Did Kathleen Sebelius have to go? Will DOJ pursue criminal charges against Lois Lerner?

President Obama taps his budget director to run HHS


This is a rush transcript from "Fox News Sunday," April 13, 2014. This copy may not be in its final form and may be updated.


Two weeks after the close of ObamaCare enrollment, HHS Secretary Kathleen Sebelius steps down.


PRESIDENT BARACK OBAMA: There are 7 1/2 million people across the country that have the security of health insurance, and that's because of the woman standing next to me today.

SEN. TED CRUZ, R-TEXAS: I think this resignation is the latest indication of what a disaster ObamaCare has been.

WALLACE; We'll discuss Sebelius, the president's nomination of the Budget Director Sylvia Burwell to replace her and where ObamaCare goes from here with two members of Senate committee that will hold confirmation hearings, Republican Tim Scott and Democrat Sheldon Whitehouse.

Then, Republican leaders pursue criminal charges against Lois Lerner for her role in the IRS targeting scandal.

UNIDENTIFIED MALE: There's reason to believe that Lois Lerner committed crime.

UNIDENTIFIED MALE: What they're doing with this hearing is essentially politicizing this issue.

WALLACE: We'll talk with two members of the House Ways and Means Committee, which voted this week to send Lerner's case to the Justice Department. The committee's top Democrat Sander Levin and Republican Charles Boustany.

Plus, our Sunday panel discusses whether the IRS scandal stops with Lerner.

And our Power Player of the Week, a historic Washington treasure that serves as a haven for achievers in the arts and sciences.

UNIDENTIFIED FEMALE: Evermay's meant for everyone to enjoy. We affectionately coined it the citizens' embassy.

WALLACE: All, right now, on "Fox News Sunday."


WALLACE: And hello again from Fox News in Washington.

Kathleen Sebelius has stepped down as secretary of health and human services. But with confirmation hearings ahead for her replacement, the battle over ObamaCare is entering a new phase. We've invited members of one of the Senate committees that will hold those hearings to discuss what happens now.

From South Carolina, Republican Tim Scott, and from Rhode Island, Democrat Sheldon Whitehouse.

Senator Scott, after the disastrous rollout of ObamaCare, did Kathleen Sebelius have to go? And how do you explain the timing of her resignation?

SEN. TIM SCOTT, R-S.C.: Well, there's no doubt that she had to go. When you think of being synonymous with failure, there has to be changes. The real questions that we should be asking ourselves is if we look at the upcoming confirmation hearing, will the next secretary have Americans first or will they have the administration's policy and try to carry the water for the president as their primary responsibility?

WALLACE: Well, I think it's fair to say that all of the glitches with the Web site followed Sebelius right through her resignation.

Here she was on Friday in the Rose Garden.


HHS SECRETARY KATHLEEN SEBELIUS: Their stories are so disheartening about finally feeling secure and knowing they can take care of themselves and their families. Unfortunately, a page is missing.


WALLACE: And that night, Sebelius sent out this e-mail, "I will be passing the baton to my friend and colleague Sylvia Burrell." In fact, the woman named to replace her is Sylvia Burwell.

Senator Whitehouse, did Sebelius have to go? And what do you make of the timing of her resignation?

SEN. SHELDON WHITEHOUSE, D-R. I.: Well, I think she gave a lot of good service to the president and to the country. She was there nearly six years and in an extremely tough job at a very consequential time through the whole health care bill and through the rollout with all these malfunctions. I think it probably is a good thing to have a new face going forward.

And Sylvia Mathews Burwell is a very good choice. She has a lot of goodwill on the Republican side and she has a lot of experience and ability. She was President Clinton's deputy chief of staff. She was Treasury Secretary Rubin's chief of staff. She had an important behind-the-scenes role in the recent budget agreement. She brings a strong set of credentials.

WALLACE: You are both members as we said of one of two Senate committees that's going to hold confirmation hearings on Sylvia Burwell. Senator Scott, when Burwell was confirmed 96-0 just a year ago to being the budget chief, you voted for her. And the question I have for you, Senator Scott, is might you vote against her now because of your concerns with ObamaCare?

SCOTT: There's no doubt she was a good choice for OMB. That does not necessarily make her guy choice for HHS. The real question we have to dig into is how ObamaCare and the role of the secretary of HHS, how they have been woven together and what it looks like to the American people.

What we learned over the last several months is that only thing that are increasing ObamaCare are the premiums. Premiums are higher than they used to be. We know there was a double digit increase in premiums both in the individual market and the small group market. We also know that out-of-pocket expenses as well as deductibles are increasing.

The only thing that's gone down so far under ObamaCare are the number of doctors in your network. The number of hospitals in your network, the number of specialists you can see.

WALLACE: But, Senator, are you going to vote against Burwell because you don't like ObamaCare?

