'Countdown with Keith Olbermann' for Thursday, June 19
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Guests: Howard Fineman, Eugene Robinson, Rachel Maddow, Jonathan Turley, Dana Milbank>

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

Red herring: Obama opts out of public campaign financing, public campaign financing to which he had never committed.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESUMPTIVE PRES. NOMINEE: Join me and declare your independence from this broken system and let's build the first general election campaign that's truly funded by the American people.

(END VIDEO CLIP)

OLBERMANN: Senator McCain responds with an attack based on a blatant inaccuracy.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R) PRESUMPTIVE PRES. NOMINEE: This is a big deal, a big deal. He has completely reversed himself.

(END VIDEO CLIP)

OLBERMANN: Except, he didn't. The question Obama was asked last November: If you were nominated for president in 2008 and your major opponents agree to forego private funding in the general election campaigning, will you participate in the presidential public financing system?

McCain hadn't agreed to forego private funding, had been running his general election campaign on private funding since the day Mike Huckabee dropped out. Only this evening did McCain declare he would sign up for public financing, but, of course, Republican 527 groups can still spend money attacking his opponent for him.

FISA settlement or FISA appeasement. House Majority Leader Hoyer offers partial telecom immunity. Democrats in the Senate say, "It's a capitulation, they will not go along with it."

The real mission accomplished: 36 years after their oil wells were nationalized by Saddam Hussein, Exxon Mobil, Shell, Total, and BP are about to be back in business in Iraq.

Worst Persons: As Rupert Murdoch pays out big after slandering a British soccer star, the "New York Post's" plan to spit on the memory of Tim Russert tomorrow.

And even Laura Bush said Michelle Obama's remarks about real pride in this country had been misconstrued. Not Mrs. McCain.

(BEGIN VIDEO CLIP)

CINDY MCCAIN, SEN. MCCAIN'S WIFE: All I know is that I've always been proud of my country.

(END VIDEO CLIP)

OLBERMANN: Well, isn't that special?

All that and more: Now on Countdown.

(on camera): Good evening. This is Thursday, June 19th, 138 days until the 2008 presidential election.

Senator Barack Obama today officially opted out of the presidential campaign public financing system and Senator John McCain today immediately declared Obama had, quote, "completely reversed himself and gone back, not on his word to me, but the commitment he made to the American people."

In our fifth story: Obama's promise even just taken on face value was to accept public financing if his Republican opponent had agreed to do the same. Senator McCain had, in essence, been running his general election campaign on private funds, not public financing since he became the presumptive nominee on March 4th.

McCain late this afternoon said he had just decided to switch to public funding but to quote Jesse Jackson's old self caricature on "Saturday Night Live" the question is moot.

On November 27th of last year, with senators Obama and Edwards, the only respondents, the Midwest Democracy Network released the results of its presidential candidate questionnaire. Question number 1B asked: "If you are nominated for president in 2008 and your major opponents agree to forego private funding in the general election campaign, will you participate in the presidential public financing system? Obama's response began with him checking the box marked yes.

But his major opponents, opponent - McCain, had not yet agreed to the premise of the question to, quote, "forego private funding in the general election campaign." Since late last year, McCain has been involved in an intricate dance with the Federal Election Committee, possibly involving breaking a few laws, getting a campaign loan based on opting in for primary funding, then opting out, then saying he was leaning towards opting back in which would seem to make McCain's outraged umbrage today about Obama, quote, "He said he would stick to his agreement, he didn't." At best self-incriminating and at worse, disingenuous.

(BEGIN VIDEO CLIP)

MCCAIN: You know, this election is about a lot of things, but it's also about trust, and it's also whether you can take people's word, because when you campaign for the highest office in the land, you make certain commitments to the American people. And if you're not even willing to keep one that is as impactful in a political campaign as his decision to finance his own campaign and completely contradict his solemn pledge, I think should be disturbing to all Americans.

(END VIDEO CLIP)

OLBERMANN: Even ignoring the straight forwardness of an "if-then" question, when the "if" had not happened, the rest of Obama's lengthy and nuance answers has been left by the wayside. Under the yes box, his comments limited to 250 words or less, one gets the feeling he felt limited, indeed.

They read: "I have been a long-time advocate for public financing of campaigns combined with free television and radio time as the way to reduce the influence of moneyed special interests. I introduced public financing legislation in the Illinois State Senate, and I'm the only 2008 candidate to sponsor Senator Russ Feingold's bill to reform the presidential public financing system. In February 2007, I proposed a novel way to reserve the strength of the public financing system in the 2008 election.

My plan requires both major party candidates to agree on a fundraising truce, return excess money from donors, and stay within the public financing system for the general election. My proposal followed announcements by some presidential candidates that they would forego public financing so they could raise unlimited funds in the general election. The Federal Election Commission ruled the proposal legal, and Senator John McCain has already pledged to accept this fundraising pledge."

