• With: R. James Woolsey, Former CIA Director

    This is a rush transcript from "On the Record," June 11, 2013. This copy may not be in its final form and may be updated.

    GRETA VAN SUSTEREN, FOX NEWS HOST: Our nation's top secrets are in the hands of thousands and thousands of contractors. Why is the government trusting them with secrets about you? Today contracting firm Booz Allen Hamilton firing Edward Snowden for leaking tons of crucial information. Former CIA director R. James Woolsey is also a former Booz Allen vice president. He joins us. Nice to see you, sir.

    AMBASSADOR R. JAMES WOOLSEY, FORMER CIA DIRECTOR: Good to be with you.

    VAN SUSTEREN: So why do we have so many contractors. Why do we not do this internally?

    WOOLSEY: I suppose part of the reason is Congress passed this law requiring lots of things to be done, and then they don't authorize enough people in the civil service to do it. And those slots are filled up by contractor people. And I got to say that it's not always the civil servants who are more trustworthy. We captured a man named Aldrich Ames, a terrible spy, and he was not a contractor. And we captured a couple years later. Also Robert Hanson, who was a terrible spy. So it's the quality of the individuals and the preparation and the schooling and so forth I think more than whether they're contractors or members of the civil service.

    VAN SUSTEREN: Is there anything, and I realize we have very limited amount of data, so is there anything peculiar about Snowden? He was only with Booz Allen three months. Before that he had been with the CIA. Anything unusual about his clearance with you?

    WOOLSEY: I have no idea.

    VAN SUSTEREN: Nothing at all?

    WOOLSEY: I don't know.

    VAN SUSTEREN: What happens when someone gets a security clearance and works at Booz Allen for 10 years and leaves? Do you lose your security clearance?

    WOOLSEY: It depends whether or not it's transferred to a different place. If you leave one contractor and go to the other and are working on intelligence matters and you can keep your clearance updated you don't lose it. But if you just quit or go off to do something else, then I think in relatively short order your clearance is lifted.

    VAN SUSTEREN: Booz Allen mostly deals with government contracts.

    WOOLSEY: It may. I haven't been there for six years.

    VAN SUSTEREN: The numbers that have been reported to is they have about 24,000, 25,000 employees, and about 75 percent of them have security clearance. That seems like a lot of security clearance that is outsourced?

    WOOLSEY: I don't know. It's possible. I haven't gone into their clearance process or had anything to do with Booz Allen for six years.

    VAN SUSTEREN: Any thought about how damaging the leak is?

    WOOLSEY: I think it's very damaging because it gives terrorists an idea of how we collect and what we might know. And you can't just inform the American people. You're informing the terrorists when you lay something like that out.

    It's really kind of the function -- what Snowden has done is the functional equivalent of what Stinson, the secretary of state, did in the late 20s. He stopped all the state department's code breaking of other countries because he said gentlemen don't read one another's mail. He was probably pretty glad that the U.S. Navy was not being gentlemanly with respect to Japanese codes, because otherwise we might have lost the battle of Midway.

    And when you make a decision, as Snowden did, that you're going to take the place of the president and the Congress and the judges that are on the FISA court and you're the one who's going to decide to balance between security and privacy, you are undertaking an action that could get people killed. And I suppose Snowden either doesn't care or doesn't think about it. I don't know.

    VAN SUSTEREN: Do you think that the people who are terrorists, that they would realize -- I guess I thought -- maybe I've seen too many television shows. I would have thought they would have not wanted to use telephones anyway or the Internet, that they would have wised up to that one by now.

    WOOLSEY: People can be careless. And, you know, we've -- we have had programs for decades in which the government has access to and keeps records on what's on the outside of the envelope. It's called -- I think it's called a mail -- some kind of a mail system. That's been sanctioned by the Supreme Court for decades. We've been doing with first class mail for decades what we're now doing with this new program that's monitored a lot more than the mail program.

    VAN SUSTEREN: Every piece of mail?

    WOOLSEY: Whatever they want. There's an authority, the mail registration program or something like that. Alan Dershowitz had a small piece about it in the "Wall Street Journal" today.

    VAN SUSTEREN: The tough one is everybody. Was the mail system everybody?

    WOOLSEY: Pretty much people who communicated. That's what they did, they wrote letters in ancient times. And so we have had a system for decades and we have one now, but it's much better supervised than anything was under the post office in the old days, supervised by the courts, supervised by hearings before congressional committees and the rest.

    And what they have, and I think this bears on Jim Clapper's statement, what they have is not -- they have data of some sort, it's what's on the exterior of the communication. But they don't have content I think Clapper's statement would have been more accurate if he had said we have data, addresses and so forth. But we don't have contact.

    VAN SUSTEREN: If they know that you called a suicide hotline, they got a little content?

    WOOLSEY: Well, by implication, maybe you're a prankster and you just like it.

    VAN SUSTEREN: That's right. That would be a dumb thing to do. But anyway.

    WOOLSEY: People do a lot of dumb things.

    VAN SUSTEREN: Nice to see you, sir.

    WOOLSEY: Good to see you, Greta.