This is a rush transcript from "On the Record," June 8, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Now, 12 years in a North Korean labor camp. That is the stunning sentence delivered to two American women journalists. The women were arrested March 17th by the North Koreans along the border of China. North Korea says the women's five-day trial, quote, "confirmed the grave crime they committed against the Korean nation in their illegal border crossing."

Now, make no mistake about it, North Korean forced labor camps are hell. These are not ordinary prisons. They're not like American prisons, either. One of the few men who has survived one of these camps wrote this about his imprisonment. In the book, "The Aquariums of Pyongyang," the author describes eating rats and bugs to survive, writing in part, "By the time a group of prisoners finished working a field, no animal was left alive. Even earthworms were fair game." The author even describes a friend of his who intentionally bred rats in his hut so he'd always have something to eat.

And tonight, the American women's families are pleading for their release. In a statement, the families say they are shocked and devastated by the sentence. Can these women be saved from imprisonment?

Former U.S. ambassador to the United Nations John Bolton joins us. Nice to see you, Ambassador.

JOHN BOLTON, FORMER U.S. AMBASSADOR TO THE UNITED NATIONS: Glad to be here.

VAN SUSTEREN: What a lousy situation these two women find themselves in. So now what?

BOLTON: Well, let's be clear. This is an act of state terrorism by North Korea. Secretary Clinton said the other day they were looking as to whether they could re-list North Korea. These two women have been kidnapped. Maybe they were in North Korea. You could resolve that by a wrist slap and let them go. Twelve years of hard labor is an entirely disproportionate sentence. You know, the Japanese have been upset for some number of years that the North Koreans kidnapped their citizens and wouldn't give them an accounting. Now, as Americans, we know what it's like to have our citizens kidnapped. This is an act of terrorism, and the administration should respond accordingly.

VAN SUSTEREN: One of the discussions is putting them back on the terrorist list. So what? I mean, when they were on the terrorist list, they were still having a lousy relationship with us. They were still developing nuclear weapons. But what does it mean to be back on the list, as a practical matter?

BOLTON: Well, as a practical matter, it delegitimizes North Korea again. It was a tragic, a terrible mistake for the Bush administration to take them off that list, and it was the precursor to opening up more economic assistance, more direct economic contact with the United States. This is classic North Korean behavior, getting concession out of concession from the United States and others. So putting them back on the terrorism list is a step in the right direction. It's certainly only one step, though.

VAN SUSTEREN: But what does it do? I mean, we're not going to be dealing goods and services with them anyway, so what if they're on the list? That means other countries are not supposed to deal with them, but they're -- but that's done sort of under the table?

BOLTON: Well, I think taking them off the list gave them a kind of political legitimacy by saying they're no longer a terrorist state. I think there are other things we need to do, like squeezing them economically and by going to China, and more importantly, having China's squeeze them economically. But as political symbolism, I think it's quite important to say, We do not regard North Korea as a legitimate government.

VAN SUSTEREN: All right, these two women either crossed the border or got nabbed while they were in China by North Koreans and accused and convicted of crossing the border. If someone crosses our border by error or by intention, what do we do?

BOLTON: Well, it's a wrist slap, basically, unless we have some reason to think that they're here for truly illicit purposes. I think these women were -- even if they were in North Korea, were certainly not American espionage agents. If that's the best our intelligence community can do, we're in serious trouble. I think they were after a story. Who knows what else. They don't deserve 12 years in prison. They deserve to be expelled, but not this.

VAN SUSTEREN: So -- so what has happened? I mean, you've got April 5th, the -- you've got the test firing of the Taepodong-2, the long-range missile. You've got the nuclear testing in May. You've got other missile launches that they've had, rocket launches. And now they've got two Americans who are having a horrible -- I mean, the 12 years in these forced labor camps is the worst. Why is this going on?

