Impact of Clinton email controversy, Planned Parenthood on 2016; Rand Paul tries to reignite his campaign

Republican presidential candidate Carly Fiorina and Jess McIntosh, a top official with Emily's List, join the debate


This is a rush transcript from "Fox News Sunday," July 26, 2015. This copy may not be in its final form and may be updated.


Will Hillary Clinton face an FBI investigation over the handling of special secrets on her personal e-mail?


HILLARY CLINTON, DEMOCRATIC PRESIDENTIAL CANDIDATE: I did not e-mail any classified material to anyone on my e-mail.

We are all accountable to the American people to get the facts right. And I will do my part.

WALLACE: Plus --

UNIDENTIFIED FEMALE: Well, you know, in negotiations, the person who throws out the figure first is at a loss, right? So --

WALLACE: The fallout over a new Planned Parenthood undercover video and what it means for the abortion debate. We'll discuss both issues when presidential candidate Carly Fiorina debates Jess McIntosh, a top official with Emily's List.

Then, Senator Rand Paul tries to reignite his campaign.

SEN. RAND PAUL, REPUBLICAN PRESIDENTIAL CANDIDATE: I'm Rand Paul. And I'm trying to kill the tax code, all 70,000 pages of it.

WALLACE: We'll ask the Kentucky senator about his strategy to regain his momentum ahead of the first presidential debate.

And our Sunday group weighs in on a slump in the polls for Clinton and Donald Trump's threat to run as a third-party candidate.

DONALD TRUMP, REPUBLICAN PRESIDENTIAL CANDIDATE: Look, I'm a Republican. I'm a conservative. I'm running. I'm in first place.

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


WALLACE: And hello, again, from Fox News in Washington.

Hillary Clinton's campaign has been hit by a bombshell. News that two inspectors general sent a referral to the FBI about the mishandling of classified information on Clinton's e-mail account.

In a moment, we'll have a debate between Republican presidential candidate Carly Fiorina and a top official of the liberal group, Emily's List, about that and those undercover Planned Parenthood videos.

But, first, let's get the latest on the Clinton case from chief White House correspondent Ed Henry -- Ed.


ED HENRY, FOX NEWS CHIEF WHITE HOUSE CORRESPONDENT: Chris, this weekend, Hillary Clinton is trying to rip the band-aid off and get this scandal behind her. But there are new signs today more political and even legal problems could be coming.

CLINTON: I never sent nor received any information that was classified at the time it was sent and received.

HENRY: Eager to turn the page on her e-mail troubles, Hillary Clinton abruptly revealed Saturday she'll testify before the House Select Committee on Benghazi in October, setting up a showdown with Republican Chairman Trey Gowdy, who could uncover new revelations four months before the Iowa caucuses.

CLINTON: I have said repeatedly that I will answer questions before the House Committee.

HENRY: Yet, there's a dispute over which questions. Clinton lawyer David Kendall, a veteran of the Monica Lewinsky scandal wants to limit it to Benghazi and lock in October 22nd as Clinton's only appearance to finish this before 2016. Gowdy will not agree to a date yet, because the State Department has been slow to hand over e-mails. Republicans worry key documents will be held back until after the appearance. A committee aide adding, while Clinton wants only Benghazi questions, quote, "her e-mail arrangement clearly falls within the scope of the select committee's jurisdiction."

That arrangement came under fire again after two inspectors general found Clinton sent at least four e-mails with classified information despite this promise.

CLINTON: There is no classified material.

HENRY: In fairness to Clinton, the e-mails did not contain classification markings, though investigators believe her server may contain hundreds more classified e-mails. While Clinton aides pounced on "The New York Times" dialing back on its original report, suggesting it's now a criminal matter. Republicans note the improper handling of classified information can lead to charges.

And this week, the State Department is slated to release more of Clinton's e-mails in response to a court order, which could lead to more revelations, especially if the intelligence community blocks the release of some of those e-mails to prevent the leak of more classified information -- Chris.


WALLACE: Ed, thanks for that.

Joining us now, one of the Clinton's toughest critics, Republican presidential candidate Carly Fiorina, and Jess McIntosh, the vice president of the Emily's List, which works to elect Democratic women who take liberal stance on abortion and other issues.

Ms. Fiorina, let's start with the security referral by two inspectors general to the FBI.

Do you think that Hillary Clinton broke the law?

CARLY FIORINA, REPUBLICAN PRESIDENTIAL CANDIDATE: Well, it's clear she broke the rules. It's absolutely crystal clear she broke the rules. It's crystal clear that she has been engaged in a cover-up of lots of things. Benghazi, the fact that she broke the rules.

I mean, how amazing that she's had this server in her basement all this time and decides to wipe it clean two years after she leaves the State Department and just before she gets ready to run for president. Of course, she's engaged in a cover-up and, of course, she's broken the rules.

WALLACE: Ms. McIntosh, here are two inspectors general, two independent government watchdogs who said in their referral to the FBI that there was classified information that was being transmitted -- classified information at that time, not subsequently, that's still classified -- and that this is information that never should have been transmitted through private e-mail.

