Peace process permanently derailed in Middle East? Plus, Darrell Issa on IRS scandal

Israeli ambassador to the US on 'Fox News Sunday'


This is a rush transcript from "Fox News Sunday," July 6, 2014. This copy may not be in its final form and may be updated.

SHANNON BREAM, FOX NEWS: I'm Shannon Bream, in for Chris Wallace.

Tensions in Jerusalem reached a breaking point, as fighting continues after the death of three Israeli teens and a Palestinian youth.


BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: We will bring to justice the criminals responsible for this despicable crime, whoever they may be.

BREAM: Airstrikes against Hamas traded for rocket attacks from Gaza as Israeli troops amass along the border. We'll discuss with Israel's ambassador to the U.S., Ron Dermer.

And two senators, John Barrasso of the Foreign Relations Committee and Bob Casey of the National Security Working Group.

Then, House Republicans ramp up pressure on the Justice Department in the IRS targeting probe.

We'll talk with Darrell Issa, chairman of the House Oversight Committee, who has spearheaded the conversation.

Plus -- the Supreme Court hands the Obama administration another loss.

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: We disagree and the constitutional lawyer in the Oval Office disagrees.

BREAM: Our Sunday panelists offer their takes on the consequences of this landmark decision.

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


BREAM: And hello again from Fox News in Washington.

There have been arrests in the apparent murder of a Palestinian youth, which was blamed on Israeli extremists as a revenge attack for the deaths of three Israeli teens, whose bodies were found in the West Bank earlier this week.

Clashes between Israeli police and Palestinian protesters continue this weekend. We will talk with Israel's ambassador to the U.S. and two key senators in just a moment.

But, first, FOX News correspondent David Lee Miller is in Jerusalem with the latest -- David.

DAVID LEE MILLER, FOX NEWS CORRESPONDENT: Shannon, there are reports now of six arrests in connection with the death of that Palestinian teenager. The six are described as Israeli Jews. They are described as having, quote, "nationalistic motives."

The question now, will these arrests tamp down the violence or only increase it?


MILLER: Palestinians and Israeli Arabs continue to voice their anger on the street. Demonstrations this weekend taking place in East Jerusalem, the West Bank, and Arab communities in the northern part of the country. Protesters hurled fire bombs and rocks at Israeli police. In some instances, Israeli Jews were targeted for attack. Police fired tear gas, stun grenades, and rubber bullets.

Palestinian anger erupted last week following the murder of 16- year-old Mohammed Abu Khdeir. According to Palestinian officials, the teenager's autopsy shows he was still breathing when a fire burned 90 percent of his body. Immediately following the attack, Palestinians blamed right-wing Israelis.

The recent wave of violence began when three Israeli teenagers, including one with dual U.S. citizenship, were kidnapped in the West Bank and found murdered last Monday. Further heightening tensions, amateur cell phone video appears to show Israeli police beating the 15-year-old cousin of the murdered Palestinian boy. The cousin, Tariq Abu Khdeir, an American citizen, who goes to school in Florida, was taken into custody by Israeli police during street demonstrations shortly before the funeral.

Police said Tariq was carrying a slingshot for lobbying stones. No criminal charges have been filed, but the teenager has been placed under house arrest. The boy's parents say their son did not take part in the violence and accused police of abuse.

Israel's justice minister who says the incident caught on camera is a very brave act committed by men in uniform and has called for an investigation of the police allegedly involved in the beating.


MILLER: In another development, so far this weekend, at least 29 rockets have been fired by militants in Gaza. At least two of those rockets went beyond border communities, targeting the city of Be'er Sheba, that is a city of some 200,000 Israelis.

Analysts say the situation now has reached the boiling point. If the situation on the ground does not improve, they say it is very possible there could be a very serious escalation of the violence -- Shannon.

BREAM: David Lee Miller reporting from Jerusalem -- David, thank you.

Let's now bring in Israel's ambassador to the United States, Ron Dermer.

Ambassador, welcome back to "Fox News Sunday."


BREAM: The prime minister vowed quick response and a quick investigation into the death of that Palestinian teenager. Sounds like this morning, there have been some arrests. I know there's a gag order in place for some of the information. But what can you tell us?

DERMER: Well, we have strong suspicions there are nationalistic motives behind these crimes. We just have to wait. In the next few hours, all the facts will be given to the public. But as you said, the prime minister said he was going to bring the perpetrators to justice very quickly, and he has.

One thing I can assure you, Shannon, that if these are Jews who are going to be prosecuted to the full extent of the law if they perpetrated these crimes, they will not be hailed as heroes by Israeli political leaders. They will not be public squares in Israel that will be named after them. Little schoolboys and schoolgirls in Israel will not emulate them as heroes.

And that's exactly what we have on the Palestinian side, where you have terrorists who are hailed as heroes by political leaders of the Palestinians, public squares named after murderers, children who learn to emulate murderers, who are taught to emulate murderers. That's the difference between our society, and it's a difference we should never forget.

BREAM: I want to ask you as well about some of the videos that you saw there purportedly of a cousin of a dead Palestinian teenager who his parents he was beaten by police.

A bit of reaction from the U.S. State Department, Jen Psaki saying, "We are profoundly troubled by reports he was severely beaten while in police custody and strongly condemn any excessive use of force. We are calling for a speedy, transparent, and credible investigation and full accountability for any excessive use of force."

I understand at least according to some reports this morning, he's been sentenced to house arrest at this point for several days.

