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Ed Gillespie, Sens. Leahy & Specter

Fox News Sunday

CHRIS WALLACE, HOST: I'm Chris Wallace. Idaho's governor looks for a replacement for Senator Larry Craig, next on "Fox News Sunday."

A senator resigns in disgrace.

(BEGIN VIDEO CLIP)

SEN. LARRY E. CRAIG, R-IDAHO: I apologize for what I have caused.

(END VIDEO CLIP)

WALLACE: And under intense pressure from Democrats and Republicans alike, Attorney General Alberto Gonzales steps down.

We'll discuss both cases with the leaders of the Senate Judiciary Committee, Chairman Patrick Leahy and top Republican Arlen Specter, only on "Fox News Sunday."

Then, what's the White House strategy for continuing the troop surge in Iraq and helping George W. Bush finish up strong? We'll ask the new counselor for the president, Ed Gillespie, in his first Sunday interview.

Plus, Fred Thompson announces he will announce a run for president. How does that change the Republican race? We'll find out from our Sunday panel -- Brit Hume, Nina Easton, Bill Kristol and Juan Williams.

And our Power Player of the Week bashes both Democrats and Republicans with a joke, all right now on "Fox News Sunday."

And good morning again on this Labor Day weekend from Fox News in Washington. Here's a quick check of the latest headlines.

Idaho Governor Butch Otter said late Saturday he has not decided who should replace Senator Larry Craig, who quit following a guilty plea in a gay sex sting. Otter said reports he's already picked Lieutenant Governor Jim Risch are dead wrong.

Two retired British generals sharply criticized what they said was the fatally flawed post-war planning in Iraq. Both blame former Defense Secretary Donald Rumsfeld for not sending enough troops and for a plan that one called intellectually bankrupt.

And in Texas Saturday, Congressman Duncan Hunter, a longshot presidential candidate, won the Republican straw poll. His top-tier opponents skipped the event.

Joining us now, the two leaders of the Senate Judiciary Committee, which will soon take up the replacement of Attorney General Alberto Gonzales, the committee chairman, Democrat Patrick Leahy, and the top Republican on the panel, Arlen Specter.

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

SEN. ARLEN SPECTER (R), PENNSYLVANIA: Thank you. Good to be with you.

WALLACE: Before we get to the choice of the new attorney general, let's discuss the resignation of your colleague Larry Craig.

Senator Leahy, let me start with you. What do you make of the case? Did he have to go?

SEN. PATRICK LEAHY (D), VERMONT: Well, apparently, there was strong pressure on him from the Republican caucus and the leaders of the Republican Party. I feel sorry for his family to have to go through that.

What is interesting and I think is going to cause some fallout, and maybe there's more to come -- we have another senator who apparently used telephones in the Republican cloak room to call the so-called Washington madam, set up illegal activity with call girls, and nobody seems to be upset with that.

Frankly, I would think that that, as compared to a sting operation in a men's room in Minnesota, would be as serious. I mean, that's a question that the Republican Party will have to answer.

WALLACE: Now, you're talking about Louisiana Senator David Vitter.

LEAHY: Yes, I am.

WALLACE: The argument they have is there was no pending court case and whatever he did, he did when he was a member of Congress, not a member of the U.S. Senate.

LEAHY: Well, there is a pending court case, of course, and that's how it all came out that there's a...

WALLACE: But not against him.

LEAHY: No, not against him. But I don't think most people, most people in the public, are going to see a big difference in that.

WALLACE: So do you think there's a double standard?

LEAHY: Well, there appears to be, but I would assume that they will want to address that. I'm not in the Republican caucus. I haven't been invited to be, and I don't think I ever would.

And I'm not going to give advice to the Republican caucus, but there is a double standard, of course. WALLACE: But let me just ask -- and I'm going to bring Senator Specter in in a second. Are you suggesting that if Larry Craig had to resign, that David Vitter should resign, too?

LEAHY: Well, I have a feeling that there -- one, I say there's a double standard. Secondly, I don't think they'll ask him to resign because, of course, he'd be replaced by a Democrat.

It's easier to ask Larry Craig to resign because he'd be replaced by a Republican.

WALLACE: Let me ask you about that, Senator Specter, and -- both the double standard allegedly involving Senator Vitter and on the merits on the Craig case. Did he have to go?

SPECTER: I don't think either of them should have been asked to resign. I'd still like to see Senator Craig fight this case. He left himself some daylight, Chris, when he said that he intends to resign in 30 days.

I'd like to see Larry Craig go back to court, seek to withdraw his guilty plea and fight the case.

I've had some experience in these kinds of matters since my days as Philadelphia district attorney, and on the evidence, Senator Craig wouldn't be convicted of anything.

And he's got his life on the line and 27 years in the House and Senate, and I'd like to see him fight the case, because I think he could be vindicated.