JESS MCINTOSH, EMILY'S LIST: You know, questions about the e-mails have been asked and answered for months. She said repeatedly that she's looking forward to testifying before the committee and I know she intends to do that.

I think that she's very smartly kept her presidential campaign focused on the lives of every-day Americans and what she wants to do for them as president.

I think that's where voters want her to be.


MCINTOSH: I think that's the kind of debate they want to have with her candidates and I think she's doing the right thing by keeping it there.

WALLACE: Ms. Fiorina, is this information about the private emails and possible mishandling of classified information -- is that irrelevant?

FIORINA: It's completely relevant. It's right at the center of what voters care about, because you see, we know voters care about whether a potential president is trustworthy. And what voters are discovering, day after day, drip by drip, is that Hillary Clinton is not trustworthy. It is the heart of the matter.

She's not trustworthy. She has engaged in cover-ups and she's not been truthful. And every day that goes by we learn that over and over and over.

And no amount of spin and no amount of talking points is going to change that reality.

WALLACE: Ms. McIntosh, the fact is that voters in the polls are saying by substantial numbers they don't find Hillary Clinton honest and trustworthy.

MCINTOSH: And, of course, she's leading Republican rivals in the polls, because I think voters are --

WALLACE: No, no, no, that's not -- wait, wait, that's not true anymore. In fact, she's trailing in three key swing states in a poll this week.

MCINTOSH: In one that appeared to be an outlier. There are some discrepancies with how many Republicans they sampled. But the point is, consistently, voters have been really excited about her message to make the American economy work a little bit better for American families.

WALLACE: Forgive, and I really do want to keep this fair and balanced.


WALLACE: But you're not answering my question. What about the honest and trustworthiness?

MCINTOSH: Yes, I think that she has a long campaign to talk to voters about who she is, about why she's doing what she's doing, about what she wants to do for them. I think that we'll see those numbers change.

I think that we're seeing voters still very interested in what she's going to do for them as president despite those numbers. So, there's a little bit of strangeness there.

But I think she's going to keep the conversation going and it's going very well for her so far.

WALLACE: OK. Lets turn to undercover videos that anti-abortion activists have released in the last couple of weeks. Here's what would planned parenthood officials said in these undercover videos about altering abortions in order to be able to retrieve fetal tissue. Here it is.


PLANNED PARENTHOOD OFFICIAL: We've been very good at getting heat, lung, liver, because we know that, so I'm not going to crush that part. I'm going to basically crush below, I'm going to crush above, and I'm going to see if I can get it all intact.

PLANNED PARENTHOOD OFFICIAL: I'll mention this to Ian and see how he feels about using a "less crunchy" technique to get more whole specimens.


WALLACE: Ms. Fiorina, less crunching technique, crushing above and below, specific organs to be used for fetal research. What's wrong with that?

FIORINA: Oh, my gosh! By the way, this has nothing to do with whether you're pro-choice or pro-life. This has to do with the moral foundation of our nation.

If a woman was sitting outside of Planned Parenthood, in, for example, her OB/GYN's office, looking at this ultrasound at the same point in her pregnancy, her doctor would be saying to her, look at your baby. Look at its heartbeat. Look at its fingers and toes.

This is an abomination that Planned Parenthood has lobbied against a woman's opportunity to look at an ultrasound before she makes an incredibly difficult choice to end the unborn life within her. And yet they are using that same technology to harvest body parts, which they claim are not a life, in order to sell them to save another life.

It is unbelievably hypocritical and I frankly find it astounding that anyone can defend it.

WALLACE: Well, Ms. McIntosh, let me ask but what specific aspect of this, because the law on this is clear, and let's put it up on the screen. No alteration of the timing, method or procedures used to terminate the pregnancy was made solely for the purposes of obtaining the tissue.

That is the law. But here's what one of the Planned Parenthood officials says.


PLANNED PARENTHOOD OFFICIAL: Before, a usual technique is suction, at 10 to 12 weeks. And we switch to using an IPAS, or something with less suction, or to increase the odds that it will come out as an intact specimen. Then, we're kind of violating the protocol that says to the patient, we're not doing anything different in our care of you.


WALLACE: But, then, Ms. McIntosh, the same woman says that she's going to ask the surgeon at this Planned Parenthood facility about violating the protocol about switching procedures in order to get better parts. Isn't that a direct violation of the federal law?

JESS MCINTOSH, EMILY'S LIST: I mean, after hours of talking to this staffer in this dishonestly edited video, they got her to say she would talk to a doctor. That's not an admission of a crime.

Listening to this language is ugly and uncomfortable and I completely understand that. The whole concept of organ donation is a really difficult thing to think about.

But the families that benefit from this life-saving medical research are immensely grateful for kindness that patients do when they donate these things. We're talking about people with loved ones with Alzheimer's, Parkinson's. This exact kind of tissue donation was used to make the rabies vaccine, the chicken pox vaccine, the polio vaccine.

This directly relates to American's health. This is life-saving medical research.

WALLACE: Let me -- let me bring Ms. Fiorina, because that's certainly one of the points that defenders of this procedure make. Fetal research has been useful in testing drugs, has been useful in finding cures for diseases. The National Institutes of Health spent $76 million on research on fetal tissue. So, you know, you may not like the way it's happening but don't these tissues, don't these organs, go for a good cause?

