This is a rush transcript from "On the Record," August 3, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Does President Obama's administration have a plan to give illegal immigrants backdoor amnesty? Republican Senator Chuck Grassley's office obtained a leaked memo and it is sending shockwaves throughout Washington. Earlier Senator Grassley went "On the Record."

(BEGIN VIDEOTAPE)

VAN SUSTEREN: I wanted to talk to you because you have gotten a memo called "The administrative alternative comprehensive immigration reform." What is this memo and where did you get it?

SEN. CHUCK GRASSLEY, R-IOWA: It was leaked to us from presumably somebody in the Department of Homeland Security. I don't know who, and I get a lot of leaked stuff, so that's not an issue. The substance of it is the most important thing.

People say, well, it's a draft. But people don't spend that time -- spend that time writing drafts. Somebody told them to write draft. What can we do to legalize a lot of the undocumented workers that are here because Congress isn't going to pass a law with amnesty?

VAN SUSTEREN: You are interpretation is it is an end run on Congress in terms of --

GRASSLEY: Of course it is an end run on Congress because this administration is getting a lot of pressure from advocacy groups for undocumented workers who would like to have those people legalized and they can't get a bill through Congress because the Democrats can't introduce a bill that doesn't have amnesty in it, and Republicans are not going to vote for amnesty because we tried amnesty 20 years ago when we only had three million people here and we found out you reward illegality and get more of it. So now we have 12 million undocumented workers here.

So what they want to do is try to see what they can get done administratively. And this memo lays out what you can do and what maybe you can't do.

The point is everything that can be done now for the president to legalize people can be done and has been done for many, many years, but it has been done on a case-by-case basis. And we see this as a memo, in fact the memo is clear in one place, that we can do it more aggressively. In other words, more people could be legalized.

VAN SUSTEREN: Do you believe the president wants amnesty?

GRASSLEY: The White House is going to say we don't want amnesty. But what they say they want, they want "earned citizenship." And "earned citizenship" is just code word for amnesty because what it is saying is that people that broke our law, crossed our borders, came here illegally, we are going to say that's OK like we did in 1986.

But it is just like we didn't learn a lesson from 1986. In 1986, we legalized three million people. You learn from that. It doesn't work. We got a 12 million person problem now.

VAN SUSTEREN: Once you got this memo leaked to you with what you see as an end run on Congress by the administration, what did you do?

GRASSLEY: OK, well, first, before we the memo leaked to us, we wrote a letter to the president saying we heard rumors you might be thinking about this. We never got an answer to that letter back in June, I believe.

Then in July, we wrote to the Department of Homeland Security that we want to have some idea of what's the numbers that you have done already for parolees, say, as an example. We want numbers on what steps you've taken to legalize people under existing law even prior to the motivation for this memo. How much have you done already, because we ought to know that? And some of that may be perfectly legitimate.

But a massive amount of it, just to get around congress, end run Congress, would be very, very wrong. It would be a violation of the separation of powers between the executive and legislative branch.

Anyway, then we have not heard an answer to the letter from Homeland Security. So then today, several of us wrote to Chairman Leahy, we need a hearing on this memo. We want the Department of Homeland Security secretary to come in. We want the people that do immigration to come in. And we want the people that wrote this memo to come in and have a hearing so we can find out what the motivation is behind this memo.

VAN SUSTEREN: You didn't get an answer to the letter. The first one was to the White House?

GRASSLEY: No.

VAN SUSTEREN: The first one was where?

GRASSLEY: To the White House, no answer. No answer from homeland security yet.

VAN SUSTEREN: Today obviously your letter to Senator Leahy, you don't expect an answer today?

GRASSLEY: No.

VAN SUSTEREN: You expect he will answer?

GRASSLEY: I hope so. I hope he will have a hearing. Maybe he will not be able to have it now with the summer break coming up, but we can have it in September.

We need get to the bottom. If congressional oversight means anything, if the checks and balances system of government where we check the executive branch to make sure the laws are followed, and there's an end run around Congress not passing an immigration bill, we ought to know about that.

VAN SUSTEREN: It is a draft memo. Do you think it was someone's random idea, or do you think it was a sneaky, deliberate effort to get something done?

GRASSLEY: I think it's a sneaky, deliberate effort to get something done. So they say it is just a draft that doesn't mean anything. Well, you know the bureaucracy. Somebody -- this is a very detailed memo. You put lawyers on writing a memo like that. Somebody had something in mind when they said write that member.

And I think it's just a -- trying to avoid the issue by saying it is a draft memo.

VAN SUSTEREN: Do you have any doubt of its authenticity?

GRASSLEY: Nobody has questioned its authenticity. Even the people in the department of Homeland Security even the people in the White House have not questioned that. All they've tried to do is divert attention and saying it is a "draft memo."

VAN SUSTEREN: They haven't said senator, someone just made that up?

GRASSLEY: No.

VAN SUSTEREN: This is the real McCoy?

GRASSLEY: Yes. It came over the transit from somebody that wanted Congress to know what was going on in the executive branch. You can call them whistleblowers, whatever you want to. I don't know who they are.

But the point is, a lot of information that Congress gets to do its constitutional job of oversight comes from sources like that. And it's a doggone good thing it does, because it gives us an opportunity to preempt what Congress is -- in a devious way the executive branch is trying to get around congress.

VAN SUSTEREN: You used the term paroling. In terms of immigration paroling is different than the criminal system, right?