'Countdown with Keith Olbermann' for Oct. 3
video 'podcast'

Guests: John Edwards, Brian McGough, Joel McHale

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

The first State Department report on the deaths of Iraqi civilians at the hands of Blackwater contractors was written by a Blackwater contractor. Now, news that the FBI agents investigating the deaths of Iraqi civilians at the hands of Blackwater contractors were to be protected in Iraq by Blackwater contractors. That tonight has been reversed. To paraphrase Joseph Heller's "Catch-22," everybody works for Blackwater.

Who will stop this? Democratic presidential candidate John Edwards insisting he would return most security missions from the Blackwaters to the military. He joins us tonight to unveil the specifics of his proposal.

Senator Leahy to Attorney General-designate Mukasey, answer questions about the Justice Department scandals, which the White House won't, or you can pretty much forget about getting to run the Justice Department.

The president's cruelest veto yet. Four million poor kids who will not get health care. Republicans revolting and coming together with Democrats over the president's attack on the health of the most vulnerable of us.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I do want Republicans and Democrats to come together to support a bill that focuses on the poor children.

(END VIDEO CLIP)

OLBERMANN: Well, soon they will all be poor children, thanks to you, sir.

Comedian Rush Limbaugh escalates his phony soldiers' scandal, comparing the latest real one, who responded to his spear, to a suicide bomber.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, TALK SHOW HOST: You know, this is such a blatant use of a valiant combat veteran, lying to him about what I said. Then strapping those lies to his belt, sending him out via the media and a TV ad to walk into as many people as can he walk to.

(END VIDEO CLIP)

OLBERMANN: That smeared soldier, Brian McGuff, responds to the sickness of Rush Limbaugh in his first TV interview with us tonight.

New video as the latest official inquiry into the death of Princess Diana begins.

Same old story for Britney Spears. The bad news, she has lost the kids. The good news, she has finally gotten that California driver's license.

All that and more, now on "Countdown."

(on camera): Good evening. Somebody has some shame. The team of FBI agents headed to Baghdad this week to investigate Blackwater security contractors for possible murder were to be protected by body guards from Blackwater.

Tonight though, breaking news in our fifth story on the "Countdown," assistant FBI Director John Miller having issued a statement this evening, reading, "To avoid even the appearance of any conflict, the FBI team deployed from Washington to assist the State Department in the events of September 16 will have any additional security needs provided by U.S. government personnel." Nobody saying additional to what. The presumption is no Blackwater guards trailing along as the FBI investigates alleged Blackwater murders. But that is not made explicit in the statement.

"New York Daily News" having unveiled the FBI's security arrangements in today's editions. The bureau acknowledging that the agents sent previously in Iraq were protected outside Baghdad's Green Zone by Blackwater operatives.

The State Department, whose employees are also protected by Blackwater in Iraq, having no such qualms about the duplicity.

The web site CSM Muckraker having reported Monday that the State Department's initial report into last month wants incident in which Blackwater guards were accused of killing Iraqi civilians, was written by a Blackwater contractor.

Other news organizations have since confirmed that.

The death toll for that incident now up to 17. According to the "New York Times" today, far higher than previously thought.

At yesterday's Blackwater hearings on Capitol Hill, the Oversight Committee asked by the Justice Department not to question Blackwater Chair Erik Prince about the September 16th killings, a request with which the lawmakers complied.

Republican Darryl Issa of California, citing Blackwater's mission to protect even the members of the Oversight Committee, as reason enough for the congressional investigation to be, well, dismissed.

(BEGIN VIDEO CLIP)

REP. DARRYL ISSA, (R), CALIFORNIA: Blackwater is just easier to attack directly by members of Congress than would be our men and women in uniform.

UNIDENTIFIED CNN ANCHOR: Let's go back to Blackwater because you and others wrote a letter to the chairman asking him to postpone this hearing.

ISSA: To let the process go forward the way it's supposed to. We are supposed to allow the administration to do its investigation and then we do oversight. We don't - we are not investigators. If Henry Waxman today wants to go to Iraq and do an investigation, Blackwater will be his support team, his protection team. Do you think he really wants to investigate directly?

(END VIDEO CLIP)

OLBERMANN: We'll skip for the moment one member of the California congressional delegation indirectly referencing a threat to the life of a second member of the same congressional delegation.

And note, instead, that on the campaign trail in New Hampshire this afternoon, Senator John Edwards announcing a plan that would end the current system of outsourcing security missions, in large part, to private contractors and return those duties to military command.

Senator Edwards joining us from Boston.

Senator, thanks for your time tonight.

JOHN EDWARDS, (D), PRESIDENTIAL CANDIDATE: Thanks for having me.

OLBERMANN: Given how stretched the U.S. military already is because of Iraq, if men and women are in uniform are going to take over the Blackwater missions and the other private contractor missions there in Iraq, does that mean, as you suggested today, that the drawdown of current force levels is an inherent part to your proposal?