FIORINA: Well, let's just start with her comment about a heavily edited video. I mean, I find it fascinating that Planned Parenthood, Emily's List and all the rest of the pro-abortion lobby are now suddenly so concerned about a heavily edited video. I don't recall them ever being concerned about a heavily edited video of, say, Mitt Romney at a fund-raiser. I don't remember them being concerned about Edward Snowden. We've had a lot of things where information has come out that we needed to see.

So, instead of going after the people who have put out this video information we clearly need to see, let's talk about the issue here. Of course, they're trying to change the subject. Of course, they're trying to say this is life-saving research.

I just find it amazing that this group of pro-abortion lobbyists continue to say that they are protecting women's health. Really?

Late-term abortion is bad for women's health. They continue to lobby against parental notification. Really? It's protecting a teenager's health that she can go to a tanning salon or get a tattoo without -- with her mother's permission but she can get an abortion without her mother's permission?

This is not about someone else's health. This is about a woman's health, a woman's opportunity to have all of the choices in front of her and it's about a life that she is bearing.

So, let's talk about -- once again, I'm pro-life as you know, Chris, but there are plenty of pro-choice women who are horrified by this as they should be. And, by the way, after-hours honestly, the fact that these officials can sit here swilling their wine, drinking their salad, laughing over getting a Lamborghini and talking about specimens and fetal tissue, I just find it horrifying --

WALLACE: All right. Let me --

FIORINA: -- and the majority of Americans do as well.

WALLACE: Let me pick, because there are two issues here, specifically whether or not you are in favor or not of abortion, Ms. McIntosh, the altering of the procedure and the procedure has to be altered in order to get fetal body parts. There's also the question of price, because selling fetal tissue for profit.

And here's undercover video of a Planned Parenthood official seeming to be haggling over price. Here she is.


UNIDENTIFIED FEMALE: What would make you happy? What would work for you?

PLANNED PARENTHOOD OFFICIAL: Well, you know, in negotiations, the person who throws out the figure first is at a loss, right? So --


If this in the ballpark, then it's fine. If it's still low then we can bump it up. I want a Lamborghini.


WALLACE: I mean, you can't deny what you're seeing there, Ms. McIntosh. She's haggling over the price.

MCINTOSH: I saw a tasteless joke absolutely. But --

WALLACE: Wait, wait, it was more than just a joke. She also said talking about what the price is, she says, well, the first person to offer --


WALLACE: -- always ends up at the low end.

I mean, the law is they are allowed to recover costs.


WALLACE: Cost is cost. If it's $100, it's $100. But she's talking about something more than cost.

MCINTOSH: And she had also said in the same video that had been so long since she had a conversation where somebody wanted to discuss compensation that she didn't even know what cost was. So I think talking about the deceptively edited videos does matter when they take out the ten times where the Planned Parenthood staffer very clearly says they wouldn't be able to sell this because it violates the law and they're not going to do that.

WALLACE: I think that was the other staffer, right? I don't think this was this one.

MCINTOSH: That was the other staffer, correct, yes.

I think that Republicans maybe risk alienating folks that they're not thinking about alienating when they talk about the abortion debate the way Ms. Fiorina does. I think it's important to know that 65 percent of the women who get abortions are moms already. And the decision when to have a child is the most important economic one that most American families will ever face. I don't believe that politicians should be involved in making that choice for them. And I do think that there are a lot of women --


FIORINA: For heaven's sake, the left --

MCINTOSH: On both sides of the aisle --

FIORINA: Politicians are involved all the time. And politicians are involved in this debate all the time. Emily's List, a pro-abortion lobby organization, is involved in politics every single day, and consistently, Emily's List is lobbying for pro-abortion candidates. There's simply no justification anymore for federal funding of Planned Parenthood.

MCINTOSH: I think that --


WALLACE: Wait, wait, ladies --

FIORINA: The only reason Planned Parenthood is standing up asking to continue to be federally funded --


WALLACE: This will work better if you let me ask the question, because this is the last time we're going to have time to talk about, and that is the issue of federal funding, because Ms. Fiorina, you have called for an end to federal funding. It's about half a billion dollars a year of federal funds that goes to Planned Parenthood.

I want to put up these statistics. It is Planned Parenthood, the nation's single largest provider of abortions, 327,000 in 2013. But it also performed 487,000 breast exams and 704,000 HIV tests. Hillary Clinton says it's a matter of women's health.


CLINTON: I'm hoping that this situation will not further undermine the very important services that Planned Parenthood provides.


WALLACE: Let me pick up on that with you Ms. Fiorina. Doesn't Planned Parenthood do a lot of things? If you defund them, aren't you going to lose things likes breast exams and pap smears and HIV tests?

FIORINA: Oh, gee, I thought Obamacare was supposed to take care of that.

I'm so tired of the canard about women's health. There are plenty of places where women can achieve and have these services.