And operative conclusion: "If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to reserve a publicly financed general election."

On his Web site, Senator Obama today is explaining why he is opting out of this form of public financing.

(BEGIN VIDEO CLIP)

OBAMA: The public financing of presidential elections, as it exists today, is broken. And we face opponents who become masters at gaming this broken system. John McCain's campaign and the Republican National Committee are fueled by contributions from Washington lobbyists and special interest PACs. We've already seen that he's not going to stop the smears and attacks from his allies, running so-called 527 groups, who will spend millions and millions of dollars in unlimited donations.

(END VIDEO CLIP)

OLBERMANN: Senator Obama attesting that his groundbreaking fundraising operation amounts to a new kind of public financing system.

(BEGIN VIDEO CLIP)

OBAMA: You fuel this campaign with donations of $5, $10, $20, whatever you can afford. And because you did, we've built a grassroots movement of over 1.5 million Americans. So, join me, and declare your independence from this broken system and let's build the first general election campaign that's truly funded by the American people.

(END VIDEO CLIP)

OLBERMANN: By the way, that Midwest Democracy Network asked the same "if-then" question that started this dispute, the one about public financing, to all five candidates still in the race as of the end of February of this year. Senator Obama repeated that lengthy, wonkish answer. The other four, didn't even bother to answer, including Senator McCain.

Time now to call on our own Howard Fineman, senior Washington correspondent for "Newsweek" magazine.

Good evening, Howard.

HOWARD FINEMAN, MSNBC POLITICAL ANALYST: Hi, Keith.

OLBERMANN: Mr. McCain has tried to make this about Obama's word and it sounded a little bit like, I don't know, the bride jolted that the altar or something here. But it seems that Obama fulfilled that word, he agreed to negotiate the thing with McCain, obviously, that didn't work. Is the McCain version of this dependent on really severe oversimplification of this whole thing?

FINEMAN: Keith, this just proves to me, once again, that there's nothing that gets in the way of honest discussion and politics like the topic of fundraising.

OLBERMANN: Yes.

FINEMAN: It's just - you've got to sort through all the mess here. First of all, John McCain does not come in to this court with clean hands, as you pointed out in the piece that you just did. I mean, he gained the system in the primaries. Let's face it. First, he was for public financing to get him through the hard times and then he jettisoned it when he really decided he wanted to try to run a general election campaign in March through June, which he's done. So, he's gone back-and-forth on that himself.

And in Senator Obama's case, let's be frank here. When he was still running against Hillary Clinton, his people in arguing to the superdelegates said, "Look, we have tremendous fundraising potential here, we can raise money off the Internet, that's what we really want to do."

And as far as the aggressive negotiations here, it cuts both ways. On the one hand if you read the document carefully that you just showed on the screen, what Obama's talking about aggressively negotiating, is his whole plan to keep the system alive. He was not talking about the pledge that he made earlier on, the conditional one.

On the other hand, it's clear that the Obama people didn't really want to deal with McCain. They didn't want to deal - and frankly, neither did the McCain people. So, it's been a kind of dumb show here going on in the last few weeks. Now, they both have the system they really want.

OLBERMANN: The timing of this, also, it confuses me. Did McCain stall on his final decision on public financing to make Obama go first and, thus, be able to make him, in the simplified world, really look bad. I mean, because it seemed awfully strange that Obama made his announcement today and then McCain suddenly announced, yes, late this afternoon. There were no cameras present; there's been no press release, apparently. It's just the whole thing.

The timing of it, explain that to me.

FINEMAN: Here's what I think happened. First of all, it's no secret that Obama was going to do this. He signaled this back in April. So, he's been taking some hits for it since then. I don't think there was much expectation that McCain would ever get out of the public financing system for the fall because he's got trouble raising money from traditional Republican donors.

So, I think everybody knew Obama was going to do this. I think McCain was going to attack. I think they forgot to file the papers. I think they didn't realize until the end, the point that you made about the conditional nature of Obama's promise and that questionnaire from last year.

OLBERMANN: When people wag a finger that media and say, in trying to be balanced, sometimes we actually give the same credence to the truth and the not-so-much truth. Is this the sort of thing they're talking about? I mean, I understand this is complicated and people don't want to hear complicated and it's nuance, then you have to go through it and read a really long wonkish statement from one guy.

But I heard Charlie Gibson tonight call this a clear reversal by Obama and George Stephanopoulos chimed in with it's a flip-flop. And I'd just thought - you guys have bigger I.Q.s than that, can't you read the whole paperwork?

FINEMAN: Well, look, I do think that to some extent, it goes against the grain of what Obama has been arguing, except for the fact, I think, his strongest argument is the one that you alluded to before. That this is a form of public financing, in the sense that, he does have a genuine grassroots movement and he is proposing a sort of Net-based alternative to collecting taxpayer money for public financing. It is a form of public financing in that sense, and I don't think that's an argument he should shy away from.