SCOTT: Absolutely not. But the questions that we have to get to, however, is whether or not Director Burwell will be serving for the president of the United States with his agenda as the primary objective or will she get into the details of the numbers and she's obviously strong on the numbers and figure out whether 7 million people actually signed up and paid, or whether it's other independent sources suggest, that we've had fewer than 5 million sign up and pay, as well as looking at the fact that when you have 6 million cancellations and 7 million signed up by the president's suggestion, that what is the actual number of those who have signed up and paid?

So, we're going to have an opportunity to discuss with Director Burwell her approach to making sure that American people are the primary objective and not politics.

WALLACE: Senator Whitehouse, I mean what you're hearing is -- I think this can happen for some red state Democrats seeking re-election as well as Republicans, that the confirmation hearing on Burwell can end up being a referendum on ObamaCare.

WHITEHOUSE: Well, we couldn't be happier to have that conversation. I'm hearing in Rhode Island from people who have been on health insurance for the first time in their lives, from people who because they got on health insurance for the first time in their lives, had a checkup that revealed a significant illness at a time that can still be treated. This was a single mom. So, her daughter's life has been turned around by the fact that her mom caught this illness in time to treat it.

And over and over again, people on the health care benefit from the -- the seniors who are getting their pharmaceuticals paid for -- I'm struggling for the donut hole. There we go.

It's been very good for most Rhode Islanders. And there are good stories for people to tell out there. And we think there is going to be great opportunity to tell the real human stories and not just the political attack ad lines that the Republican Party is bringing to this conversation.

WALLACE: Well, Senator Scott, are you going to use and will your fellow Republicans on the committee use the confirmation hearings as leverage to try to get information documents from the administration? If so, what specifically and what policies specifically are you going to go after?

SCOTT: Well, I think the first thing we have to do is make sure that we keep the folks on the American people not on politics. The way you do that is to figure out first and foremost who actually has benefited from the so-called success of ObamaCare and its rollout.

What we know about controlling cost is that we can't find the key ingredient to controlling costs in ObamaCare. When you spend $2 billion to promote the enrollment process, you don't save money; $2 billion have gone to marketing agencies, TV commercials, $700 million of that number for the Web site.

Here's what we should do, is focus on the fact that that means that's 2 billion that did not go to doctors, did not benefit a patient, but it did benefit politicians. And so, what we're going to dig into is how do we make a fast forward this health care law? My request is figure out what will make this work? Because the premise of the health care law was flawed from inception. Seven million young people signing up in order to reduce the price for elder Americans.

WALLACE: Senator Scott --

SCOTT: This led to adverse risk selection.

WALLACE: Let me ask you another aspect. There are 36 unilateral changes by the White House. Are you going to be seeking some assurance from Sylvia Burwell that that's going to stop? If there are any more changes, they'll come back to Congress and ask them to actually change the law?

SCOTT: Well, Chris, we have had that assurance before from Secretary Sebelius that there would be no more delays. Unfortunately, what we realized is that the definition of delay must have changed because we've had several delays even since she said there would be no delays.

We've learned very consistently that even March of last year, there were suggestion that's the premiums would be higher. We heard exact opposite along the way. So, we have not found a place where we can hear what they say and see what they did and have those things be the same. So, we're going to continue to look for real information.

WALLACE: Senator Whitehouse, you just said a moment ago you look forward to the confirmation hearings because that's going to be an opportunity for you to talk about the good news of ObamaCare. But I want to take a look at the latest public opinion polls. According to the latest Real Clear Politics average of recent polls, 39.8 percent now favor ObamaCare, while 52.3 percent oppose the law. Doesn't this confirmation hearing mean that Democrats are going to be stuck defending what is still a relatively unpopular law and not doing what the president seemed to be doing and Democrats in the senate seem to be doing recently, which was trying to change the subject to income inequality?

WHITEHOUSE: As I said, bear in mind that this law has immensely helpful to real people, real families all across this country. And they are true stories. They're human stories. And those, I think, are important stories for us to get out there.

I think that that will add value. I think it is important. I think it's also important to remember that of the people who disapprove of the ObamaCare law, a lot of them are people like me who would have liked to have seen a single-payer option, who would have liked to have seen a public option, who feel that it didn't go far enough in terms of being a really efficient national health care option.

WALLACE: Senator Scott, Senator Whitehouse, we're going to have to leave it there. I want to thank you both so much for coming in today. And we look forward to the confirmation hearings. Thank you, gentlemen.

SCOTT: Thank you, Chris.

WHITEHOUSE: Thank you.

WALLACE: Be sure to tell us what you think about Sebelius' resignation and her ObamaCare legacy on Facebook, and share your favorite moments from today's show with other FNS viewers.

Up next, could former IRS official Lois Lerner face jail time for targeting conservative groups? We'll ask two members of the committee seeking criminal investigation of her actions.


WALLACE: It's been almost a year now since we learned the IRS was targeting conservative groups. And this week, Republicans tried to push what's been a faulting investigation.

