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Trent Lott, Dianne Feinstein, Sharon Eubanks, Roundtable

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace. Iran says no to U.N. demands to stop its nuclear program, next on "Fox News Sunday."

The White House and Congress headed for showdowns over the war in Iraq and those fired U.S. attorneys. We'll discuss both with two key senators, Republican Trent Lott and Democrat Dianne Feinstein.

Plus, new charges of political tampering by the Justice Department and a major lawsuit against big tobacco. We'll talk about the allegations with former lead attorney for the government Sharon Eubanks.

Al Gore takes his global warming crusade to Capitol Hill. What's fact? What's political hot air? We'll have a fair and balanced report.

Also, a personal struggle becomes part of the presidential campaign. We'll have our weekly You Decide '08 update with our Sunday panel, Brit Hume, Nina Easton, Bill Kristol and Juan Williams.

And our Power Player of the Week brings some good news from Walter Reed Military Hospital, 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. Iran has rejected the latest U.N. Security Council attempt to get that country to suspend its uranium enrichment program. On Saturday the council imposed new economic sanctions.

Also from Iran today, threats that those 15 captured British navy personnel will be charged with spying. Officials in London insist the men were in Iraqi waters when they were seized.

And Senator John McCain, citing a late start and a busy schedule in Congress, says his campaign will not meet its fundraising goals for this quarter. Top McCain staffers say former governor Mitt Romney may end up raising more money than McCain does.

Joining us now to talk about those clashes between the White House and congressional Democrats over the firing of the U.S. attorneys and the war in Iraq are the number two Republican in the Senate, Trent Lott, and senior Democrat Dianne Feinstein.

And, Senators, welcome back to "Fox News Sunday".

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: Thank you.

SEN. TRENT LOTT (R), MISSISSIPPI: Good to be back, Chris.

WALLACE: Friday night the Justice Department released documents that showed that Alberto Gonzales met with top advisers 10 days before those eight U.S. attorneys were fired to discuss the matter.

This seems to contradict what he said about how far removed he was from the discussion. Let's look at what he had to say two weeks ago.

(BEGIN VIDEO CLIP)

ATTORNEY GENERAL ALBERTO R. GONZALES: ... 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 Lott, as his story continues to shift, do you still have full confidence in Alberto Gonzales?

LOTT: I see no evidence that anything illegal was done or improper. As a matter of fact, it looks to me like when you look at the dates there that this discussion took place kind of after the decisions had been made.

But here's my point on all of this. I think it is a fact that it hasn't been handled well. I don't think anybody would assert that it has been. There needs to be a way to find out exactly what went on and why was this done.

But the president has every right to remove U.S. attorneys. And I think, frankly, they should be. In fact, I've noticed that they tend to get to think that they are federal judges. They'll do what they want to.

And if U.S. attorneys are not prosecuting immigration cases, not prosecuting death penalty cases, not prosecuting obscenity, or if you just think a few changes would be good, you ought to be able to do that.

WALLACE: Senator Feinstein, what do you make, one, of this new disclosure that Gonzales, in fact, did meet with top aides 10 days before the U.S. attorneys were fired? And how badly do you think he has been damaged as the chief law enforcement officer of the country?

FEINSTEIN: I think he's been damaged very badly. He certainly has in my eyes and, I believe, in the eyes of the nation and in the eyes of many, many senators.

He said very clearly, "I did not see any memos. I did not have any discussions." This firing was carried out on December 7th. The meetings were held shortly before that.

WALLACE: November 27th.

FEINSTEIN: November 27th. Clearly, he was there. Not only that, there is another e-mail that says attorney general will call Senator Kyl. So clearly, he knew.

Now he's saying he doesn't know. I think the day of the dual- hatted attorney general should be over. Attorney General Gonzales has had the view that he serves two masters, that he serves the president and that he serves as the chief law enforcement officer.

He serves one master, and that's the people of this country in being straightforward, in following the law.

WALLACE: I have to follow up, because up to this point, you have held off on calling for his resignation.

FEINSTEIN: Up to this point, I have held off. It was really Friday when I saw this. You have to realize he called me...

WALLACE: So you think he should resign now.

FEINSTEIN: He called me when I began to become involved in this and told me I didn't know my facts, I didn't know what I was doing. And it turns out he wasn't telling me the truth then either.

