Transcript: 'Special Report with Brit Hume,' June 26, 2007

This is a rush transcript of "Special Report With Brit Hume" from June 21, 2007.

BRIT HUME, FOX NEWS ANCHOR: Next on SPECIAL REPORT, that controversial immigration bill survived what its opponent fear was their last best chance to stop it in the Senate. But what about the House? We'll find out. Republican Senator Lugar expresses his long-held doubts about the Iraq war in a floor speech that makes him the talk of the town. A spirited debate in the House subcommittee whose chairman asserts that captured terrorists should have full rights.

And the CIA airs some of its dirty laundry, breathing some new life into some old scandals. All that right here, right now.

Welcome to Washington. I'm Brit Hume. The immigration reform bill is by no means a done deal tonight, but it has cleared one major step on the way to a vote. The Senate today brought the measure, once thought to be dead and buried, back to life with modifications to come. Congressional correspondent Major Garrett reports.


SEN. EDWARD KENNEDY (D), MASSACHUSETTS: This may not be perfect, but it's the best opportunity we have to do something significant and substantial.

MAJOR GARRETT, FOX NEWS CONGRESSIONAL CORRESPONDENT (voice-over): The Senate, with 24 Republicans in tow, voted 64 to 35 to revive the once dead immigration bill, a measure reshaped yet again to woo conservative critics, and, more importantly, potentially minimize accusations the bill grants amnesty. Under a proposal likely to be adopted later this week, most heads of households who seek legal status under the new Z Visa program will have to return to their home country and apply. The original bill made no such requirements, leading to charges that illegals could obtain open ended legal status through a Z Visa. The original bill only required illegal immigrants who sought permanent residency, also known as a green card, to return to their country of origin. Another proposal that is likely to be adopted would impose new criminal penalties and possible deportation of immigrants who have overstayed work or student visas. These changes, however, didn't appear to win over any of the entrenched opponents.

SEN. JOHN CORNYN ®, TEXAS: I think the American people can be forgiven in doubting the commitment of the federal government and the willingness of the federal government to actually do all of the things that it is promising. That's why this bill is such a tough sell.

SEN. JEFF SESSIONS ®, ALABAMA: Our own Congressional Budget Office just on June 4, this month, did an analysis of the legislation. They concluded that when the - if this bill were to become law, illegal immigration would only be reduced 13 percent.

GARRETT: President Bush today tried to answer allegations the bill grants amnesty, but he mangled the message.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I have heard all the rhetoric-you have heard it too-about how this is amnesty. Amnesty means that you have got to pay a price for having been here illegally and this bill does that.

GARRETT: The president meant to say fines paid for Z Visas, green cards and citizenship remove the taint of amnesty, something the White House conveyed later in a written statement. As for his administrations ability to secure the southern border, the president said-

BUSH: We do have to do more to protect our border and that's why this bill has a lot of border security measures that will help continue the strategy that we have been implementing over the past year.

GARRETT: The Senate majority leader, who has joined the president in rare common cause on immigration, also urged the Senate to approve the compromise.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I would hope that everyone understands that we can't leave the system as it is now. Gee whiz. The present system is not working. And we must start with border security.


GARRETT: Senator Reid is an important figure in this whole Senate debate, because he has engineered a process by which 26 amendments will be considered by the Senate. But he and those who support this bill have hand pick those amendments, angering those who want to stop the bill. So they have objected to ruling that on a unanimous consent agreement, forcing something that's going on the Senate floor right now. Let's go to the Senate floor live. We are hearing the clerk of the Senate read all the words of all 26 amendments. Let's take a listen.


UNIDENTIFIED MALE: On immigration-sorry-Non immigrant status and D, may not be considered an unauthorized alien, as defined in Section 274 F of the immigration nationalities. Unless-


GARRETT: That clerk will be reading those amendments, Brit, for quite some time. It could go on for hours and hours. It's just one of many delaying tactics opponents will use to try to derail this bill before its expected passage-or at least a vote on expected passage on Friday. Brit?

CLYBURN: Major, thank you. You better hurry over there and catch every word. Whatever happens in the Senate, the immigration bill faces still more hurdles in the House. If anything, House Republicans may be even more strongly opposed to the measure than some of the Republicans in the Senate. Chief Washington correspondent Jim Angle joins me with that story. Jim?

