blame it henri oh. plets play "hardball. good evening. i'm chris matthews in washington. leading off tonight -- ♪ when my baby smiles at me, i go to rio dejaneiro ♪ >> that's the late great peter allen with "i go to rio." the 2016 summer olympics won't be played in the u.s. blame it henri oh. crime wid den, but wildly exciting, has made chicago once again the second city. plus florida congressman allan grayson the guy who caused all the noise by nailing the

republicans on the health care issue starts us off tonight. he's proving his fellow democrats have overlooked a key element in american politics. make the other guy play defense like martin luther he stood up to the powers that be, and he's still standing. what's that say about what works in this national debate over health care. congressman alan grayson will be here. has david letterman taught us a lesson in how to dig out of a tough situation? the person who tells you first about something is the one you tend to believe. he revealed he is the target of a $2 million blackmail plot. could this be his greatest hit? what about some more hand ki pan ki? we've got more for you. senator john ensign did one hell of a job trying to find jobs and contracts for his former staffer, you know, the guy whose wife the senator was having a long affair with. the new york report reports that ensign obtained a lobbying job

and clients for his ex-lover's husband and then was lobbied by him. you think any laws were broken? let's go to rio. if you want to see the 2016 olympics, you'll have to. the windy city got blown out in the first round of voting. does the president get an e for effort or an f for a flop, or is this just a good example of a poll tipgs just having to do the best he can, no matter what anybody says, for his hometown. that's in the politics fix. john mccain's campaign manager, steve schmidt, smart, honest. now there's a combination for you. he says nominating sarah palin in 2012 would be the dumbest thing the republicans ever did. >> my hon oeft >> my honest view is that she would not be a winning candidate for the republican party in 2012 and, in fact, were she to be the nominee, we could have a catastrophic election result. >> catastrophic election result.

i thought he was honest. that's coming in -- coming on in the "sideshow" tonight. notice sarah palin always shows up in the sideshow? we start tonight with democratic congressman alan grayson of florida. i have to hand it to you. i think you are a martin luther. i remember being there when the berlin wall was coming down, there with john mclachlan, my colleague. how did you know you could stand up to the republicans in the real clowns out there? we can start with limbaugh and the rest of them. you know the whole crowd. what's his name? beck. a whole number of them. how come you knew the way to beat these guys was to put them on defense? >> they're bullies and bullies back down. don't we all know that? that's what happened here. >> tell me about it. what has happened to you? did pelosi come along and tell you to cool it? did steny hoyer tell you to cool it? did you get any mean looks on the republicans on the floor

from boehner? boehner looks like the golfer who has blown a putt? doesn't he look like that to you? looks like he's playing golf all the time. throws it down, ticked off, takes the putt and blows it. he always looks like that. what did you learn in these couple days of being the hot shot? >> well, what i learned is people really want a congressman who has guts, who says it like it is. for god sakes, for months we've been on the defensive. why? we have a plan, the other side doesn't. they have nothing. it's been 72 hours since i've said this. where have we heard about the republican plan? who has stepped forward to say, no, grayson is wrong, it's not true. they only do their personal attacks and means nothing because the american people deserve better than that and they know it. >> how come we've spent, now, 50 some years going back to harry truman with nightclub comics, all the way back to allen king talking about doctors and people talking about hmos and problems of getting payment when you have a problem and problems of insurance.

the status quo has never looked so sweet as when the republicans start to attack the democrats. why did the democrats spend the last year attacking the way things are as a way of getting them fixed? isn't that how you get a tire fixed? you say it's blown out. you don't say how great the tire will be when it's fixed. you say it's blown out, you got to fix it. why do the democrats go after the problem and saying, we're going to focus it and say, gee whiz, we have a problem. >> they brought into the story line of democrats there was a need for bipartisanship. the republicans never intended anything resembling bipartisanship. not on this issue or any other issue. now we understand since i spoke out that the cost of delay is death. we have 44,789 americans who die every year because they don't have health insurance. this is a harvard study. don't take my word for it. it's in a peer reviewed journal.

192 americans die every single day. the story line shouldn't be longer, which republican is >> are the republicans on the floor circling for you. i remember when margerie march goal lis had the gults to vote for the clinton tax increase. it was for the rich. they were dancing and singing on the floor of the house. anti to go "good-bye margerie?" are they circling around you because thinking they've got you? >> we'll see how it goes. if they don't feel that way already, they sure will. i'll continue to speak out. >> i'm looking for insight here. i'm a reporter. when you walk around the floor, when you walk past the republican cloak room, get on the elevator, on the subway over there, do these republicans come up to you and say your number is up, buddy? >> i hear that all the time. i get dirty looks from the

republicans all the time. i can't decide on my vote. i can't decide on health care, on energy independence, on jobs, on the economy. based upon dirty looks from people who throw hissy fits and expect we're supposed to decide american policy on that basis. that's what they've been doing time after time. this famed indignation, time after time. we can't let america be run that way. >> you can't call them neanderthals. they done buy this thing of lucy and way back four or five million years. they don't buy that. calling them neanderthals doesn't hurt these guys. >> actually i said knuckle-dragging neanderthals. one of them came up and said i don't like you talking about me that way. he was trying to prove to me that he was a knuckle-dragging neanderthal. i said look at your knuckles, there's no callouss.