EDWARDS: It is absolutely crucial part of the proposal. The answer to this is to get American troops out of Iraq, which is why I'm committed to getting our combat troops out of Iraq, stopping combat missions, doing it the right way.

But these things that are going on with Blackwater, they worry all Americans. I hear it everywhere I go. You know, people wonder, first of all, why a company that - whose executives gave hundreds of thousands of dollars to Bush and to Republicans are getting these no-bid contracts with hundreds of millions of dollars. There is something wrong with this picture.

Then, on top of that, why are they usurping what the American voluntary military normally does in providing security? I mean, it doesn't make any sense. It has got to stop. I will stop it as president.

OLBERMANN: As I just reported tonight, we are learning that the FBI agents heading to Iraq this week to investigate Blackwater were, indeed, to be protected by operatives from Blackwater but somebody there said well, that's probably not a good idea. We will leave it to U.S. military personnel, although that's vague in terms of who is going to be doing that.

But yesterday we had this news about the State Department's initial report on the incident being written by a Blackwater contractor. How do you prevent that kind of a snake-eating-its-own-tail scenario and what's in the proposal to keep the government from employing what amounts to a paramilitary?

EDWARDS: Snake eating its own tail? I like the description.

OLBERMANN: That's what it is, isn't it.

EDWARDS: That's exactly what it is. I haven't heard that description though. I love it.

We need to have a system in place that ensures, number one, that this

cronyism is eliminated. Only under the rarest of circumstances are private

contractors doing something that the voluntary U.S. military ought to be

doing. And we need - to the extent that they are, in fact, private firms

there are private firms providing some level of service - that should only happen rarely, if at all. But, if it happens, they need to be the military chain of command, responsible and held accountable to the military chain of command.

OLBERMANN: So you would actually have Blackwater representatives or whatever the company is, responsible to local commanders in Baghdad or wherever they might be deployed?

EDWARDS: Yeah. But I don't want them at all. Let me be really clear about. I think only in really exceptional circumstances that they ought to be used at all. I think they need to be out of Iraq. I think that's the real answer. To the extent, in the short-term, it's necessary to have them there in a small way, they need to be accountable and responsible both legally and militarily to our chain of command.

OLBERMANN: On the point of the no bid contracts and the whole financial aspect to this, whether it's Iraq or Katrina, whatever the issue, does it seem to you that the current administration believes all problems should be outsourced to private contractors, that their mistakes are almost intended as a revenue stream for their cronies and their contributors?

EDWARDS: It's absolutely clear. You have seen it over and over and over with Halliburton and others in Iraq. You have seen the same problem in the aftermath of Katrina in New Orleans.

Instead of allowing the people of New Orleans, which is what should have been done, to rebuild their own city - and, by the way, we don't need a surge in Baghdad. We need a surge in New Orleans. We need to help the people of New Orleans rebuild their own city. That job should not be outsourced to Halliburton and other multi-national corporations. It ought to be done by the people of New Orleans, who are given a decent job, paid a prevailing wage, getting health care coverage, having pension protection, and them being able to rebuild their own city that they love so much.

OLBERMANN: Senator, in your speech today in New Hampshire you also questioned the stance about the Iraq war of your chief rival for this nomination, Senator Clinton, for having refused to pledge to end all combat operations in Iraq. The Clinton campaign has taken to dismissing your criticism of their candidate as acts of political desperation. How do you respond to that?

EDWARDS: Voters have choices. You know, we have choices between the Democrat and the Republican. And we have choices between the Democrats. We just - listen, I respect Senator Clinton, but we disagree about this. I think if you are going to continue combat missions in Iraq, that is a form of war. And I think the war needs to be ended. I think the combat missions need to be stopped. I think our combat troops ought to be out of Iraq. There is a very clear choice for Democratic voters. One candidate, Senator Clinton will continue combat missions. She has said that repeatedly now. I will end combat missions. If the Democratic voters want a candidate for president who wants to continue combat missions, they should vote for her.

If, on the other hand, they want this war actually ended, they should vote for me. And I - in the fall of next year, when I'm on the stage with Romney or Giuliani or McCain or whoever survives the Republican process, I want the debate to be from me, ending the war, from them, continuing the war, as opposed to less war verses more war. We need to be more than just a little better than the Republicans. I think we need to give Americans clear choices.

OLBERMANN: Practically, sir, in this latest "The Washington Post"- ABC news poll, Senator Clinton, in that poll, has opened up a 33 point lead on Senator Obama and 40 percentage points ahead of you. It's obvious a majority of Americans, a significant majority of Americans wants us out of Iraq. You have taken responsibility for your vote authorizing the use of force in Iraq. Is that, in your estimation, not resonating or what - how do you explain Senator Clinton's lead in these polls growing at this point.