WALLACE: So you think he should step down?

FEINSTEIN: I believe he should step down, and I don't like saying this. This is not my natural personality at all. But I think the nation is not well served by this.

I think we need to get at the bottom of why these resignations were made, who ordered them, and what the strategy was.

WALLACE: Let me bring in Senator Lott about that, because you said we need to find out what really happened here.

There is, as you well know, a long history of White House aides coming up and talking before Congress. There was a congressional study that was done that showed that 31 aides spoke -- in the Clinton administration spoke to Congress a total of 47 times.

Since the president is willing to allow his aides to talk to Congress, how do you defend, or do you defend, his insistence that they testify in private, not under oath, no transcript being made?

LOTT: I believe that something could be worked out and can be worked out in that regard.

The question is are the Democrats in the Senate interested in information or confrontation. In my mind, I think if the president would agree for his close advisers in the White House to testify before Congress under oath, he'd be making a huge mistake.

There is a thing called executive privilege. I do think...

WALLACE: A lot of these Clinton aides testified under oath.

LOTT: Well, yes, but that doesn't mean it was a smart thing to do or that it should have been done. I mean, I do think the president should pay attention to the precedents they set for their successors. Going back to George Washington, Thomas Jefferson, Alexander Hamilton, I mean, you have a right to have executive privilege there.

Can a way be worked out to discuss with these people what happened? But you know, in the end, eight were removed, and I assume that there was some good cause.

But frankly, if you just don't think the, you know, U.S. attorney is particularly to your liking, you ought to be able to remove him.

And by the way, the attorney general is the chief law enforcement officer. He has, you know, a high responsibility to do that job in the Constitution. He also works at the pleasure of the president.

And that's the thing with Alberto Gonzales. As long as the president says I have confidence in the attorney general, he's going to stay.

WALLACE: Senator, let's follow up on this issue that Senator Lott has brought up a couple of times. Congress has been looking at this for weeks. You have received more than 3,000 documents from the White House and the Justice Department.

At this point, do you have any hard evidence that anyone at the Justice Department did anything illegal, improperly interfered with a political investigation?

FEINSTEIN: Well, we're trying to ask those questions, and we need to get those people before us. And the first one will come before us willingly -- and I think that's commendatory -- willingly on Thursday.

WALLACE: That's going to be the former chief of staff, Kyle Sampson.

FEINSTEIN: That's correct. So the questions are yet to be asked. Both Senator Leahy and Specter are trying to negotiate with the White House.

I heard Senator Lott say, "Well, they shouldn't take an oath." The oath isn't that important as the transparency and the transcript is.

And you know, you saw one right now. If it hadn't been in public when the attorney general said, "I've seen no memos, I've had no discussions" -- that was a very affirmative and definitive statement. If that hadn't been in public, he would have denied it.

WALLACE: But I mean, doesn't it say something -- and we'll get back to that issue with Senator Lott. Doesn't it say something that here you are, you've been looking at this for weeks, you've got 3,000 documents, and there's still no "there" there in this story?

FEINSTEIN: The "there" there is why were they dismissed. And you know, every day something new comes out. The attorney general in Michigan, Margaret Chiara...

WALLACE: No, The U.S. attorney.

FEINSTEIN: Excuse me, the U.S. attorney in Michigan has held a press conference and said she was dismissed clearly for political reasons.

WALLACE: But that's all right.

LOTT: Horrors of horrors.

FEINSTEIN: That's fine.

LOTT: My goodness. How were they selected in the first place? And I have found that U.S. attorneys forget quite often how they got where they are.

You know, all of a sudden they think, "Hey, I must be a federal judge. I'm here in perpetuity. I'll do what I please," and dare anybody to tell them, "Hey, you've got to prosecute more and more aggressively," running around trying to indict some lady that got a grant improperly instead of a billion dollar contractor. You know, you have questions about that.

WALLACE: Senator Feinstein?

FEINSTEIN: Well, six out of the eight of them are involved in public corruption cases, most of those cases against Republicans. They were removed while the investigation or the prosecution was ongoing.

LOTT: But the one in California...

FEINSTEIN: Or they removed...

LOTT: ... you wrote a letter about...

FEINSTEIN: Can I finish?

