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Transcript: Bill Richardson and John McCain on FOX News Sunday

The following is a partial transcript from this week's FOX News Sunday with Chris Wallace:

CHRIS WALLACE: Joining us from the campaign trail in Iowa, Governor Bill Richardson, candidate for the Democratic nomination.

And, Governor, welcome back to "Fox News Sunday."

GOV. BILL RICHARDSON (D), NEW MEXICO: Thanks, Chris. Nice to be with you.

WALLACE: Let's start with the turmoil in Pakistan. Speaking to the nation of Pakistan just this morning, President Musharraf said that they will hold elections as scheduled in January, but the state of emergency won't be lifted.

Governor, can there be fair and free elections while the constitution there is suspended?

RICHARDSON: Chris, at the outset today, being Veterans Day, I want to thank all the veterans that have served our country and made us free. On your question, let me say that I'm very skeptical of this announcement of President Musharraf. You can't have democracy halfway. Yes, he said he's going to have elections, but I'm skeptical. He still has a crackdown, martial law. The supreme court has been disbanded. I am extremely concerned that we are associating ourselves with a dictatorship that is basically just revamping the entire constitutional system to keep its purposes of being in power.

And then lastly, Chris, I am extremely concerned that President Musharraf has not delivered, in my judgment, as much as he could on going after Al Qaida, on disbanding some of the terrorist headquarters that are on the Afghan-Pakistani border.

And it's a failure of leadership on the part of the Bush administration. We should be saying to Musharraf very clearly, "We give you $10 billion since 9/11. Unless you have free elections and return to democracy, unless you go after Al Qaida in a determined and effective way, your conditional assistance may be terminated."

That's what I would do. I think right now we have a failed nation state on our hands.

WALLACE: Well, Governor, let me ask you about that, because you have said that if they're not going to hold fair elections, if they're not going to lift the emergency rule, that we should cut off all aid.

If he says no, what does that do to our leverage in Pakistan? And what does that do to the ability of the Pakistani army, limited or unsuccessful as it may have been, in going after the terrorists?

RICHARDSON: Well, Chris, if I'd been president, I never would have had us in this situation. What we need to do now...

WALLACE: But we are in this situation, sir.

RICHARDSON: Well, right now Musharraf is in dear trouble. Al Qaeda is getting stronger. Our leverage, I believe, right now is almost vanished.

What I would like to do — what I would convince Musharraf to do is if he has free and fair elections, if he brings Benazir Bhutto in, the coalition government, if he opens up the supreme court, if he sincerely goes after Al Qaeda, then I believe our foreign policy objectives are dramatically increased.

Right now, Chris, we've got the worst of all worlds.

WALLACE: Governor, let's turn to Iraq, where you had staked out the most absolute position of all the Democratic candidates: All U.S. troops out of Iraq in the first year you're president, no residual forces.

I want to make sure I've got this straight. No combat forces, no counterterrorism forces, no forces to protect against ethnic cleansing and genocide, all out?

RICHARDSON: Yes, Chris, because I believe our troops have become targets. When over 60 percent of the Iraqi people say it's OK to shoot at an American soldier, when right now it's no known movement toward a political solution, at a time when our Iraqi commander, General Sanchez, who is serving in Iraq is saying that this is a disaster coming, I believe the best policy today is to have a withdrawal of our forces within a year.

And we can do it. Our military experts say we can do it. But you have a diplomatic plan. You have diplomacy, a political compromise that the United States pushes, a Dayton-type agreement, getting the three groups of Iraq to have a political coalition, an all-Muslim peacekeeping force headed by the United Nations, a donor conference to rebuild Iraq.

Bring Iran and Syria into a solution that I believe everyone would want to have, because nobody wants to have a humanitarian crisis in Iraq, refugees spilling over. So my plan is not just to get our troops out in a wave. My plan is to get our troops out, but use the leverage of that withdrawal to forge a political coalition.

WALLACE: But, Governor, isn't the plan that you're offering — isn't it basically out of date? You've been saying this for months now. But aren't you, at this point, about to pull the troops out at exactly the moment when the troop surge shows signs of working?

I'd like you to take a look at these numbers, sir. Thirty-nine U.S. soldiers died in October. That's the lowest monthly number since sectarian violence spiked in March of 2006. According to the U.S. military, Iraqi civilian deaths fell from 2,800 in January to 800 last month.