EDWARDS: I think this is all very superficial. I just came from New Hampshire. You see polls - in Iowa, we are basically in a dead heat. Senator Obama, Senator Clinton and myself, we're all basically tied in Iowa. In New Hampshire she has some lead. But, what I know from having just been in New Hampshire is between 80 and 90 percent of New Hampshire voters have not committed to any candidate. They are just starting to look at the race, which is exactly what's happening in most of America.

And, what - you remember at this point in 2003 - because I was running in 2003 - Governor Dean had a huge lead and I had a lead in Iowa, we had a lead in New Hampshire, had a big lead nationally. And he did not win, obviously. So, what we need to do is continue to make clear to voters that they have choices. They have a different choice between me and Senator Clinton on Iraq.

They have a different choice on Iran. I mean, I listen to the Senator Clinton's explanation for voting for a Senate resolution that declared the Iranian Revolutionary Guard a terrorist organization, which, to me, is the equivalent of giving George Bush the authority of the first step to go to war in Iran. I'm against that. And there is another choice that voters have.

We want voters to know what those choices are. It doesn't mean Senator Clinton is not a good person. It just means that we have different views and voters are entitled to know that.

OLBERMANN: Democratic presidential candidate John Edwards joining us tonight from Boston. Senator, many thanks for your time tonight.

EDWARDS: Thank you for having me.

OLBERMANN: Please give my regards to your wife.

EDWARDS: I will do it.

OLBERMANN: President Bush no longer content having just Democrats just mad at him, now facing a possible rebellion from Republican lawmakers for today vetoing health care legislation that would have insured 400 million American children. We can't show you video tape of the president signed that veto because he did so privately. No cameras allowed. Mr. Bush dismissing the so-called SCHIP legislation, despite the sizable majorities in both houses and both parties which supported it.

President Bush claiming after the veto that he is still willing to compromise.

(BEGIN VIDEO CLIP)

BUSH: I do want Republicans and Democrats to come together to support a bill that focuses on the poorer children. I'm more than willing to work with members of both parties from both houses. And if they need a little more money in the bill to help us meet the objective of getting help for poorer children, I'm more than willing to sit down with the leaders and find a way to do so.

(END VIDEO CLIP)

OLBERMANN: Here's the part that offers a hint into just how out of touch Mr. Bush has become in denying four million children with a pen, even the legislation has broad bipartisan support.

Senate Republicans, like Chuck Grassley, countering today they have been sitting down with White House officials repeatedly since early this year to discuss funding and expanding SCHIP. As a result, they are willing to bring about a veto override, in Mr. Grassley's case, by calling House Republicans personally to line up their votes.

(BEGIN VIDEO CLIP)

SEN. CHUCK GRASSLEY, (R), NEBRASKA: Congress bridged a divide and put together legislation meets a challenge set by, who? The president himself. The president so often has said, about getting health insurance to more kids through the SCHIP program. Along the way, in trying to work with the White House, I met repeatedly with White House officials, starting early this year. My staff did even more of that. Every effort was made to bring the administration into the process.

But it decided to veto the bill, I think, before it was even written. The administration's position, in my way - from their position, it was either my way or the highway. Well, that's not how the legislative process works. Now, we have got to do what we can to try to override.

(END VIDEO CLIP)

OLBERMANN: Welcome back to Gonzales-gate. The chairman of the Senate Judiciary Committee warns the attorney general-designate he better be ready to answer the questions which Mr. Gonzales was not.

As Rush Limbaugh devolves from covering up slander to troops, comparing one American soldier to a suicide bomber, that soldier, Brian McGuff, joins us for his reaction in his first television interview.

You are watching "Countdown" on MSNBC.

(COMMERCIAL BREAK)

OLBERMANN: Five weeks after Alberto I-don't-recall Gonzales resigned, his proposed replacement is now being asked to remember for him. Our fourth story on the "Countdown," the latest attempt by Senate Democrats to penetrate the White House smoke screen of executive privilege.

After hinting last month that he could hold up Michael Mukasey's confirmation hearings if the White House kept withholding information from the committee, Senator Leahy is indicating he will try to get that information from him during confirmation hearings instead.

Telling him in a letter that the White House has, quote: "Left you to answer the unanswered questions and left longstanding disputes unresolved." And that, quoting again, "those matters now encumber your nomination and, if confirmed, your tenure."

No indication of exactly why Senator Leahy thinks Mr. Mukasey might be able to answer those questions that the administration has kept secret. Especially given what the testimony before the Judiciary Committee yesterday, a former head of the office of legal counsel for the Department of Justice, demonstrated.

Professor Jack Goldsmith still could not talk about which constitutional laws the White House tried to circumvent during his tenure, but pointed out that certain programs, like the terrorist surveillance program, were so secret that even the general counsel for the National Security Administration, which was in charge of the spy program, was not briefed on any of it.

