The following is a rush transcript of the October 18, 2009, edition of "FOX News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.
CHRIS WALLACE, HOST: This week the Obama White House turned up the heat on Fox News. Communications Director Anita Dunn called us, quote, "opinion journalism masquerading as news."
We wanted to ask Dunn about her criticism, but as they've done every week since August, the White House refused to make any administration officials available to "FOX News Sunday" to talk about this or anything else.
So what about their strategy? Joining us are two men who have worked at the highest level of politics. Terry McAuliffe is former chair of the Democratic Party and one of Bill Clinton's closest friends. Karl Rove was a senior adviser to former president George W. Bush.
Gentlemen, welcome back to "FOX News Sunday."
Let me start by playing a clip from my interview in the Oval Office with President Obama in February and then some of Anita Dunn's remarks last Sunday. Let's watch.
(BEGIN VIDEO CLIP)
PRESIDENT BARACK OBAMA: I don't always get my most favorable coverage on Fox, but I think that's part of how democracy is supposed to work. You know, we're not supposed to all be in lockstep here, and you've always been very gracious to me, and...
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
ANITA DUNN, WHITE HOUSE COMMUNICATIONS DIRECTOR: The reality of it is that Fox News often operates almost as either the research arm or the communications arm of the Republican Party.
(END VIDEO CLIP)
WALLACE: Karl, you're not in the meetings in this White House but, best guess, why the dramatic change in strategy?
KARL ROVE, FORMER SENIOR ADVISER TO FORMER PRESIDENT GEORGE W. BUSH: Look, I think this White House is dominated by Chicago- style politics, so if you don't like the questions that are being asked by Major Garrett or Wendell Goler or Chris Wallace, then you try and demonize Fox News.
If you don't like what the Chamber of Commerce is doing in opposing health care reform, you go out and you start telling CEOs to pull out of the chamber.
If you don't like — you know, if you don't like a Democrat, a wayward Democrat, voting against the stimulus bill, then you have the president of the United States in a House Democratic Caucus meeting say to him in public, "Don't think we aren't keeping score, buddy."
So this is — this is — this is demeaning to the White House and unnecessary.
WALLACE: Terry, why do you think — I mean, those two clips are pretty dramatic. Why do you think that Fox News was, quote, "part of how democracy is supposed to work" a few months ago, and now we're the opposition?
TERRY MCAULIFFE, FORMER CHAIR OF THE DEMOCRATIC PARTY: Oh, I think clearly President Obama has said he would — he's been on the show. He'll come back on Fox. He said that. Anita said that later in the interview.
But there are some issues. I mean, listen, we're talking about a huge issue, health care reform. And I think people were annoyed that Fox was the only broadcast station that did not broadcast his speech in front of the United States Congress.
You had some crazy show on about how to learn to dance. I think that was very problematic. I thought that was a very crazy decision, whoever made that decision. It's a very important issue.
If you look at the chyrons on Fox News, they're the talking points of the Republican National Committee.
You have Glenn Beck, who is one of your big opinion leaders on Fox — went on the morning show, a news show, and actually called President Obama a racist. There is no place for that.
So President Obama's going to talk to all the networks. He's going to go out there. He loves competition. He loves being engaged in the battle. But he's got to deal first with those folks who are going to give him a fair hearing on health care.
ROVE: Well, look, Fox News carried the president's speech to Congress. It was Fox the entertainment channel. So Anita Dunn was not attacking Fox the entertainment channel. They were attacking Fox News.
And look, there are lots of objectionable things said on MSNBC, and NBC, and cable channels, and CNN for every president, for him or against it. And that ought not be the standard by which a White House determines whether or not it's going to demonize a news channel as an enemy.
And they called it an enemy, a White House enemy. That is over- the- top language. We heard that before from Richard Nixon. And we have this White House prone to that kind of — kind of attitude. And it's not helpful. It's demeaning to the president.
If — the president of the United States should not be picking out enemies in the media like that, and personalizing it, and allowing his people to personalize it as well.
