'Countdown with Keith Olbermann' for Monday, March 2 2009
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Guest: Richard Wolffe, Chris Hayes, John Dean, Paul F. Tomkins High: Which of these stories will you be talking about tomorrow?

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

Comedian Rush Limbaugh and the Republicans split. The chairman of the RNC dismisses the comedian as a comedian.

(BEGIN VIDEO CLIP)

MICHAEL STEELE, RNC CHAIRMAN: Rush Limbaugh is an entertainer. Rush Limbaugh - his whole thing is entertainment. Yes, it's incendiary.

D.L. HUGHLEY, TV HOST: He influences the Republican Party, right.

STEELE: Yes, it's ugly.

(END VIDEO CLIP)

OLBERMANN: Today, comedian does not like being called comedian.

(BEGIN VIDEO CLIP)

RUSH LIMBAUGH, RADIO TALK SHOW HOST: Michael Steele, you are head of the RNC. You are not head of the Republican Party. It's time, Mr. Steele, for you to go behind the scenes and start doing the work that you were elected to do instead of trying to be some talking head media star.

(END VIDEO CLIP)

OLBERMANN: First, South Carolina Governor Sanford said, "Anybody who had hope Obama failed was an idiot," now, the Limbaugh-Steele steel cage match. Did Republicans just lose the Republican base? Or did Limbaugh just lose his? By the way, comedian also misquoted the U.S. Constitution.

(BEGIN VIDEO CLIP)

LIMBAUGH: Life .

(APPLAUSE)

LIMBAUGH: . liberty .

(APPLAUSE)

LIMBAUGH: . freedom and the pursuit of happiness.

(END VIDEO CLIP)

OLBERMANN: Freedom isn't in that list. And, oh, by the way, the list, it isn't in the Constitution. It's in the Declaration of Independence.

Fighting for the budget: This is more than just a shopping list.

We'll explain why it is Obama's first self-definition of his presidency.

The definition of the Bush presidency: Horrifying internal memos just released by the Justice Department. President Bush was told "a military commander carrying out a raid on a terrorist cell" in this country would need no search or arrest warrant, and the detention of any international terrorists on U.S. soil could have been ordered by Bush.

And the latest grotesquerie from Bill O'Reilly, the man who once called a murdered rape victim, quote, "moronic" and described the miniskirt and halter top she was wearing and said, "Every predator in the world is going to pick that up at 2:00 in the morning." Bill O'Reilly is now supposed to go speak to a support group for survivors of rape.

All that and more: Now on Countdown.

(on camera): Good evening from New York.

If you wondered why President Obama would inflate somebody as ultimately peripheral to the actual dynamics of American politics as Rush Limbaugh, by referencing him personally, tonight, you may have gotten your answer because - in our fifth story: If a president or his people single out a radio announcer as the de facto head of the opposition party, the actual politicians, the actual heads of that opposition party might conceivably rise up in defense of their territory and denounce the announcer, and it all ends with somebody meekishly apologizing to another. This they now do.

First, Governor Sanford of South Carolina and then Chairman Steele of the RNC - and now, comedian Limbaugh, ambassador from "ego land." CPAC, last week's Conservative Political Action Conference, the gift that still keeps on giving, on Saturday, keynote speaker Limbaugh issuing his first self-described first national address before an adoring crowd in Washington, calling on right wing conservatives to take back the country and defending his remark about wanting President Obama to fail. Limbaugh comparing that, his desire to see the president fail during the nation's economic equivalent of 9/11, is nothing more than cheering for the Steelers over the Cardinals in this year's Super Bowl.

RNC Chairman Steele, among those Republicans distancing themselves from Limbaugh's remarks, Steele also chafing at the suggestion that a comedian - other than him that is - is now leading the Republican Party.

(BEGIN VIDEO CLIP)

HUGHLEY: You have your view. I have mine. We don't need incendiary rhetoric.

STEELE: Exactly.

HUGHLEY: Like Rush Limbaugh, who is the de facto leader of the Republican Party.

STEELE: No, he's not.

HUGHLEY: Well, I'll tell you what. I've never heard anybody .

STEELE: I'm the de facto leader of the Republican Party.

(LAUGHTER)

HUGHLEY: Then you know what? Then I can appreciate that. But no one will actually decry down some of the things he says. Like when he comes out and says that he wants the president to fail. I understand he wants liberalism to fail. Like, I get it's not about the man. But it is still about the idea that he would rather have an idea fail so his idea could move to the forefront.

STEELE: But, D.L. wait a minute .

(CROSSTALK)

HUGHLEY: And to me is destructive.

STEELE: D.L., how is that any different than what was said about George Bush during his presidency?

HUGHLEY: You're absolutely - let me say something. You're absolutely right and both of them are wrong.

STEELE: So, let's put it into the context here. Let's put it into context here, Rush Limbaugh is an entertainer. Rush Limbaugh - his whole thing is entertainment. Yes, it's incendiary.

HUGHLEY: He influences the Republican Party, right.

STEELE: Yes, it's ugly.