The House Oversight Committee voted to hold ex-IRS official Lois Lerner in contempt of Congress. And the House Ways and Means Committee is asking the Justice Department to consider criminal charges against her.

Joining us now, two members of Ways and Means, from Michigan, the top Democrat Sander Levin, and from Louisiana, one of the leading Republicans on the panel, Charles Boustany.

When the IRS scandal broke last May, gentlemen, President Obama condemned what the agency officials reportedly done as outrageous. But now, he says that they have been cleared.

Take a look at his change of heart on this scandal.


OBAMA: If, in fact, IRS personnel engaged in the kind of practice that have been reported on and were intentionally targeting conservative groups, then that's outrageous. And there's no place for it.

BILL O'REILLY, FOX NEWS HOST: But no mass corruption?

OBAMA: Not even mass corruption. Not even a smidgeon of corruption.


WALLACE: Congressman Boustany, given the fact the Justice Department investigation is still on going, how do you explain that change of heart from the president?

REP. CHARLES BOUSTANY, R-LA.: Well, it's hard to believe because based on all the documents we've reviewed, over a million -- half a million documents, dozens of interviews, we found compelling evidence that indeed Lois Lerner was involved in criminal activity. It's highly suggestive and it needs to be thoroughly investigated. That's why we're asking for the criminal investigation.

WALLACE: So, how do you explain the president, again, when this investigation in the Justice Department investigation is still open, how do you explain them saying there's not a smidgeon of corruption?

BOUSTANY: Well, that's the point. Our investigation is still on going in Congress. If the Justice Department is doing an investigation, it's still open. We need to get to the facts. And that's what we tried to do at the Ways and Means Committee.

But we know that she violated internal procedures. She violated -- potentially violated federal law by revealing private confidential taxpayer information by putting it on her own personal e-mail address. We know that she tried to or sought to intervene in the appeals process for some of these groups, which is a violation not only of procedure but also federal law.

So, there are some really disturbing facts that are emerging in this. And that's why we need to complete the investigation and that's why there needs to be a full criminal investigation.

WALLACE: Congressman Levin, you know, you can say, well, that's just the Republican majority on Ways and Means. But the Treasury Department inspector general did a report that came out last May and he found that conservative groups seeking tax-exempt status were treated very differently from liberal groups.

Let's put up his findings: 30 percent of organizations with progress or progressive in their names were examined as possible political groups. And, therefore, not included -- would not have been considered for tax exempt status. But 100 percent of groups with Tea Party, Patriot or 9/12 in their names were examined.

Congressman Levin, 248 conservative groups were examined, but only 29 liberal groups. How do you explain that disparity?

REP. SANDER LEVIN, D-MICH.: Well, first of all, the inspector general left out the information in this report that there were liberal groups.

But let me try to explain what's happening here. You know, the document that we were given to look over, it said this on the top: "The following document contains confidential tax reform information and is being provided to you for review. Any subsequent unauthorized disclosure of the content is prohibited by law and is punishable by fine or imprisonment."

So, what happens is the chairman gives us the material. We can look at it for one day. Take no notes. And then we go into executive session and we violate the confidentiality of the taxpayers --


WALLACE: Congressman Levin, that is a very interesting answer. It has nothing to do with my question. I'm asking you a specific question --

LEVIN: It does. It does.

WALLACE: No, it doesn't, sir. I'm asking you a specific question. How do you explain the fact that 30 percent of progressive groups were examined for their tax exempt status eligibility and 100 percent of conservative groups? How do you explain that?

LEVIN: I'll explain it. It also does what I said to respond to your question as to what's going on here.

More Tea Party groups and conservative groups applied for 501c4 status than other groups. In 2006, of the 501c4 organizations, only $1 million was spent on election campaign stuff. In 2012, $256 million and two of the organizations were Koch brother organizations and a third was Karl Rove. So, one half --

WALLACE: But, sir, it still does not explain -- you can say that there are more conservative groups. It doesn't explain why 100 percent of conservative groups were examined and only 30 percent of liberal groups. It doesn't matter if it was 10-3, it was 100 percent of the conservative groups, and 30 percent of the liberal groups.

How do you explain that?

LEVIN: Look, this is what the attorney general is looking into.

WALLACE: He's been looking into it for a year, sir.

LEVIN: The president called for an examination by the attorney general. They are looking into that. We should not disrupt that by essentially having a secret session. WALLACE: But do you think the president disrupted it when he said there wasn't a smidgeon of corruption? Do you think that was right for the president to say?

LEVIN: No, he -- I'll tell you what he was talking about. The first hearing that we had, the chairman of the committee said there was a culture of corruption and administrative -- administration interference. There has been zero, zero evidence that the White House had anything to do with what happened.

WALLACE: The question has nothing to do -- the question has nothing to do with the White House. It had to do -- the question had to do with there is any corruption. He basically gave the IRS a clean bill of health when the investigation was still going on.

