'Countdown with Keith Olbermann' for Thursday, July 31
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Guests: Howard Fineman, Eugene Robinson, Paul Krugman, Chris Kofinis, Derrick Pitts

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

Meltdown. After the McCain "Britney Spears" ad, with its almost subliminal racism, a black man with two women, John McCain, personally, calls the Obama response "playing the race card."

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D-IL) PRESIDENTIAL CANDIDATE: They're going to try to say, "Well, you know, he's got a funny name and he doesn't look like all the presidents on the dollar bills and the $5 bills."

(END VIDEO CLIP)

OLBERMANN: But McCain didn't call that playing the race card when Obama said it three times yesterday and McCain didn't call that playing the race card when Obama first said it on June 20th.

(BEGIN VIDEO CLIP)

OBAMA: I do have to ask my opponent, is that the best you can come up with?

(CHEERS)

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R-AZ) PRESIDENTIAL CANDIDATE: All I can say is that we're proud of that commercial.

(END VIDEO CLIP)

OLBERMANN: Now, about two days behind his own campaign, McCain also repeats the lie about Obama in Landstuhl, 24 hours after his own campaign's official blogger acknowledged it wasn't true.

While you hawk the silverware to fill up the tank, Exxon Mobil is now making $1,486 profit a second. Its profits for the second quarter break all American records - $11,700,000,000.

(BEGIN VIDEO CLIP)

OBAMA: We can't afford anymore tax breaks to oil companies while they make record profits, and we're paying $4 a gallon at the pump.

(END VIDEO CLIP)

OLBERMANN: Ted Stevens indicted.

We've killed the al Qaeda guy who recruited the "shoe bomber." We've killed him for the second time in two years.

We found water on mars - again.

Luke Russert joins NBC News for the conventions.

And, the sound byte of the month -

(BEGIN VIDEO CLIP)

WILLIAM BRATTON, LAPD CHIEF: Evidently, Lindsay Lohan has gone gay.

(END VIDEO CLIP)

OLBERMANN: Live on local news the police chief of the city of Los Angeles, everybody.

All that and more: Now on Countdown.

(on camera): Good evening. This is Thursday, July 31st, 96 days until the 2008 presidential elections.

Senator McCain is saying this afternoon he wants the American people to decide who is playing the race card in this campaign. The first African-American with a shot of winning the White House now under attack for saying something yesterday, that he first said on 20th of June, to almost no response, or the campaign that has in a TV commercial, intermixed footage of that black candidate with images of two young white women.

In our fifth story on the Countdown: Who do you think is playing the race card?

The Republican today accusing the Democrat of playing it and playing it from the bottom of the deck because Senator Obama has responded to the Britney/Paris attack ad, by saying that his opponent is painting him as risky and different. Funny how the McCain campaign did not seem to have a problem with that yesterday when Senator Obama said it three times or six weeks ago at a Florida fundraiser when he went further, actually saying of himself, "And did I mention he is black."

This is the tape from yesterday.

(BEGIN VIDEO CLIP)

OBAMA: They're going to try to say, "Well, you know, he's got a funny name. And he doesn't look like all the presidents on the dollar bills and the $5 bills."

So, what they're saying is, "Well, we know we're not very good, but you can't risk electing Obama. You know, he's new, he's - he doesn't look like the other presidents on the currency."

"He's got a funny name. You know, he doesn't look like all those other presidents on the dollar bills, you know."

(END VIDEO CLIP)

OLBERMANN: Obama senior strategist, Robert Gibbs, is saying in a statement that Obama was not referring to race in Missouri yesterday. McCain campaign manager, Rick Davis, just as adamant that he was, telling our own Andrea Mitchell by telephone this afternoon about the Obama campaign's perceived indiscretion.

(BEGIN AUDIO CLIP)

RICK DAVIS, MCCAIN CAMPAIGN MANAGER: His campaign actively has been feeding to journalists all night last night and all day today, the notion that somehow, something we have done in our campaign of which I could not identify for you today - was somehow had racial overtones.

(END AUDIO CLIP)

OLBERMANN: Even though staff members like Mr. Davis speak for the McCain campaign and we have been told Senator McCain does not speak for the Senator McCain campaign. The senator is telling a crowd in Wisconsin that he is proud of the Britney Spears/Paris Hilton commercial and telling John King of CNN that the race card accusation stands.

(BEGIN VIDEO CLIP, CNN)

JOHN KING, CNN CORRESPONDENT: Is that a fair criticism for Rick Davis to say the Obama campaign is playing the race card?

MCCAIN: It is. I'm sorry to say, that it is. It's legitimate and we don't - there's no place in this campaign for that. There's no place for it and we shouldn't be doing it.

KING: They say that's not the case.

MCCAIN: OK, John.

KING: OK. So, I -

MCCAIN: I'll let the American people judge.

(END VIDEO CLIP)

OLBERMANN: There's no place for it. But apparently there is a place for merging the celebrity attack with the false, no longer abandoned Landstuhl attack.