BOLTON: Well, I think these two women are convenient bargaining chips that the North Koreans picked up, and they will deal them for some concession. Secretary Clinton has said that you have to keep the two reporters separate from the nuclear issue. That's a signal of genuine American weakness. The North Koreans think they're related, and will find something to trade for, you can bet on it, in the next 30 to 60 days.

VAN SUSTEREN: All right, they've had Americans before and we've dealt with them on it?

BOLTON: We have in -- during the Clinton administration. This is all part of the North Koreans being rewarded for unacceptable behavior. Now they're facing the prospect of increased American sanctions. These women will be traded to reduce those sanctions.

VAN SUSTEREN: When is that going to happen?

BOLTON: I think it's going to happen over the course of the next several months. We're going to see possibly some action finally in the Security Council in New York on a modest increase in the sanctions regime, and I think the North Koreans will find ways to bargain to get advantage politically and economically, while keeping their nuclear weapons program. They've been at this for 20 years. They play this administration like a violin.

VAN SUSTEREN: Well, it must infuriate Japan because Japan's got two problems. One is the kidnapped Japanese that you talked about, and the other is their -- you know, their enormous and real fear about nuclear weapons. They are within reach, without any doubt. Now, they haven't been able to put a nuclear warhead on a missile, but that's next.

BOLTON: That's coming. Well, this is one reason why the de-listing of North Korea as a state sponsor of terrorism was such a mistake. Here's Japan, one of our closest, strongest allies in the world, outraged at their citizens being kidnapped, as we should be outraged about what's happened to these two women, and the Bush administration just blows them off when they say, How can you take North Korea off the list of state sponsors of terrorism? So certainly, another benefit of putting the North back on is to say to the Japan, We've got our feet on the ground again here.

VAN SUSTEREN: Why did we take them off?

BOLTON: The Bush administration, Secretary Rice, President Bush felt that if they took North Korea off the list, North Korea would make further changes in its nuclear weapons program. It was fundamentally wrong. It was a mistake when it was done. This just proves it was a mistake.

VAN SUSTEREN: In the last 50 years-plus -- actually, 60 years' history -- has North Korea ever entered into a deal with us and kept its word?

BOLTON: Not once. And this goes back, a long history back to the armistice negotiations in 1953. Over and over again, they make the same concession. They get new assets from the United States and others. It's remarkable that successive secretaries of state have not seen through this, but one after the other, they fall into the North Korean negotiating trap.

VAN SUSTEREN: Why does it always seem like they have their foot on our throat and we don't have our foot on their throat?

BOLTON: Well, that's -- that's -- that's the $64 question. That's exactly why the only way to deal with North Korea's nuclear program is through pressure, and ultimately, bringing that regime down and reuniting the Korean peninsula. Anything less than that an objective is doomed to failure. So the Obama people say, Well, we'll put more sanctions on in order to get North Korea back to the six-party talks. That's like saying if only we could get them on a merry-go-round, we could solve the nuclear program. It's not going to work.

VAN SUSTEREN: It seems to me -- and I -- not that I pretend to have any great wisdom, but the only way is if China would finally get tough with them. I mean, why won't China? What's their disincentive? Because they're still wheeling and dealing with them. They're...

BOLTON: China's policy is schizophrenic. They say, and I think correctly, they don't want a nuclear North Korea because of the instability it creates in Northeast Asia, maybe Japan going nuclear itself. But they're not willing to apply the requisite pressure to North Korea because they like a divided Korean peninsula. As long as they pursue a policy of not pressuring North Korea, they're going to perpetuate North Korea as a nuclear weapons state. Somebody needs to break through to them on that point.

VAN SUSTEREN: But if -- but if Japan now decides to develop nuclear weapons, now China does have that nuclear race in Northeast Asia. Then it becomes a problem for -- why not head it off at the pass and...

BOLTON: Exactly. Exactly right.

VAN SUSTEREN: Anyway, Ambassador, thank you.



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