WALLACE: Are you suggesting that if he could fight the case and could be vindicated that he should then rescind his resignation?

SPECTER: Well, he hasn't resigned. Bear in mind, Chris, if you look closely -- listen closely to what Senator Craig said, he said he intends to resign. Once you resign, you're out. But when you have a statement of intent to resign, that intent can change.

And if he could change the underlying sense of the case, feel of the case -- listen. You can go to court and you can withdraw a guilty plea. Of course, disorderly conduct is not moral turpitude and wasn't the basis for being very excited.

The underlying facts, OK, question of what happened and what was intended, and if that case goes to trial -- and I say I've seen matters like this since my days as a prosecutor -- he wouldn't be convicted of anything.

And if he went to court, was acquitted, all of this hullabaloo would have no basis. It doesn't have a whole lot of basis to start with.

WALLACE: You know, I really want to get to the attorney general, but I'm... LEAHY: Well, this is interesting. You've just heard from one of the best lawyers I've ever served with in the United States Senate and, you know, from a legal point of view, he makes a very, very good point.

Now, from a political point of view, I don't pretend to know what Idaho's politics are or how they might be. But Senator Specter has laid out as strong a legal case as I've heard.

WALLACE: All right. Let's move to what we've invited you here for in the first place, which is...

LEAHY: I was going to say.

WALLACE: ... to talk about the choice of a new attorney general.

Senator Leahy, you sent a letter to President Bush this week suggesting that he meet with you and Senator Specter to find what you called a, quote, unifying nominee.

What does that mean in terms -- not specific names, but what does that mean in terms of the kind of person you'd like to see named and the kind of person you don't want to see named?

LEAHY: Well, I'd like to see the president be a uniter and not a divider in his choice. He's only got a little over a year left in his term.

We have a Department of Justice that's in shambles. The morale is the lowest I've ever seen it under either Republican or Democratic administrations. We have some superb people there that we'd like to keep.

Put somebody in who demonstrates we're not doing this from a political or ideological -- we just want the best man or woman who can run the place, restore the sense of commitment and restore the sense of integrity to the Department of Justice.

I think if he were to do that, you would hear a huge sigh of relief from both Republicans and Democrats in the Senate, and such a person would have the kind of support that was not there for Mr. Gonzales because he had angered so many Republicans and Democrats.

WALLACE: Senator Specter, should the president pick someone as attorney general as a compromise, as a, quote, unifying nominee?

I suspect some Republicans are going to say you know, if you're working that hard to satisfy Pat Leahy, you're not going to pick a true conservative.

SPECTER: Chris, I think he ought to select a real professional, somebody who understands the difference between being the president's lawyer and being the chief law enforcement officer of the United States who has a duty to the American people in addition to being a cabinet officer.

I think he ought to select somebody who would give him some candid, frank, forceful advice on what's constitutional.

I think the president and the administration would be well served by having somebody as attorney general who occasionally would tell the president some things he doesn't like to hear.

I think the president has made some very significant mistakes on legal issues, on as far as he's gone on signing statements, on his refusal to recognize the bold, clear-cut constitutional authority for habeas corpus.

I think the president needed some advice early on on the terror surveillance program. He finally put it into the court, but there's no doubt that the current attorney general has only told the president what he wants to hear.

The president would be well advised by having some frank, independent advice and some things he doesn't want to hear. Listen. Then the president can make a decision. But he ought to have vigorous advocacy on both sides. And that's the kind of an attorney general he ought to get.

WALLACE: Let me bring in Senator Leahy to talk about a different aspect of this debate.

Some congressional Democrats say they want to link confirmation of a new attorney general to continuing investigations.

House Speaker Nancy Pelosi talked about that this week, and let's put up on the screen what she said. "The nominee must pledge to cooperate with ongoing congressional oversight into the conduct of the White House and the politicization of federal law enforcement."

Senator Leahy, will you support holding up confirmation until the White House agrees to name a special prosecutor or forces -- let's say allows people like Karl Rove to testify? Are you going to create some linkage?

LEAHY: I've asked for an independent investigation of what Mr. Gonzales said when he gave sworn testimony that I did not find credible.

And now for the first time in history, the inspector general of the Department of Justice is doing that investigation. That is what I wanted. I am very pleased that it's being done, because I think that we should have the answers, and I have a great deal of confidence in the inspector general.

I have told the White House there's a lot of information we need to have before a confirmation hearing. Senator Specter has mentioned a number of areas where the attorney general gave poor advice to the president.

I want to know what some of those areas -- what the advice was, so we can ask somebody coming in -- both Republicans and Democrats can ask somebody coming in, "Will you give the same kind of advice? How do you feel about this torture memo? How do you feel about the warrantless wiretapping of Americans?"

WALLACE: But that's not the question I'm asking. The question...