The McCain campaign today sending out a statement for a former doctor at Landstuhl that reads, quote, "Last week, Senator Obama skipped a visit with wounded U.S. troops in Germany because the Pentagon would not allow campaign staff or media to company him into the hospital. I served as director of trauma surgery at that hospital for nearly four years and saw the effect that a visit from a celebrity like Senator Obama could have on morale."

Even before it, Landstuhl turned out to be back on the table after the campaign had supposedly rid of it. Senator Obama left wondering again what Senator McCain has in his platform besides attacks on him - featuring pop stars.

(BEGIN VIDEO CLIP)

OBAMA: Given the magnitude of our challenges when it comes to energy, and health care, and jobs, and our foreign policy, you'd think that we'd be having a serious debate. But, so far - all we've been hearing about is Paris Hilton and Britney Spears.

(APPLAUSE)

OBAMA: I do have to ask my opponent, is that the best you can come up with?

(APPLAUSE)

OBAMA: Is that really what this election's about? Is that what is worthy of the American people?

(END VIDEO CLIP)

OLBERMANN: Now, if we are addressing what is worthy of the American people, McCain surrogate/apologist, Senator Joe Lieberman, today is saying anyone now complaining about that Paris Hilton/Britney Spears ad, quote, "should just relax and enjoy it."

(BEGIN VIDEO CLIP)

SEN. JOE LIEBERMAN, MCCAIN SURROGATE: So, the American people have an important choice to make in this election between Senator McCain and Senator Obama. I think the ads that Senator McCain is running are ads in that spirit; they simply compare the two candidates. When you talk about that, you know, and to some extent, the appearance of Paris Hilton and Britney Spears - people complain about it - I think they should just relax and enjoy it and be drawn - the idea is to draw people into the ad.

(END VIDEO CLIP)

OLBERMANN: Anybody with any idea what Senator Lieberman means should immediately contact - Senator Lieberman.

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

Howard, good evening.

HOWARD FINEMAN, MSNBC POLITICAL ANALYST: Hi, Keith.

OLBERMANN: How did Obama, saying what he said three times yesterday and having - actually said something even a little stronger for the first time in Florida towards the middle of June, how did that go from not being playing the race card as of last night, in the McCain campaign estimation, to being playing the race card today?

FINEMAN: Well, it's because the McCain campaign strategy has changed in the meantime. They've gone all negative all the time. All derisive ads, all Britney and Paris. And this is what they've been doing for the last several days and Obama walked into the propeller blades of the new McCain strategy.

I think the McCain people watched what happened in the primaries - saw that Obama was able to maneuver the race issue to his advantage, in many ways - in states like South Carolina, which totally flummoxed Bill Clinton. The McCain people decided they were not going to get in the same fix and decided to go on the attack as part of their new strategy to distract attention from whatever substantive issues Obama may be trying to raise in this campaign.

OLBERMANN: But also looking at the primaries and the Obama experience in that - is there a tipping point here? I mean, Landstuhl, Britney Spears, and the race card in three days - does McCain have to stop this at some point because others have tried this against Obama and inevitably wound up painting themselves into a corner where they didn't just look, initially they looked bitter, and then they moved on a kind of obsessed looking?

FINEMAN: Well, obviously, McCain's problem is he doesn't want to look like Jack Nicholson in "A Few Good Men" here. But he's got a problem. Most of the Republican conservative base doesn't like John McCain very much.

The only route he has to getting their support and getting them it show up, it seems, at least this is their theory, is to demonize Obama, to draw out the Republican base to go to the polls specifically to vote against this demon Obama. That seems to be the McCain strategy.

The risk for McCain is that he can lose whatever appeal he still has among independent voters. I just spent the day in Virginia, Keith, looking at that swing state. Obama's running strong in the Virginia suburbs, but McCain's got a shot there. But if McCain does this day after day after day, he's going to lose those independents in Northern Virginia.

OLBERMANN: And more to that point, I was amazed to hear McCain's answer to that woman at his rally, saying he was proud of that Britney Spears ad and then his answer to John King about the use of the phrase "race card." Is this a correct impression that this is not a carefully crafted campaign strategy by somebody else, but this is John McCain's personal game plan and this is John McCain right now?

FINEMAN: Well, I think it is John McCain right now because, I think, they're throwing everything against the wall and seeing what sticks. This is John McCain in survival mode. It's not quite like the prison years, but he is tough character in a tough spot, and he's going to use anything he can to survive.

And they're getting some positive feedback, they think, from the polls, including the latest Gallup Poll which shows the race daily tracking tightening again. Of course, McCain isn't busting beyond 44 percent or 45 percent himself. But, at this point, he doesn't seem to care if he can drag Obama down to his level which he is trying to do, trying to get Obama in an alley fight. That's exactly what McCain is trying to do.

OLBERMANN: Well, and to that point, has Obama handled this correctly, politically. I mean, should the campaign really be claiming he was not referring to the Republican noting the color of his skin? And I ask this because the first version of what he said three times yesterday.

What he said on June 20th in the Florida fundraiser, the phrasing was very specific - let me quote this to you - "We know what kind of campaign they're going to run. They're going to try to make you afraid. They're going to try to make you afraid of me, 'He's young and inexperienced and he's got a funny name. And did I mention he's black?'"