(END VIDEO CLIP)

OLBERMANN: Limbaugh stating his response on his radio program this afternoon, ranting for 20 minutes, alleging that Chairman Steele cares more about being a pundit than about running the party.

(BEGIN VIDEO CLIP)

LIMBAUGH: Michael Steele, you are head of the RNC. You are not head of the Republican Party. Tens of millions of conservatives and Republicans have nothing to do with the RNC, and right now, they want nothing to do with it and when you call them, asking them for money, they hang up on you. It's time, Mr. Steele, for you to go behind the scenes and start doing the work that you were elected to do instead of trying to be some talking head media star, which you're having a tough time pulling off. But it seems to me that it's Michael Steele who is off to a shaky start.

(END VIDEO CLIP)

OLBERMANN: Mr. Limbaugh also contained that because when Steele was a Senate candidate, Limbaugh made the unfortunate decision to equate Parkinson's sufferer Michael J. Fox to Duffy Duck after Fox had endorsed Steele's challenger, Senator Ben Cardin, Mr. Steele now owes him his everlasting and unquestioning loyalty. Exactly the kind of logic that today had the comedian defending his "Obama failure" stance in terms of "You are either with the Limbaugh or against the entire Republican Party."

(BEGIN VIDEO CLIP)

LIMBAUGH: If it's your position that you want President Obama and Speaker Pelosi and Senate Leader Harry Reid to succeed with their massive spending and taxing and nationalization plans, I think you have some explaining to do. Why are you running the Republican Party? Why do you claim you lead the Republican Party when you seem obsessed with seeing to it that President Obama succeeds?

(END VIDEO CLIP)

OLBERMANN: The denouement, tonight, Mr. Steele's office says the chairman reached out to talk to Limbaugh, but nobody is saying whether or not he succeeded, Steele saying he wants Limbaugh to know he meant no offense, that he went back at that tape and realized, "Words that I said weren't what I was thinking. I'm not going to engage these guys and sit back and provide them the popcorn for a fight between me and Rush Limbaugh."

As my old fried, the late great Chick Hearn used to say, "He's already in the popcorn machine with butter and salt all over him."

Time now to call in our own political analyst, Richard Wolffe.

Good evening, Richard.

RICHARD WOLFFE, MSNBC POLITICAL ANALYST: Good evening, Keith.

OLBERMANN: Did the president just play the GOP into this? Did he just cause its chairman and its loudest mouth to rip each other? Or is that too Machiavellian to be possible?

WOLFFE: Machiavelli was foreign, wasn't he?

(LAUGHTER)

WOLFFE: Look, this is not too Machiavellian. In fact, what surprising is how well and how quickly it's worked. It's a playbook that is incredibly familiar. If you cast your mind back all the way back to the Bush era, you find Republicans doing the same thing to Democrats. They tried to define them as Move On or Daily Kos - or as Rush Limbaugh was just trying to do, as Pelosi and Reid.

The problem is, you got to pick a face that is pretty unacceptable, and Rush Limbaugh has a striking face, which is totally unacceptable to independent voters, the people who put President Obama over the top in Indiana and North Carolina, they find him to be a turnoff and you can define the Republican Party as Rush Limbaugh, then you are laying the groundwork for this ongoing civil war for the next couple of years.

OLBERMANN: But the last 60 years of American political civil war is littered with politicians who went after the media or specific people in the media, as you suggest. Joe McCarthy versus Edward R. Murrow, Richard Nixon versus Dan Rather, Spiro Agnew versus everybody, but each of those, each one of those was a frontal attack. This is something different, isn't it? A divide-and-conquer thing - you go after the vanities of everyone on one side of the political spectrum in hopes of getting them to do the attacking for you. There's brilliance to this that I don't know that we've seen before.

WOLFFE: Well, it's divide-and-conquer and there's certainly enough vanity to go around here. But Rush isn't just a member of the media, he is a political force and has been used as such. He is one of the four walls of the Republican echo chamber. He may be two, you know, he's that big.

(LAUGHTER)

WOLFFE: The problem here for the Republicans is that if it was just a member of the media, there would be no conflict. It would be easy to throw him over the board - although that's an image I wish I hadn't risen. But you have here is someone who is a very effective channel for mobilizing the base. So, it's incredibly difficult to go out and attack him.

OLBERMANN: But, apology or not, Steele just cut Limbaugh, Eric Cantor just cut Limbaugh, and that's two years ago that Cantor sent out this fund-raising letter that said, "I stand with Rush," he even created a Web site called that. Could it be dawning on Limbaugh here that possibly, Republican politicians have been, you know, using him as opposed to actually worshipping him?

WOLFFE: I suspect it's dawning on Limbaugh that his audience is more loyal to him than Cantor's is to himself. And so - look, his numbers, I expect they're going to go through the roof after all of this. He's been attacked by the Obama White House. There is a marketplace out there for people who hate this president and he's trying to corner it.

The question for Republicans is: Where does it leave their debate about their identity and their values and what they stand for? Does the Limbaugh agenda have any resonance anymore? Do they to not have just to disassociate themselves from him but everything he talks about? That's the difficult challenge and that's where the sort of brilliance of this strategy comes into play. It's not about Limbaugh; it's what do the Republican politicians have to do.

