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NSA snooping worse than expected

This is a RUSH transcript from "The O'Reilly Factor," August 15, 2013. This copy may not be in its final form and may be updated.

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INGRAHAM: In the "Unresolved Problem Segment" tonight, as you know President Obama has consistently denied that the U.S. has a domestic spying program.

(BEGIN VIDEO CLIP)

OBAMA: America is not interested in spying on ordinary people. What you are not reading about is the government actually abusing these programs. And, listening in on people's phone calls or inappropriately reading people's emails. What you're hearing about is the prospect that these could be abused.

(BEGIN VIDEO CLIP)

INGRAHAM: However, an explosive new report today in the "The Washington post" paints a very different story from what the President just described. According to an internal NSA audit, the agency has broken privacy rules thousands of times every year each year leading to unauthorized surveillance of innocent Americans.

Joining us now to sort this all out from San Francisco is Julian Epstein, he's a Democratic strategist; and in New York Matt Welch, the editor-in-chief of "Reason" magazine.

Let's start with you Julian. To listen to the President there, again we are not spying on Americans. We don't have domestic spying. Jay Carney reiterated last week these would be incidental intrusions and everything would be deleted immediately if it wasn't necessary to the review that they were doing.

In fact this audit showed something different. What is your reaction to this given what the President has tried to do to assure Americans?

JULIAN EPSTEIN, DEMOCRATIC STRATEGIST: I'm not going to argue with the point that the audit does show some serious problems that do need to it be addressed.

I think you do have to step back and look at the big picture. First, nobody is alleging that the NSA is spying on the personal communications of every day Americans.

Secondly, overwhelmingly, the NSA programs are aimed at getting at meta data -- what we call meta data -- things like telephone toll records not of the personal communications.

Third, the audit report today, at least as reported in "The Post", shows that most of the errors -- a few of them were pretty serious -- but most of the errors were mostly clerical errors or errors involving automated systems or what have you.

And fourth, you have to remember unlike the previous administration, this program is being done with the supervision and warrants granted by the FISA court. And in a couple of instances we know from the audit report the court slapped down two different NSA programs.

But at the end of the day this is something that the public still supports by large, large measure.

(CROSSTALK)

EPSTEIN: If you listen to law enforcement it is interrupting terrorist plots.

INGRAHAM: Well yes, you can live in a police state and have no terrorist plots or very few. That's not what we want either.

EPSTEIN: Police state doesn't mean -- by definition that we don't have a court supervision. You don't have a system where there are courts granting warrants for these things.

INGRAHAM: Here is the problem. This audit and Matt, you can chime in on this. This audit only applied to one facility. The Fort Mead NSA operation, right? One.

MATT WELCH, EDITOR-IN-CHIEF, "REASON" MAGAZINE: Right.

INGRAHAM: This was 2,776 instances of unauthorized storage collection, and access to information. Now, given the public's distrust of how the government operates after the IRS deal and now drip, drip, drip on this, Matt, can you blame people for being very suspicious of this and very concerned?

WELCH: No. Consider that not only is the President looking you in the eye and lying to you as he did at that August 9th press conference, as he did on Jay Leno when he said we don't have a domestic surveillance program. We just have, I guess, a surveillance program that we use domestically and he has been consistently lying about this as did his predecessor.

John Ashcroft 10 years ago said it's baseless hysteria to worry that the Patriot Act is going to be used and engaged in domestic surveillance even though we are having. So they are lying to you. James Clapper director of national intelligence under oath in front of congress is lying to you about this.

But not only all of that but Senators Mark Udall and Ron Whitey said just today what we have seen in the "The Washington Post" is quote the tip of the iceberg. These are guys who know they sit on the relevant intelligence committees they know much more than they're allowed legally to say because we have allowed national secrecy exemptions to run amok in this country. The executive branch can do what they want. So they know and they say this is just the tip of the ice berg.

So yes, the more Americans realize what is happening, the less popular all of these programs are becoming and the less popular the politicians are who are trying to change their positions as Obama has done so violently.

INGRAHAM: Go ahead -- Julian.

(CROSSTALK)

EPSTEIN: I think Matt makes a fair point in pointing out, I think fairly that a lot of the problems began under the previous administration, the Bush administration. He even-handedly criticizes both administrations. I would like to see more of that kind of evenhandedness in the administration's critics.

INGRAHAM: Well Julian, believe me. There's no love lost between me and the Bush administration on these types of issues.

EPSTEIN: Ok. Fair enough.

(CROSSTALK)

INGRAHAM: I would say if this were a Republican president now and this was coming out, you would be raising holy hell about this. I mean -- I think fair-minded liberals are raising hell about this program.

EPSTEIN: No. Actually, I was actually supportive under the Bush administration on very aggressive NSA surveillance technique so long as there was a court order. But I think Matt does miss in his attempted evenhandedness a couple of points here.

First of all was my point that overwhelmingly these violations involve clerical errors. Things like using the area code 202 when they intended to use 20 as foreign area code to go at communication coming from Egypt. Secondly --

INGRAHAM: Yes, Julian that's actually not true. That's actually not true. There are other serious instances here --

EPSTEIN: Why is that not true?

(CROSSTALK)

EPSTEIN: I agree. I told you --

INGRAHAM: Because number one the audit actually reveals that there was instruction given to NSA employees to be very, quote "general" in the way you describe things both to FISA court and to Congress.

EPSTEIN: Yes.

INGRAHAM: Congress can't do its oversight if the information Congress is getting is incomplete. I think that is a very disturbing development.

EPSTEIN: That was not my point -- my point was that there were some seriously disturbing developments in this.

INGRAHAM: All right. We have got to wrap.

EPSTEIN: But I'm saying overwhelmingly these were clerical errors and remember this is being supervised and authorized by the court which we --

WELCH: By a court that doesn't have any information.

INGRAHAM: Then the President can't describe it the way he did. He cannot describe it the way he did in public.

EPSTEIN: And the public does support.

INGRAHAM: Yes. Well, he is describing it inaccurately at the very least.

Gentlemen, we are out of time.

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