Can you tell us anything about what happened?

DERMER: Well, we condemn excessive use of force. It's unacceptable in our system if police use excessive force.

I will tell you from what I understand about the facts of the case -- this is not just an innocent bystander who was pulled off a schoolyard. He was with six other people. They were masked.

They threw petrol bombs and Molotov cocktails at our police. Three of them had knives, from what I understand. That does not excuse any excessive use of force, and our justice ministry is opening an investigation.

Just in the case of Arab boy, we will bring the perpetrators to justice. And no one in uniform can employ excessive use of force in Israel. We're a democratic society run by laws and we don't tolerate it.

BREAM: Any update into the investigation of the three young Israeli men who were found dead earlier this week?

DERMER: Unfortunately not. We hope that the Palestinians will treat that crime with the seriousness my prime minister treated this crime of the Arab boy, this heinous crime where he was killed. If they would -- if the Palestinian leadership would treat it in the same way, then maybe we could get faster to a good outcome of this investigation.

Unfortunately, half of the Palestinian leadership is run by Hamas, which is a terror organization openly committed to our destruction. They fired thousands of rockets at our cities. As you heard in your report, in the last couple of days, they have fired about 50 rockets at Israelis. And the southern part of Israel right now is under rocket fire as we speak.

BREAM: All right. I want to turn to Iran, because the talks are ramping up again in Vienna. There's a July 28th deadline for an agreement that deals with easing international sanctions against Iran in exchange for getting some kind of control or assurances from them regarding their nuclear program.

Our Secretary of State John Kerry wrote an op-ed this week. Quote, "Iranian officials have stated repeatedly and unambiguously that they have no intention of building a nuclear weapon and that their nuclear activities are designed solely to fulfill civilian needs." Well, Iran's deputy foreign minister says no matter what's agreed to, he says it's only going to be temporary. Is there ever a point at when you're OK with Iran having a nuclear weapon?

DERMER: No, and the world should not be OK with Iran having a nuclear weapon. It's a threat -- a direct to my country, an existential threat to the state of Israel, it's a threat to the whole region and it's a threat to the world.

I think that the secretary of state made an important point, that they do not need nuclear weapons. They've said they don't need nuclear weapons. So then the question becomes, why do they have 19,000 centrifuges? Why do they have thousands of kilos of enriched uranium? They don't need a single kilo of enriched uranium. They don't need a single centrifuge to have a peaceful nuclear program.

A lot of people don't know this. There are 17 countries around the world that have peaceful nuclear energy programs, but they did not enrich uranium on their soil. Iran should not be allowed to keep centrifuges. They should not be allowed to keep enriched uranium. And we hope that the U.S. administration and the P5-plus-one will stand very firm in the talks and ensuring those capabilities are removed from Iran.

BREAM: So, those who are supporting these talks and feel like there can be a good outcome are also relying on inspectors. Do you think they have the capability to really be sure they know everything they need to know about Iran's capabilities? DERMER: I don't think so. Look, I is a country that's half the size of Europe. An inspection regime relies on unfettered access. That's a big country to search.

And the second thing, it relies on good intelligence. And our intelligence agencies and your intelligence agencies did not catch many things that Iran was doing right away. For instance, in Qom, where they built an enrichment facility in the side of a mountain, it was four years before our intelligence agencies knew about it.

So, the last thing we want to do is leave Iran parked as a threshold nuclear power a few months away from getting the fissile material necessary for a bomb and to rely on inspectors to do the job. If the only thing between radical ayatollah getting nuclear weapons is U.N. weapons inspectors, then that's a huge problem for the entire world.

BREAM: And quickly, how concerned are you about Iran's role -- what's it's doing, what it's playing in Iraq and with the advent of ISIS there?

DERMER: Look, Iran is the foremost sponsor of terrorism around the world. In the last four years, they have perpetrated terror attacks on five continents in 25 different countries. They're the reason right now why Syria's regime, why Bashar al Assad has killed nearly 200,000 Syrians. They're there working through their proxy Hezbollah.

They're in Iraq. They're responsible for the murder of many American soldiers in Iraq over the years.

They're not your friends. They're not your partners. They're not going to help you in Iraq. They're not going to help you in Syria. They're not going to help you anywhere in the region.

They're an enemy of the United States. That's how they see themselves. And I think enemies have to be treated as enemies.

BREAM: Ambassador, thank you very much for your time today.

DERMER: Thank you.

BREAM: Well, the crisis in Israel is just the latest in a number of troubling situations overseas. In Iraq and Syria, the militant group ISIS continues to hold a broad swath of areas across both countries. The Iraqi military, which stood by as ISIS moved closer to Baghdad, has now launched a series of targeted air strikes aimed at pushing ISIS back.

In Syria, where President Obama asked Congress to provide $500 million to train rebel fighters, the rebel chief has warned of a humanitarian disaster without more assistance in the face of fierce in fighting.

Now, to cover all this from Philadelphia, we have Senator Bob Casey joining us. And here in studio, Wyoming Senator John Barrasso.

Welcome to you both.

SEN. JOHN BARRASSO (R), WYOMING: Thank you. Thanks for having me, Shannon.

BREAM: Let's start here.

SEN. BOB CASEY (D), PA: It's good to be with you, Shannon.

BREAM: Senator Casey, thank you very much.

I want to start by asking both of you for your reaction. We'll start with Senator Barrasso, to the events in Israel.