So, sure, I mean, he's doing what's required to try to win this election because the Republicans are going to have the 527 groups, although, interestingly, the most active 527 group right now is the one supporting Obama. But that's just the beginning of what's going to happen in the rest of the year.

So, I don't think of it as 180 degree reversal. I think of it as a recognition of reality and one he's been signaling for a long time. This guy cares about changing the system, paradoxically in his mind, and I think to some extent, he's right. This is what he has to do to try to change the system.

OLBERMANN: Howard Fineman of MSNBC and "Newsweek," who will never shy away from nuance and subtlety of the explanation. As always, sir, great thanks.

FINEMAN: Thank you, Keith.

OLBERMANN: Beyond the broken public financing promise obvious flip-flop that isn't so obvious, today, bringing day three of the McCain campaign's attempt to distort the Obama belief apparently shared by Rudy Giuliani that the United States can combat terrorism within the constraints of that old Constitution.

Today's manufactured outrage over Obama's statement yesterday that he did not want to make a martyr out of Osama bin Laden. Today's disingenuously outrage McCain's surrogate, Senator Fred Thompson - back from vacation or something - expressing alarm at this false allegation that Senator Obama wants to employ only a law enforcement approach to terrorism, you know, like on the show "Law & Order" he used to be on.

The Tennessee Republican accusing Senator Obama of being inconsistent on matters of national security and foreign policy, adding that the presumptive Democratic nominee would do well to stop apologizing to the rest of the world for defending ourselves in war.

All of which would seem to be a reversal for Senator Thompson, who when still a candidate for president, appeared to support a legal approach where Osama bin Laden ever to be captured, having said last September that the al Qaeda leader is, quote, "more symbolism than anything else," arguing that bin Laden, Thompson said, quote, "should be afforded due process if he were ever caught."

That was then and this is now.

Let's turn now to our own Eugene Robinson, columnist and associate editor of the "Washington Post." Good evening, Gene.

EUGENE ROBINSON, MSNBC POLITICAL ANALYST: Good evening, Keith.

OLBERMANN: So, let me see if I understand this collective position expressed by Giuliani and Thompson on behalf of McCain correctly - martyrdom, good; Constitution, bad?

ROBINSON: You know, I'm not sure, Keith, to tell you the truth. They did support more legal means, judicial means of dealing with terrorism than George Bush did, for example. But that was back then, and now, apparently, things have changed. I'm not quite sure what they're saying about martyrdom, I'm not quite sure what the basis is of the attack, except to kind of throw smoke and to make Obama seems soft on terrorism.

OLBERMANN: But if you go back to Fred Thompson last September, we're not talking about something from the year 1895, where he said Osama bin Laden should be afforded due process if he were ever caught. This is just, it's too easy. The research on finding something that contradicted what Fred Thompson said today in Fred Thompson's own past, took less time than it's taken me to ask you this question.

Where is - where are the big guns? I mean, the McCain campaign trotted out Giuliani yesterday, who wound up saying, "Well, you know, we largely can behave within the Constitution. It won't make that much of a difference." And now today, with Fred Thompson, this is remarkable just from a political strategery point of view.

ROBINSON: Right, that's strategery. You know, at least, Rudy Giuliani is associated in the public mind with 9/11 and the response to terrorism. So, that makes certain sense in my view, but, Fred Thompson, I mean, did he, were there a lot of terrorism cases on "Law & Order" - I'm just not sure.

OLBERMANN: Touching on what we touched on with Howard Fineman. The Republican National Committee put out a news release today with a quote from Senator Clinton from February which she was quoted in saying, "My understanding is that Senator Obama said he would take public financing and that now he's saying he won't. Actions speak louder than words."

That quote, is this not the exact concern about that nomination battle and the length that it went and the degree to which it was perhaps unnecessarily fierce, that the Republicans, eventually would, even they would be able pick these quotes up off the floor from Senator Clinton and use them to some degree, great or small, against Senator Obama in exactly the same way she did?

ROBINSON: Well, that certainly one of several concerns that Democrats might have going to the length and nature of the campaign. But, you know, in a sense, those quotes could be the gift that keeps on giving to the Republicans and that they are there. You can't erase them and they will be trotted out in due course.

What could potentially, I guess, negate some of their impact would be for Senator Clinton to come out and either clarify or disown or say, otherwise, say nice things about Senator Obama. But we're going to hear them again. We're going to hear all those quotes.

OLBERMANN: But, of course, now, with the public financing decision by Obama, he can simply buy an ad, feature Hillary Clinton in it, and just overwhelm McCain in that sense or at least try to.

Eugene Robinson of MSNBC and the "Washington Post" - as always, Gene, many thanks for your time tonight.

ROBINSON: Good to talk to you, Keith.

OLBERMANN: The next fight: Democrats versus Democrats. There's a FISA telecom immunity deal to be voted on in the House tomorrow, and some in the Senate plan to still try to kill it.