LEAHY: No, no, no, it is. It is.

WALLACE: No, no. But the question I'm asking is would you -- are you going to hold up the confirmation of a new attorney general until you get satisfaction on things like Rove testifying, a special prosecutor being named to look into the case?

LEAHY: I haven't asked for a special prosecutor, and what I have...

WALLACE: But some of your colleagues have.

LEAHY: I haven't asked for a -- I'm the chairman. I haven't asked for a special prosecutor. And I think I can understand why some have, because of just the almost unbelievable attitude of the attorney general. I don't question their motives in doing that.

What I've asked is not so much on individuals, but I've asked give us his information. They operated under a legal document apparently approved by the attorney general that has allowed everything from signing statements to torture to warrantless wiretapping of Americans.

We have to know what was in there so we can ask the next person what's going on. I'll know when we have enough information to ask the valid questions on both sides, and then we'll go forward with a confirmation hearing.

WALLACE: Senator Specter, how do you feel about this idea of putting conditions on confirmation? Is that appropriate?

SPECTER: I do not think there ought to be any conditions placed on the president in the exercise of his Article II constitutional powers.

Congress has plenty of authority to exercise our oversight responsibilities, and Senator Leahy and I have run some very piercing, intensive, appropriate investigations.

What I'd like to do is I'd like to come to terms with the president on the questioning of the White House officials and some other items.

And I renew my request that the president sit down with the chairman of the House Committee, with Senator Leahy and myself, and let us work this out. Let us not get embroiled in two years of litigation on what executive privilege means until this administration is gone.

There are some important questions to be answered, and Congressional oversight can do it without putting a lot of preconditions and tying up the confirmation of a new attorney general. That ought to be done promptly. It ought to be done independently.

WALLACE: Senator Specter, we've only got a couple of minutes left.

And I want you both to answer this question, because I want to look back at the Gonzales legacy which you both have referred to.

Senator Specter, after Gonzales resigned this week, your colleague here, Chairman Leahy, put out a statement accusing Gonzales of presiding over what he called a massive breach at the Justice Department.

And let me put up a phrase or a sentence from that. "The Department of Justice suffered a severe crisis of leadership that allowed our justice system to be corrupted by political influence."

Senator Specter, there are clearly questions about the firing of the U.S. attorneys, questions about Gonzales' involvement in the warrantless wiretaps, but is there at this point, as we sit here, any proof that the department interfered in any cases for political reasons?

SPECTER: No, there has not been proof. There have been suggestions. There has been smoke. But no fire has been detected.

Listen. The administration of the attorney general with Mr. Gonzales is explained by incompetency. You don't have to look beyond that. I think that it was just not handled competently.

But I'd like to forget about yesterday, get a new attorney general in, get that department functioning to carry out its important duties on investigating terrorism and fighting crime. Let's forget about yesterday.

WALLACE: Senator Leahy, one question about yesterday. You make it sound as if Alberto Gonzales was as bad as Attorney General John Mitchell during Watergate.

LEAHY: Well, I wasn't here when Attorney General John Mitchell was here. I was a prosecutor, as was Senator Specter at that time.

But what I see now -- we've got about a dozen people -- key people in the Department of Justice have resigned. They haven't been able to get anybody to replace them. That's a dysfunctional Department of Justice.

And the dysfunctional aspect of it has gone right back to the attorney general. That's why both Republicans and Democrats were asking for him to step down and a great deal of pressure came on him from Republicans to step down.

I can't quite agree that we don't look back. We look back just to make sure that the same mistakes aren't made again. And I want to make sure that whoever is attorney general is somebody that will restore the Department of Justice to the kind of integrity that we expect no matter who is president. WALLACE: Senator Leahy, Senator Specter, we want to thank you both so much for coming in and sharing part of your holiday weekend with us. Thank you both.

LEAHY: Thank you.

SPECTER: Thank you. Nice to be with you. Thank you, Chris.

LEAHY: Thank you.

WALLACE: Up next, what's the White House view on the Craig resignation, the choice of a new attorney general and the war in Iraq? We'll talk with the new counselor to the president, Ed Gillespie, when we come back.

(COMMERCIAL BREAK)










WALLACE: Joining us now for his first Sunday interview since becoming counselor to the president is Ed Gillespie.

And welcome back, Mr. Gillespie, to "Fox News Sunday."

ED GILLESPIE, COUNSELOR TO THE PRESIDENT: Thank you for having me back.

WALLACE: As we've been saying, Senator Craig resigned yesterday, but doesn't the Republican Party still have a problem with ethics? Hasn't the GOP brand been damaged in this area?

GILLESPIE: I think we have suffered. In the last election in 2006 we saw damage to the GOP brand when it came to ethics. I think that you're seeing Republicans in Congress and in the party respond to that and, I think, vigorously promote an ethics agenda.