If Planned Parenthood is so concerned about women's health, why don't they accept, for example, federal funding of pregnancy centers, one next door to every single Planned Parenthood clinic, so that women can look at an ultrasound before they choose to have an abortion? Or so that they can have options presented to them if they choose to bring the life into the world?

But, no, Planned Parenthood doesn't want that. Look, this isn't about women's health. This is about Planned Parenthood wanting to preserve their political power so that they can lobby consistently on behalf of pro- abortion Democrats. Why should they be given federal funding? Why should they get federal funding so they can continue to lobby for certain candidates as Emily's List does every single day.

WALLACE: Ms. Fiorina, Ms. McIntosh, we have run out of time. I want to thank you both. Thank you for joining us today.


FIORINA: Thanks.

WALLACE: Up next, Republican presidential candidate Rand Paul looks to revive his campaign ahead of the first GOP debate. We'll ask how he plans to do that when we come right back.


WALLACE: A look outside the Beltway at the New Jersey Festival of Ballooning this weekend.

But now back to the race for the White House. Just 11 days before the FOX News/Facebook First Presidential Debate on August 6th in Cleveland.

Kentucky Senator Rand Paul will almost certainly be on the stage as one of the top ten candidates in the national polls.

Senator Paul, welcome back to "Fox News Sunday".

PAUL: Thanks for having me, Chris.

WALLACE: I want to start with a couple subjects we discussed in the previous segment. Do you believe that Hillary Clinton broke the law in her handling of classified information on her private e-mail? And what if the Justice Department decides not to investigate?

PAUL: Well, I think it's pretty damning that President Obama's Justice Department has even brought this up -- the fact that they are saying that they're concerned that classified information was transferred.

But I think people have to understand how many things are classified. Even her daily schedule is classified to protect her and to protect the people who protect her. Think about if she had e-mailed the ambassador in Benghazi. I don't think she ever did communicate with him. But had she just tipping off people to his whereabouts through e-mail would be something that would be very sensitive if not classified.

So, that's why we have a rule and that's why even she knew there was a rule. They actually admonished one of her ambassadors because he wasn't using the proper server. So, I don't understand how she can skate by and act as if she really wasn't aware of the law.

WALLACE: Let me ask you about the Planned Parenthood videos. After they were released, you offered an amendment to the highway funding bill to defund Planned Parenthood, but Senate Majority Leader McConnell is not even going to offer you a vote on that amendment.

So, what are you going to do now?

PAUL: I think conservatives across the country are outraged by this. I've submitted a discharge petition. This is highly unusual for a non- leadership position to submit a discharge petition. This means that I'm going to try to force a vote on this.

I think the time is now to discuss whether taxpayer dollars should be going to such a gruesome procedure. I mean, the doctor on video in a casual voice while sipping wine and eating Brie, talks about rotating the baby around so she can get better access to baby parts that she's gong to harvest for sale to researchers.

So, I really think that time has come in our country to debate -- do people want their taxpayer dollars going to this kind of procedure?

WALLACE: But what happens if it looks like you're not going to get a vote on the Senate floor?

PAUL: They may block me today on a vote on an amendment to the highway bill but I'm trying to file for a discharge position to have a separate bill. If I have 16 senators to sign a bill saying they think we should defund Planned Parenthood, and I guarantee you that people across America who are outraged by this are going to call their senators and say, have you signed Rand Paul's discharge position? Because they're going to want a vote on defunding Planned Parenthood, and I think we actually might be able to win that vote, because I think even pro-choice people are horrified of the idea of sort of preserving part of the baby and not crushing the brain so we can harvest the liver.

People are outraged by this, and I think the American people deserve to have a vote on it.

WALLACE: Senator, let's turn to the state of your campaign.

Back in December of 2013, you were running second in the polls with 17 percent. Last November, you ranked first in the polls with 11.8 percent. But now in the latest Real Clear Politics of polls, you're in seventh place with 5.6 percent support.

Question: Why has your campaign lost momentum, sir?

PAUL: I'm not so sure we have. I mean, there are a lot of polls out there. And some of the polls that we find very interesting are when you poll my candidacy head to head with Hillary Clinton, we actually beat Hillary Clinton in five states won by President Obama. We lead her in Pennsylvania that hasn't been won by a Republican since 1988.

So, this is what I've been saying about my candidacy. I'm a different kind of Republican. I'm a Republican who can win independent vote.

In all five of those states we beat Hillary Clinton by nearly ten points among independents, that's how you win. So, we have to convince enough Republicans that this is a winning message and I can actually win the purple states, and that's what the early polling shows.

WALLACE: There is also a sense, in terms of your diminished status at least in the Republican primary polls, that the world has changed on you. You were running strong in the polls a couple of years ago, even a year ago, when your positions on limits to foreign intervention, limits to domestic surveillance were very popular.

But now with ISIS on the march and with increased domestic terrorism at home, there's a concern that maybe you aren't tough enough on those issues.

PAUL: I think the interesting thing is, we poll these issues and we asked these questions of voters all of the time. And there was a poll not too long ago in Iowa and they ask, do you think e should be more involved in foreign war like John McCain who wants to be everywhere all the time, or do you think we should be less involved or more judicious and only go to war when we have a threat to an American interest, a vital American interest, like Rand Paul?