Exxon Mobil, BP, Shell about to go back in business in Iraq, 36 years after Saddam Hussein nationalized their oil wells. Mission accomplished? You bet.

(COMMERCIAL BREAK)

OLBERMANN: The Democrats had resisted the president's hysterics about FISA and telecom immunity until today. Stanley Hoyer has suddenly stopped resisting. Why a deal, why now? Jonathan Turley joins me next.

And later on Worst Persons: On the very day his London paper has to pay out for slander, why is Rupert Murdoch's New York rag preparing an item which try to dirty up the memory of the late Tim Russert?

Ahead on Countdown.

(COMMERCIAL BREAK)

OLBERMANN: "Never appease political bullies," President Bush admonished at the Israeli Knesset. Oddly, House Democrats chose to ignore him on the subject of dealing with him.

A new FISA bill that gives President Bush exactly what he wants, increase abilities to spy on Americans without warrants and the level of immunity for the telecom companies who already illegally spied on Americans for him.

Our fourth story on the Countdown: And the Democrats may split over the tentative deal. The bipartisan bill will allow the government to use broad wiretaps to wiretap foreigners and the chance to spy on Americans without any warrant, if they think it's an emergency, for up to seven days. It also gives the phone companies immunity for past crimes, if a district judge decided they get or got a valid wiretap request from the White House.

This is expected to go to the floor tomorrow and to the Senate next week. Well, House Majority Leader Stanley Hoyer supports what he refers to as a compromise bill, emphasis on the "compromise." Senator Majority Leader Harry Reid actually praised parts of it.

Senator Russ Feingold ripped the thing, and implicitly, his fellow Democrats who agreed to it apart, quoting him, "The proposed FISA deal is not a compromise; it is capitulation. The House and Senate should not be taking up this bill, which effectively guarantees immunity for telecom companies alleged to have participated in the president's illegal program, and which fails to protect the privacy of law-abiding Americans at home. Allowing courts to review the question of immunity is meaningless when the same legislation essentially requires the court to grant immunity."

Let's turn now once again to George Washington University, law professor and constitutional expert, Jonathan Turley.

Thanks for your time tonight, Jon.

JONATHAN TURLEY, GEORGE WASHINGTON UNIVERSITY: Hi, Keith.

OLBERMANN: Have the Democrats blinked or Mr. Feingold and Mr. Leahy are going to kill this in the Senate?

TURLEY: Well, this is more like a one-man staring contest. I mean, the Democrats never really were engaged in this. In fact, they repeatedly tried to cave in to the White House, only be stopped by civil libertarians and bloggers. And each time they would put it on the shelf, wait a few months, they did this before, reintroduced it with Jay Rockefeller's support, and then there was another great, you know, dustup and they pulled it back.

I think they're simply waiting to see if the public's interest will wane and we'll see that tomorrow, because this bill has, quite literally, no public value for citizens or civil liberties. It is reverse engineering, though the type of thing that the Bush administration is famous for, and now the Democrats are doing - that is to change the law to conform to past conduct.

It's what any criminal would love to do. You rob a bank, go to the legislature, and change the law to say that robbing banks is lawful.

OLBERMANN: But, of course, it's not just that. I mean, extensively, it is about granting immunity to the telecoms for what they've already done that would be illegal. But is it also not about giving them a pass on what they yet do that may yet be illegal?

TURLEY: Yes. This is a very frightening bill. What people have to understand is that FISA itself is controversial. This court issued tens of thousands of warrants granted applications for surveillance without turning down any. Only recently did they turn down two.

So, the standard is already so low that they have virtually never refused a request. That standard, however, was too high for the Bush administration.

And, so, people need to be very, very much aware of this bill. What you're seeing in this bill is an evisceration of the Fourth Amendment of the Constitution. It is something that allows the president and the government to go in to law-abiding homes on their word alone, their suspicion alone, and to engage in warrantless surveillance. That's what the framers that drafted the Fourth Amendment wanted to prevent.

OLBERMANN: And, also hidden in here behind this headline - if you immunize the telecoms, are you not also immunizing the president, the Bush administration and, to some degree, the Congress that went along with all of these crimes in the last seven years?

TURLEY: Well, there's no question in my mind that there is an obvious level of collusion here. We now know that Democratic leadership knew about the illegal surveillance program almost from its inception. Even when they were campaigning about fighting for civil liberties, they were aware of an unlawful surveillance program as well as a torture program. And ever since that came out, the Democrats have been silently trying to kill any effort to hold anyone accountable because that list could very well include some of their own members.

And, I'm afraid this is Washington politics at the worst. And, so, I think that what you're seeing with this bill is not just caving in to a very powerful lobby, but also caving in to sort of the worst motivations on Capitol Hill since 9/11. You know, the administration was very adept at bringing in Democrats at a time when they knew they couldn't refuse, to make them buy in to this program, and now that investment is bearing fruit.

