This is a rush transcript from "On the Record," March 10, 2010. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Tonight, Karl Rove unedited and "On the Record."

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Karl, nice to see you.

KARL ROVE, FORMER BUSH SR. ADVISER, FOX NEWS CONTRIBUTOR: Greta, how are you doing?

VAN SUSTEREN: I'm very well. Your new book, "Courage and Consequence" -- how different it looks from the inside than from the outside, doesn't it, on these jobs in politics.

ROVE: It does. That's one of the reasons I wrote the book. I wanted to draw back the curtain and give people a view of what actually went on in the Oval Office from a advantage point about 15 steps away.

VAN SUSTEREN: You know what? There are a couple, obviously, particular issues I want to draw upon, but the thing that struck me in reading it is that there's almost one event that had it gone differently, it would have had a -- be a completely different narrative. And that's the story involving Richard Armitage and the fact that he was the leak on Valerie Plame and everybody thought you were the bad guy. You were the one who was investigated by the grand jury. It would have been a completely different story.

ROVE: Yes. When they thought that I'd leaked the name of Valerie Plame to Bob Novak, I had, you know, lots of people camped out in front of my house, members of the press, and then protesters. And when, you know, three years later, it turned out that it was Richard Armitage, he literally got an exculpatory editorial from The Washington Post that said, you know, Now that we know it was him, there's no real problem. I mean, people were calling for my head when they thought it was me. But when it turned out to be him, it was, like, Who cares?

VAN SUSTEREN: Well, let's go back -- let's go over the facts of this because this -- I mean, in your book, you go through this. And it was a deeply painful experience, as I read it in the book...

ROVE: Right.

VAN SUSTEREN: ... created all sorts of financial problems, everything. But take us back. July '03, Bob Novak writes this editorial and they think that -- that -- outing a CIA official, right?

ROVE: Yes. Well, let's go back. July 6th, Joe Wilson writes an op- ed, and on Monday, July 7th, Bob Novak, a fact that we don't know for years, turns out to have had a meeting with Richard Armitage. And in meeting -- in the course of their meetings, Novak says to him, you know, What do you know about this guy? And Armitage says, His wife sent him to Niger. And they both agreed, apparently, what little they thought of him.

And Armitage gives him his -- gives him Wilson's name and Valerie Plame's name, knowing full well that he's going to print it. He says, That's real Evans and Novak expletive, isn't it? And then Novak calls me ostensibly to talk about Fran Townsend. But by the time I return his phone call, he's already put his column to bed about Fran Townsend sometime Tuesday. And during the course of a conversation, we get to talking about Wilson, about his op-ed, about how obnoxious Novak thought he was, which I agreed with, having seen Wilson on television several times by then.

And then he says to me, You know, his -- Valerie Plame works at the CIA and she played a role in sending him to Niger. At first, I couldn't figure out what he was talking about, and then I realized, after he talked a little bit more, that he was talking about Wilson's wife.

And I said to him at that point, I heard that, too, which I had heard inside the White House someplace or by a -- or from a reporter or someplace I had heard that Wilson had gone to Niger after a recommendation from his wife.

But you know, right from the get-go -- I met with the -- I -- I -- when this started to break, I told the White House counsel. I told the chief of staff. I was called by the president and asked to explain my role. And I met with the FBI and it was clear right from the get-go -- I mean, they basically said, the first time I met with them, We don't think we'll need to talk to him again.

After the second time they talked to me, it was a minor issue, and they wanted me to identify if I had seen a particular memo. For two years, I was told, Look, we're just -- we're a witness. They dragged me before the grand jury four times, but it was ostensibly to collect information. It was only after two years that they said, you know, You're getting a target warning. And then shortly after that, my attorney was told, We might indict Rove.

And in the book, I talk about, when they finally had this climactic meeting in Chicago, what it was that the special prosecutor was interested in and how unconnected it was with anything that had to do with Valerie Plame. And yet -- you know, it -- when they finally asked the question, my attorney gave them a simple answer, and the special prosecutor's response was to say, You've rocked my world and took them six...