JIM ANGLE, FOX NEWS CHIEF WASHINGTON CORRESPONDENT: Brit, whatever the outcome of the Herculean effort in the Senate, immigration reform faces yet another daunting challenge getting through the House, where some Republican members made clear today they are not receptive.


REP. PETE HOEKSTRA ®, MICHIGAN: We are committed to having a comprehensive immigration reform bill, but the Senate bill isn't what we believe is the direction that we need to go.

ANGLE (voice-over): Representative Pete Hoekstra of Michigan offered the one-sentence statement resolved the House GOP conference disapproves of the Senate immigration bill. And he had little trouble getting support.

REP. JOHN BOEHNER (R-OH), MINORITY LEADER: It's clear there is a large number of House Republicans who have serious concerns for the Senate bill.

REP. JOHN SHADEGG ®, ARIZONA: There is, in fact, overwhelming opposition in the U.S. House to the Senate immigration bill. Members have studied it. They recognize that it does not strike a balance.

ANGLE: There is an effort to beef up border security and enforcement to convince conservatives that reform will not leave a swinging door on the border, but many are skeptical to say the least.

REP. MARK SOUDER ®, INDIANA: It is unimplementable. The proposed fence just on the south border is eight billion dollars. The true estimates are closer to 30 billion. Four billion is a sneeze at the challenge we have.

ANGLE: Since a more security border is the one thing most lawmakers agree on, some want to break that out into a separate bill.

REP. TOM PRICE ®, GEORGIA: The common denominator to every member of Congress and every single member of the United States Senate isborder security and border control. So we believe-I believe that in order to regain the trust of the American people, we must have border security and border control first.

ANGLE: But other Republicans believe if they strip out tighter security, the one thing everyone agrees on, they will lose what little momentum they have for broader reform. Democrats, who control the House, say the Senate bill isn't very popular on their side either.

REP. JAMES CLYBURN (D), HOUSE MAJORITY WHIP: In its current form that the bill would not go anywhere in the House. I don't think it would get 25, 30 votes.

ANGLE: Consequently, Speaker Pelosi intends to use the Senate bill as a starting point, but not take up the Senate bill itself. Representative Clyburn, the number three man in the Democratic leadership, said he thinks they can get 70 to 75 Republicans to vote for comprehensive reform, as long as it begins with security.

CLYBURN: People who want to see a comprehensive bill that may not be implemented all at one time, that it would be implemented in stages with enforcement being priority.


ANGLE: One Democrat said Speaker Pelosi is only looking for 50 Republican votes or so, but probably wouldn't need that many. If the Senate passes the bill this week, one source said the House would start hammering out its own bill in July and try to get something to the floor by the end of month. But if the Senate fails to pass a bill, leaders of the House have no intention of trying to revive the issue on their own. Brit

CLYBURN: Jim, thank you. Senate Democrats today were unable to get enough votes to force consideration of a bill that would have allowed labor unions to organize work places without a secret ballot election. They needed 60 votes, but were able to pass the measure by just 51 to 48. Democrats and unions had pressed for the bill, which had already passed the House. Republicans opposed it though, and President Bush had warned he would veto it. Later in our program, the CIA reveals more about its covert operations against American citizens and other. And when we come back, some Senate Republicans split with the president over the war in Iraq.


CLYBURN: Republican unease over the war in Iraq seems to be mounting in the U.S. Senate tonight. Indiana Republican Richard Lugar said last night on the Senate floor that the current strategy in Iraq is not working. Today he was joined by Ohio Republican George Voinovich in the call for a transition that would bring U.S. troops home. Chief White House correspondent Bret Baier is standing by with more on this. Bret?

BRET BAIER, FOX NEWS CHIEF WHITE HOUSE CORRESPONDENT: Hi Brit. After the president met with a group of House and Senate Republicans this afternoon, senior aides say they are confident there is not a full revolt on Iraq policy by GOP law makers. That said, there is clearly growing concern, well ahead of scheduled updates from U.S. commanders and administration officials in July and then in September. Senator Lugar used a floor speech last night to detail why he believes changes in U.S. force posture need to happen now.


SEN. RICHARD LUGAR ®, INDIANA: In my judgment, the costs and risks of continuing down the current path outweigh the potential benefits that might be achieved. Persisting indefinitely with the surge strategy will delay policy adjustments that have a better chance of protecting our vital interest over the long-term.


