This partial transcript of Special Report with Brit Hume, October 11, 2001 was provided by the Federal Document Clearing House. Click here to order the complete transcript.

BRIT HUME, HOST:  Some insights now from Mort Kondracke, executive editor of Roll Call, Mara Liasson, national political correspondent of National Public Radio, and from the White House north lawn, Bill Salmon, White House correspondent on The Washington Times.  Fox News contributors, all.  

Bill, in addition to this dust-up today in New York over that Saudi prince and his $10 million donation now not to be received, there have been reports over the past 24 hours that the Saudis are not playing along fully in this war on terrorism, particularly on efforts to trace money, for example.  

Give us a sense of how the administration is dealing with these serious questions about the fullness of Saudi cooperation.  

BILL SAMMON, WASHINGTON TIMES:  Well, Treasury Secretary O'Neill came out after the Cabinet meeting this afternoon to talk to a few of us reporters, and we were asking him about this, whether the Saudis have, indeed, agreed to freeze, for example, the assets of bin Laden that they can freeze within Saudi Arabia.  

And he kind of danced around the question.  He did say that they're being as cooperative as they can, but you definitely get the sense that the Saudis are dragging their feet, are not really embracing the American requests to clamp down on, for example, charities within Saudi Arabia that supply a lot of the money, I think, to bin Laden.  

And, you know, this recalls what happened after the Khobar Towers bombing four or five years ago.  Remember then, we had trouble -- our FBI  had trouble getting the Saudis to cooperate in giving us information on the investigation.  So, this isn't anything new.  I think it reflects how -- what a conservative Islamic society Saudi Arabia is.  

There's been a lot of talk about how terrible the Taliban is, and they are terrible.  But the Saudis aren't exactly enlightened by Western standards, when it comes to how they operate their society.  

MORT KONDRACKE, ROLL CALL:  It says something about Saudi in gratitude, as well.  I mean, after all, we saved their kingdom from Saddam Hussein, and they've been treating us like crap ever since.  You know, they insist that we not touch Iraq now.  They won't cooperate on investigations.  They won't give intelligence.  They won't freeze assets.  

I mean, Usama bin Laden is a menace to them, too, and he hates the Kingdom for allowing us to base troops there.  And they've withdrawn his citizenship.  You would think that they would have cut off his assets a long time ago.  

MARA LIASSON, NATIONAL PUBLIC RADIO:  This also raises questions about the nature of this coalition.  I mean, President Bush very famously said you're either with us or against us.  Well?  

And he's also said that he will ask different things of different members of the coalition.  Well, he's asked certain things of the Saudis and, military, we hear yes, they are cooperating, but they haven't done the very important things on money laundering and freezing of assets that he's asked them.  

Does that mean the Saudis are with us or against us?

HUME:  And of course it does also -- you get the question of the internal politics of the Saudi Kingdom.  Obviously, it's a dictatorship, so  people naturally assume that the leaders there can do whatever they want. It's a little more complicated than that.  

As Bill noted, they practice the Wahabi strain of Islam, which is shared by, among others, Usama bin Laden.  And perhaps that's what makes the Saudis a little afraid of being seen as being too close the man they -- that some call the great Satan.  

KONDRACKE:  OK, but giving intelligence and cutting off assets are things that you do silently.  And, you know, you don't have to talk a lot about it.  What Usama bin Laden objects to is our very presence there.  We're there!  We have an air base there.  We have a command center there.  

HUME:  We're there, in the first instance, to defend them from possible future invasion.  

KONDRACKE:  And also our own oil supplies and stuff like that.  

SAMMON:  I think Mort raises a great point, because I think a lot of Americans remember the Gulf War as us essentially expelling Iraq from Kuwait, which of course, we did.  But the initial reason for us going over there was to prevent Iraq from invading Saudi Arabia, and we've been there ever since.  And so I think there is a question of ingratitude.  

And also, it doesn't make sense from the standpoint of it was the Saudi royal family that expelled bin Laden in the first place.  And, in fact, the Saudi Arabian society is one of the primary targets of bin Laden.  So it's curious to see that they haven't been really embracing our requests to clamp down on the network that supports him

HUME:  Well, let's take a look, then, at this remarkable development in New York.  Here comes one of the princes, second or third-richest man in the world, Prince Alwaleed.  And he puts up $10 million, which is a drop in the bucket to him, I presume.  And then there's this statement, which the contents of which we saw in Rick Leventhal's report a few minutes ago, suggesting that the U.S. and its policy in the Middle East, particularly toward Israel and the Palestinians was a factor in this equation.  

What about that?

LIASSON:  Well, first of all, it's completely false.  But of course if he really was being truthful about the causes of this, what made bin Laden feel this way, it's because we're in Saudi Arabia and because his regime is corrupt, and that's what are the more real causes.  Palestinians are way down the list for Usama bin Laden.  Now he's using them, of course, propaganda, but he's never been that concerned about them.  

Bit I thought it was an outrageous statement and the mayor did the right thing and refused the money.  

KONDRACKE:  You know, if the Saudis had been so concerned about the Palestinians, they would have used some of this vast oil wealth of theirs to build the Palestinian state -- to make it flower the way Israel has made the desert flower.  You know, the Palestinian people are perfectly bright.  They could have had a high-tech economy.  

What the Saudis and the other rich fat cats in the Arab world have done is to just let the Palestinians fester for 50 years in order to -- in order to be a political issue.  You know, there were more Jews expelled from the -- from Islamic countries than there were Palestinians ever expelled from Palestine by -- you know, during the various wars in the Middle East.  

So you know, the Saudis ought not be using this issue.  I mean, it's a false issue.  

SAMMON:  Also, I think at first blush, when you think about, gee, $10 million -- Giuliani is turning his nose up at $10 million --  couldn't that have helped a lot of families and so forth?

But when you think about it, upon reflection, you think, you know, this guy is essentially trying to buy legitimacy for his extreme views, which is, you know, that the American policy towards Israel is to blame for this attack on the World Trade Center, which, of course, is outrageous, as Mara says.  

And so I think it was the right thing to turn it down.  Especially when you think about $10 million, in this grand scheme of $800 million.  I mean, that's less than 2 percent of that.  And when you look at the generosity of the American people, you know, that $10 million could be made up by people who are outraged by this very story.  So I don't think -- I think it's blood money and we're better off without it.  

HUME:  What's the tricky point here for American policy-makers in dealing with this?

LIASSON:  Well, we need Saudi Arabia, No. 1.  We want more cooperation from them.  And we're also trying to keep a lid on the Palestinian and Israeli conflict.  

KONDRACKE:  Well, the latest turn in that is -- I mean, there is linkage that this prince was making between...

HUME:  Yes, he since called it, by the way, spoken of a "blind alliance" the U.S. has with Israel.  

KONDRACKE:  Yes, well, you've got people in the State Department who have upped the ante again and are saying that the United States might go back to the Clinton position, that is, sharing Jerusalem and giving 95 percent of the West Bank, that we might start pressing for that again, to curry favor with the Arabs.  

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