All-Star Panel: How will emerging Libya scandal impact election?

This is a rush transcript from "Special Report," October 10, 2012. This copy may not be in its final form and may be updated.

BRET BAIER, ANCHOR: We thought we'd start off with just the panel after the long 11-minute piece you just watched, so let's bring them in, Steve Hayes, senior writer for The Weekly Standard, Mara Liasson, National Political Correspondent of National Public Radio, and syndicated columnist Charles Krauthammer.  OK, Steve, this Libya situation, today's hearing and what you just watched in context.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: I think the timeline that you just played is absolutely jaw-dropping. There are so many times at which the administration makes claims that are inconsistent with one another and inconsistent with what virtual virtually everybody understood was the ground truth behind the attacks.

And we saw examples throughout the hearing today. There was one particularly interrogation by Congressman James Langford of Oklahoma. He was talking to a senior State Department official Charlene Lamb who was in charge of security there. And he asked her in detail about where she was that evening, the night of the attack, September 11, who she was talking to, what she was doing. And she answered him in some detail. Said I was here in the United States, I was in contact with people on ground as all of the attacks were unfolding. I talked to them all night. I talked to them the next day getting details about what precisely had happened.

And Langford, I thought, very skillfully, then turned to her and said how is it that you were in contact with these people on the ground as this was happening and five days later, Susan Rice was out selling the country a totally different story?

And what makes this even more incredible is you see the President of the United States on David Letterman selling the story that at least some people understood immediately was untrue, immediately. We also had intercepts that very night of discussions between Al Qaeda and the Islamic Maghreb, terrorists from that organization, and local jihadists that told us this was a terrorist attack, that suggested that this was premeditated.  And yet for weeks the administration went out and sold a totally different story.

BAIER: And Mara, to hear Jay Carney today try to repackage this today was kind of interesting.

MARA LIASSON, NATIONAL PUBLIC RADIO: To say that this is what we thought at the time and information evolved. I think the most kind of mystifying part of this is that Susan Rice was so definitive and was so out over the tip of her skis, as they say, on the Sunday talk shows. Why not say then we're doing an investigation to find out what happened instead of saying definitively it was a spontaneous protest that in some cases got hijacked? That has caused more trouble for them than the attack itself, I believe.

BAIER: Which is often the case in this town.

LIASSON: Yes, often the case.

BAIER: Charles, to Steve's point, the shocking thing was the State Department last night on this conference call. We weren't invited to it. They say it was an oversight. We pointed that out last night. They say everything is calm. The ambassador walks the Turkish diplomat, essentially, out to the road. There is nobody there. They don't see anybody on the video. The security people say it's been like that all day. Nobody is around. Nothing unusual all day long. As Steve points out, this official says they talk all the way through the attack. They talk after the attack, six hours long this attack took. And they have all of this information, and yet five days later Susan Rice goes out on five TV shows and doesn't have that information, yet these people do. It's such a disconnect.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: It's beyond a disconnect.  That is utterly damning. There are two scandals going on, the first is a cover-up. We now know and they knew earlier there was no mob. There was no demonstration. There was no incentive about the video. That was all completely false story. This was simply an attack of armed men who infiltrated and killed our people. So everything Susan Rice said was a confection, it was an invention. And it was -- as you showed, it was repeated again and again.

You had Hillary Clinton speaking about the video as the body of ambassador lying next to her. And you had Susan Rice spinning the tales. You had the President of the United States addressing the General Assembly more than two weeks later talking about the video, the insult to Islam, et cetera. You have this entire story going all along. They are trying to sell the video; they are trying to sell extremism; and they are trying to sell all of this at a time they know it isn't true. So that is number one. And it's a scandal. And I think it has to do with the fact that they were spiking the football over the death of bin Laden and Al Qaeda a week earlier in Charlotte and this was a contradiction of it.

The second scandal is the lack of security at the site before. So what happened before? And I think that what happened was, the administration -- it wasn't a lack of money that they withdrew all the support and they didn't put up all the required barbed wire and fences and all of that. It was under the theory that starts with Obama at the beginning. We don't want to be intruders in the area, and we don't want to be oppositional. We don't want to have a fortress of America. And we don't want to look imperialist. We want to blend in with the people and help them build.  That is a noble aspiration, and that was the motive for having very light security. But it was a catastrophically wrong decision to do it in Benghazi in a no-man's-land in Dodge City, and it cost us the lives of the ambassador and three other Americans.

BAIER: We want to play some of the exchanges from that hearing. We took a lot of time obviously with that timeline. We will do it on the online show, so stick around for that. Mara I want to put up some of the polls from the new Fox poll. First of all, the question President Obama's handling of Libya among voters here, approve, disapprove? You see September to now, disapprove 46 percent, that has changed a bit. The Obama administration initially giving false information on the attack - it is troubling, 67 percent, not much of a concern, 26 percent. And the reason for the information on this, from the beginning to help Obama's campaign 37 percent. When you look at the polls, you look at this issue. Where do you think this falls in the campaign?

LIASSON: Well, I think this is an opportunity for Mitt Romney. He in essence gets a do-over. When he first waded into this controversy he focused exclusively on a press release the embassy in Cairo had sent out. He didn't decide to make a kind of comprehensive critique of the president's bungling of the Arab spring. That is a decision he made then --

BAIER:  -- which the White House also disavowed that.

LIASSON: Yes that's true. But he still didn't take the opportunity that I think was before him then. This now he gets a chance –

(CROSSTALK)

LIASSON: Yes. That's what I'm saying.  Now this gives him a new opportunity and he can certainly do it in Florida at the foreign policy debate to say that this -- all, of the things that we just heard -- that this was bungled, there wasn't enough security, you couldn't say straight what it was.

And we already know that the president's numbers on the foreign policy are dropping, even though this has been a strength for him throughout the campaign. We know it's not a top issue for voters, this is an economic policy election. But this comes at a really crucial moment. Mitt Romney has kind of forced the door open with his good debate performance in Denver. Now he has to get a shoulder in the door and keep on pushing through it. And this is one of the opportunities. And foreign policy is an important issue, just for baseline credibility as commander-in-chief.  So I think this is a big opportunity for him.

BAIER: I want to go over the other Fox polls, some more about politics on the other side of this break. And Steve gets to start. So keep it here.  

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