OLBERMANN: MSNBC political analyst, Richard Wolffe - it's fascinating. As always, sir, great thanks.

WOLFFE: Thank you, Keith.

OLBERMANN: Let's turn now to Chris Hayes, the Washington editor of "The Nation" magazine.

Chris, good evening.

CHRIS HAYES, THE NATION: Good evening, Keith.

OLBERMANN: The idea that we want Obama to fail and Michael Steele, ironically enough, have defended that at the beginning of that interview with D.L. Hughley. Now, Michelle Malkin joined Limbaugh in going over the "We want Obama to fail" cliff. Do these guys not get that in this particular case, this isn't just a new president coming into office, in this era of bailout and economic teetering on another cliff, if Obama fails, we go into a depression? Is that somehow forgotten in the equation here?

HAYES: Yes, I don't think that the really hardcore conservatives like Limbaugh and Malkin and the people that find their rhetoric appealing, "A," I don't think they necessarily themselves feel particularly close to the precipice, and "B," I don't - I think they're people whose commitment to their ideology is so intense that it sort of overrides anything else.

And that's - you know, it's a small - it's a small part of the electorate as a political force, but it's a lot of people. I mean, there's a significant number of people who feel that way, and what Richard just said is really right, there is a market right now of sort of anger and even hatred of the president that is there to be kind of leveraged and conquered. And clearly, that's what Rush Limbaugh and Michelle Malkin and all those other people are engaged in.

OLBERMANN: But one of the things they've used to defend this, which would suggest that it might drive their audience sort of off into the wilderness, is this is the same - Limbaugh said this is - this is the same as those of us who criticized George Bush. But those of us who criticized George Bush did not say we want him to fail. We said we were afraid he would or he had.

HAYES: Right.

OLBERMANN: And we're trying to talk him out of doing the things that we thought we're causing him to fail. The Republicans don't see that difference either?

HAYES: No. That's an interesting distinction, because there's been a little bit of walking back, people who sort of have circled around the Limbaugh call have said, "Well, we think he will fail" or tried to sort of add that level of explanation. But I think Limbaugh is being entirely honest in speaking for a lot of conservatives. They just hope the whole thing crashes and burns.

And there's kind of economic nihilism. I mean, that's the word that David Brooks used after Bobby Jindal's speech. He called it - he called it economic nihilism. And I think that exactly captures it.

There is the kind of Joker in the "Dark Knight" "let the whole thing burn" streak to conservatism right now that is a little difficult to square with any sort of reasonable debate about the direction of the country. I mean, if you're really that invested in essentially this whole thing kind of blowing up, it's a little hard to have a back-and-forth about policy and politics.

OLBERMANN: And that sure makes it easier to analyze things if you want everything to blow up. But there's a tone deafness to nihilism in a time of crisis. And I'm wondering, is it a snowball kind of thing? Because Limbaugh came out and made fun of liberals reading from Teleprompters, I'm amusing he meant the president. And then he misquoted something from the Constitution that was actually from the Declaration of Independence anyway, he probably could have used a Teleprompter. And now, he apologizes or analogizes the "I want Obama to fail" to rooting for the Steelers in the Super Bowl, except and you would think that a self-professed football expert like Limbaugh would know that the Steelers' coach and the Steelers' owner campaigned for Obama and they did so to such an extent that the second person the team owner, who was a Republican, thanked right after they won the Super Bowl was Barack Obama. Does this suggest that this actually sort of intermeshing battle here is rattling Limbaugh to some degree?

HAYES: You know, what I think it does suggest and this is true of Limbaugh and it's true a bit more broadly of conservatism right now in America, which is that they've kind of - the echo chamber has become so powerful they've lost the ability to speak outside of the very small group of people that already agree with them.

And this something that happens to political movements of all sorts of stripes. It's something that was - that the left was accused of for many years, particularly in the late '70s, during the rise of Reaganism, which is this sort of - you lose sight of what kind of vocabulary and rhetoric has a general appeal to people that aren't obsessively downloading from Townhall.com and listening to Rush Limbaugh every second. And you see that. You see the fact that they just are really caught in this kind of "hall of mirrors" of conservative references.

OLBERMANN: It's extraordinary. Chris Hayes of "The Nation" - great thanks for your insight tonight, Chris.

HAYES: Thanks, Keith.

OLBERMANN: And we haven't even gotten to Limbaugh misquoting that line from the Constitution that isn't even in the Constitution. We haven't because there is tonight, the revelation of a battle for more significant than Rush Limbaugh versus Michael Steele or Rush Limbaugh versus America. It is contained in the series of Bush era memos just released this afternoon by the successors to the people Bush put into the Justice Department.

And it is a harrowing confirmation of every seemingly paranoid nightmare of the last seven years. His Justice Department told Mr. Bush that he could legally muzzle the media or detain anybody he wanted in this country, or order a military strike against any place in this country provided his targets were assumed to be terrorists. To analyze this chilling perversion of the nation's principles, we will be joined by John Dean.