Let me -- but you bring up a good point. And I want to bring --

LEVIN: That is what is -- look.

WALLACE: That was the question asked by Bill O'Reilly at the Super Bowl. I watched the interview.

LEVIN: I know. I heard it. The corruption charge related way back to the administration and whether they were involved in this. There was an effort by the Republicans to tie the White House to this. There was zero evidence.


WALLACE: Let me interrupt and ask --

LEVIN: He said there was zero evidence.

WALLACE: It's a fair question. Let me ask Congressman Boustany.

Congressman, do you have any evidence after a year of investigation that any official higher up in the IRS, higher up in the Treasury Department, or in the White House, directed Lois Lerner to do what she allegedly did?

BOUSTANY: Chris, the problem is we have been trying to get -- follow these facts wherever they go and we've been stonewalled with slow production of documents. Clearly, we've been obstructed by Lois Lerner at every level. She misled the inspector general for tax investigation. She has, of course, pleaded the fifth in front of the committees -- one of the committees twice.

We have been not getting the documents that we need to really fully evaluate this so we can follow the facts from the ground up and see where they lead.


WALLACE: Congressman, let me interrupt you, too, if I -- let me interrupt you, too, if I may, Congressman, because a lot of people -- Congressman Levin, let me ask my question to Congressman Boustany. A lot of people, including some Republicans, some of your colleagues, say that your committee and the House Oversight Committee have blown this because of the fact that you should have given Lois Lerner immunity. I mean, let's face it -- nobody really cares what Lois Lerner did, the question is did she get it from higher ups or was this just the decision by a mid-level bureaucrat in the IRS? Why not give her immunity a year ago under subject of penalty of perjury and have her say, were you given direction by anybody above you?

BOUSTANY: Well, that is a debatable point. It's worthy of discussion. The fact is we're still being obstructed by the IRS. We've now gone through two confirmed -- we have two confirmed IRS commissioners and two acting commissioners and we have still not gotten all the documents that we need to conclude this investigation.

The fact is, I want to follow the facts on this from the ground up starting with the Cincinnati office. We've had good interviews.


WALLACE: You've had a year, sir. You've had a year.

BOUSTANY: Yes, it's been 10 months, and we're still obstructed.


WALLACE: Congressman Levin?

LEVIN: Can I break in? You asked Mr. Boustany if there is any evidence of White House involvement. He doesn't answer it zero.

I was among the first to say Lois Lerner should be relieved of her duties, among the very first. And there's been zero evidence of this involvement of the White House.

And let me also say, there was an alternative. When Mr. Camp and Republicans in the House wanted to send the information that was in this booklet to the attorney general, they didn't have to have a secret session. And then make it public, violating the public's right to confidentiality.


LEVIN: All the chairman had to do was to call up the attorney general and say I want to give you this information.

WALLACE: OK, Congressman, I think you -- I think you made that point.

I want to ask you about this, though, because the fact is that the IRS was under heavy pressure at particularly this time to go over -- to go after conservative groups that were seeking tax exempt status. They were under heavy pressure from top Democrats, including David Axelrod, who has been an adviser to the president, Dick Durbin, Charles Schumer, and a fellow named Carl Levin, the senator from Michigan who just happens to be your brother. You really don't think that that pressure from all the top Democrats on the Democratic IRS and Democratic administration had anything to do with this?

LEVIN: The inspector general said in essence, no. And let me just point out very clearly -- the 501c4 --

BOUSTANY: The inspector general just simply did an audit. They haven't completed their investigation.

LEVIN: Let me just finish. Let me just finish.

501c4s are for entities that are involved in social welfare, not politics. As I said, in 2012 --


WALLACE: Congressman, there were liberals groups that were involved in politics as well like Priorities USA, or at least as involved as Crossroads GPS. The Justice -- I mean, the IRS did nothing to look at those liberal groups but they went after groups.

I mean, we have a point at which two liberal campaign finance groups went to Lois Lerner and said, you really to go after GPS, Crossroads GPS, the Karl Rove group, and she immediately orders an examination, an audit of that.

LEVIN: Look, some of the 501c4 groups are liberal groups. There were liberal groups that were investigated. And the names of some of them are in the documents that were supposed to be secret. One half of the money in 2012 reported to the SEC came from two groups that are related to the Koch brothers and one to Karl Rove. It went from $1 million, as I said, in 2006 to $256 million in 2012, half of it from very conservative groups.

WALLACE: Gentlemen, we're --

LEVIN: A number of groups have been doing. This we need to look at it.

WALLACE: Again, I leave you gentlemen with again the point in the inspector general's own report -- 100 percent of groups with "Tea Party" or "Patriot" in their names were examined, and only 30 percent of groups with "Progressive" or "Progress."

