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David Iglesias, Bud Cummins, Arlen Specter, John Kerry, Roundtable

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace. Attorney General Gonzales apologizes for the way the U.S. Attorney firings were handled, next on "Fox News Sunday."

A political firestorm hits the White House over the firing of eight U.S. attorneys. What happened then and what will Congress do now? We'll ask two of the attorneys who were dismissed, Bud Cummins and David Iglesias, as well as Republican Senator Arlen Specter.

The war in Iraq four years in. We'll discuss the president's policy and how Democrats will try to counter it with Senator John Kerry.

Plus, Valerie Plame testifies before Congress. We'll discuss the latest on the CIA leak case with our Sunday regulars, Brit Hume, Mara Liasson, Bill Kristol and Juan Williams.

And today, a new feature. The You Decide '08 Power Player of the Week. She tells one of the top presidential contenders where to go, all right now on "Fox News Sunday."

And good morning again from Fox News in Washington. Here's a quick check of the latest headlines. Attorney General Alberto Gonzales in a conference call with U.S. Attorneys said he was sorry for how eight of their colleagues were dismissed.

He did not apologize for the firings, but rather how they were handled, including suggestions some prosecutors performed poorly.

In Iraq, a deadly weekend for U.S. troops. Four were killed by a roadside bomb while two others were killed in separate incidents.

And in Washington Saturday, thousands of antiwar protesters marched on the Pentagon. Authorities kept counter demonstrators away.

Well, the firing of those eight U.S. attorneys is the big political story in Washington right now, and we're going to cover it from several angles.

First of all, two of the prosecutors who were dismissed, from Little Rock, Bud Cummins, who headed the Eastern District of Arkansas. And from Albuquerque, David Iglesias, who ran cases in New Mexico.

Gentlemen, let's start with Attorney General Gonzales' apology Friday for any suggestion that you and the other six U.S. attorneys were fired for poor performance.

This seems to contradict what the attorney general told Congress in January when he said that all of you were dismissed based on performance, not politics. Let's watch.

(BEGIN VIDEO CLIP)

ATTORNEY GENERAL ALBERTO R. GONZALES: I would never, ever make a change in a United States attorney position for political reasons or if it would in any way jeopardize an ongoing serious investigation. I just would not do it.

(END VIDEO CLIP)

WALLACE: Mr. Cummins, what do you make of the attorney general's apology now and of his credibility?

BUD CUMMINS, FORMER U.S. ATTORNEY: Well, Chris, I'm not familiar with the apology that was made Friday, if it was made.

And my understanding of the telephone call to the United States attorneys was that he more or less apologized for the manner in which this was handled, but I wasn't aware that he apologized for suggesting that there was performance reasons behind the firing of any of my colleagues or myself.

If he did that, I think that's a huge step. And I'm really pleased that they've appointed Chuck Rosenberg to be his chief of staff. I think that's a great first step.

Mr. Rosenberg's a real professional, and he will be in a position to help them assess what's happened here.

As far as the attorney general's credibility, it's obviously been injured, and I guess it just remains to be seen about how much of this nonsense that went on he was actually aware of while it was going on.

WALLACE: Mr. Iglesias, your sense of the attorney general's credibility, given what seemed to be somewhat shifting stories.

DAVID IGLESIAS, FORMER U.S. ATTORNEY: Well, that's a distinctive problem. The stories keep changing. I just wish they would have said at the beginning in January, "These are political appointees. There are political problems. We don't have to tell you."

Instead, they said performance, and now they're saying not performance. I think the credibility is significantly strained at this point.

WALLACE: Let's talk about that, because, in fact -- and we've looked at the records that have been brought forth -- you both got strong ratings on performance from the Justice Department.

So, Mr. Cummins, let's talk about other reasons that you may have been let go. The e-mail traffic seems to indicate that the reason you were dismissed is because Karl Rove wanted a political associate of his, Tim Griffin, a former aide, given your position.

Given that these are political appointments, what's wrong with that?

CUMMINS: Well, you know, I have no comment about it. You may think that that may be a good decision, or you may think that that might not have been a wise decision.

But in my case, I served at the pleasure of the president. They asked me to leave. I left. And they told the truth almost consistently throughout this about my situation.

So I really don't think this is as much about me as it is the positions they've taken to try and explain the other seven. And that's where I personally am still very concerned, because I don't think they've been fair to the other seven colleagues at all.

WALLACE: All right. Let's bring in Mr. Iglesias.

You say that last fall that you got calls from New Mexico Republican Senator Pete Domenici and Republican Congresswoman Heather Wilson asking whether you were going to bring charges against Democrats before the November election.

Now, the day you were fired, the White House deputy counsel sent this e-mail to justice, "Domenici's chief of staff is happy as a clam and will get us names," possible replacements, "forthwith."

A week later, the attorney general's chief of staff sent this e- mail, "Domenici is going to send over names tomorrow, not even waiting for Iglesias' body to cool."

Mr. Iglesias, what did you think when you saw those e-mails?

IGLESIAS: Well, it absolutely corroborated what I'd been thinking all along. Performance has nothing to do with this. This is a political hit.