BAIER: Now Lugar said, no matter how much time the U.S. buys the Iraqi government with U.S. troop presence in major Iraq cities, he sees no convincing evidence that Iraqis will make the political compromises needed to solidify a functioning government in the short run. Lugar is calling for an immediate repositioning of U.S. troops, and not a full withdrawal. Now Lugar, the ranking Republican on the Senate Foreign Relations Committee, is well respected on the Hill. And several Republican aides tell Fox his speech could clear the way for more Republican criticism of the president's Iraq strategy after the July Fourth recess. Top Democrats today, of course, praised Lugar's speech. Senate Majority Leader Harry Reid called it brilliant, courageous, and said it would be noted in history books as a turning point in the war. Needless to say, the White House wasn't that impressed.


TONY SNOW, WHITE HOUSE PRESS SECRETARY: This is Dick Lugar repeating a position. I think, if you take a look at what his own people have said -they said it is consistent with what he has said in the past.

We hope people are going to rush to contemplate what is going on here, and not only think about the importance of giving this operation a chance to succeed, but also the real dangers of creating a vacuum.


BAIER: Today Republican Senator George Voinovich of Ohio sent a letter to the president also calling for a change in the Iraq strategy, saying the Iraqis won't step up until they, quote, know we are leaving. White House officials said that Voinovich, like Lugar, quote, never was on board with the president's troop surge, and neither senators' comments are surprising. Brit?

CLYBURN: Bret, thank you. Amid calls for the closure of Guantanamo Bay and the arrival of a new terror suspect at that detention facility last week, House members today engaged in sharp debate over just how much abscess detainees should have to the American court system. National correspondent Catherine Herridge looks at the debate.


CATHERINE HERRIDGE, FOX NEWS NATIONAL CORRESPONDENT (voice-over): Before a House subcommittee, the Democratic chairman criticized the administration's policy to limit the ability of enemy combatants to challenged their detention.

UNIDENTIFIED MALE: No executive in an English speaking country has claimed such tyrannical powers since before Magna Carta 800 years ago.

HERRIDGE: Limiting the access of enemy combatants to the U.S. legal system was the only appropriate course of action, according to the ranking Republican from Arizona.

REP. TRENT FRANKS (R-AZ), HOUSE CONSTITUTION SUBCOMMITTEE: If this Congress makes the mistake of granting constitutional protection to the most insidious enemies this nation has faced, the Congress itself, and not the constitution, will have chosen that tragic course.

HERRIDGE: At the heart of this hearing, a question that was brought before the Supreme Court in the case of Salim Ahmed Hamdan, the bodyguard and drive for Osama bin Laden. It is the question of habeas corpus, that is the ability of the accused to challenge his detention within the U.S. courts. A former Justice Department official said so far habeas actions have created legal gridlock.

GREGORY KATSAS, JUSTICE DEPARTMENT: It prevented military commission trials from even beginning and it impeded interrogations critical to preventing further attacks.

HERRIDGE: A former State Department legal advisor reached a very different conclusion.

WILLIAM TAFT IV, FMR STATE DEPT LEGAL ADVISER: Providing habeas corpus review of the very limited number of cases at Guantanamo will impose only a very modest burden on the courts.

HERRIDGE: At one point the hearing focused on Mohammed Atta and what would have happened if he had been tried as a common criminal, a strategy advocated by the Democratic committee chair.

BRAD BERENSON, FMR WH ASSOCIATE COUNSEL: If we had captured Muhammad Atta on September 10, we would have had no choice but to treat him as a criminal defendant, which would have been interrogation, no intelligence, and the World Trade Center is coming down.

UNIDENTIFIED MALE: That is exactly right. And when he captured mass murderers in the United States, we do the same. We captured Charles Manson.

HERRIDGE: An opinion writer for the "Wall Street Journal" believes that extending habeas corpus to terrorists would be a mockery of the system.

JAMES TARANTO, EDITOR, OPINIONJOURNAL.COM: The members of Congress who are attempting to extend it to al Qaeda detainees at Guantanamo are, in effect, seeking to reward our enemies for defying the rules of war, for engaging in terrorism and wantonly killing civilians.

HERRIDGE (on camera): This hearing is part of a series being held on Capitol Hill which will examine the legal status of the nearly 400 enemy combatants that remain at Guantanamo Bay. In Washington, Catherine Herridge, Fox News.