And I think you'll see in 2008 voters will make a determination of our party's nominee and candidates as they stand in the House and Senate, and I think that we will not have candidates who have any kind of ethical considerations that will be a concern to the voters come 2008.

WALLACE: What about the argument we just heard from Senator Leahy that there's a double standard in the Republican party moving so fast to get Larry Craig out, but they've done nothing about David Vitter?

GILLESPIE: Well, there's a critical difference here, Chris, as you know. The fact is that Senator Craig pled guilty to a crime and, therefore, was convicted of a crime. I believe it was a felony. I'm not a lawyer, but that's what I understand.

WALLACE: I think it's a misdemeanor.

GILLESPIE: A misdemeanor?

WALLACE: Yes. GILLESPIE: Either way, he was convicted of a crime, and that is different. Senator Vitter has not been charged with a crime or let alone convicted of one. So there's a pretty big distinction here.

WALLACE: You had more bad news this week when Virginia Senator John Warner announced that he's retiring after 30 distinguished years in the Senate, which means that that race will now be competitive.

You, of course, before you took this job, were the state chairman for the Republican Party in Virginia. With Republicans defending 22 seats and Democrats defending only 12, aren't you almost certain to lose some ground in the Senate next year?

GILLESPIE: No, we're not almost certain. The Virginia Senate race will be competitive, it's likely, without Senator Warner.

Had Senator Warner run for reelection, I don't know if the Democrats could even have fielded a challenger to him. But now it will be an open seat and both parties will vie for it vigorously.

But the fact is we have a number of Democratic senators in some pretty red states. And so we have opportunities for pickups. You know, the Senate is very closely divided, 51-49, and I believe that we can make gains in the Senate.

In 2008, with a strong performance at the top of the ticket, I believe that we could recapture the Senate.

WALLACE: Let's turn to the search for a new attorney general. How important is it for the president to pick what Senator Leahy just called a unifying nominee?

GILLESPIE: Well, I believe that the president, who is talking to or reaching out through his staff to members of Congress on both sides of the aisle, senators on and off the Judiciary Committee and in the leadership, including Chairman Leahy -- he's going to put forward a nominee who is qualified in terms of experience and intellect and who shares his views when it comes to the policies that help keep us safer as a nation in the war on terror.

The Department of Justice plays a very important role in keeping us safer, obviously, and I think that you'll find when he puts forward this nominee that it is someone who will be confirmed because it is the president's prerogative to appoint the attorney general.

Obviously, the Senate has the right and the prerogative to confirm, but I think that you'll see that this is -- whoever he puts forward when he returns from his trip to Australia will be someone that senators will find worthy of confirmation.

WALLACE: Let's turn to Iraq. You were quoted this week as saying that you believe the White House made significant progress during this last month of August in building support for the troop surge.

Do you now think that the president's surge policy is safe going into 2008?

GILLESPIE: You know, Chris, any time that our country has brave men and women in harm's way protecting our freedom and our national security, it's right that we have a serious debate about this.

We're going to have a serious discussion about our Iraq policy in September after General Petraeus and Ambassador Crocker come back and brief the Congress on the situation in Iraq and the conditions on the ground.

I believe what we've seen throughout the month of August is that the president's surge policy and the increase in troops there has had the intended effect of helping to secure the population, and that is now translating into the goal of allowing for progress to be made on the political front in Iraq as well. And so I think that we hear from members of Congress from both sides of the aisle who have been over to Iraq during this August break who have come back and have seen this progress and have told their constituents about it.

People are seeing progress, and I think that the support for it continues, and we saw just this week that a majority of Americans believe that Iraq is winnable.

WALLACE: But when you were talking about that you felt a whole lot better at the end of August than you did at the beginning of August, you were talking less about the situation on the ground in Iraq, although that obviously is a reason for it, and you were talking more about the political situation here in Washington.

Do you think the situation has changed during the month of August?

GILLESPIE: I think the conditions on the ground improved and as a result of that, the political assessment or the public opinion changed as well, and it improved as well.

And the president gave a series of speeches throughout August, beginning with a speech about the importance of defeating Al Qaida in Iraq, the historic parallel or some of the lessons that we've learned from our experience in Asia and how they apply in Iraq, and then most recently at the American Legion about the importance of Iraq in the Middle East and the importance of the Middle East to our national security.

I think all those things, along with those conditions on the ground that we've seen improve, did result in a sense amongst members of Congress that this is a policy worth supporting.

WALLACE: But specifically, there was a lot of talk in July that Senate Republicans were moving away from the president and might be about to jump ship and join Democrats in calling for a time line for withdrawal.

As you go into September, do you have a feeling that Senate Republicans are more solidly on board the president's surge policy? GILLESPIE: Well, we'll know better, obviously, next week when Senate Republicans come back into town.

