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‘Saturday Final with Lawrence O’Donnell’ for Aug. 16

Read the complete transcript to the show
/ Source: msnbc.com

Guests: Flavia Colgan, Penn Jillette, Tom McClintock, Arianna Huffington,

Joel Fox

LAWRENCE O’DONNELL, MSNBC ANCHOR: Welcome to SATURDAY FINAL. I am Lawrence O’Donnell coming to you from Los Angeles, California, the center of recall madness. If your power was out this week, you may have missed the latest twist in the recall saga.

Take a look at the most recent field poll. It shows that Lieutenant Governor Cruz Bustamante has gotten a real boost. He is now the leader, the first choice among Californians if Gray Davis is recalled, 25 percent of the vote to Arnold Schwarzenegger’s 22 — that’s a drop for Schwarzenegger.

In the number three spot, Republican State Senator Tom McClintock, who has more than doubled his numbers since last weekend’s poll. He is up to 9; Bill Simon who ran for governor against Gray Davis last time got eight, Peter Uebberoth at 5. Arianna Huffington, who will be joining us shortly, coming in sixth at 4.

There was a bombshell in this campaign this week, the Buffett bombshell. Started off well when Arnold Schwarzenegger announced he was adding Warren Buffett to his campaign team, but on Buffett’s first day, he was quoted in the “Wall Street Journal” as suggesting that California property taxes are too low. He compared them to the property taxes he pays in Nebraska and said that Nebraska property taxes are higher than California’s, so California has got to do something about that. Arnold’s rivals have pounced on this statement, and there has been a big shift in the Republican support from Schwarzenegger to my next guest.

Joining me now is California state senator and candidate for California governor, Tom McClintock. Senator McClintock, L.A. talk radio yesterday was absolutely wild with the Buffett bombshell. John and Ken on KFI, Al Rentell (ph) on KBC. They were being challenged by their listeners because they have been supporting Schwarzenegger because he can win, and they have not been supporting Tom McClintock because Tom McClintock absolutely cannot win. Their listeners yesterday were switching from Schwarzenegger to McClintock. Do you think that momentum is going to continue?

TOM MCCLINTOCK ®, CA GUBERNATORIAL CANDIDATE: Oh, I think it will, and by the way, the poll that you just cited came out of the field prior to the Buffett bombshell. So that, that migration away from Arnold Schwarzenegger and toward our camp really is not yet being reflected in the polling data.

But it is a bombshell. I mean, California already has one of the heaviest income taxes in the country. We have one of the heaviest sales tax burdens. We have one of the heaviest car tax burdens. Just saw that tripled. For Arnold Schwarzenegger’s chief financial adviser to be pining for the days before Proposition 13 when folks were losing their homes because of skyrocketing property tax assessments, that is a shock wave in California.

O’DONNELL: Just the example he gave was that he has a $500,000 house in Nebraska, where the property taxes are $14,401. He has got a $4 million house in Laguna Beach, a $4 million house where the annual property taxes are $2,264. Which by the way, Senator McClintock, is about five times less than my property taxes on a house that’s valued a lot less than $4 million. How does this happen?

MCCLINTOCK: Well, bear in mind, first of all, Californians are paying one of the heaviest overall tax burdens in the country. The alternative to the property tax system in California is a system where people are losing their homes because they can’t keep up with the rapidly escalating property tax bills. Now, that might not make any difference if you’re earning as much as Warren Buffett or Arnold Schwarzenegger, but if you’re a retired couple on a fixed income, that’s the difference between keeping and losing your home.

O’DONNELL: Should Arnold Schwarzenegger fire Warren Buffett?

MCCLINTOCK: It is not just Warren Buffett. Don’t forget that before this, Arnold Schwarzenegger had assembled around him the same team that in 1991 imposed the biggest tax increase in American history by a state right here in California. It was $1,100 on average per family. It broke the back of the economy. It turned a recession into a near depression, needlessly prolonged our financial problems years into the future. And that’s the team that he had before he brought on Warren Buffett.

O’DONNELL: But what about Buffett? Tom McClintock, you are known for answering yes or no questions.

MCCLINTOCK: OK.

O’DONNELL: Should Arnold Schwarzenegger fire Buffett?

MCCLINTOCK: Yes.

O’DONNELL: OK.

MCCLINTOCK: But he has ought to go a lot farther than that. He ought to fire the team that brought us the 1991 tax increases. He ought to also fire the team that was at the center of the Charles Quackenbush (ph) scandal a few years here ago in Sacramento, where the insurance commissioner was actually stealing money.

O’DONNELL: Now, are you talking about former governor and his chief of staff and the others who have been working on the Schwarzenegger campaign?

MCCLINTOCK: I’m referring to the Wilson team that was directing...

O’DONNELL: Pete Wilson, former Governor Pete Wilson and his team.

MCCLINTOCK: He was responsible for the biggest tax increase in this state’s history. It was ruining us too, and by the way, we actually brought in less total tax revenues with those tax increases than we had received the prior year without. That was the economic damage that they did to the state’s economy in 1991. Heaven forbid that that should be repeated again in this decade.