LOTT: Sure, go ahead. Yes. I mean, I don't see where there's a large number of them involved in, you know, corruption cases.

I think they were involved -- well, they were taking action on death penalty cases, immigration cases or obscenity cases.

FEINSTEIN: I'll stand by my statement.

WALLACE: Let Senator Feinstein answer your question.

LOTT: All right.

FEINSTEIN: Thank you. Six out of the seven of them were involved in public corruption cases. This is in particular my interest.

I think before you remove somebody in the middle of a public corruption situation, you ought to be very sure of what you're doing and that you don't in any way chill the investigation or chill the trial if it's going on.

In the case of Carol Lam, it's a particularly sensitive time. The day after she sent a notice of intent to file search warrants against Dusty Foggo and a defense contractor that was close to Duke Cunningham, the e- mail went out, "We have a real problem with Carol Lam."

WALLACE: Yes, but I want to say something about...

FEINSTEIN: Now, I want to ask whether that is a cause and effect. I'll have that opportunity, I hope, on Thursday.

WALLACE: Well, but let me just say something about that, Senator Feinstein, because we've seen the documents along with you. And you're exactly right -- and let's put it up on the screen -- on May 10th, Lam told justice that she was going to execute search warrants against Dusty Foggo, involved to some degree, allegedly, in the Duke Cunningham case.

The next day, Kyle Sampson sends this e-mail to the White House asking to discuss the real problem we have right now with Carol Lam. The problem is that a month before that, he had sent another e-mail suggesting that they get rid of Carol Lam.

I mean, the fact was they were upset -- you were upset -- with the fact that she wasn't prosecuting immigration cases.

FEINSTEIN: No, no, no, no, no. I was not upset.

WALLACE: Well, you sent a letter to the Justice Department.

FEINSTEIN: I wrote a letter of inquiry and I received an answer back saying that her immigration prosecutions were satisfactory to the department.

WALLACE: OK. Let's move on, if we can, to Iraq, because that's the other big clash that's going on now. The House voted Friday to bring all - - well, most U.S. combat troops, almost all of them, home by August 31st, 2008.

The Senate is going to consider a bill that would set a goal for getting most combat troops out by next March.

Senator Lott, do you have the votes to strip the timetable from the spending bill?

LOTT: We have not done a whip check specifically on this upcoming vote, but I believe that we do. There are members in the Senate in both parties that are not comfortable with how things have gone in Iraq.

But they understand that artificial timetables, even as goals, are a problem. Now, to have some benchmarks of things that we expect to happen - - that's fine. But we will try to take out the arbitrary dates.

You know, we need to put that kind of decision in the hands of our commanders who are there on the ground with the men and women. For Congress to impose an artificial date of any kind is totally responsible.

And here's the other point, the main point. It's sort of what -- you know, so far the Congress this year has done nothing. And even the New York Times talked about the perils of a heavy gavel, we're investigating, we're forcing our hand." This is not going to happen.

So why are we going through this exercise of heaping pork on the backs of our men and women in uniform and trying to put artificial dates which will not occur? We'll either knock it out or it will be taken out in Congress or the president will veto it.

WALLACE: Senator Feinstein, we're beginning to run out of time, and I want you to answer that question, but I also want to ask you another one at the same time.

The Pentagon came out this week and the said if they don't get this emergency spending -- this is all about $100 billion in emergency spending -- by mid-April that it's going to hurt training, it's going to hurt deployment, it's going to hurt repairs of important equipment.

If it comes down to a choice between the timetable and funding the troops -- and it may come down to that with vetoes and all these other things -- where do you come down?

FEINSTEIN: Well, first of all, I don't think we know that it will. I don't think we need to engage in that hypothetical discussion. This is a very serious matter, and the Congress has an obligation.

We're in our fifth year of this war now. A timetable, I believe, is, in fact, in order. This is a binding resolution that's in the supplemental.

If, you know, Senator Lott doesn't want help for Hurricane Katrina in Mississippi, we'll take it in California for the freeze. That's...

LOTT: I'm not going to be bribed...

FEINSTEIN: ... for sure.

LOTT: ... on something that will undermine our troops.

FEINSTEIN: I don't think you're being bribed, Senator.

WALLACE: Let Senator Feinstein answer.