Congressmen Levin, Congressman Boustany --


WALLACE: -- I want to thank you both. We're going to stay on top of this story. Thank you, gentlemen.

Where does the IRS scandal go from here? Our Sunday group joins the conversation.

Plus, what you would like to as the panel? Just go to Facebook or Twitter @FoxNewsSunday, and we may use your question on the air.



REP. JIM JORDAN, R-OHIO: Did you interview Lois Lerner?

ATTORNEY GENERAL ERIC HOLDER: I just said, this is an ongoing matter and I'm not going to comment on ongoing matter.

REP. STENY HOYER, D-MD.: This is really turning into a witch hunt, frankly to serve the base of the Republican Party.


WALLACE: Some of the back and forth in Congress this week as the IRS targeting the scandal heats up again. And it's time now for our Sunday group. Fox News senior political analyst Brit Hume. Julie Pace who covers the White House for the Associated Press. Syndicated columnist George Will, author of the new book "A Nice Little Place on the North Side" about Wrigley Field at 100, and Bob Woodward of "The Washington Post." Well, as we said, it's been almost a year, a year since the Treasury's inspector general came out with this report that said that there had been targeting of conservative groups by the IRS. And then Brit, let me ask you the question I was going to get at with the new congressman, why are we not further along? Is it as Senator Levin said -- or rather as (INAUDIBLE) said, administration stonewalling? Is it because of ineptitude by the Republican investigators or is it something else?

BRIT HUME, FOX NEWS SENIOR POLITICAL ANALYST: That's both. The administration has certainly stonewalled. There is a vast array of material that hasn't turned over. You have got the -- you know, Lois Lerner using her constitutional right not to incriminate herself. And the committee -- it seems to me the committees on the house have not done a particularly effective job. It was a mistake, I think, for the leadership in the House not to agree to the appointment of a select committee, which would have been a higher profile and like the more aggressive operation. And it was a mistake not to grant Lois Lerner immunity. I don't think in the long run it's going to matter whether she's prosecuted or not. But the immunity -- used immunity as it's called to get to testify and I think if they had done those two things, we would be much farther along.

WALLACE: Julie, I want to go back to the two clips of President Obama that I played for the two congressmen. I mean 11 months ago you have Barack Obama, I'm sure you were there that day coming into the East Room and expressing outrage at what had been alleged about the IRS and the targeting of conservative groups. Then you have him in the Super Bowl interview with Bill O'Reilly saying there is no corruption. There's not even a smidgeon of corruption. How does the White House justify that given that at least allegedly the Justice Department is still investigating?

JULIE PACE, THE ASSOCIATED PRESS: Sure. The Justice Department is still investigating this. But you have to remember that from the White House perspective, the thing that is most important to them is whether there has been any White House link to what the IRS did. And so far that has not been proven to be true. And so from their perspective, they say that is the core of the issue. There are problems over at the IRS. We've had changes in leadership there. And we are investigating this. But the issue that was at the center of this at the very beginning, whether there was White House involvement has not been proven true. And they said (ph), in fact, it's the most important point.

WALLACE: But doesn't it make it a little bit hard if you are going to have this open thorough ongoing investigation by the Justice Department when you have the president basically saying case closed?

PACE: Well, I don't know if he exactly said that the case is closed. But I mean certainly ...

WALLACE: Not a smidgeon of corruption?


PACE: Certainly, I think that that is a tricky thing for a president to say when you do have an ongoing investigation that you use as the thing that you point to to say that the administration is taking this seriously.

WALLACE: George, I was struck a couple of days ago on our sister broadcast special report when you said that there have been three great scandals over the last 40 years here in Washington. Watergate, Iran-contra and IRS. A couple of questions. One, why do you think this rises to that level? And why do you think the investigation has stalled?

GEORGE WILL, SYNDICATED COLUMNIST: The investigation to take last first, has stalled because the Justice Department has already leaked its conclusion, which is that no one would be prosecuted. It rises to that level because the Internal Revenue Service is the most intrusive and potentially the most punitive institution of the federal government and has been thoroughly politicized. Let me give you five things we know that she's done right now. She said the delay on approving conservative groups is caused by a serious uptick in applications. The inspector general of the IRS says that is just not true. She said the Tea Party group was very dangerous. In Texas and Kentucky and probably elsewhere, IRS employees have violated the Hatch Act by using federal resources for campaigning and obviously for Barack Obama.

WALLACE: Can we -- I just want to point out -- because the office of Special Council came out this week with a report and they said, now, there weren't vast cases although in Dallas they apparently -- they were wearing campaign buttons and there are screen saver said Obama and stuff like that. But there was at least one case where if you called the helpline this person was in effect tell you when you should vote for Obama and not for the Republicans because they'll keep you in this mess. On the IRS helpline. So, (INAUDIBLE) with you recitation, I'm (INAUDIBLE). WILL: Confidential taxpayer information of the organization, the National Organization for Marriage was leaked to a rival group. And finally, when Senator Schumer and Durbin and others were exerting the IRS to be more political in their application of views, she said with regard to Crossroads GPS, the most important conservative group, we are working on a denial of the application. Not expediting, not coming to a quick conclusion, but we are working on denial of it. That's why this rises because as Bob Woodward remembers, the Watergate scandal was fundamentally in the words of John Dean using the machinery of the federal government to punish our enemies.