And I just wish the Justice Department would have been honest when it testified in January that these were, in fact, not performance related but, in fact, political.

I think it's incredibly telling that I wasn't on any hit list until just weeks after those two very inappropriate phone calls from two members of Congress.

WALLACE: Well, New Mexico Republicans -- and this is a story on the front page of the New York Times today. They say the real problem was that there was significant evidence of voter fraud, that left-wing groups were trying to register ineligible voters and that you failed to prosecute those cases.

IGLESIAS: And that's true, because we didn't have evidence beyond a reasonable doubt. Prosecutors can't just prosecute on rumor and innuendo. I set up only one of two election fraud task forces in the country. In fact, the Justice Department asked me to speak at an election fraud seminar as a result of those task forces.

I wanted to prosecute those cases. I thought I had one case that I could have prosecuted. At the end of the day, I didn't have the evidence beyond a reasonable doubt, so I did not prosecute.

WALLACE: Well, you say, Mr. Iglesias, "Look, this is a political hit." The fact is these are political appointments. We all know that home state senators often have a say in who gets appointed or not appointed.

So what is wrong with what happened to all of you?

IGLESIAS: Nothing wrong per se. It was just the manner in which they tried to misrepresent the true nature of our firings.

All they should have done was just say at the very beginning, "These political appointees have lost political favor. We don't need to give any details," and let it go at that.

But instead, they tried to slander us on our way out. And I had a duty to defend my honor and the honor of my office, which is one of the hardest-working offices in the country.

WALLACE: Mr. Cummins, how much damage has been done to the Justice Department? And I'm sure you must have an opinion on all this. Should Attorney General Gonzales step down?

CUMMINS: Well, you know, out here in Arkansas, we don't necessarily put a bullet in everybody that makes a mistake like they seem to do in Washington.

So I wouldn't say that, in my opinion, he necessarily needs to step down. I think they need to take a quick look -- and it really shouldn't take very long.

And they need to go around the room and say, "Who knew about the bases for these decisions as they went along? Who knew that the White House had this much input, was able to inject this much improper political consideration into these decisions?"

Because each of those people really don't need to be at the Department of Justice anymore. If he's one of them, then maybe he does need to resign, but I know he's a very close friend of the president. Judge Gonzales is a good, fair man.

And if he wasn't involved in this, then he might be as good a person to fix it as anybody. But they need to get to work fixing it.

And the first step is to apologize to these seven people that I worked with that they said had performance problems. They didn't. There's no evidence that they did. And it's long overdue for them to retract those statements.

WALLACE: Finally, Mr. Iglesias, in January, after you were fired, you sent this e-mail to the Justice Department, to the chief of staff, to the attorney general.

Let's put it up on the screen. "I wondering if you could ask the judge," meaning Attorney General Gonzales, "if I can list him as a reference."

Mr. Iglesias, if you were so upset about the way your case was handled, why were you asking the Justice Department for a job reference?

IGLESIAS: It's a good question. It's a very simple test. I wanted to see if the true nature of my firing was performance based. If it was performance based, there is no way they would have agreed to have allowed me to list them as a reference.

In fact, they agreed, telling me that the true nature was political, not performance.

WALLACE: Mr. Cummins, Mr. Iglesias, we're going to have to leave it there. We thank you both so much for coming in today and talking with us.

CUMMINS: Thank you.

IGLESIAS: Thank you very much, Chris.

WALLACE: We asked Attorney General Gonzales to come on today, but the White House declined our invitation.

Chances are his fate rests largely in the hands of key Republicans in the U.S. Senate and, perhaps most of all, our next guest, Arlen Specter, the top Republican on the Senate Judiciary Committee, who joins us from Philadelphia.

Senator, Attorney General Gonzales came out in a press conference this week and said that he believes in accountability, but then he minimized his role in this whole episode. Let's take a look.

(BEGIN VIDEO CLIP)

GONZALES: Like every CEO of a major organization, I am responsible for what happens at the Department of Justice, was not involved in seeing any memos, was not involved in any discussions about what was going on. That's basically what I knew as the attorney general.

(END VIDEO CLIP)

WALLACE: Senator, do you still have confidence in Attorney General Gonzales?

SEN. ARLEN SPECTER (R), PENNSYLVANIA: I'm reserving judgment on that, Chris, until we finish the inquiry. This is one of two very important matters we're looking into. The other one is the misuse of national security letters for the FBI.

There are many conflicting assertions here, Chris. The Department of Justice continues to say that the resignations were requested because people weren't performing properly.

And I want to find out the facts, and there's a good bit of investigation that has to be done before we can really evaluate what the attorney general has done here.

WALLACE: On the other issue facing the White House now, should they allow Karl Rove and other top officials to testify? And if they don't, will you vote to subpoena them?

SPECTER: I believe that Mr. Rove and others ought to be before the committee. There are many precedents for having people in similar situations testify.

Will I go along with a subpoena? I want to see exactly what the White House response is. Maybe the White House will come back and say, "We'll permit them to be interviewed and we'll give them all the records."