O’DONNELL: Now, Senator McClintock, you are the poorest Republican candidate in the race. You are not a rich man. Arnold Schwarzenegger says, vote for me because I am rich, because I have a lot of money. He is saying that he is incorruptible by all the evil influences in Sacramento because he is rich. Does that mean if a working guy like you gets up there, you are just going to be sold to the highest bidder in your first week?

MCCLINTOCK: Oh, on the contrary. In fact, our principle source of contributions is coming from small contributions over the Internet. We’re actually raising more in Internet contributions now than Howard Dean is raising in his run for the White House.

O’DONNELL: All right. Let’s go to our panel. We have with us today Penn Jillette, coming to us from Las Vegas, of the team of “Penn & Teller,” and Flavia Colgan, Democratic strategist, and also with us is Noah Oppenheim, MSNBC political analyst. Noah, do you have a question for Senator McClintock?

NOAH OPPENHEIM, MSNBC POLITICAL ANALYST: I mean, I’m happy for the senator’s 9 percent, but I’m more concerned about Cruz Bustamante’s 25 percent. Is the California Republican Party which lost to Gray Davis in the general election and has been in a sort of a state of abject disarray going to give us-kick out Davis and then give us Cruz? How are you guys going to get his numbers down, how are you going to beat Cruz Bustamante?

MCCLINTOCK: Well, I think Cruz Bustamante ultimately will beat himself. I don’t believe that the people of California, having voted out a governor for policies that have bankrupted our state’s finances and devastated our economy and decimated our infrastructure, are then going to turn around and elect another Democrat to carry on precisely those same policies. That’s just not rational. But that’s what the campaign will be sorting out over the next 52 days.

O’DONNELL: Flavia Colgan, take a shot at Tom McClintock.

FLAVIA COLGAN, POLITICAL ANALYST: Well, I just saw you being critical of the 1991 tax increase and Buffett’s most recent remarks. What are your ideas for increasing revenue? What are some of the first cuts that you would make, and how as governor without a mandate would you get a largely Democratic legislature to help you push those priorities through?

MCCLINTOCK: First of all, California is not suffering from a revenue shortfall. We’ve had 21 percent increase of inflation and population combined over these last four years. We’ve got a 25 percent increase in revenue. So this is not a revenue problem.

COLGAN: Well, how do you...

MCCLINTOCK: ... the problem is — the problem is our spending went up 40 percent in the same period. So what you have to do is begin reorganizing the way we’re spending money.

For example, simply restoring to California government the same freedom that every household and every business has to shop around for the best service at the lowest price will save about $9 billion across all departments, according to a recent study done by the Reason Foundation and the Performance Institute. Streamlining the state’s bureaucracies, that means eliminating agencies that duplicate one another’s services. For example, we’re the only state in the nation that has two entirely separate tax agencies collecting taxes. Untangling all of that mess is about another $6 billion in savings right there.

Simply restoring our workers’ compensation laws to reflect the savings that Arizona, for example, is enjoining, bring our workers comp costs down by two thirds, which I have pledged to do in the first few hours of this administration, at least set the special session for the legislature in motion. That’s about $2.5 billion of direct savings to state and local government alone.

COLGAN: And how do you work with the Democratic legislature?

MCCLINTOCK: Well, I’ve said within moments of taking the oath of office, I’ll sign the executive order to rescind the tripling of the car tax. That can be done without the legislature. I will act to void $42 billion of outrageously overpriced electricity contracts that Davis locked us into. That can be done without the legislature.

And when I call that special session of the legislature to replace California’s workers’ compensation law with Arizona’s, I’ll give them 30 days to act, and at the end of those 30 days, I’ll take the measure to the ballot and let them explain to the voters while they failed to act while this state’s job market was collapsing.

When Hiram Johnson took office as governor in 1910, that’s exactly what he did to go around a recalcitrant legislature that was totally dominated by special interests. He ushered in a breathtaking air of political reform by doing that, and I believe the next governor of California has got to take a page from that playbook.

O’DONNELL: Penn Jillette, do you have a quick question for Tom McClintock?

PENN JILLETTE, RESEARCH FELLOW AT CATO INST.: Yeah, do you give a damn about the Republican Party? I mean, you seem to know more than anyone and you seem to believe what you believe. If it comes down to the wire where it’s either a Republican wins and you have to kind of jump on board with someone else, give up what you believe, would you do that? Do you care more about the issues or more about the party?

MCCLINTOCK: I care more about the issues. This is not about the Republican Party. This is about the future of California. Look, it is fight or flight time here in this state. A lot of folks are fleeing. We’ve lost a net loss of nearly a third of a million jobs in the last two and a half years. We’ve seen the first net domestic outmigration in this state’s history. But those who are staying realize that this state is worth fighting for.

O’DONNELL: Tom McClintock, Republicans have put a lot of pressure...

(CROSSTALK)

MCCLINTOCK: ...future of California.

O’DONNELL: Tom McClintock, you guys know, David Dreier and others Republicans are putting pressure on Republicans to stay out of this race, let Arnold go all the way. Quickly, yes or no. Are you in this until October 7, no matter what?

MCCLINTOCK: Yes. Yes.