And it almost polls equally in Iowa, same in New Hampshire, same in Nevada. So, I think the party is split on some of these things. I do want to defend America. I will defend against terrorists.

In fact, I think I would do a lot more than the others on the stage because I think they are distracting ourselves from the real -- from the real terrorist threat by collecting so much information that we get inundated by the information and we get distracted. I want to collect more information on terrorists, but I want to do it according to the Fourth Amendment was put forward that suspicion should be individualized and there should be a warrant with the judge's name on it.

PAUL: Senator, as you know, FOX News and Facebook are teaming together to put on the first Republican presidential debate on August 6th in Cleveland and we are asking you, the viewers, to submit questions either written or videos that we're going to ask candidates on that stage.

Facebook tells us that the top three issues among people who talk about you are taxes, intelligence gathering and privacy and homeland security. And here's a comment from Johnny Anderson on Facebook, who writes, "Senator Rand Paul is working overtime to protect homegrown terrorists. Americans are dying."

Senator, how do you answer Johnny?

PAUL: I think it's kind of a misunderstanding of the situation. The interesting thing is we just had another terrorist shooting in Chattanooga. We had Boston bombing. We had Major Hasan at Fort Hood. All of these occurred under mass accumulation of data, the bulk collection of data that President Obama is doing, which has been ruled illegal by the courts and I think contravenes that Fourth Amendment.

So, we've been having these terrorist attacks despite the collection of all this information and the interesting thing is, when you look at it, I think maybe we're distracted by too much information.

Malcolm Gladwell puts it this way, he says good decision making isn't about knowledge or data, it's about understanding the data. So, I actually want to collect more information about terrorists but I don't want to indiscriminately collect all Americans information and invade their privacy. So, I think what we've been doing, even the government admits, we haven't been catching many terrorists with this bulk collection of data.

Congress now says we shouldn't do it. The courts have said we shouldn't do it. And I think it goes against every sense of what the Founding Fathers put into the Fourth Amendment.

So, no, I think my position on privacy is very popular. People under 40 -- 83 percent of people under 40 think the government shouldn't be collecting your phone records all the time.

WALLACE: Senator, you put out a video this week that showed you destroying the IRS tax code and at various points, you set it on fire, you feed it into a wood chipper, you use a chainsaw to take to it.

And I guess the question I have, because it does seem to be a bit of a stunt, is this an effort to take the spotlight away from Donald Trump who seems to be soaking up all of the media's attention these days.

PAUL: Well, you know, I have three teenage sons. And the teenage sons don't watch the news channels but they pass things around from friend to friend. And so, I think what you find is that if you have something interesting or people think is clever or funny, it gets passed around from teenager to teenager.

And so, that's why I'm trying to put things out that sometimes will get into the hands of youth who aren't watching the traditional news.

WALLACE: Senator, one of your big issues in this campaign, I think you have been talking about it more than any of other Republican candidates, is trying to grow the party. You're campaigning in inner cities, you're reaching out to minorities. Do you worry that Trump's comments about illegal immigrants coming over the Mexican border is going to hurt that effort and alienate the very kind of voters that you're trying to attract?

PAUL: You know, every candidate is going to have to do what they want to do. My concern is that I want to reach out to new people, go places that no Republican has been going. So I've been to Detroit. I've been to Ferguson. I've been to the South Side of Chicago. I've been to inner city Philadelphia at a Boys Latin school. I've been trying to go places that no one else is going. I've been to the historically black colleges. I'm going to keep doing that and reaching out. And when I think of immigration, I think that you do have to have a secure border, but I don't automatically think, oh my goodness, that immigrants are bad people. I think the opposite. I think of my great grandfather, who came here from Germany, and I think that most immigrants come here seeking the American dream. And I'm not going to vilify all immigrants with a broad brush.

I think that there are some bad people. And I put in legislation on the sanctuary cities to try to make sure that never happens again, but I think by and large, the people who come to our country want the American dream.

WALLACE: Senator Paul, thank you. Thanks for coming in. We'll see you on the campaign trail, and most likely at that first debate. Thank you, sir.

PAUL: Thank you.

WALLACE: Up next, our Sunday group joins the conversation about Hillary Clinton's potential legal problems and Donald Trump's threat.



CLINTON: I'm certainly well aware of the classification requirements and did not send classified material. We all have a responsibility to get this right.


WALLACE: Hillary Clinton in March and again on Friday, defending her use of a personal e-mail server as she now faces the possibility of an FBI investigation. It's time now for our Sunday group. Fox News senior political analyst Brit Hume. Sheryl Gay Stolberg of the New York Times. Syndicated columnist George Will, and Fox News political analyst Juan Williams.

Brit, there was a lot of bad news for the Clinton campaign this week. First of all, as we just saw, the referral by two inspectors general to the FBI about the handling of classified e-mails, classified information on her private e-mails, and then also some polls. Let's put these up on the screen. Quinnipiac polls in the swing states of Colorado, Iowa, and Virginia showing her trailing Marco Rubio, Jeb Bush and Scott Walker in all three of those states. And in those states, her numbers have dropped on the question of whether she's honest and trustworthy. Brit, how serious for Hillary Clinton, both the polls and also this new potential investigation?

