This partial transcript of The Beltway Boys, Jan. 19, was provided by the Federal Document Clearing House. Click here to order the complete transcript.

FRED BARNES, CO-HOST: Let's go to the Ups and Downs, since we've exhausted this other stuff.

Up: Attorney General John Ashcroft 

BARNES: Up, Attorney General John Ashcroft.  He got the first big indictments  in the war on terror this week, American Taliban John Walker and alleged  shoe bomber Richard Reid.  Ashcroft tied both men to bin Laden and the al  Qaeda this week.  Watch.

(BEGIN VIDEO CLIP)

JOHN ASHCROFT, ATTORNEY GENERAL:  Reid's indictment alerts us to a  clear, unmistakable threat that Al Qaeda could attack the United States  again.  The lessons for Americans are undeniable.  We must be prepared, we  must be alert, we must be vigilant.

(END VIDEO CLIP)

BARNES:  Mort, there are a couple interesting things about Reid and about Walker.  Reid – The Wall Street Journal deserves a lot of credit,  because one of their young reporters bought a couple of computers from a  looter in Kabul, Afghanistan, that the guy had gotten from the Al Qaeda  headquarters.

They brought them back to the U.S., they've looked at them and now  found that about probably Reid that he had gone around Europe and Pakistan  and Israel and so on looking – casing places as targets for future  terrorist attacks.  And, of course, one of them was on that plane, where he  was going across the United States, allegedly.  Is he – he's going on  trial.

About John Walker, there's an interesting thing that's been in the San Francisco press, will be in The Weekly Standard, but hasn't been  mentioned elsewhere, and that is, one of the things which obviously led him  to join this radical Islamists, and that is, when his father left home for  another men.

MORT KONDRACKE, CO-HOST:  Homosexual liaison?  I mean, he could in...

BARNES:  Yes.

KONDRACKE:  ... in response to that, he joined the Taliban.

BARNES:  I'm not, I'm not drawing a direct cause and effect.  All I'm  saying is, that looks like a contributing factor that the press has been  suppressing...

KONDRACKE:  Well, he...

BARNES:  ... including Roll Call.

KONDRACKE:  Well, what he should have done is gone – is just signed  up with the Jesse Helms campaign or Jerry Falwell.

BARNES:  Now, wait a minute...

KONDRACKE:  But, very seriously – but...

BARNES:  ... all right.

KONDRACKE:  ... seriously, I mean, John Ashcroft is exactly right.  I  think Americans have begun to get complacent about terrorism, and to think  that because we're winning – we've won in Afghanistan and because there  haven't been any more terrorist attacks, that they can't do anything.

Well, the Richard Reid episode indicates that everybody should pay  attention to those pictures that Ashcroft revealed of these five  terrorists.  You know, you're taking an airplane, I'm taking an airplane,  take those pictures in mind and look around.

BARNES:  Indeed.

Down: the accounting firm Arthur Andersen 

KONDRACKE:  Down, the accounting firm Arthur Andersen.  Not only is  the firm accused of cooking Enron's books and destroying key documents, it  now faces the ultimate humiliation, getting officially dumped by Enron as  the company's official auditor.

Now, wait a minute.  In – for Enron to fire Arthur Andersen...

BARNES:  Yes.

KONDRACKE:  ... is sort of like Butch Cassidy firing the Sundance Kid  when the, when the Bolivian army is closing in.  I mean, En – Arthur  Andersen – this is not the first case of Arthur Andersen being so wedded  to companies because it was getting lucrative consulting and auditing  contracts that it, that it couldn't call – be a good watchdog.  I mean,  and I'm afraid, for Andersen's sake that it's going to go under because of,  because of all this stuff.  I mean, it's one case after another, Waste  Management, and other cases...

BARNES:  Yes, right, well...

KONDRACKE:  ... as well.

BARNES:  ... you're right, you did touch on something.  These  companies, auditing companies that will fudge the audit in order to keep  this very, very lucrative advising business and consulting business...

KONDRACKE:  They should be split.

BARNES:  Yes, well, they may be, that's one of the proposals.  But the  new SEC chairman, Harvey Pitt, has said at the beginning, what we probably  need are not self-policing by these auditing firms, it hasn't worked very  well, but to have outside experts be watching the audit firms and auditing  the auditors, actually, that that might work.

Down: Saudi Arabia's Crown Prince Abdullah 

BARNES:  All right.  Down, Saudi Arabia's Crown Prince Abdullah.  Caving in to  domestic pressure, the Saudis could soon ask the U.S. to end its military  presence in that country, and the feeling is increasingly mutual, the  hostility.

KONDRACKE:  Well, you know, Abdullah is caving in to Usama bin Laden.   This is exactly what Usama bin Laden wanted.  And what Abdullah's doing is  basically firing the police force in the middle of a, of a, of a crime  wave.  You know, if the United States gets sent out of there, and the, and  the Saudi regime is be – is in danger of being toppled by the terrorist  extremists, I'm in favor of letting them go and just seizing the oil fields  in trusteeship for the world economy.

BARNES:  That's a very good idea.  I think the Saudis, the Saudis are  counting on being able to kick the U.S. military out and we'll still rescue  them when the time comes.

KONDRACKE:  Let...

BARNES:  And it's probably...

KONDRACKE:  Let's just move to Kuwait.

BARNES:  Well, that'll probably happen.

Down: former Montana governor Marc Racicot 

KONDRACKE:  Down, former Montana governor Marc Racicot.  Racicot takes  over as chairman of the Republican National Committee under an ethical  cloud.  At issue, Racicot's plan to continue, quote unquote, "strategic  advice-giving" to clients for a Houston-based lobbying firm while  continuing to serve as RNC chair.

BARNES:  You know, this is such a bad idea.  I don't know why George  Bush, the president, insists on it.  They don't need Racicot as – I mean,  anybody can be Republican national chairman.  Mort, you could do it.

KONDRACKE:  No, I couldn't.

BARNES:  It'd be fun.

KONDRACKE:  No, I couldn't.

BARNES:  And, look, Racicot's needed in Montana to run for the Senate.   He could knock off Max Baucus, and Republicans could take over the Senate.

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