• This is a rush transcript from "Fox News Watch," May 25, 2013. This copy may not be in its final form and may be updated.


    BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: I believe we must keep information secret that protects our operations and our people in the field. To do so, we must enforce consequences for those who break the law and breach their commitment to protect classified information. But a free press is also essential for our democracy. That's who we are. And I'm troubled by the possibility that leak investigations may chill the investigative journalism that holds government accountable.


    JON SCOTT, HOST: President Obama there attempting to quiet the backlash over his administration's spying on journalists. A Washington Post report earlier in the week broke the story. It turns out the Justice Department did some spying on the news gathering activities of a Fox News reporter as a potential crime in relation to classified leaks from the State Department about North Korea. Chief Washington correspondent James Rosen is the target. In one document an FBI agent labels Rosen a co-conspirator. Investigators pulled Rosen's security badge records, phone logs and his personal emails. But they never charged him with a crime. Reaction is fierce.

    Executive vice president of Fox News, Michael Clemente, "We are outraged to learn that James Rosen was named a criminal co-conspirator for simply doing his job as a reporter. In fact, it is downright chilling." As the story develops and more details about the scope of the investigation emerged, Fox News chairman Roger Aisles reacted. "The administration's attempt to intimidate Fox News and its employees will not succeed and their excuses will stand neither the test of law, the test of decency, nor the test of time. We will not allow a climate of press intimidation unseen since the McCarthy era to frighten any of us away from the truth."

    So Jim, what about that comparison to the McCarthy era? That was a pretty dark day in America.

    JIM PINKERTON, THE AMERICAN CONSERVATIVE MAGAZINE: That was the early '50s and many people lived in fear of telling the truth and I think the periods are comparable. I think it's quite something and I -- I'm intrigued to see that President Obama declares himself to be, quote, "troubled by this," but then, of course, at the same time, keeps the same attorney general who did all this. As Jennifer Rubin pointed out in The Washington Post it is just simply not believable to think that Holder wasn't doing this, even if he said he recused himself. And so, why is he still on his job if he's doing a policy the president doesn't agree with?

    SCOTT: The reaction from editorial boards and journalist has been fierce, Judy, including The New York Times your former employer. They wrote, the Obama administration officials often talk about the balance between protecting secrets and protecting the constitutional rights of a free press. Accusing a reporter of being a co-conspirator on top of other zealous and secretive investigations shows a heavy tilt towards secrecy and insufficient concern about a free press." Pretty strong from that newspaper.

    JUDY MILLER, FOX NEWS CONTRIBUTOR: Well, pretty strong as far as The New York Times goes. I mean there are really, the most fundamental questions about what this Justice Department is up to are raised by this kind of a search warrant, not only against James Rosen, but also against the A.P. And the fact that Eric Holder doesn't remember how many of these warrants he signed, how many he turned back, for modification as he called them, but that the president continues to maintain confidence in him, raises a lot of questions.

    SCOTT: Well, and Rick, we're also getting word that the guy assigned to sort of investigate these issues within the Justice Department, is the head of the Justice Department, Eric Holder is going to be investigating himself. What's been the reaction to that in the media?

    RICHARD GRENELL, SPOKESMAN FOR LAST 4 U.S. AMBASSADORS TO U.N.: Well, the whole story has been kind of pooh-poohed it from the beginning. And let's face it. This is not the Obama administration going after leakers. They're going after leakers who make the Obama administration look bad. I mean you cannot compare the fact of James Rosen and, say, David Sanger at The New York Times. David Sanger has been getting intel from someone at the Obama administration from four months in when he started reporting on North Korea. He has not been given the same scrutiny that James Rosen has, simply because David Sanger reports in a very fluffy way and a positive way towards the administration. James Rosen has not done that, the A.P didn't do that and they're the ones who are getting pressured.

    SCOTT: I want to get your reaction, Ellen, to what Dana Milbank in The Washington Post wrote. He said, to treat a reporter as a criminal for doing his job, seeking out information the government doesn't want made public, deprives Americans of the First Amendment freedom on which all other constitutional rights are based. So if the administration is spying on reporters and accusing them of criminality just for asking questions, well, who knows what else this crowd is capable of doing? Your thoughts?

    ELLEN RATNER, TALK RADIO NEWS SERVICE: Well, you know, I am a member of the White House press corps, a member of the White House Press Association. It took a while for them to react, but I've got to tell you I was in the basement of the White House when a lot of this broke and people were pretty outraged. And not only has James Rosen been, you know, a colleague of ours, but between the A.P and the James Rosen stuff, it's frankly very chilling.

    CAL THOMAS, SYNDICATED COLUMNIST: Jon, policy is set from the top, from the beginning of this administration, from Robert Gibbs, the first press secretary, to David Axelrod who has gotten on various network programs, Fox News has been singled out as a special target, not only of the White House, but of the left generally. Axelrod has said that this is not a legitimate news organization. Robert Gibbs, when he was press secretary, mocked some of the questioners from the White House correspondent. So I think that sends a certain message throughout the administration that Fox can be a target.

    RATNER: You know, it's interesting because who except this administration could unite both the far right and the far left, because the left basically came out with an article that said, if this had been done under Bush or Reagan, there would have been a lot of screaming.

    SCOTT: Here's what NBC reported, Jim. And I want to get your reaction to this. They say that Eric Holder signed off on a controversial search warrant that identified Fox News reporter James Rosen as a possible co- conspirator in violation of the Espionage Act and authorized seizure of his private emails. And that was back in 2010. But in May of this year, before the House Judiciary Committee, Eric Holder said this, "With regard to the potential prosecution of the press for the disclosure of material that is not something I've ever been involved in, heard of, or would think would be wise policy."

    PINKERTON: As Karl Rove, writing for Fox News opinion on Friday, said, yeah, it would appear that Holder misled the Congress. Now, if others can decide what the misleading exactly works out to in terms of legal implications, but he said over and over again, I recused myself. Of course, he couldn't find his recusal document. Of course, the rare lawyer that doesn't write things down and keep records.

    SCOTT: There are a lot of press questions that should be asked and need to be answered. We'll continue to keep an eye on it. Next on "News Watch," the liberal media spin on the IRS scandal.

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