Well, obviously, that was a reference to the color of his skin and it was the only thing he did not repeat virtually word for word yesterday.

FINEMAN: Well, you can't take Robert Gibbs' statement at face value. You just can't. It doesn't make any sense and I think it's tactically wrong because Obama is saying that Democrats need to be on guard. Obama is saying that the country needs to be on guard. Obama is saying that it's a challenge for the country to deal, both with the positives and negatives of his candidacy.

He's trying to be honest about it. He should have all of his advisors and spokespeople be honest, too.

OLBERMANN: Yes. Howard Fineman of MSNBC and "Newsweek" - as always, Howard, great thanks.

FINEMAN: Thank you, Keith.

OLBERMANN: What if the McCain campaign had written two scripts for two different Landstuhl ads. For the ad they did produce - if Senator Obama canceled his trip to visit wounded troops in Germany, and one for - if he went through at the trip, accusing him of using wounded troops as campaign props.

A GOP strategist is telling "Business Week" that the campaign had just such a second script ready to go so that, quote, "no matter which way Obama turned, McCain had an Obama bashing ad ready to launch." McCain's campaign manager, Rick Davis denying to Andrea Mitchell this afternoon that the campaign had a second ad ready to go, saying he still thinks Senator Obama made a mistake in judgment in not visiting the troops at Landstuhl.

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

Good evening, Gene.

EUGENE ROBINSON, MSNBC POLITICAL ANALSYT: Hi, Keith.

OLBERMANN: All right. Two ads ready to go. If true, would that not seem to prove that McCain having already reversed that position of "I'm running a completely clean" really could be willing to say anything to win the White House?

ROBINSON: Well, what that would certainly indicate is what is important is not the substance of the bashing but the bashing itself.

OLBERMANN: Right.

ROBINSON: And I think that is, that is where we are right now. I mean, you know, this was probably always going to be a negative campaign run by John McCain. He starts the race with a number of disadvantages. And the way to deal with that, classically, and often it works, is through negative campaigning. So, some Republicans are wondering what took him so long.

OLBERMANN: Yes, but on the other hand, a lot of other people are wondering, how did they get there this soon? We are getting one new sort of massive detonation today, the going negative portion of the McCain campaign seems to have started awfully early against historical references, does it not?

ROBINSON: Well, I guess, historical references, yes. And there is a certain kind of frantic nature, the sense you get that - you know, we talked about having two ads ready. You know, that they have a second, you know, Paris Hilton ad, too, a Lindsay Lohan ad, in case that tested better?

I mean, it's just like throwing this stuff against the wall. It's to create noise. It's to create a distraction. It's to make it about Obama and, you know, survive to, you know, deeper into the campaign. I think the McCain campaign was concerned about Obama just kind of running away with this thing.

OLBERMANN: But the frantic nature of this, though, never mind right or wrong - 96 days to go, can any campaign maintain this kind of pace in terms of attacks, or does it necessarily implode by just trying to do too much and trying to keep this bio-move (ph) 11 on a scale of one to 10 every darn day?

ROBINSON: Well, I don't think you can keep this up for very long. For one thing, as we've already seen, you can't keep the candidate on message if the message keeps shifting every day. So, you know, while we've disavowed the Landstuhl ad, you know, does he still support it? There's no way to expect a candidate in the middle of a campaign to keep all that straight. So, you're going to have some serious message problems, and then, just the energy level involved in, you know - I mean, they were so outraged that Obama dared, you know, note the fact that he's the first major party African-American candidate.

You know, fairly silly, in fact, that campaign doesn't have it be about that, but it's true. He doesn't look like those other presidents on the dollar bills. But, you know, that took a lot of energy to summon that sort of outrage in the McCain campaign. I don't think you can do this indefinitely.

OLBERMANN: And if the goal is to influence not necessarily national media but local media, as they have said, then they get hit with stuff like what was in the "St. Petersburg Times" today, "The self-described "happy warrior" in the 2000 presidential campaign has turned sour in 2008, and the candor and straight talk that once made him such an attractive candidate are rapidly disappearing."

That's obviously a crucial swing state. Is there some indication that this is backfiring on that grassroots level where they think it's actually going to succeed?

ROBINSON: Well, that's, you know, that's obviously not the kind of editorial you want to see. And the question is - is McCain aiming all this at the kind of "red meat" conservative Republican base that may have had some doubts about him from the beginning, or is he going to go after those independents who remember the old independent bipartisan John McCain.

Right now, he seems to be trying to energize the base and - you know, but I kind of take issue with the question of who these ads are aimed at. I think they are aimed at the national - they're kind of a national -

(INAUDIBLE) they're aimed at us. They're aimed at us as a kind of megaphone that gets the stuff out there and - so, I'm not sure I entirely buy the idea that, "Oh, well, we're just trying to reach folks that grassroots."

OLBERMANN: Well, save your wisdom on that. But just remember, if it doesn't work, they'll come out with an ad eventually saying Obama is not black enough. So, just stand by for that later on on the campaign.

(LAUGHTER)

ROBINSON: It will happen. You're right about that, Keith.

OLBERMANN: Eugene Robinson of the "Washington Post" and MSNBC - thank you, Gene.