O’DONNELL: And once again, you are calling for Arnold Schwarzenegger to fire Warren Buffett for his bad advice in this campaign. You’re making news right here on SATURDAY FINAL.

MCCLINTOCK: Of course I am. And I am going to step farther and saying he needs to fire the team that brought us the 1991...

O’DONNELL: Get rid of Warren Buffett and get rid of everybody else who he’s got in his team right now.

MCCLINTOCK: Yes.

O’DONNELL: All right, thanks, thanks, we are going to hold it right there. Thank you very much, Tom McClintock, we’ll be right back. This is SATURDAY FINAL on MSNBC.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP, “TONIGHT SHOW”)

JAY LENO, HOST: An NBC News poll has found that if the election were held today, 31 percent of California voters would vote for Arnold Schwarzenegger and 26 percent were not sure. And today Gray Davis announced he is changing his name to Not Sure.

(END VIDEO CLIP)

O’DONNELL: Well, that poll was outdated pretty quickly. Welcome back to SATURDAY FINAL. The new numbers are 22 percent for Arnold Schwarzenegger and a shocking 25 percent for Cruz Bustamante, who is now the frontrunner. It’s time to go to our panelists for their picks of people, places and events that will be this week’s winner and losers. Let’s start with Flavia Colgan. Flavia, your winners and losers.

COLGAN: My winner of the week are the people of New York, who despite a massive power outage...

O’DONNELL: Oh, how sweet! How nice!

COLGAN: ...and heat and all the rest, our power grid might not have been updated in the last couple decades but New Yorkers’ attitudes in times of crisis, this is a far cry from the blackout in 1977 where there was widespread looting and crime and all the rest. So my winner is definitely the New Yorkers.

My loser for the week has got to be the Democratic candidates for president, because they just cannot get any coverage. With the recall circus going on in California, coming into our living rooms like electronic wallpaper, it is going to be very hard for these guys to penetrate. They’re trudging from one forum to the next, and they really only make news if they make a misstep. I would suggest they go to the battleground early and start doing some hand-to-hand campaigning instead.

O’DONNELL: All right, and Noah Oppenheim, your winners and losers.

OPPENHEIM: Well, this is going to be kind of dull. My winner is also the people of New York City.

O’DONNELL: Oh, that’s...

OPPENHEIM: I actually live in New York. I was here. We turned the blackout into a block party. It was great. People were in the streets drinking beer, having a good time, and generally proving this is the greatest city on Earth.

O’DONNELL: Noah, Noah, how drunk did you get?

OPPENHEIM: I got-well, my mom might be watching, Lawrence, I don’t know...

O’DONNELL: Where were you when the lights went out?

OPPENHEIM: I was actually here in Secaucus, New Jersey, when the lights went out, and then I made the trek across the river.

O’DONNELL: So the lights didn’t go out for you.

OPPENHEIM: Well, we have a generator here, thankfully. But we made the trek across the river and had to drink the beer before it got too warm. So it was a good time in New York City.

My loser of the week, unfortunately is the ice cream of New York City, which melted much quicker than we could actually eat it, so that was unfortunate.

O’DONNELL: There’s a tragedy. Penn Jillette, winner and loser.

JILLETTE: My loser of the week is Las Vegas casino, New York, New York, who refused to turn off all their powers Thursday night in solidarity with the people in the northeast.

O’DONNELL: Oh, those heartless-because they should have had people sleeping out in the street in front of New York, New York.

JILLETTE: Exactly. That’s what the casino should be. It should reflect the name, New York, New York.

And my winner is this whack job, Alabama Supreme Court Chief Justice Roy Moore, who is refusing to take down the Ten Commandments because he says that God’s law supersedes state and even federal law. I’m completely behind him, and I trust that he will then realize that since he is answering to God’s law, he should step down and let people who believe in freedom, tolerance and the constitution take over his job, while he follows God’s law in his private life.

COLGAN: I thought judges were supposed to follow the law.

O’DONNELL: This guy is great, didn’t he sneak those things? He snuck it into the building like after midnight or something.

OPPENHEIM: Yes, this is the greatest problem we have in modern America, a Ten Commandments stone statue in a courthouse. Heaven forbid that should happen. It’s awful, absolutely awful.

JILLETTE: (UNINTELLIGIBLE) pounds and four feet high, he could not sneak it in, I don’t think. He brought it in there. Yeah, that’s really great. And I hope they have all sorts of-all sorts of statues for religions you don’t believe in all over every place and make you pay taxes for it.

OPPENHEIM: All right, the foundation of Judeo-Christian law. It is a shame that we should remember our western heritage; it’s an absolute travesty.

JILLETTE: OK, there’s other people that live here, too. If you want to throw them out, throw them out.

OPPENHEIM: I don’t want to throw them out. They are more than welcome and in the courthouse as well.

O’DONNELL: All right, we are going to hold it right there with our winners and losers. We will be right back. You’re watching SATURDAY FINAL on MSNBC.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: ...evacuated the whole building. They said pretty much sleep on the street tonight.

UNIDENTIFIED MALE: And that’s what you did?