WALLACE: All right, Mr. Woodward, you know something about scandals. And if that's forgetting them, how serious is the IRS scandal and, you know, I think one of the key questions is, does this really begin and end with a midlevel bureaucrat who we never heard of a year ago named Lois Lerner?

BOB WOODWARD, THE WASHINGTON POST: Well, there is obviously something here. And the question is does this committee know how to investigate? And they're worried about this one person who has invoked her Fifth Amendment rights not to answer questions and you have congressmen on the committee going on and saying we have evidence she's involved in criminal activity. I don't think you should cross that line. The second thing is there's always one person who's not going to talk. And when you conduct an investigation like this, I have not gone into the details, you need to find people who will talk. And there are always people who will do this. And, you know, we should dig into it. There should be answers. It's quite correct. And for the president to take that position is very, very unusual and say there is not a smidgeon of evidence here. I mean George has got a good list -- I think, actually, there's more. And there's a question and you're right, the IRS particularly this week as we know will file our tax returns has a big place in everyone's life. And they have immense power. And the power of the federal government to come and say we're auditing you or we're going to do something to you, I mean it's a ten ton truck coming at you. And it's the sort of thing that the leadership and the White House should take a position. Look, we will not tolerate this.

HUME: Chris, the same set of facts that Bob and George have described would have touched off, I think, in previous days a media firestorm. What we had was kind of a campfire in most of the media, which was doused before very long and the story has been basically dormant. We at Fox News have continued to pursue it and some other media outlets have as well. But when that kind of firestorm occurs, it creates an atmosphere in Washington where for the administration with a message to try to promote day by day, you can't get it out. You can get nothing out. We can all remember what it was like. And that creates a hothouse sort of atmosphere, in which all investigations end up being accelerated. There are minute details leaked, they get reported and the thing develops a life of its own and ultimately the combination of things, you know, brings the issue out and you get to the facts. It has not happened here.

WALLACE: No, let me bring Julie in. And we've got to move on after this. You're the chief AP reporter and correspondent at the White House. And I think it's fair to say there was a storm of interest and then it faded. Why?

PACE: Well, I think part of it has to do with the fact that the amount of information that we've been getting on it has run out. There has been so much focus on Lois Lerner and she's not talking so you're in this period of time, where if you are going to this -- I said it's about a lot of congressional investigations, that if you are going to keep the story going and you want to keep the investigation going, eventually there has to be some material there to work with. And we're in this period of time where we don't have a lot to work with.

WOODWARD: But non-partisan. I mean this really should have been a joint committee. And if you look at Congress ...


WOODWARD: They don't know how to investigate.

HUME: Now, I degree that, Bob. And I don't think -- I don't think if you look back at these investigations when Republican presidents were in the White House that you could say that those investigations were particularly nonpartisan. Partisanship is a part of it. You can't take the politics out of ...


HUME: But nothing ...

WOODWARD: The Watergate committee was set up by a vote of 77 to zero. All Republicans who were voting.

HUME: But by the time that happened.

WOODWARD: Voting and investigating ...

HUME: All the hell had broken loose and we were in the midst of the firestorm that I just grabbed -- it never happened.

WALLACE: I love this conversation.


WALLACE: But unfortunately, we have another great conversation to have. So, I'm going to take a break here. Up next, Attorney General Eric Holder describes his treatment by House Republicans this week as ugly and unprecedented. How big a factor is race in our politics now? We'll ask our panel.



LOUIS GOHMERT (R) TEXAS CONGRESSMAN: Now, I realize that contempt is not a big deal to our Attorney General, but it is important that we have proper oversight. ERIC HOLDER, ATTORNEY GENERAL: I think that it was inappropriate. I think it was unjust, but never think that that was not a big deal to me. Don't ever think that.

You look at the way the Attorney General of the United States was treated yesterday ...


HOLDER: By a House committee. It had nothing to do with me. Forget that. What attorney general has ever had to deal with that kind of treatment?


WALLACE: Attorney General Eric Holder complaining about treatment of him and also the president after another testy exchange with House Republicans on Capitol Hill. And we're back now with the panel. Well, Attorney General Holder said the Obama administration has faced, his words, "unprecedented, ugly opposition" and speaking to Al Sharpton's National Action Network, he clearly implied it's because of race. Brit, does he have a point?