ROBINSON: Good to be here, Keith.

OLBERMANN: Exxon-Mobil made $1,486 per second in profits in the second quarter and John McCain is pushing for more oil drilling and more tax breaks for Exxon-Mobil. Gas, big oil, Obama, McCain and Paul Krugman.

And the Sy Hersh report - sitting around Dick Cheney's office, daydreaming of dressing up American Navy SEALS as Iranians, shooting at them, claiming Iran was trying to start a war and then attacking Iran.

(COMMERCIAL BREAK)

OLBERMANN: With the price of a gallon of gas up $2.50 since George Bush was sworn in, why would anyone trust a Republican to do the right thing on prices at the pump, drilling or the profit that Exxon-Mobil just declared for the second quarter, $11,680,000,000? Economists and columnist, Paul Krugman, next.

Later: The sound byte of the month as Britney Spears' panties and the sexual orientation of Lindsay Lohan are discussed on a morning newscast, not by a gossip reporter but by the police chief of Los Angeles.

Live, local, and late-breaking: you are watching Countdown on MSNBC.

(COMMERCIAL BREAK)

OLBERMANN: Eight years ago, the average price of a gallon of gas was $1.47 and now it's $3.95. Eight years ago, Exxon-Mobil's second quarter earnings were $4,015,000,000. Today, that company announced second quarter earnings that are the highest in U.S. corporate history, a record breaking $11,680,000,000.

Our fourth story on the Countdown: Amazing what happens when two former oilmen are in charge of the country. How in the heck did we not see that coming?

Exxon's earnings as record-breaking as they were, were not as high as Wall Street projected, so the company shares dropped today. The classic case of "what have you done for me lately." Nevertheless, this year promises to be even more lucrative for the oil industry than last year when companies made over $155 billion.

Such record oil profits giving Senator Obama an opportunity to point out that his opponent's policies on oil are not geared towards helping the consumer, that according to the administration's own Energy Department - increasing offshore drilling will not lower gas prices now and will not produce any oil for at least 10 years, and even then, would not affect more than a few cents on a gallon of gas.

But a gas tax holiday would only save consumers half a tank of gas through the whole summer, and that the only people helped by such policies are the ones already making money hand over fist.

(BEGIN VIDEO CLIP)

OBAMA: Senator McCain proposed a corporate tax plan that - listen to this - would give $4 billion each year to the oil companies, including $1.2 billion to - guess who? Exxon-Mobil. Last month, Senator McCain raised more than $1 million from, guess who? Oil and gas executives and employees most of whom - most of these campaign contributions came after he went to Houston to meet with a bunch of oil executives and announced that he was in favor of offshore drilling.

(END VIDEO CLIP)

OLBERMANN: We're joined now by "New York Times" op-ed columnist and professor of economic and international affairs at Princeton University, Paul Krugman.

Thanks for your time tonight, sir.

PAUL KRUGMAN, NEW YORK TIMES: Good evening.

OLBERMANN: We always fight the logical fallacy here but this cause-and-effect apply directly in this case, gas prices are more than doubled during the Bush presidency, oil profits have more than doubled during the Bush presidency.

KRUGMAN: Well, the gas prices and oil profits are going together. I mean, basically, you've got an oil company that owns some oil and the price goes up the way it has, they're going to make a lot of money.

Now, whether, you know, Bush is responsible for high oil prices, I don't think you can make that case. But we should remember that he promised, he said back in 2000, that he had - he knew what to do. He would deal and talk to OPEC into opening the spigots and, you know, they haven't managed to do that, so, this is a failed energy policy, for sure.

OLBERMANN: And speaking of failed energy policies - offshore drilling as a solution, even the Bush administration's own figures, experts, departments, are showing how meaningless this is, why is McCain still pushing it and why does it seem to be resonating with a lot of people?

KRUGMAN: Well, he is still pushing it because it's resonating. And I have to say, this is a little bit, you know, this is as clear cut, this is as cut and dry you can get. The Energy Information Administration last year in its energy report specifically addressed this and they said basically - no new oil, zero, zip until 2017 and insignificant effect on the price ever. So, you know, this is not, this you got from the horse's mouth, if you like.

But, you know, the people, it sounds good. We're going to drill, we're going to, you know, get some more stuff and American oil and I have to say - this is kind of disillusioning because, in the past, you know, when Bush has come out with crazy stuff, I partially blamed the news media for just not reporting on this. In this case, actually, the press has been pretty good in saying this is nonsense, but it's still working.

And half of the American people, according to the latest polls think that allowing this offshore drilling will, you know, cut oil prices next year when, in fact, it's going to take 10 years for it to do anything at all.

OLBERMANN: When you see a country like Brazil, which 30 years ago said enough to this and launched these serious, intense, alternative energy programs, and now, some huge percentage of their cars run on, essentially modified sugarcane.

Is the reason we don't do that here and have not committed to that here the fact that Exxon just declared an $11 billion second quarter profit and Wall Street was still disappointed? I mean, what is the incentive for these companies to spend to develop alternatives?