But my sense is that people agree that it would be premature to impose an artificial time line for withdrawal on our troops at a time when we are seeing progress being made.

And I do believe that Republican senators and Democrats as well, Chris, I think, understand the risk of and the consequences of the wrong policy in Iraq.

And a policy of premature, precipitous withdrawal from Iraq would be the wrong policy and would have very dangerous consequences for the American people here at home.

WALLACE: Despite all the resignations of top administration officials over the last few weeks -- and there have been a few.

GILLESPIE: Yes.

WALLACE: I know that you at the White House generally talk about a sprint to the finish. Let's talk about the rest of the president's term.

A lot of talk about getting into a veto fight with Congress over spending even over children's health care, the so-called S-CHIP program -- true?

GILLESPIE: Well, I hope not. But when you look at what this Congress is doing in terms of moving reauthorization of the S-CHIP program, what they're talking about is raising taxes on the American people to expand a program which we are in favor of expanding, by the way, Chris.

You know, the president's proposal is to expand the S-CHIP program by 20 percent funding. That's a pretty remarkable increase. I think the American people would say a 20 percent is a pretty sizable increase in a program that warrants it, to help make sure that we get poor children health insurance.

WALLACE: But isn't it a political loser if the headline in the paper is President Vetoes Children's Health?

GILLESPIE: Well, Chris, you always have to get past the headlines, and I know that's the headline that the Democrats would like to see.

But when the American people understand that what Democrats propose to do is to have a massive tax increase in order to expand this program, to actually take people who have -- children who have private insurance, move them from private insurance onto a government program, to take it to not children, but adults who are in households with incomes of up to $85,000 a year in income, that is moving it away from the focused goal that it deserves, which is to focus on children who do not qualify for Medicaid but are in families where they can't afford to pay for health insurance. We want to cover those folks and we should cover those people. But we shouldn't have a policy that actually moves children who are covered by their parents' private insurance onto a government insurance program. That's not the right approach.

WALLACE: Finally, what does the president make of the increasing talk in this town that he's a lame duck?

GILLESPIE: I think the president understands that he has about 18 months, or a little less now, to get a lot of things done, and we're going to get a lot of things done.

In fact, he just on Friday unveiled an initiative to help those who are caught in a little squeeze here and are at risk in terms of their own mortgages in a bump that they can't afford their monthly mortgage payment. We're -- and unveiled an initiative to help people caught in that kind of a squeeze.

We're trying to reauthorize the No Child Left Behind Act, trying to get people confirmed for the judiciary, and we have energy policies and health care policies.

We can do things by executive order if this Congress is unwilling or unable to address the needs of the American people.

WALLACE: So when people say lame duck...

GILLESPIE: I say pretty strong duck flapping, you know, and flying pretty high right now.

(LAUGHTER)

WALLACE: All right. I guess we have stretched that metaphor as far as it will go. Mr. Gillespie, thank you very much. Thanks for coming in. Please come back.

GILLESPIE: Thanks for having me, Chris.

WALLACE: You're always welcome.

Up next, the Craig resignation. Does the quick end of the story limit the damage to the GOP? We'll ask our Sunday panel when we come right back. Stay tuned.

(COMMERCIAL BREAK)










(BEGIN VIDEO CLIP)

CRAIG: To pursue my legal options as I continue to serve Idaho would be an unwanted and unfair distraction of my job and for my Senate colleagues.

(END VIDEO CLIP)

WALLACE: That was Republican Senator Larry Craig on Saturday resigning from office under heavy pressure from his own party.

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, Brit, what do you make of the whole Craig saga this week, of the astonishing speed with which Republicans moved to get him out of town, and Senator Specter's effort today to say maybe he should stay on and not resign on September 30th?

BRIT HUME, FOX NEWS WASHINGTON MANAGING EDITOR: I think Senator Specter's view of this will be a minority within the minority in the Senate, to say the least.

This is one of the cases where the minute you knew what had happened, and you knew some of the details of what was being charged, and you heard a little bit of what Senator Craig said initially about it -- you know, he was saying that the reason he touched the foot of the guy in the next stall was that he had a wide stance -- the only question was how long it would take.

You knew he was gone, you know, and the rest of it was details. And as you point out, it happened very quickly, almost efficiently. But there was never any doubt what was going to happen here.

This guy was -- now, had he been a member of the other party, which has a different constituency and a different set of positions on issues related to gay rights and so on, it could have been an entirely different proposition. But he was a Republican, and he was toast.

NINA EASTON, FORTUNE MAGAZINE: It's interesting to hear Senator Specter say I'd like to see him fight for his innocence, because you didn't see much of that this week at all.

I think, first of all, this is a human tragedy to watch a career and a reputation go up in smoke in a week.

