This is a rush transcript from "America's Election HQ," April 7, 2008. This copy may not be in its final form and may be updated.

BILL HEMMER, CO-HOST: First on FOX tonight: There were some campaign drama for Hillary Clinton. Her top strategist abruptly resigning over the weekend after a lobbying scandal, as a new story-telling scandal emerges, just as the Bosnia sniper flap starts to die down.

Former Hillary White House counsel and current Hillary Clinton supporter, Lanny Davis is here tonight.

Hey, Lanny, how are you?

LANNY DAVIS, FMR. CLINTON WHITE HOUSE COUNSEL: Hi. How are you, Bill?

HEMMER: Thanks for coming on. I'm doing fine. Thanks for coming on in our program.

DAVIS: Thanks for having me.

HEMMER: Mark Penn is out. What does that do to a campaign two weeks before a critical vote in Pennsylvania?

DAVIS: Well, I think that Hillary Clinton has her message and has her strategy. And with all due respect, Mark Penn is a very intelligent man. I think Hillary Clinton has her voice, as she said in New Hampshire. And voters in Pennsylvania are going to vote for Hillary Clinton and Barack Obama based upon their view of their qualifications and their abilities to be president, not on whether they have a particular person running their campaign.

HEMMER: So, you're saying this has no effect on her?

DAVIS: I don' I don't think so, among other than with all due respect to media and people like you and me, I don't think there is a single Pennsylvania voter affected by whether Mark Penn is running the campaign strategy or not.

HEMMER: But it's not just the voters in Pennsylvania. It's about distributing that message and standing on course and not giving in to what appears to be a clear division within her campaign, Lanny.

DAVIS: Well, I'm not even sure what that refers to, because Senator Clinton has done all the things that I see people claiming there was division about. She clearly is the most experienced of the two. There's just no doubt that voters see her in every major poll as the more experienced qualified candidate, ready to be president, as compared to someone who spent two years in the state Senate and two years in the U.S. Senate. That's one of the themes that she's run on.

HEMMER: Maybe, we should approach it from a different angle here. What I'm reading on the inside is that there is Mark Penn camp and there is the other camp who wanted him out. Just in a word or two here, is it a good thing he's gone?

DAVIS: Well, there are always debates in campaigns. I'm not a part of this one, so I can be an observer here, Bill. I think Hillary Clinton isn't a debate between two camps. She is who she is. She's a great person, a great U.S. senator. She's a great leader, and she understands economic issues and has spoken to them much better than Barack Obama.

So, the camps within the campaigns don't really affect voters. All I'm trying to say is, of course there are camps, of course there are debates within both campaigns.

HEMMER: OK. I agree with you out on that.

DAVIS: I think, Hillary Clinton has been clear in her message on experience and on talking about economic issues. That's why in the big states, in the swing states, she is handily defeated Barack Obama in every one of those major states as she will in Pennsylvania, is my prediction.

HEMMER: That's your prediction tonight, by how much?

DAVIS: You know, I heard somebody trying to raise the bar to say it has to be double digits or triple digits or single digits. She's going to win in Pennsylvania I don't know by how much, but she will win, and I think she will win in most of the rest of the primaries, and I think she will be ahead of Barack Obama in the most important place of all.

And here's my prediction: she will be running ahead of John McCain by a greater margin than Barack Obama because he hasn't shown the ability to run strongly in the Democratic base and in the swing states that Democrats must win to win the presidency. And that's why I think she will be our nominee.

HEMMER: Well, Lanny, Lanny - OK, you've got Pennsylvania on 22nd. You've got the 6th of May for North Carolina. I'm looking at polling averages is she shows a six-point lead in Pennsylvania, which has dropped considerably from two weeks ago. But in North Carolina, there is an average poll out there, 17 to 20 points that gives Barack Obama a lead in North Carolina. How can you say that she's going to win that state?

DAVIS: I don't think she will necessarily win in North Carolina, and of course, the margins always drop when you're being outspent four to one, five to one on television, and in every state we've been in. She was outspent two to one in Ohio, and the narrow gap went down to single digits, she won by 14 points. In California, Bill, do you remember what the Zogby Poll was the night before California?

HEMMER: I know you're going to tell me.

DAVIS: Barack Obama plus 14 and she won by 10.

HEMMER: Lanny, let's move to a different topic here. You had this "sniper-gate" a few weeks ago about Bosnia, and then, you had this hospital story on the campaign trail. I know you got in our network a little earlier this morning. What is the truth about why that story was pulled back, because the hospital went public and said the facts aren't there?

DAVIS: First of all, the story was not pulled back. The hospital did not contradict what the deputy sheriff said, and all we ask is facts to be put out to your viewers. The fact is the deputy sheriff who told Senator Clinton that story, verified the story.

This young woman did die after being declined service at the hospital, according to the deputy sheriff. Nobody has contradicted the deputy sheriff that the hospital, which was not identified, mysteriously contradicts something that nobody ever said and hasn't verified its own version, and suddenly there is a scandal. The deputy sheriff has verified the story.

HEMMER: I think to be fair to our viewers, the hospital is what went forward because this woman lost her baby, and then she lost her own life after she went to, I believe, three different counties, eventually airlifted to a hospital in Columbus, Ohio. The hospital was called O'Bleness Memorial Hospital back in Athens, Ohio, about 75 miles of the southeast. When the hospital heard about it, they went public. That's how we knew about it, not through the sheriff's deputy.

DAVIS: Right. But all I'm saying, Bill, is that any good reporting and you're a great reporter, you would say here is what the hospital says. Here's what the deputy sheriff now re-verifies that this tragic young woman told him, and he verifies he told that to Senator Clinton. You'd want to report both of those facts.

When I was interviewed this morning on this network, nobody heard about the deputy sheriff re-verifying that he told Senator Clinton that story, because that's what the woman told him. All we heard about was the hospital's claim, which I haven't seen any verification.

HEMMER: But I can say she's dropped the story from her speech. And you just said she will continue then (ph). That's not true.

DAVIS: You mean, ever since this morning? Or I don't know how many times Barack Obama does anecdotes. Here, he had an anecdote that he was a professor of law and that turned out not to be true. Sometimes, anecdotes that people tell you turn out not to be true.

I remember Ronald Reagan, remember the welfare queen turned out not to exist. But anecdotes that are told to you on a campaign trail by a deputy sheriff who then verifies that only that he told that to Senator
Clinton but that that's what the woman told to him and she did die and the essence of the story is true. She was denied care when she first showed up according to the deputy's story.

HEMMER: But we still have the candidate dropping the speech as of Sunday afternoon. I'm way out of time. We got a lot more to get to you, Lanny.

DAVIS: All right. Thanks for all the time, Bill.

HEMMER: Let's continue this, OK?

DAVIS: Thank you for all the time and thanks for having me, Bill..

Content and Programing Copyright 2008 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2008 Voxant, Inc. (www.voxant.com), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon FOX News Network, LLC'S and Voxant, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.