KRUGMAN: Oh, no, they don't - I mean, if you want to, you know, the reason to hate Exxon is not that it makes so much money, per se, it's the fact that it has not done anything to address the energy problem and it's actually spent heavily on, you know, financing climate skeptics, on basically blocking intelligent policy, on muddying the waters of our debate.

Now, whether we could have, you know, to be fair, we don't have a lot of sugarcane, so we couldn't really have done it as easily as the Brazilians did. But we could, you know, if Jimmy Carter had actually managed it sell us on energy conservation 30 years ago, we would be in a lot better shape than we are right now.

OLBERMANN: Back to the price of gas and the profits and this presidential campaign - if you look at the swing state polls, particularly in the 50/50 figure that you mentioned about, people believe that more drilling will affect, it will lower prices next year, and McCain has gotten a bounce from that belief - it would seem Obama is not winning one of the battles that might be easiest for him to win. Why not and what should he be doing that he is not doing?

KRUGMAN: Well, you know, I think he's falling into the kind of mistake that I would tend to make which is saying, "You know, this is silly, this is ridiculous. Nobody is going to believe that and that's not good enough."

And I think he's got - look, when I read Obama's response to the McCain ad about, you know, prices at the pump, Obama's response was, you know, "This is the same oil politics," which is true, but, you know, he was being dismissive. Obama was being dismissive when he ought to be outraged.

He's got to do some scene, "This is (INAUDIBLE). This guy is insulting your intelligence, he's really doing bad stuff, and you shouldn't be taken in by this," not sort of, "Oh, well, you know." I think that Obama is being a little bit too much of a professor, if I can say that.

OLBERMANN: Well, specify it, walk people through it.

Paul Krugman of the "New York Times," always in education, thank you, sir.

KRUGMAN: Thank you.

OLBERMNANN: OK, time for the religious citing of the day. An angel inside this window you say has nothing to do with the reflection of the lights across the street.

And the craziest sound byte of the month, maybe the year, as L.A.'s police commissioner today discusses whether Britney Spears is wearing pants and what Lindsay Lohan's sexual orientation is. Live on the local news.

But first, the headlines breaking in the administration's 50 running scandals - Bushed.

Number three: He was so bad we had to kill him twice-gate. As the Web site LegitGov.org points out, in January 2006, the Pakistani military claimed and the American media happily reported that in an air raid there, the U.S. had killed the Midhat Mursi, also known as the al Qaeda bomb maker and the man who recruited Richard Reid, the shoe bomber - Abu Khabab al-Masri from Peshawar, Pakistan comes the news today that during an air raid by drones in south Waziristan, the U.S. has killed Midhat Mursi, also known as the al Qaeda bomb maker and the man who recruited Richard Reid, the shoe bomber, Abu Khabab al-Masri.

Now, maybe we had to kill him twice because he used two different names.

Number two, Halliburton-gate. This is the ever-escalating story of the Halliburton subsidiary, KBR electrocuting our troops in Iraq. The House Oversight Committee is conducting hearings, the Pentagon's inspector general sent a memo to that committee, claiming that there is, quote, "no credible evidence that KBR or the Defense Department knew in advance about the electrocution risks in the soldiers' showers."

That's a lie. As committee chair, Henry Waxman pointed out, he produced a work order from July 8th, 2007, in which Sergeant Justin Hummer, stationed at the Legion Security Forces building in Baghdad reported, "Pipes have voltage, shock in shower." Sergeant Hummer survived, the man who next occupied that very same room, Staff Ryan Maseth, was electrocuted while showering on January 2nd of this year.

And, number one: Katrina-gate - or perhaps more accurately, Katrina-revisionist history-gate. The secretary of energy, Samuel Bodman, interviewed on "fixed noise" answered a question that could have been fresh off White House talking points, about whether technology has improved dramatically enough that offshore oil drilling now poses no risk to the environment. Bodman answered yes. "When we had Katrina and Rita, the two worst hurricanes in at least recent memory in '05, some three years ago, there's not one case where we had a situation with oil or gas being spilled in the environment."

Sadly, Mr. Bodman is not telling the truth. The United States government's Minerals Management Service published offshore damage assessment in May 2006, Rita and Katrina destroyed 113 oil platforms. Rita and Katrina damaged 457 oil pipelines. Rita and Katrina caused 124 offshore oil spills. Rita and Katrina led to total spillage amounting to 743,700 gallons of oil.

Rita and Katrina proved that offshore oil drilling risks damage to the environment. And Energy Secretary Samuel Bodman proved that he is a cheap liar.

(COMMERCIAL BREAK)

OLBERMANN: Bests in a moment, and the chief of police of L.A. talking about whether or not a celebrity is gay. Damnedest sound bite of the month. But, first, on this date in 768, Philip I began his reign as pope. And also on this date in 768, Philip I ended his reign as pope. At a time when popes were regularly seated or removed as part of wars, Pope Constantine had been captured by military forces early in the morning of July 31st, 768, and forced to quit.

Philip, who was a chaplain in a monastery at Rome, was promptly installed as his successor. But the man behind the coup had somebody else in mind for the papacy. So at nightfall of the same day he became pope, Pope Philip I quit and went back to his monastery and shortly thereafter Stephen III was elected, making Philip pope for a day!