And, Governor, look at these numbers from Baghdad — murders down 80 percent from the peak. Attacks using roadside bombs down 70 percent. Governor, aren't you giving up — aren't you going to turn back hard-won territory to our enemies just at the moment when the surge is beginning to work and violence is decreasing in Iraq?

RICHARDSON: First of all, I don't believe the surge is working. You don't mention progress...

WALLACE: Well, wait a minute. Wait.

RICHARDSON: ... Chris, by body count.

WALLACE: Sir, how do you explain those numbers? I mean, October was 39...

RICHARDSON: You don't measure progress by body counts. Here's how I would measure progress. Number one, there is no progress in political compromise. The Maliki government has failed to make that happen in dividing up all revenues. Three out of 18 benchmarks by the General Accounting Office have shown that it is a failure — three out of the — benchmarks, especially the ones that matter, like are we training Iraqi forces at a successful rate.

Is there movement toward a political compromise where the three groups get together? General Sanchez, our Iraqi commander, comes out and says basically the...

WALLACE: Wait a minute. Sir...

RICHARDSON: ... surge is a disaster.

WALLACE: ... I mean, you've mentioned Sanchez twice. He was our Iraqi commander a good long time ago, and he was let go as part of the Abu Ghraib scandal. So I mean, he's not on top of the situation right now either. I mean, you're ignoring...

RICHARDSON: No, but, Chris, he's a military leader.

WALLACE: ... the fact that — if I may.

RICHARDSON: He was on the ground.

WALLACE: Sir, you're ignoring the fact...

RICHARDSON: He was on the ground. He should know...

WALLACE: Some years ago.

RICHARDSON: ... if the surge is working.

WALLACE: Some years ago he was on the ground. It seems to me you're...

RICHARDSON: No, but my point...

WALLACE: ... ignoring the fact, Governor, that in Anbar province, the Sunnis have turned away from Al Qaeda and now favor us. Places like Ramadi and Fallujah — people can walk down the street. There are neighborhoods in Baghdad that used to be death zones that are now safe for people to walk. And aren't you ignoring just the facts on the ground in Iraq?

RICHARDSON: No, this is a quagmire. There is no military solution. There's only a political solution. And that window, in my judgment, is vanishing. When 3,800 American troops are dead, 60,000 American troops are wounded — mental health — 100,000 Iraqis have perished, you can't say that this successfully has been a military operation.There is a political solution, and I believe that solution can happen if we use the leverage of our withdrawal responsibly over a 12- month period, but push the United States diplomacy, leadership, a Dayton-type agreement in which the three groups in Iraq potentially have some kind of a political compromise where they share power, an all-Muslim peacekeeping force with European forces, too, headed by the United Nations to patrol that potential agreement.

And then thirdly, other countries, Chris, like donor countries in Europe and Japan, to pay for a war that has cost the American people $750 billion. We need to shift our forces. I would keep some in Kuwait. I would refurbish our presence in Afghanistan. We need two more divisions in the Army. We need one division in the Marines. Our military has been bled dry by this war. It is time to shift.

WALLACE: Governor, let's shift, if we can, to domestic issues. One of the big issues in the Democratic campaign right now has been whether to allow illegal immigrants to get driver's licenses. Now, as governor of New Mexico, you signed a law making New Mexico one of only eight states in the country that allows that.

The 9/11 Commission says that 13 of the 19 hijackers who flew those planes into the buildings that day had valid U.S. driver's licenses, and some of them used those to get on those planes. So aren't you, in effect, creating a tremendous security breach for terrorists?

RICHARDSON: Chris, four years ago, the legislature sent a bill to me and, at the request of my law enforcement leaders, I signed it, which allows licenses for undocumented workers. The reason I did this is because there's a failure of an immigration law in the Congress and the president. It's a matter for us in New Mexico of public safety, of safety on the roads.

At the time that I signed the bill, 33 percent drivers were uninsured. Today it's 11 percent uninsured. This law has helped. It's a matter of public safety.

Now, I also have a responsibility as a governor, you know, when the federal government and the Congress don't act, to protect my citizens. That's the reason I did it, as a matter of public safety.

WALLACE: But, Governor, can I ask...

RICHARDSON: And if you want to look at it...

WALLACE: ... you about another aspect of public safety? Is there any security provision in the law, anything, that prevents illegals from using these driver's licenses that you give them to get on airplanes?