CLYBURN: Coming up later in our program, is the NFL doing right by its disabled players. And after a break, GOP presidential candidates struggle for the support of religious conservatives. Stay tuned.


CLYBURN: For a Republican who hopes to be president, it is all but essential to win the support of the religious right, one of the largest blocs of conservative voters. But conservative opposition to abortion and same sex marriage poses a significant obstacle for a couple of the leading candidates this time around. Nevertheless, chief political correspondent Carl Cameron reports the top tier is weighing in.


CARL CAMERON, FOX NEWS CHIEF POLITICAL CORRESPONDENT (voice-over): Some think winning over the religious right will be impossible for GOP front runner Rudy Giuliani, but there he was at TV evangelist Pat Robertson's Regent University.

RUDY GIULIANI ®, PRESIDENTIAL CANDIDATE: Don't expect you're going to agree with me on everything because that would be unrealistic. I didn't agree with myself on everything.

CAMERON: He talked about terrorism, tax cuts and leadership, but never mentioned social issues. As a Catholic, Giuliani's pro-choice, pro-gay rights and pro-embryonic stem cell research views are at odds with his church and religious conservatives. Some priests have even threatened to deny him communion. After his speech, he talked to reporters about faith.

GIULIANI: I would reaffirm the basic Judeo Christian value of caring about people, loving people.

CAMERON: Some evangelicals refuse to support Giuliani. Robertson, who founded the Christian Coalition, and ran for president himself in 1988 met privately with Giuliani and has not taken a position on his candidacy. But evangelicals like James Dobson of Focus on the Family have said they can never support Giuliani for his socially liberal views. A major test of 2008 religious voters will be South Carolina, the buckle on the Bible Belt. GOP chairman Katon Dawson.

KATON DAWSON, SOUTH CAROLINA GOP CHAIRMAN: The fact is, we are an early presidential primary, the first in the south presidential primary, and religious conservatives are a large part of our party.

CAMERON: The Southern Baptist Convention is the largest and most influential religious denomination in the state, 2,000 churches and 750,000 members. Officials say bluntly, Giuliani's fiscal conservatism and 9/11 leadership are appreciated but insufficient.

TONY BEAM, SC SOUTHERN BAPTIST CONVENTION: All of those things are not enough to overcome in most peoples' minds, believers minds, the problems with the social agenda.

CAMERON: Mitt Romney also faces skepticism, not only for having been pro-choice and pro-gay rights as recently as two years ago, but for his faith. Devote Southern Baptists Consider Mormonism a cult.

BEAM: For those people, it's going to be very hard to support a candidate who is actively involved in the Mormon faith. One thing that is true about Mitt Romney, that I think is to his credit, he is not a part-time or drive-by Mormon.

CAMERON: John McCain has popularity problems too. He apologized for calling Christian conservative leaders, quote, agents of intolerance back in 2000, but they remain offended and skeptical. And then there is Fred Thompson. They like what they hear, so far.

BEAM: He sounds like us, for one the thing. When he talks, he just sound like Uncle Fred.

CAMERON (on camera): Fred Thompson arrives in South Carolina to test the waters for the first time on Wednesday. Republicans, and particularly religious conservatives, say they are eager to hear from him or, for that matter, from any candidate that they think can win the nomination and carry their values into the White House. In Columbia, South Carolina, Carl Cameron, Fox News. (


CLYBURN: The latest Rasmussen national poll finds former Tennessee Senator Fred Thompson leading among Republican presidential candidate, though he has still not said definitively that he is even running. Thompson draws 27 percent of likely Republican primary voters. Rudy Giuliani close behind with 23. Mitt Romney 12 and John McCain now at 11 percent. New Hampshire's governor and legislature remain determined to keep their state's status as the first in the nation to hold primary elections. Monday, the governor signed a law that says the primary can be on any day of the week, not just a Tuesday. That new law expands the authority of the state's secretary of state to set a primary date a week before any similar election, with, of course, the exception of Iowa caucuses. Assassination attempts, coups, illegal spying on American citizens; it sounds like the activities of some renegade third world country. But it's actually all in the records of the CIA. Some details, many in fact, have been previously released. But correspondent James Rosen reports the agency now is trying to come clean with the public.


