This is a partial transcript of "Special Report With Brit Hume," Aug. 25, 2004, that has been edited for clarity.

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BRIT HUME, HOST: I'm pleased to be joined now for his first broadcast interview in years by Karl Rove, President Bush's counselor and chief political advisor. Welcome to you, sir.

KARL ROVE, WHITE HOUSE SENIOR ADVISER: Thank you. Glad to be here.

HUME: Today we saw Ben Ginsberg, counsel to the Bush campaign, step down from his post because he'd been advising the now famous 527 group, so-called the group Swift Boat Veterans for Truth.

We see another Bush volunteer having stepped down for similar reasons. It is said that -- in fact, it's acknowledged that a prominent Texas -- well-heeled Texas Republican Bob Perry gave this group a couple of hundred thousand dollars to get them started. Why should people not conclude that this group of veterans is really a creature of the Bush campaign?

ROVE: Well, first, no one in the Bush campaign has coordinated with the swift boat veterans. Ben Ginsberg, as you said, was our outside counsel and also outside counsel to the 527 group. That's normal. The legal counsel for the Kerry campaign is counsel to 527 groups there. The DNC legal counsel is the legal counsel for MoveOn.org, as well. They're fulfilling a legal function, not a political -- they're not political consultants. But Ben Ginsberg, who's a great friend of this president and has been with him since he began to run for president in 1999, did -- was -- resigned from the Bush campaign in order to remove any possibility of being a distraction to his friend. He wants to see the president reelected. He knows that there's a hypocritical double standard on the part of some in the media, where a lawyer for the Bush campaign who is also the lawyer for a 527 is somehow suspect, where a lawyer for the Kerry campaign and the Democratic National Committee, who's also a lawyer for a 527 group is not. And he accepted that reality and decided he wanted to help his friend. And the best way he could help his friend was to resign.

HUME: Bob Perry, the Texas businessman who gave them the seed money, is a noted Republican, has been a contributor to President Bush, is someone you know. What about that connection, if there is a connection?

ROVE: Well, look, I know Bob Perry. I've known him for 25 years. When I moved to Texas, you can count the wealthy Republicans who are willing to write checks to support Republican candidates on the hand -- on the fingers of one hand. It would be unusual if I didn't know him, having been active for 25 years in Texas.

HUME: When's the last time you talked to him?

ROVE: Sometime in the last year. I can't remember exactly when. I saw him in the last year, and I remember seeing him someplace along the campaign trail and exchanging a few pleasantries.

HUME: Have you ever discussed this effort by -- by the swift boat veterans or -- or Kerry and his military record with him at all?

ROVE: No, no, no. In fact, the last time I saw Bob was literally to say, "Hello, you're looking great. How are you doing? Hope to see you again soon." But I mean, anything -- he's a good friend of mine. I don't want to leave any misimpression, but he's not somebody that I've had, you know, any extended conversation with in years and certainly did not discuss with him or anybody else in the swift boat leadership what they're doing.

HUME: Has anybody in the Bush campaign or the White House, to your knowledge, engaged in any consultations, coordinations, cooperation, with the swift boat veterans group?

ROVE: No, absolutely not. Absolutely not.

HUME: All right. I'm going to move on to the race. The -- all the latest polling shows the president's approval rating hovering at or below -- in most polls, it's said to be below -- 50 percent. You see most of the polls now show John Kerry with at least a slight lead. Some are different. But most show that. Why would we not look at this race, as the Kerry camp does, as really theirs to lose?

ROVE: Well, first of all, the Gallup poll -- I need to correct you on two points. Take the latest Gallup poll. It shows the president's job approval at 51. By comparison, at the same time in August of 1996 in the Gallup poll, Clinton's was 52. And in August of 1984, Ronald Reagan's was 54. So I mean, this president's job approval rating is within spitting distance of two men who won big reelections.

HUME: In that poll?