VAN SUSTEREN: And what was it that they -- what were they interested in, in the meeting?

ROVE: What they were interested in was -- they said, Look, we're inclined to believe Rove, except for one thing. If he can't recall a conversation with Matt Cooper, a reporter for Time magazine, why it is that he asked his staff to go find any evidence that he had had a conversation with Matt Cooper? If he didn't recall it, why is he asking his staff to check through the files to find any evidence of a phone call or a communication or phone message with Matt Cooper? They thought, If he didn't recall it and he's asking staff to find any evidence, maybe he's going to destroy that evidence.

And what my lawyer, Bob Luskin of Patton Boggs, said to them was, Look, the reason he asked his staff to do that was me, his lawyer, because I had drinks with a Time writer who said her colleague, Matt Cooper, was insisting that he'd had a telephone conversation with Matt Cooper with Karl Rove and that as a result, my lawyer had called me and said, Get your staff to see if there was any evidence that you had a contact with Matt Cooper because he thinks he talked to you.

And that's what Peter -- Patrick Fitzgerald, on the eve of indicting me, five days before he was planning to indict me, said, You've rocked my world. And at that point, all he had to do, and he did eventually take the deposition of my lawyer, the deposition of the Time colleague of Matt Cooper, and then in August of 2006, after sort of stringing me on for five or six months, brought me before a grand jury for a fifth time, asked me that question, Why did you do this? I explained. He asked the grand jury, Do you have any other questions? And that was the end of the story.

VAN SUSTEREN: From the outside, Karl, we were on indictment watch of Karl Rove for months and months and months...

ROVE: Right.

VAN SUSTEREN: ... because we all thought that, you know -- you know, that sooner or later, your head was going to be...

ROVE: Right.

VAN SUSTEREN: ... you know, delivered to the media.

ROVE: Yes. Well, the...

VAN SUSTEREN: And -- and -- you know, and in reading the book, you know, you can see the pain on the inside.

ROVE: Yes. Well, the irony is, is that the media got really ramped up at exactly the moment when I was out of it. I went for the fifth visit to the grand jury in April of 2006, and this is where, in essence, they say, All right, here's the question we haven't asked you for previous meetings, and why don't you give us your answer, and then that's it. And at that point, when I'm -- - when I -- when it's clear I have no liability and I'm going to be shortly let out of the process altogether, that's when the press really ramped it up.

We had talking heads on MSNBC and other networks talking about how Rove is shortly going to be indicted. There was a very nutty posting by a blogger who turned out later to have been a journalist who had been indicted for -- indicted on -- you know, had drug and alcohol problems and had been indicted for some kind of financial fraud. And he wrote that there had been a marathon session at my lawyer's law office on a Friday, where I had been told that I would be indicted, you know, the next week and that I had to go get my affairs in order.

Well, my attorney wasn't even at work that day because he was taking his cat, Charlotte (ph), to the veterinarian for her annual check-up, and so we got tons of phone calls from people in the media saying, Well, what about this report that you have had a day-long meeting with the prosecutor at Patton Boggs to plan your -- you know, your surrender to the authorities? And all my lawyer could say was that he had gone to the veterinarian and her -- she was found by the doctor to be parasite-free, unlike the -- the -- you know, this claim that I was about ready to be indicted.

I mean, literally, one reporter called his -- dug out his veterinarian and tried to confirm that Bob had been there that day with his cat. And it turns out there is veterinarian-cat patient confidentiality, and the doctor -- the veterinarian could neither confirm nor deny that Bob Luskin's cat, Charlotte, had been in that day for a check-up.

VAN SUSTEREN: You know, when you read this -- and of course, in a prior administration, in the Clinton administration, as well, is that, you know, people get these huge legal bills. And we see things from the outside and all this sort of suspicion. Meanwhile, on the inside, I mean, this has put financial pressure on you. I imagine this was tough on your family.

ROVE: Yes, it was...

VAN SUSTEREN: Right?