OLBERMANN: So, it's self-protection is the answer to the question of why Congress didn't let FISA, this bill, at least, go sunset and do this in the next administration. The answer is really self-protection?

TURLEY: I'm afraid it is. And I also don't understand why they didn't let that happen, because what you would be left with was, would be judges who would have to look at whether there was a basis for engaging a surveillance. What's so horrible about that? The old FISA law, by the way, had a provision that said that if there was an emergency, you didn't have to get an immediate FISA approval, something that the president continually omits from his comments, making it sound like you would have to stand there knocking on doors before you could chase al Qaeda. That was never the case.

OLBERMANN: So, this is not FISA, this CYA.

Jonathan Turley of George Washington University - as always, Jon, our great thanks.

TURLEY: Thank you, Keith.

OLBERMANN: Also from Capitol Hill tonight, a short time ago the House of Representatives passed a $162 billion measure to continue to fund the wars in Iraq and Afghanistan. Another act of capitulation to the president, the money comes with no timetable for any kind of withdrawals. The legislation does however, provide historic increases in aid for our returning troops to help pay for college, something Senator McCain has announced his opposition to.

Why not just get a roll of quarters and phone it in, like this guy. Middle of the gas crisis and this joker has just reduced his highway mileage to just two minutes or less.

And: Rupert Murdoch purges the "Wall Street Journal," pays up for slandering a sports star, and prepares to muddy the memories of Tim Russert.

Special edition of Worst Persons is ahead on Countdown.

(COMMERCIAL BREAK)

OLBERMANN: Thirty years ago, June 19th, 1978, cartoonist Jim Davis presenting himself as cartoonist John Arbuckle introduced himself and his new cat in a new comic strip, promising our only thought is to entertain you, whereupon the cat is shown with a thought bubble reading, feed me. And so Garfield was born. Still carried in more than 2,500 newspapers, some of which may not have checked recently to see if it is still at all funny. Let's play Oddball.

(BEGIN VIDEO CLIP)

OLBERMANN: I know you're going to get on the phone, wait a minute.

We begin in Seattle, Washington. Caller, hello. Behold the phone car. It's the creation of Hunter Mann, who said he wanted to tele-commute to work so there you go. The horn rings like a real telephone, drives like any other car, except for the 12 huge plastic squares on the wind shield obstructing your view.

Phone car is built on the chassis of an old Volkswagen Beetle, which means the phone is bugged. Man says he loves to drive it and when he's not on the road, he parks phone car under a glass case in the office of police commissioner Gordon.

More automotive technology in Osaka, Japan; great news, it's a car that runs entirely on hydrogen dioxide. Even better news, hydrogen dioxide is fancy science-type talk for water. The car's makers say it will run for an hour, doing 50 miles an hour, on just a liter of water. The car fits two comfortably, and apparently comes with a handy microwave in the backseat, so you can enjoy some mid-trip hot pockets.

The maker is reportedly expecting to be silenced by the automotive and oil cartels within hours, days, if he's lucky.

Finally to the scene of a daring kitten rescue in Zeberts (ph) Auto Shop in Columbus, Ohio. This past weekend, employees heard a meowing coming from a drainage pimp outside the shop. They called animal control, then dug, dangled and did everything they could to lure the kitten out. When all else failed, they called the plumber. That's when Roto-Rooter showed up and sucked the kitty out with it's septic tank vacuum.

Tragically, we don't have video of that. But the kitten was fine. And, for their trouble, Roto-Rooter got a new slogan out of it, call Roto-Rooter, that's the name and we'll suck the kitten right out of your drain.

(END VIDEO CLIP)

OLBERMANN: The war in Iraq was not about oil. That BP, Exxon, Mobil and Shell Oil are about to go back and make money in Iraq for the first time since 1972, total coincidence.

Spouses are supposed to be off limits in the campaign. Sadly, no rules were ever established about one spouse ripping the other. These stories ahead, but first the headlines breaking in the administration's 50 running scandals, Bushed.

Number three, how's that surge working-gate? While the Republicans still insist it's the greatest thing since sliced bread, the breathing space within which a workable political system could evolve and Iraq could unify and take its own part; in January, the Iraqi parliament passed a law to readmit former members of Saddam's Baathist party to government jobs, one of the long-since forgotten benchmarks. President Bush congratulated the parliament, congratulated himself. Now comes word that what the Iraqis actually did was turn over the job of clearing Baathists for government jobs to the exact same committee that until January was responsible for purging Baathists from government jobs. Efficient.

Number two, show trial-gate. Lieutenant Commander William C. Keebler (ph) is a great military man in the mold of Charles Swift. Keebler is defending the Canadian detainee Omar Kadder (ph) at Gitmo. What he says about Mr. Bush prosecution of people like Kadder should set your hair on fire; "the system," quote, "is designed it get criminal convictions with no real evidence. It lets military prosecutors, quote, launder evidence derived from torture."