But it was, I think, very much symptomatic of the fragile nerves of the Republican Party, who last year had to deal with Bob Ney, Duke Cunningham and, of course, Mark Foley. We forget how much of an impact that had on the 2006 elections.

Fast forward to now, and you're dealing with Senator Vitter and the D.C. madam questions. And we heard Senator Leahy suggest that there might be investigations over this coming out of the Senate.

So I think this was a very nerve-wracking time for the Republican Party, and the leadership acted swiftly.

WALLACE: Bill, I want to go back to the election last November and the voter exit polls. And let's take a look, because in the 2006 exit polls, 41 percent said corruption in government was extremely important to their vote for the U.S. House.

That's more than said the economy, terrorism, the war on terror, the war in Iraq or illegal immigration. Does the Republican Party have an ethics problem and -- at least perceived by the voters, and will the Craig scandal add to that problem?

BILL KRISTOL, WEEKLY STANDARD: Well, Senator Craig wasn't a corrupt senator. And indeed, his misbehavior was personal, not -- you know, not official in any way.

WALLACE: I think they consider that part of the corruption. I mean, this was obviously -- corruption had to do with Mark Foley, too.

KRISTOL: Yes, but he wasn't using a Senate position -- look. What he did was -- I'm not going to defend Senator Craig, and I think he did the right thing in stepping down.

Yes, I think the Republican Party on the financial side in particular, with the Abramoff scandal and other brewing problems with some of the senators and congressmen -- Senator Stevens' home has been raided by the FBI. There are a couple of other -- I think Congressman Doolittle is going to have to resign.

WALLACE: Yes, let's go to the -- we have a picture here of recent and current senators. There you see the three on the top who were involved in personal issues -- Craig, Vitter and Foley -- and then Senator Stevens and Congressmen Doolittle and Renzi, all under a cloud for financial investigations.

KRISTOL: And Foley was particularly offensive because he was using his position as a congressman, it appears, to have inappropriate contact with pages, for God's sake.

No, absolutely. The Republicans need to clean house in Congress. And I think at the presidential level, they will need a candidate who can plausibly say that I'm not part of the Republican establishment that has gone bad in some respects in the 12 years in power in Congress, and I'm a fresh face.

JUAN WILLIAMS, NPR: Well, I mean, I don't know how you do it. It's hard to get over that hurdle at this moment because there's just so much, as we just saw on that graph.

I, by the way, think that -- I didn't see Senator Craig really express remorse for what took place here. I think that he's still in the fighting mode, and I think that's why he hired Billy Martin, a Washington lawyer.

WALLACE: Who also, we might add, represents Michael Vick.

WILLIAMS: Michael Vick. And you know, actually, if you watch what Michael Vick said versus what Senator Craig said, Michael Vick was far more remorseful.

Senator Craig, it seems to me, feels that he's got a case and he's being unfairly vilified. And I think he's angry in the way that -- remember, Trent Lott was so angry after the White House and others turned away from him after he made some comments about Strom Thurmond's presidential ambitions.

I think that Senator Craig has the sense that he was abandoned here by the Republican leadership and -- especially when they suggested there would be an ethics investigation, they would air all this dirty laundry.

I think the party, as you just heard from Ed Gillespie, is worried about the brand, and worried about the brand and what people like Tony Perkins of the Family Research Council -- what strong social conservatives have to say about this kind of behavior.

KRISTOL: This isn't strong social conservatives. This is -- normal Americans do not approve of this kind of behavior. I would say that normal Democrats, incidentally, don't approve of this kind of behavior.

WILLIAMS: I agree.

KRISTOL: And I think Democrats who are being so high and mighty might reflect that they defended a president who used his office to do things that are just as bad as what Larry Craig allegedly did in the stall of a public restroom.

So I'm not sure the Democrats really want to get into the business of having a big fight on personal morality here.

WILLIAMS: No, no, but it's not with the Democrats. It's with your own voters. It's your own voters, as Chris pointed out, who say morals and corruption are a big issue for them in how they feel and, I might add, a big issue for swing voters who are going to be key to the '08 election.

KRISTOL: Well, good for those voters. I'm proud that Republicans care about morality and corruption.

WILLIAMS: Well, I'll only say this. I wish they did, right? I wish they didn't pull out a card and say, "I'm a U.S. senator," to the policeman.

WALLACE: Brit, what about this issue? And I have to say, a lot of people asked me about it this week -- that the party moved so strongly against Larry Craig and hasn't moved against David Vitter.

Is there, as Senator Leahy suggested, a double standard there, or are the two cases really all that different?

HUME: Well, they're different to some extent, and you don't have a guilty plea in the case of Senator Vitter.

And you also -- you know, he came out and apologized for what he had done years ago and so forth, and there was a -- there was a striking sense of -- that was over.

If Craig had stayed to fight on, who knows where it would have led, but it wouldn't have been over. There was nothing Craig could do short of what he ultimately did to get this thing to stop.