But I don't like to make judgments before it really crystallizes and comes into focus.

WALLACE: Do you have any sense -- are you, in fact, talking with White House Counsel Fred Fielding? Do you have any sense when they're going to make that decision?

SPECTER: Sure did, had a long talk with him Friday morning. And I think we'll know their position on Monday.

WALLACE: Let's talk about the firing of Mr. Iglesias that we just discussed with him.

When you hear that Senator Domenici and Congresswoman Wilson called him before the election, he alleges to ask him about a politically charged investigation; when they confirmed the fact, if not the substance, of those conversations; when you see this e-mail traffic which shows the chief of staff to the attorney general saying that Domenici's chief of staff was happy as a clam, does this trouble you?

SPECTER: Well, I think the issue really is whether Mr. Iglesias was performing properly. The New York Times has a very extensive story today outlining both sides of the matter -- lots of complaints about what he was doing and lots of complaints about what he was not doing.

Now, if a United States attorney is not doing his job, he ought to be replaced. And it wouldn't be unusual for the chief of staff of the senator who makes the recommendations to be happy as a clam if they're going to get somebody in who's well qualified.

Look, Chris, it all turns on the facts. Was he doing the job or wasn't he doing the job? We know that the president has the authority to fire without any reason.

President Clinton fired 93 U.S. attorneys when he took office, and nobody said a word. But there's a real question here if he fires for a bad reason, if he fires because a U.S. attorney would not respond to pressure to prosecute or if there was pressure on him to not prosecute.

We're taking a look now, Chris, at whether Congress ought to legislate to require some showing of cause. The special counsel can only be terminated by the attorney general, for example, with cause.

So Congress has the constitutional authority to set some parameters and guidelines.

We don't want to interfere with the president's basic right to set policy. If he wants immigration cases emphasized, his U.S. attorneys ought to do that. If he wants -- whatever class of cases he wants ought to be followed.

But we're learning from this experience, and we really ought not to rush to judgment to either approve what Mr. Iglesias does or condemn it until we know a lot more facts.

And if we find that there's a way to better regulate this kind of a situation, Congress ought to act.

WALLACE: Senator, do you think that the administration used its emergency powers under the Patriot Act to get around sending at least some of the replacements for these U.S. attorneys to the Senate for confirmation? And if so, was that appropriate?

SPECTER: I don't think they did. The provision in the Patriot Act which expanded the attorney general's power was not noticed by anybody, and it was in the conference report for some three months.

It was only when it was put into effect and we saw its harmful application that we saw it was a bad change in law, and Senator Feinstein took the lead, and I have co-sponsored her legislation to change that back.

WALLACE: This week, you said that New York Democratic Senator Schumer -- that his role leading the investigation into the U.S. attorneys at the same time that he's running the Democratic Senate Campaign Committee is a conflict of interest. Has he crossed a line here?

SPECTER: I think he has. And I confronted Senator Schumer on it eyeball to eyeball on Thursday in the Judiciary Committee meeting.

But let's look at what the facts are. Senator Schumer is leading the inquiry, and the day after we have testimony about Senator Domenici, he puts his name up on the Democratic Senatorial Campaign Committee, criticizing or really making the argument that he ought not to be re- elected.

Now, I think that the inquiry by the Judiciary Committee ought to have at least a modicum of objectivity, and if Mr. Schumer is doing a job to defeat Senator Domenici, which he is now -- that's his job as chairman of the Democratic Senate Campaign Committee -- that he puts it up on their Web site the very next day, and then he has made very conclusory and judgmental statements all along.

And I challenged him on that a week ago in the Judiciary Committee, and he calls it a purge, and he's taken a very political stance. Now, he's got a right to do that. He's a politician and I'm a politician.

But I don't think he can do both things at the same time without having a conflict of interest, but that's up for him to decide.

WALLACE: Senator, we only have about 30 seconds left. Are you calling on Senator Schumer to step down -- if he's going to continue this political effort, are you calling on him to step down in terms of leading the investigation?

SPECTER: Nope, I'm calling on him to use his own judgment on that. If I call him to step down, somebody's going to say Arlen Specter is trying to stifle this investigation, and I'm not.

I've been totally cooperative, as all of my Republican colleagues have been, with this investigation. But when he has a conflict of interest, I'm not going to be afraid to say so.

WALLACE: Senator Specter, you seldom are afraid to say so. Thank you. Thanks for joining us. We appreciate it as always.

SPECTER: Nice being with you, thanks.

WALLACE: Up next, we'll take a look at where we are in Iraq as we enter the fifth year of the war. We'll sit down with Senator John Kerry when we come back.

(COMMERCIAL BREAK)

WALLACE: Joining us now from Massachusetts, Senator John Kerry.

And, Senator, before we get to Iraq, let's talk about the dismissal of those eight U.S. attorneys. Back in 1993, Bill Clinton, as Senator Specter noted, fired 93 of the 94 U.S. attorneys, the first time that had ever been done in such a summary fashion.

I understand that President Bush is doing this in the middle of his term in office, but why is what he's doing any worse than what President Clinton did?