Joined now by Dana Milbank, national political reporter for the "The Washington Post."

Good evening, Dana.

DANA MILBANK, NATIONAL POLITICAL REPORTER, "THE WASHINGTON POST":

Good evening, Keith.

OLBERMANN: We'll get to Professor Goldsmith's frightening testimony in a moment. But first about Senator Leahy and this decision to redirect questions from the White House regarding White House and DOJ involvement to the nominee for attorney general. Did the Democrats essentially cave here before the implacability of executive privilege?

MILBANK: Well, Pat Leahy has Alberto Gonzales' scalp on his wall to prove he hasn't caved. He has answered by saying, yes, we will allow prosecutors to prosecute these cases against the White House involving the congressional subpoenas. But, beyond that, they are in a bit of a box because Mukasey's name was given to the White House Chuck Schumer, a Democrat on the Judiciary Committee. And they have all given pretty favorable reviews. It's not a terribly plausible threat that they would actually block his confirmation if he doesn't comply.

OLBERMANN: So, then what is this? And why is it preferable in the Democrats' estimation to say exerting their own kind of congressional privileges over hearings, over funding, over other means of pressuring the White House that they really haven't used yet?

MILBANK: Well, they have done about all they can with the hearings.  Nobody would fault them for not having enough hearings.

OLBERMANN: True.

MILBANK: Now, the serious threat they have is funding. But, to make any sort of a credible funding threat, you have got to get 60 votes in the Senate. Republicans are not going to go along with them there.

And, once again, the Gonzales resignation is seen as something of a peace gesture here. It sort of took a little bit of the wind out of their sales there. There is not a whole lot they can do other than make noise at this point.

OLBERMANN: Senator Leahy says is he looking for a promise from the attorney general-designate that under his tenure White House influence in the Department of Justice will be waning. But as the White House has now successfully, it seems, argued all that falls under executive privilege, there is not only no way of correcting things, you don't even know where you are here. How would Congress even know whether the White House influence has waned or not if nobody is legally allowed to even talk about that influence?

MILBANK: I'm sure they will take his word for it.

OLBERMANN: Yeah.

MILBANK: Well, look, the White House side of the equation has been made off limits. The Congress can still get a large number of documents about what the Justice Department is doing so it can, therefore, get somewhat of an idea what's going on in the White House. There already are indications that Mukasey is going to make limit White House influence, say, in criminal prosecutions, one of the sensitive issues that had come up before. So, no guarantee here but certainly indications of an improvement.

OLBERMANN: To this testimony from Professor Goldsmith yesterday. Not only did he call the spy programs of the administration, quote, "the biggest legal messy had ever encountered," and not only did he charge that the White House's insistence on extraordinary secrecy led to a lot of mistakes, but he said when he had objections, when he went to Dick Cheney's counsel David Addington, Addington told him he could have blood on his hands if there was a new terrorist attack.

So, are we seeing a situation where the White House doesn't just try to terrorize the electorate or the Congress, it does it to its own functionaries?

MILBANK: And he's not really just a functionary. This is one of the leading conservative thinkers in the country. I suppose it's refreshing, on one hand, that it's equal opportunity. And it shows this sort of binary logic that Addington and some other hard core members of the administration have, you're with us or you are with the terrorists. It's indicates it's not some political slogan but is, in fact, some sort of pathological belief.

OLBERMANN: If you aren't Dick Cheney or George Bush or Barney, you are a functionary.

MILBANK: And with the terrorists.

OLBERMANN: Thanks, Dana, of "The Washington Post" and, when we're lucky enough, with "Countdown." Thanks, Dan. Good night.

MILBANK: Thank you.

OLBERMANN: One of the key players in the Alberto Gonzales-U.S. Department of Justice scandal is reportedly planning to retire. New Mexico Republican Senator Pete Domenici will leave office rather than seek office next year, according to several reports and confirmed today by NBC news. Domenici has suffered health problems, not the least of which the health of his reputation after his possibly unethical phone calls pressuring a U.S. attorney came to light after that prosecutor was one of those fired.

Domenici one of the senior Republicans in the Senate has served six terms and with more than 20 currently Republican seats being contested next year and four Republicans retiring, Republicans now have to find someone to run for his seat. The Democrats are chomping at the bit.

The Britney Spears saga has a new element, an eye patch in court. We don't know what is shaking in your local government but this is how they get the business done in South Bay, Florida. This is a baby shower at city commission headquarters. No, I'm not kidding, next on "Countdown."

(COMMERCIAL BREAK)

OLBERMANN: 45 years ago today, in Athens, Greece, Thomas Lee Bass was born to a U.S. serviceman and his wife, Miss Greece of 1957. The kid always liked to hit things with sticks. After the family moved to California in 1963, he found how best to do that. As a drummer he joined in the founding of a band called Motley Crew, using the stage name Tommy Lee. That's right, Tommy Lee is now 45. Check, please.