MCAULIFFE: What is offensive is one of your top folks on Fox calling the president of the United States a racist on a news show. Nobody came out and said anything against it. It wasn't on the broadcast Fox, the health care speech.
You've got to be kidding me. Here you put on a show about teaching people how to dance. The president of the United States is...
ROVE: Well, look, that was a...
MCAULIFFE: Wait a minute. Let me...
ROVE: That was not on Fox News.
MCAULIFFE: Karl, let me finish. It was not...
ROVE: Anita Dunn is attacking Fox News.
MCAULIFFE: ... on the main — let me just finish...
WALLACE: Wait, wait, wait, wait.
MCAULIFFE: ... on the main broadcast channel.
WALLACE: Wait, wait. Let...
MCAULIFFE: It wasn't on...
WALLACE: I never thought I'd say this, but let Terry speak.
MCAULIFFE: And then — and then the president went around and did all the different networks and cable shows. He didn't do Fox News because they should have had a dance person on. He went to Univision, which has a huge audience out there.
The bottom line is if you watch Fox, they have an — opinions on it. That's — President Obama gets that. We understand that. He's going to come on Fox. I think people are probably overstating this. But there are instances where Fox has gone over the top and that's what I find very offensive.
WALLACE: You know, Terry, you did not always have such a negative opinion of Fox News. In fact, last year, during...
WALLACE: ... the campaign, you were complaining about all the other broadcast networks in the tank to Fox...
WALLACE: ... or to Obama, rather, over your candidate, Hillary Clinton. And I want to play a clip...
MCAULIFFE: Sure, let's do it.
WALLACE: ... of what you said on the night of the Pennsylvania primary.
WALLACE: Here it is.
(BEGIN VIDEO CLIP)
MCAULIFFE: And let me congratulate Fox, because you were the first ones to call it for Hillary Clinton. Fair and balanced Fox, you beat them all.
(END VIDEO CLIP)
WALLACE: So, question.
WALLACE: Is the definition of a fair and balanced news organization one whose stories you like?
MCAULIFFE: Well, fair — sure enough, she was — they were supporting my candidate that night. You bet. Whoever is helping me at the time, I love them. But as you know, I have had many statements about Fox. You go on. I said it's a tool of Rupert Murdoch and Roger Ailes. That's fine.
I — you know, listen. I believe that Fox News is an appendage of the Republican Party. That's fine. I love...
WALLACE: But then why were we fair and balanced in the Pennsylvania primary?
MCAULIFFE: Because you called it for Hillary first.
MCAULIFFE: Good work for you.
WALLACE: No, no, that wasn't the point. And you said it over and over again, that you thought we were giving a fairer shake to Hillary Clinton in our campaign coverage than any of the other networks were.
MCAULIFFE: I always say fair and balanced — no offense — I always have a little tongue in cheek and a little smile on my face. I have many statements about Fox. But we shouldn't debate Fox. I love coming out, because there are people who watch this who are independents.
But there's no question — you watch the show, it's part of the Republican National Committee. I've said it for years. That's fair. I enjoy coming on, getting my point out. I ought to — believe we ought to be in the battle. I grew up as a boxer. I love a good fight. I love coming on with you and Karl. This is exciting.
ROVE: Look, MSNBC has over-the-top left-wing hosts, but you should not then denigrate NBC for having — for having liberal opinion programs for their — there is a difference between opinion and news, and Fox does a good side on the news side.
And it's being — and again, I love it. Fox News is being attacked for supposedly not — for Fox broadcast not running the speech. I mean, why don't they — why don't they say we're attacking Fox broadcast rather than Fox News? Let's not kid ourselves.
This is a White House engaging in its own version of the media enemies list. And it's unhelpful for the country and undignified for the president of the United States to so do.
MCAULIFFE: Fox broadcast should have shown it. So if you want me to use the word broadcast, I'm happy to do it.
WALLACE: OK. I — let's talk about Anita Dunn, the communications director...
WALLACE: ... who's leading this fight. She criticized "FOX News Sunday" last week...
