This is a partial transcript from "FOX News Watch," on May 7, 2007:

ERIC BURNS, HOST: This is Deborah Jeane Palfrey, the so-called D.C. madam. Except she says she wasn't running a prostitution service — she was running a "high-end fantasy business." — I don't know what that means, either.

In an attempt to stay out of jail, Palfrey has given ABC News the phone numbers of thousands of her clients so that ABC can call them, and they can tell ABC and law enforcement officials that she really wasn't running a prostitution service — she really was running a high-end fantasy business. I still don't know what that means!

But what I ask you, Neal is not what it means. That's for some other show. What about — I don't even know if I want to use the word "ethics." What about the relationship between Palfrey and ABC here?

NEAL GABLER, MEDIA WRITER: I don't like it. And I'll tell you that I do not think it is the function of a media organization to investigative witness for a criminal defendant.

BURNS: But if...

GABLER: That is not their job. Not only is it not their job.

BURNS: If she comes to them, which she did...

GABLER: Yes.

BURNS: ...doesn't ABC need to follow up on - on her charges?

GABLER: First of all, there's a legal process ongoing here. So I always look to the public interest. The public interest may very well be served by the legal process. Now we don't know whether it will be or not, and if it's not, then I think ABC can say, Look it, there is something that is not kosher here, and it ought to be revealed, because it wasn't revealed in the legal process.'

BURNS: All right, Jane: what should ABC have done when approached by Palfrey?

JANE HALL, AMERICAN UNIVERSITY: Well, I think they looked at the May sweeps calendar and said, 'Ethics, May sweeps —I don't know.'

I — you know, I have a lot of respect for Brian Ross, and it remains to be seen.

GABLER: But let's respect now.

HALL: But - but it remains to be seen how significant a story this is. If there are high-level officials who were being blackmailed or had security clearances - you know, there may be something there. I mean, the hypocrisy, I think, is what makes this titillating.

(CROSSTALK)

HALL: I mean, the idea of a government official — the one who has resigned...

BURNS: Are — wait a minute. Are you saying, Jane — and I'm going to ask Cal, just sort of to get Cal in on this.

CAL THOMAS, SYNDICATED COLUMNIST: Thank you.

BURNS: Is she saying that this is a story to the extent that the people in availing themselves of the services are high-level officials? And if they're lower-level officials, it's not as big a story?

THOMAS: Well, there are several elements to this, first of all, Palfrey was trying to create a preemptive strike in the media...

GABLER: Yes.

THOMAS: ...to protect herself in court. She was hoping that some of these clients would come forward and testify, 'There as no sex.'

BURNS: Testify that — yes. Right.

THOMAS: Yes.

But the problem was, is some of the women were interviewed and said, 'Oh yeah, there was.' So that kind of did away with that.

I heard Brian Ross interviewed on the ABC radio station in Washington extensively on Thursday about the standards he was using to reveal these names. He had two of them, he said.

One, they had to be a high-level official, presuming that that would put them in danger of blackmail. Or the other, they have to be a hypocrite, like this guy Tobias, who resigned, and one of his responsibilities was promoting abstinence.

BURNS: Yes.

THOMAS: But that's an awful lot of power to put in the hand of a journalist.

GABLER: Yes.

THOMAS: ...who can ruin families, ruin lives and break up marriages. I don't know.

JIM PINKERTON, NEWSDAY: Yes.

As Adam Schrek in the L.A. Times wrote, that Washington is now divided between the people who are in fear of getting revealed by this thing, and everybody else who can't wait to find out the names.

HALL: I do think that's funny. The Washington madam — the D.C. madam's a lot more compelling than Heidi Fleiss or the Mayflower madam because it is about hypocrisy. Ultimately, I think I that's what's so amusing...

THOMAS: And sex and power, sex and power!

PINKERTON: In New York or L.A., you can just be nakedly ambitious, and ferocious and nobody really cares, because that's what everybody is.

BURNS: But still..

PINKERTON: But in D.C., there's an element of hypocrisy because the people in Washington get their power, ultimately, from the folks back home, who are voters, who have traditional voters. And so in D.C., you can be just as grasping as in New York or L.A. But you have to pretend that you're not, and this D.C. madam may well have exposed that hypocrisy.

GABLER: You know, I said there was a legal process and it will — and it will work its way out, and we'll get revelations from it, presumably. But there's also a court order against this woman to pursue her clients. So ABC is enabling her to violate a court order. What they're doing is essentially illegal!

BURNS: It's time for another break.

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