(COMMERCIAL BREAK)

OLBERMANN: We'll get out the Countdown magnifying glass to examine how one presidency may well be defined by a budget, while its predecessors may well be defined by a series of memos from its own Justice Department just released this afternoon that depict a president who was told he was within his rights to order military raids on this country. John Dean joins us for the latter.

Later, Rod Blagojevich finally sees some lettuce from his gold mine. And Rush Limbaugh can't tell his Constitution from his Declaration of Independence and still gets the quote wrong anyway. Worst Persons in the World: ahead on Countdown.

(COMMERCIAL BREAK)

OLBERMANN: The Republican Party was out in full force this weekend, whipping up fear over the president's budget because, you know, Republicans are fiscal conservatives now.

Our fourth story tonight: The real story of the budget, the real story of the opposition to it. Former Bush political guru, Karl Rove, opposing Obama's budget of $3.5 trillion on the grounds that - you know, Republicans are fiscal conservatives now.

(BEGIN VIDEO CLIP)

KARL ROVE, FMR. BUSH ADVISOR: To suggest that adding $2.9 trillion to the deficit in eight years with two wars, Katrina, 9/11, and a tech bubble bursting, makes us somehow - the Republicans unable to talk about fiscal responsibility, when this president, in his own budget document right here, says he's going to add $3.2 trillion to the deficit in the first 20 months and 11 days. He's going to - he is going to double it in the first four years and triple it if he gets another term.

(END VIDEO CLIP)

OLBERMANN: Except, of course, unlike President Rove or his assistant Mr. Bush, President Obama includes the cost of Mr. Bush's wars in his budget as well as the cost of Mr. Bush's unfought war, an actual effort to get bin Laden. President Obama also includes the $60 billion a year loss to the suspension of the AMT, the alternative minimum tax. President Obama also budgets more for federal disaster relief than Mr. Bush did which was both literally and far too powerfully, symbolically, exactly zero billion dollars.

More so than Mr. Rove, Senate Republican whip, Jon Kyl, expressing the honest GOP position when he said of the budget this weekend, quote, "It is terrifying in the policy implications." Terrifying. The budget is, as he says, not just numbers, it is a road map of presidential policy. In this case, a historic president whose budget road map reveals not just historic but a radical redirection of the entire country.

So, what exactly are the policy implications of Mr. Obama's new direction for America monstrous enough to terrify you as senators? Perhaps it has to do of where the money is going.

The U.S. government - us, we the people - we will set aside $634 billion over 10 years, as a downpayment toward the ultimate goal that everyone, every American, will have health coverage, including the 46 million and counting Americans - men, women and children - who lack coverage as well as all the Americans who would otherwise go bankrupt paying for future health coverage. Included in that cost: Preventive care, a cost that is apparently, transparently, a cost-cutting measure down the road.

And yes, o ye, puritans among us, America will pay for contraceptives, taxpayer dollars for evil condoms, and horrible birth control pills. Contraceptives that states already have the option of providing for low-income fornicators. Fornication that otherwise would lead to untold, unwanted pregnancies, unwanted babies, unwanted abortions, unwanted drains on families, unwanted drains on - yes, the national economy.

The Congressional Budget Office estimating $200 million saved over five years, thanks to - yes, contraceptives and family planning.

Or could this be about the kids receiving massive increases in government scholarship and lending, from college down to early head-start? Or could it be about the poor in line for everything from help weatherizing their homes to save on energy costs, the average family saving an estimated 350 bucks a year on energy cost, to federal assistance expanding Internet access to remote rural areas of the country? Not to mention improving our roads and our bridges and easing the strain on them with high-speed rail quite possibly through John Boehner's district.

If all those sound like worthy investments, perhaps Republicans' terror stems from the source of this money. Is the president planning to end three decades of growing income disparity, tilt the playing field back towards the middle-class?

Is Obama really trying to turn America into a country that taxes the rich people? Oh, yes! Hell, yes! Starting not now in a recession but in 2011, rich people will qualify for fewer tax deductions, so few that the functional tax rate might even rise to something like yours. And capital gains, money that you make any way other than working for it. That will now get taxed not at 15 percent but at 20 percent. Oh, the humanity.

Oh, and hedge fund managers will have their tax rates raised to the astronomical rates now being paid by hedge fund manager secretaries. The rich will also get less in Medicare benefits. You heard me, they get Medicare benefits.

What about the small businesses that will get crushed by these tax hikes? That part is true, tax hikes are on the way for every single small business, except 98.1 percent of them. And of those remaining 1.9 percent small business owners, more than half a million are merely passive investors who have nothing to do with actually running that business, George Bush for instance, seriously.

But hold on, House Republican Leader Boehner says the budget raises taxes on every American. How? Because now, energy suppliers will pay a fee, $646 billion over 10 years for exceeding carbon caps, and therefore, they might in turn raise prices to the consumer. Corporate America equivalent to government in Republican eyes, namely a private price hike equals a public tax hike.

But in reality, those carbon fees will not only offset the price hikes, they will be used to cut payroll taxes for every single American on a payroll, not to mention $15 billion a year to research alternative energies - oh, and to lower greenhouse gases, just might slow global warming thereby saving the planet. No planet and the economy will really slow down, and suddenly.