RICHARDSON: Chris, there are valid certificates of identification that they have to provide to the motor vehicles department of New Mexico. We have had this law now for four years, and it has been successful. It has lowered the number of uninsured. Traffic safety accidents have gone down. We're able to keep track of where these individuals are.

WALLACE: But it wouldn't stop them...

RICHARDSON: Nonetheless, this is unpopular.

WALLACE: ...from getting on an airplane, sir.

RICHARDSON: This is an unpopular decision, but I believe it's the right decision for my people. What we need is comprehensive immigration. Why isn't the Congress and the president getting together and passing standards that would allow states like mine to protect our own citizens without having to take these measures? We are acting because the federal government and the Congress and the president are refusing to act. We have an immigration crisis in this country.

WALLACE: Governor, we have a couple of minutes left and I want to talk to you about where you stand in the Democratic race. In the last debate, you came to the defense of Hillary Clinton, which led some observers to think that maybe you're really running for the number two slot on her ticket. Let's take a look.

(BEGIN VIDEO CLIP)

RICHARDSON: I'm hearing this holier-than-thou attitude toward Senator Clinton. It's bothering me because it's pretty close to personal attacks that we don't need.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

(UNKNOWN): Could I help out at all?

(UNKNOWN): Actually, we could use some ice.

(UNKNOWN): I'm on it.

(UNKNOWN): OK.

(END VIDEO CLIP)

WALLACE: That last, of course, from "Saturday Night Live." Governor, you deny you're after the number two slot, so tell us quickly a few issues where you disagree with Senator Clinton.

RICHARDSON: Well, first, I want to get all our troops out of Iraq and leave no residual forces behind. She wants to leave 75,000. Secondly, on Iran, that resolution branding the revolutionary guard terrorists — I would have voted against it because it was saber-rattling.

We don't need to give the president another opportunity to justify a potential military effort.

Third, on education issues, no child left behind — I want to get rid of it. She wants to keep it. There are many ways that we're different. My point there, Chris, is that we shouldn't get personal. We shouldn't engage in personal attacks about whether we trust the candidate or the candidate is controlled by special interests.

The American people want a positive campaign. They don't want us to tear each other down. I'm a candidate who's positive, who's patriotic. I want to talk about what's good for America, how we can bring people together.

The point I was making is that, in my judgment, both Senator Edwards and Senator Obama were getting in that range that would be branded as personal attacks. We don't need that.

WALLACE: Governor?

RICHARDSON: The voters here in Iowa and New Hampshire — they want clean campaigns, and that's what I was advocating.

WALLACE: Governor, we have a minute left, and...

RICHARDSON: I'm not interested in being vice president.

WALLACE: Governor, we have a minute left, and I want to ask you about one other pressing question. Dennis Kucinich got a lot of attention at the last debate when he said that he had seen a UFO at Shirley MacLaine's home. And she says, in fact, that you're the one that should be talked about. Take a look.

(BEGIN VIDEO CLIP)

SHIRLEY MACLAINE, ACTRESS: And if they had asked Governor Bill Richardson, he would have, too, because he is the governor of UFOs in New Mexico.

(END VIDEO CLIP)

WALLACE: Governor, in a 2004 book, you said the government should disclose everything it knows about the 1947 crash in Roswell, New Mexico, and this is what you said. "The American people can handle the truth, no matter how bizarre or mundane."

So what truth? What don't the American people don't know about the crash in Roswell in 1947?

RICHARDSON: Well, first of all, I don't believe in UFOs. Secondly, I don't think there was any potential sightings. But the problem here, Chris, is like in many other cases, the federal government, instead of like releasing all the information when they had it and saying that this is all the documentation we have about those incidents in Roswell, never did it. So it causes enormous suspicion.

Now, look. I'm governor of New Mexico. Roswell, New Mexico is a great town in my state. They have a UFO museum. They have a tradition there.

You know, admittedly, sometimes I pump it up for tourism reasons because that's my job as the governor. I have to promote jobs and tourism.

But the reality, really, is that in many cases the federal government, the Pentagon especially, should just release this information, all they have, just get it out there so the public can make up their minds.

WALLACE: Governor, we have to go, but I think you just lost Shirley MacLaine's vote.

We want to thank you so much for talking with us, and safe travels on the campaign trail, sir.

RICHARDSON: Thank you.

WALLACE: Up next, Senator John McCain, who this week began a new assault on the Republican frontrunner, Rudy Giuliani. We'll be right back.

WALLACE: As we continue our coverage of You Decide '08, we're joined now from the campaign trail in New Hampshire by Republican presidential candidate Senator John McCain.