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

We begin at Miami, Florida, and two nominees for dumbest criminal of the day who tried to steal a light poll by strapping it to the roof of their van. Because the police are never going to notice somebody driving around Miami with that hanging off their roof. Nice tying of the red handkerchief there.

To Porterville, California, and an angel in a carpet store. Angel in a carpet store. No, no, more accurately, it was in the window of a carpet store. Hundreds of people have been thronging to the parking lot of this store every night to see the heavenly apparition which only appears when the gas station opposite the store switches its outdoor lights on.

Apparently the good people of Porterville have yet to be told about that little something called reflection. Ted Stevens of Alaska, indicted but defiant, insisting he will stay on in the Senate and they'll have to pry the pork from his cold, dead hands.

And NASA says there is definitive proof of water on Mars, and this time they mean it, I think. Derrick Pitts joins us. All that ahead.

First, time for Countdown's top three best persons in the world. Number three, best hire, Luke Russert. It's official, he will join NBC News and MSNBC as a correspondent-at-large with the conventions coverage from Denver and St. Paul, focusing on the youth vote.

Number two, best birthday present. The author J.K. Rowling on her birthday confirming today that the handmade Harry Potter sidebar she sold for charity, "The Tales of Beedle the Bard," will be made available in commercial editions in time for Christmas. Now if she will only reveal the hint about the U.S. elections she put in one of the Potter books.

Number one, best crazy-ass sound bite from a public figure. Our first video best, L.A. police chief William Bratton, who this morning interrupted a workout at his gym to come out on the street and volunteer to be interviewed live on our MSNBC station in Los Angeles to insist that proposed legislation to protect celebrities from the paparazzi is utterly unnecessary. Listen to this.

(BEGIN VIDEO CLIP)

WILLIAM BRATTON, L.A. POLICE CHIEF: If you notice, since Britney started wearing clothes and behaving, Paris is out of town not bothering anybody anymore, thank God, and evidently Lindsay Lohan has gone gay, we don't seem to have much of an issue.

(END VIDEO CLIP)

OLBERMANN: Evidently, Lindsay Lohan has gone gay. Only in Los Angeles could the police chief who was born in Boston and used to be in the chief in New York come out of his gym to explain on a live morning show that evidently Lindsay Lohan has gone gay!

(COMMERCIAL BREAK)

OLBERMANN: Senator Ted Stevens heads to court and his Republican colleagues head for the hills. Our third story on the Countdown tonight. While the scold of the religious right, Tony Perkins, openly worries about how this will hurt the GOP's attempt to claw its way back to respectability. His word, claw.

Senator Stevens' lawyer, Brendan Sullivan, did the talking during today's brief arraignment in Washington, pleading not guilty for the senator on corruption charges. Stevens, accused of concealing more than $250,000 worth of goods, and services from VECO Corporation, seven years' worth.

Sullivan requested a speedy trial. It might commence as early as September 24th so that Stevens could, "clear his name before the election." The senator was booked by U.S. marshals, released on bail, his passport surrendered.

Meantime Tony Perkins of the Family Research Council, handily weaving Stevens into the bigger picture, writing in his newsletter yesterday: "As Republicans try to claw their way back to respectability before an election cycle, Stevens' debacle may do even more damage to the Republican brand."

Trying to avoid bad branding, the presumptive Republican nominee donated to charity the $5,000 Mr. McCain had received from Northern Lights, Senator Stevens' political action committee. And most of the GOP senators up for re-election have also donated Stevens' PAC money to various other charities. Let's turn now to Democratic strategist Chris Kofinis, former communications director for the presidential campaign of Senator John Edwards.

Chris, good evening.

CHRIS KOFINIS, FMR. EDWARDS COMMUNICATIONS DIR.: Good evening, Keith.

OLBERMANN: A trial starting about September 24th. Did you suggest that to him or somebody in the Obama campaign or was this his own stroke of genius?

KOFINIS: Actually, I suggested a trial that lasts many weeks and with a televised verdict right before the election. You have to wonder whether Stevens got a bunch of phone calls from Republicans after today's hearing where they asked him, which side are you on? I mean, this is getting, you know, unbelievable.

I mean, this is just another sad example of a self-centered politician that seems to put himself first, instead of his party or the country and it's unfortunate. But from my perspective, I'd say, thank you, Mr. Stevens.

OLBERMANN: Well, but to that point, now Senator Craig, Senator Vitter, now Senator Stevens, only Senator Craig even briefly thought about resigning to help clear the issue of - you know, perception of Republican scandals aplenty off the table for his party. Is there any evidence of a sense of bigger purpose or even a little selflessness inside the Republicans?

KOFINIS: It doesn't seem to exist. You would think that someone would want to take one for the team, especially if they remember what happened in 2006 when all the scandals really hurt and devastated the Republican Party, you would think that some would say, listen, it's time to go.

It doesn't seem to be the case. It seems to almost be the opposite where the Republican Party from the halls of Congress to the White House seems to be working pretty hard to prove the old axiom that, you know, absolute power corrupts absolutely. It doesn't make sense, but it really is an indication of what state the Republican Party is in.