Also, coughing up money, toxic waste polluters: $17 billion over 10 years. Superfund is back, kids. Agribusiness, not small farmers, will lose its $500,000 subsidies, just like banks will lose $4 billion in government payments for making student loans. Oil and gas will lose $35 billion in payments and loopholes. Insurance companies and pharmaceutical companies are losing billions in wasted federal payments.

You get the picture. And that, in short, is just some of what terrifies the GOP. That is what lies behind the budget debate, a debate Republicans have every reason to keep fighting, despite the fact that they've already lost it - on Election Day.

OK. I get the cute premise of the human vending machine here. If you got a human, you don't need to pretend he's a machine. And if you got a vending machine, you don't need a human in it.

Speaking of not having humans in it, stunning Bush Justice Department memos released today that authorize the previous president to detain people or order military raids in this country. And, how many videotapes of detainee interrogations and torture did Bush's CIA erase?

(COMMERCIAL BREAK)

OLBERMANN: Bushed in a moment, and the number of detainee interrogation tapes the CIA made and destroyed was zero, then became two, then three, then at least three, today, it jumped and it jumped amazingly.

First, on this date in 1877, the special electoral commission finished its negotiations, and declared Republican Rutherford B. Hayes won the contested 1876 election. In exchange for conceding, the Democrats got the compromise of 1877 - federal troops would be removed from the south and reconstruction and campaigns for equal rights abandoned there, thus ushering in 90 years of Jim Crowe laws and near apartheid. So much for bipartisanship.

Let's play Oddball.

We begin at Victoria Station, the train station in downtown London, and a cautionary tale. The next time you feel like just another cog in a work place machine, imagine being this guy. Yes, for those wanting a little more personality with their vending machine experience, here's a guy inside a vending machine. Just tell the smiling face which chocolate you'd like and presto, a human hand delivers your desired product. What happens if the machine gets jammed and the customer tries to rock it back and forth?

Sichuan Province, China, hello, school is back in session at the panda kindergarten. Oh, that's enough of that crap. All right. The Oddball favorite has returned to the new class of 13 baby pandas on a quest for knowledge and bamboo. The pandas' intense curriculum includes eating, sleeping, and interacting with playground equipment, except for that one who was jailed for being too adorable.

The startling Justice Department memos, his lawyers told President Bush he could detain anybody in this country without a warrant or order a military raid on them if they were terrorists. But who would decide if they were terrorists? John Dean joins us.

Even if fly fishermen are angry at Dick Cheney.

But first, because they may be gone, but their deeds outlive them, the headlines lingering from the previous administration's other 50 running scandals, still Bushed.

Number three, Blackwater-gate. The founder and chairman of one of the companies that have made us internationally the third most popular country on the continent has stepped down as its CEO. Five of Eric Prince's mercenaries are under indictment on 35 charges, mostly man slaughter, in the massacre of civilians during a Baghdad traffic jam in 2007. Mr. Prince says his resignation from Blackwater, now Xe, spelled X-E, quote, reduces the X on the thing. One of Eric's hobbies is Scrabble.

By the way, while no long CEO, Prince will remain sole owner of Xe and its subsidiaries. He added, he was, quote, worn out. We can only hope.

Number two, sadism-gate. This is what we've been dealing with. One of the causes of torture at Gitmo and Abu Ghraib and everywhere else is simple, some Americans like to torture other people or worse. Gary Berntsen, who led a CIA special forces team into Afghanistan for Mr. Bush in 2001 now says, quote, "it's ridiculous that the Bush administration after seven years didn't deal with many of those that we know are enemy combatants by killing them."

Specifically Khalid Shaikh Mohammed. "After seven years, the intel has dried up," Berntsen says. "Execute him." No trial. No phony trial just for show. Just kill him. Mr. Berntsen probably would be flabbergasted to know that his philosophy on this is interchangeable with al Qaeda's or that it would further their conviction that they would be absolutely justified in having executed him if they captured him. He, of course, said this on Fox News, where the news actors just nodded blankly.

Number one, torture tape-gate. For the last seven years, repeatedly, at several levels of the Bush administration, its operatives were asked if any of the interrogations of detainees were recorded at Gitmo or anywhere else, and if those tapes still existed or if they had been destroyed. Lev Dassin, the acting U.S. attorney in the southern district of New York, until a full-timer is appointed by President Obama, has today written to the ACLU, which sued over this issue, and the presiding judge in the case. "The CIA can now identify the number of videotapes that were destroyed," he writes.

The number in a moment. It is much more educational to recap the evolution of the number. As of December 2007, the official Bush administration number of destroyed tapes depicting detainee interrogation and, in some cases torture, was zero. Then the "New York Times" reported that two tapes had been made and destroyed in 2005. At the Moussaui trial admitted, yes, two tapes were made, two video tapes, also the one audio tape, but that was it.

Then it revealed that there might have been other interrogation or torture tapes made. Now Lev Dassin's letter today, quote, "92 videotapes were destroyed."