You were, of course, a Navy flier, Sen. McCain. You ever see a UFO?

MCCAIN: I can't say that I did, but I kept looking all the time.

WALLACE: Well, that's good to know, that you were on the watch. You've been going after Republican frontrunner Rudy Giuliani pretty heavy recently. When former New York City Police Commissioner Bernie Kerik was indicted on Friday on federal corruption charges, you said this raises questions about Giuliani's judgment.

And take a look at what your campaign manager had to say. "Rudy Giuliani has repeatedly placed personal loyalty over regard for the facts."

So, Senator, what facts? Are you suggesting that Giuliani knew that Kerik was a crook?

MCCAIN: No. But I would hope that it would have been taken into consideration by Rudy that Mr. Kerik went over to Iraq, was assigned the task of the Iraqi police, obviously left after a short period of time, and the Iraqi police effort was in total collapse.

MCCAIN: It was part of the terrible mismanagement of the conflict under Secretary Rumsfeld and in the early years. But look. I am friends with Rudy Giuliani. I respect him. But the fact is that I'm the only one of the top three with any national security experience. Any. I've been involved in national security issues for the last 20 years. I was in the military for 22 years before that.

I know these issues. I was involved in them ranging from the Cuban missile crisis to the issues we face today. That's what my qualifications are, and I think they're certainly — it's well to point out that neither Gov. Romney nor Mayor Giuliani have any national security experience.

WALLACE: Well, you're speaking a bit more gently than you and especially your campaign manager, Rick Davis, were on Friday about the Kerik affair. And in fact, the Giuliani campaign was so stunned that they fired back and said your attacks are a sign of your desperation and your failing campaign, and it would be as unfair as judging you based on your involvement in the Keating Five savings and loan scandal back in the '80s.

How do you respond?

MCCAIN: I'll match my public ethics in public office with anyone who's running for president of the United States today. I'm proud of my record, and I will stand on it. But the challenges that face America today are a myriad of national security issues, the latest in Pakistan that you discussed earlier with Bill Richardson.

I know Musharraf. I met with him on numerous occasions. I know the area. I've been to Waziristan. I know these issues. I know how to handle them. And I've been involved in all these issues for, as I say, the last two decades. And that's the area that I think will, at the end of the day, convince the voters here in New Hampshire that I'm the most qualified, especially on national security, of any of the candidates.

WALLACE: So be specific. I mean, this is one of the real-time crises a president has to face.

MCCAIN: Sure.

WALLACE: So you're in the president's seat. Richardson says he would threaten to cut off all U.S. aid. Would you?

MCCAIN: No, because if you play that last card and it doesn't work, then obviously you have no leverage whatsoever. I think that Musharraf, by — agreeing to the elections in February is a step forward. It's not what we want, but it's a step forward. But look. You've got to put this — Chris, the situation in the context of the last 20 years or 30 years. Pakistan was a failed state. It was a failed state under Benazir Bhutto. Her husband was convicted of corruption.

Musharraf came to power to replace a failed state. There is significant elements within the Pakistani army and in Pakistan itself of radical Islamic extremism. We all know about the sanctuary in Waziristan that was provided by Musharraf. One of the reasons for that was difficulties within his own army because of the high casualties that he was taking there. I think we should appreciate if Pakistan collapses into a radical Islamic state, then our chances of building democracy and freedom in Afghanistan are in severe jeopardy, and democracy and freedom throughout the region are in great jeopardy.

So this is a very delicate time. I would be doing intensive behind-the-scenes negotiations, and I would do my best to convince Musharraf that the best thing for him, as well as the future of Pakistan, is to go ahead and schedule these elections and move forward with the democratic process. But to issue ultimatums and threats right now that may result in damage to United States national security I think is inappropriate.

I would remind you when we thought it was the best thing to do for the shah of Iran to leave Iran. There were some unintended consequences associated with that.

WALLACE: You know, I want to talk about your critique especially of Giuliani this week on the question of national security credentials, because you obviously have a very different opinion than he does about the possible effectiveness and morality of waterboarding.

You have openly questioned his experience to be president. In an interview in Saturday's New York Times, you had this to say about Giuliani's decision to leave the bipartisan Iraq study group. That's the Baker-Hamilton bipartisan commission. "He didn't show much interest in a war where young Americans are fighting and dying."

Senator McCain, do you really want to stand by those words about Rudy Giuliani?