OLBERMANN: The remark by Tony Perkins to say the GOP is still clawing in the clawing phrase of restoring its brand, once again, did you write that for him?

KOFINIS: Well, the words I would use describe the Republican brand have a lot more expletives involved. So my guess is, you know, clawing was the family-friendly way of describing the state of the Republican Party. I mean, let's be frank about it, this is a party with no ideas, no vision, no future electorally.

I mean, they are going to suffer some serious losses come November, even the Republicans, I think, can understand that. And when you have Republicans like Newt Gingrich saying that the party needs to come up with ideas and a vision, you know you're in a pretty bad state of affairs.

But their problem is, they're not only facing I think, political trouble, they're facing the wilderness. If they don't change and start changing their ideas, they're going to suffer more than just political defeats in '08. They're going to suffer, I think, a complete rebuke from the American people.

OLBERMANN: And as far as Senator McCain having to give the PAC money from Stevens to charity, why did they take PAC money from Stevens in the first place? I mean, this is anti-earmark McCain and Mr. Earmarks, Ted Stevens.

KOFINIS: Well, hypocrisy is becoming an increasing characteristic of John McCain and his campaign in 2008. You know, it's kind of unfortunate. He has become a sad caricature of the candidate he was in 2000.

You know, as I say, the John McCain of 2000 wouldn't vote for the John McCain of 2008. He proves that every single day. But what this also does, I think, expose a really powerful angle of attack from not only the Democrats, but for the Obama campaign. You know, this notion of John McCain as a maverick, as an independent, it's a mythology. It does not exist, it is no longer true.

And that, I think, is a very powerful angle of attack over the coming months. You prove the reality that John McCain was not the person he once was. His candidacy will crumble. And once that happens, this election is effectively down.

OLBERMANN: Chris Kofinis, former communications director of the Edwards campaign, thank you as always, Chris.

KOFINIS: Thanks, Keith.

OLBERMANN: There is frozen water two inches below the Martian surface. OK. We've all heard something like this before, why this matters from Derrick Pitts of the Franklin Institute in Philadelphia.

And this matters, you're sitting around Cheney's office thinking about dressing up Navy SEALs as Iranians and shooting at them so that we could claim Iran was trying to start a war? Part of worst persons ahead on Countdown.

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OLBERMANN: There is another lake somewhere in the universe, we're not alone. And there is another chunk of ice somewhere in the universe. It's two inches below the surface of Mars. Why we are supposed to believe the scientists are serious about that this time.

And another conservative radio yakker doesn't even realize he has just called Ronald Reagan the anti-Christ, while an exterminator survives by eating bugs, and another exterminator plots a phony war against Iran in the White House. They are tonight's "Worst Persons in the World."

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OLBERMANN: There's water on Mars. Seriously, scientists mean it this time. They're not pulling your leg, probably. Oh, and there's a lake full of liquid ethane on a moon of Saturn. That's ahead.

But first, time for Countdown's number two story, tonight's "Worst Persons in the World." The bronze, to Theo Rasmulder (ph), a part-time gold prospector in Australia who was found by natives deep in the outback after he was lost without food or water for four days. Rasmulder survived by eating insects and termites.

Look, there's nothing wrong with doing that. You do what you got to do. It's just that Mr. Rasmulder said afterwards that the taste of the bugs wasn't "too bad." And that just when he's not getting his butt lost while prospecting for gold, Mr. Rasmulder's day job is bug exterminator. Maybe he can cut down on the insecticides, just go to your house and chow down.

The runner up, speaking of bugs, Brian Sussman of KSFO Radio in San Francisco, which seems to produce an abnormally large number of radio guys who don't have time for the facts, spouting the GOP talking points about Obama and expanding on them to claim Obama was running for anti-Christ.

"He's giving this speech in Europe. He is talking about us being citizens of the world. I've got news for you, dude, I'm not a citizen of the world, I live on this planet, but I'm a citizen of the United States of America."

I've got news for you, dude, Obama said he was a proud citizen of the United States and fellow citizen of the world, and the last guy that said something like that, "I speak today as both a citizen of the United States and of the world," Ronald Reagan. Cool, a conservative too stupid to realize he just called Reagan the anti-Christ. Dude.

And our winner, Vice President Cheney. Seymour Hersh's reporting sometimes seems way out there, but usually he winds up having actually understated reality. So let's just keep this in the "probably" file for now. He told the Campus Progress Journalism Conference that in a meeting in the vice president's office, members of the administration sat around brainstorming ideas to provoke a war with Iran.

"The one that interested me the most was, why don't we build, we in our shipyard, build four or five boats that look like Iranian PT boats, put Navy SEALs on them with a lot of arms, and the next time one of our boats goes to the Straits of Hormuz, start a shoot-up. Might cost some lives and it was rejected because you can't have Americans killing Americans."

That's the kind of - that's the level of stuff we are talking about. Provocation, but that was rejected. Can you see this happening in Cheney's office? Sure you can. Can you see Cheney getting all happy and worked up and almost smiling? Sure you can. Can you see when they get to the part about Americans being killed and you can't do that and he just stares them all and says, so?