WALLACE: ... for fact-checking — fact-checking...
WALLACE: ... an administration official. They didn't say that our fact-checking was wrong. They just said that we had dared to fact-check.
WALLACE: Let's fact-check Anita Dunn, because last Sunday she said that Fox ignores Republican scandals, and she specifically mentioned the scandal involving Nevada senator John Ensign.
I want to show you what she said, and then a question that I asked a top Republican official in July. Here it is.
(BEGIN VIDEO CLIP)
ANITA DUNN: Did you see coverage of that on Fox News? I'm not talking Glenn Beck. I'm not talking Sean, not talking "The Factor". I'm talking about Fox News.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
WALLACE: When you've got Republican leaders like Governor Mark Sanford of South Carolina or Nevada senator John Ensign admitting to extramarital affairs and staying in office, questionable use of either private funds, or state money in the case of Sanford, doesn't the GOP, with all its talk of family values, risk looking like a bunch of hypocrites?
(END VIDEO CLIP)
WALLACE: Terry, a number of Fox shows have run — Fox News shows have run stories about Senator Ensign.
WALLACE: Anita Dunn's facts were just plain wrong.
MCAULIFFE: Well, I can't speak to Senator Ensign. I think the broader point, Chris — and I know I talked to the White House before I came on the show to find out what had happened with this. They spoke to you, I guess, and asked how many times have you had an administration official on — Secretary Duckworth was on.
A week later you went back on and fact-checked her on the air. Apparently, that has never happened before with an administration official, Democrat or Republican. So I think it was the issue, Chris, in fairness — have you done it before?
WALLACE: If you want to go into that, and I suspect you don't know the...
MCAULIFFE: OK, let's do it.
WALLACE: ... you don't know the details of it, but the fact of the matter is that I had never had an administration official of any administration come on and so directly misrepresent the facts as Secretary Duckworth did.
She said the law prevented her from taking off the "Your Life, Your Choices" counseling book to the V.A. There was no such law, and nobody at the White House had ever said there was.
MCAULIFFE: Well, we should fact-check everyone who's been on, then, and see what's right.
ROVE: Look, two points — two points. Anita Dunn is making these charges because she's leaving at the end of the year. This gives them a chance to send somebody out there to throw the grenades, turn on the flame thrower and then be gone at the end of the year.
The second thing is — look, again, it gets back to attitude. The White House attacked the insurance industry this week for issuing a report — having the temerity to issue a report critical of health care reform and said we were blind-sided.
I mean, this is an administration that's getting very arrogant and slippery in its dealings with people. And if you dare to oppose them, they're going to come hard at you and they're going to cut your legs off. And that's exactly — Fox is not being — you know, Fox is asking tough questions.
Fox has got on the opinion side of it some very tough critics of the administration. They're conflating the news side and the opinion side in order to — in order to attack a media outlet. Again, it's undignified for the president of the United States to be doing.
MCAULIFFE: But that report, in fairness, that Karl talks about — the accounting firm has already come out — let's be fair...
WALLACE: All right. I'm not...
MCAULIFFE: ... and said that it was misleading.
WALLACE: ... I'm not going to talk about the health care...
MCAULIFFE: OK. It was misleading.
MCAULIFFE: They were paid to do a tiny piece of it. Don't mislead the American public on health care. It's too big of an issue.
ROVE: Yes, but don't...
WALLACE: Please, let's not get into the health care report.
MCAULIFFE: All right.
WALLACE: They can have their own show.
MCAULIFFE: All right, fair enough.
WALLACE: But let's talk about presidents. Presidents — Terry, you were very close and are very close to Bill Clinton. He had plenty of problems with the press, especially during the Lewinsky scandal.
ABC news was hitting him hard on the Lewinsky scandal and apparently, reportedly, getting leaks from the special prosecutor's office, Ken Starr's office.
WALLACE: Did he ever consider going after and cutting off ABC News?
MCAULIFFE: I don't think so. But you know, when...