FYI, Attorney Keebler not only says he has never voted for a Democrat in his life, but he's also a self-described born again Christian.

Number one, travel-gate. The inspector general's office of the Department of Justice is investigating Jay Robert Flores, Mr. Bush's administrator of the Office of Juvenile Justice and Delinquency Prevention. When not hiring people for new jobs, he just happened to have raised 50,000 bucks for Mr. Bush's re-election campaign. Mr. Flores likes to travel around the country, around the world on tax payer money. Oddly, every day, one of his staffers just testified at a Congressional hearing, Mr. Flores would find the best golf course in the area and go and play it on tax payer money, clearly ignoring the president's heart felt and inspiring decision to honor our dead in Iraq by making the ultimate sacrifice, giving up the game for the duration.

(COMMERCIAL BREAK)

OLBERMANN: The people of Iraq have one truly vast and valuable natural resource left to them, oil. With Saddam Hussein gone, his grip on the nation's resources has been broken. Thanks to the sacrifices of American troops and the Iraqi people, those resources, the oil, is now being returned to its historic, rightful owners, the international oil companies. In our third story tonight, the "New York Times" reporting today that on the 30th of this month five major oil companies and a number of smaller ones, too, will announce the first deals to service Iraq's largest oil fields.

The companies include the four original partners in the Iraq Petroleum Company, which have wanted to get back in for 36 years. Mission accomplished. The four returning companies are Exxon, Mobil, Shell, British Petroleum and the French outfit Total. Exxon's former CEO, Lee Raymond, telling "Newsweek" last year, quote, "we basically had the whole country." Sounded wistful.

More recently, the four companies have been advising Iraq about oil, for free, a factor that helped them win these new, no-bid contracts, contracts that are relatively small, but might just amount to footholds in the still emerging Iraqi oil fields, said to be on par with Iran's. Iran's, the second largest in the world.

Chevron, not one of the original four families, gets a taste, too, along with the Bazini brothers. Iraq still does not have a law codifying a plan for how its share of oil revenues will be shared among its people. Perhaps the answer to that will be not at all. Mr. Bush used to point to the oil laws as one of the key determinants of a surge success, a success Senator McCain says has already arrived.

With us now, MSNBC political analyst Rachel Maddow, host of her own show on Air America Radio. Hello, Rachel.

RACHEL MADDOW, AIR AMERICA RADIO: Hi, Keith.

OLBERMANN: Is this the smoking oil well that we've been waiting for since 2002?

MADDOW: I am a big believer in Occum's Razor, right, that the simplest explanation is probably best and if there is an explanation that is being proffered that doesn't make sense, discard it and look to the simple explanation, instead. We have had a lot of explanations for why we went to Iraq, but none of them have ever really made sense. I mean, ties to al Qaeda; there was never really any evidence of that. That was disproved. Weapons of mass destruction, no. Saddam a bad man, definitely; obviously, not why we went.

Corruption in the Oil for Food Program, things that Saddam did before the first Gulf War; all of these things have been proffered as explanations. None of them have really made sense. No matter what new retroactively applicable explanations for why we invaded the White House and war supporters have come up with, there still has been no credible explanation for why we went, especially one that would explain not only why we went, but why it's so important why we don't leave now.

OLBERMANN: Exactly.

MADDOW: Why we must stay. If you believe that we went because Saddam was a bad man, what does having American troops there for 100 years now do with that?

OLBERMANN: Remember those stories that he thought he was immortal; maybe they think he will jump out of the ground and take back the oil fields.

MADDOW: We're patrolling the tomb, just in case. What actually does make sense, the actual, simple explanation that has been staring us in the face since before the beginning, since a guy had to quit Halliburton in order to become vice president, is that they want Iraq to be an oil colony. It's a very 19th century idea. It's their natural resources. It's our markets. It's our profits. It's an old idea, but it's always been what has been staring us in the face.

OLBERMANN: We have seen this point go from being the ridiculous tin hat, paranoid explanation of the far left to the Bush administration rationale - imagine if al Qaeda got a hold of all the oil; it would be four dollars a gallon, wouldn't it, in the words of the vice president. Does it, at some point - do they just pull all the walls down? Does this become John McCain's rationale for the war? Is he going to run on, we have to get the oil companies back in there because that's when we can bring the price of gas down.

MADDOW: Because we need a colony.

OLBERMANN: We need the oil.

MADDOW: It was the first week of May, just last month, you and I talked about this. John McCain at a town hall event in Colorado - today I went back to the transcript and pulled this out, "my friends, I will have an energy policy that we will be talking about, which will eliminate our dependence on oil from the Middle East, that will then prevent us from ever having to send our young men and women into conflict again in the Middle East."

Remember, he dialed that back and he first said, oh I was talking about the first Gulf War. That was the war for oil, not the second one. Then he dialed that back again and said, no, I didn't mean either of those. It was obviously about weapons of mass destruction. Maybe that was a Freudian slip or maybe they're getting around to the idea that they'll say this was a war for oil and we need another.

