This is a rush transcript from "Hannity," June 14, 2012. This copy may not be in its final form and may be updated.
SEAN HANNITY, HOST: The current stand-off between Congress and the Department of Justice over the stonewalling in the Fast & Furious scandal comes as no surprise to those of us who have been paying very close attention to the controversial tenure of the Attorney General of the United States.
U.S. ATTORNEY GENERAL ERIC HOLDER, JAN. 15, 2009: Work to restore the credibility of a department badly shaken by allegations of improper political interference. Law enforcement decisions and personal actions must be untainted by partisanship.
HANNITY (voice-over): From the moment he uttered those words to this very day, Eric Holder's tenure as attorney general has been marred by controversy and obstruction. But his failures as a leader began long before operation Fast & Furious made national headlines.
Holder was given his first major assignment in Washington by another president whose administration was paralyzed by scandal. In 1997, he became the deputy attorney general of the United States. And in the final hours of the Clinton administration, Holder was tasked with overseeing the mountain of presidential pardons.
And we now know that behind the scenes, he was a staunch advocate for a number of wildly controversial pardons, including granting clemency to 16 members of a violent Puerto Rican terrorist network known as the FALN, an organization responsible for multiple bombings inside the United States.
Holder also played a vital role in the pardoning of billionaire financier Mark Rich, a man who fled the country before being indicted on scores of tax fraud charges. Now Rich, who appeared on the FBI's most wanted list for many years, was accused of making secret oil deals with the ayatollah during the Iranian hostage crisis. But thanks to Eric Holder support and the millions of dollars that Rich's wife donated to the Clinton family, he is now a free man.
After leaving the White House, Holder's credibility deteriorated even further. In 2004, he represented Chiquita after the company admitted that it provided material support to a terrorist organization in Columbia.
Now, apparently, these are among the many accolades that Barack Obama was looking for in his attorney general.
OBAMA: The attorney general serves the American people. And I have every expectation that Eric will protect our people, uphold the public trust and adhere to our constitution.
HANNITY: And since returning to the Justice Department in 2009, Holder has been at the center of the administration's most embarrassing moments and troubling scandals. Among his questionable actions -- deciding to try the 9/11 terror masterminds a block away from Ground Zero, declassifying top-secret documents about the CIA's enhanced interrogation program, dropping voter intimidation charges against the new Black Panther Party even after their actions were caught on tape by Fox News, criticizing Arizona's immigration law without taking the time to read the 10-page bill first.
SEN. LINDSEY GRAHAM, R-S.C.: I think you are missing the fact that this is a very big deal.
HANNITY: Now, the man who vowed to restore the credibility of the Justice Department is facing contempt of Congress charges and calls for him to step down.
SEN. JOHN CORNYN, R-TEXAS: You violated the public trust in my view. You leave me no alternative but to join those that call upon to you resign your office.
HANNITY: And joining me now with reaction, Fox News contributor Liz Cheney and from the American Center for Law and Justice, Jay Sekulow is with us.
You know, Liz, I know we are all talking about the attorney general, the contempt before Congress issue is coming up, calls for his firing. But I thought it was important tonight to put all this in perspective and lay it out for people. When you see this in its entirety, what's your reaction?
LIZ CHENEY, FOX NEWS CONTRIBUTOR: You know, I think that it's clear at this point, Sean, that even in an administration which has set a very low bar in terms of interpretation of the law, interpretation of the constitution, Attorney General Holder hasn't even managed to clear that hurdle. You know, your piece laid it out, but you know, one more thing I would point out, is this attorney general has spent more time trying to figure out how to investigate and prosecute potentially, CIA officials for programs that they participated in that kept us safe after 9/11, than he has spent trying to establish a way for us to interrogate terrorists; something that apparently we don't even have the ability to do now three years after they stopped the enhanced interrogation program.
And on top of all of that, you showed the clip of Senator Cornyn, you know, over the last year now, we have had the attorney general, apparently mislead the Congress about the Fast & Furious program, which you know, people should never forget, resulted in the death of an American law enforcement official, somebody who died at the hands of the Mexican cartels from these guns.
HANNITY: Brian Terry.