BARRASSO: Well, obviously, our hearts go out to all of those families involved. There will be justice. I believe that. We hear that from the ambassador.

There's obviously emotions. There is -- there's been revenge, senseless violence. And you worry about it spiraling downward.

BREAM: And, Senator Casey?

CASEY: Shannon, whether it's the killing of three Israeli teens or the killing of a Palestinian teenager, in both instances, we have to condemn acts of violence in the strongest possible terms, number one.

And, number two, the justice systems in both places have to take care of this now. And you heard from the ambassador the commitment the Israelis have to bringing their own people to justice. I have no doubt now that we see the news of six arrests that they will do that because Israel is a place where the rule of law still prevails.

I would hope, and I would expect that the Palestinians would do the same thing, but that remains to be seen. But we're heartened by the news that at least arrests have been made and the justice system is proceeding.

BREAM: All right. I want to turn to new video that purports to show the leader of the group ISIS now calling itself the Islamic State. He's speaking at a mosque in Mosul. And this is a bit of what he had to say, translated, of course, to English.


ISIS LEADER (through translator): The mujahidin had been rewarded victory by God after years of fighting. They were able to achieve that aim in hurry to announce a caliphate and choose the imam.


BREAM: Senator Barrasso, this was a man who was in custody. When he left reportedly said, "I'll see you in New York." Obviously been very successful across Syria and Iraq.

How concerned are you?

BARRASSO: Very concerned -- concerned for the safety and security of the American people.

Obviously, he feels emboldened by what this Islamic State has been able to accomplish. He must feel safe in that large area they've taken control of, which shows you that when the United States leaves a vacuum, others will go in, others will fill it. Bad actors will show up. And we're seeing that right now.

And my greatest concern is for what he intends to do, and I think they have the capability and intent to attack the United States.

BREAM: And, by the way, Iraqi officials say they're working to confirm this is, indeed, al Baghdadi. So, he purports to be. We'll see if it is.

I want to play something Ryan Crocker, former U.S. ambassador to Iraq, had to say on Wednesday about the situation.


RYAN CROCKER, FORMER U.S. AMBASSADOR TO IRAQ: The Iraqis are not politically developed to the point where they can run the train on their own. We're wired into their system. And our effective disengagement in 2011, I think, led to a downward spiral that has brought us to where we are.


BREAM: Senator Barrasso, how much fault does the U.S. bear with what we're seeing happening now?

BARRASSO: I believe that President Obama is projecting worldwide U.S. weakness. And I think that it's hurting us all across the Middle East, but other places worldwide as well, including Russia and the Ukraine.

So, I think that the U.S. withdrawal has created this vacuum, which has allowed for this to happen. And it just emboldens others and invites them to act in a belligerent way, so that our friends no longer trust us, our enemies don't fear us, and when the United States says to our friends, you know, you're on your own, what that allows to others is they come and get it.

BREAM: All right. Senator Casey, Iraq's current prime minister has taken a lot of heat of this. Nouri al Maliki says he intends to run for a third term. It sounds like he's not stepping down, although there are -- a lot of calls for that. He's been accused of making the situation worse there in Iraq by not being more inclusive.

This is what General Martin Dempsey, chairman of the Joint Chiefs of Staff, had to say earlier this week.


GEN. MARTIN DEMPSEY, CHAIRMAN OF THE JOINT CHIEFS OF STAFF: Unless the Iraqi government gets the message out that it really does intend to allow participation by all groups, everything we're talking about makes no difference.


BREAM: So, Senator Casey, do you think that al Maliki is capable of that, or do you think it's time for him to go?

CASEY: No, I don't think he's capable of it, Shannon. I think the last couple of years are testament to that. In retrospect, I think probably both administrations put too much confidence in him.

So, we would hope -- although we can't dictate -- we would hope that the Iraqi people would choose a new leader to lead them forward. He's not had a government that's been inclusive. He's not taken the steps that are necessary to have a government of national unity.

But I do think the president -- I would disagree with John about the president's leadership. I think he's shown strong leadership in the region. I think the steps he's taken so far as it relates to Iraq and focusing on ISIS as a threat, not only to the Iraqi people but to the region and ultimately to us if they're going to try to form a caliphate.

So, I think the president has taken the right steps so far. We don't know what will happen next in terms of additional steps. We don't know if there will be any other direct military action, but I think putting our personnel on the ground to protect our diplomatic interests, to protect our embassy and our personnel as well as to get an assessment from an intelligence point of view of what's happening on the ground is appropriate and prudent, but other steps may need to be taken.

BREAM: Well -- and, Senator Casey, to that point, we have ramped up the number of U.S. personnel we have on the ground there. We know, the Defense Department confirms there are drones flying over, although no authorization for airstrikes at this point.

I want to ask you both, and I'll start with you, Senator Casey, at what point do you think the president needs to come to Congress to authorize any further level of involvement in Iraq?

CASEY: Well, Shannon, I don't think we're at that point yet. And I hope -- I hope that the president will continue to on the path he's been on, which is to assess the situation, make sure our national interests are served.

But an interesting development in the last couple of days where the president, I think appropriately, asked Congress for support for the Syrian opposition, the well-vetted Syrian opposition to make sure that we can change -- have an impact, I should say, changing the dynamic on the battlefield in Syria, because as we know, the moderate opposition in Syria is fighting in a sense a two-front war. Fighting Assad and the barrel bombs and brutality that he has -- the he has put forth as well as the Syrian opposition fighting ISIS.

