This is a rush transcript from "On the Record," April 5, 2011. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Does he have blood on his hands? Libya's ex-minister, Moussa Koussa, was a longtime adviser to Moammar Qaddafi. Moussa defected from Libya last week, but now the U.S. is demanding answers from him. Was he involved in the 1988 Lockerbie bombing? Was he responsible for the murder of those 270 innocent people?
Former national security adviser, Stephen Hadley, joins us. Good evening, sir. Moussa Koussa, why is he being held in London in a safe house? Any thoughts?
STEPHEN HADLEY, FORMER NATIONAL SECURITY ADVISER: There's obviously a lot of information they would like to get from him. They would like to turn him into the prototype of what they would like, which is those people close to Qaddafi defect from him. They particularly like the military to defect from him.
The only way you going to get him [Qaddafi] out of power is if the people around him, particularly military, turn on him and dispatch him. I think they would like very much if they could get others to follow Moussa Koussa's line. I thought it was interesting, the U.S. made it public now he has come away they've lifted sanctions on him. I think this is an effort to incentivize others to make the shift.
VAN SUSTEREN: When they lifted the sanctions, my heart goes to the families of the victims of Pan Am 103. I realize the overriding concern of the administration is to get Qaddafi out of there. I've got my attention on Pan Am 103. It has been a long-standing crime. These families -- I think of the college student sitting on that plane going home for Christmas or the holidays or whatever. This man may know a lot about that flight.
HADLEY: I think that's one of the reasons they want to talk to him. It's interesting that they lift the sanctions but make it clear he's going to be held for his crimes. The main actor in all of this is Qaddafi. I think the dilemma the administration has is they've gone into this on the grounds of duty to protect to try to protect the people of Libya from this dictator who is clearly going to kill them in order to maintain his position.
But in some sense the no-fly zone and all the rest, none of it works until Qaddafi goes, because if he stays the threat of violence lingers. Similarly, the president said it is important to send a message that dictators cannot hold power by attacking their own citizens. That lesson is learned only if Qaddafi goes.
VAN SUSTEREN: Why in the world would he go? If I'm Qaddafi and I hear the President of the United States says no regime change, that's not our goal and I'm not going to put boots on the ground. I'm thinking I'll wait this out. So what if people defect I'll replace them with six more.
If the army turns against him, at some point the army is going to have to dispatch him. He's not going to leave voluntarily. He is loving this. He's sort of at the center of the world stage.
I think they have to depend on two things one, the army turns against him and decide to dispatch him and get rid of him. Secondly, the interesting thing will be whether the Libyan people decide this is their opportunity to get rid of a dictator, and whether they start turning out in the streets, whether they feel safe enough and whether the international support is such they can come out in the 10,000, 100,000.
If you put the two together that is the best chance of getting what the administration wants which Qaddafi to go so they can make points about not using violence against your own people to maintain power.
VAN SUSTEREN: One option is Qaddafi goes. If he goes into exile we go back to where I started the whole Pan Am 103. The American people, the families of these people we are they going to get justice? They've already let the guy go from the Scottish prison, which to me is inexcusable. He's living high off the hog some place in Libya, as we say in Wisconsin. If Qaddafi goes into exile and the administration gets what it wants he's out of there and what the world wants --
HADLEY: I don't think he goes to exile. We got compensation. He did compensate them. That is not the same as justice. I think in terms of justice, court of law. I don't think you see it.
When they made it clear they would consider International Criminal Court sanctions Qaddafi it gives him no incentive to leave. He's going to go down with the ship. The notion of exile, I don't think he's the kind of man that goes into exile. I think at the end of the day it is only going to happen when the military decides this guy is a liability and they get rid of him.
VAN SUSTEREN: In terms of compensation in talking to the family, I don't think they want that blood money. That's just stolen money that Qaddafi stole from his people. I think they want who is responsible for killing their families.
HADLEY: I agree.
VAN SUSTEREN: I think our government over the last 20 years has turned their back on these Pan Am families.
HADLEY: We did get them compensation.
VAN SUSTEREN: They don't want it.
HADLEY: They took the money. It cannot make up for the loss. What you say is right, they deserve justice. I think they will not -- they will get it if they take satisfaction when this guy goes. I think he will go, as I say, by being dispatched by his military.
I think the likelihood of him standing trial for these crimes I think pretty small. This is a guy who won't leave precisely because of those kinds of things handling over his head.
VAN SUSTEREN: I hope people from Pan Am 103 the families get real justice.
HADLEY: That would be a good thing instead deed.
VAN SUSTEREN: Stephen, nice to see you. Thank you, sir.