'Special Report' Panel Analyzes How John Edwards' Affair Will Impact His Political Career and Conflict Between Russia and Georgia

This is a rush transcript of "Special Report With Brit Hume" from August 8, 2008. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

JOHN EDWARDS, (D) FORMER NORTH CAROLINA SENATOR: I have no idea what you're as king about. I've responded to—consistently to these tabloid allegations by saying I don't respond to these lies, and you know that. You've covered me. And I stand by that.

(END VIDEO CLIP)

BAIER: Former presidential candidate John Edwards last month addressing a question about a tabloid story that he had an affair and also a love child. Today he admitted the affair, denied that he has fathered a child out of marriage, and released this statement.

"In 2006 I made an serious error in judgment and conducted myself in a way that was disloyal to my family and to my core beliefs. I recognized my mistake, and I told my wife I had a liaison with another woman and asked for her forgiveness.

I am and have been and willing to take any tests necessary to establish the fact that I am not the father of any baby, and I am truly hopeful that a test will be done so this fact can be definitively established.

I also have not been engaged in any activity of any description that requested, agreed to, or supported payments of any kind to the woman or to the apparent father of the baby," ending

"In the course of several campaigns I started to believe that I was special and became increasingly egocentric and narcissistic. If you want to beat me up, feel free. You cannot beat me up more than I have already beaten up myself."

BAIER: What about all of this, this statement, the impact? Some analytical observations from Bill Sammon, Senior White House Correspondent of "The Washington Examiner," Jeff Birnbaum, Columnist at the "Washington Post," and syndicated columnist Charles Krauthammer, FOX News contributors all.

This is just part of the statement, Bill. It is a lengthy statement. What do you think about today's events?

BILL SAMMON, SENIOR WHITE HOUSE CORRESPONDENT, "THE WASHINGTON EXAMINER": The question is not how much does it damage John Edwards, because Edwards' political career is over. The question is how much does it damage the Democratic brand?

In September 2006 Mark Foley, an obscure Republican Congressman, had his own sex scandal. That was a major reason, I believe, for Republicans losing the Congress in the 2006 midterms.

Here we are in August of 2008. John Edwards is an infinitely larger political figure than Mark Foley was. This was a guy who was the vice presidential candidate during the last cycle caught up in a scandal that is probably not actually going to go away for awhile.

There are reports tonight that his wife Elizabeth is supposed to be speaking at the Democratic Convention. Think about how that's going to look. Everybody is going to be talking about that two weeks from now. She's going to give some heroic speech, a very sympathetic figure. This thing's not going to go away. I don't think it's helpful to Democrats.

BAIER: Elizabeth Edwards obviously fighting breast cancer. This statement says she knew about this in 2006. Jeff, it's an ugly story from top to bottom.

JEFF BIRNBAUM, COLUMNIST, "THE WASHINGTON POST": It's really a terrible story, and I agree that John Edwards' political future is nil because of this.

And it is not over. I agree with Bill that it goes that far. There's still questions to be asked and answered about this.

What is not clear to me is that this goes beyond hurting Obama in the short run. I think that a day was lost today because Hillary Clinton was going to be the focus of news coverage, her campaigning for Obama. That was completely wiped away this weekend.

Whatever sorts of coverage that Obama might have hoped to get, even though he's on vacation now, that's over with.

But John Edwards I think is—and his problems here are not likely to leach over and hurt Obama, in part because this has come out in the doldrums of summer, right as the Olympics were about to start.

And I don't think that the Democrats need to worry very much about this, unless it turns out that Edwards is lying about either paying this woman or having his friends pay it, and, heaven forbid, that he is lying about the paternity of her child.

BAIER: Which is odd, Charles, that he even talks about this in this statement, isn't it? He says "I welcome a test. I want a test." I mean, isn't he urging the story to continue as it gets closer to the Democratic Convention?

CHARLES KRAUTHAMMER , SYNDICATED COLUMNIST: Well, assuming he's now telling the truth, he wants exoneration to be second charge, which I think he would do if, in fact, it weren't true.

But I think there are two elements to this story as there are to all sex scandal stories. On the one hand I've always been really uncomfortable with the press and public intruding on the private lives of politicians — 50, 60 years ago with FDR, and Eisenhower had a mistress, and Kennedy, we all know-it was not the case.

Today we're obsessed with it, and I don't think it's a healthy thing, and it's really hurt our politics. Personally, I don't want to know.

However, on the other hand, the other element of this is that in modern times our politicians use the families to advance their careers. I often thought it ought to be a criminal offense for a politician to put his spouse and kids up on a podium, punishable in severe ways. I haven't gotten a long way with that.

And both of these elements are obviously in play with Edwards. The world was intruding on his life. On the other hand, he certainly made the wife and the relationship an essential element to his campaign. And that's why he's in this dilemma as we are.

I'm really uncomfortable. I feel awful for the family, but this is the world that we live in.

BAIER: So no backlash on the party?

KRAUTHAMMER: The party, I think, escapes, because it will be a short story, dropped on the Friday of the Olympics. And I think the party will escape relatively unscathed.

SAMMON: I think there are storm clouds building. You have this Edwards scandal, you've got Hillary and Bill going to create a ruckus and make it all about them at the convention.

