This is a rush transcript from "On the Record," May 17, 2016. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Texas Governor Greg Abbott saying no to President Obama. Now, the Texas governor, despite President Obama's request, says he will not lift Texas sanctions against Iran. The lifting of those Texas sanctions would send billions of dollars into the hands of Iran.
Governor Abbott even going one step further saying he will tighten and strengthen the Texas sanctions. Texas governor, author of the brand new book "Broken But Unbowed," Governor Greg Abbott goes ON THE RECORD.
Good evening, sir.
GREG ABBOTT, TEXAS GOVERNOR: Good evening, Greta.
VAN SUSTEREN: So you got a letter dated April 8th from the president of the United States saying essentially, and I think it's a form letter. I think a couple governors got the same letter, but it has your name on it. It says that he wants you to eliminate the sanctions the state of Texas has to Iran and you say, what?
ABBOTT: We say, no way. We believe that the Iran deal is bad for America. It's bad for Israel. The way the law works is that states are not required to make that divesture or to relinquish the sanctions. And so what Texas is going to do because we believe it's the right thing to do to stand with Israel, we are going to maintain the sanctions against Iran.
We are going to maintain the divesture of investing in Iran. But we are going even further because we are going to expand the divesture mandate.
Right now, it's just the large pension funds in the state of Texas. What I'm asking the state to do is to expand that to every state agency in the state and to ask local governments to also participate in the divesture.
VAN SUSTEREN: All right. Now, exactly what does a divesture mean?
ABBOTT: It means divesting in any investments they may have in Iran and the step further is not making any further investment in Iran.
As you know with the lifting of sanctions by the Obama administration, it is allowing the countries maybe the United States of America itself to invest in Iran. And we are saying that Texas will not be an accomplice to supporting terrorist activity in Iran.
VAN SUSTEREN: All right. Did you have investments in Iran? Does Texas have them? And why did it have them in light of all the sanctions and leading up to this?
ABBOTT: Right. At the time that the sanctions were placed, there were some investments in Iran and there was the allowance of time to go through the divesture process.
Now that the sanctions have been lifted, what the United States is requesting is opening the investment door back up. And we are saying no. We are not going to open the investment door back up. In fact we are going to close it even tighter and put a lock on it.
VAN SUSTEREN: All right. Well, how much is this going to pinch Iran? I mean, how much is Texas worth to Iran?
ABBOTT: Texas is the 12th largest economy in the world. Our state domestic product is more than a trillion dollars. Our investable assets could be in the billions of dollars.
And so we hope, for one, this will pinch Iran. But, hopefully for others, this will send a signal to other states across the country. Hopefully, all 50 states will join with Texas and sending a message to Iran that we do not agree with your policies. We do not agree with the message that you sent to Israel by launching that missile that said eliminate Israel from the face of the earth.
VAN SUSTEREN: All right. I've seen your May 16th letter that you sent back in response to the president's April 8th. And you say in part, "Not surprisingly, your administration was able to implement the Iran deal only through the use of false pretenses.
Are you suggesting that the White House lied?
ABBOTT: Well, Greta, you're familiar with the story about the fabricated story that the Obama administration used to sell the deal. It's been --
VAN SUSTEREN: Is that a lie?
ABBOTT: Put it this way, it's a fabrication. It's an exaggeration. It is a story-telling. And so it's not telling the truth to the American people about...
VAN SUSTEREN: It's a lie?
ABBOTT: ... exactly what was happening.
VAN SUSTEREN: Well, then it's a lie. I mean, if you are trying to pull off -- are you saying they are trying to pull a fast one?
ABBOTT: They have admitted that they pulled a fast one. They have admitted that they fabricated a very sophisticated story that they would sell to the press, to sell to the American people to buy into a deal that otherwise may not have been sellable.
VAN SUSTEREN: All right. Speaking of selling, you are selling a new book. You've got a new book out. What is it?
ABBOTT: It's "Broken but Unbowed." It's a story -- and Greta, you know me. And you know that I'm in a wheelchair, but most of your viewers may not. As I sit here right now, I'm in a wheelchair because I can't walk. The reason is because a tree crashed down on my back leaving me immediately paralyzed when I was the age of 26. But, I remain unbowed.
And it was after that that I became a Texas Supreme Court justice. The longest serving attorney general in Texas history and now the governor of the state of Texas.
But, Greta, here's the bigger point. I connect that challenge with what is going on in America today. America is the greatest country in the history of the world. But we have to agree that America is broken, we must remain unbowed and we must return to our constitutional foundation.
VAN SUSTEREN: Governor, nice to talk to you. And I know the book just came out. I'm getting it because I want to read it. Thank you, sir.
ABBOTT: Terrific. Thank you, Greta.