JAMES ROSEN, FOX NEWS CORRESPONDENT (voice-over): The plot to kill Cuban dictator Fidel Castro was one once the most sensitive covert operation in America. A Central Intelligence Agency project at the dawn of the 1960's that required, as an agency official put it in one of the newly released document, gangster-type action against the mission target Castro. As has been well-established over the last three decades, the agency worked through Robert Mayhew, a former FBI agent and CIA contractor, who in turn engaged two of the most fearsome bosses of the mob underworld, Santo Trafficante, and Sam Giancana. The newly released documents show that for his help in the futile effort to whack Castro, Giancana sought a return favor from the feds. "Giancana expressed concern about his girlfriend, Phyllis McGwire, who he learned was getting much attention form comedian Dan Rowan while both were booked at a Las Vegas night club," the documents show. Mayhew put a bug in Rowan's room to determine the extent of his intimacy with the Ms. McGwire.

The technician involved in the assignment was discovered in the process, arrested and taken to the sheriff's office for questioning. He called Mayhew and informed him that he had been detained by the police. The Department of Justice announced its intention to prosecute Mayhew, along with the technician. The documents continue, on the 7th of February, 1962, CIA's director of security briefed the Attorney General Robert Kennedy on the circumstances leading up to Mayhew's involvement in the wiretap. At our request, prosecution was dropped. A similar set of events would arise a decade later when, in the early morning hours of June 17th, 1972, Washington, D.C. police caught red handed and arrested five CIA veterans, one of whom, Yuhenio Martinez (ph), was still on CIA's payroll during a burglary and bugging operation inside the headquarters of the Democratic National Committee at the Watergate Office Complex. Six days later, on what would become known as the smoking gun tape, President Richard Nixon could be heard instructing his chief of staff, H.R. Haldeman, to contact CIA's deputy director Vernon Walters and order Walters to tell the acting FBI director, L. Patrick Ray, to stop pursuing the Watergate burglary and bugging case because of the burglar's CIA connections and because national security was at stake. (INAUDIBLE)


ROSEN: And, of course, we all know how that turned out. The CIA refused to comply with Nixon's orders. His taping system was exposed and when this particular transcript surfaced in August of 1974, Nixon resigned three days later. It was not long after that, Brit, that the history of the CIA's illegal activities also came to light, including its surveillance of you and your boss in the early 1970's, the columnist Jack Anderson. That has been public knowledge-what, since around 1980 or so, correct?

CLYBURN: That's right. And it came to light in a Freedom of Information Act suit that we had been spied on by the CIA, attempting to find out who leaked papers to Jack Anderson that led to his Pulitzer Prize winning reporting on the Nixon administration's policy toward India and Pakistan.

ROSEN:During the war at that time. What is new-what was part of these newly released documents, Brit-perhaps this is news even to you-is that early in 1975, the then director of CIA, William Colby, went to the Oval Office, met with President Ford. There is a transcript of this meeting, which is itself interesting. I did not know that Gerald Ford was taping his conversations in the Oval Office. And Colby said, we put a tap on Jack Anderson and three of his associates. President Ford asked who ordered it. Colby said his predecessor, CIA director Richard Helms, whether on his own or not. This was not illegal, Colby said, but perhaps outside our jurisdiction. Were you aware that you were wire tapped or was it just physical surveillance?

CLYBURN: I-I don't recall knowing that. I knew we had been surveilled. I don't recall knowing it was a wire tap. I will say this, the assertion that it wasn't illegal seems dubious to me, in light of the fact that National Security Act of 1947 prescribes the CIA from any domestic operations.


CLYBURN: That's it for this segment. Grapevine is next.

professional football greats were playing for keeps today on Capitol Hill. They feel they have been ah abandoned by the National Football League and the Players Union as they struggling with injuries sustained on the field many years ago. Now they're telling Congress about it, and correspondent Molly Henneberg reports.


MOLLY HENNEBERG, FOX NEWS CORRESPONDENT: Former Chicago Bears coach and player Mike Ditka says retired football players need help. He says the NFL and its players union have made it onerously difficult to get disability benefits for injuries due to the game. Today he told a house Committee about it.

MIKE DITKA, FORMER NFL COACH: The reality of the situation is if you make people fill out enough forms, if you discourage them enough, if you make them jump through hoops, eventually they will say, jeez, I don't need this, I can't do all this, this is ridiculous. And they're going to walk away from some of these situations.

HENNEBERG: Other former players agreed, including Kurt Marsh, who played for seven years for the Oakland Raiders, but said he didn't qualify for NFL disability.