UNIDENTIFIED FEMALE: That’s what we did.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

O’DONNELL: And welcome back to SATURDAY FINAL. There is one candidate in California’s recall that is countering the Schwarzenegger media blitz with her own set of very interesting strategies. Arianna Huffington is joining us from Los Angeles today. Arianna, you’ve told me and you’ve told the press that you plan to, in your campaign against Arnold, link him to President Bush’s policies. What does Arnold have to do with President Bush?

ARIANNA HUFFINGTON (I), CA GUBERNATORIAL CANDIDATE: Well, Arnold is a Republican. He is a Bush Republican. I know he hasn’t said much, but he has not in any way distinguished himself from Bush’s economic policies of tax cuts, of distorted policy priorities, of cozying up to Enron and energy companies that have basically been to a large extent responsible for the plight of California. And last week when I held a press conference and pointed out that Arnold Schwarzenegger was one of some senior Republican figures who met with Ken Lay in the middle of California’s blackouts, there was no response from the Schwarzenegger camp, except for the candidate to say that he couldn’t remember such a meeting.

O’DONNELL: Well, wait a minute, Arianna. I think we do have a response from Arnold about something you said this week. I think we have a screen ready for it, where he said he would be crazy if he answered any questions that you asked, something like that. What was he talking about? There it is. It says, “It doesn’t matter what Arianna or anybody says. I’m not responding to any of those things, because I would be crazy if I would.” Arianna, how do you campaign against that?

HUFFINGTON: And then, then, Lawrence, then he also did say that he couldn’t remember if he met with Ken Lay, because he can’t remember all the meetings he held in the last 10 years. It’s a really stunning way of campaigning if you want to be the governor of California. And I think the media are making a big effort to try and get some answers out of him, including a couple of other questions that I have. Does he agree with Warren Buffett that Bush’s tax cuts are a scream of injustice, as he calls them, or that Prop 13 was not the best idea, and that property taxes should be raised?

O’DONNELL: All right, Arianna, let me ask you-let me ask you about Warren Buffett’s point. Do you agree with Warren Buffett’s point that in California, property taxes are too low?

HUFFINGTON: What I’m going to be saying, when I release my proposed plan for tackling the budget deficit is that we need to assess commercial property taxes thoroughly, because right now there’s a loophole that was put there since Prop 13 was passed, which allows commercial property taxes not to be assessed every time that they change hands at the same rate that home owners’ properties are assessed. And as a result, home owners are paying a larger percentage of property taxes than commercial properties are.

O’DONNELL: Arianna, we just had Tom McClintock on the show, he made news calling for Arnold to fire Warren Buffett, but more importantly, possibly from your perspective, to fire Pete Wilson and all of his staff that he now has working on his campaign, all those Sacramento insiders, former and current lobbyists some of them. Tom McClintock says Arnold needs to fire them all. Do you want to join McClintock with the idea of firing either Warren Buffett or the Pete Wilson team?

HUFFINGTON: Well, I’m not going to give Arnold advice on what to do with his team. But there’s no question that he cannot continue running as an outsider against the special interests when he has Pete Wilson as his chairman and an entire team of insider lobbyists and consultants as his campaign team, including Wilson, who as I mentioned in my press conference, was a spokesman for Reliant (ph), one of the energy companies that defrauded California.

O’DONNELL: OK, let’s bring in the panel. Penn Jillette, do you have a question for Arianna Huffington? Do we have Penn Jillette? It looks like we have got nothing. OK, we dropped here. Who do we have? Anybody?

OPPENHEIM: Part of the magic show.

O’DONNELL: Flavia Colgan, are you there? Can you hear me?

COLGAN: Yeah, I can-I can hear you.

O’DONNELL: Flavia, do you have a question for Arianna Huffington?

COLGAN: Yeah, my question for you is, you’ve come on and you’ve said, you know, your position on Proposition 13, the way you feel about the racial data collection that’s on the ballot. Certainly answering a lot more specifics than Arnold is. Lawrence has gotten people to give more answers in five minutes than Arnold has been talking about for weeks. Why does “The New York Times” and other people refer to you as someone who is a credible candidate sort of on the brink of being a crackpot. What is it about you that makes people call you names like crackpot and crazy and, you know, she’s a little off.

O’DONNELL: Arianna, I actually watched you on “Bill Maher Show” last night so I know your answer to that question. So you don’t have to do that word for word. But go ahead.

HUFFINGTON: You know what? I think people are more comfortable with public figures that they can put in neat little boxes. And I’m not predictable. I speak my own mind. I have no allegiance to either political party. I’m running as an independent. I have written two books in which I’ve challenged the system and hundreds of columns in which I’ve been very specific about what needs to be done. So there’s a body of work that I’m running on. And what I’m doing is I am making it specific to California.

O’DONNELL: Penn Jillette, do we have your camera back up in Las Vegas? Can you hear us?

JILLETTE: I think so. I can hear you, yes.

O’DONNELL: Go ahead if you’ve got a question for Arianna.

JILLETTE: Speaking of neat little boxes, you didn’t check yours on the bottom of your tax return the last two years that says give money to the campaigns for president. And I have a lot less money than you. I’m sure you don’t do your own taxes. Mine just come in with a little yellow arrows that I sign right next to them. But my business manager always asks me if I want to give that $3 to the campaign. Why didn’t you want to?