So, I think it's very important that the well-vetted Syrian opposition has the resources to be able to fight and to change the dynamic on the battlefield. If that changes, that will have a positive impact not only in Syria but in Iraq as well.

BREAM: And, Senator Casey, I want to come back to you on that point, but first give Senator Barrasso a chance to weigh in.

Do you think at some point the President Obama needs to come to Congress regarding our involvement in Iraq? And what would that point be for you?

BARRASSO: Well, if the president wants boots on the ground -- yes, he must come to Congress in that situation. But a strong foreign policy means that when a president says something that those words have meaning followed through on. Like there was this -- we talked about Syria, I arming the rebels, training them. And, you know, there are 30 different groups, moderate groups, six larger groups within that with different interactions.

So, you're not exactly sure who to help and who they attack. You right now have Assad attacking ISIS. So, who do they fight? Where do you train them?

I think the president does have to come to Congress for additional authorization. And the president, I think, really has not been leading. I want to know what the president's plan is. He drew a -- he bluffed with his red line in Syria. I think he was slow to recognize what was happening with ISIS.

And we need a plan from a president who's engaged, not who seems to be just running out the clock.

BREAM: Well, and as Senator Casey mentioned, he has asked for this $500 million that would be aimed at appropriately vetted opposition forces in Syria.

Senator Casey, you've been calling for that for a long time. Do you think we missed our window of opportunity there, even if Congress goes along with this request, is it too little too late?

CASEY: I don't think it's too little too late. I would have preferred it happened earlier, but I do think in response to what John said, I think that the president's request for support for the opposition in Syria is the beginning of a new approach and a strategy to have better success on the ground.

I would also say that when it came to the debate last fall and the red line and the use of force, I'm not sure that that transpired as I would have hoped. But I do think we should -- we should commend the administration for the result that they got. The removal of chemical weapons out of Syria is a substantial accomplishment. Not to say that we're certain that every single chemical weapon is out of there, but to have, by one estimate, 100 percent of the chemical weapons secured and taken out of Syria diminished the threat to Israel, diminished the threat to the region, and I think that's an accomplishment.

We've got to have, I believe, much more of a bipartisan approach to Syria and to Iraq and some of that will involve the president coming to Congress as it relates to Syria as well as Iraq, but I would agree with John when he said that there's no reason for combat troops in Iraq.

BREAM: And, Senator Barrasso, I want to pivot to Iran. There's been some skepticism on the hill about dealing with Iran. There was bipartisan legislation proposed by Senator Menendez. Both you and Senator Casey signed on as co-sponsors of that. It would have some teeth for going after Iran if it doesn't comply with the deals and the deadlines. The White House immediately threatened to veto it.

So, for you, how will you define success with regard to the talks and that July 20th deadline?

BARRASSO: The July 20th deadline is for the talks to be finished by then. This is now the end of the six-month period. It seems to me at this point, Iran has gotten everything that they've wanted. The sanctions have been released. They've gotten the freeze of the $7 billion in assets lifted. And they've given nothing so far.

So, if you've seen the YouTube video of the foreign minister of Iran, he seems like he's setting up to either blame the United States if it doesn't work, or try to take credit if it does work.

There's a letter signed by 83 senators that says how we define success, which is no ability to enrich at all and significant inspections. A level of being able to see what they're really doing and getting around. And I think it's going to be very difficult for Iran to comply with that.

BREAM: All right. Senator Barrasso, Senator Casey, we thank you both for joining us today.

BARRASSO: Thanks for having us.

BREAM: All right. How concerned are you at home about the fighting in the Middle East? Join the conversation on Facebook with other FNS viewers.

And does the terrorist threat to Iraq mean Americans will be in danger here at home? Our Sunday panel weighs in, next.



GEN. MARTIN DEMPSEY, JOINT CHIEFS CHAIRMAN: ISIL itself, the Islamic State of Iraq and the Levant, goes by other names, but they are a regional threat today that over time could become a transregional and global threat. And so, that's why we're there.

(END VIDEO CLIP) BREAM: Chairman of the Joint Chiefs of Staff Martin Dempsey warning of the potential far-reaching threats of the al Qaeda inspired group that is taking control of regions of Syria and Iraq.

It's time now for our Sunday group. Nina Easton of "Fortune" magazine, Mara Liasson from National Public Radio, FOX News contributor Liz Cheney, and Charles Lane of "The Washington Post."

Welcome. Good to see you all this Sunday.


BREAM: Nina, I'll start with you. General Dempsey saying there is a real long-term threat to the U.S. So what do we do next with regard to Iraq?

NINA EASTON, FOX NEWS CONTRIBUTOR: Well, actually, it's not just long-term. It's actually the White House now is worried about short- term threat. I think it kind of got buried this week that security measures at airports internationally are being increased. The White House is really worried these American passport-holding jihadists can come in legally.

And, by the way, they have the ability now to produce bombs that can get through our security measures. So, we're on the case trying to look for ways to stop those kinds of bombs to get on airplanes.

This whole rise of ISIS, which is now by the way calling itself the Islamic State, has become a national security threat. It was a long time ago, but it's a clear and present danger right now to the United States.


Mara, how does the administration balance that against the president being very clear he wants us out of Iraq? That was all part of his campaigning and he's carried that out. But now, we do have interests that are involved there with the rise of ISIS, the Islamic State. How does the administration thread that needle?