BRIT HUME, FOX NEWS SENIOR POLITICAL ANALYST: I was stunned by those polls. I didn't believe that she had fallen that far in the eyes of voters in states where she was going to be expected to get a decent reception. So I think it's striking. And I think this whole e-mail controversy feeds that. And the news that these inspectors general looking at what, 40 out of thousands, found what, ten instances in which they thought -- four instances, excuse me, 10 percent, in which classified material that they said was classified at the time the e-mails were written and sent, that to me says -- that goes to the question of whether she's, as I think she's proven herself to be many times, a liar.

She said there's no classified information in these e-mails of hers. And on a small sample, they found 10 percent presence of classified information.

Whether the Justice Department will ever do anything about it is highly dubious, but it does feed the public perception of here.

WALLACE: Sheryl, how big a deal for Clinton? The fact that you have two inspectors general. We should point out, these are government officials, but they're independent, outside the bureaucracy, State Department and intelligence community saying that there was classified information, classified at the time, that was being sent, and some of it was being sent by Hillary Clinton and referring this to the FBI. How big a deal, and do you think it's big enough that it may begin to nudge somebody else like Joe Biden or Elizabeth Warren to get into the race?

SHERYL GAY STOLBERG, THE NEW YORK TIMES: Intentionally releasing classified information is a big deal. Right? David Petraeus, the general, was sentenced to probation for doing that just this year. Whether or not Mrs. Clinton did that, I think we should sort of set that aside. She says she didn't release classified material. Investigators will have to determine whether or not she did. But as Brit said, this goes to a narrative about her campaign. Questions that voters have. Is she trustworthy and is she one of us? And the very existence of the private e- mail server I think has raised questions in the questions of the minds of many Americans. Most ordinary Americans don't have a private e-mail server at home. They expect their government officials to be using government e- mail servers. So it's striking to me that we're still talking about this story five months after the New York Times broke the initial story about this private e-mail server. So I think these are the questions that are going to continue to percolate throughout her campaign. Whether or not it will nudge Joe Biden in or anybody else in is hard to say. But she's clearly going to have to continue to address these questions, and we know she's going to testify or she says she will in October. So this isn't going away.

WALLACE: I want to switch to the other big political story this week, and that involves Donald Trump, who has raised the possibility, in effect a threat, that if he doesn't feel he's being treated fairly by the Republican National Committee, he may run as an independent, third-party candidate. George, looking back at Ross Perot in 1992, who got 19 percent of the vote, didn't win any electoral votes but I know the George H.W. Bush felt he was the difference between winning and losing, what's the possibility that if Trump does decides to go ahead and run as an independent, he ends up handing this presidency over to the Democrats?

GEORGE WILL, SYNDICATED COLUMNIST: That's a real possibility. I should say at this point that my wife works for his target du jour, which is Scott Walker.

That said, you put your finger on it. Successful third-party candidates have two things in common. They're all unsuccessful. That is they don't win. And second, they have a regional base. Strom Thurmond, George Wallace. They actually won electoral votes. Ross Perot didn't. Because he didn't have a regional base.

Chris, but it's a marathon and not a sprint. It's a long time before the first votes are even cast in Iowa. Before Mr. Trump might lose, at which point he would look like a sore loser.

There is going to be some information that gets out after all the hullabaloo about his manners or lack thereof. They're going to find that he's not just uncouth, he's unprincipled. They're going to find that he was pro-choice, very pro-choice, as he used to say. They're going to find that he gave money to Hillary Clinton, Chuck Schumer, Reid, Nancy Pelosi, because he obviously wanted a Democratic Congress, and they're going to want to think about that.

Other issues. The Kelo decision, the worst Supreme Court decision probably of this century, which vastly expanded the power of people like Donald Trump, using government, to take away private property. He supports that. We'll see how people like that.

WALLACE: Trump went to the border with Mexico, the southern border on Texas this week, and to talk about illegal immigration, and he got a tough reception from reporters. Take a look.


UNIDENTIFIED FEMALE: Have you seen any evidence here to confirm your fears about Mexico sending its criminals across the border?

TRUMP: Yes, I have. And I've heard it. And I've heard it from a lot of different people.

UNIDENTIFIED FEMALE: What evidence specifically have you seen?

TRUMP: We'll be showing you the evidence.


WALLACE: We'll be showing you the evidence at some point. Juan, what do you make of that, and also what do you make of this threat to run as an independent?

JUAN WILLIAMS, FOX NEWS ANALYST: I think that was the big news of the week. I mean, if he runs as an independent, what it reminds me of is Ralph Nader in 2000, and I think most Democrats think Ralph Nader cost Al Gore the presidency. And I don't think there's any question -- George makes a relevant point here. He doesn't have a regional base, but he has a national base. I thought after last week's events, where he was so harshly critical, unfairly critical, of Senator McCain, that he would crater, but according to what we've seen and very sketchy polls that have come out since, he has not cratered. He's still in this race and in some cases leading. So I think he's still around.