So the number of tapes, none, two, two plus an audio tape, at least three, and now 92. But at least we have a final answer. Sure, we do.

(COMMERCIAL BREAK)

OLBERMANN: They confirm that the darkest nightmares you might have had in the Bush presidency were, at minimum, plausible. People pulled off the streets without warrants on the order of the president, U.S. military strikes on American soil because of purported terrorism, newspapers, radio, television, the Internet restricted by a declaration of urgent necessity. None of it happened.

In our third story on the Countdown, we learned today that Mr. Bush's Justice Department thought all of it could have and could have legally. The current Justice Department releasing nine Bush era memoranda late this afternoon. Attorney General Eric Holder citing transparency and openness in a statement. There are other still classified documents yet to be made public.

But the memorandum dated October 23, 2001, from the Assistant Attorney General John Yoo is plenty. It is 37 pages, reading in part, "we conclude that the president has both the Constitutional and statutory authority to use armed forces in military operations against terrorists within the United States."

Not clear enough? How about the memo dated March 13, 2002, concluding that "the commander in chief's power to transfer prisoners captured in war is not restricted by the torture convention." And that "al Qaeda and Taliban prisoners are not entitled to POW status."

While that sounds like something we heard before, a little gem on page 20 of the same 34 page document may give everyone pause. Quote, "in sum, historical practice firmly supports the power of the president to transfer and otherwise dispose of all," emphasis included, "individuals captured incident to military operations, and not merely those individuals who may technically be classified as prisoners of war under relevant treaties."

There were also memoranda suggesting that the government could put new

restrictions on press and speech and one contemplating ways to use wiretaps

without warrants. Two of the nine memos came later, and constituted an

attempt at a cover, if not the cover up. October 6th, 2008, just before

the presidential election, quote, "advise that caution should be exercised

before relying in any respect on the memorandum 'authority to use military

force to combat terrorist activities within the United States.'

January 15th, this year, days before the inauguration, quote, "certain provisions stated in several opinions issued by the Office of Legal Counsel in 2001 to 2003, respecting the allocation of authority between the president and Congress in matters of war and national security do not reflect the current views of this office."

Let's call in FindLaw.com columnist, author of "Worse Than Watergate" and "Broken Government," former Nixon White House counsel, John Dean. John, good evening.

JOHN DEAL, FINDLAW.COM: Good evening, Keith.

OLBERMANN: Can we overstate how bad this was?

DEAN: I don't really think so. During the Civil War, they called Lincoln a Constitutional dictator. Reading these memos, you have to almost conclude we had an unconstitutional dictator. It is pretty deadly and pretty serious what is in these materials.

OLBERMANN: One could argue that in a time of widespread violent crisis, were we to have one in this country, that maybe the military could be used, maybe it would be needed to be used against terrorists. Maybe you could seize terrorists and worry about the legal niceties later. But isn't the flaw in this situation contained in this question, who in this formula was supposed to decide that these were terrorists?

DEAN: Well, according to these memos, it really is rather limited to the president of the United States. There are no guidelines as to how he might define or describe who was or was not a terrorist. That is the flaw. You put your finger exactly on it.

OLBERMANN: So that is the scenario that when we were assured that any of these suspensions of habeas corpus would apply to non-American citizens, that was the catch in it. If you were pulled off the street and said, wait a minute, I was born in this country. I have to go see a judge. I have to show you my birth certificate. You would never get to see a judge. It wouldn't matter whether or not you were born in this country?

DEAN: Exactly right. This is indeed the problem we have had with some litigation with some of the detainees. The president can unilaterally or, theoretically, even somebody he delegates can decide who indeed can be incarcerated, who can not. That is why I say, this is pretty close to being an unconstitutional dictator, in any definition under the law of this country.

OLBERMANN: Do these memoranda - again, we have only seen a couple of them and only for a couple of hours. Do they at this point offer any insight into any of the other Bush policies, like torture or water boarding? Do they help us contextualize them?

DEAN: I think, Keith, they are good example of what you can call the corporatization of government law. By that I mean, in corporations, you tend to have lawyers who set their goal as to where they want to take a gift argument. They have decided where they want to go before they start writing the opinion. That is what happened in this instance. These aren't fair allocations or analysis of what indeed the law is. It is an effort to indeed push a position and back it up with legal reasoning.

OLBERMANN: And those last two memos, the October 2008 one that says advise that caution should be exercised before relying in any respect on one memorandum, and the one from January, the one that says, the current positions are not reflected in the views of some previous memos - does the old cover up is worse than the crime thing apply here? Are those last two, pay no attention to the previous memos, more damning than the rest?

DEAN: Well, indeed, this is pretty close. I don't give evil motives to anybody involved in this. Certainly, there is some CYA in here, as far as cover up. I think that certainly comes through in these last two memos you mentioned, where they are really repealing the early ones. Someone is protecting themselves because these opinions, while they sat on the books for a long time, and for literally years of the Bush administration, it wasn't until really the final days of the administration they decided we better clean this up and repeal these and say these aren't standing precedents.

OLBERMANN: What does it say about what we need to do now in terms of investigating this, John? Is this the scale tipper for everybody?

