Inside Media Matters: Should group lose tax exempt status?

This is a rush transcript from "Hannity," February 15, 2012. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: And finally tonight, the blatant bias of Media Matters has been exposed, thanks to shocking internal memos uncovered by the Daily Caller. And one of the main target of that left-leaning organization is none other than the Fox News Channel.

Now, one memo from 2009 written to the founder and president reads quote, "Simply put, the progressive movement is in need of an enemy. George W. Bush is gone. We really don't have John McCain to kick around anymore. Filling the lack of leadership on the right, Fox News has emerged as the central enemy and antagonist of the Obama administration, our Congressional majorities and the progressive movement as a whole."

Now, the same memo also suggested that it would be a good idea to do opposition research on the people that work at this network. It reads, quote, "We should also hire a team of trackers to stake out private and public events with Fox News anchors, hosts, reporters, prominent contributors and senior network corporate staff."

And now Congress is reportedly planning to question the group's tax exempt status.

Joining me now with reaction, from the Fox Business Network, Sandra Smith and the co-host of "The Five," she deals with Beckel five days a week, Andrea Tantaros. She has our undying admiration.

All right. Let's start with a couple of things here. Before we get to just the tactics of trying to smear and destroy people's lives, bad enough and enough itself. The collaboration that they talk about on a weekly basis with the White House means -- this is a political operation. This is not a 501c3. You know, tax exempt organization. This sounds like a political organization in close collaboration with the White House.

ANDREA TANTAROS, CO-HOST, "THE FIVE": Yes. Designed to quote, "smear and conduct sabotage and guerrilla warfare," as its head David Brock told Politico in an interview. And he said many times. There's nothing charitable or educational about Media Matters. And just because they are labeled a charity folks, doesn't mean they are doing good work. Their sole existence, Sean, the sole purpose of Media Matters is to take out a for profit company which is News Corp, the parent company of this network.

HANNITY: But the reason they want to take it out is they don't want opposition speech. They don't want alternative voices heard in the media.

Now, as strange as this may it sound -- now I think if they are collaborating with the White House that's proven. They are not tax exempt, that would be a violation of law. And I want to know, if they have an enemies list and they collaborated the White House, does it mean the White House may have an enemies' list?

SANDRA SMITH, FOX BUSINESS NETWORK: Well, you could actually draw, you know, connect those dots. But hey, at the end of the day --

HANNITY: By the way, my name was on the list. Shocking.

SMITH: That is political agenda outright. This is a tax exempt organization. Once we see proven in these letters that there is political agenda, surely they should be scrutinize and reviewed by Congress without a doubt. Chuck Grassley already called for it. This must happen.

And if anything, Sean, just digging through the numbers proves this whole thing. I mean, you are talking about $14.6 million, they raked in under the Obama administration. OK? We're talking about half of them coming -- half that dollar amount coming from 21 donors, two of which donated over a million dollars but that is anonymous.

HANNITY: You know, look, I guess holding people accountable and they hire people to monitor every word that is uttered on talk radio by conservatives, any conservative voice on the Fox News Channel. We have plenty of liberal voices, by the way they ignore those, interesting. So the fact that they do that, all right, I guess that is fair game. We're all in the public arena.

SMITH: But that is their mission. But their mission is reactive.

HANNITY: Well, because they want --

SMITH: It's to correct what the conservative media.

TANTAROS: Well, and that is OK. And that's OK. But you can't get tax exemption status for doing that.

HANNITY: Exactly. And collaborating the White House.

SMITH: Or for being proactive, which they're clearly showing that is what they are trying to do now.

TANTAROS: They are also training an army of Democratic pundits that arguably they are putting on campaigns and they're placing in different places which is also a violation.

HANNITY: Well, they also want to infiltrate Fox News, interestingly. And follow us in our private lives in hopes of taking out people. This is now, that is an enemies' list, to hurt people specifically because you disagree with them.

One other issue here. One of the things we learned in all of this, NBC's Cable News operation, they're claiming that they write the script for them every single night. And not only that, but it's also the L.A. Times, the New York Times, the Washington Post, columnists E.J. Dionne and Eugene Robinson. They are basically taking this left wing propaganda fed to them I assume in patr by the White House and it runs as news.


HANNITY: Runs the whole NBC News organization.

TANTAROS: I got a lot of flack when I said some, not all, members of the liberal media are lazy, this is case in point. They take the talking points, they write the stories, they don't do the research. We're not really all surprised that the mainstream media is listening to an organization like Media Matters but the fact that Media Matters could be coordinating with the White House is really, I mean, that's just, it's unbelievable.

HANNITY: The funny thing is that they're claiming Fox News sets the agenda for the rest of the media.

SMITH: Well, because we have the most viewers. So, they take that.

HANNITY: They are little jealous.

SMITH: Yes. They're little jealous of us. But I think you have to also look at the bigger picture here and that they are targeting Fox News not the broader conservative media. They are solely targeted on Fox.

HANNITY: Mostly Fox, but it's also conservative radio, they're after me and Rush and others.

TANTAROS: Because Fox is the one place you go, and you can get both sides of the story. You get fair and balanced but they don't like fair balanced, to left. They have to silence any kind of opposing argument, and that's what they're doing.

HANNITY: How does NBC get out of this from the point of view, because the next installment, I don't --they said it publicly, and I've spoken to the guys of the Daily Caller -- the next installment is going to be, they are going to show you examples. Media Matters wrote this and this was the script on NBC News.

SMITH: These are same organizations that are asking for tax royalties to be taken away from the big oil companies. How about we search and look at this matter? They've got tax exempt status!

TANTAROS: Two economies, right? So the left demonizes the businesses that are actually trying to make a profit and trying to hire people. And then there's the other economy like Media Matters, tax exempt status they are using this edge I would say of not paying taxes to take out a for profit corporation.

HANNITY: Unbelievable. It's actually scary, if you go to the White House, the interaction on a weekly basis, then you go to filtering to the media, it just reminds me of a propaganda campaign to destroy people.

TANTAROS: Liberal tolerance on display everybody, isn't it wrong?

HANNITY: You know, politics of personal, real personal destruction because they don't want other voices, that is frightening.


HANNITY: All right, guys, good to see you.

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