One of the more ridiculous things he said on the border was he's going to win the Hispanic vote, Chris. I don't know where he gets that idea from. Univision has a poll out; they have him like 70-20 versus a Hillary Clinton.

What you see instead is he's damaging the Republican brand. I think that's what's going on here. You see a Pew poll this week indicates the Republican favorability rating has gone down first six months of this year. I think that's directly tied into the kind of extremism that you're seeing from Donald Trump and its impact on independent and swing voters.

WALLACE: It's interesting. It's what I talked about that with Rand Paul. Some people are trying to grow the party, and he seems in some respects to be trying to contract it.

All right, we have to take a break here. When we come back, Secretary of State Kerry goes to Capitol Hill to try to sell the nuclear deal with Iran. The reaction? Not so good.



SEN. BOB CORKER, R-TENN.: Not unlike a hotel guest that leaves only with a hotel bathrobe on his back, I believe he had been fleeced.

JOHN KERRY, SECRETARY OF STATE: We set out to dismantle their ability to be able to build a nuclear weapon. And we've achieved that.


WALLACE: That's just the taste of the treatment Secretary of State John Kerry got this week in the first public hearing on the nuclear deal with Iran. We're back now with the panel.

Brit, we always knew that Republicans would oppose this deal. Do you get any sense that the president and his team may be losing some support among congressional Democrats, who are going to decide whether this deal goes through or not?

HUME: Yes, and I think there are a lot of congressional Democrats who are opposed to this deal, and perhaps we'll hear about more of them. The question, really, though, however, is does that mean that the president will be unable to hold what, 34 senators and/or a third plus one of the House of Representatives.

WALLACE: He only has to do that to sustain his veto.

HUME: I think it will be damaging to him and to the attitude that the people have about this agreement if it isn't approved. It won't be approved. It will likely be disapproved, but not by enough to withstand a veto, in which case the president gets his agreement that lasts, at least on paper, until the end of his term and that's it. But that will be a big deal for him. He'll claim it as a victory. I'm not sure it's a victory for anybody.

WALLACE: Sheryl, there are a number of issues that critics have with this deal. The whole inspections regime. The fact that the arms embargo against Iran is lifted starting in five years. The fact that they, while we limit it, their basic nuclear infrastructure remains intact through this deal. What do you see as the biggest problem in trying -- of those or another issue, in terms of trying to get it through Congress over the next two months?

STOLBERG: I think the biggest sticking point is that it's not a permanent fix. Right? That over time, beginning in about ten years and over time from 10 to 15 years, Iran will be able to start enriching uranium again. So that's No. 1. Congress, members of Congress also have concerns about the fact that there's a 24-day wait period for the IAEA's inspections to take place. There's concerns also that money will flow to bad actors in the region, that once sanctions are lifted and money starts flowing into Iran, that some of it will flow into the Quds force and other bad actors in the region. And I would say also in addition to what Brit said, one person to watch, one Democrat is Chuck Schumer.

WALLACE: Senator from New York.

STOLBERG: Senator from New York. Obviously has a big Jewish constituency. He's in line to become the Democratic leader after Harry Reid steps down. This week in New York, there were 10,000 protesters in Times Square demanding Chuck Schumer vote against this deal. Senator Schumer is usually very outspoken and talkative. He's unusually quiet right now. His aides say he's not made a decision about what he's going to do.

WALLACE: I'm going to ask you an unfair question. What do you think Schumer is going to do?

STOLBERG: I have no idea. I tried to find out yesterday. The answer was he's still thinking about it.


WALLACE: Would you agree that if Schumer goes against this, it may sink the deal?

STOLBERG: I think it is very -- I think Schumer is in a really difficult bind. He's supposed to be someone who is carrying President Obama's water on Capitol Hill, and if he goes against it, and already there's one Democrat openly against it, and that's Bob Menendez of New Jersey. So I don't know.

WALLACE: You're shaking your head, George.

WILL: He'll vote against it if, but only if, his vote is not needed. If his vote is needed, he's going to vote for it. This minuet we see all the time with so-called moderate Democrats, they furrow their brow and they purse their lips, and then they vote for the Affordable Care Act. It's always the same dance.

The question to me is how many Democrats have enough institutional pride to vote against this, in part because the president has gone out of his way to insult the Congress by going first to the United Nations, saying Congress' opinion is interesting but optional and a real afterthought. Those who hold to the constitutional oath they took to defend the Constitution, who understand this should have been a treaty anyway, should vote against this on procedural grounds.

WALLACE: Another issue is the fierce opposition to the deal from Israel, and there was an interesting development on that front this week. Jonathan Pollard, not directly related to this, but you'll see in a moment, bear with me, U.S. officials say that they're preparing to release Pollard. He was a U.S. intelligence analyst who spied for Israel, gave them U.S. secrets, that they may release him, even before possibly his mandatory 30- year parole consideration comes up. He's been in prison for just about -- in November it will be 30 years. And the thought is, although the administration flatly denies it, Juan, that this may be a way to get Israel to be less opposed to the deal. What do you make of all this?

