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Special Report

'Special Report' Panel on President Obama Releasing CIA Documents, Concerns About TARP Bailout Program

This is a rush transcript of "Special Report With Bret Baier" from April 21, 2009. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What about those who devise policy?

RAHM EMANUEL, WHITE HOUSE CHIEF OF STAFF: Yes, but those who devise policy, he believes that they should not be prosecuted, either. And it's not the place we go.

As he said in that letter, and I would really recommend people look at full statement, not the letter, the statement, in that second paragraph — "This is not a time for retribution. It's a time for reflection."

OBAMA: With respect to those who formulated those legal decisions, I would say that that is going to be more of a decision for the attorney general within the parameters of various laws, and I don't want to prejudge that.

(END VIDEO CLIP)

BAIER: Well, President Obama today explicitly left the door open for Justice Department attorneys to possibly prosecute Bush administration lawyers and policymakers who approved enhanced interrogation techniques, or came up with them, of captured suspected terrorists.

That, after his White House chief of staff said what he said over the weekend. Let's bring in our panel — Bill Kristol, editor of "The Weekly Standard," Mort Kondracke, executive editor of "Roll Call," and syndicated columnist Charles Krauthammer.

Bill, the White House had quite a time at the briefing today trying to explain this.

BILL KRISTOL, EDITOR, "THE WEEKLY STANDARD": Well, they flip- flopped, obviously.

What was even more amazing what we reported earlier in this show, that Dennis Blair, the current Director of National Intelligence, in a current letter to current employees, said we acquired high value information from the methods that we used.

So now we have Obama's own director of national intelligence saying that we acquired high value information from these methods, and yet the president seems to think that they are so out of the question that he has repudiated the use of them and is talking about the possibility of criminal prosecution of people who wrote in good faith legal analyses which explained, which distinguished them from torture.

Eric Holder, incidentally, his attorney general, said in 2002 that the Geneva Convention did not apply to Al Qaeda captives.

And the idea that we're going back and even raising the possibility of criminal prosecution is so appalling that it renders me almost speechless.

And President Obama at the CIA yesterday, if I could make one more point, in a speech to the CIA operatives, trying to reassure them, said don't be discouraged by what has happened in the last few weeks. We may have potentially made some mistakes. That's how we learn.

Really, we have a president engaging in baby talk at a time when there is an ongoing terror threat to this nation.

BAIER: Mort, there is a push from the left, Moveon.org specifically, to get a special prosecutor.

MORT KONDRACKE, EXECUTIVE EDITOR, "ROLL CALL": And it's handmaid MSNBC is shrieking for it, too.

Look, there is hysteria on the left about this, and it's not hysteria only over the alleged torture. What they want is they want the heads of Bush administration officials. They didn't get what they really wanted, which was impeachment of George Bush and Dick Cheney and all that, so now they want their blood this way.

And it really is hysteria. I mean, they and everybody in their corner, including "The New York Times" editorial page, "The Washington Post" editorial page, for heaven's sakes, has completely forgotten what things were like on 9/12. We were scared to death that there was going to be more attacks.

And there would have been more attacks. As Mark Thiessen points out in today's "Washington Post," the interrogation, the waterboarding of Khalid Sheik Mohammed resulted in information which foiled an attack on a tower in Los Angeles, the so-called "second-wave attack."

What we really need here is the full disclosure of what — or to the extent possible, of what was actually prevented by this, by these interrogations, so that the public understands. If the public knew all the stuff that was prevented by this happening, and how it was prevented, I think they would support a continuation of the policy.

BAIER: Which is what Vice President Cheney called for on Hannity.

KONDRACKE: Yes.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: The administration has put out stories about how Obama agonized about the release of the documents. Well, if you were born yesterday, you'll believe that.

You look at the political expediency and the political objective of these leaks. Obama was elected by running against George Bush, even though he wasn't on the ballot. He has been running against Bush in the first 100 days. He ran against Bush when he was in Europe and in Trinidad. He's making himself the foil against Bush.

And you would expect that has to end after a few months. Well, with the torture issue, it doesn't end. It's a perfect way to keep Bush alive as the permanent nemesis and foil of Obama.

And what he's doing is by strategically releasing a memo here, a memo there, he creates a firestorm, which is all predictable, which is not going to end up in prosecutions. It will end up in a truth commission.

You will have all kinds of congressional hearings. You will have all kinds of commissions. You will have leaks. You will have televised, very dramatic testimony.

This issue, the Bush issue, will be alive for a long time.

And the reason Obama is trying to look magnanimous in saying he won't prosecute the CIA officials is because, obviously, there is no way to prosecute an official who acted in good faith. And even their lawyers, who simply offered an opinion, you're going to lawyer who simply offered an opinion?