HUME: I don't think so. And I think, you know, first of all, it's false that no attorney general and no president have been subjected to this kind of treatment. After all, Bill Clinton was impeached. Think about that for a moment. John Mitchell went to jail. I mean the list is long of attorneys general and other officials who have been subjected to some very rough treatment on Capitol Hill and elsewhere. And this strikes me as kind of crybaby stuff from Holder. My sense of that this is that both Eric Holder and Barack Obama have benefited politically enormously from the fact that they are African-American and the first to hold the jobs that they hold. And this, I don't know if he's specifically meant race or not. I suspect perhaps he did. But to those two men, race has been both a shield and a sword that they have used effectively to defend themselves and to attack others. And I think it is depressing at this stage in our national life after all we've been through on this issue and given the overwhelming consensus on the issue of civil rights that this kind of stuff is still going on.

WALLACE: I think it's fair to say that this is widely seen, these kinds of comments as an effort by the Obama administration to try to mobilize black voters. As this was to the National Action Network, in advance of the Republican -- or rather of the November elections and you also have President Obama going to the National Action Network this week and complaining about photo I.D.s and efforts to restrict voters' access to the polls. Take a look at this.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Across the country, Republicans have led efforts to pass laws making it harder, not easier, for people to vote.


WALLACE: Julie, whether it's voting rights or complaining about ugly treatment, do White House officials see this as smart politics, effective politics, a way to mobilize part of their base?

PACE: They do. And it's part of a broader effort. It's not just trying to mobilize African-Americans, but if you look at the past two weeks and what the president has been doing, there has been targeted outreach to African-Americans, targeted outreach to women, talking about equal pay issues. Because when they look at the November election, they see an electorate that doesn't look like it does when President Barack Obama is on the ballot. And if some of these Democrats who are in tough races are going to win, they need to have the electorate look more like it did in 2012 or 2008. So you're going to see this not just over the next couple of weeks but straight through November.

WALLACE: When you walk the corridors of the West Wing, do you get the sense that a lot of the top officials there feel that he is treated differently because of race? Or the administration is?

PACE: I think they tread very carefully on this issue. I think to Brit's point, I mean certainly when you look at talking again just about electoral politics, if you look at the coalition that Barack Obama has brought together and the people who have voted for him, he certainly benefited from huge African-American turnout. But they're also -- they are also careful to not say that he is treated differently or that he has benefited because of race. It's a very touchy subject for them. And when you talk about Eric Holder, too, you know, Eric Holder has a slightly different political antenna when it comes to issues of race. He's been making comments that have made the White House cringe going back to 2009.

WALLACE: We asked you for questions from the panel, for the panel, rather. And we got this on Twitter from Michael Dagan. "Why is it that if you oppose their position and you're white, you're branded a racist? Both Attorney General Holder and POTUS, president of the United States race bait?" George, is that what's going on here?

WILL: Sure. Look, liberalism has a kind of Tourette's syndrome these days. It's just constantly saying the word "racism" and "racist." It's an old saying in the law. If you have a law on your side, argue the law, if you have the facts on your side, argue the facts. If you have neither, pound the table. This is pounding the table. There is a kind of intellectual poverty now. Liberalism hasn't had a new idea since the 1960s except ObamaCare and the country doesn't like it. Foreign policy is a shambles from Russia to Iran to Syria to the Israeli-Palestinian conflict. And recovery is unprecedentedly bad. So what do you do? You say anyone who criticizes us is a racist. It's become a joke among young people. You go to a campus where this kind of political correctness reins, and some young person will say looks like it's going to rain. The person listening says, you're a racist. I mean it's so inappropriate. The constant implication of this that it is, I think, becoming a national mirth.

WOODWARD: And the question is, who is invoking it? And I think if you look at the record and Julie knows this best, Obama has not and he's been quite careful on the issue of race and I don't -- I mean there are supporters and there are certain groups and you're right, there is politics involved in this. But I don't -- I think this is something where he's put a line between him and some of his advocates on. And you do walk the corridors of the West Wing or the White House or the administration and I think you don't hear people really saying that he or other people say a lot of these things are race.

WALLACE: So how do you see -- Eric Holder, and this is not the first time that he's in effect said we're treated differently because we're black.

WOODWARD: And he didn't say that though. Unfortunately, there are facts. What happens is a reporter asked John Boehner the speaker about this and the reporter's interpretation was that what Holder said was about race. And he didn't mention race.


WALLACE: Wait a minute. When he goes to the National Action Network, Al Sharpton's group, overwhelmingly African-American crowd and he says when was the last time that an Attorney General was treated this way?

UNIDENTIFIED MALE: And the president.

WALLACE: And then, when was the last time a president was treated this way? What do you think he's talking about?

WOODWARD: Well, you know, you make your interpretation.

WALLACE: But what do you think? No -- he didn't -- Well, look, it's politics. But the point Brit made is exactly right. I mean it's tough being Attorney General and some of them have gone to jail and some of them have had a real, real hard time. And Holder should kind of emotionally back off on this and kind of say hey, look, you know, we're in political fights and keep them political on the substance of the things George is talking about. ObamaCare, foreign policy and the economic recovery. That's what people really care about in this country.