Let's play "Oddball."

We begin in South Bay, Florida, where if had you popped by the local city commission chambers, you would have seen this - a stripper, a gyrating naked lap dancing stripper. What was said stripper doing at the city commission chambers you ask, other than shaking his groove thing. He was the hired entertainment at a baby shower. What says congratulations on your new baby to be, better than a guy in baby's clothing?

At Cambridge, Massachusetts - wonder where all the town's parking meters went? I found them. They were all there, piled up in every crevice of some dude's apartment - 123 of them. The past year, he had been systematically stealing them, taking them home and slicing them open to get at the coiny goodness inside. In keeping 123 mementos of his dastardly crime spree, he will soon be paying for it 10-fold after somebody dropped a dime on him. He will be going to the big house.

The Iraq vet who Rush Limbaugh smeared as a suicide bomber responds.

Brian McGuff in his first television interview here on "Countdown".

And 10 years after the fact, new images of the night Princess Diana was killed.

These stories ahead, but first, time for our goof balls and good guys here on "Countdown's" top three best persons in the world.

Number three, best time savers for the police. Christie Jeffers and Chelsey Guinn of Salem, Oregon, dropped by the Marion County jail to visit a boyfriend there. Police leaving the jail to investigate reports of a stolen 1984 Toyota truck in the neighborhood, were startled to find it sitting in the jail parking lot with Mrs. Jeffers and Guinn inside, along with 21 grams of meth, packing material and scales.

Number two, best police overreaction. The London Metropolitan police after somebody in Soho claimed a smell was burning their throat. The cops and the fire brigade shut the neighborhood down and went in hazmat suits and discovered the origin the calamitous smell, the kitchen of the Thai Cottage Restaurant, where birds eye chili peppers were being fried to make spicy dip known as Man Prick Pow (ph).

Number one, best job of getting rid of wasps. Hugh Williams of Piedmont, North Carolina found a hole full of yellow jackets, a burro next to his house, sprayed it with insecticide. The yellow jackets didn't even flinch. So he stuck a piece of paper in the hole and lit the paper and watched his house burn down. But, he got rid of the wasps.

(COMMERCIAL BREAK)

OLBERMANN: As we reported to you last night, Rush Limbaugh yesterday responded to criticism of his phony soldiers cover up attempt, criticism by a real American soldier, by comparing that soldier to a suicide bomber, when, coincidentally or not, it was a car bomber who caused the injuries that led to this soldier's Purple Heart, received for actions in service to this country. In our third story tonight, so far Limbaugh is still too scared or too smart, perhaps, to accept this soldier's challenge to confront him on the air.

So, in a minute, we will give that soldier, Brian McGough, a chance to watch Limbaugh's latest remarks and respond for himself here instead. It all started, of course, a week ago when Mr. Limbaugh referred to soldiers who enlisted so they could go to Iraq as, quote, real soldiers, and anti-Iraq war soldiers as, quote, phony soldiers. The group VoteVets.org released this TV ad in response today, featuring Sergeant McGough.

(BEGIN VIDEO CLIP)

SGT BRIAN MCGOUGH, US ARMY: More and more troops and veterans of Iraq believe George Bush's military policy has been a disaster. I am one of them. Rush Limbaugh called vets like me phony soldiers for telling the truth about Iraq. Rush, the shrapnel I took to my head was real. A traumatic brain injury was real, and my belief that we are on the wrong course in Iraq is real.

Until you have the guts to call me a phony soldier to my face, stop telling lies about my service.

(END VIDEO CLIP)

OLBERMANN: Rush Limbaugh today claimed that when he used the phrase phony soldiers he had in mind a segment from a previous day's broadcast about one actual fraudulent soldier, even though did he not reference that individual until two minutes after the generic references to phony soldiers. A good enough story, perhaps, if Limbaugh had been trying to do the normal human thing, and apologize for misspeaking, but he was not. Instead he was attacking Sergeant McGough, individually and brutally.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO SHOW HOST: There is a man identified as Brian McGough. It's M-C-G-O-U-G-H. Not sure how he pronounces it. I have not watched ad. He discusses his service in Iraq, the wounds he suffered there and he says to me in this ad, until you have the guts to call me a phony soldier to my face, stop telling lies about my service. You know, this is such a blatant use of a valiant combat veteran, lying to him about what I said, and then strapping those lies to his belt, sending him out via the media and a TV ad, to walk into as many people as he can walk into.

This man will always be a hero to this country with everyone. Whoever pumped him full of these lies about what I said and embarrassed him with this ad has betrayed him. They are not hurting me. They are betraying this soldier. Now, unless he actually believes what he is saying, in which case it's just so unfortunate and sad when the truth of what I said is right out there to be learned.