KERRY: Well, I believe that history will show that George Herbert Walker Bush, president 41, also asked for the resignations.

It's pretty traditional when a new president comes into office to ask for the broad-based resignations of everybody in one place or another.

In fact, historically, presidents in a second term have asked for the resignations of their entire cabinet, and then they decide if they're going to keep people.

This is political. This is being done clearly for political purposes because somebody wasn't doing what political people wanted them to do.

You don't own the U.S. attorneys. Yes, it's a political appointment. But that doesn't mean they have to behave politically or that politics gets in the way.

WALLACE: Well, let me just follow up, if I can, for a moment on that, because one of the U.S. attorneys that President Clinton fired back in 1993 was a fellow named Jay Stevens, and there was a big furor at the time...

KERRY: I remember that, sure.

WALLACE: ... about the fact that he was weeks away from deciding whether to indict a very powerful Democrat, Dan Rostenkowski, then chairman of the House Ways and Means Committee. I mean, the basic point is, as you say, these are political appointees. I'm sure you as a senator, or most home state senators, have a say in who gets appointed as the U.S. attorney in their states.

I mean, isn't it in the very nature of the game that these are going to be political appointees?

KERRY: No. The word "political" does not mean that they are to belong to the political process. It means they are appointed by the party in power. That's different.

But the standard which applies to those appointments is still supposed to be the highest legal, the highest professional standard, Chris.

Nobody wants the White House or the Congress interfering in our judicial process. That's why we have a separate branch. And the fact is that this was clear political interference.

It's always been wrong. If it happened politically under Clinton, it's wrong. Two wrongs don't make a right. The fact is that this was political and it's wrong.

And there's a cloud over this attorney general. It's not just this. It's Guantanamo, it's the Patriot Act excesses. I believe this attorney general does not have credibility within the judicial system itself as well as outside.

WALLACE: Senator, let's move on to Iraq as we enter the fifth year of this war. General David Petraeus, the head of U.S. forces there, says that his plan, the so-called troop surge, shows -- and he's very cautious about it, but shows at least preliminary signs of working.

The Iraqis say the level of violence in Baghdad has dropped substantially during this first full month of the surge. Why not give the plan a chance to work?

KERRY: Chris, the plan is obviously getting its chance to work because the president has an opportunity to put it in place. That doesn't mean it's the right policy.

General Petraeus himself has said there is no military solution to this war. Now, if there is no military solution to this war, where is the political diplomatic solution?

I get really angry -- I mean, I heard about those four soldiers killed today, and I say to myself, as someone who remembers going out on patrols that sort of had a huge question mark over them, "What are we doing? What are these kids doing going out there and finding an IED the hard way? What has that accomplished?"

The fundamental problem of this war is between Sunni and Shia. Our troops cannot resolve that difference.

Now, in the first month or two months or three months of this escalation, sure, I expect the militia to melt into the background. I expect them to be very cautious about choosing where to engage.

And they will do what insurgents and militias traditionally do. They'll watch where the troops go. They'll learn their movements. They'll find their weak points. And then they'll probe and attack again. This will not change the fundamental dynamics.

And that's why so many of us, 48 of us, voted to set a date to leverage the behavior of the Iraqis. We're not trying to cut and leave it. We're not trying to abandon it. That's not a precipitous withdrawal. That's a year from now. That will be the entering of the sixth year of this war.

It's time for the Iraqis to assume responsibility for Iraq. And I've heard from experts in the region, from our own diplomats, that the only way to leverage the behavior we need from the Iraqis is to be firm and tough and clear about their need to compromise.

WALLACE: Senator, as you just pointed out, the Senate voted this week and rejected a plan, in part authored by you, by a vote of 48-50 to call to begin the pullout of troops and eventually to set of goal of pulling them out in a year. When you are still...

KERRY: No, Chris, that's wrong. Can I interrupt you there? I'm going to interrupt you there.

WALLACE: Well, let me just ask the question and then you can set me straight on what I...

KERRY: Well, fine.

WALLACE: But in any case, you needed -- you were 12 votes short. You weren't 3 votes short. You were 12 votes short of the 60 you would have needed to actually pass this.

When Democrats are still so short, so far away from passing something that will actually force the president's hand, limit his policy, what do you do now?

KERRY: Well, actually, Chris, we're 19 votes short because you need 67 to overcome the veto. And there would be a veto. We all understand that.

But last summer when I brought that resolution to the floor, I got 13 votes, 48-13. That is an enormous change in a very short time.

And what we've learned in the great fights of the Senate and historically in this country is you have to keep fighting. You keep trying.

The Civil Rights Act didn't pass immediately. Important pieces of legislation take time. We will change this policy over time.

But the reason I wanted to interrupt you there is because you and others in the media, and particularly on the Republican side of the aisle, continually characterize the plan we put forward as a complete withdrawal of all the troops and as a precipitous withdrawal. It is not a complete withdrawal. It specifically allows the president the discretion to leave troops there, to complete the task of training the Iraqis, and that is fundamentally all we ought to be there for.

