Cabinet search heats up after Giuliani's exit

The 'Special Report' All-Star panel weighs in


This is a rush transcript from "Special Report with Bret Baier," December 9, 2016. This copy may not be in its final form and may be updated.


RUDY GIULIANI, FORMER NEW YORK CITY MAYOR: We're down to the last two, three, four. So it makes sense to just get out of the way. Honestly, the other positions I didn't have an interest in.

NEIL CAVUTO, FOX NEWS: Is it fair to say that the only one that you wanted, if there -- the one to consider would be secretary of state?

GIULIANI: That is fair. That's absolutely fair. And that I indicated privately and publically.

PRESIDENT-ELECT DONALD TRUMP: We have another great person going to be -- a lot of them, but in terms of what we're talking about next week, somebody that you are going to have tremendous respect for also.


BRET BAIER, ANCHOR: There you hear former New York mayor Rudy Giuliani pulling himself out of consideration at all for anything inside the Trump administration, that happening today, putting out a release. This as the hunt for secretary of state nominee continues, and the people who are leading in this race seems to have shifted, at least from what we are hearing. Former ford CEO Alan Mulally, Rex Tillerson, Exxon Mobil's CEO, Senator Bob Corker, Mitt Romney, whose niece is now the RNC -- the head of the RNC according to the Trump sources, John Bolton and John huntsman and former General David Petraeus.

With that let's bring in our panel: Michael Needham is the chief executive officer at Heritage Action for America, Jonathan Swan, national political reporter for The Hill, Fortune magazine's Nina Easton, columnist for, and syndicated columnist Charles Krauthammer. Surprised, Michael about Giuliani?

MICHAEL NEEDHAM, HERITAGE ACTION FOR AMERICA: I think he would have been a strong candidate, but this is a little with a lot of strong candidates on it. You have people with business experience. You have people with foreign policy experience, General Petraeus on that list. So Rudy obviously was somebody who wanted it. He was part of a pretty thorough process. I think president-elect Trump has now seen 90 people go through Trump Tower. But Rudy decided it wasn't right for him.

BAIER: We are hearing, Jonathan, we don't know this and Giuliani wouldn't confirm it, that he was offered other positions like DHS and others. He said they talked about other positions today in an interview with Neil Cavuto. But he really wanted state and it wasn't looking like he was heading that way.

JONATHAN SWAN, THE HILL: The way it was put to me by someone in Trump's inner circle is if he wanted DHS he could have gone it. But he really made it clear from the outset that the only thing he wanted was secretary of state. He sort of put himself in a tough bind because he was telling everyone immediately -- I was getting phone calls from people saying I just spoke to Rudy Giuliani and he said the only thing he wants is secretary of state. I think the fact that he made it so public actually probably did him more harm than good.

BAIER: All of this talk about generals inside the nominees here -- first of all, you have the NSA, General Mike Flynn, retired general, you have General Kelly, DHS, you have General "Mad Dog" Mattis at the Pentagon. And considering General David Petraeus at State, you know, President Obama -- president-elect Obama had a number of military officials, too, Jim Jones, Admiral Blair. He has General Shinseki.

NINA EASTON, FORTUNE MAGAZINE: Right. To be honest, we don't know what's going on inside. It's clear that on the secretary of state is a plum position. It's an incredibly important position. It sends a signal to the world about the administration.

I think clearly the president-elect is taking his time. And we are hearing some words that being a general may be hurtful to Petraeus in addition to other issues that he may be facing, but we don't know for sure. It's an interesting list. Rex Tillerson is somebody who has got -- will view things from an economic perspective, especially an oil perspective looking at Russia and China and the Middle East. And you've of course got Mitt Romney and John Huntsman. I'm not sure if Huntsman is still on the very, very short list. But we don't know. The word I hear is that early next week we are going to know something much more clear.

BAIER: Meantime you have Cathy McMorris Rodgers talked about for interior secretary. She of course is in the leadership in the House. And also Gary Kohn for head of National Economic Council, tied to Goldman Sachs. This is not something this president-elect, Charles, is very concerned about it seems. Any tie to Wall Street, he has a number of people that are.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Well, there isn't a lot of consistency between the campaign rhetoric and the appointments. Goldman Sachs was a whipping boy for Bernie Sanders, for Donald Trump, and for lots of folks as a symbol of Wall Street corruption, greed, et cetera, overbearing influence. And they get two appointments, major appointments in the new administration. But I don't think Trump cares about that. I'm not sure he needs to. People are going to judge him by how he does not by how consistent what he does now is with the rhetoric in the campaign. He has jettisoned a lot of stuff from the campaign. Some of it, I think it's a good thing he jettisoned. This is all going to depend who he feels the most comfortable with and who are the best of people.

BAIER: Meantime, Michael, this investigation the president has launched telling intelligence agencies that he wants a report before he leaves on possible hacking or interference by foreign governments, including Russia, into the election. What about this move?

NEEDHAM: Well, I think, first off, let's be clear in something that has gotten lost in some of the coverage. Donald Trump won this election because he did a better job of connecting with Americans on their economic anxiety, on the corruption of Washington, D.C., on pride in being part of a great nation, not citizens of the world but citizens of America.

Within that context, it makes all the sense in the world for us to do thorough investigations into critical infrastructure, into our energy infrastructure, and into the security of our elections. So there's no problem with doing a thorough investigation into that in the context of this white hours has already said that there is no doubt that foreign involvement did not play any role in the outcome of this election. This was an election that Donald Trump won. This wasn't an election decided on anything else.

BAIER: But interesting that it's going to come up pretty quick.

EASTON: Yes. This is something -- we're not talking about the outcome of this election. We're talking about a national -- an outside power working against democracies not only in the United States but also in Europe. We're seeing the -- Russia is funding Marine La Pen, the rightist candidate who could very well be president of France. And we're also seeing Russia very much involved in central European countries, having a big investment, a big financial imprint, and using that to clamp down on free media and democracy in those nations as well. It's a broader, more important issue that -- I think both sides need to look at. It's a bipartisan issue.

BAIER: Yes. So let's say the report comes back and they find out Russia did hack and did try to interfere with the actual vote. What happens? This president is coming to the end of a term. The next president obviously has a very different view of Russia and what potentially the relationship is going to be with Putin. So does this president act in some retaliation?

EASTON: I think what you do is you look at what you do going forward. And it becomes part of the whole cyber security concern that we need to have. We need to have about our infrastructure, and the president-elect talked about this. We need to have cyber security concerns about our infrastructure, about companies, and also about our electoral system. You need to know what happened in these past few months so we can move forward and take action to protect ourselves.

BAIER: Either way, we're probably looking at congressional hearings.

SWAN: I think so. There's been a little bit of support. Lindsey Graham in the Senate has said we should look into this. But it will be interesting to see what retaliation, if any, the Trump administration takes, because, as you say, he is much more sympathetic to Vladimir Putin.

BAIER: By the way, on that very issue, back to the secretary of state, you have Rex Tillerson, CEO of Exxon Mobil who has a pretty chummy relationship with Vladimir Putin, and Mitt Romney who clearly has a different view geopolitically of Russia. And they're both finalists, we're told, for this position.

KRAUTHAMMER: And who he chooses who Trump chooses, will be the first signal about how pro-Russian the Trump administration will be.

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