DEAN: It could be, because the public is going to be aware of a lot more than they were aware. There is an investigation that has been ongoing that started in the - late in the Bush administration, by the Office of Professional Responsibility. I think that investigation, which we've heard a little bit about, is going to be very hard to suppress now. As lawyers get in and look at the strengths and weaknesses of these arguments - and they're primarily weaknesses, because that is why they were indeed repealed - I think the Office of Professional Responsibility may make some very strong recommendations, that could include prosecution.

OLBERMANN: John Dean, author of "Broken Government" and "Worse Than Watergate," and who knew, we would have to congratulate George Bush on his restraint. Great thanks, John.

DEAN: Thank you, Keith.

OLBERMANN: Hoist on his own petard, Comedian Rush Limbaugh excoriates liberals for not knowing the Constitution. He then misquotes the Constitution. In fact, the line is actually in the Declaration of Independence.

And a terrible O'Reilly story. A man who has blamed dead rape victims is to speak at a fund-raiser for rape victims.

And when Rachel joins you at the top of the hour, more on the John Yoo Bush Justice Department memos, and the erased CIA torture tapes with Michael Isikoff of "Newsweek."

(COMMERCIAL BREAK)

OLBERMANN: Comedian Rush Limbaugh mocks liberals for reading teleprompters. Then in his speech, he misquotes the Constitution. And it wasn't the Constitution. It was the Declaration of Independence. Teleprompter, teleprompter for Mr. Comedian. That's next, but first time for Countdown's number two story, tonight's worst persons in the world.

The bronze to right wing documentarian, failed sports caster and Sarah Palin would be groupie, John Ziegler, a guy who once scared her by showing her a picture of me. Speaking at the conservatives coven, he unloaded on conservatives who criticized Palin or each other. Quote, "a lot of us end up selling out to the other side for a guest spot on "Meet the Press" or "Larry King Live," because they know that a conservative saying something bad about another conservative is automatically going to be newsworthy and get them a higher profile. Well, those people ought to be ostracized and punished. This goes far deeper than those who are traitors for a spot on 'Meet the Press.' This goes throughout the entire organizational structure of the conservative movement. They do not take this issue seriously. They do not protect their own."

By the way, Bobby Jindal is going on Larry King this week. Well, good, stay off "Meet the Press" and CNN, isolate yourselves even further. Bigger than that, you are calling conservatives who criticize conservatives traitors. Didn't you just criticize conservatives?

Our runner up, Mary Matalin, went on "The Today Show" and got Governor Bobby "let me tell you a story" Jindal in more hot water. "He's the greatest public policy innovator in the country today," she said. "Bobby Jindal has made more progress in Louisiana in the shortest period of time in the history of the state, probably in the country. Education reform, ethics reform; everything that put Louisiana down in scale is now one of the top states in the country."

The annual report card on education in the states by Education Week for 2007, Louisiana 21st best. The annual report card on education in the states by Education Week in 2008, Louisiana 35th best. This comes from a press release issued in January by the Louisiana Department of Education.

But our winner, Bill-O the clown, once again getting a well meaning charity into trouble. In 2007, it was the Naples, Florida branch of the National Center for Missing and Exploited Children, which had invited O'Reilly to be its keynote speaker at a fund raiser, just weeks after he claimed that when an 11-year-old Sean Hornbeck was kidnapped by a pizzeria manager and held captive for two years, quote, "the situation here for this kid looks to me to be a lot more fun than what he had under his old parents. He didn't have to go to school. He could run around, do what he wanted. I what it all comes down, what is going to happen is there was an element here that this kid liked about his circumstances."

This kid was repeatedly raped and abused by his abductor for two years. After a few weeks, the Center for Missing and Exploited Children quietly announced that there had been a scheduling conflict, and Mr. O'Reilly would no longer be appearing at its event. Now it has happened to the - it happened to Alexa Foundation, which has invited O'Reilly to speak at its fund raiser two weeks for Thursday in Palm Beach, Florida. It is a group that supports rape survivors.

August 2nd, 2006, on the air, O'Reilly blamed a rape and murder victim for her own terrible death. "So anyway," he said, "these two girls come in from the suburbs and they get bombed and their car is towed, because they are moronic and you know they don't have a car. Jennifer Moore, 18, on her way to college, she was 5'2, 105 pounds, wearing a mini skirt and a halter top with a bear mid riff. Now again, there you go. So every predator in the world is going to pick that up at 2:00 in the morning."

Translation, she was asking for it. The assumption is that The It Happened to Alexa Foundation was not aware of O'Reilly's attitude that the victim is sometimes to blame or they would not possibly have extended the invitation. One assumes it will quietly announce another scheduling conflict before the March 19th event.

There's one person who knew about O'Reilly's attitude. And if he had a soul, he would have had the decency not to expose this group to his bitter hypocrisy. That, of course, is Bill O'Reilly, today's worst person in the world.

(COMMERCIAL BREAK)

OLBERMANN: The phrase requires only grade school knowledge. Mangled by comedian Rush Limbaugh, life, liberty and the pursuit of happiness. Comedian's version presently. In our number one story, Dick Cheney invited to a fund raising dinner to benefit the American Museum of Fly Fishing amid protest, and also former Governor Rod Blagojevich finally getting some cash for his bleeping valuable thing.

