more to charity. That pretty much sums up the good stuff.

Our number two story, the bad stuff; the woman who famously said only the little people pay taxes decided that a little dog will get the largest single bequest from her inheritance. Just to recap, Miss Helmsley died last week after leaving a four billion dollar fortune made by investing in luxury hotels, cheating on taxes and abusing employees.

She served two years for tax fraud, once sued her only son's estate after he died because he owed her money, and earned a reputation, as one writer put it, as the Lady Macbeth of the lodging industry. And now from beyond the grave, one more up yours from Leyona. Her favorite Maltese lap dog Trouble has been named as the largest individual beneficiary in her will, inheriting 12 million dollars.

Trouble will also be laid to rest - not now, but when the time comes

right next to Helmsley in an ornate million dollar stained glass and granite mausoleum, which is to be steam cleaned at least once a year in perpetuity. Leona always prided herself on the house keeping at her hotels.

As for her only four grandkids, she cut two of them out of the will entirely for, as the will states, reasons which are known to them. So far they're not telling. Two other grandchildren get five million dollars each, but only if they visit their father's grave at least once a year and sign in to prove it.

The prize money not quite great on TV's "Dancing With the Stars." The opening act in tonight's edition of Keeping Tabs. Speed Skater Apollo Ono was one of the fleet footed former champs on hand this morning when the show revealed its new dance card for the new season. Although the show's producers say a new format is the really big news, how can you top this? Wayne Newton is one of the dozen stars who will be dancing their way all over your living room. Here's hoping nothing breaks off from the 65 year old Vegas legend as he breaks off some moves.

He joins an eclectic list that includes Scary Spice Melanie Brown, Marie Osmond, actresses Jane Seymour and Jenny Garth, boxer Floyd Mayweather - wait until you see him in the clinch - and Mark Cuban, owner of the Dallas Mavericks and HD Net, who, based on his experience in the NBA with the referees, will doubtless start screaming at the judges on day one, and then bring in Dan Rather.

For all the jokes at the expense of Senator Larry Craig, nothing could be funnier than the police report itself and we will reenact the pertinent parts next. But first time for Countdown's latest list of nominees for the Worst Person in the World.

The bronze to the Federal Mine Safety and Health Administration; the families of the six miners buried alive in Utah have signed paperwork designating the United Mine Workers Union as their representatives in the investigation of the disaster. The Federal Mine Safety and Health Administration has told them no. The mine was non-union. So for the six buried Utah miners to get a union to represent them in an investigation, they have to sign the paperwork themselves, seriously.

The runner up, Fidel Castro, writing an editorial in the official Cuban communist party newspaper about who the Democrats should nominate for president and vice president next year. An apparently unbeatable ticket, he writes, could be Hillary for president and Obama as her running mate. Exactly what in the hell do you know about elections, Castro?

But our winner, CNN's Glen Beck. On this second anniversary of Hurricane Katrina, he's got the solution for the administration's continuing disinterest in helping the Crescent City, especially in terms of policing itself. Quote, there's not enough guns in New Orleans, he explained on the radio today. I think we should have a gun fund. If you are living in New Orleans and you are a law-abiding citizen, you have a legal right to own a gun; you come on my program, say I am poor, I am a law abiding citizen. I don't have a record. Blah, blah, blah. I will match you with a donor that will buy you a gun. You have to go buy it the right You have to do it all legally.

Now this may sound insane since, well, it's insane, but not just because how do know all those guns will be used in self-defense? It is insane for Beck, because if he does this and any people are lying to him about having the legal right to own a gun, he could be guilty of making what the Bureau of Alcohol, Tobacco, and Firearms calls a straw purchase, in which somebody buys a gun for somebody else who doesn't have a legal right to have one. It's against federal law, U.S. code Title 18, Chapter 19, Section 371.

If convicted, Mr. Beck would liable by statute to a fine of up to 250,000 dollars, a 100 dollar special assessment, three years of supervised release and five years in jail. Glenn, bon chance. Glenn Beck, today's Worst Person in the World.

(COMMERCIAL BREAK)

OLBERMANN: The news outlet "Roll Call" broke the news Monday night that Idaho Republican Senator Larry Craig had pleaded guilty two weeks ago to a misdemeanor, what captured the public and political attention was not so much the charge itself, disorderly conduct. No, in our number one story tonight, as the old saying goes, god is in the details. The details are divine.