HUME: Chris, Chris, what the president said there about what they call voter suppression and others call voter I.D. laws should not go unremarked on. These are (ph) a better example of the distrust between the two sides -- liberals versus conservatives in this country than that issue. The idea that people should be able to (INAUDIBLE) identify themselves as legitimate voters when they go to the polls has overwhelming support in the public. We see voter I.D. cards in places like Afghanistan. And yet in this country from the president's podium we hear it argued that these are efforts -- not efforts to keep illegitimate voters out of the polls or an effort to keep people from voting. It is -- it is ...

WALLACE: Let me just -- Julie, what do you make of the fact that now you're seeing states limiting when people can register, limiting when people can vote? I mean isn't it the point to make it as easy as possible for people to vote?

PACE: Sure. And the White House says that they're not opposed to efforts to cut down on voter fraud. They look specifically at this voter I.D. issue, though, and say that a lot of people who are low income don't have identification because they may not drive. I mean there is an interesting proposal out there to put photos on Social Security cards which would basically ensure that every American citizen would have an identification. The White House hasn't taken a position on that. I think that will be forced to have to take a stand on that if they really are using this -- they really are concerned about voter rights, not just using this as a political issue.

WALLACE: 15 seconds.

WILL I want to complain to Eric Holder about the use of photo I.D.s.? Go to the Justice Department, but bring your photo I.D. because you can't get into his building without one.


WALLACE: A point taken. Thank you, panel. See you next week. Up next, our "Power Player of the Week." A 200-year-old estate is breathing new life into Washington's cultural scene.


WALLACE: It is one of Washington's most spectacular homes built in 1801. This week we got to go inside and see the fascinating work they're doing there. Here is our "Power Player of the Week."


KATE GOODALL, COO S&R FOUNDATION: It's a wonderful place that tons of individuals that we support can come and really get a breath of fresh air.

WALLACE: Kate Goodall is talking about Evermay, a remarkable estate in the heart of Washington's Georgetown neighborhood that has become a retreat for outstanding young achievers.

GOODALL: The S&R Foundation's mission is to support highly talented individuals with high aspirations in the fields of art, science, and social entrepreneurship.

WALLACE: S&R stands for Sachiko Kuno and Ryuji Uen, biotech entrepreneurs whose drug company has come up with breakthrough treatments for glaucoma and other diseases. In 2000, the couple known as the doctors, started their foundation.

GOODALL: The vision of being able to give back to support talented individuals, to give them room to breathe and create that is entirely theirs.

(on camera): So, welcome to the Evermay garden. This is where the doctors fell in love with the property. And you can see why.

WALLACE (on camera): Is it true that they made the decision to buy this in about five to ten minutes?


GOODALL: I think when you fall in love with something, you fall in love with something.

WALLACE (voice over): But doctors bought Evermay for $22 million. Each year they give awards to five to six young artists and one scientist. Then do everything they can to support them.

GOODALL: I'm happy to show you one of the centerpieces of Evermay here. This is our ballroom. Where we have our concerts. And this is where (INAUDIBLE). He's our artist and resident.

WALLACE (over here): He just comes here and rehearses?

GOODALL: He often practices here. And he certainly performs here all the time.

WALLACE (voice over): While the doctors keep a low public profile, Doctor Kuno does sometimes host the concerts.

SACHIKO KUNO: Good evening, everyone. And welcome back to Evermay. I'm Sachiko Kuno.

WALLACE (on camera): But let me guess. This is the dining room.

GOODALL: Well done. This is actually set up as you see today for what a dinner might look like at Evermay. Some of our events conclude dinner for donors and sponsors and VIP guests.

WALLACE (voice over): But for all the highbrow endeavors, they also hold an annual Easter egg hunt on the estate.

GOODALL: Evermay is meant for everyone to enjoy. We affectionately coined it the citizens' embassy.

WALLACE: The S&R Foundation has a new project. The doctors bought another Georgetown mansion, (INAUDIBLE) and house for $11 million. In September they'll give fellowships to 14 social entrepreneurs.

GOODALL: It can be a for profit or nonprofit or a government solution, but it has to be aiming to solve a 21st century social challenge.

WALLACE: The doctors say they're the caretakers of two treasures of America's history. Which they hope provides the right setting for great accomplishments in the future.

GOODALL: We find really talented people who are on their way to building a huge fire. And we at the foundation and the doctors come along and provide them with the match. And that is thrilling time and again.



WALLACE: If you're wondering whether the doctors ever considered living at Evermay, the staff says they're far too low key for that. In fact, while the mansion has 12 bedrooms, when the couple does spend the night, they stay in a small carriage house on the grounds.

And that's it for today. Have a great week. And we'll see you next on "Fox News Sunday."

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