MCCAIN: He didn't show interest in the Iraq study group, which was about where Americans are fighting and dying. The Iraq study group met without his participation, and he either voluntarily withdrew or was asked to withdraw from the Iraq study group, which was trying to sort out the tremendous challenge we had, particularly at that time, in Iraq because of the failed strategy of Rumsfeld.

I admire and respect Rudy Giuliani. We know each other well. This is not a question of personality. It is a question of experience, knowledge, background, and ability to lead. And that's where I believe my qualifications are clearly different from those of Rudy or Gov. Romney. And I think it's clear to point out those differences.

I served on a weapons of mass destruction commission, and I was pretty busy with other things at the time, too.

WALLACE: You were one of the prime movers, it's fair to say, on the issue of campaign finance reform, but now one of those so-called independent groups is running a TV commercial in South Carolina supporting you. I'd like to address two issues. First of all, do you oppose that ad?

And have you called Rick Reed, who's one of the people behind the group that is putting that ad on the air and, in fact, has done work for your campaign in the past — have you called him and said stop the ad?

MCCAIN: I have not called Rick Reed because I don't know what his involvement in it is. I don't know who is involved with it. I have condemned those ads. If I knew who was involved in it, I would tell them to — that I would like to see them taken down, and Mr. Reed has not been involved in our campaign except in an advisory capacity — give us some advice a long time ago as there are many, many others who have.

But I have always condemned these kinds of ads and I will continue to do so. But I don't know any of the details of them, obviously.

WALLACE: What will you do if you were to find out that any member of your campaign staff was involved in raising money or arranging to set up this organization?

MCCAIN: Well, obviously, I would think that it's the wrong thing to do. I'd have to know — I mean, if I knew that anybody in my campaign did anything that was morally wrong, or wrong — that I would take action about it if something like that was — came to light, obviously.

WALLACE: This week all of the top Republican candidates got endorsements from one of the leading social conservatives, if not more. What do you think of the fact that Pat Robertson, the televangelist, supported Rudy Giuliani? And to the degree that the Christian conservative leadership gets splintered among all of you, doesn't that actually help Giuliani?

MCCAIN: I don't know. As I said about Pat Robertson's endorsement of Mayor Giuliani, I'm not often rendered speechless. I certainly was at this event.

WALLACE: Well, you've had a few days to overcome that. Why are you so astonished by that?

MCCAIN: Sure, I'm still surprised by it, and I will continue to be surprised by it for probably as long as I live.

WALLACE: Why?

MCCAIN: Look, for obvious reasons. Pat Robertson has usually advocated support for people that have a strong pro-life position, among others. I think it's — I wasn't the only person that was surprised in America. But the fact is that I will continue to work with members of the Christian community as well as other parts of our Republican Party, and I'll do my best to work with them and cooperate with them. And we need to keep a team of all Republicans together in order to win the next election.

WALLACE: Senator, finally, and we've got less than a minute left, let's look at the latest Wall Street Journal poll out this week, national poll. It shows you up slightly in the last month, but now into second place, and Fred Thompson down dramatically into third place. What's happened to your campaign in the last month, Senator?

MCCAIN: Well, we've been moving up, with obviously a great deal more enthusiasm at town hall meetings. I think there's a poll out this morning that shows that only 16 percent of the people in New Hampshire have definitely made up their minds.

This thing is wide open. I know from previous campaigns that a lot of people, particularly independents here in New Hampshire, wait. A lot of people haven't made up their minds.

We're campaigning hard. I'm glad the way that things are going. And I can sense that we're doing very well here in New Hampshire. We're on the upswing. And I can tell you right now I will win New Hampshire.

WALLACE: You're saying flat out you'll win New Hampshire.

MCCAIN: I'm saying flat out, Chris.

WALLACE: And if you don't?

MCCAIN: I will.

WALLACE: But are you saying if you don't that you're out of the race?

MCCAIN: Of course not. I'm just telling you I will.

WALLACE: All right. All right. Well, we've heard it here. We'll mark the tape, Senator. Thank you.

MCCAIN: OK, pal. Good to talk to you.

WALLACE: Thank you. Thanks so much for joining us. Please come back, sir.

Chris Wallace is the anchor of FOX News Sunday (FNS), Fox Broadcasting Company's Sunday morning public affairs program. He joined FOX News Channel (FNC) in 2003 and is based in Washington, D.C. Click here for more information on Chris Wallace