MARA LIASSON, NATIONAL PUBLIC RADIO: Well, he's already sent up to 750 American military personnel to Iraq. He says that's not re- occupying Iraq or going there to help the Iraqi military.

The problem is that the new vision that the president laid out at West Point was about helping partners around the world. We're not going to do this ourselves. We're going to shore up the terrorist- fighting capabilities of our partners.

Well, that can't happen. We just saw what happened to our partner, the Iraqi military, who pretty much collapsed in the face of ISIS.

So, the question for the administration is, is there a strategy short of reoccupying Iraq that can prevent this Islamic State, whatever we're calling it, from becoming a safe haven like Afghanistan pre-9/11 for terrorists who can threaten us?

And the administration says, well, there are ways to do this. You know, look at Somalia or Yemen or the territories on the border of Pakistan with drones, with -- you know, intelligence we're able to contain them. It might be a little harder to do that in Iraq.

BREAM: And we're seeing poll numbers overall, the president is suffering with regard to public perception of his performance. But when we talk about foreign policy, Liz, he's hitting all-time lows.

Is there a chance here for him to come up with a strategy that redeems his credibility in that area?

LIZ CHENEY, FOX NEWS CONTRIBUTOR: You know, it's difficult. I think the American people are looking at what's happening sort of seeing the region in flames.

And looking at the extent to which -- you know, there are a lot of debates about Iraq which people have gone over and will continue to go over. But at the end of the day, when this president took over, Iraq was stable. You saw our Ambassador Crocker there talking about the extent to which al Qaeda had really been defeated.

And so, for the president to then decide he's going to walk away and to have this be the aftermath, I think people are very worried about it and they're worried about what's happening in Afghanistan and the fact he may well be -- he says he's going to go down essentially the same path there. So, I certainly hope that he will turn things around because I think that turning around the poll numbers would be a sign that he actually was exercising some leadership and moving in a direction that was going to keep us safe, but I'm not optimistic.

BREAM: Well, and, Chuck, we have the request now in from the administration for the $500 million to help in Syria, where ISIS has taken many strongholds as well. And there are questions about whether it's going to make a difference at this point. Is it too late?

CHARLES LANE, THE WASHINGTON POST: Well, that $500 million, assuming it's all well spent and it works and it goes to the purposes it's intended to, if you really think about it, is money that will go to prolonging the war in Syria by creating a force strong enough to counter ISIS. That's the -- that's the theory of it.

So, I don't even think anyone is claiming that that money is going to bring this all to a conclusion. What we have is a giant sort of strategic vacuum that goes almost all the way from Aleppo in Syria to Baghdad in Iraq and everybody is fighting over it. The Saudis are involved. Assad's regime, the Iranians are huge players, these guys from ISIS. It's a complete mess.

And the United States, unless it wanted to get in a huge way with all kinds of hundreds of thousands of troops, which we're not going to do, we're kind of reduced to this kind of measure of attempting to manipulate the balance from a long distance through proxies we don't entirely trust, going to Mara's point, and so far (ph), it's on. I think it's -- at best, it's a prolonged, difficult struggle, and I wouldn't bet on any outcome of it.

BREAM: Well, and Nouri al Maliki says he's staying. He wants a third term. Does he survive? Can he be helpful in any way?

LIASSON: Well, he's not helpful. And part of the reason we don't have troops there with pressure on him from Iran not to allow the security agreement that we keep troops here. And I think Chuck is right. There are no good options, but one option has to be -- and this was run by the White House, by his own advisers, including Hillary Clinton and Panetta two years ago, is to vet and arm the pre- Syrian army because they have gone toe to toe with the ISIS in Syria. So you've got to -- there's a lot of fronts that you have to work on.

LIZ CHENEY, FOX NEWS CONTRIBUTOR: The problem you've got with the situation with Maliki now, though, is a priorities issue. Because you've got a number of people saying Maliki needs to go, Maliki needs to form a government that's more representative. That's not our big problem right now. Our big problem right now is ISIS. And we need to be able to say we're going to separate out everything else and we are going to go forward in a way that frankly we ought to have been doing air strikes already that defeat ISIS. And after we've been in there defeating ISIS, we'll then have the credibility to go back to Maliki and say, OK, look, you know, you need to be much more representative. Perhaps we need another prime minister. But that shouldn't be the issue we're focused on today.

CHARLES LANE, THE WASHINGTON POST: Or if at that point if Maliki feels secure, because ISIS is no longer the threat that he can tell us, we don't care about your demands that I'd be more inclusive.

CHENEY: But ISIS is the threat to us.

LANE: It's true, and I think the most we're going to be able to accomplish, if anything, maybe is deny that space to ISIS. But to build something positive in that space, I'm not so sure.

BREAM: All right. We are going to leave it there on this topic. But panel, stick around. We're going to see you a little bit later. When we come back, though, the questions over Lois Lerner's missing e- mails continue.

Congressman Darrell Issa joins us live to discuss what's next in this ongoing investigation.


BREAM: The IRS continues to turn over new documents after claiming to have lost two years' worth of e-mails belonging to ex-IRS official Lois Lerner. Republican and Democratic staffers are reportedly scouring tens of thousands of pages of newly provided material on a holiday week, no less. Joining us now, the chairman of the House Committee on Oversight and Government Reform and a key leader in the investigation, Darrell Issa. Chairman Issa, welcome back to "Fox News Sunday."

