All-Star Panel: Reaction to latest NSA surveillance allegations

This is a rush transcript from "Special Report," October 31, 2013. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

GEN. KEITH ALEXANDER, DIRECTOR, NATIONAL SECURITY AGENCY: This is not NSA breaking into any databases. It would be illegal for us to do that.  And so, I don't know what the report is, but I can tell you factually, we do not have access to Google servers, yahoo servers, dot, dot, dot. We go through a court order.

(END VIDEO CLIP)

CHRIS WALLACE, ANCHOR: General Keith Alexander, head of the NSA reacting to a new report that his agency has broken into Yahoo! and Google communications links. And we're back now with the panel.

Steve, and I say this to somebody who doesn't fully understand these stories when they come out, what does this new revelation from Edward Snowden about the NSA reveal what the agency has been up to.

STEPHEN HAYES, SENIOR WRITER, THE WEEKLY STANDARD: Well, I think, the way that you just introduced that is crucial, right? Because virtually every one of these stories, the day that it comes out, everybody pulls out their hair, runs around, I can't believe this is happening. This is crazy and then quietly over the next couple days we get revisions to the story. Sometimes we get wholesale rewrites of the stories and they don't appear to be anything like what they were when they were first broken. We did that with the story we discussed here on the panel one night when it came out the Washington Post broke the story originally and then it had to be basically rewritten a couple days later. We have seen the same thing with the stories about the United States vacuuming up virtually every phone call across Europe turns out that wasn't true. It turns out our partners in Europe were actually involved in that, turns out they probably did most of the vacuuming for us.

I'm just really reluctant to offer any kind of definitive take on what this means until we know that it actually means what it seems to mean.

WALLACE: It seemed like he was -- the term of art that he kept talking about was server.  Because the allegation is, I guess we get court orders to go get information from Yahoo! and Google, but this is some sort of back door breaking into their system without a court order.

HAYES: I think that that's exactly right. But the problem is the people who are doing the interpreting don't necessarily know all these terms of art that we are talking about. And this is what's led to confusion about these stories in the past.

WALLACE: Regardless of whether or not we know A.B., there is a growing split on Capitol Hill about whether or not to put more safeguards on what the NSA is doing with the collection of data, especially when it comes to Americans. Who do you sense is going to win here, the privacy side or the security side?

A.B. STODDARD, THE HILL.COM: I think that, you know we, as Steve says, there is usually a strong reaction to the stories. And I think most people in the country say, of course, these companies have no control over what the NSA has the ability to do to monitor them or any of us, or any of the citizens in our allied countries or enemy countries. I think they are everywhere all the time and everyone pretty much assumes that.

What is happening on Capitol Hill is the unholy alliance of liberal Democrats and the libertarian Republicans. You are going to find Rand Paul, the leading libertarian voice in the Republican Party just today talking about how he is sure the NSA is spying on President Obama's cell phone. He is worried about the NSA spying on the Pope.

This is going to be a big issue in the end, I don't believe that they reach critical mass and actually make profound changes and I could be very wrong but I do think in the end there are too many people that back up this kind of surveillance --

(CROSSTALK)

WALLACE: -- unholy alliance? I mean, one could argue these are people whether they are liberals or libertarians who are concerned with privacy.

STODDARD: They are an alliance that tends to frustrate their party in their traditional base of their party. And they meet on Afghanistan, and they meet on drone use, and they meet on surveillance. And you just saw Dick Cheney, you know, empathically defending this kind of surveillance in his interviews about his book in the last couple of days. They are still in the Republican establishment a strong defense of whatever the NSA is doing. And I think in the end it will be interesting to see if whether or not the new coalition is the majority.

WALLACE: Charles, has any of this, as it's come out and Steve is quite right because the initial headlines sometimes isn't backed up by what we find out, has any of it changed your mind about Edward Snowden and whether or not he is a whistle-blower or somewhere on the spectrum to traitor?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I never had any doubt that he is a traitor. These revelations regardless of the content of them, for example, just the fact that we are -- he is implicating the British working with us is a betrayal of our partners. Think of how it will damage other intelligence agencies who will not help us. And we need the help of the British, the Spanish, the Egyptians and others all over the world if we are going to penetrate cells that are out to kill Americans.

I found one curiosity in this report -- who knows if it's true -- that we are eavesdropping on the Pope. Reminds me of Stalin's question the Pope how many divisions does he have? Why in God's name are we listening in on the Pope unless, I guess, the NSA employees want to be theologically inspired.

It sounds like the NSA is in a position where it can collect signal intelligence and anything it can collect it will collect. I think what's happening with this denial by Alexander that we are not breaking into these nodes, these data centers is an artful way of perhaps not addressing what I think is the allegation that we aren't looking into the data centers but the lines connecting them. That's where we are siphoning off the data.

WALLACE: Which may explain, incidentally, we are out of time, why I can never get a cable guy to show up except between nine and five in the afternoon.

All right, that's it for the panel.

But stay tuned to see a baseball game played Halloween style.

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