(END VIDEO CLIP)

OLBERMANN: Let's bring in retired U.S. Army Staff Sergeant Brian McGough, who served in Kosovo, earned the bronze star in Afghanistan, and, as we just saw, sustained a devastating head wound in Iraq. Sergeant, thank you for joining us. Thank you for your service to this country.

MCGOUGH: Thank you for having me.

OLBERMANN: Before we get to the specific points Mr. Limbaugh made in that tape from broadcast, what's your initial reaction to him?

MCGOUGH: My initial reaction is disgust. How someone can sit in that chair and say that I am a car bomber or - excuse me, a suicide bomber - is disgusting. I have seen the after-effects of a suicide bomb. I have friends that were hurt by suicide bombs. It makes me mad down to a place where I can't even think to describe. It's just repugnant.

OLBERMANN: To fact check his claims in there, and he has admitted he hadn't seen what you said, which is a sort of bad starting point from his point of view, one would imagine. But, did anybody interpret his remarks for you or tell you what to think about them? You have heard them for yourself, have you not? Unlike what Mr. Limbaugh did not hear from you.

MCGOUGH: Yes, I have heard them for myself. I have read the transcripts. I have heard the audio. I was asked if I would be interested in doing an ad. I told them I would be as long as I agreed with the language of the ad. I read the language of the ad and agreed with it. It's something that I stand by and stick by.

I do believe it and I can think for myself. And for Rush Limbaugh to say that an American soldier like me can't think for myself because I speak out against the Iraq war is preposterous. A growing number, almost 70 percent of the U.S. population, does not believe in the war. Military is just a mirror image of that, so a lot of veterans and troops don't believe in the war.

What he is really saying is that a growing large number of veterans and troops can't think for themselves.

OLBERMANN: Even if it was just you. Even if it was just you or a handful of people, that's still your right, is it not?

MCGOUGH: Yes, it is my right. It's my right that I fought for. I bled for. I sweated all the time. I cried for. And he has the right to say what he wants too. But he has to understand he has got a responsibility. And I said what I said, and I'm coming out and saying, look, these are my words. I believe in them. Where is he? I would like him to have any member of our organization on his show at any time so we can talk to him and look him in the face and say, am I phony soldier? Do I look like a suicide bomber to you? That's all we ask.

OLBERMANN: As a soldier, did you hear something in his remarks that goes against all soldiers, namely this implication the soldiers are great, as long as they agree with me, Rush Limbaugh. But they are all on notice if they disagree; they are stupid or gullible or being used, or, as he said, phony? Is that in some ways a swipe at all soldiers staying in line or else?

MCGOUGH: It is. It's him pretty much saying if you agree with me, I will take care of you and I will back you and I will talk great about you. If you don't agree with me and you don't tow the line, you are on your own and I'm going to talk bad about you, and I'm going to let the world - what he thinks is the world - know that you are not a real soldier, which is just disgusting and is not acceptable.

OLBERMANN: You do your duty honorably. You risk death for your country countless times. You received a purple heart. You return home and you get told by a radio commentator, who got deferments and who was defended by the same politicians who sent you into that war, that you are a phony and you can't validly disagree with him, all of this while you and your wife still deal with the after-effects of your injuries sustained in this war, and you are trying to get on with your life and going back to school.

On a personal level, is there anything you would like to say or add to this whole mess?

MCGOUGH: I would really like to say - and to reiterate, I have said before - ask me or any of the members of VoteVets.org to come on your program and talk to you and tell you how we feel. Don't just talk bad about us and then when we say, hey, that's not right, try to talk bad about us again. And think before you open your mouth.

OLBERMANN: Brian McGough, a veteran of the Iraq war, a recipient of the Purple Heart. Great thanks for your time. And, once again, since Mr. Limbaugh won't say this, thank you for your service on behalf of all of us in this country, sir.

MCGOUGH: Thank you for having me on.

OLBERMANN: Our pleasure and honor. A decade later and still there are new images of this. Earlier this week new pictures; tonight there's new videotape. And a new twist in the increasingly cartoonist life of Britney Spears. She has just lost custody of the kids to a guy wearing an eye patch. The latest ahead, but first here are Countdown's top three sound bites of this day.

(BEGIN VIDEO CLIP)

DAVID LETTERMAN, "THE TONIGHT SHOW": Now, ladies and gentlemen, it's time for great moments in presidential speeches.

HARRY TRUMAN, FORMER PRESIDENT OF THE UNITED STATES: A full acceptance of the Potsdam declaration, which specifies the unconditional surrender of Japan.

DWIGHT D. EISENHOWER, FORMER PRESIDENT OF THE UNITED STATES: We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Let me - let me - let me - let me -

UNIDENTIFIED MALE: The experience of watching big brown bears, it doesn't get much better than Brooks Falls. For many red salmon from Bristol Bay, their trip ends just short of the spawning grounds in the jaws of a bear.

