• With: Rep. Michele Bachmann

    This is a rush transcript from "On the Record," November 17, 2011. This copy may not be in its final form and may be updated.

    GRETA VAN SUSTEREN, FOX NEWS HOST: Representative Michele Bachmann calls it "gangster government." She is talking about the Obama administration's controversial loan to the now bankrupt Solyndra. We spoke with Congresswoman Bachmann about Solyndra and her struggle to gain ground in the GOP polls.


    VAN SUSTEREN: Congresswoman, nice to see you.


    VAN SUSTEREN: And I should say we're in a bar. We picked it, you didn't -- just so that everyone knows that you're not running around the bars in Iowa...


    VAN SUSTEREN: ... that we picked this one.

    BACHMANN: Look, I run around Iowa a lot these days, so I'm glad that we get to meet up here in Des Moines.

    VAN SUSTEREN: OK. Good. All right. Well, a lot's going on. Let me first talk about Solyndra. Today Secretary of Energy Chu testified, and he said that -- he describes what happened with the Solyndra loan that the American taxpayers are on the hook for about over $528 million, is -- his words were "extremely unfortunate."

    BACHMANN: Well, that's the understatement of the year. This is the height of crony capitalism. This is President Obama's political donors that he's paying off. And essentially, what the president did is he put one of his fund-raisers into the Energy Department to point out which of the loans should be made to which person that gave political donations to the president. Donations were made to companies like Solyndra, companies like LightSquared, companies like Beacon Power. And now there's a new one that came out, I think it's Seega.

    This is really serious because you're talking over $500 million that are going out to companies that had no chance of being successful, and based upon a political donation. It's crony capitalism at its worst.

    VAN SUSTEREN: Well, he said that the...

    BACHMANN: You can't just say, "Oops, sorry."

    VAN SUSTEREN: He said that the decision to give the loan to Solyndra -- and I assume he also meant the restructuring that was done which put the American taxpayer at the end of the line...

    BACHMANN: Right.

    VAN SUSTEREN: ... that the White House didn't pressure him.

    BACHMANN: Well, but the point is, it was done because, again, what happened -- and I think it's important to point out what you just said -- there was a restructuring after the loan was already a failed loan and the United States took a lower position to get paid back first. That's unprecedented. And instead, the political donor of President Obama was put at the top of the heap so that they would be the first ones paid out. That's wrong.

    Plus, it's also important to note that the wife of the person dealing with this loan was also representing the law firm of Solyndra. This is dirty in every single aspect, and it represents the very worst of Washington. But the worst of what President Obama is doing, which is crony capitalism, paying off political donors with taxpayer money or favors. That's what's wrong.

    VAN SUSTEREN: Should Secretary of Energy Chu resign or be fired?

    BACHMANN: Well, I think that he should resign, and I think that President Obama should fire him. I think this is clearly bad dealings, not just that loan, but other loans that are suspect. And you can't do that to the American people.

    VAN SUSTEREN: You know, it's sort of interesting, the Republicans who are driving this, and also the candidates in the field who are, you know, raising hell about Solyndra, they're all talking about the crony capitalism. But even if you put the best look at it and assume that it wasn't crony capitalism, it was incompetent at best. I mean, it was a really a bad decision. I mean, no one's sort of look at, like, Well, you know...

    BACHMANN: Incompetent or criminal.

    VAN SUSTEREN: Well, yes, no, I'm saying -- well...

    BACHMANN: It's criminal.

    VAN SUSTEREN: Well, whatever. But I'm saying is that -- you know, is that the question of, like, you know, is it smart to have someone in the job who has made such a profoundly bad decision, assuming that it was done, you know, good heart and good mind? It was just a really bad decision.

    BACHMANN: It was a really bad decision is exactly right. But it's the idea that this isn't just a one-time occurrence. If it was a one-time occurrence, you'd be very suspect. But it happened over and over.

    And like LightSquared, that was a decision that was made to give bandwidth next to the GPS devices, and this has national security implications because with LightSquared, that is -- the GPS devices would be compromised for military aircraft and commercial aircraft. They could essentially go dark. And the Obama administration was pushing, giving this bandwidth to LightSquared at the detriment of commercial aircraft.

    This is something that's very wrong, and it's the idea of picking winners and losers based upon political donations. That's criminal. I think that's criminal. It's morally and ethically bankrupt, but it's also criminal.

    VAN SUSTEREN: All right, I use the term "criminal" very loosely, and so I want to at least make sure I understand how you use it. I say a lot of things are criminal. I mean, it might be criminal, you know, if I have to stand in line for six hours to get something, when clearly (INAUDIBLE).

    But you know, are you using -- are you using "criminal" in a flip sense, or do you genuinely believe that there is a violation of the code, the criminal code, that this is a criminal violation?

    BACHMANN: I genuinely believe that it's wrong, Greta, because...

    VAN SUSTEREN: Wrong or a crime, a real crime?

    BACHMANN: Well, that -- that would be up for people in Justice to make that decision as far as a crime because I certainly wouldn't be the one to bring it. But I do think there's something morally reprehensible that it rises to a level that has the president of the United States using the United States government for the purpose of paying off political donors.

    That's gangster government. That's gangster government when you have a government pay off your political donors to pay off your debts. That's wrong.

    VAN SUSTEREN: All right, the polls -- let's look at Iowa. You were the biggest, hottest thing last August. You won the straw poll. You had taken the state by the storm. Now you're -- you're -- at least by the polls, seem to be struggling. What happened? Or what are you doing?

    BACHMANN: Well, I think a lot of it is a function of the media, which candidate is it that media follows, and then that candidate will tend to rise in the polls, kind of a self-fulfilling prophesy.

    But I think, again, what we've seen is, almost like Wall Street has gone up and down on the stock market, no one has ever seen a political market like this, where the fortunes of candidates rise and fall.

    My -- what I'm doing here in Iowa is exactly what I need to do. I'm meeting with people, just as I did before. And we're seeing the churn here in Iowa. We've had wonderful meetings with people all across the state.