OLBERMANN: What happened in the event of an Obama victory in November to Iraq's oil? What sort of position does he have to take on it?

MADDOW: If you don't want to be seen as a colonial power, you stop acting like one.

OLBERMANN: Yes, that would help.

MADDOW: So you get the Americans out of the oil ministry. There are still American advisers in the Iraqi oil ministry now. Honestly, you get the foreign occupying army off the streets of Iraq, so that that country and its people have a choice and a chance at some point in the future of having a government that is seen as legitimate, as opposed to the occupied government, which we ensure that they're seen as, as long as our military's there.

OLBERMANN: Rachel Maddow of Air America and MSNBC, when we're fortunate, thanks, as always, for coming in.

MADDOW: Thank you, Keith.

OLBERMANN: Zell Miller without that insane look in his eyes. Joe Lieberman makes it official, he will speak at the Republican Convention. And now he's afraid of Democrats, too.

And ahoy there. Ahoy there. Rupert's London paper slanders a sports star. He's now paying out big time. In New York he is working at this hour on a story insulting the memory of Tim Russert. Worst persons ahead next on Countdown.

(COMMERCIAL BREAK)

OLBERMANN: Senator Obama yesterday tried to declare spouses off limits in the presidential smear-fest ahead. But he didn't mention spouse on spouse verbal violence. That's next, but first time for Countdown's number two story, tonight's worst person in the world.

The bronze to Rupert Murdoch, explaining the firings in April of the managing editor, the deputy managing editor, the Washington bureau chief, and now another deputy managing editor of his "Wall Street Journal" and insisting this is not because he has replaced them with sycophants who will spew his personal radical politics, "certainly in hour newspapers in Britain and the U.S. are not just ours," he says. "The line," arrrr, "is very clear when it comes to presenting news of views. There's no compromising." Arrrr. "It's very simple and very straight."

True. You print what Murdoch tells you to print or you're fired. "I was surprised by how cooperative the vast majority of the journalists have been," arrrr, he continued about "the Wall Street Journal." Also true, also explained by that same fact; you print what Murdoch tells you to print or you're fired.

The runners up, London's tabloid "the Sun," which has just settled a libel case by Manchester United soccer star Christiano Rinaldo. The Sun published a story that instead Of spending his team's practice practicing, the player had brought his cell phone on the field and was sending four text messages, causing the team's coach to fine him 8,000 pounds. A player testified in court it wasn't true. The coach testified in court it wasn't true. Today, the Sun settled out of court, admitting it had published a falsehood, paying the player an unnamed sum, which he has, in turn, donated to a charity in Spain. The Sun is published by Rupert Murdoch.

The Rinaldo story perhaps a cautionary tail to one of his other employees, our winner tonight, Paula Froelich of the gossip section of Page Six, the entirely disreputable portion of his almost entirely disreputable "New York Post," the paper that makes its readers every day feel like they need to shower immediately.

Preparing at this hour an item about Chris Matthews and me to be run as early as tomorrow, in which, as Miss Froelich describes it, quote, both are vying for Tim Russert's job. Chris at the reception for Tim's memorial at the Kennedy Center was overheard by several guests talking to presumably his agent about pitching NBC for the job and what he should say in the meeting with NBC execs. Keith, apparently, has threatened to quit if he doesn't get the job.

As we mourned Tim Russert yesterday in Washington, a Pennsylvania acquaintance of Chris' came up to him and said, you should be on the list to succeed him. Chris said he didn't want to be on any such list. He changed the topic immediately. He asked this Pennsylvania man, who was not his agent - no agent would be crass enough to bring up such a topic now or there - for advice on a speech Chris is to give at Gettysburg, PA next week. What he should say, how should he approach it, the speech.

As for myself, not only have I never threatened to quit if I don't get Tim Russert's job, not own have I not vied for it, not only has the subject not even come up between me and anybody who will be involved in this sad task, not only did the Post make this up, not only is the very subject of Tim Russert's job not appropriate now, as anyone with a shadow of a heart would understand. But I don't even consider myself qualified for it.

Would that Ms. Froelich and her boss, Richard Johnson, and his boss, Mr. Murdoch, understand just how unqualified they are for the jobs that the mistakes of fate have given them. Paula Froelich of Page Six of the "New York Post," today's worst person in the world.

(COMMERCIAL BREAK)

OLBERMANN: It is said that Mamie and Dwight Eisenhower so personally disliked Bess and Harry Truman that they refused to enter the White House for even the ceremonial cup of coffee with them in the hour before Eisenhower's first inaugural. President Truman was supposedly so offended by what he saw as a slight against the first lady that he was going to refuse to get into the same car with the Eisenhowers until the Mrs. said, in effect, Harry, we get to get the hell out of here now, let's go.