WILLIAMS: Look, this is a real spy. He stole classified information. Stole it, and then he pled guilty to it, and of course the --

WALLACE: And sold it.

WILLIAMS: Yes, sold it, I said. So what you have here is a real bad actor. And from President Reagan through President Clinton through the second President Bush and first President Bush, everybody said no to this, because you can't allow that to happen as an example to the rest of the intelligence community. Nonetheless, I think this would be a conciliatory gesture. It would be a consolation in some sense to Netanyahu and to Israel. Would it be effective? I don't know. Remember, he's eligible for parole in November. And I think what happened this week is they floated it, Chris, as a kind of, you know, is this a possibility, what would America say, what would Israel say? So far, it doesn't look like it's getting great acclimation from anybody. Although I think for Israel, they would like to see their guy out of jail.

WALLACE: Do you think that's enough to get Israel and Netanyahu to soften their criticism of the Iran deal?

HUME: On the Iran deal, absolutely not. It is conceivable it would have some softening effect on the tensions between the United States and Israel that relate to a range of issues, but not on the Iran deal. Israel believes it's a threat to Israel's very existence, this deal. They are not going to change that view because some long sought spy of theirs finally gets out of the pokey.

WALLACE: You don't hear the word pokey very often. Sheryl, the White House flatly denies that there's any linkage between Pollard, release of Pollard, and trying to smooth things over with Israel. But the fact is, if the White House goes ahead with it, and they were certainly leaking the possibility heavily this week, they would be going very much over the very strong objections of the CIA, the FBI, other agencies who feel this is a guy who spied and stole secrets, sold secrets to Israel, was a civilian analyst but was working along with the Navy, military secrets -- your thoughts about that, and also the impact it would have on Israel?

STOLBERG: Absolutely, and frankly to little effect. Relations between Barack Obama and Bibi Netanyahu are so sour now that this is not going to cure that. And as Brit said, Israel does view Iran and this deal as an existential threat.

WALLACE: OK. Thank you, panel. See you next Sunday. Up next, our power player of the week. How one of the biggest names in hotels is appealing to the next generation of travelers.


WALLACE: His name has been one of America's best brands for more than half a century. As we told you last November, now he's trying to tailor that brand for the next generation. Here's our power player of the week.


J.W. "BILL" MARRIOTT, JR., EXEC. CHAIRMAN, MARRIOTT INTERNATIONAL: Before you walk through the lobby, you checked in and you went to your room, and you never came back to the lobby unless you were on your way out of the hotel. Today the lobby is a gathering place. That's totally different.

WALLACE: Bill Marriott is talking about millennials. Folks in their 20s and early 30s, and what they want in hotels. And while Marriott has been in the business 60 years --

MARRIOTT: I traveled 110,000 miles last year.

WALLACE: At age 83, he's all about the future.

How much of your focus is on the millennials?

MARRIOTT: Right now there is about 45 to 50 percent of our business. In another three to four years, it will be 60 percent of our business.

UNIDENTIFIED MALE: We just got done talking about portfolio projects in New York City that we have going on.

WALLACE: Marriott has an innovation lab, where staffers brainstorm and talk with millennials. They even have mockups of potential hotel rooms. Edgy, not much color, big beds and big TVs. But often no desk, since they're on their laptops.

So this is the shower?

MARRIOTT: That's the shower, almost right in the guest room.

WALLACE: It's pretty bare bones. You got a bed, a shower, a sink.

MARRIOTT: And a big TV.

WALLACE: And a big TV.

WALLACE: You can tell Marriott is having to adjust to some of it.

MARRIOTT: We were not exactly cool with flowered bedspreads. Now there's no bedspreads. You know, we have a cover over the sheet and blankets, but there are no real bedspread.

WALLACE: And does that scare you? Or --

MARRIOTT: No, I think it's the right thing to do. This is what the customers want.

WALLACE: That could be the motto for Marriott's remarkable success. Bill's dad, J.W., started with a root beer stand in 1927.

MARRIOTT: He opened on the same day Lindbergh flew over the Atlantic. He met Lindbergh once, and he said you and I went in business on the same day. He said, but you got all the publicity.

WALLACE: Now Marriott has 19 brands. More than 4,000 hotels. 720,000 rooms and a lot of guests.

MARRIOTT: Probably over a million people a night.

WALLACE: How does that make you feel?

MARRIOTT: Concerned that they are being well taken care of.

WALLACE: Three years ago Marriott stepped down as chairman and CEO.

You haven't exactly retired though, have you?

MARRIOTT: No, I don't think I ever will until they probably carry me out feet first.

I am averaging about 40 to 50 hours a week.

WALLACE: Why do you keep doing it?

MARRIOTT: I love it.

WALLACE: But when we asked what the satisfaction of the job is, Marriott surprised us. He talked about the 360,000 employees.

MARRIOTT: 50 percent of our general managers in our hotels have been with the company 25 years or more, and have started as hourly workers, and that to me is terrific. I mean, when we bring someone in as a waiter and make him president of the company, that's just the way America is supposed to work.


WALLACE: Even though he's moved upstairs in the company, Bill Marriott still visits about 200 of his hotels each year. And he shows no signs of slowing down.

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

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