ROVE: ... awfully tough on my family. In fact, in the summer of 2005 -- I mean, we had protesters. I would get death threats. I mean, people would say ugly things to my -- you know, when -- my wife -- I think the final -- one of the final straws was when the mother of one of our son's closest friends in high school was heard to be saying that she was really looking forward to the day that Karl Rove was going to be sent to jail. And literally, the summer of 2005, my wife just couldn't take the, you know, film crews sitting outside and wait -- you know, on death watch. And she literally, you know, bundled up our son and headed to our place in the panhandle of Florida and said, I'll come back when school starts. I just can't take it. And I don't blame her.

I had a -- you know, I had the advantage of going to work each day and having something, you know, to focus my energies and efforts on. She had to worry about when was the next time some guy with a bullhorn was going to show up in front of the house and start yelling, Your father is going to jail, at my 12-year-old.

VAN SUSTEREN: You know, the book goes through, you know, the whole -- and I don't have, you know, forever. I'd love to talk to you forever about it, and I know that other people have interviewed you. So I want to cut to some other things, is that what struck me is that it's deeply personal about it. And I'm not suggesting that you're whining, but believe me, you know, the fact that your mother committed suicide on September 11, 1981 -- of course, September 11, you know, is a date that's, you know, branded in all our memories. You know -- you know, you didn't -- you know, this has not exactly been an easy ride for you.

ROVE: Well, you know what? I don't want to -- I'm not a victim and I've had a wonderful life. I had a wonderful childhood. My mother was troubled. And it's terrible -- I mean, it's horrifying that at the age of 51, she felt so hopeless that she committed suicide. And it's uncomfortable for me to write about these things.

The only reason I wrote about them was that journalists have seized upon my parents' separation, my mother's suicide and my father to say things about me that in the process of attacking me have said untrue things about my parents and alleged -- you know, alleged my father was gay and that as a result, my parents separated over that and my mother 12 years later killed herself because of that, which is not borne out by anything that the children knew or borne out by her letters to my father, in which he expresses regret for decisions that she made that made their marriage hard to maintain.

And you know, my father loved her all of his life. And the idea that he was, you know, somehow gay and left her because -- then she committed suicide -- I mean, literally, when he was dying, what he wanted me to promise him that would be done is that he would -- his ashes would be mingled with hers and put -- and distributed at a rock in northern Wisconsin near the lake at which he had grown up at the family cabin. And I mean, you know, the people wanted to say ugly things about me, and if the collateral damage was my parents, that was fine with them. And I just wanted to set the record straight. But it wasn't very comfortable doing it.

VAN SUSTEREN: Well, I imagine -- and as I say, how deeply personal it is -- for instance, this part, you write about -- about your first wife. I mean, I don't think anything's rawer than this, is that she said when your marriage is breaking up, I don't love you. I never loved you. I never will love you, and I don't see any purpose in this. I mean, it didn't get much rawer than that.

ROVE: Yes. And you know, but I look back and I say, you know, thank goodness it happened then, when we were young and we didn't have children and we had all -- you know, had years ahead of our lives to get -- you know, to find happiness and -- rather than it happening later on. But look, I needed to -- my -- my -- my editor popped up and said, You know, you can't show up as a fully formed adult at the age of 42 helping Bush run for governor of Texas. You've got to tell people how you emerged and what you are, and it's -- I wanted to make an honest story, something that's durable, particularly when it comes to the record of how Bush got into office and what he did there. I wanted it to be durable and honest and for people to say, You know what? I learned something from this book, and it's authentic and credible.

(END VIDEOTAPE)

VAN SUSTEREN: In two minutes, more with Karl Rove. If Karl had do- over, what would he change about the Bush administration? The inside story is next.

(COMMERCIAL BREAK)

VAN SUSTEREN: More with Karl Rove. In (ph) his new book, it's deeply personal, "Courage and Consequence."

(BEGIN VIDEOTAPE)

VAN SUSTEREN: In the book, it's clear -- and I -- and I -- you know, there's an awful lot about the campaigns, about serving the eight years, and the readers will see that. But what is it about -- because you admire President Bush 43. What is it about him that made you think that he was someone that you really wanted to work for?