It allows the president to leave troops there to chase Al Qaida and prosecute the war on terror, and it allows him to leave troops to protect American facilities and forces.

Now, six years into the war, really, what more could you want for our troops to be doing? This has got to -- this debate has to be real, not a straw man debate where you set up a phony deal which is precipitous and complete withdrawal. It's a responsible plan that allows us...

WALLACE: Senator?

KERRY: ... to stay positioned against Iran and do what we need to protect American interests.

WALLACE: Senator, let me just say for the record, I never said it was a complete withdrawal or a precipitous...

KERRY: Yes, you did. If you go back and look at the transcript, you said all the troops out.

WALLACE: Well, but I never said a complete or precipitous -- I also said that it was a goal, not an absolute deadline. But you're right. It is not a complete withdrawal.

Let me turn, if I can, finally, to 2008. You announced in January that you are not going to seek the Democratic presidential nomination, and you said you wanted to devote all of your time to Iraq and to climate change. But you're also a very...

KERRY: Correct.

WALLACE: ... practical politician. Did you make a clear-headed calculation, "2008 is not my time?"

KERRY: No. Listen, you're talking to somebody who ran for president when the media absolutely and totally wrote me off and dismissed me and I was 30 points behind. And I knew at that time that I could win.

At the time that I made the decision not to run, I think I was running third or fourth in the polls after some fairly broad, not very flattering publicity. I'm absolutely confident that had I entered -- I know how to compete, Chris, and I know how to come from behind.

But I felt very, very strongly that just from my own point of view, everything I would be fighting for, every day of clawing and fighting, would be clouded -- everything I said would be viewed in a political prism exclusively.

I believe this issue, Iraq, is just so monumental. It's so important. You talk to those families. I was with troops yesterday who are leaving, some of them going over.

One fellow volunteered after his son-in-law was blown up by an IED, and he volunteered to go so that some other family might not have to go through what they've already gone through.

There are amazing sacrifices being made, and they're so personal and so real that those of us in public life have a huge responsibility to get this right.

I think you need a profound shift in the diplomacy of the Middle East. This can be resolved. We all want success.

I'll never forget flying into Baghdad and the pilot of the C-130 turned to me, a captain, and he said, "Senator, make sure that 20 years from now this was worth it for all of us." That's what we have to do here. And that's what I'm fighting to do.

And global climate change is far more serious, far more urgent, than many people have yet embraced. We've got to get these things done.

WALLACE: Senator, we're going to have to leave it there. We want to thank you, as always...

KERRY: Thank you.

WALLACE: ... for coming in and talking with us, and please come back, sir.

KERRY: Thank you. I'd like that. Thank you.

WALLACE: Up next, Valerie Plame Wilson finally speaks out on the CIA leak case. We'll check in to see what our Sunday regulars have to say about that. Stay tuned.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

VALERIE PLAME, FORMER CIA OFFICER: Karl Rove clearly was involved in the leaking of my name, and he still carries a security clearance to this day, despite the president's words to the contrary that he would immediately dismiss anyone who had anything to do with this.

(END VIDEO CLIP)

WALLACE: That was ex-CIA operative Valerie Plame Wilson this week finally getting her chance to fire back at the Bush administration.

And it's time now for our Sunday gang, Brit Hume, Washington managing editor of Fox News, and Fox News contributors Mara Liasson of National Public Radio, Bill Kristol of The Weekly Standard, and Juan Williams, also from National Public Radio.

Well, Mrs. Wilson told a congressional panel she was a covert officer, that she was still making secret missions shortly before she was outed.

Putting aside the legalities of this case, putting aside the whole question of whether Scooter Libby lied or not, Brit, doesn't this raise a serious question for the White House of whether they chose political pushback over protecting CIA operations?

BRIT HUME, FOX NEWS WASHINGTON MANAGING EDITOR: No, it doesn't raise that at all. What had happened is that Valerie Plame Wilson's husband had come back from a mission that she, according to documents uncovered by the Senate Intelligence Committee and evidence uncovered -- testimony to that committee, had gotten him, a mission to Niger.

He came back from the mission to Niger and reported, according to the CIA, that he had found no evidence that any uranium acquisition deal had been completed or done by Saddam Hussein's government in Niger, but nonetheless that an effort had been made.

That is what the president said, according to British intelligence...

WALLACE: Yes, but we're talking -- I'm asking you, though, about Valerie Plame Wilson.

HUME: Yes, I understand. So the question naturally arose is -- when this guy comes back and misrepresents his findings in the editorial pages of the New York Times, the question arose is, "How in the world did this guy ever get hired for this job?" He had no particular qualifications for it.

And the answer was that his wife was CIA. Now, the CIA is a big place. There is no evidence that Karl Rove or Richard Armitage even, who's the person, by the way, who made the only leak that mattered -- there's no evidence that they knew she was covert or thought she was covert.

And there's no evidence that she was covert under the meaning of the law that has to do with outing agents. So the answer to your question is, I think, no.

WALLACE: Well, of course, there is also a question, though, Mara, as to whether or not any of those people ever asked the CIA whether she was covert.