Nothing graphic, nothing sexual happened, after all. But if you have ever read a police report, you know they are rendered in an especially dry style, a style made famous on the old TV cop show Dragnet. The just the facts style that renders sad, silly human beings behavior, such as the semaphore of elicit foreplay, irresistibly absurd.

In that spirit, we offer the following dramatization, utilizing the actual unaltered text of the Craig incident report, embellished only with a Dragnet style introduction and wrap up. Just like on the TV. No actual senators were harmed in the making of this film.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The story you are about to see is true. The names have not been changed to protect anybody.

OLBERMANN (voice-over): This is the city, Minneapolis, Minnesota. I work here. I carry a badge. It was Tuesday, June 11. It was sunny and warm for Minneapolis. I was assigned to the vice squad, working in the men's room at the airport. My boss is Chief Dolan. My name is Karsnia. I'm a cop, a cop on the toilet.

At 1200 hours I was working a plain clothes detail involving lewd conduct in the main men's public restroom of the Northstar crossing of the Lenburg Terminal. From my seated position, I could observe the shoes and ankles of the person seated to the right of me. An unidentified person entered to the left of me. From my seated position I was able to see his shoes and ankles.

At 12:13 hours, I could see an older white male with gray hair standing outside my stall. He was standing about 3 feet away and had a roller bag with him. The male was later identified by driver's license as Larry Edwin Craig. I could see Craig look through the crack of the door from his position.

Craig would look down at his hands, fidget with his fingers, and then look through the crack into my stall again. Craig would repeat the cycle for about two minutes. I was able to see Craig's blue eyes as he looked into my stall. At 12:15 hours, the male in the stall to the left of me flushed the toilet and exited the stall. Craig entered the stall and placed his roller bag against the front of the stall door.

My experience has shown that individuals engaging in lewd conduct use their bags to block the view from the front of their stall. From my position, I could observe the shoes and ankles of Craig seated to the left of me. He was wearing dress pants with black dress shoes. At 12:16 hours, Craig tapped his feet. I recognized this is a signal used by persons wishing to engage in lewd conduct.

Craig tapped his toes several times, then moved his foot closer to my foot. I moved my foot up and down slowly. While this was occurring, the male in the stall to my right was still present. I could hear several unknown persons in the restroom that appeared to use the restroom for its intended use. The presence of others did not seem to deter Craig as he moved his right foot so that it touched the side of my left foot, which was within my stall area.

At 12:17 hours, I saw Craig swipe his hand under the stall divided for a few seconds. The swipe went from the direction from the front door side of the stall back towards the back wall. Craig swiped his hand again for a few seconds in the same motion to where I could see more of his fingers. Craig then swiped his hand in the same motion a third time for a few seconds.

I could see that it was Craig's left hand due to the position of his thumb. I could also see Craig had a gold ring on his ring finger as his hand was on my side of the stall divider. At about 12:19 hours, I held my police identification in my right hand down by the floor so that Craig could see it. With my left hand near the floor, I pointed to the exit.

Craig responded, no. I again pointed toward the exit. Craig exited the stall with his roller bags without flushing the toilet. Craig handed me a business card that identified him as a U.S. senator as he stated, what do you think about that. I responded by setting his business card down on the table and again asking him for his driver's license.

Later, in a recorded post-Miranda interview, Craig stated the following; he's a commuter. He went into the bathroom. He was standing outside the stall for one to two minutes, waiting for the stall. He has a wide stance when going to the bathroom and that is foot may have touched mine.

UNIDENTIFIED MALE: The story you have just seen is true. On August 8th, Larry Craig pleaded guilty to misdemeanor disorderly conduct in court number one for the County of Hennepin. He never told anybody about it. Not his family, not his constituents, not the U.S. Senate's, not until his conference on August 28th. In one moment, the results of that news conference.

(END VIDEOTAPE)

OLBERMANN: The Countdown players and the film artistry of director Brendan Trufo Amalia (ph). There is one further final note from the final paragraph, in which the sad story of Senator Craig and the toilet foot tappers actually transcends the cramped and sordid confines of a Minneapolis men's room, and becomes a story for all people for all time. Again quoting the sergeant; Craig was worried about missing his flight. Detective Nelson tried to call the airline to hold the plane. The airline did not answer the phone.

Ask not for whom the bell tolls; It tolls for thee! That is Countdown for this, the 1,587th day since the declaration of mission accomplished in Iraq. 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