ROVE: Well, I'd known him a long time. And I must admit I'm not the most objective person about him. But I think he's a person of great moral clarity. I think he's a person of deep compassion. I believe he's a principled conservative. And I saw him as a strong leader. And America saw that, too, in the aftermath of 9/11.

I learned while -- during my years in the White House that you don't get to choose what comes your way. Something -- history will throw you something, and how a president reacts to it will measure whether they succeed or fail. And how he handled the war on terror and what came to us on our shores on 9/11 is pretty remarkable.

VAN SUSTEREN: What about a do-over? In terms of your almost eight years in the White House -- well, almost eight years, you left early, shy of the eight years...

ROVE: Yes.

VAN SUSTEREN: But if you -- if you could have a do-over, what would it be?

ROVE: Well, I talk about a number of them in the book because, again, I wanted to be honest and durable. And look, we made a big mistake. In July 15th of 2003, Ted Kennedy makes a speech saying Bush lied about WMD. Later in the day, Tom Daschle holds a news conference in which he says, Bush lied about WMD. On the 16th, John Kerry and John Edwards make speeches, one of them in a committee hearing, one of them outside a committee hearing, to say Bush lied about WMD. And then they were joined by Jane Harman, the ranking Democrat on the House Intelligence Committee, saying Bush misled the country about WMD.

And I wish we had at that moment or shortly thereafter, when it became apparent that this was a concerted effort by Democrats to corrode public confidence in President Bush's leadership, that we had taken it on in a high-profile way because it was a lie. Ted Kennedy himself, despite the fact he opposed the Iraq war, said Saddam Hussein has WMD. Kerry and Edwards and Harman voted for the war resolution, saying he has WMD. In fact, there are 110 Democrats who vote for the authorization to use force resolution, and 67 of them on the floor of the House or Senate say, Saddam Hussein has weapons of mass destruction. If Bush lied, then every one of them lied, as well.

VAN SUSTEREN: All right, but it was his job. I mean, the buck stops with the president.

ROVE: Absolutely.

VAN SUSTEREN: I mean, I'm not saying that he lied. But you know, we did get it -- I mean, he did get it wrong...

ROVE: And look, the intelligence...

(CROSSTALK)

VAN SUSTEREN: ... wrong.

ROVE: Intelligence got it wrong.

VAN SUSTEREN: Why -- and so the question, Why -- why did -- why did we get it wrong? Why did the United States get it wrong? Whether it's President Bush and everybody else...

ROVE: Right.

VAN SUSTEREN: ... but you know, how could we have such a failing?

ROVE: Well, complicated answer. Good question, complicated answer. One is, we know he had the stuff. We know he had it as late as the late 1990s. Blix, the international weapons inspector, reported finding chemical and biological material. We know that he had, you know, lots of material that had degraded. He had 500 tons of yellowcake. He had tens of thousands of warheads, artillery shells that were biological and chemical that had degraded.

You know, he wanted us to believe that he had it. He thought that weapons of mass destruction, having chemical and biological weapons, kept him strong in the neighborhood. It kept him in power. He'd used it on his own people to stay in power, and he thought it acted as a deterrent to the West.

And we now have two reports, one by Charles Duelfer and one by David Kay, international weapons inspectors, who point out that he maintained an active interest in these programs. He felt the West would lose interest in Iraq, that the oil-for-food sanctions perhaps was being eroded. He was siphoning money out of that in order to keep together the dual-use facilities and the scientists and technicians and engineers to reconstitute these programs. And he thought in a very short period of time, the sanctions would, in essence, erode away, and he could reconstitute these programs in a very powerful and dangerous way.

VAN SUSTEREN: And of course, that -- this is going to be the issue's going to be debated for probably decades. But the book, "Courage and Consequence" -- it goes through so many facets of the administration. And I hate the fact that, you know, we don't have the time through everything, but it's fascinating and very personal to boot. Karl, thank you.

ROVE: Thanks for having me, Greta.

(END VIDEOTAPE)

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