>> let me talk about real people and real problem. my thinking is you want to make health insurance accessible, affordable, everybody has to chip in to the ability they can. nobody is getting a free ride here. talk about why it matters to you. i want some heart here. >> why it matters to me, i was so sick growing up as a child. i had to go to the hospital four times a week for treatments. when i was growing up my parents had union benefits. both belonged to a union. they both got union benefits, twice, when i was 7 and when i was 17, they went out on strike. i wondered whether i would survive. whether our health benefits would remain in place and whether i would be able to continue my treatment. it's a hard thing. it's a hard thing when you're a child to think about whether you're going to live or die. i don't want to see anyone in america go through that. i was so happy to vote in favor of health insurance for children my first week in congress. 4 million children all across the country didn't have to worry about that anymore. why should the sins of the parents descend on the children?

why should children ever have to worry about that? 10,000 in orlando alone saved from having to worry if whether they would live or die. >> you sound like a liberal. >> progressive. >> populist. don't hide from that word liberal. progressive sounds a little, well, i can't say it. liberal's a good word. make it sound good. yeah, i'm a liberal. i believe in opportunity and freedom for everybody. i'm an american, of course i'm a liberal. people should say that. be more fun. this progressive sounds like you're hiding from being who you are. the conservatives don't come up with euphemisms. they call themselves right wingers. they love it. thanks for getting around for doing our show. you've done every show in the world, by the way. >> i thought you were going to beat me up so badly. >> you're really scared of me, i'm sure. if you're not scared of the republicans you're not scared of me. thank you, buddy. i'm glad to call you buddy. i like you. thanks for coming on "hardball." a target of extortion.

david letterman forced to admit -- he wasn't -- well, yes, he was forced. that was his strategy. had sex with his staff members. forced to have sex with them? no. we'll get to the latest of the strange and curious case as a guy using as his monologue this incredible confession. what if you could capture the fresh taste of broccoli in a luscious soup? v8 garden broccoli. from campbell's. velvety, delicious. campbell's v8 soups. also, try new garden vegetable blend.

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welcome back to "hardball." here's a story we didn't think we would be covering yesterday. last night on his show, david letterman made an unusual turn, describing an extortion racket against him. a blackmail plot that hit him for some relationships he had with some staffers. let's take a look. >> i have had sex with women who work for me on this show.

now, my response to that is, yes, i have. i have had sex with women who worked on the show. and would it be embarrassing if it were made public? perhaps it would. perhaps it would. especially for the women. but what you don't want is a guy saying, i know you had sex with women. so i would like $2 million or i'm going to make trouble for you. >> joining me, msnbc news jeff rossen. "new york daily news's" george rush. this is a strange story. especially for us at nbc that have been covering it. did he make one of the public relations moves in history, blowing the story that would normally be considered

embarrassing, but turning the tables not just on the blackmailer but the bad pr that could be coming his way >> you know how it works. first one out. you tend to believe the person who come out with the story first. why else would you come out with the story unless you were telling the truth? that's what the pr experts will tell you. he probably felt like he was backed into a corner enough where this was going to get out. what would happen, chris? you would see "the new york post" photographers chasing him down every single day, trying to get a comment from him and he would look guilty when that happens. now he is out. he spent ten minutes on the show last night. he even laughed about it a little bit saying he was scared. he played the role of the victim. that is the way this news cycle has been going right now. look at the headlines. focusing on the extortion. not about the sexual relationships he's had. >> yeah, i think so. let me go to george. it seems to me, this fellow is not bishop sheen, either. his job description isn't morality. it is late night television. how many divorces did johnny carson have? how many times did he come on with ed mcmahon and call him bar rag breath and talk about their night out the night before?

it was part of the schtick. is this guy able to subsume a serious embarrassment, multiple relationships with staffers, as a pr plus? >> so far. i mean, he has done a masterful job of turning it into a bit of comedy that had everybody in the audience ready to hug him. the facts are, he was unmarried. yes, he was in a long-term relationship, but so far we have not heard that any of these interoffice relationships weren't consensual. i mean, that's what we'll have to see. whether there is any sex harassment charges that bubble up. but you look at the way he handled this, versus the way his notorious foe bill o'reilly handled it. sex years ago. and o'reilly's statement came off like nixon's checker speech. his lip was sweating. so i think dave has definitely

taken this bull by the horns. >> he was released within the past couple of hours. robert halderman, the cbs news producer. he is out. he is walking the streets right now. >> well, let's not exonerate him yet. let's go to the crime here. it has all the look, without judging the case as a juror, jeff, you first, of blackmail. a $2 million demand. a check was passed over, a bogus check. it was going to bounce immediately. the guy went through the act. i know what the commission of a crime is. is you go through the whole process. they set him up to complete the action but clearly the intent was there to blackmail, it seems to me. it was extortion, it was big money, and this guy was, a grand jury involved here. where does it stand legally right now, jeff? >> he has been indicted and the manhattan prosecutor, the d.a. robert morgenthau announced today he's been indicted on one count, class "c" felony, attempted grand larceny for the $2 million extortion plot.