HUFFINGTON: Well, I did want to. And it is an oversight. And the next year I’m definitely going to mark and give my $3 to finance presidential campaigns. But much more important...

JILLETTE: But two years?

HUFFINGTON: ...if elected, I’m going to propose an initiative to make public financing of campaigns the law of California. Because that’s what it’s going to take really to put an end to the dominance of big money in California politics.

O’DONNELL: Arianna, do you promise to send in an extra three bucks next year to make up for this year?

HUFFINGTON: Absolutely. With interest, Lawrence, $3.65, I think.

O’DONNELL: OK, Noah Oppenheim, question for Arianna.

OPPENHEIM: I would like to know who her accountant is and how she seems to pay so little in federal taxes, given how much she is supposedly worth. But I guess my more substantive question is, how raising commercial property taxes is going to solve the problem of so many businesses fleeing the state of California? I don’t own a major corporation, but if I did I wouldn’t be inclined to stay someplace where a gubernatorial candidate was saying, I think I’ll raise the taxes on your office warehouse.

HUFFINGTON: Actually, let me just clarify what I said. Commercial property taxes are supposed to be reassessed every time that the commercial property changes hands. But a loophole has been bought, because, you know, these loopholes do not just appear, they are bought by special interests, which says that if you have a limited liability partnership, then you don’t have to pay commercial property taxes on the new value but the old value. It is nothing but a tax dodge.

And you know what? It’s time that we stop giving businesses a free ride when it comes to tax dodging. Because that is the mentality that prevailed in the ’90s, and that has led to all those business collapses, because everybody was turning a blind eye, because they didn’t want to interfere with a good thing, the boom times of the ’90s. And as a result, billions of dollars were lost, in shareholder value, in pension funds, in 401(k)’s. That’s not the way to bring business back to California. It is the way is to support small businesses, which are the ones actually most suffering in the current climate.

O’DONNELL: Arianna, it’s been a bumping week for you, you have had the problem with the tax returns coming out and reporting no-not enough income to have any taxation.

HUFFINGTON: Lawrence, you know, let me just say something about that...

O’DONNELL: Go ahead.

HUFFINGTON: Because it’s really no problem at all. I paid close to $250,000 in property taxes, and in payroll taxes, and there is no problem. When you have a year when you are actually writing and researching as opposed to researching a book, to have losses that are greater than your income. That’s not a problem at all. That’s how our tax laws work. In 2003, which is going to be a very profitable year because my “Pigs at the Trough” book was published, my new book contract was signed. It is a year when I are going to be making a profit and paying taxes.

O’DONNELL: And also in the polls, Arianna, a there’s a new field poll out today, shows Bustamante surging ahead of Schwarzenegger, 25/22. So there’s big movement at the top compared to the polls of last weekend, which I always thought were kind crazy, anyway, because they were taken in the middle of the frenzy.

But, you’re still stuck at four percent. You’re in-at four percent in earlier polls, and in today’s poll, you’re still at four percent. When are you going to have to move? You have to move up to 10 percent to qualify for the debate that the California broadcasters are going to have and you don’t have-you have about a month to get there. What’s your strategy for getting from at least four to 10 percent to get into the debate?

HUFFINGTON: Well, first of all, Lawrence, let me say that I completely agree with you. That putting a lot of value on politics at this early stage is not very meaningful. I mean, Arnold went from 42 points to 22. I don’t exactly believe that. At least my supporters have stayed at a rock soiled four percent.

O’DONNELL: Good-you got that solid four. Right? That is your zip

code, isn’t it

(CROSSTALK)

HUFFINGTON: I have that solid four percent. Nobody seem to be wavering. But seriously, you know, first of all, this is a poll taken among likely voters. And part of my campaign strategy is actually going for unlikely voters. There are 13 million eligible voters who did not vote in the last election. And we are actually very directly appealing to them through our Web site, Ariannaforgov.com.

(CROSSTALK)

O’DONNELL: Arianna, you don’t have to say it. We’ve been running it -

” this is a first appearance where we’ve been running it under your head the whole time. You didn’t have to say it.

HUFFINGTON: Thank you so much. That’s terrific, Lawrence, thank you. And also, let me just say that for outsider candidates, the polls are always stacked against them. I mean, Jesse Ventura, as you know, since I know you studied that campaign-was not predicted as the victor in any poll, including on the day of the election. Any national or statewide poll. All of them had him losing.

O’DONNELL: All right. Thanks, Arianna. We are going to have to wrap it right there. Thanks for coming in, Arianna.

HUFFINGTON: Thank you.

HUFFINGTON: You’re watching SATURDAY FINAL. We will be right back.

Stay with us.

(COMMERCIAL BREAK)

O’DONNELL: And we’re back on SATURDAY FINAL. U.S. officials in Southeast Asia captured a top al Qaeda operative believed to be behind the terror bombings in Bali and Jakarta. And an FBI sting nailed a British arms dealer who was trying to sell a missile that would be used to shoot down an American airliner. That’s the good news.

But, at New York’s JFK this week, there were three young men on an inflatable boat that blew ashore near the airport. They got out on to the runways looking for help. Walked around the runways for nearly an hour. Couldn’t find anyone. Finally found the port authority police. They found the police. The police didn’t find them.

