This is a rush transcript from "Special Report," December 22, 2014. This copy may not be in its final form and may be updated.
JOHN ROBERTS, HOST: The president over the weekend saying that the alleged North Korean hack at Sony pictures was not an act of war. It was an act of cyber vandalism. Senator John McCain disagrees, thinks it's an example of the new form of warfare that we face. Senator Lindsey Graham said he believes it's terrorism. Juan Williams, what is it?
JUAN WILLIAMS, SENIOR EDITOR, THE HILL: I think it was cyber vandalism. I don't think it was an act aimed at our military, aimed at our government functions. So it wasn't aimed at the state. It was aimed at a major American corporation and our culture and apparently the North Korean leader thinks that he can take this action independently without any consequence. So I think it was sort of a punk move. It wasn't intended to start a war. It's not, you know, Senator McCain said that the president needs to understand that this is a new era and that kind of cyber-attack does amount to warfare. I would disagree.
ROBERTS: Would you say, Jason, it was terrorism?
JASON RILEY, WALL STREET JOURNAL: Well, the president doesn't call it terrorism.
ROBERTS: No, but Senator Graham did.
RILEY: Right. But one of the responses to it is apparently considering putting them back on the terror list. So, whatever it is, whatever you want to it call it, it warrants that sort of serious response. And I think that is one of the things we can do and should do. I think the Bush administration was wrong to remove North Korea from that list when it did in response, you know, in exchange for a promise from North Korea to eliminate their nuclear program. They clearly haven't done that. So I think that is one possible response.
Another good response, I think, would be to go after the banks that we suspect of laundering money for North Korea. We know who those banks are. And I think we could also consider taking action against them. That, too, would squeeze the regime.
ROBERTS: Jason brings up a couple of good points. If it's cyber vandalism why do you put somebody on the terror list? And was President Bush wrong for taking them out in the first place?
CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Yes, he was. And it's not something you want to do as a trade. We are working on their plutonium facility and getting a promise of dismantlement and in return we took them off the list. But if the list is an authentic list it shouldn't be a trading item.
But Juan talked about this being a punk move. Well, unfortunately, this guy has punk nukes. And if they land on you it would have the same effect as a real nuke. I'm glad we are retaliating. There is a report, as we reported earlier in the show, that the entire network Internet in North Korea has gone dark. And as --
ROBERTS: Of which the U.S. government knows nothing about.
KRAUTHAMMER: We know nothing, which I'm glad to see, and as I predicted on Friday, it has brought the entire North Korean three car trolley system to a screeching halt. So it's having its effect. When the president says a proportional response you can't have one against a country that essentially has nothing. So he doesn't have any tools other than a military attack, which is incidentally why he can't use the word "an act of war," because if you are a president and you say that you have to retaliate in some military way.
RILEY: Release the movie. Get the movie out there. That too would really hurt them. ASAP.
KRAUTHAMMER: As with everything they are about three weeks late. They should have released in immediately and made it the most watched movie in the history of the world.
ROBERTS: Judging from reviews maybe they should have released it in North Korea only.
KRAUTHAMMER: It's going to be the most seen movie in American history and it will probably one of the worst. It will not speak well for our culture. But, nonetheless, it has to be released.
ROBERTS: The idea of a proportional response, though? Can you have a proportional response or, if you are the president, do you have to come down heavy and say don't be hacking our companies, don't be messing with our economy?
WILLIAMS: Well, you absolutely have to do it. The thing is, the United States and China, you know, have had their fingers in this pie before. We went after Iran as a way to slow down their nuclear program. China has been suspected, I think more than suspected of trying to infiltrate our government. And that's the difficulty there. By the way, let me just note that it's a rare Christmas season point of agreement that all three of your pundits today think release the movie. Let it out. And I do say it may not be a Christmas treat, but don't let anybody censor and bully us. That was a mistake.
ROBERTS: Thanks, guys, appreciate it. That's it for the panel. But stay tuned for a look back at one of the moments that really made us laugh this year.
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