FEINSTEIN: I don't think you're being bribed at all. Look, I know what happened in California in the freeze. And we take care of our own, too, and that's what I'm most proud of as an American. Having said that, this is a very big discussion. People of this country have spoken overwhelmingly. It's been constant now. They want us out. It is time for the Senate to weigh in. I hope we will have the votes.

WALLACE: Senator Feinstein, Senator Lott, I'd love to continue this conversation, and please come back and we'll do so.

LOTT: We'll be there.

WALLACE: But thank you for coming in today and sharing part of your Sunday with us.

FEINSTEIN: Thank you.

WALLACE: Up next, another -- and they're shaking hands right off camera, let me say.

Another controversy for the Justice Department. Did top officials there pressure the government's legal team to go easy on big tobacco? We'll sit down with the lead prosecutor after this quick break.

(COMMERCIAL BREAK)

WALLACE: With the Justice Department already under fire for the dismissal of eight U.S. attorneys, there were new allegations this week that top officials there interfered in a 2005 lawsuit against big tobacco, pressuring the lead prosecutor for the government to go easy on the companies.

Joining us now, the former government attorney in the case who's making the charges, Sharon Eubanks.

And, Ms. Eubanks, welcome to "Fox News Sunday."

SHARON EUBANKS, FORMER U.S. ATTORNEY: Good morning.

WALLACE: You say that your bosses at justice forced you to do three things, that they asked you to get the witnesses to change their testimony, that they wanted you to drop a demand that some of these corporate executives, big tobacco executives, be removed from their jobs, and also to cut the damages that you were seeking from $130 billion to $10 billion.

And you say this was as the result of political interference. Explain.

EUBANKS: Yes. I mean, the fact is that we had put on substantial evidence to support the government's case, and when it became clear to all that we were going to win, that we had enough evidence to win the case, then that's when the heavy-duty interference began and we were asked to do things like lower the remedy, interfere with the witnesses' testimony and cut back on some of the...

WALLACE: Why? Why would they interfere in a case at the last minute?

EUBANKS: Because if you just let it go on to decision and it's looking like maybe it wouldn't be so bad, you could let justice run its course.

But instead, they interfered and wanted to make it clear that the government was asking for something less than what it was entitled to under the law.

WALLACE: But again, if I may, why? I mean, why would they basically ask you to go easy on big tobacco?

EUBANKS: Well, they wanted to make sure, I believe, that any number that the court came out with was just pocket change for the companies. You'd have to ask them why that was important to them. But that's clear.

WALLACE: Now, when you say heavy-duty pressure, how heavy duty? Again, I understand they forced you to rewrite your closing argument.

EUBANKS: No, they didn't force me to rewrite it. They wrote it. They actually sat down and on the position that we had to take, lowering the remedy -- they wrote that. They drafted it and they required me to say it verbatim.

But that all started out with a meeting where they called me up and said, "Let's get together. I want to talk about lowering the amount." I wasn't given the reason at that point in time.

WALLACE: Now, you led the tobacco litigation team for six years. You're forced at the last minute -- I assume you were deeply involved in this case -- to read word for word what they said. How did that make you feel?

EUBANKS: Well, to quarrel a little bit with the question, it's not about how I feel. It was its effect on the American people, because we were representing the American people in that case.

My feelings in that sense had nothing to do with it. I had a job and an obligation. At that point, when my supervisors are telling me I've got to say something, or basically the fact is I could be removed from the case if I didn't do what they were saying, that was appropriate then, I guess, for me to get up there and to read what they were saying.

They were ultimately in charge of deciding what it was that the government was going to seek.

WALLACE: Now, Ms. Eubanks, the Office of Professional Responsibility, which conducts internal reviews in the Justice Department, looked at these allegations, and here's what they concluded.

And let's put it up on the screen, "Actions in seeking and directing changes in the remedies sought were not influenced by any political considerations, but rather were based on good-faith efforts to obtain remedies from the district court that would be sustainable on appeal."

In effect, OPR, the Office of Professional Responsibility, said your bosses did nothing wrong.

EUBANKS: Well, let's talk about that. The fact is that that's not an independent office. In the first place, Capitol Hill asked the inspector general to look into matters. The inspector general at the department is an independent office.