REP. DARRELL ISSA, R-CALIF.: Good to be back. Sorry to be still talking about the same issues month after month as we get dribbed and drabbed documents, as you said, in the opening.

BREAM: Well, and to that point, in a letter dated June 27th, the commissioner, IRS commissioner John Koskinen wrote to your counterpart that came over at House Ways and Means and he said, quote, "We are working to complete our production of Ms. Lerner's e-mails for the tax writing committees by the end of next week as promised." Of course, that puts that smack up against a holiday. Now, we've been told tens of thousands of pages of material were turned over. What can you tell us, if anything, about that?

ISSA: Well, you know, he said tax writing committees. Because there's been a double standard. The tax-writing committees, they could have pushed one button, taken everything that came out of this surge, and handed it to tax-writing committees in hours, not over a year. In the case of my committee, they redact and they check to make sure that I'm not getting any of your personal tax information, especially if you were a conservative targeted by Lois Lerner. So there's an understanding of why there's a little delay for us. But the commissioner has had -- three commissioners have had these delays since the beginning of our investigation when, in fact, there should be no looking at these documents. They should simply hand them to the tax-writing committees. Do I expect that there are more documents to come well after this week? Absolutely.

BREAM: All right. You also wrote a letter to the commissioner this week inviting him to clarify some discrepancies in testimony that he gave, sworn testimony before the committee, and comments that we've now had publicly from Lois Lerner's attorney. What are the discrepancies? Will he take you up on that offer?

ISSA: Well, he's asked to come back for a committee hearing that we didn't ask him to come to, related to improper payments at the IRS. And we presume he'd like to use that opportunity to correct the record, and he should. Because either Lois Lerner's attorney is outright not telling the truth, which he's played fast and loose with the truth several times, or the commissioner was inaccurate in his testimony before Congress. Now, the lawyers, Mr. Taylor, is not under oath. The commissioner is. So, hopefully he'll clarify it, support it and it probably will make us understand that Lois Lerner's attorney continues to profess her innocence when we're long past the question of guilt. She broke rules, she broke the law, and she continues to hide under the Fifth Amendment, which is her right, but let's understand, she's, in fact, a person who's been referred for criminal prosecution.

BREAM: She has. And the Justice Department is doing an investigation. It said, it's, you know, a year or so ago that it announced that it was going to do that. The Attorney General Eric Holder says that's ongoing. I know that you and others in the House have concerns about exactly what's happening. One of the committee staffers said that the committee is going to take a, quote, closer look at what the DOJ is or isn't doing. What does that mean? What's the plan?

ISSA: At some point, after you've produced -- and I brought my props. But this is all about the targeting of conservatives, not progressives, targeting of conservatives for their political beliefs. This is a pretty definitive document on Lois Lerner. And there's more to be done. And this is separate from the indictment referral. Now we have to ask, how long will the Justice Department not take on this case? My ranking member Elijah Cummings continues to say this case is over and has been saying it for more than a year. But it's amazing that until the Justice Department actually does a criminal investigation, hopefully with a special prosecutor, the American people aren't going to believe for a moment that, in fact, nobody's at fault here, this was just an accident, some rogue people in Cincinnati as Lois Lerner and the president would have had you believe.

BREAM: So what can you do to push the DOJ or to dig into what they are or aren't doing?

ISSA: We actually think the pressure of an upcoming election, the pressure of the Attorney General wanting to leave at the end of this year may cause them to at least go through the motions of presenting the contempt before a grand jury and coming back with some responses to these rather scathing indictments of Lois Lerner that came out of the Ways and Means Committee.

BREAM: I want to read you something that her attorney said, just a few days ago. This is a quote. "She's been made to be a villain in a way that's very, very unfair. She's a person who did everything she thought was right and now she's being blamed for things which aren't really even scandalous." Does she make a perfect villain for you for the committee?

ISSA: Well, you know, Bill Taylor is doing a really good job for his client, but he's just not telling the truth. Let me just take it as the truth. She did everything she thought she should do. That's right. She agreed with the president in opposing Citizens United, a Supreme Court decision that he was scathing in the House opposing. And she agreed. She agreed with the progressive movement. She disagreed with conservatives. So she did what she thought was right. She went after and tried to stop conservatives from expressing their beliefs, held up systemically along that some of her co-workers, just paused (ph) on others, held up their applications until well after the election, two years and more. She did that.

And she's -- in her e-mail, I remember one of them said she didn't want to look per se political. Yes, she hid the fact that she was politically biased and that she was using the power, the great power of her position, against conservatives and in support of the president's opposition to Citizens United. Her attorney's right in that sense.

BREAM: OK. It's no secret that you and the ranking member, Democrat Congressman Elijah Cummings, are not the best of friends. You've had some differences.

ISSA: Just a bit.

BREAM: He says that you've released things selectively and that you've -- that's given a false impression at times. Seemed like he took a swipe at the committee this week as well. I want to read something he was quoted in "USA Today" saying this. "Our committee and all committees should use taxpayer dollars to help better the everyday lives of our constituents, not inflate the press operations to basically run political campaigns out of government buildings." Your response?