Penn Jillette, we seem to be getting-doing a pretty good job at one end of this defensive war on terror by nailing the arms dealer. But those guys walking around the runway at JFK showed you how easy it is to use one of those rockets. You could you just sit on the runway and pick off any 747 you wanted. While of course they’re checking grandmothers’ shoes inside the airport before getting on the plane. When are we going to get this thing in balance?

JILLETTE: I think that all we’re trying to do is just do a show. There’s no attempt whatsoever to make it safer. The checking-the airport security, you can strap a ceramic knife-you can hide it anywhere on you and then you know that all the good people are going to be completely disarmed. So bad guys still have the huge advantage.

They’re not going to find every ceramic knife that wants to go through there. Once you said that, it’s useless. They’re just showing off and taking away liberty. I mean, the idea of ‘give me liberty or give me death’ is not anti-American. That’s a good idea. We have to be braver.

(CROSSTALK)

O’DONNELL: Noah Oppenheim, all the kings’ horses and all the kings’ men could not keep three guys off the runway at JFK.

OPPENHEIM: Look ...

O’DONNELL: Tom Ridge and the whole Homeland Security apparatus couldn’t do anything about it.

OPPENHEIM: Penn is right about one thing, which is that the bad guys always doe have the advantage, and that is why the best defense is a good offense. Look, the fact of the matter is, is that there is always going to be a way to sneak things by security.

(CROSSTALK)

JILLETTE: Wait a minute. That is why we need to ...

O’DONNELL: We have a Homeland Security system that has not thought about securing the waters around JFK Airport.

JILLETTE: How do you know they haven’t thought about it? That’s a ridiculous statement.

O’DONNELL: No it’s not ...

OPPENHEIM: I guarantee you, they’ve thought about it. The fact that this happened is obviously extremely embarrassing and unfortunate and shows more work needs to be done. It doesn’t mean the Homeland Security Department is sitting around playing pinochle in the basement.

(CROSSTALK)

O’DONNELL: You got a guy who has no idea what’s happening right under their noses ...

OPPENHEIM: You got a guy who is caught trying to by stinger missiles. Well, look, it’s-obviously it is not a good thing. I’m not saying it’s a good thing, but the point is, is that people are working on these issues. I mean, it is funny how you introduced it. You said, oh, by the way, we caught the mastermind of the Bali bombing.

O’DONNELL: Hey, that’s not a very good impression ...

OPPENHEIM: We got the stinger missile thing. That’s not important. What’s really important is that these three teenagers happened to land on the JFK runway. I mean, that’s ridiculous. Yes, three teenagers happened to land on the JFK runway. Unfortunately, the much bigger thing is the Bali bombing mastermind is caught, the stinger missile smuggling thing is disrupted ...

(CROSSTALK)

O’DONNELL: No. The missile-the missile wasn’t anywhere near this country. The missile that they were going to buy and sell wasn’t anywhere near this country. If someone does sell a missile to a bad guy, the bad guy has to probably get it across a couple oceans and-but the really easy part is when you get it to New York harbor.

OPPENHEIM: Yes, yes. And if you’re a teenager from Westchester and you happen to have a little dingy, you can probably have a pretty easy time. But, if you’re a terrorist overseas working within an organization that the CIA, the FBI, et cetera, are working hard to track and monitor, et cetera, then it might be a little bit difficult to ever get to that stage where you’re loading into the dingy and getting to the runway. The NSA isn’t listening in on ...

(CROSSTALK)

O’DONNELL: That’s how they blew up the Cole. Guys in a little boat, you know, just puttered out there ...

OPPENHEIM: Yes. Before 9/11.

(CROSSTALK)

COLGAN: Our port security is horrible. Our port security is horrible. And, despite the fact that we’ve had two studies that have shown that checking container ships is one of our hugest vulnerabilities, the president still doesn’t want to give money to ensure our port security. Secondly, we also had a guy caught in Heathrow Airport the other day, an investigative journalist, bringing in knives in his shoes. We have to have a zero tolerance policy in terms of checking all the people who work in the airports just like New York City, City Hall...

(CROSSTALK)

OPPENHEIM: I want to go back to Penn. Because, Penn says that they’re taking away our liberty and he’s upset about that. So Penn, would you say like take down the airport security ...

JILLETTE: Yes.

OPPENHEIM: ... and let people walk on the planes?

JILLETTE: Absolutely.

OPPENHEIM: OK. So, how exactly does that prevent terrorism?

JILLETTE: Because the idea that we have to decide who the bad guys are, if people were allowed to walk on with what they had, if people on 9/11, if you had had a grandmother there that had a weapon, if you had somebody there with mace, they would have had a chance. All you’re doing is giving power to the strongest and baddest people.

OPPENHEIM: So it’s gun fire in the OK Corral.

(CROSSTALK)

JILLETTE: A gun fight on that plane would have been better than going into the World Trade Center. Are you going to argue with that?

OPPENHEIM: That’s great. All right, so we are going to arm everyone.

That’s tremendous.

JILLETTE: Well, no. Not arm everyone. Just not let people know where people are unarmed. Just do not allow good people to go defenseless.