the alleged plot. he went to be arraigned today. the judge set bond at $200,000 and within the past couple hours, he bonded out. those are the pictures you were showing from the chopper surrounded by the media frenzy of him getting out right now. so he has been suspended by cbs. remember, david letterman owns his own company. worldwide pants. and as the ceo of that company, david letterman is not a cbs employee. he works for worldwide pants who produce "the david letterman show," "the late show with david letterman" show for cbs. so the staffers work for him. not necessarily for cbs. halderman, the alleged extortionist, he works for cbs. >> so what does that distinction mean to you legally? >> the distinction means, i have spoken with several people about this today, is that depending on what kind of policy, what kind of sexual harassment policy there is at worldwide pants versus cbs, cbs is going to handle halderman the way they want to handle him.

david letterman and the staffers, even if it was consensual, it is still a boss having sex with employees. >> we'll have to see. the new york department of labor may get involved. let me to go george on this. do the media politics, this will help his ratings in the short run, obviously. this is a cause for, this is going past, rubber necking, a traffic accident at least for a while here. >> oh, yeah. there is curiosity about him. i think people will be switching other channels to see if leno or jimmy kimmel are making jokes about letterman but those will come up inevitably. >> inevitably, i think leno will have something fine to say. he's been having fun with the talks about nbc maybe being for sale. leno talks about anything. i was on him last night. i am a huge leno booster. so i think he will be having some fun with this and all the other shows as well. >> can i jump in here? the people from worldwide pants must watch this show. as we were just talking, i got an e-mail.

we have a written policy in our employee manual that covers harassment. it is circulated to every employee every year. dave is not in violation of our policy and no one has ever raised a complaint against him. so that can answer part of that. >> you keep your pants on at worldwide pants. i guess anyway. what the heck? i wish them well. i wish them well. i like all entertainers generally. anybody that has to go on television and face the music. thank you, jeff, thank you, george of "the daily news." you'll have colors soon, right? big color on the front page of "the daily news" coming soon. i hope it helps you. we like to save newspapers. next, last night i appeared on the jay leno show and answered his ten in ten questions. that's on "the sideshow." it's coming up. carol!

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back to "hardball." let's hit "the sideshow." by now everyone know sarah palin's book is a best seller even before it hits the book stores. we get to look at the cover. good looking cover there. called "going rogue." there she is looking up at the sky. sarah's the talk of the town. john mccain's campaign manager steve schmidt was asked about palin's book and her future at the big atlantic first draft of history here in washington. here he is, steve schmidt. >> obviously, there is a lot of fascination about her out in the country, just looking at the presales of the book. >> i don't think it is inconceivable that she could be the republican nominee for president of the united states. i do think it is fairly inconceivable that she would be elected president of the united states. >> my honest view is that she would not be a winning candidate for the republican party in 2012. and in fact, were she to be the nominee, we could have a catastrophic election result. >> wow, catastrophic. schmidt said a rarity in the

business. he said what he thinks and doesn't do air kisses to the big shots just to cover his butt. as you just saw. next, last night david letterman dropped a bombshell, as i said, on his show. i was on leno having fun with his ten questions. here it goes. >> number one, worst job you've ever had. explain. >> i was a singing waiter at father's mustache in summer's point, new jersey. >> have you ever seen a ghost? >> yeah. richard nixon and bill clinton. these guys, you think they're dead and they keep coming back. >> in 15 seconds, recite the declaration of independence. the clock starts now. >> let's see. we hold these truths to be self-evident. that men -- all men are created equal. they're endowed by certain inalienable rights. among them, life, liberty and

the pursuit of happiness. >> very good, very good. give us or best impression. >> that's a good one. >> hillary, hillary, you're doing one hell of a job at the state department. >> oh, not bad. >> actually, i'm quite proud of my imitation. you ought to hear my arlen specter. that's the unique ability. now time for "the big number." a big one. a troubling one. the labor department reported today, the unemployment rate in this country has risen to 9.8% in september with employers cutting 263,000 jobs this month. today president obama addressed the job loss numbers. >> today's job report is a sobering reminder that progress comes in fits and starts. we're going to need to grind out this recovery. step by step. >> that's not happy news. that's our "big number" however, tonight. 15.1 million. 15 million workers out of work. not funny at all.

join us again weeknights at 5:00 and 7:00 eastern. up next "your business." you look beautiful tonight. allow me. it's tough to reach that five servings a day if you don't always like the taste of vegetables. i'll be right back. ok. good thing v8 v-fusion juice gives you a serving of vegetables hidden by a serving of fruit. v8. what's your number? get a $1.00 coupon for v8 v-fusion juice at tryv8.com.

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