WALLACE: I mean, do you think this is a good strategy, to individually attack, call out and attack, an individual news organization and, frankly, to cut off doing any business with them?
MCAULIFFE: Well, they're not doing any business — they know I'm on here today, and...
WALLACE: Well, with all due respect, you're not an administration official.
MCAULIFFE: It's hard for anyone to prove what I do. I just do what I — but I spoke with the White House before I came on this morning. It was a different time back then. Honestly, with the 24/7, the — with all the new media and all that, it's a different world than it is today, Chris.
But the bottom line is Anita Dunn has said — she said on that interview that President Obama is — you know, he loves to engage in a good debate on the issues. He just wants a fair debate. But he's going to come on Fox. He'll be on your show.
WALLACE: You know, we're...
MCAULIFFE: He went on "The Factor" with Bill O'Reilly.
WALLACE: ... not pleading with the president to come on Fox.
WALLACE: But for instance, there's going to be a decision made on Afghanistan and sending more troops. And there are a lot of people — and you have to remember, 61 percent of our audience, according to the studies, is middle of the road and liberal, self-described.
A lot of people would like to hear from an administration official when they decide to send thousands of more troops in harm's way.
WALLACE: I'd like to ask some questions.
WALLACE: As of now, they're not going to — they're going to cut us off and not give us...
MCAULIFFE: Well, I think that will change...
WALLACE: ... anybody to ask questions of.
MCAULIFFE: A good debate, having everybody on — that's why — listen, I don't agree with much that Fox does, but I love to come on. At least you give me the opportunity to talk, and I think it's important to present our side.
ROVE: Yeah, look. Look. Last — between March and June of 2008, Hillary Clinton availed herself of Fox, and that's the time when she began winning the primaries. And between March when she came on and June at the end of primaries she got more votes and more delegates, as you will recall, Terry, than President Obama did. And why? Because this network is watched by a wide variety of open-minded independents and Democrats who want to hear the news.
And the administration — again, this gets back to the administration's making a mistake for itself but, more importantly, it is demeaning the office of the president by taking the president and moving him from a person who ought to be talking to everybody and communicating through every available channel to saying, "If you oppose me, if you question me, if you're too tough on me, by gosh, me and my people are not going to — are not going to come on. We're going to penalize you," and that just is wrong, fundamentally wrong.
WALLACE: Karl, Terry, thank you both. Thanks for coming in.
MCAULIFFE: Thank you. Right. Democrats, big win, Virginia and New Jersey, coming up.
ROVE: No, no, no, no, and I agree with Terry McAuliffe when he said - - McAuliffe says Deeds can't win, and we'll win in New Jersey as well.
MCAULIFFE: I said Deeds can win. Of course he can win.
ROVE: Yeah, because...
MCAULIFFE: And he's going to win.
ROVE: No, no, you said he can't beat McDonnell. Right there. Right there. McAuliffe says Deeds can't beat McDonnell.
MCAULIFFE: Is this a Fox data?
ROVE: No, no, this is from the Richmond Times Dispatch in June. And you said he couldn't win because he's — because Deeds is for higher taxes. And guess what? He's for higher taxes. You're right.
MCAULIFFE: No. Well, this is the — you're going back to the primary.
ROVE: I agree. I agree with you.
MCAULIFFE: OK, you're going back to the primary.
ROVE: I totally agree with you, man.
MCAULIFFE: Well, why don't you have a...
ROVE: Right there.
MCAULIFFE: ... (inaudible) about me (inaudible)?
ROVE: (inaudible) I just agreed with your opinion.
WALLACE: This is going to get out of hand and you — and you didn't disappoint.
MCAULIFFE: I got 250 people at my house today with (inaudible) campaign manager. We are kicking off — Bill Clinton's coming Tuesday.
ROVE: No, no, no.
MCAULIFFE: Barack Obama's coming in.
ROVE: Moment of candor.
WALLACE: All right. All right. Thank you.
Content and Programming Copyright 2009 FOX News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2009 CQ Transcriptions, LLC, 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 CQ Transcriptions, LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.