BARBARA WALTERS, "THE VIEW": Please welcome back Faith Hill. Listen, Faith, you know, you have been on with us before and you are one of the - just one of the nicest women. We would all like to do your husband.

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OLBERMANN: Time now for our nightly roundup of celebrity and entertainment news, Keeping Tabs. Tonight concentrating on the less than happy side of celebrity, beginning with newly released video of Princess Diana from the long delayed inquest into her death ten years ago. Security video showing her and Dodi Fayed using the back door of the Ritz Hotel in Paris. The couple seeking to avoid the crush of paparazzi gathered out front.

The footage also shows Mr. Fayed leaving the hotel to visit what all sides agree were nearby jewelers. His father is convinced he was looking at an engagement ring, that the couple was murdered by the royal family because she was pregnant and planning to marry a Muslim. Other new footage shows the couple walking through the lobby, not long before the fatal chase, and a smiling Diana riding in an elevator with the hotel director.

Although French and British police concluded it was an accident, the official British inquest has been delayed until now and could take six months for the jury to resolve.

Less fatal, less bizarre, less of a draw back, but it doesn't make it any more normal. Actor Nicholas Cage experiencing the celebrity phenomenon of a bizarre intruder in his home. Cage, who won an Academy Award for "Leaving Las Vegas," called a security guard early Monday morning to report there was a man standing in the doorway of his bathroom wearing one his leather jacket, but otherwise naked. Police identified the suspect as Robert Furrow (ph), a tailor, which might explain why he would have had an interest in trying on Cage's wardrobe. Either that, or he is the guy who designed the emperor's new clothes.

He was never the most famous American actor, but he was clearly one of the most gifted. George Grizzard has died. From a chilling movie debut as a demonic senator in "Advise and Consent" in 1962, through a small role in Clint Eastwood's "Flags of Our Fathers" last year, George Grizzard always jumped off the screen. He was John Adams in TV's "The Adams Chronicles." He was "New York Times" reporter Tom Whicker (ph) in a movie about the Attica riots. And a mad scientists on "Alfred Hitchcock Presents," and a cut throat defense attorney on "Law and Order."

Not once did he fail to make any of his characters human and believable and filled with a range of emotions. The mad scientists had ironic pangs of guilt. His John Adams used to mumble to himself to be nicer to people. George Grizzard had a parallel and successful career on Broadway, starring in the original adaptation of "Who Is Afraid of Virginia Wolf." He won a Tony Award three decades later for another play, "A Delicate Balance."

Grizzard died in New York on Monday of complications from lung cancer.

He was 79 years old.

Custody of Britney Spears children apparently awarded to a pirate.

That's ahead. But first time for Countdown's Worst Persons in the World.

The bronze to AT&T, which has just advised users of its high speed Internet packages of what they like to call updated terms of service. You know, this is the thing that comes in the bill that you throw away. However, in this one, the company now claims their right to cancel or suspend your service if you do anything it believes, quote, tends to damage the name or reputation of AT&T or its parents, affiliates, and subsidiaries.

So if you tell a neighbor that AT&T's Internet service isn't real good, they could just drop you? Nice. If we live in Myanmar.

Our runner up, Bill-O, still obsessing over his defeat by Media Matters and David Brock. Asserting last night that Brock, quote, is obviously main stream media access, which the right wing does not have.

Bill, I hate to break this to you, but as your hourly references to the manly size of your ratings suggests, by definition, you and those other lunatic fringe right wingers at the Fixed News wore house are the mainstream media.

But our winner conservative pundit Jonah Goldberg, whose response to the Limbaugh phony soldiers cover up was, this was a question of Democrats being driven crazy by people questioning their patriotism. Yet, he said, I have never heard actually a conservative basically flat out deny the patriotism of the opposition. He told that to the comatose John Gibson on Fixed Noise.

Forget Mr. Bush and Mr. Cheney for a moment. How about a little broadcast directly relevant to the Limbaugh cover up. From August 23, 2005, titled by its speaker, "You Are Damn Right American Left, We Are Questioning Your Patriotism," by Rush Limbaugh.

Jonah, I guess you didn't hear that one, did you, Goldberg, today's Worst Person in the World.

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OLBERMANN: Physical custody of Britney Spears' two children will remain with their father, Kevin Federline, in our number one story on the Countdown. But the court today prescribed means by which Ms. Spears may have monitored visitation. That according to attorneys from both parties, who refrained from specifically stating the court's orders, which will be released soon. And if Spears gets visitation roughly every other day, as her lawyer said, we must wonder if this other Spears-breaking news is true, that she is planning to check into rehab this weekend. That rehab in Antigua, Eric Clapton's Cross Roads. The entire plan reported by "OK! Magazine."

A pal of Miss Spears saying, quote, "Britney's team has been working closely with her attorneys to figure out a way to get the babies back from Kevin." - Britney's team - "She is surrendering herself to rehab for treatment of depression of alcohol so there is no questioning if she is drinking or missing any future tests."