KURT MARSH, FORMER NFL PLAYER: I have had a total of 31 surgeries due to injuries suffered in my career. They include four lower back, one neck, two open reductions, two hip replacements, seven orthroscopies(ph), and 14 ankle surgeries, including an amputation.

HENNEBERG: And former Minnesota Viking Brett Boyd, who says he sustained concussions but can't get the highest level of NFL disability benefits.

BOYD: Using their tactics, deny, and hope that I put a bullet through my head to end their problem.

HENNEBERG: According to the NFL and the Players Union, there are about 8,000 former players. Of that 8,000, 317 meet the NFL standards for disability benefits. Twenty million dollars was paid to those 317 former players last year. Also at the hearing today, lawyers for the NFL and the players union, who say their agreement on disability benefits is among the most generous in professional sports for those who qualify.

DOUGLAS W. ELL, NFL PLAYERS RETIREMENT PLAN: Vested players can get total and permanent disability benefits if they are unable to work for any reason at any time, even decades after their career ends. Benefits can be as large as $224,000 a year for life.

HENNEBERG: The NFL also recently changed its policy and decided that players who qualify for Federal Social Security Disability benefits now automatically qualify for NFL disability benefits. Committee Chairwoman, Democratic Representative Linda Sanchez, says today's hearing was a fact finding exercise. And her spokesman says the committee hopes that the NFL, the players union, and the former players can "work this out on their own." In Washington, Molly Henneberg, FOX News.


CLYBURN: Outgoing British Prime Minister Tony Blair will be named tomorrow as Special Middle East Envoy for the international quartet, a group of nations composed of the U.S., Russia, the European Union, and the United Nations. Blair's chief task will be to help Palestinians build political institutions. He is not initially expected to as act as mediator or negotiator between the Palestinians and Israel. Today Blair met with California Governor Arnold Schwarzenegger to discuss global warming. It was Blair's last meeting with a foreign official before he steps down tomorrow. At the United Nations conference in Vienna, world diplomats are discussing ways to improve their governments to make them more accountable. But correspondent Eric Shawn reports the very agency that is sponsoring that conference faces some ethical challenges of its own.


ERIC SHAWN, FOX NEWS CORRESPONDENT: The seventh Global Forum on Reinventing Government is a week long United Nations sponsored gathering whose theme is to restore trust in government. But can the U.N. be trusted? Two-thousand world leaders and bureaucrats have gathered in Vienna to share strategies on improving government ethics, transparency, and accountability.

ASHA-ROSE MIGIRO, UN DEPUTY SECRETARY GENERAL: It is a place to extend ideas and develop strategies for improving governance and public administration in our complex and ever changing world.

SHAWN: There were lofty themes, such as citizen expectations and trust in the state.

MARY ROBINSON, FORMER IRISH PRESIDENT: Trust has to be earned by government. And that trust, of course, is earned by governments living up to, not just verbal promises, but, quite often legal commitments they have made.

SHAWN: But perhaps the U.N. should be taking notes at its own conference, for the main U.N. agency running the show is accused of violating the very principles espoused here. Among those sitting in the audience was Guido Bertucci, head the U.N.'s Division for Public Administration and Development Management, who is under investigation for alleged improprieties in the awarding of consulting contracts, staff intimidation, and favoritism. He and his department, which set up the conference, have also been under investigation for how $5 million from the Greek government was spent on a good government center for the Balkans. Greece claims millions were wasted.

UNIDENTIFIED MALE: This year, the U.N. are award three main categories.

SHAWN: Bertucci even handed out awards this Vienna. The first U.N. prices for improving transparency, accountable, and responsiveness in public service. But he wasn't very responsive when we tried to ask him about the investigation.

SHAWN: Allegations concerning the contracts? Nothing at all? Bertucci promises to answer questions when the probes are completed, ostensibly this fall. But the U.N. audit identifying mismanaged funds was completed last April. The U.N. insists that all the disputed money was spent on the project, but its own auditors say much of it was squandered. So, who do you trust? In Vienna, I'm Eric Shawn, FOX News.

CLYBURN: Next on "Special Report," that Immigration Reform Bill, it's back in the Senate. What are its chances? We will ask the FOX all-stars next. (COMMERCIAL BREAK)


SEN JOHN CORNYN, ® TEXAS: I think the American people can be forgiven in doubting the commitment of the federal government and the willingness of the federal government to actually do all the things it is promising. That's why this bill is such a tough sell.