Comedian first and his big CPAC State of the Union type, big thing speech.

(BEGIN VIDEO CLIP)

LIMBAUGH: We believe the preamble to the Constitution contains an inarguable truth that we are all endowed by our creator with certain inalienable rights, among them life, liberty, freedom, and the pursuit of happiness.

(END VIDEO CLIP)

OLBERMANN: You may believe that the preamble to the Constitution includes that, but that whole inalienable rights phrase comes from the Declaration of Independence. Of course, the often cited passage ends "life, liberty and the pursuit of happiness." This from the winner of CPAC's Defender of the Constitution Award.

While the former vice president has agreed to speak this fall at a fund raiser for the American Museum of Fly-Fishing, the fisherman are having none of it. They want to throw him back, citing Cheney's environmental policy record. From the conservation editor at "Fly Rod and Reel Magazine," quote, "the entire fly fishing community is appalled and disgusted. We all need money, but to apply green lipstick to this Darth Vader of fish and wildlife is whoring. It's grotesque."

Good for you, Ted Williams. How about a six figure book deal for the former governor of Illinois with Phoenix Books, about his rise and fall, mostly fall.

Let's bring in the host of Vh-1's "Best Week Ever," comedian Paul F.

Tompkins. Paul, good evening.

PAUL F. TOMPKINS, VH-1: Good evening, Keith.

OLBERMANN: Rush Limbaugh, defender of the misquoted Constitution apparently.

TOMPKINS: What I love - it's really - I think maybe he is trying to defend the Constitution by disguising it as the Declaration of Independence. So if people come a looking for it, to grab it and tear it into shreds, or whatever they're going to do, they will mistake it for the other document.

OLBERMANN: Great idea. Also, this was in the speech: "also, for those of you in the drive by media watching, I have not needed a teleprompter for anything I have said." Maybe he should have used a teleprompter, rather than just relying on his ego to remember which is in the Constitution and what it is.

TOMPKINS: I'm not quite sure who this zinger was intended for exactly, like anyone whose job involves public speaking since the invention of a teleprompter. It is not a shameful thing. Also, I think you shouldn't call people out for needing a script when you need a script. In speech making terms, that is considered being awful at your job.

OLBERMANN: Turning to the former vice president, even more criticism, the former commissioner of the Vermont Fish and Wildlife Department called Mr. Cheney, quote, "one of the great enemies of healthy fish and wildlife conservation in the US over the last eight years." Do we have a prospect here of actually seeing guys in knee length boots, with hats and the little flies attached to them, and the rod and reel over their shoulders, protesting outside this dinner, if it actually comes to pass?

TOMPKINS: I hope so, because that will be the most beautiful bucolic protest anyone has ever seen. It will be like it was painted by Thomas Kincaid.

OLBERMANN: The other man protesting from the "Fly and Rod Magazine" is the other Ted Williams, apparently. But the response to all of this, I imagine, from Cheney would be, so?

TOMPKINS: Yes, exactly. Like this guy did not care when people questioned him putting humans into harm's way. I don't think he's afraid to go to war with just fish. Fish are just humans that haven't been intelligently designed yet.

OLBERMANN: Paul, it is like shooting humans in a barrel. Sorry. To the governor, Mr. Blagojevich, his statement, the governor chose to go with a large independent company, a publisher, because he wanted to tell his stories without restrictions over content. Like 100,000 dollars to write a book about his decline in the whole selling of the Illinois Senate seat. What sort of restrictions is he preparing himself for, like restrictions where he would have to stick to the truth?

TOMPKINS: Who is holding the guy back now? He has done every show from "The View" to Yo, Gabba Gabba (ph), saying that he didn't do anything wrong, when he's on tape doing something wrong. I can't wait to see this book, because I am hoping that is going to be written in crayon.

OLBERMANN: One last thing - by the way, he personally will sell every copy of that back and negotiate the price with you. If you don't pay enough, he will start swearing at you.

Last thing from CPAC, they had a presidential straw poll. The CPAC-ors chose Mitt Romney 20 percent, Jindal second, Ron Paul and Sarah Palin at about 13 percent. This was a ringing endorsement of what, do you suppose?

TOMPKINS: A group shrug. This has to be the hollowest victory for Mitt Romney, that he was only seven percent ahead of these other goofballs. Don't you understand, I'm the guy who almost lost to Obama.

OLBERMANN: What was the ratio, he spent 60 million dollars to get two delegates or whatever it was and 20 percent in a straw poll?

TOMPKINS: Yes, money well spent, Mitt.

OLBERMANN: He's the business man. Paul F. Tompkins - that explains the whole business community at the moment. Paul F. Tompkins, the host of VH-1's "Best Week Ever." Thank you, Paul.

TOMPKINS: Thank you, Keith.

OLBERMANN: That is Countdown for this the 2,123rd day since the previous president declared mission accomplished in Iraq. I'm Keith Olbermann, from New York, good night and good luck.

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