But the people in OPR, the Office of Professional Responsibility -- they report up through the chain, either in fact or certainly in effect, because I had problems with the investigation myself. And I called up the so-called target of the investigation, Robert McCallum, told him about those. And do you know what he told me? "You know what? I will call Marshall Garrett and I will take care of that for you." That's not in the report.

Furthermore, I was interviewed for an entire day for that OPR report. Not once did they ask about the e-mail exchange between the White House and the Justice Department which I was on. Not one question. It's a whitewash. That's what that is.

WALLACE: And very briefly, what was in the e-mail exchanges? Is there something significant there?

EUBANKS: Yes, it was. After the announcement of the reduction in the amount sought came about, there was a lot of furor from the press. Everyone started asking questions.

So the response that the department had was they wanted to do an op-ed for a newspaper. In this case it turned out to be USA Today.

Robert McCallum was drafting it, and he was sending his draft over to the White House, taking their edits and their remarks and putting it together for the reason why this happened.

WALLACE: Now, one thing you're neglecting to mention is that prior to the alleged interference, there was a ruling by an appeals court that basically said that you couldn't go after the tobacco companies, as you were in this $130 billion, for past profits.

And in fact, when the ruling finally came down from the judge in your case, and she ruled in your favor, she said, "Not only can't you get the $130 billion, I can't even order the $10 billion."

So in effect, weren't your bosses -- when they asked you to reduce the amount you were seeking, weren't they simply following what the appeals court judge said? Weren't they following the law?

EUBANKS: Absolutely not. If you look at the first decision of the Court of Appeals, that was February 4th. Immediately following that decision, the judge gave the government an opportunity to revamp, if you will, its position on remedies in light of the direction received from the Court of Appeals.

The administration folks weighed in and allowed us to put on the evidence of the smoking cessation. Look closely at those opinions, Chris, because they're not about how much. They're about whether you could apply or not.

And it's really important here that right now in the same Justice Department a decision is coming up on what to do about the government's position on appeal.

So there is an opportunity, a chance, for the Justice Department to review this matter and to do what's right rather than...

WALLACE: But the fact is the judge in your case, when she ruled in your favor, wouldn't even give the $10 billion, let alone the $130 billion, right?

EUBANKS: She refused to allow a remedy for smoking cessation which the Justice Department did not back off from -- you can get a remedy for smoking cessation. They just said the amount you're seeking is too much, for political reasons. And that's exactly my point.

Right now on appeal, the question is what will the government do with respect to that remedy, notwithstanding what the lower court has said, insofar as our ability to obtain that remedy.

WALLACE: You were a career lawyer for justice. You didn't just come in. You weren't a political appointee of the bush administration. In fact, you started in the 1980s under Ronald Reagan.

Was the atmosphere when it came to political considerations different under this president?

EUBANKS: It was different under this president than under any other president that I had served. In fact, the career people were edged out on a lot of the decision-making processes.

I never even met General Gonzales during my time at the Justice Department. And I'm working on the largest civil case that they've ever prosecuted. I mean, that's highly unusual.

The fact is that career people and their positions were something that this Department of Justice has not demonstrated that it's particularly interested in.

WALLACE: We have about 30 seconds left. Do you see some connection between your experience and what happened with the U.S. attorneys?

EUBANKS: Yes. I don't serve at the pleasure of the president, and most of the people who work at the department don't. But they're being interfered with every day in their work.

WALLACE: Ms. Eubanks, we're going to have to leave it there. We want to thank you so much for coming in today and talking with us.

EUBANKS: Thank you.

WALLACE: Coming up, our Sunday panel weighs in on the firing of those U.S. attorneys, and then we'll discuss the news that made even cynical Washington pause this week, Elizabeth Edwards' new struggle with cancer. We'll be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. PATRICK J. LEAHY, D-VT.: What we're told we can get is nothing, nothing, nothing. We're told that we can have a closed-door meeting with no transcript, not under oath, limited number of people, and the White House will determine what the agenda is. That to me is nothing.

(END VIDEO CLIP)

WALLACE: That was Senate Judiciary Committee Chairman Pat Leahy vigorously rejecting the president's offer for private interviews with White House advisers in the U.S. attorney case.

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

Well, as I discussed with the two senators, after all these weeks, after the 3,000 documents, there's still no hard evidence that anybody in this case, either in the White House or the Justice Department, did anything wrong.