Spears' lawyer has responded, telling NBC News that Spears is, contrary to the report by "OK! Magazine," not checking into rehab within the next 48 hours. This weekend would be more than 48 hours, wouldn't it?

Late but better than never, Miss Spears now has an interim California driver's license in her hot little hand. She got it yesterday. Amazingly, she had taken and passed the written test in April, according to a DMV employee. She just had not bothered to go back for finger-printing and the photograph.

Mr. Federline, by the way, unexpectedly showed up to today's hearing wearing an eye patch over his right eye. Ahoy matey. Ms. Spears did not attend.

Let's turn now to the host of the pop cultural critique of record, "The Soup" on the E Network, Joel Mchale. Joel, good evening.

JOEL MCHALE, "THE SOUP": Good evening, Keith.

OLBERMANN: What do we make of today's decision to keep those kids with Mr. Federline?

MCHALE: I think it's a good decision, because if Federline can now get ahold of Char Jackson's kids, I smell a sitcom.

OLBERMANN: And discounts for volume purchases.

MCHALE: It will be great.

OLBERMANN: Spears is maybe off to rehab in Antiqua. Is this a crazy rumor? Is it the truth? Can we tell anymore in this story?

MCHALE: Well, with reliable sources like "OK!," how could it not be? No, I think it's great. She is going to go to Eric Clapton's Cross Roads, so it's great news. She might actually learn an instrument, incredible.

OLBERMANN: She could hum Layla at the end of 12 weeks.

MCHALE: Yes.

OLBERMANN: It was only a matter of time, I suppose, until video in this case from the inevitable, pervasive TMZ.com would be subpoenaed in some celebrity case. This is the video of her illegally driving this past weekend, subpoenaed by Federline's lawyer. If the judge wanted proof that the woman driving the car in the video was actually Britney Spears, what do you think he looked for?

MCHALE: Well, here's the thing. I don't think it's her. There wasn't a child seat in the back of that car. Oh, wait a minute, there were still kids in the back. OK, my theory is falling apart. I would just look for the cigarettes.

OLBERMANN: This is where Mr. Mchale's theory fell to the ground.

MCHALE: Yes.

OLBERMANN: We haven't seen the images yet, and we can't wait, I know.

What is the deal with K-Fed's eye patch.

MCHALE: Well, he was picking up a couple extra shifts at Long John Silver's and also Jaden James put a cigarette out on his eye. So - no, wait, it was Shawn Preston. Shawn Preston put the cigarette out on his eye.

OLBERMANN: Caught yourself on that. This interim driver's license that she has gotten, the one with the picture that is going to be sent out in the mail, we understand. Do we give Britney Spears some credit for that, even though there was a drag time between the application and going to get it after all hell broke loose?

MCHALE: I don't know. Should we give your appendix credit for not exploding for the first 46 years of your life? I don't think so. OK?

OLBERMANN: Ow, don't. We're going to see if this pans out, but as we mentioned yesterday, "In Touch Weekly" reports the existence of the only thing that seems to be missing from this thing, a sex tape with Britney Spears and some guy who lived on the big island at the time. We're not speaking metaphorically. "In Touch" is now reporting on another front that the long time assistant to Miss Spears, her strongest supporter, Alley Simms, has walked out on her.

Which of these two things, Joel, do you think would be the biggest disaster for her?

MCHALE: Well, first of all, assistants in Hollywood are disposable as a paper coffee cup. Speaking of, do you call this coffee? What do you call it? Don't make eye contact with me. I hear Dog the Bounty Hunter is in the sex tape. Stop making eye contact.

OLBERMANN: The lawyer, the Federline lawyer, has conceded that the former body guard, the big guy, Tony Barretto, was key in impressing the judge that Spears has some serious issues. What is she going to do? Is she going to screen her body guards better now or what?

MCHALE: Well, I think it's good thing she let Barretto go. Have you seen that guy?

OLBERMANN: Yes.

MCHALE: The only thing that guy could do in a crisis situation is accidentally crush her. Perhaps sweat on someone, I don't know.

OLBERMANN: A mud slide. No, it's not a mud slide. That's the body guard. Have we learned anything as a species from this?

MCHALE: Well, this whole time I have been studying Norse mythology.

Did you know Wednesday used to be Oden's day?

OLBERMANN: No, I didn't. No.

MCHALE: It did. He is the all father.

OLBERMANN: So that's -

MCHALE: That's what I have been doing.

OLBERMANN: That's what you have been doing. At least your time hasn't been wasted on this. Joel Mchale of "The Soup" on E, brand new on Friday nights. Can't wait as usual. Great thanks, Joel.

MCHALE: Thanks, Keith.

OLBERMANN: That is Countdown for this the 1,617th 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