ROVE: In the Gallup poll, which is, you know, is historically the best indicator and the longest running of these polls, it's -- that are out there. And yes, it's a close race. But again, as the Gallup poll, this president was up four points in the last Gallup poll. No Democrat, or nobody -- no challenger has ever beaten an incumbent president unless they came out of their convention with a big lead. Carter in 1976 had a 31-point lead over Gerald Ford, went on to win a narrow victory. Ronald Reagan had a 16-point lead over Jimmy Carter in 1980. Clinton had a 22-point lead over the senior Bush, Bush 41, in 1992. After the Democratic convention, the Gallup poll goes out and Kerry is behind. That's -- that's not, you know -- this is, it's going to be a close race. No doubt about it. But this president is in good shape to win a strong victory this fall.

HUME: It is conventional wisdom of politics that undecided voters who decide late break for challengers. That's -- we've certainly seen that happen in a number of instances.

ROVE: Yes. I don't think that -- that may be true for races like Congress or governor, where you have one well-known candidate and one unknown candidate. And what people are hoping to do is at the end of the day get enough information about the other candidate and then go for him. But here, it's a different kind of race. When you're running for president, particularly after the two candidates are selected in the spring, not the nominating conventions but in the spring, people know who they are. And so as a result, what happens is at the end of the campaign, the undecided voters break by where their predilections would lend them -- lead them to go. That is to say, you need to understand who the undecided voters are in order to understand which way they might go at the end.

HUME: So who, in your judgment, are they?

ROVE: Well, they are -- they look like everybody else, with a couple of significant differences. One difference is that they're taking in a lot of information, but they're not keeping a lot of it. And they're going to make up their minds late. That is to say, they're not -- they're not as clued in to the political structure as -- as other partisans are, and while they're paying attention to it and taking it in, not a lot of it's sticking. And they're going to make up their minds late. But the second thing is, and this is interesting from our perspective, is that they are predisposed our way. They are -- they tend to be -- they tend to be more moderate and more conservative rather than liberal.

HUME: Well, there are some poll -- pollsters who suggest that their results are otherwise. I think John Zogby, for example, has said that most of the undecided voters that he -- he finds in his samples are disinclined towards Bush.

ROVE: Well, I disagree. First of all, I think there's a -- there's a scientific precision that we give these polls that is not accurate. And particularly when you're dealing with, as Mr. Zogby does, one or two polls, where you might -- he might poll 800 people. And then maybe six or eight percent undecided, which means you're dealing with a very small sample size.

HUME: Forty-eight of 50 people.

ROVE: Thirty-six to 48 people. And you can't make very strong or worthwhile judgments about that small a number of sample.

HUME: But you suggest, though, that you've been able to make such judgments about the nature of the undecided voters. How have you been able to do that?

ROVE: Well, I get all the individual state polls that we've been doing and take a look at the...

HUME: You're talking about your own polling?

ROVE: Right. Right.

HUME: And how big a sample have you been able to put together?

ROVE: Well, 300 and some-odd, 400 people. Based on looking at 6 percent to 8 percent of the battleground states, (UNINTELLIGIBLE) that we've asked.

HUME: Let me ask you a couple questions about battleground states. I was looking at Ohio. What does your polling and your indications suggest you're doing there? Kerry seems to be slightly ahead in some polls, Bush slightly ahead in others.

ROVE: We think we're slightly ahead. But look, these battleground states are going to be battlegrounds. They're going to be tight, hard-fought races right to the end. And the big states like Florida, Ohio, and some of the smaller states like Nevada and -- and New Hampshire. But at the end of the day, because of the way the race is structured, this race is about big issues. It's about how we're going to fight the war on terror, what are we going to do to -- to extend prosperity and to grow our economy, and what are the values of these two candidates. And we have -- we have a clear choice. So over the course of the campaign, it's going to become ingrained in people's minds, and it will be our benefit. They have a choice between somebody who is strong and resolved in the war on terror and somebody who voted for the war and then voted against supporting the troops when they're under fire.

HUME: Pennsylvania.

ROVE: A close race. I think maybe a little bit behind today, but very competitive. This is a state where the Democrats won last time by five points. Yet in Michigan and all the public polls, we're either slightly up or slightly down.

HUME: Where are you today (ph)?

ROVE: Slightly up. But again, it's going to be a race right to the end.

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