If I may, let's listen to what Mrs. Wilson said about the operational effect of the effort to blow her cover. Here it is.

(BEGIN VIDEO CLIP)

PLAME: Not only have breaches of national security endangered CIA officers, it has jeopardized and even destroyed entire networks of foreign agents.

(END VIDEO CLIP)

WALLACE: And that's really the question I'm asking. Didn't this security breach put lives at stake?

MARA LIASSON, NPR: Well, and that's why the CIA refers these matters, and they referred this one, to the Justice Department for investigation. That's how this whole thing got started.

But, look. I think that there's no doubt that the White House was trying to discredit Valerie Plame's husband by making it seem like this was a boondoggle, he'd been sent by his wife.

But I don't think yet, as Brit said, that there's evidence that they purposely outed her to punish him. In other words, we have to know that they knew that she was covert, which we don't know yet because that isn't what came up in the trial, and they did that to punish him. They clearly wanted to discredit...

WALLACE: Wouldn't you think if they're going to name a CIA officer they would actually ask whether or not she was covert...

LIASSON: Yes. Yes.

WALLACE: ... whether naming her would actually bring up issues of security?

LIASSON: I just think that they wanted to show he only went there because of nepotism. That discredits him. But the leap that Valerie Plame is making -- and maybe it will turn out to be so. Maybe their civil trial will uncover this evidence. We just don't know yet.

That they knew she was covert and they purposely outed her to punish him -- we don't know that yet.

WALLACE: I guess the question I have, Bill, is couldn't they have pushed back against Joe Wilson without outing a CIA operative?

BILL KRISTOL, WEEKLY STANDARD: Maybe. Maybe. They didn't, of course. Richard Armitage outed the CIA operative, and he was not a supporter...

WALLACE: Well, so did Libby. So did Karl Rove. So did Ari Fleischer.

KRISTOL: No. No. That's not true.

WALLACE: They didn't talk to reporters?

KRISTOL: They may have talked to reporters about the fact that his wife was at the agency as a way of explaining the trip. That's what the State Department reported. There's nothing secret about that.

Valerie Wilson attended a Senate Democratic Policy Committee meeting in early may with her husband, Joe Wilson. He was on a panel denouncing the Iraq war. She was there.

They had breakfast the next morning with New York Times columnist Nick Kristof. If she is so covert, if she was so concerned that her presence might endanger operations, why does she accompany her husband -- why does she first send her husband or help send her husband to Niger which, of course, was going to raise questions ultimately about why he was picked as a critic of the war?

Secondly, why does she attend a partisan Senate Democratic committee meeting with her husband? Why does she have breakfast with a New York Times reporter?

CIA operatives are not supposed to have breakfast with the media, incidentally. They're supposed to report media contacts. If anyone outed Valerie Plame Wilson, it was her and her husband.

WALLACE: Juan, before I get you into this, I also want to -- because several of you have brought this up.

Valerie Plame flatly contradicted the central premise of this story that she somehow sent her husband to Niger as a junket. Let's take a look.

(BEGIN VIDEO CLIP)

PLAME: No, I did not recommend him. I did not suggest him. There was no nepotism involved. I didn't have the authority.

(END VIDEO CLIP)

WALLACE: Juan?

JUAN WILLIAMS, NPR: In fact, what she said was that he had gone on other missions and this idea came from someone else at CIA. All that was done was that she was informed of it and she let other people know. That's totally different.

In addition to which Mike Hayden, who's now head of CIA, has said that she was a covert agent at the time. That's what he said. He's classified her as such.

And yet this argument continues. Whether or not she had lunch or dinner with her husband and somebody who's a reporter -- that doesn't mean that she's compromising herself.

The action that was taken damaged the entire network, as she said, and it seems to me that's the hard point that -- I don't understand how you can try to ignore it by saying she had lunch with somebody.

KRISTOL: What do you mean somebody? CIA covert operatives are not supposed to have breakfast with reporters with their husband and -- Kristof later reported that two sources knowledgeable about what had happened gave an account of Wilson's -- this is before Wilson had gone public.

This is before Scooter Libby talked to anyone. This is before Richard Armitage spoke to Bob Novak. She compromised her own situation.

WILLIAMS: But Nick Kristof didn't report -- she didn't say to him, "I'm a CIA operative and you're free to report it." She's a source. CIA operatives are sources all over this town.

LIASSON: But you know what? Even if she did do that, that still is no excuse for if the White House, in fact, did do this.

HUME: Oh, stop.

LIASSON: But you know, there's one other point that she did raise, which is kind of maybe ancillary to this, but the fact that Karl Rove has now admitted that he did discuss her. He wasn't charged with anything. And the president did at one point say...

HUME: What did he say, Mara? What were his words? What do we know?

LIASSON: That he confirmed -- that he said, "I've heard that, too."

HUME: I've heard that, too.

LIASSON: Yes. OK.

HUME: So he's talking to a reporter who already knows this and has already had it planted in his head by a guy over at the State Department who, by the way, happens to be a critic, not a supporter, of the administration's Iraq policy.

