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Impact of FBI probe into Clinton 2016 bid

This is a rush transcript from "Special Report," January 11, 2016. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIP)

JOHN DICKERSON, 'FACE THE NATION' HOST: You directed him to, quote, ‘turn into non-paper with no identifying heading and send non-secure.’ Aren't you ordering him to violate the laws on handling classified material there?

HILLARY CLINTON, D, PRESIDENTIAL CANDIDATE: No, not at all. And as the State Department said just this week, that did not happen, and it never would have happened because that's just not the way I treated classified information. Headings are not classification notices, and so oftentimes we're trying to get the best information we can and, obviously, what I'm asking for is whatever can be transmitted, if it doesn't come through secure, to be transmitted on the unclassified systems.

(END VIDEO CLIP)

BAIER: OK, Hillary Clinton on 'Face the Nation' this weekend being asked about this e-mail that came out late last week we first reported on, which was an e-mail with Jake Sullivan, an aide at the State Department. You see it here. The line is that they can't turn into non-paper with no identifying heading and send non-secure. They say they had issues sending secure fax. They are working on it. And she is essentially saying take off the headings.

This comes as Catherine Herridge here at FOX is reporting that the FBI is not pulling back but expanding the investigation into Hillary Clinton, not just email but also looking at, she says, the comingling of her work as secretary of state and the Clinton Foundation.

Just moments ago Hillary Clinton was with 'The Des Moines Register' editorial board in Iowa. Jennifer Jacobs tweeted this, "Absolutely not true Hillary Clinton says of a FOX News report that FBI is investigating whether any public corruption laws were violated. Hillary Clinton tells 'The Des Moines Register' she has not heard anything from the FBI. No, there's nothing like that happening, she says. She saw un-sourced FOX News story as I was coming in myself and it was quite unexpected and unfounded she tells 'The Des Moines Register.'

However, in Iowa, there are problems for Hillary Clinton, at least when you look at the polls. It's essentially tied in the latest NBC/'Wall Street Journal'/Marist poll, and there you see within the margin of error.

Let's begin there with our panel, Tucker Carlson, host of 'FOX AND FRIENDS WEEKEND,' Charles Lane, opinion writer for the 'Washington Post,' and syndicated columnist Charles Krauthammer. What about that explanation over the weekend, Tucker?

TUCKER CARLSON, FOX NEWS HOST: It's the greatest explanation ever. First of all, turning something into non-paper, I hope she never tells someone to turn me into a non-paper. It sounds very ominous and Orwellian to me.

The explanation is that's just not the way I do it. It's not true because it's just not true. And that is basically the same as their explanation for the Catherine Herridge story on the FBI. It just can't be true and therefore it isn't.

They are telling this out loud because they want donors to hear it because they don't want panic to ensue. There are a lot of Democratic donors who are concerned about this. They know that they wouldn't want an FBI investigation hanging over, one with no budget or time constraints which no FBI investigation has. It's really, really troubling, obviously. But it also suggests a very high level of denial. When she says that you get the sense she believes it. And this is of a piece with a lot of other evidence we have that this is how she manages. Well, that's just not what I want reality to be and therefore it isn't.

BAIER: Let's be clear. The investigation, the problem is the server. It's not any specific e-mail pointing to this email, but it's the server in general to begin with. The FBI is clearly continuing its investigation, Chuck. The real issue is whether they move forward and suggest a prosecution to the DOJ which then would have to make that decision.

CHARLES LANE, OPINION WRITER, 'WASHINGTON POST': Right. And I got to say, I mean, I don't -- non-paper is a term of art within the State Department bureaucracy that means an unofficial document without the headings and so on. The underlying substance of this was these were talking points for some meeting she was going to have with a foreign official that is sort of routinely classified. It wasn't like the nuclear codes or anything.

Having said all that, I would not like to be Hillary Clinton today because it reminds everybody of an issue that Bernie Sanders had told her you don't have to worry about, her own opponent. He's probably regretting that, by the way. It's always worse to be running for president with an FBI investigation going on against you than without one.

BAIER: You look at New Hampshire, Charles, and you look at the NBC poll in the New Hampshire Democratic polling, you have Sanders up within the margin of error there, it's 50-46 plus or minus 4.8, there you see it. And then the FOX News poll, which we reported on Friday, has Sanders up much bigger in New Hampshire, and there you see 50-37. So the reality is sinking in that these early states may be difficult.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Even if she loses Iowa and New Hampshire, it's hard to see how Sanders goes anywhere particularly down south when his constituency is essentially richer white liberals who live on the coast, some in university towns. It's a big constituency, but it ain't big enough. And he has, as far as we can see, no appeal or minimal appeal to minorities and African-Americans. And without that you can't win the nomination.

But if I could to return for one send to her explanation on the emails, I'm not sure I believe it's denial. I think it's worse. I think it's cynicism. I mean, after all, look at the logic of what she said. I asked him to do this, but, she says, it didn't happen. Well, that's irrelevant.
It wouldn't have happened. Well, why wouldn't it have happened? You asked him to do it. It wouldn't have happened because that's not how I do things. But she just did it. That was the instruction she gave.

And the other part is, if this is completely innocent and routine, why would you scrub the heading? It makes no sense. She knows it. She puts a smile on her face. She brazens her way through it. I have to admire her for that. But I think she knows that this is a real vulnerability. In the end it's all about the legality of this and will there be a criminal referral. If there isn't, her nomination is not in jeopardy.

BAIER: A couple of breaking things. One is the FBI doesn't have notify the subject of the investigation, so it's important to note that, in the Clinton statement to "The Des Moines Register." And also just breaking now, the State Department is going to release 29,000 pages of Huma Abedin's official e-mail. That is just coming in tonight. That raises more questions and a lot more e-mails.

CARLSON: That's for sure. I think Charles analysis is absolutely right. Nobody outside of the Clinton campaign believes that Bernie Sanders has a chance. It's a boutique campaign, but it's going nowhere. Hillary doesn't know that. The hallmark of a mediocre mind is someone who keeps refighting the last war. She is captive to 2008. I've talked to people who work for her. They say that. That's the defining moment of her political career, losing to Obama during those primaries. And she will do anything to avoid having that happen again, even though it's not even a real possibility. And that's why she's moved so far left, endorsing, for example, driver's licenses for illegal aliens. How can that not hurt her in the general election? It's not a mainstream view. Yet everything she says is designed to fight off the threat that doesn't exist for Bernie Sanders. It's very telling.

BAIER: Next up, it's too close to call three weeks ahead the Ohio caucus on the other side.

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