CHENEY: Brian Terry, exactly. So, you know, I think what we've got now is a situation in which the Attorney General clearly, as Senator Cornyn laid out, has lost the public trust. And for somebody who is supposed to be one of the most senior people giving the president legal advice, it is clearly time for the president to get a new lawyer.
HANNITY: You know, Jay, when Dianne Feinstein on the issue of the security leaks says that American lives have been jeopardized as a result of this, one has to question the decision-making behind this. I want to get your reaction to it. Is this the future, as a result of this? And when you look at the people -- he's unwilling to appoint a special prosecutor. What do you think is going on here? And the person he did recommended to investigate, well, is a big Obama donor.
JAY SEKULOW, AMERICAN CONTROL FOR LAW AND JUSTICE: Obama donor. Sure. Well, you know, it's interesting, and you said this in your piece, and Liz has said it well. You talk about the idea that, you know, Eric Holder comes in and says, the politics of the Department of Justice need to be removed, it needs to be over with, and this is the most political attorney general we have seen in our lifetime.
And let's take a look at what he has done, and what he continues to do. You mentioned the situation with the security leaks, which a Democratic member of the United States Senate said is the most serious National Security risk we have had in decades, and what does he do? He appoints one of President Obama's bundlers, large donors to investigate this. Well, that's not an investigation.
And you have you to put this into context also, a follow-up of what has taken place here. The Department of Justice -- and I have a lot of respect for the Department of Justice, I've worked with the Department of Justice. I've taught U.S. attorneys on prosecution issues. But here's the real problem. You got the Department of Justice, lead by an attorney general who files a document letter with the United States Senate, which is not only incorrect as a matter of law, but incorrect factually.
SEKULOW: It takes them seven months to remove that letter. Sean, if a citizen did that to the United States Senate under oath, they would be indicted. What happens here? Oops, we made a mistake. Well, the American people are not stupid. They know what's going on here. This is politics at its worst for a department that is supposed not to be political.
HANNITY: Let me ask Liz this question, when you think of the leak, where Obama every Tuesday would personally sign off on this kill list that they talk about, the cyber warfare, joint operations against Iran and their nuclear enrichment program with the Israelis. Do you have any doubt whatsoever that this had to come from the White House? After all, these meetings took place in the White House?
CHENEY: Well, I think you've only got to read David Sanger's piece where he says people who were in these National Security Council meetings, and now these programs, the cyber war program in particular, was likely so highly classified that there were very few people in those meetings.
So, I think you've got to assume, you know, it came from very senior people. I think you've also got the question -- and this is why an independent investigation is so important -- you have to ask the question, did the president of the United States authorize people on his staff to brief the New York Times about this program? And when you are talking about, you know, somebody who was a volunteer in the Obama campaign, somebody who was a huge contributor to the Obama campaign, you know, the American people have got to be wondering, is there nobody at the Justice Department who wasn't an active participant in the Obama campaign?
HANNITY: And how would we in the future recruit spies or infiltrate terrorists groups?
One last question Jay if I can, on the issue of Fast & Furious. I don't know what's worse, the 18 months that they obstructed the investigation by Congress, and we have, you know, co-equal branches of government and oversight is a big part of this, or the fact they that are trying to make a last-minute deal, "OK, we will give it to you now because you're going to hold me in contempt." What's worse?
SEKULOW: Yes. Well, I think that you know, the reality is that this is a constitutional crisis, as the attorney general himself said, of his own making. And the real tragedy in all of this, is the American people suffered and as Liz said, we have a dead border patrol agent with no answers to what happened, killed at the hands of our own weapons. And I think the reality is, this is a last-minute ploy on the Department of Justice, Eric Holder in particular, to try to circumvent which was going to be a very bad week next week. Senator Grassley saying he wants to see all the documents. At the end of the day, Sean, they created this mess, they are going to have a tough time getting out of it.
HANNITY: Last question, "yes" or "no," does Eric Holder survive? Liz.
CHENEY: I don't see how he does. I think at this point, he has lost confidence. You know, Senator Cornyn is somebody who himself served on the Texas Supreme Court, somebody who is a tremendously well-respected, senior, experienced senator, for him to get to the point where he's calling for resignation, the situation is pretty grave.
HANNITY: Do you agree? OK.