The issue, I think, of prosecutions, is a side issue here. The real issue is the hearings, the commissions, and the leaks that we will have in the future.

BAIER: Quickly, what do you think happened, Bill, in 48 hours from the Sunday show, where Rahm Emanuel said what he said, and from today?

KRISTOL: I guess he got a lot of pressure from people on the left and decided to throw the door open, throw it to the attorney general's court. We'll just decide when they're prosecuted.

But the real world effect of this is going to be to totally change the culture of both the legal community and the intelligence community in dealing with the War on Terror.

The 9/11 Commission said that one reason we had 9/11 was that we had bent over backwards to be careful. We had not pushed hard. We had set up walls — when it doubt, don't push.

BAIER: Not connected the dots.

KRISTOL: Not connected the dots.

And I'm afraid that what the president has done, not just with this one statement today, but over the last few weeks, has set up a situation where we're not going to connect the dots over the next months and years.

BAIER: Concerns about the governments TARP bailout program seem to be growing. The panel has some issues as well. We'll hear about them after the break.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, U.S. TREASURE SECRETARY: You have to look at two things. One is, do the institutions themselves have enough capital to be able to lend? And does the system as a whole, is it working for the American people for recovery? And that's the standard we're going to look at.

(END VIDEO CLIP)

BAIER: Treasury Secretary Timothy Geithner up on Capitol Hill today talking about stress tests for banks. A lot of information came out of those hearings as well as an Inspector General's reports on the TARP, the Troubled Asset Relief Program. There were some doozies in there.

We're back with the panel — Mort?

KONDRACKE: The bottom line here is that in spite of the $700 billion that was voted for TARP last October, bank lending is down 23 percent.

"The Wall street Journal" did a study on this — 23 percent down, less lending than there was when the TARP went into effect, which means that as of now the program is not working.

So what is the alternative? He's got basically, two alternatives — three alternatives — continue what we're doing, nationalize the banks — but the item in this report that showed that there are 10 people in the Treasury Department who are monitoring 500 banks, just monitoring 500 banks. The idea that you would nationalize banks and have to actually run it out of Treasury, they can't supervise them now. So that's a bad idea.

So what they've going to do is they've got to rely on this public-private partnership in order to get private investors to buy up the toxic assets of the banks.

The problem is that the private investors don't trust Tim Geithner. He once promised there would not be limits on executive pay at banks. Boom, there are suddenly limits on executive at banks pay.

And now there might be limits on the pay of investment firms that participate in this bailout package. They're not going to invest under those circumstances.

BAIER: Charles?

KRAUTHAMMER: It's a mess, and it's bizarre.

Last year the Secretary of the Treasury, Paulson, calls in the heads of the nine largest banks and says the government is now your partner. It usually happens that way in a banana republic with a gun on the table.

All the banks accept, of course.

And now the new treasury secretary is saying any bank who wants out, who wants to repay its loan, can't. I'll decide if I'm going to be a partner or not, or if you're going to un-partner yourself.

This is insane. Some of the banks are healthy, and they ought to be allowed to get out from under the government control.

And the ones that aren't healthy ought to be either nationalized or taken over the way small banks are done by the FDIC, broken up, healthy parts sold and the assets held by the government until they're worth something, the way it was done with the S&Ls in the 1990's.

BAIER: Bill?

KRISTOL: In any kind of crisis, foreign policy, economic, you really want two things from your leadership, a combination of steadiness and decisiveness.

Think of General Petraeus and General Odierno in Iraq. They took their time to devise a plan even though things were in a very dire situation. But they devised a plan, they executed it with great energy, flexibility on tactics, but a real steadiness in terms of strategic goals.

I don't think people see that from this Treasury Department, or from the last one, for that matter.

And I really worry that it's going to be very hard to get out of this recession, very hard to stabilize the financial system, without people having some basic confidence that the Treasury at least has a sense of where they're going and is acting more or less systematically, with some mid-course adjustments, of course, to get there.

BAIER: Tim Geithner brings any confidence in that equation?

KRAUTHAMMER: He doesn't, and the Congress makes it worse. It's reaction on the AIE(ph) stuff — it's retroactive bills of attainder is a way of warning everybody, don't be a partner in government actions.

KONDRACKE: We haven't faced the worst of this yet. There's a credit card crunch to come, and the bubble of commercial real estate is going to break. Emerging markets are going to go broke. And this crisis is far from over.

KRISTOL: Mort is short the indexes —

BAIER: What a wonderful way to leave it. Thanks, Mort.

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