So the reporter -- so Karl Rove -- the extent of Karl Rove's campaign to out Valerie Plame was, "Oh, you've heard that, too."

And the other thing that needs to be noted here is when she says that she had nothing to do with getting her husband the trip, that flies in the face of the evidence adduced by the Senate Intelligence Committee whose findings were released not on a partisan basis -- the bipartisan findings of the Senate Intelligence Committee, which was that she very much did have something to do with it, that she recommended him and that she put it in a memo.

WALLACE: So she was lying under oath?

HUME: I think that there is reason to question her credibility on that point.

WILLIAMS: Well, let's question somebody else's credibility. What happened to President Bush who said, "You know what, I'm going to investigate this and look into whether or not there was any such activity in my White House?"

According to the White House chief of security this week, he knows of no such investigation.

HUME: Can you imagine what would have happened once a special prosecutor had been named if the White House itself was still trying to conduct some type of inquiry on this?

LIASSON: He can do it now. He can do it now.

WILLIAMS: Of course he should -- the president said that he was going to do it, Brit, and apparently nothing was done.

HUME: It was done, if my memory serves, by the Department of Justice, which we are...

LIASSON: Wait a minute. What the president said is if anybody leaks anything in my White House, they're going to be out. That's different investigating the whole Plame...

HUME: And the guy who did leak it is out.

LIASSON: One of them.

HUME: Well, you say one. There was only one leak that ever mattered. And that was the one that first brought her name into the public eye. That was not done by the White House or through the White House. It was done by a guy at the State Department.

WILLIAMS: So it's only the first knife into the back that counts. All the other knives, that's okay. HUME: Juan, look. Once something is out, it's out.

WILLIAMS: Well, actually, it wasn't out because that revelation went to Woodward for a book, so the later revelations -- the one that ends up with Novak -- that's a separate item.

KRISTOL: That one was Richard Armitage from the State Department.

WILLIAMS: Correct.

HUME: That was the State Department. And that's the one that...

KRISTOL: Who was not indicted. How about that? Scooter Libby is indicted because he works for Dick Cheney. Richard Armitage, who put her name into the public -- he's fine. He's fine.

WALLACE: Well, I'm glad to see the Libby conviction has settled this...

WILLIAMS: Right, but it was for lying and obstruction of justice.

WALLACE: But coming up, the fourth anniversary of the invasion of Iraq. How is the troop surge working? And what is the political reality here in Washington? We'll be right back.

(COMMERCIAL BREAK)

WALLACE: On this day in 1959, the Hawaii statehood bill was signed by President Eisenhower. It paved the way for Hawaiians to vote themselves into the union as the 50th state later that year.

Stay tuned for more from our panel and our Power Player of the Week.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL, R-KY.: ... clear now that a majority of the Senate opposes a deadline for removal of the troops.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. HARRY REID, D-NEV.: It's very clear the Republicans are rubber- stamping the president's failed policy.

(END VIDEO CLIP)

WALLACE: That was Republican leader McConnell and Democratic leader Reid on the Senate vote this week against setting a timetable for pulling U.S. troops out of Iraq.

And we're back now with Brit, Mara, Bill and Juan.

So this week, Mara, marks the beginning of the fifth year of the war in Iraq. Your thoughts about the situation on the ground there and the situation up on Capitol Hill.

LIASSON: Well, you know, it's interesting. Harry Reid just said the Republicans are rubber-stamping. What he didn't say is that the Republicans are blocking a vote or blocking a debate, because they weren't this time.

And that's what's interesting. This time the Republicans were confident, and it turns out they were right, that they had the votes to even deny a majority, a plain majority, for this measure.

And I think what's happening is, as a practical matter, the Democratic Congress is not going to be able to stop the surge. The surge is going to have its chance to work or not work.

And I think that's where the best hopes of the administration lie. If the surge actually works, it could change minds in the United States about staying there.

Right now public opinion has certainly turned against the war. Only a change in facts on the ground, I think, can alter that, and they're going to have their shot. WALLACE: Bill, when I was talking with Senator Kerry and I noted the fact that they were 12 votes away from the 60, and he said, "Well, actually, we're 19 votes away from the 67 to override a veto," he saw that as tremendous progress because a year or so ago they got 13.

Do you look at this glass as half full or half empty?

KRISTOL: I look at this glass -- the Senate acted responsibly this week. I mean, the big story this week was Mitch McConnell's huge victory.

I think he has been the most capable Republican leader in the Senate in a long time to hold Republicans together in support of President Bush and in support of General Petraeus, winning the vote, not holding them short of 60, winning 50-48, with three Democrats, losing only one Republican.

The big story this week will be in the House. We will see if Speaker Pelosi can push through her, you know, version of the restrictions on the troops with various withdrawal deadlines. But it's spiced up with a lot of pork for members to try to vote for.

This is an emergency supplemental appropriations bill for defense which has billions of dollars of domestic pork in it on spinach growers, peanut farmers, all kinds of people. I am not sure she can win this.