SEN TED KENNEDY, (D) MASSACHUSETTS: If we sink this bill, if we vote against this bill, we won won't have even tried to do all the background checks. We won't even have tried to get the border into terms of security. We know what so many of the members of this body are against, but we have, now, yet to hear what they are for.


CLYBURN: Senator Kennedy and Senator Cornyn talking about the Immigration Reform Bill, which, after looking like it was dead and gone, is back up on the Senate floor subject to a certain set of, a restricted set of amendments. Getting it back on the Senate floor required some doing today, and it happened. Some thoughts on all this now from Fred Barnes, the executive editor of the Weekly Standard, Mara Liasson, national political correspondent for National Public Radio, and Mort Kondracke, executive editor of "Roll Call," FOX News contributors all. So, this was a big hurdle. The House remains in doubt as well. How likely now is it that this Bill will clear the Senate? Fred?

FRED BARNES, EXECUTIVE EDITOR, WEEKLY STANDARD: Well, it depends on the vote on a couple of amendments and then another cloture vote, which, in other words, you'd have to shut off debate and go to a vote. Otherwise the opponents could yap forever and it would kill the bill. There are two big amendments. One is by Senator Menendez in New Jersey, a Democrat, who would cut out of bill-he would bring ban back chain migration. You know, family unification, where your sister and her sister and her uncle, and all these people get in, and it dominates legal migration. Ending that was a key to getting the Republicans like John Cornyn. And, secondly, in a bigger amendment is one by Lindsey Graham that would really toughen the enforcement in the bill. It would say the head of your household would have to go back to your home country and do a touchback in order to get a Z visa, and-

CLYBURN: Is that likely to pass?

BARNES: Well, wait a minute, it's tougher than. And it also jumps if on those who only have visas who come here, about 30 percent or more of those who are illegal immigrants in America overstay their visa. This would say after 48 hours, if you haven't turned yourself in or left or notified authorities, your name would then be put on the National Criminal database, and you would be, obviously, subject to arrest and then deported. That is very tough. And so, I don't know whether the Democrats, the liberal Democrats like Teddy Kennedy are going to go for that or not. But, I'll tell you, if it doesn't pass, they will lose Lindsey Graham and Jon Kyl, the key Republicans, and the bill will fail.

MORT KONDRACKE, EXECUTIVE EDITOR, ROLL CALL: But the Kyl-Graham bill on touchback, the head of family going back home, is a means of avoiding, of killing and even tougher bill which is regarded as a point and fill. That is the Hutchison bill-

CLYBURN: Let's not get too far off into the weeds here.

KONDRACKE: OK, but look, so the grand bargainers basically like that Kyl-Graham bill that-

CLYBURN: Provides a touchback provision, that before you get to Z visa-

KONDRACKE: But it guarantees that you can come back after you do your touchback.

MARA LIASSON, NATIONAL PUBLIC RADIO NATIONAL CORRESPONDENT: Well, I would say that, in terms of prospect of this bill, I haven't heard anybody feel very, very confident. That doesn't mean it's not going to pass, but I this think it is extremely unclear at this point. Whether these amendments are going to get passed, are they going to bring requisite number of Republicans along to vote for this. There are plenty of Republicans who, no matter what amendments you are going to pass, believe that if there is any KAPSA citizenship for illegal aliens in this bill, that's amnesty, and they are against it.

But, you know, if you can peel off a small handful—

CLYBURN: But that isn't really the provision thought, Maura, that has given rise to the claims of an amnesty. That is the provision that allows, before you get to this question of Z visas and all that, a temporary visa that will allow you to stay in the country while you go through the process.

BARNES: That, too, has been changed in the Graham amendment. Right now it would be if it passed. Right now it says after 24 hours, if the federal authorities haven't found some reason you are a criminal, or something, for not giving you this probationary visa, you automatically get it. But the Graham amendment would change it to say you have to wait for all the tests, the data-

CLYBURN: You don't get it automatically.

BARNES: You don't get it automatically. And that's the third. That why this amendment is so important.

CLYBURN: Now, those three measures would keep Republicans on the reservation?

BARNES: Look, you are going to get about 20 Republicans anyway. If it passes-you start with 20, and you pass the graham amendment, you could get up to 26 or 27 Republicans, a majority of the Republicans, and the bill would pass with you have 64, 65 votes.