But, Brit, with the shifting stories, with the document release on a Friday night, they sure act like they've got something to hide.

BRIT HUME, FOX NEWS WASHINGTON MANAGING EDITOR: Well, and what you can tell from all that is that this thing is going to be with us a while.

And I think, frankly, that Senator Leahy in particular and a number of the other Democrats as well deserve real credit for being able to keep a straight face about their indignation about this.

That sound bite you played of Pat Leahy is a classic. I mean, Pat Leahy has been around Washington since I can remember, and he's seen attorneys general come and go, and he's seen all -- he knows perfectly well that nothing really wrong happened here, and he's all allegedly -- about how the White House officials are going to be questioned about it.

It was very convincing. I think Al Gore better keep working, because the next Academy Award may go elsewhere.

WALLACE: Are you as convinced that there's no "there" there, Nina?

NINA EASTON, FORTUNE MAGAZINE: You know, this case, like a lot of Washington cases, like the Scooter Libby case, quickly became less about the underlying issue or the underlying so-called crime or the underlying wrongdoing. It's about who said what, where, when.

HUME: Yes, afterwards. That's correct, basically.

EASTON: You've got Chuck Schumer now saying, "When the story keeps changing, that suggests to me that there's something to hide." It's been so mishandled.

WALLACE: Well, it does suggest that, doesn't it?

EASTON: It does, and it's been so mishandled by the administration. One of these e-mails that was just released I thought was so telling.

In November, a top communications official at the Justice Department says, "Well, these six attorneys -- I think they'll resign quietly." I mean, that was a miscalculation from the administration from the get-go.

They've miscalculated how to handle this the whole way. And I don't think Attorney General Gonzales resigning is going to put an end to this. This is going to be a rolling scandal.

HUME: And his salvation in office I think depends on his performance on Capitol Hill. And based on previous performances on Capitol Hill, if I were a betting man, and I'm not, I don't think I'd bet much on his being able to pull this out.

WALLACE: Bill, let's talk about the president's offer that we saw Senator Leahy so firmly reject, which is private interviews with Karl Rove and other top officials, but no transcripts, no under oath.

Mr. Bush says he needs to get candid advice from his staffers, but what's the constitutional principle, if you're going to let them talk in the first place, in making it so that you can't have a record of what's said?

BILL KRISTOL, WEEKLY STANDARD: Yes, he probably shouldn't have let them talk in the first place. I mean, he probably should draw a firmer line between the White House and the cabinet agencies.

Obviously, cabinet agencies -- there's congressional oversight. And the problem here is the deputy attorney general of the United States, Mr. McNulty, testified under oath that these U.S. attorneys had been removed for performance-related reasons.

I think that has become a hard position to sustain. I don't see how the deputy attorney general can stay. They've already fired the chief of staff. It might be pretty hard to keep Gonzales, I suspect.

WALLACE: For substance reasons or because he's...

HUME: For what they said about it.

KRISTOL: I thought, personally -- once they let the chief of staff go, I thought that was it. I was chief of staff in a cabinet agency for Vice President Quayle, and I'm against throwing chiefs of staff overboard.

WALLACE: You wanted to make that record right here.

KRISTOL: The chief of staff should be defended at all costs. Really, what's ridiculous is to say, "The chief of staff did something wrong, he's got to go," and the attorney general didn't know about it, something as sensitive about removing U.S. attorneys, which is a major thing? It doesn't happen that often. It's within the president's prerogative.

WALLACE: And now we know he did know about it because of this memo.

KRISTOL: Yes. Now, if they let him go, they need to be tough, and they cannot make it look as if the Democratic Congress just gets to roll over one presidential appointee or another.

They need to bring in a strong conservative to replace Gonzales, someone like former Judge Larry Silverman, someone who could get confirmed but also will know what he has to do constitutionally in terms of relations with Congress, but also when he's -- someone who is willing to fight the Democratic Congress.

WALLACE: Juan, it sounds like he thinks Gonzales is a goner.

JUAN WILLIAMS, NPR: Yes, or ought to go in favor of a real conservative that would please you.

KRISTOL: That's right.

WILLIAMS: Thank you. But you know, I've been a fan of Gonzales because I think it was great that the president would appoint the first Hispanic to that position. I thought Gonzales had worked his way up. I mean, he's really kind of a, you know, Horatio Alger-type character.