ISSA: Well, he should tell that to the president who has the large political campaign and Air Force one to do it. We have a small staff that work on new media and when I say small, you know, it's less than a handful. The fact is that he talks about selective release. He is free to release the counterpoint of anything we do. When we do these reports, he's free to produce a minority report. But back to the question of releasing selectively. Of course, you shouldn't show your whole hand. Did you ever see a U.S. Attorney hand out an entire case or throw out all the transcripts? We do try to keep the American people informed. We're doing -- partly doing that by being on with you today because it's important they understand. Conservatives were targeted for their political beliefs. Progressives weren't. Lois Lerner broke rules. She broke the law. And now two years of her e- mail are missing. And we may never know all that she did.

BREAM: All right. Chairman, thank you for your time today. We know this is far from over. So we'll continue to follow it. Thank you, sir.

ISSA: Thank you.

BREAM: All right, when we come back, the Supreme Court this week sided with Hobby Lobby, ruling that companies can cite religious objections. And off that, of the Obamacare contraception mandate. We'll bring back our panel to discuss that. Plus, what would you like to ask the panel about that monumental decision? Just go to Facebook or Twitter @foxnewssunday, and we may use your questions on the air.



ADELE KEIM, LEGAL COUNSEL, BECKET FUND: The court issued a careful ruling, it issued a narrow ruling, and it squarely rebuked the administration's groundless position that Americans lose their religious freedom when they go out and open a family business. We're thrilled with this decision.


BREAM: One of the attorneys representing Hobby Lobby in its case before the Supreme Court celebrating Monday's 5-4 decision. We are back now with the panel to talk about that. Mara, I want to start with a question we got via Facebook from Tom Johnson. He says, "What will be the political and legal fallout from the decision? Will another set of religious objection cases start winding their way through the court?" And, of course, we know we have the religious groups now separately fighting this as well.

MARA LIASSON, NATIONAL PUBLIC RADIO: Yes, I think you will have more cases winding through the courts. As far as the political fallout, you heard it just in that clip of tape. It's really important for Republicans and conservatives to say this is an issue of religious liberty, not contraception. And that's what she was trying to do there. The lawyer saying, no, no, this is not about contraception. It's really important for Democrats and women's groups to make this about contraception. Because that is the fault lines along -- that the midterm elections are going to be fought. Democrats desperately need to energize single women, unmarried women. This is a very important issue for them. So, it's important that they see this as a threat to contraception.


EASTON: And we have seen this already play out. So in 2012 when the White House looked like a frontal assault on the Catholic Church, which at first seemed really stupid. Like, why would you take on the Catholic Church over this issue? Well, it turned out that that contraception issue got into the table -water table, excuse me, of the presidential election, and it suddenly became Republicans want to take away your contraception. That's how it got contorted. And Romney won married women. He lost single women.

LIASSON: By 29 points.

EASTON: Yes. And Mara is right. And keep in mind, single women are a growing portion of the vote. So this could really hurt Republicans in 2014. And, I think, you know, you have to look at races like Kay Hagan and Mary Landrieu. Both Democrats, both potentially -- both vulnerable Democrats, but this could actually help them.

LIASSON: And the court didn't help with the Wheaton decision.


BREAM: Right. To catch everybody else on that, there are religious groups that the administration has created an accommodation for them. They can say I'm a nonprofit religious group. I have objections. This is different than for-profit Hobby Lobby. There's the form they want them to sign which would then absolve them of any connection to the contracept -- this is third party that handled that. A number of these groups, dozens of them across the country, are challenging that saying we don't want to sign a permission slip for something we'd never agreed to and never give permission to. Wheaton College was among those who filed for an emergency injunction at the Supreme Court. And they got one. And there was a very lengthy dissent. I want to read a little bit of it. Because this came from Justice Sotomayor and Justices Ginsburg and Kagan signed on as well. And she said, you know, we feel like there's been a switcheroo with the Hobby Lobby decision. She said, "Those who are bound by our decisions usually believe they can take us on our word. Not so today after expressly relying on the availability of the religious nonprofit accommodation to hold that the contraceptive coverage requirement violates RFRA, that Religious Freedom Restoration Act as applied to closely held for-profit corporations. The court now as the dissent in Hobby Lobby feared it might, retreats from that position." Liz, how does that complicate the conversation now? CHENEY: You know, I think both of these cases -- I mean, with respect to Wheaton, the court was doing something that was very straightforward, was saying essentially Wheaton doesn't have to fill out the form that they're bringing suit about until the case has been heard.

BREAM: Right now.

CHENEY: Yes. Now, Justice Sotomayor, if you look at her dissent, at the end of it, she basically says, this is just not the way we normally grant an injunction, but there's a huge amount of passion in the beginning of that dissent. I think that both of these cases show, particularly if you look at the dissent, the court was saying Religious Freedom Restoration Act says that government's got to have a compelling interest if it's going to burden your free exercise of religion, and it has to choose the least restrictive means to do that. And they said in the case of Hobby Lobby, this isn't the least restrictive means. It was very straightforward. The dissents of both of these cases, though, show the passion that's there, but also, frankly, a legal theory that we haven't seen before, which is essentially a theory that says abortion rights trump everything else. Abortion rights are more important than the free exercise of religion. This isn't about Republicans blocking access to contraception. This is about the court saying, this is the law. And don't forget that RFRA was passed unanimously in the House, only- yes, three votes against it in the Senate, and signed by Bill Clinton.

BREAM: Right.

CHENEY: So, this is very clearly a defense of the free exercise of religion, not trying to somehow prevent women from getting access to contraceptives.