CLYBURN: In the meantime, we have a little bit of news here. The House Republican Conference has voted 114-23 to say they do not like and do not support the Senate Bill. Now Nancy Pelosi has talked about that meeting.

KONDRACKE: Nancy Pelosi has stepped back from the idea that she needs 70 votes.

CLYBURN: No kidding.

KONDRACKE: It's forty to 50 she is after now, and they are not going to start with the Senate Bill. They are going to start fresh and try to build a new bill.

CLYBURN: When we come back with the panel we will discuss Senator Lugar's speech on the war in Iraq, which is the talk of the town. Stick around.



SEN. RICHARD LUGAR ®, INDIANA: Unless we recalibrate our strategy in Iraq to fit our domestic political conditions and the broader needs of United States national security, we risk foreign policy failures that could greatly diminish our influence in the region and the world.

TONY SNOW, WHITE HOUSE PRESS SECRETARY : Dick Lugar is a serious guy, so obviously you take it seriously. But on the other hand, again, he voted against is the surge, he said the U.S. had reservations. We take seriously his point of view because he is a serious guy.


CLYBURN: Well, how big a deal is it that Richard Lugar, the former chairman and now the ranking member of the Senate Foreign Relations Committee has made public his-at least in terms, made a big speech expressing some long-held reservations about the policy in Iraq? It wasn't long before George Voinovich, another doubting Republican, was out commending Lugar and saying what a great speech it was. Democrats, of course, love it. John Warner expressed his admiration as well. How serious, folks? Is this a major blow, or is this not very important?

KONDRACKE: I don't think it is-it's not the end of the story, because the end of story, we have been hearing forecasts of it for a while. Even Mitch McConnell, the Republican leader who is conservative and has been a down the line supporter of President Bush, has said that in September there is going to have to be a change of strategy. And Lamar Alexander and others are sponsoring an amendment that says that the Iraq Study Group ought to be the basis of future policy. And that is essentially what Lugar said, that the surge is not working, we have to start looking at a plan B. And the plan B is a lot like what the Iraq Study Group propose.

LIASSON: Look, I don't think-this might be a turning point, we don't know yet. But I think it is a pretty serious step along the road that seems to be-there seems to be a consensus forming. When you have Mitch McConnell, and Dick Lugar, and other Republicans talking about something has to change in September, and that something is some kind of a draw down. Even the generals are talking about that, being able to do that. I think it is important. And I think-

CLYBURN: So the surge gets up to speed in June and allowed to proceed for what, three months?

LIASSON: Maybe longer.

CLYBURN: And then they start the drawdown then, or are you talking about some later drawdown?

LIASSON: Well, maybe longer. He's talking about a plan to do that. And what he said that was interesting is he said one of the problems is that the prospects for the success of surge are too dependent on the action of others who don't share our agenda. Meaning-

CLYBURN: The Iraqis?

LIASSON: Yes. Even if you provide the security that space that the security was supposed to provide for political reconciliation, that part of it, which only the Iraqis can do, isn't happening.

BARNES: I admire Senator Lugar. He is totally wrong the about this.

The speech, when you stop and think about it, it's a ridiculous speech. He says he wants to stop the surge, stop the counterinsurgency, move the troops of combat, and then that will achieve four goals: no terrorists haven in Iraq, less sectarian violence, it will prevent Iranian domination, and limit the U.S. loss of credibility. Those are the things-those are what he will achieve. It's only the surge and the counterinsurgency and its chance of winning in Iraq that will achieve those goals. And he thinks they will be achieved by doing the opposite. He is just totally wrong about this.

KONDRACKE: This is all premised op notion, which I'm afraid is the reality, that America lacks what our ambassador there calls "strategic patience," and that the time is going to run out, and that we ought to plan ahead for it.

CLYBURN: That's it for the panel. But stay tuned to find out why a talk show host sometimes must learn to hide his reaction. That is next.


CLYBURN: Finally tonight, we assume this is on the up and up, but we're not quite sure. It seems a Dutch TV talk host was interviewing a man who had a lost an important part of his manhood as a result of a terrible surgical mistake. Nothing funny about that, right?




CLYBURN: And that's "Special Report" for this time. Please tune us in next time. In the meantime, news is on the way. Fair, balanced, and unafraid.

Content and Programming Copyright 2007 Fox News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2007 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.