And that, after all, in political terms is always the objective when scandal breaks, and that is to get the damn thing to stop. And you know, you pick your strategies accordingly, as a rule.

Now, very often, you know, you have -- as you had in this case, you have somebody being asked to give up his office to save the offices of a whole bunch of others, but at the end of the day, this guy had no choice.

WALLACE: Well, I mean, let me ask you about that, though, Nina, because Bill Jefferson, who was caught with, what, $90,000 in cash in his freezer -- he's still a member of Congress last time I checked. Could Larry Craig have toughed it out?

EASTON: But he may not be. I mean, the problem -- the Larry Craig thing is -- this is a question of a man who -- he can't just say I'm sorry that some incident happened.

This goes to the very soul of who this man is with his family, with his friends. Is he gay? He says he's not gay. I mean, this is a big -- this is a human question. There's a human dimension to this. And I don't see how there's any way that he could have gotten over this or got past this.

KRISTOL: If he were a Democrat, he could have toughed it out. Gerry Studds toughed it out. Barney Frank toughed it out. He could have if he were a Democrat.

HUME: Bill Clinton toughed it out.

KRISTOL: Bill Clinton toughed it out.

WILLIAMS: Wait, these other guys -- wait. He's the guy who says, "I oppose gay marriage." He's the guy who says, "Naughty, naughty, naughty, bad boy," to Bill Clinton. Don't you think there's a little bit of you can't do that and then behave this way?

HUME: Exactly right. That's the difference, as Bill has been suggesting, between the Democratic Party and the Republican Party.

The Republican Party has far stricter and more censorious views of these kinds of behavior than the Democrats, than the Democratic Party does.

The Democrats have within their constituency people who are much more forgiving of this sort of thing, or perhaps not of bathroom sex particularly, but of homosexuals...

WILLIAMS: I think not.

HUME: ... and the whole homosexual agenda.

WILLIAMS: But I think personally -- the key here is that Republicans have made personal behavior and sexual conduct a political issue.

EASTON: Just on this gay marriage thing, every single report mentions that he opposed gay marriage. Well, most of the Democratic candidates for president oppose gay marriage. So I think that's a false thread.

WALLACE: We need to take a break here. And I desperately hope this is the last time we ever talk about bathrooms in airports. I tell you, it's been a strange week.

But when we come back, he finally says he's going to say he's getting in the race for president. We'll examine the Fred Thompson factor in just a moment.

(COMMERCIAL BREAK)

WALLACE: On this day in 1944, 20-year-old Navy pilot George H.W. Bush was shot down by Navy forces during a mission to take out a radio station in the Pacific. The future president was rescued by a U.S. submarine.

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

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

FORMER U.S. SENATOR FRED THOMPSON: Clearly, I think you know the direction I'm headed in. A final decision will be made soon and, you know, I'm just urging my friends to keep their powder dry.

(END VIDEO CLIP)

WALLACE: That was Fred Thompson in late July. But now, according to his staff, the big tease is over and next week Thompson will announce he's in the race for the Republican nomination.

And we're back now with Brit, Nina, Bill and Juan. And we should point out right at the start that if you get your Newsweek magazine this week -- there it is -- on the cover, Fred Thompson with the headline, "Lazy Like a Fox."

So, Brit, why did it take Thompson so long to get in the race, and has he hurt himself with this long build-up?

HUME: Well, I think it took so long because he did well by not doing it for so long. And I think what's now happened is that at what is still, in traditional terms, a very early stage in this race, he's now getting in, because after a while his non-participation and not being a candidate was beginning to wear a little thin.

And I think part of the reason why it was wearing a little thin was that as he was going around making speeches to various groups and behaving for all the world like a candidate, he wasn't really racking up what one would call big wins.

People hearing his speeches said that they were disappointed, that he didn't seem -- that he wasn't electrifying in the way that they hoped he would be, they're looking for someone different and inspirational and so forth.

And so he was not gaining ground by his public appearances, and he had to do something to change the atmosphere, and I think that -- which had begun to sour on him, and getting in was the logical step and is the logical step.

WALLACE: Nina, one issue is that there's going to be a debate on Wednesday in New Hampshire, which in the interest of full disclosure we should say is going to be broadcast at 9:00 p.m. Eastern here on Fox News Channel.

And while the other eight candidates are all on that stage in New Hampshire, Senator Thompson is going to be in California appearing on Jay Leno. The Manchester Union Leader, the big paper in New Hampshire, is not amused by this and wrote an editorial this week about it.

And let's put up what they had to say. "A no-show will be counted here as a snub. That would give his foes the chance to say he is either not serious about running for the nomination or is too unprepared to be considered a credible candidate." Do you think this is going to hurt Thompson in New Hampshire, ducking this debate?