Our number one story in the Countdown, it's McCain versus Obama, Cindy McCain attacking Michelle Obama. The non-issue happily resurrected by "The View" co-host yesterday, what Michelle Obama meant when she said, four months ago, quote, "for the first time in my adult life, I am really proud of my country." Mrs. Obama explained that, of course, she was always proud of her country and that she had simply been referring to the political process. And Mrs. Obama expressed gratitude towards the first lady, Laura Bush. When the faux controversy had first erupted, Mrs. Bush had said that Michelle Obama had meant to say I'm more proud and that candidates' spouses have to be careful, since their words can be easily misconstrued.

But from Cindy McCain today on "Good Morning America" -

(BEGIN VIDEO CLIP)

CINDY MCCAIN, WIFE OF JOHN MCCAIN: I don't know where - why she said that. You know, everyone has their own experience. I don't know why she said what she said. All I know is that I've always been proud of my country.

(END VIDEO CLIP)

OLBERMANN: In February, Mrs. McCain was asked about her first swipe at Mrs. Obama. She had gently back pedaled about that one. She said then, "it was nothing more than me saying look, I believe in this country so strongly. I think she's a fine woman. She's a good mother. And we're both in an interesting line of work right now." You're both in beer distributorships? Wow.

Let's bring in the national political reporter of the "Washington Post," MSNBC political analyst Dana Milbank. Good evening, Dana.

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

OLBERMANN: Proud, really proud, always have been proud, of course I'm proud. There's nothing wrong with being proud of your country, but how much more silly is this going to get? And are we still going to be talking about it four months from now?

MILBANK: I'm proud of you for bringing this up, Keith. This has not been a proud moment for our country. And unfortunately, I think where you can see where this is going. It is going to come to mono a mono. There will have to be a bake off. And whoever can steal the best cookie recipe is going to win this one.

OLBERMANN: A quick race to the Safeway for the best cookies. Cindy McCain had given this jab back to Mrs. Obama in February, same issue. Michelle Obama told her co-hosts on "The View" yesterday she was grateful to Laura Bush because, quote, "she doesn't sort of fuel the fire." Was that directed in a subtle fashion at Cindy McCain? Was this actually triggered this time by Mrs. Obama and not by Mrs. McCain?

MILBANK: It could be, except Michelle Obama doesn't really do subtle. And this was the week it was supposed to be her big makeover. And I'm sure she's very displeased that everybody's talking about this remark all over again. In fact, the next time somebody brings it up, I suspect they'll get something other than a fist bump.

OLBERMANN: Another news tonight that doesn't have to do with them directly, but this is about Senator Lieberman, who says he will be speaking at the Republican convention in September. He was asked if he would also attend the Democratic convention and he said, laughing, that could be dangerous. I'm not following this. What do you think he's worried about?

MILBANK: I know what he's worried about. You remember Godzilla when Zell Miller went nuts in 2004, leading him to challenge Chris Matthews to a dual. And I think, you know, there's been this sort of this uneasy truce between Lieberman and the Democrats. But when he actually takes the stage in Minneapolis for the Republicans, I think he's crossed over into Godzilla territory. And that's going to be a very dangerous place for him, not just at the convention, but when he gets back to the Senate.

OLBERMANN: Could there be a prick of conscience at some point here, because Senator Lieberman, who also says he was among those who encouraged Obama to run for president and has since endorsed McCain - there's a really strange dynamic here. It was the end of March, 2006. Nobody really emphasizes this. But with that challenge from Ned Lamont looming in the Connecticut primaries, Obama endorsed Lieberman and starred at an event for him, a fund-raiser in Hartford. That is a very strange thing to lead to this two years later.

MILBANK: Short memories in politics. You also have to remember, Obama joined everybody else among the Senate Democrats in supporting Lamont in November. So, this is sort of a monster that Ned Lamont created and, to some extent, it just keeps metastasizing.

OLBERMANN: And something of great importance that I know is in your wheel house here, as they say; the former "American Idol" contestant, Oscar winner Jennifer Hudson, said she would love to help out the Obama campaign, but she has still not gotten a call. Is she unaware of the etiquette here, you're supposed to e-mail first, like Scarlet Johansson did.

MILBANK: It's amazing that Obama has time to email with Scarlet Johansson. But I think what's even more amazing is Jennifer Hudson having that self-absorption to believe that he should take some time away from his campaign's finance or his Iraq policy and give her a call. But I decided to make it easier. I went to BarackObama.com and here is the number for Jennifer Hudson. It was right there on the website. So, if she will just give that a ring, I think this can all be taken care of in rapid order.

OLBERMANN: You also don't want to put Obama in the position of having to take away valuable time from e-mailing Scarlet Johansson either. Dana Milbank of MSNBC, the "Washington Post," and he works, as you see, part time for the information service for the phone company in Washington. Thank you very much, Dana.

MILBANK: My pleasure.

OLBERMANN: That's countdown this - we're proud of you - this 1,877th 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