O’DONNELL: OK. We’ve got it. Penn Jillette gets the last word on that one.

When we come back, we’ll go inside Arnold Schwarzenegger’s political machine.

(COMMERCIAL BREAK)

O’DONNELL: And welcome back to SATURDAY FINAL. Perhaps the strongest criticism of Arnold’s campaign so far is that he hasn’t spoken enough about the issues. Where does Governor Schwarzenegger to be stand on tax and the other issues of the day?

Joining me now with, I hope, some answers is Schwarzenegger campaign policy adviser, Joel Fox. Joel is the former president of the Howard Jarvis Taxpayers’ Association. Joel, as he we all know, Howard Jarvis was the father of Proposition 13, with limited property taxes in California. And Howard Jarvis must be moving a little bit in his grave if he heard what your other campaign adviser, Warren Buffett, said about California property taxes this week. Don’t you think?

JOEL FOX, SCHWARZENEGGER ADVISER: Well, certainly Howard wouldn’t have agreed with what Warren Buffett said. But more importantly, Arnold Schwarzenegger is not going to agree with Warren Buffett said about property taxes. Arnold has been a strong supporter of Proposition 13. Has been for 25 years. And just a couple of months ago, Lawrence, he gave the key note address at the 25th anniversary celebratory dinner for Proposition 13. He is a big supporter.

O’DONNELL: Joel, you’re an adviser to Arnold-an economic adviser to Arnold in this campaign?

FOX: Yes. Budget, taxes, policy...

(CROSSTALK)

O’DONNELL: Have you spoken to Arnold Schwarzenegger about Warren Buffett’s quote?

FOX: Not today.

(CROSSTALK)

O’DONNELL: Have you seen Arnold Schwarzenegger this week?

FOX: Yes. I saw Arnold this week.

O’DONNELL: Since Warren Buffett spoke?

FOX: No, no. I said I didn’t talk to him about Warren’s quote-

Warren Buffett’s quote. I are going to see him tomorrow.

(CROSSTALK)

O’DONNELL: What are you allowed to talk to him about? The press isn’t allowed to talk to him about anything. What are you allowed to talk to him about if you’re not allowed to talk to him about what Warren Buffett said about property taxes?

FOX: No, no, no. No. Well, first of all, saying allowed is not correct. I can talk to Arnold about anything I want when I see him. I just haven’t seen him since Warren Buffett’s statement. The fact of the matter is, Arnold ...

(CROSSTALK)

O’DONNELL: (UNINTELLIGIBLE) we are wondering-we, in the press, are wondering who has seen him, because he doesn’t go out and campaign. He’s been avoiding everybody this week. And he’s been taking these bombs from the Buffett situation. And he’s starting to lose support to Tom McClintock, as the field poll shows today. So everybody is wondering what Arnold actually thinks. And you’re coming on to tell me what Arnold thinks about Warren Buffett but you haven’t spoken to him about Warren Buffett.

FOX: Well, I’ve talked to him about Proposition 13 and that’s what you asked me, Lawrence. What does he think about Proposition 13. He’s been a strong supporter for 25 years. The fact of the matter is ...

O’DONNELL: Go ahead.

FOX: The fact of the matter is, Arnold has been talking to a lot of policy advisers this week. Not just Warren Buffett. He’s been talking to quite a few. As you know, George Schultz, from the Reagan administration, has also been named as part of the economic recovery council. And you know, it’s interesting. Your previous guest, Arianna Huffington, mention in her interview that she hasn’t come out with her proposals yet. But, people aren’t jumping all over her, asking where proposals-she said it right here on the air. But Arnold I s going to have his proposals and he is going to have them in time for the voters of California to decide whether he’d make a good governor.

O’DONNELL: Joel, our first guest, Tom McClintock, Senator, Republican, Senator Tom McClintock of California, called on Arnold Schwarzenegger to fire Warren Buffett immediately. When is he going to fire Warren Buffett for saying something that he so dramatically disagrees with?

FOX: Arnold is listening to the voices of advisers, to listen to the voices of California. Just because somebody says something...

(CROSSTALK)

O’DONNELL: Is there talk-are you advising-are you advising the campaign to fire Warren Buffett?

FOX: I’m advising the campaign to come out strongly and let everyone know that Arnold is in support of Proposition 13. Warren Buffett has other things to talk about, about the economy ...

O’DONNELL: He does.

FOX: ... that I think will be valuable for our ...

O’DONNELL: Let me give you another quote from Warren Buffett in the

“Wall Street Journal.” The last line of the story which I know your hands

must have been shaking when you were reading this piece. He said about California, they have to do whatever is necessary on spending or taxes to get the budget in balance.

FOX: Yes.

O’DONNELL: This is someone who is talking about Arnold has to be able to do whatever is necessary in term of raising taxes.

FOX: No. You said, or. Spending or taxes. We think we can solve the problem on the spending side, and most importantly, and this is Arnold’s agenda that he’s already talked about publicly. He wants to grow the economy. He wants to make sure that business comes back to California. We’ve been terrible to business here in California. And if we bring in the revenue, then we will be able to fund the programs that we all want to see funded, and that’s Arnold’s agenda and that’s what he’s going to be working on.