Vice President Dick Cheney, today's "Worst Person in the World"!

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OLBERMANN: Stop me if you've heard this one before. NASA has found water on Mars. Ha, ha, ha, ha, ha, ha. No, seriously. The number one story - I know what you're saying here, I have been saying it all day, didn't they say this previously 10 or 20 times? The presence of H2O, albeit in the form of ice just beneath the red planet's surface. Scientists at the University of Arizona, leading the Mars Phoenix Lander mission, say ice was discovered in a soil sample from the Snow White Trench - hi ho, about two inches deep and nine inches wide.

In other interplanetary news tonight, Saturn's moon Titan now boasting its own liquid, not for drinking though. Using instrument aboard the Cassini spacecraft, NASA concluded that Ontario Lacus, a lake about the size of North America's own Lake Ontario, contains Ethane produced when Methane reacts with sunlight. But it's a liquid, which happens to be a key component of crude oil.

Hey, let's start drilling, Senator McCain.

Time, once again, to call upon Derrick Pitts, chief astronomer from the Franklin Institute Science Museum in Philadelphia.

Good evening, Derrick.

DERRICK PITTS, THE FRANKLIN INSTITUTE: Good evening, Keith.

OLBERMANN: OK. I think I have been hearing this since I was in high school. How many times have we discovered water on Mars or just about discovered it, and why is today different?

PITTS: We're not pulling your leg. Honest to goodness, we're not. No. Here is the real story. The story is that finally we've been able to do the actual scientific tests on the soil to determine that water actually is there. Before we were looking at all sorts of other sort of indirect evidence. Photographs from orbit, radar studies, things like that.

Now, the way the scientists say, in the actual testing itself, we've been able to touch and taste the water. So we know it is really there now for sure.

OLBERMANN: All right. They taste - I heard this before earlier.

They tasted it. Who tasted it?

PITTS: It's actually the testing device itself that is lined with about - I think it's about 24 different sensors that can actually, in a sense, really taste it. So they know for sure it's there, but there's nothing else in it so far.

OLBERMANN: And they've already decided it is better than the tap water in L.A.

PITTS: Far better.

OLBERMANN: Let me put my cynicism aside. This discovery, what are the implications about life on Mars then or now?

PITTS: OK. So now what we have is the real set-up, Keith, for the possibility that life could have existed on this planet and maybe still does. We know for a fact that in order to actually chase the story of life, we have to look for the water. Now we know for certain.

And remember, NASA is trying to make sure it very carefully checks off each and every step to make sure that there's no mistake because you don't want to make a mistake going down the line of saying whether or not there's life if you don't have water, so on and so forth like that.

OLBERMANN: All right. I guess it's easy to understand, relatively speaking, why water on Mars would be a big deal, but what is the excitement about a lake full of ethane on one of the moons, the Titan moon.

PITTS: It may not seem like it's a very exciting story just for that reason, but actually it is. Because ethane is one of the organic compounds that we find all over this planet. And in fact, when we look at this, we have to look back at the parent element of this and that's methane.

And when we look at that, we're actually looking at something that we find plenty of here on this planet and really does indicate that there are organic compounds. So, if we were to say, for example, take some of the atmosphere of Titan and mix it with an atmosphere or an environment like Mars, add some heat and a few other reactions, you might end up with something like what we have here on Earth.

So that's how we have to think of it, is that we have one piece over here on Titan, another piece over on Mars.

OLBERMANN: Can't miss while we have you. This is not from today, but Edgar Mitchell, the sixth man who walked on the Moon, came back this week and said we've been visited repeatedly by UFOs. He has been talking about this stuff since the '70s. He even did an ESP experiment while he was on board Apollo 14.

Should I be believing him or is there just a good statistical chance that one of the astronauts necessarily had to believe in all this stuff anyway?

PITTS: Well, let's take away the fact that he's an astronaut, he has been to the Moon, and just look at him as a regular person. He's saying that aliens have been here. We have to ask the basic question, do you have any proof? He has none. So, his value of stating that aliens have been here, even as an astronaut, is no greater than anyone else's.

OLBERMANN: And he has no opinion on the value of there being a lake of something somewhere in the universe? He doesn't have any extra added insight into that would you assume?

PITTS: I don't know how well his ESP works that far out or not. But no, I don't think so.

OLBERMANN: And by the way, is there any value to the fact that there is a lake of something, never mind what it is. Is - does the geological or topographical structure of a lake mean something in outer space?

PITTS: Actually, it really does. It shows us that the process that we have looked at here on Earth for creating streambeds and valleys and all those sorts of things is copied everywhere else in the solar system. We see it on Mars, we see it on Titan, and this is evidence that liquids falling from an atmosphere can create streams that eventually create these reservoirs like lakes.

OLBERMANN: And perhaps provide more offshore drilling. Derrick Pitts, chief astronomer of the Franklin Institute, it's always an education, sir. Always, thank you for your time.

PITTS: Thank you, Keith.

OLBERMANN: That's COUNTDOWN for this, the 1,119th day since the declaration of "Mission Accomplished" in Iraq. I'm Keith Olbermann, good might and good luck.

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