And now you've got Obama leaving for a Hawaiian vacation just as there are all these jitters about his prospects. I think there are some ominous things developing here.

BAIER: Last word on this panel.

Next up—a shooting war involving Russia is never a good thing to talk about. We will talk about what Russia's conflict with the former Republic of Georgia means for the U.S. when we return.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MIKHAIL SAAKASHVILI, GEORGIAN PRESIDENT: A wide-scale military aggression has been waged against Georgia. In the last minutes, the last hours, there was a bombing from the Russian Federation side. They bombed civilians, peaceful places. This is nothing more than classical international aggression.

SERGEI LAVROV, RUSSIAN FOREIGN MINISTER: What happened this night was actually an aggression of the Georgian troops against southern Ossetian people, against the Russian peacekeepers.

(END VIDEO CLIP)

BAIER: There you see the President of Georgia and Russia's Foreign Minister talking about the same situation in the former Soviet state of Georgia, where Russian troops are moving in, columns of tanks. We're hearing about air bombardment now. It is a major situation on the ground.

The White House had this to say about what's developing there. Dana Perino, White House Spokesperson-"The united States supports Georgia's territorial integrity. We call for an immediate ceasefire.

We urge all parties Georgians, south Ossetians, Russians to deescalate the tensions and to avoid conflict. We are work on mediation efforts and to secure a ceasefire, and we are urging the parties to restart their dialogue."

Charles, this sounds, as you listen to what's happening on the ground, very dangerous.

KRAUTHAMMER: It's quite ominous. It is clearly a Russian invasion of another country.

It's quite complicated because the Ossetians are ethnically different from the Georgians. North Ossetia is in Russia, so it's a way of protecting a minority who a lot of them are Russians.

The Russians are quite upset that we allowed the Balkans to split up- Serbia. Just a few months ago the United States supported the independence of Kosovo, and now the Russians are saying so why shouldn't south Ossetia be independent as well? It's ethnically different.

So the international legal arguments are complicated. However, I don't think the Russians are reckless. What they are doing here is reasserting control of this province. And when it's done, which will probably happen in a couple days, the firing will crease. But they want to change the facts to be ground. The Georgians tried reclaiming south Ossetia, and the Russians are saying no, it's not going to happen. It's going to be our enclave, our province.

And that's where I think it's going to end. I don't see it escalating. But it does tell you how wise it was when NATO rejected the Bush idea of including Georgia and Ukraine and NATO, because otherwise we would today be at war with Russia, since NATO says an attack on one country is an attack on every country.

SAMMON: What's motivating Russia is the fact that Georgia wants to join NATO, and Russia's upset with that. Of course, Russia is still upset that the Soviet Union broke up. I think at least the current leadership of Russia is upset, and that's why they've been fomenting this unrest by having to so-called "peacekeeping" Russian troops in this breakaway province and another breakaway province in Georgia.

But the analogy to the Balkans is dead on, because it raises the questions, when the soviet Union broke up, it broke up into all these countries that were previously their own countries. When the Balkans broke up, the former Yugoslavia broke up into six republics.

Well, then those republics themselves started to break away, and Kosovo started to the break away from Serbia, and we supported that.

So now we have an analogous situation where these little province of Georgia are trying to make themselves their own countries, and it puts us in a little bit of a difficult spot because there's real no good guys or bad guys.

BAIER: The U.S. is urging calm. You have now Russian Prime Minister Vladimir Putin saying the war has started. The Georgian president has said he's going to pull 1,000 Georgian troops out of Iraq to come back and fight in the homeland. It's tough to not see escalation in the future here.

BIRNBAUM: Well, this has been going on since 1992, essentially, when- -ever since Georgia separated from Russia there have been outbreaks like this. This is the most serious of them without question.

And the Georgians were already pulling out their 2,000 troops from Iraq. That was going to happen anyway. This just makes it go a little bit faster.

I think we need to emphasize something here in case people are worried for some reason. Because Georgia is not part of NATO, there's really no danger the United States or Europe will get in involved in what is really a civil war almost between—within this small part of Georgia.

Both Russia and Georgia claim this part, and they are likely to fight until the Russians take it over, at least this time, because the Russians have such overwhelming force compared to Georgia.

And then the United Nations will probably step in and try to keep things as they are when Russia finally lays its claim to this part of Georgia.

And all of this will be happening under the cover of the Olympics, and we probably won't get involved.

BAIER: Ten seconds.

KRAUTHAMMER: It won't escalate because Russia's strong and Georgia is weak. It would only escalate if Russia goes into Georgia the capital of Georgia and tries to take over all of Georgia. If it stays in south Ossetia, this little mini-war will be settled.

BAIER: OK, last word for this panel, but stay tuned. Those Olympics promos just keep getting better.

(COMMERCIAL BREAK)

BAIER: Finally tonight, it is the start of the Olympics. After all of the buildup, it is finally here.

But the producers of those Olympic ads need to create drama to draw people into watch every sport. I mean everyone.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: To win the gold in Olympic shotgun shooting, you need more than the ability to pull the trigger, more than focus, more than a sharp eye. To win the gold in a shotgun shooting, you also need a good belt.

The Olympics is no place for morons.

(END VIDEO CLIP)

BAIER: "No place for morons."

That's "Special Report" for this time. More news is on the way-fair and balanced, as always. Make it a great weekend.

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