O’DONNELL: Now, Cruz Bustamante has surged ahead of Arnold in the field poll that’s been released today. Actually, Cruz Bustamante has returned to the position he was in in the poll a month ago, which was a little bit ahead of Arnold then. What is the feeling inside the Arnold Schwarzenegger campaign about the collapse in the bubble that occurred last weekend in his polling number?

FOX: Well, we think that there is going to be a lot of polls throughout the course that is going to be up and down. There is the only one that really notes that Bustamante is ahead of Schwarzenegger. A number of other polls have indicated otherwise, that Schwarzenegger is leading.

We think that there is going to be a lot of polls. This was a very small sample, Lawrence, in this poll, in this field poll. So I think there were about 450 people as part of this poll. A very small sample for California. And so a wide margin of error. And we expect to see some polls up, some polls down. But, we think in the end, Arnold is going to be on top of the heap.

O’DONNELL: Joe, Arnold is running as an outsider. No ties to Sacramento. No ties to special interests. Are you a lobbyist?

FOX: No. I am not a lobbyist and I certainly no outsider...

(CROSSTALK)

O’DONNELL: Are you the only person working in the Schwarzenegger campaign who is not a lobbyist?

FOX: Oh, that’s not true. A lot of people are not lobbyists.

O’DONNELL: Well, a former governor, Pete Wilson, former governor, Pete Wilson’s chief of staff, and many of the rest of Governor Wilson’s staff have worked and have currently worked this year as lobbyists. Haven’t they? With very strong ties ...

FOX: Yes. Some ...

(CROSSTALK)

O’DONNELL: ... to what Arnold would condemn as special interests, right?

FOX: Some people have worked as lobbyists. But, the fact of the matter-Arianna’s campaign manager is a lobbyist. Bustamante’s campaign manager ...

(CROSSTALK)

O’DONNELL: That’s right. They’re all over the place. You don’t think you can find a campaign in the top tier in the polling that doesn’t have lobbyists working in it, the kind of people Arnold would condemn as special interests that he has promised not to deal with, right?

FOX: There are people who know how Sacramento works. And people that you listen to. But, you know, I’m an outsider. I’m a rebel, if you will. The Proposition 13 campaign was a rebellion. I was a head of the Taxpayers’ Association for many years, and went up against many of the legislators and governors in the state from both parties.

So Arnold has reached out to a variety of people to help him form a campaign, to lead him to victory and a campaign that has all kinds of points of views. And I think you’ve seen that from some of the people that he selected. What we’ve talked about earlier, Lawrence. Schultz and Buffett, for example, running one advisory council. I’m an outsider. And as you pointed out, he does have somebody who’s been an insider. So there are all kinds of people advising him. But Arnold’s position is, he is going to be an outsider to clean up Sacramento, and I believe he’ll do that.

O’DONNELL: OK. Joel, thank you very, very much for coming in. Joel Fox from the Schwarzenegger campaign.

When we come back, we are going to have final thoughts from the panel.

(COMMERCIAL BREAK)

O’DONNELL: Welcome back to SATURDAY FINAL. I want to go our panel for final thoughts, here. Take a look at Arnold’s army everybody. The heavy weights that he has enlisted to get himself to the governorship of California. Former governor, Pete Wilson; and then his big star, Warren Buffett, who has already gotten him into trouble. Former Secretary of State, George Schultz; and of course, Rob Lowe.

Penn Jillette, which of those people do you expect to cause the most trouble for the Schwarzenegger campaign? Warren Buffett is in the lead right now.

JILLETTE: I’ve been sitting just here trying to think of some way to fight with you over the Schwarzenegger thing. Is anybody going to stick up for him? That is what you should ask. Does anybody think he’s got a chance or he’s doing anything good?

O’DONNELL: Well, wait. When you say have a chance, do you think the bubble has burst for him and the polls ...

(CROSSTALK)

JILLETTE: Yeah. I think he is crashing and burning. Is even Noah going to stick up for him?

O’DONNELL: Noah, the big Republican decision in California right now is do we abandon Schwarzenegger and go to McClintock, the guy we really believe in. What do you think they should do?

OPPENHEIM: I mean, it pains me to say it, but I’ll stand on the side of principle here and say go with McClintock. I mean, Arnold Schwarzenegger-the guy is a joke. I mean, I guess I kind of like some of his movies, but “Kindergarten Cop” was ...

(CROSSTALK)

O’DONNELL: I’ve actually convinced Noah that Arnold is a joke. Flavia, do you think it is over for Arnold? Can we set the clock and have it start ticking?

COLGAN: I think he is only going to go down from here. And part of the problem is having a campaign that only makes news by naming its newest advisers is a lot of these guys have more baggage than a local airport. You have Rob Lowe coming on as a political operative. His only experience is playing one on TV.

O’DONNELL: Hold it right there. Rob Lowe is a friend of mine. He is the only guy who is going to do him any good in this campaign. That’s all the time we have in this week. Thanks to the panel. Penn Jillette, Flavia Colgan, and Noah Oppenheim. And thanks for watching.

Up next on MSNBC ...

END

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