This will be interesting if she can hold all the Democrats in the House. And I think Republicans have a chance to say, "Give us a clean supplemental for the troops, ignore all this pork, and these benchmarks and deadlines, which just signal to the enemy that if they hang on, we're losing our will and therefore debilitate the successful efforts that are going on now under Petraeus in Iraq," I think Republicans have a chance to defeat Pelosi on the floor of the House this week.

WALLACE: Juan, do you think at some point the Democrats might be making a mistake to continue to put these resolutions one after another out there, when the American public might at some point say, "Hey, why don't you do some business?"

WILLIAMS: I think they are doing the American people's business. The American people overwhelmingly want American troops out of Iraq. I don't think there's any question about that.

So the question is why is it that the political representatives of the American people are unable to follow through on this policy.

How is it that you have someone in the White House who is indifferent to American public opinion to, you know, the overwhelming voice coming from the House and the Senate? You know, 50-48 -- it's a very close vote, and yet the policy goes down one track, you know, almost -- you know, it's callous.

And by the way, let me just say -- let me finish on this.

KRISTOL: Would Pelosi's legislation get us out of Iraq? What would Pelosi's legislation do?

WILLIAMS: Pelosi's legislation, as I understand it...

KRISTOL: It wouldn't get us out of Iraq.

WILLIAMS: ... under the House deal, we withdraw by 2008. Under the Senate deal...

KRISTOL: So we fight ineffectually. Our soldiers are sent there and said, "You keep fighting for a year and a half, but we're not going to win."

WILLIAMS: No.

KRISTOL: "We're not going to give you a chance to win. We're just going to pull you out by September 2008." It is the worst kind of irresponsible legislation.

If Nancy Pelosi had any guts, she'd say, "Pull out the troops in 90 days." This is disgraceful. This is a disgraceful...

WILLIAMS: Wait a minute. Wait a minute.

KRISTOL: ... thing to tell the troops.

WILLIAMS: Wait a minute.

KRISTOL: "Keep fighting, but you're going to have to get out in a year and a half, so your sacrifices are for naught."

WILLIAMS: Well, wait a minute.

KRISTOL: It's a total disgrace.

WILLIAMS: Someone is trying to compromise with you, Bill. Someone is trying to say here is a reason -- OK, immediate withdrawal -- you think that's wrong, that might endanger American national interests. We'll do it slowly. We'll try to encourage some political development.

Chris asked Mara, "What about what's going on on Capitol Hill?" I think the key development here is the lack of political progress in Iraq. Where are the Iraqis in terms of making deals and allowing some kind of consensus government to form?

They're not helping. Why are we putting our people at risk?

WALLACE: Brit?

HUME: Well, Juan, two points. First of all, one of the critical elements in a political compromise that is thought necessary here is a petroleum revenue distribution measure.

WILLIAMS: Right.

HUME: The cabinet has now completed that, and it appears that it is on its way to passage. That's one thing the Iraqis are doing.

The other thing is you heard the military spokesman say this week was that the Iraqis have stepped up, they have sent the units into Baghdad they've said they would.

They are clearly trying their best to hold up their end of the bargain. So in two areas there, you have the Iraqis making a difference.

The other thing is we used to have a problem in places like Sadr City that U.S. and combined U.S.-Iraqi units couldn't go in there to try to sweep that place because it was too politically sensitive because of Muqtada al-Sadr.

Well, the Iraqi government has given the green light to all of that. Muqtada al-Sadr has gone to ground, thought to be in Iran, and the Mahdi army has melted away.

So just on those three counts alone, Juan, it's fair to say that while we're a long way from any kind of final success here, the Iraqi government has stepped up. They are doing something different. The strategy is different.

And the problem with the debate in the Congress as I see it at the moment is that the Democrats seem impervious to the fact that something genuinely new is being tried there. That doesn't mean it's going to work, but it does mean that it is something different.

WILLIAMS: No, but here's the thing. The Pentagon this very week, Brit, said this is a civil war. They're using that language that has been resisted by the White House and by Republicans. It's a civil war.

The second thing to say here is...

HUME: Well, all that may be, Juan, but would you dispute that militarily at least some signs of progress are evident, and that on the political side there are signs of progress evident there as well?

WILLIAMS: Well, that's why you have military people in this town calling it, you know, by this derisive term, the "whack-a-mole" strategy.

You've got a huge surge right now. Some people withdraw. Some people wait. Are we going to be there forever to try to hold peace between warring sects?

HUME: Evidently.

WILLIAMS: That's not the American military interest. That's not why we should be there. So, yes, for the moment, you look like you have a decrease in violence, but you know what? It's not anything that we can say is now in place to offer a stable future for Iraq or for our interests in the Middle East.

HUME: Things are better or not? WILLIAMS: Better for what? For the moment?

HUME: Well, that's the only time we can talk about here.

WILLIAMS: No. I think we have long-term interests and that's what we should be steering our policy to achieve.

WALLACE: I've got to talk about the moment. Say goodbye, everybody. Thank you all, panel. See you next week. You guys ate your Wheaties today.

For more visit the FOX News Sunday web page.

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