But in this case, where you have, as you just heard from Senator Feinstein, six of eight of the cases were corruption cases, six of the eight that were fired, it seems to me a direct connection between the political office at the White House and what they're trying to do in terms of these corruption probes, either stop them or say, "We want you to go after Democrats at the time of the election."

That to me is a great concern. The line coming from conservatives is, "Nothing illegal was done here. Where is the 'there' there?"

Well, it seems to me that once you understand that the justice process is being sacrificed to political ends from one party or another, there's a "there" there. That means that you can't trust the prosecutor. You can't trust the courts.

WALLACE: Speaking of politics, as hard-bitten as the political world is, I think it's fair to say that we all stopped short this week when the sad news came out that Elizabeth Edwards has had a recurrence of cancer.

Obviously, it is overwhelmingly a personal struggle, but when a person is running for president, it can't be entirely personal. Everyone wishes her the best.

But it has raised questions about Edwards' candidacy and, in fact, he raised them himself during his announcement. Let's watch.

(BEGIN VIDEO CLIP)

JOHN EDWARDS, FORMER U.S. SENATOR: If you're not able, in a focused, thoughtful way, to deal with this kind of pressure, you're not ready to be president.

(END VIDEO CLIP)

WALLACE: Brit, what do you think this very sad news does to his standing as one of the frontrunners in the Democratic field?

HUME: Particularly sad, I think, because it looked like she'd beaten the disease. And this is what makes that more sort of disturbing, even to people who, you know, may not care much about her. This is formerly a disease that was thought to be easily curable.

I think it's uncertain what effect it will have. It's unclear that this incurable form of cancer, which has reached her bones, will swiftly debilitate her or whether it may be relatively dormant for a long period of time.

They seem hopeful that it's the latter. If it's the latter, he can still campaign and there may be a sympathy factor. It may be that the public will look at this and think, you know, watching a first lady struggle with cancer is something that they want to avert their gaze from. And that, you know, I suppose, could hurt in some way.

But I think in the near term, it doesn't do him any harm. He hasn't been doing well except in Iowa, which, of course, is very important. It might give his campaign, in the short term at least, a little bit of a boost.

It certainly gets him in the limelight. I gather he's going to come out "60 Minutes," and that will undoubtedly be favorable and helpful to him in some way. So we'll see.

WALLACE: Nina, in just a cold-blooded sense, does it make some of the money men, for instance -- are you going to be less likely to give money because you think he might have to drop out of the campaign? Do some campaign organizers decide, "I'm not sure this is somebody I want to, quote, 'invest my time and my effort in?'"

EASTON: Well, I think yes. On a cold-blooded level -- I mean, at first when this news first came out, I think on a personal level for this couple, they need to continue campaigning.

I mean, they've always responded to tragedy in their lives like the death of their 16-year-old son...

WALLACE: Yes, you know these guys well, don't you?

EASTON: Well, I wouldn't say that well. But I know them somewhat, and I've written about them. And I think, you know, they've dealt with this tragedy by -- the loss of their son by moving on. He ran for Senate. They had a couple more kids.

And she loves the campaign trail. This is something to keep in mind. She loves the campaign trail. She thrives on it. She's said as much. I think this decision was at least as much hers as his.

Does it leave a cloud? You know, as Brit mentioned, I think the -- you know, it depends on which way this disease, you know, progresses or doesn't progress, hopefully. And I think it does raise the issue.

I mean, you know, several months down the line, is he going to continue to be able to be going full bore with this or fighting?

WALLACE: Let me just say, again, as we move on to another subject, that all of us wish, obviously, Elizabeth Edwards the best.

And also in our thoughts and prayers this weekend is our former colleague and now White House spokesman Tony Snow, who is going in for surgery tomorrow. He's had a growth in his abdomen. He's going to have it taken out. All the tests so far have been positive.

HUME: Negative.

WALLACE: Have been negative, rather, exactly. But we wish him the very best, and he as well as Mrs. Edwards are in our thoughts and prayers.

Let's move on to Iraq. Bill, the house voted on Friday to attach to a spending bill a measure that would bring most combat troops home by August 31st of 2008. Now the Senate's about to take it up.

Where do you think the congressional debate stands now over Iraq?

