The following is a transcription of the February 3, 2007 edition of "FOX News Watch" that has been edited for clarity.

ERIC BURNS, HOST: Scooter Libby — former chief of staff to Vice President Dick Cheney. His trial on charges of perjury and obstruction of justice continued this week, with former White House spokesman Ari Fleischer among those testifying. Former New York Times reporter Judith Miller also took the stand.

And with each new witness, it seems, comes more information about the secret relationship between journalists and their sources in government.

Neal, I think that is ultimately going to make this a landmark trial. I don't know if it will be legally, but it will be journalistically. What's going to happen as a result of this trial, in terms of the relationship between journalists and governmental sources?

NEAL GABLER, MEDIA WRITER: I don't think very much. Now what have we learned from this trial, in terms of that relationship? One thing we've learned is that the Bush administration was waging a smear and disinformation campaign. Well, you know, that comes as no surprise to anybody who's been in the United States for the last six years. — But that's not going to change with future administrations. We've learned that reporters are very sloppy, that sometimes they just shove their notes into a shopping bag, as Judith Miller did, and don't even look at them. Is that going to change? You know, we've learned that there is a very cozy relationship between reporters and the administration. And I don't think that that's going to change.

CAL THOMAS, SYNDICATED COLUMNIST: Using the press to smear people that a particular political person doesn't like is nothing new. It happened a lot. You may remember the Clinton administration, Nixon administration, all kinds of other administrations. But here's what I think — if the public is following is this — is going to be disappointing to an awful lot of people. There's too much suck-up going on between the press and their sources inside of the government. Little promises, little tete-a-tetes, little secret luncheon meetings, little leaks of information to make an administration look good.

And the lapse of memory — if you read the testimony of Judith Miller, formerly of The New York Times — who was wrong about WMD — and all of a sudden can't remember key parts of her reporting about her conversations with Scooter Libby. This does not bode very well for the credibility of the media.

BURNS: And something else that doesn't bode very well for the credibility of the media, Jane — and maybe we'll learn about this — what do reporters have to give up to get "highly placed information" like this that supposedly shouldn't be on the record?

JANE HALL, AMERICAN UNIVERSITY: A lot. And I think it's why, you know, two young metro reporters named Woodward and Bernstein were the ones that ultimately uncovered Watergate . Not the people who were at the White House! I mean, you get to a certain level — this is the dirty little secret, I think, of this story, and it's revealed: you get to a certain level, and the White House press secretary is trying to leak to the reporter from the network or from The New York Times. People are using each other to leak, to do all kinds of things. And there's sort of a friendship that develops. People marry each other! Press secretaries, and others, you know, — there's — it's way too cozy, and it should be more adversarial. And it's not, because you need the access. And it's a real dilemma.

BURNS: But Jim, it.

GABLER: But for what, Jane?

HALL: That's what people perceive.

GABLER: You know, that's the interesting thing. Because all Judith Miller was doing here was putting out the administration version of events.

(CROSSTALK)

GABLER: She got nothing in return. What she got was access.

JIM PINKERTON, NEWSDAY: She got the Pulitzer Prize.

GABLER: A long time ago...

(CROSSTALK)

PINKERTON: For WMDs. She got it for WMDs.

BURNS: Jim, if Jane is right, and one side is using the other side, there's a side that's not even in the equation here, and that's the public. To what extent do they lose when journalists and governmental officials are making deals about information?

PINKERTON: Well, I mean, the public is obviously secondary. There's obviously a game here. But I think that what struck me most about the Libby trial this week was the clear, if you will, "death wish" that Libby has in terms of writing things down, knowing — and putting things in a file— - knowing that sooner or later, historians or journalists or investigators or prosecutors are going to get their hands on it.

So he puts notes and things, like, "My Conversation with Mary Matalin where I am strategizing with her about how to screw up the coverage of this." And so while there's plenty of friendship among journalists and the rest, as we're all agreeing here, there's also rivalries.

And so Mary Matalin tells Libby, in Libby's notes, Oh, let's go to Tim Russert, because Tim Russert hates Chris Matthews . — And that will undermine Chris Matthews's coverage.

So there's lots of little games here. But I agree with the original point, Eric: the public interest, if you will, and just a full, honest airing disclosure, is secondary or even tertiary.

THOMAS: Well, what is happening here — and the public is going to forget, and a lot of the reporting, as is always the case in these things — it's not about the supposed leak of a supposed covert operative at the CIA, Valerie Plame ; it is about the coverup and memory and lying and suppressing evidence and obstruction of justice. So the alleged crime, the alleged infraction is now secondary to memory and who knew what and when they knew it.

GABLER: What I find startling in this is that the reporters who were in the middle of it missed the story. The story was that they were being used to smear Joe Wilson . So here they are being used in that way, and instead of going out and saying, Look it, this is what the administration is doing. They're trying to smear Joe Wilson, who actually told the truth — they just sat back.They talked about David Gregory and John Dickerson — David Gregory of NBC and John Dickerson of Time at the time — who said, we're not interested in that information.

HALL: But Matt Cooper [also of Time magazine, at the time] Matt Cooper wrote about it, and got hauled into court.

BURNS: We have to take another break. We'll be back with our "Quick Takes" on the media.

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