BREAM: Well, and already we're now seeing full-page ads calling for the repeal of RFRA because people are still upset, which there's always a backlash whenever the Supreme Court does anything controversial. And when it's 5-4, it's always controversial. Chuck, I want to give you the question that we got from Twitter. Jackie Brooks, she asks, will this lead to more challenges of the ACA that makes the full implementation and enforcement of the law impossible? And this was a regulation, of course, that stemmed from the law, it wasn't the law itself. But is it the first bite of the apple? Will it open other opportunities?

LANE: I don't think so. If she's saying would it make it the full implementation impossible, I think we're past that point. We had the big health care case at the Supreme Court, the statute was found constitutional. But do I think it can kind of, you know, sort of nip at the heels, so to speak, of this law and create a lot of controversy? Yeah. And the Wheaton case is a good example of that. I guess I have to say that I view this as a very difficult issue, right. This is not an easy question, where religious liberty ends and the federal government's legitimate authority to put a welfare program in starts. But one thing you can be sure of, Shannon, is we're not going to have a nuanced, calm discussion of this over the next eight months, we are going to have ... BREAM: The dust is still settling.

LANE: We're going to have a battle because Mara's right. The ads are already started in the North Carolina race against Tom Tillis, but over in Arkansas where Mark Pryor is running for re-election as a Democrat, they're using these cases against him because, you know, apparently the ruling is more popular in Arkansas and people are saying, well, Mark Pryor wouldn't have put Sam Alito on the Supreme Court. The Supreme Court is more politicized and polarized than ever. It's a reflection of what's happening in the broader electorate. And, you know, I don't think that's a good thing because I think the Religious Freedom Restoration Act itself is a token of an earlier, more bipartisan time when Congress was capable of getting together and attempting to strike a balance on these very emotional subjects. And that time, that was 20 years ago. That's over.

BREAM: Well, and within minutes of the ruling coming out and people sort of digesting it, we heard not only -- well, you heard from the White House eventually, later in the day. They said, the constitutional lawyer in the Oval Office does not approve. Not surprising. But again, putting that emphasis on, well, he understands the Constitution and how this all works. Although, you know, he's taking a lot of heat from not necessarily adhering to it at all times.

LANE: Well, it wasn't a constitutional ruling, by the way. It was a statutory ruling.

BREAM: Right. They stayed away from the ...

LANE: The statutory ruling. So ...

CHENEY: Well, and his constitutional interpretation has left a lot to be desired in many instances in this administration. So, I think the fact that he opposes this ruling, you know, it was a ruling based on what the Religious Freedom Restoration Act says. And it's a very practical ruling.

BREAM: All right. We've got to leave it there, panel. Thank you very much. See you next week. Well, up next, bringing America's heroes to the highest courts in the land.


BREAM: The Supreme Court is our nation's highest court, and the Pentagon a symbol of the U.S. Military. One woman has made it her mission to unite the two by thanking our wounded warriors.


MARTHA-ANN ALITO: Well, I'm very lucky.

BREAM: Martha-Ann Alito has led a life full of unexpected adventures, living all over the globe as the only daughter of parents who both served in the U.S. Military, ultimately landing in our nation's capital when her husband Samuel Alito was nominated to the U.S. Supreme Court. Not long after she started putting down D.C. roots, a friend invited her to Friday appreciation day at the Pentagon.

MARTHA-ANN ALITO, WIFE OF SUPREME COURT JUSTICE ALITO: You walked through the Pentagon, all of the members of the service who had been in whatever capacity wounded were walking through the corridors of the Pentagon, and everyone came out and applauded. It was so moving. At that point, it occurred to me, well, the military, they're fighting for the rule of law. Let's bring them to the court.

BREAM: Savvy, connected, and determined, Alito worked to arrange visits, which now happen twice a year, most recently in early June.

(on camera): What does it mean to you when you see them getting off the bus and you know they're about to have something very special?

MARTHA-ANN ALITO: Well, my heart just swells. I cannot tell you how much I love this country. I believe fully in American exceptionalism and the fact that these young people understand the concept of what our country is about, that it is for all of us, that they are willing to sacrifice themselves for all of us really makes me think, what have I done lately?

BREAM (voice over): Though she spearheads the visits, which include behind the scenes tours of the court, an afternoon tea, and visits with the justices, Alito deflects any praise, noting the scores of volunteers who get involved in everything from transporting the wounded warriors to making sure their every question is answered.

MARTHA-ANN ALITO: The warriors themselves will run around to each justice. Justice, may I have your picture, may I have your autograph? Justice, would you mind? Would you mind? Could we discuss this?

BREAM: Alito says she used to be surprised at how complex some of the questions from the soldiers were, showing a deep understanding of the Constitution and intricate legal issues.

MARTHA-ANN ALITO: I would go back and talk to Sam and say to him, you won't believe the question that came up, and I'm still amazed that this happened.

BREAM: That's important to her because all along her hope has been that the soldiers and justices would see their shared link in defending America's foundations. Alito says many of the justices send her notes after the visits, telling her how humbled they are.

(on camera): What experience do you want them to have? How do you want them to remember that, both the justices and the wounded warriors and their families who visit? What do you hope all sides get out of it?

MARTHA-ANN ALITO: The biggest plus is that indeed their country and the justices value their service.


BREAM: The wounded warriors' next visit to the court is in November. A special thanks to the Marines, Army, and the Supreme Court for allowing us to share the story with you. And that's it for today. Have a great week. We'll see you next "Fox News Sunday."

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