EASTON: Well, actually, it's not a no-show because he's bought advertising that is going to run around the debate, so that he -- it's actually pretty smart on his part. He doesn't have to engage at this point with other candidates.

Look. At this point, Fred Thompson is the check box to the undecideds in the Republican primary campaign, which is a really good place to be in this -- with so many dissatisfied Republicans right now.

If he gets on stage and starts engaging these guys right now, right out of the box, it's risky for him, and this is a much less risky move for him to buy advertising but not to have to answer questions or be challenged by the other candidates.

WALLACE: Bill, do you think it was clever to duck the New Hampshire debate or too clever by half?

KRISTOL: I'm not sure, honestly. You know, you could argue that one either way. Maybe the cleverest thing would be to announce Tuesday that he'll take a pass on Jay Leno, do it the week after, and show up suddenly in New Hampshire -- great drama, comes on stage -- "Get me an extra lectern. I'm ready to mix it up with these gentlemen."

Who knows? I don't know. We'll know. Look. He's starting the race in second place. It's important -- he has to -- he's got to be ready, obviously, to perform at top level as soon as he's in, because whether he's in the debate or not Wednesday, he'll be in Iowa Thursday, Friday with reporters pestering him on a bunch of issues.

He needs to be ready. I think he'll be ready. He's a pro. And he will be a viable candidate along with the others.

WALLACE: You should probably give your disclosure now.

KRISTOL: Right. My daughter is working for the Fred Thompson campaign, as I said last week, and I don't think she's still quite been paid, but I'm sure they'll work on that once...

WALLACE: So you have own economic issue with Senator Thompson.

KRISTOL: Once the money floods in after his excellent performance this week, she'll be in better shape.

WALLACE: Yes.

Juan, let's talk about that. Thompson comes into the race, second place in the polls. Obviously, though, a lot of people -- as has been suggested, it's a vessel for their dissatisfaction with other candidates.

Where do you think he really stands in this race as he enters this week?

WILLIAMS: Well, you know, the problem for him is, one, money. As I said before, he hasn't raised the money that he thought he was going to raise coming out of the box, so I hope that your daughter gets paid. That's my concern.

And then the second issue is building an infrastructure to mount a campaign. He's coming in very late to this game. So Giuliani has been consistently in the lead.

The Washington Post points out this morning no Republican nominee, the eventual nominee, has ever not been in the lead on Labor Day. And Giuliani has, you know, surprised everybody by consistently holding this lead.

So Thompson comes in. He's going to have to raise money and build structure, and he's going to have to spend that money judiciously. And it looks like there's a southern strategy in place.

If you'll notice, what he's going to do after he announces is Iowa, New Hampshire barely, but really South Carolina, Florida, Tennessee. And that's where he's going to have to hope that he can build sufficient support to carry him to the nomination.

WALLACE: Brit, do you really think there's an opportunity here for Thompson, that there really is dissatisfaction that there's not a, quote, true conservative in the field, and that's a vacuum that he can fill?

HUME: I think that the opportunity is there. Whether he will be able to fill it and sort of fulfill this set of hopes that people have for him, I think, is another question.

And you know, judging by his recent public appearances, he's got some ground to make up. And you know, whether he can -- when he gets in there with these other candidates who have been at this a while and who have gotten a bit polished, you know, he may not stand out from the crowd the way that he would hope to and the way I think people expect him to.

The truth is he's probably smart to stay out of these debates. I mean, you've got all these candidates. They may be remembered when we all look back on this as a series of meaningless cattle calls, and he may not hurt himself at all. But at some point he's going to have to get up on the stage with the rest of these people and stand out. And you know, you look at the performance that Rudy Giuliani has given, which I think -- in these debates, which I think has contributed enormously to the persistence of his lead, and he is visibly energetic and alert and on his game and politically sharp and grabs opportunities and runs with them, and I think that's why he's ahead.

How will the more easy-going Thompson appear in relation, say, to Giuliani is going to be a very interesting question.

WILLIAMS: And Thompson's -- you know, the argument for the Thompson candidacy seems to be his message seems to be small government. We've got a government that's grown too big, especially too big under Republicans, let's cut back.

And then secondly, that I'm here as someone who can represent those conservative values. But so far that hasn't even made a dent with the contributors, with the big money people. They don't seem to be energized by it.

KRISTOL: Aren't you obsessed with money, Juan?

WILLIAMS: I know.

KRISTOL: Look. Thompson has an easy message -- I'm a consistent conservative. Rudy isn't a conservative on some issues that Republican voters care a lot about. And Mitt Romney, whatever his current conservative views and however sincere they are, has not consistently been a conservative.

It's not a bad message to go into September with.

WALLACE: All right. We're going to have to leave it there. Thank you, panel. See you next week. We'll have lots more to talk about as well.

For more visit the FOX News Sunday web page.

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