KRISTOL: I think the Senate may be able to strip the binding timetables from this legislation. I think ultimately the president will end up signing a clean appropriations bill and therefore the surge will not be undercut and General Petraeus will have a chance...

WALLACE: How do you think we get from here to there, that it just won't come out of the...

KRISTOL: Either it won't come out of the...

WALLACE: ... Congress that way, or that he'll veto it and then they'll...

KRISTOL: Either. I think the president will correctly say, "Are you kidding?" The surge is beginning to work.

The inspector general, who has been very, very critical -- correctly, probably -- of our efforts in Iraq for the last three years, Stuart Bowen, came and testified to Congress Friday -- and this got, needless to say, no attention in the media -- testified to Congress Friday and said, "You know what? For the first time in 20 months, I've come back and I'm somewhat optimistic about what's happening in Iraq."

This man has been consistently pessimistic, and I'm afraid correctly so, about what was happening there. Things are turning around. And the Democratic party, unfortunately, wants to pull the plug on the effort just as it's making progress.

The president, I think, will be able to resist that, and I think Petraeus will have a chance to make the surge work.

WALLACE: You know, let me just say, Juan, I asked Senator Feinstein this question and she kind of resisted it. But at some point, aren't Democrats in Congress going to have to decide are they going to come down on the side of insisting on the timetable or funding the troops, because they're not going to be able to get both?

WILLIAMS: Well, I think it's largely a function of the fact that the president sets the agenda, because you could say based on this week's votes, "Gee, the Republicans didn't vote to fund the troops in the field because they voted against the funding package." But the reality is that that's the way it will be presented.

But I think the other half of this is Secretary of Defense Gates saying that he needs money by April, if not May, to make sure that he can still rotate the troops properly in and out.

That is pressure on the White House, on President Bush, to try to make some kind of deal. I think Bill Kristol is exactly right. The negotiation that will take place in conference between the House and the Senate will largely be determined by non-binding and make sure that that's non-binding.

I think that's what will eventually end up being signed by the president, but there will be some sense in there of a deadline for withdrawal. The American people want it.

I think the people who voted on the Hill, especially the liberals who voted to support Pelosi, who had a really spectacular day in terms of her leadership -- they want some kind of withdrawal deadline put in there, and so there's going to have to be something like that. Otherwise, you're not going to get anything out of Congress.

HUME: There's another way to look at this, and that's the question of what the president will have to accept in order to get the money. I think the timetables will come out. Certainly, binding timetables will not become law.

The question is will the president supposedly do this, supposedly strip the timetables out of the bill and leave all the pork in. Will he sign that? And of course, you know, the administration has vowed that in this term they're going to be much tougher on spending.

Will this president be tough on this spending in this bill loaded up as it is?

WALLACE: That would be pretty hard for him, wouldn't it?

HUME: Well, it's a tough call. Would he have the stones to say, "OK, I'm vetoing this and send me a clean bill. I insist on it?"

EASTON: Without the subsidies for tropical fish and...

HUME: Without the tropical fish and...

WALLACE: Shrimp and spinach.

HUME: ... the spinach growers and all that.

WILLIAMS: You know, I just disagree with this. You know what? I mean, I'm not for pork. How can you defend pork?

But is it pork to say we want to take care of people who have brain injuries, people -- to make sure Walter Reed is up to snuff? That's what's in there. And we're not talking $100 million...

HUME: Juan, Juan...

WILLIAMS: ... for Afghanistan and Iraq, Brit. We're talking a small percentage. And yet the conservatives who are opposed to the withdrawal...

WALLACE: It's about $24 billion.

WILLIAMS: Yes, but $100 billion is going to Iraq, and that's the big ticket.

HUME: Juan, it's a military appropriations bill. If these were such worthy projects, why do they have to ride on this?

WILLIAMS: Because the Republicans didn't do their jobs. They didn't pass a budget before they left.

HUME: Didn't pass the spending subsidies soon enough?

WILLIAMS: Didn't what?

HUME: Didn't pass the spending subsidies soon enough?

WILLIAMS: I don't know about it, but I'm saying that's the kind of agricultural step that needs to be taken in this country. But forget about it. What about taking care of Walter Reed, taking care of our soldiers?

WALLACE: I speak for Fox News. We are all for spinach here.

For more visit the FOX News Sunday web page.

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