SPECIAL REPORT

Where does the administration head after the Flynn fallout?

This is a rush transcript from "Special Report with Bret Baier," February 14, 2017. This copy may not be in its final form and may be updated.

(BEGIN VIDEO CLIPS) SEAN SPICER, WHITE HOUSE PRESS SECRETARY: The question wasn't did he do anything improper or illegal. It's a question of, could he be trusted further? And that trust, or the erosion of that trust was frankly the issue.

REP. ADAM SCHIFF, D-CALIF.: The resignation of Michael Flynn was brought about not by discovering the falsehood but by the fact that the falsehood became public.

REP. JOSEPH CROWLEY, D-N.Y.: President Trump is leading a very dysfunctional White House. So the real question with respect to Flynn is what did Trump know? What did President Trump know, and when did he know it?

SEN. LINDSEY GRAHAM, R-S.C.: I think Americans have a right to know whether or not this was a General Flynn rogue maneuver or was he basically speaking for somebody else in the White House.

SEN. ROY BLUNT, R-MO.: I think it's likely that General Flynn will be at some point asked to come and talk to the committee.

(END VIDEO CLIPS)

BRET BAIER, ANCHOR: Republicans and Democrats reacting to the big news out of Washington, the resignation of the national security advisor, Michael Flynn, who in a resignation letter said "I inadvertently briefed Vice President-elect and others with incomplete information regarding my phone calls with the Russian ambassador. I have sincerely apologized to the president and the vice president and they have accepted my apology. I have always performed my duties with the utmost integrity and honesty to those I have served, to include the president of the United States. I am tendering my resignation. Honor to have served our nation and the American people in such a distinguished way." Again, that's Michael Flynn.

With that and all the fallout in Washington, let's bring in our panel from Washington: Charles Lane, opinion writer for The Washington Post, editor in chief of Lifezette, Laura Ingraham, and syndicated columnist Charles Krauthammer. OK, Laura, your thoughts on this fallout and where this administration heads from here?

LAURA INGRAHAM, LIFEZETTE.COM: Well, I understand there will be a replacement for Flynn soon, and by all accounts it looks like there's one, former Navy SEAL, very close with Mattis, Harward, who is a leading candidate. That's number one.

Number two, I think people have gotten way ahead on the story as to how this happened, why he was ultimately asked to resign. There have been some confusing signals that came out of the White House yesterday. That's already been gone over, one spokesperson saying one thing, another saying another thing.

But one of the most interesting pieces that I've read on this came from Eli Lake, Bret. He wrote a piece in Bloomberg, and the title was "The Political Assassination of Michael Flynn." I was hearing back in December that the long knives were out for Flynn. There are now reports in the "Free Beacon" that Obama associates and loyalists have been working to plant stories about Flynn behind-the-scenes for months because he was such a fierce, probably the fiercest critic of the Iran deal and the Obama legacy in foreign policy. So he had very few friends obviously in Washington, and they wanted him out early on.

Ultimately Donald Trump, for reasons they said related to the erosion of trust, decided to ask for his resignation. But last night Kellyanne Conway did say that he saw the full confidence of the president. So I think a lot of questions still to be answered here.

BAIER: Yes. You make a great point. General Flynn as the head of the defense intelligence agency after he left was one of only people talking about, for example, the thousands and thousands of documents that were recovered in the Usama bin Laden raid, and the administration was not dealing with any of that.

Chuck, what about the timeline here and all the questions. The Democrats now again and again saying what did President Trump know and when did he know it? Do we know anymore after Sean Spicer's press briefing today?

CHARLES LANE, WASHINGTON POST: No. All we know is that according to Sean Spicer the firing offense wasn't an illegal deed. It was just the fact that he was proved to be untrustworthy with respect to the vice president, which is, when you stop and think about it, a sensational accusation all by itself.

But as for the timeline, what I think people are going to be interested in is the following. The Obama administration back in I believe it was December imposed some sanctions on the Russians because of their breaches of cyber-security at the DNC and other Democratic targets during the campaign attempting to influence the campaign. And on that same day Mike Flynn discussed apparently in general terms, but we don't know the specifics, those sanctions on the phone with the Russian ambassador. And then the very next day Vladimir Putin comes out with this sort of tepid response to the sanctions, no retaliation, for which the president-elect then congratulates him. So that's going to be something people are going to focus on.

The whole big picture here is there are two problems. Not even -- there are a number of Republicans who don't trust the administration on the issue of Russia very specifically, and there are more people around the country who are having a problem with the things this White House says and whether or not they can even be trusted as to whether or not from one minute to the next, the national security advisor enjoys the president's trust. So there's going to have those credibility problems when they're trying to dig out of this hole.

BAIER: Charles, there was a lot of focus on what you said on the show last night and your characterization of it. We have since learned the attorney general, acting attorney general, Sally Yates did communicate with the White House and said that she was concerned about this phone call and saying that they could hold over, the Russians could hold something over Mike Flynn as a possible negotiation ploy, if you would, and told that to the White House counsel. From what we can gather, what Sean Spicer said, the White House counsel then told President Trump that, but Vice President Pence, his people are saying he did learn about it until February 9th.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think there are a lot of mysteries here. That's one of them. But for all of this idea that high officials are being targeted by enemies both inside and outside the administration, there's nothing new there. The reason that Flynn is gone is not because he was a target of political assassination. It's because he lied about something material to the vice president of the United States, left him hanging, telling a lie in public in a way that was ultimately embarrassing. You cannot do that.

Now, I have maintained from the beginning this is a cover-up without a crime. There is nothing wrong with an incoming national security advisor talking with the Russians, talking about sanctions with the Russians. It's not illegal. It's not improper. But you can't lie to the vice president about it.

The mystery here, and I think the reason that you need an investigation, is why would Flynn have done that? It was, I think, clearly an innocent act in the first place. Is there anything else he's covering up? Are there any other contacts he might've been afraid would come out?

BAIER: So Laura, I guess Democrats, it is clear, are smelling blood in the water on this issue and are saying that it's not going away. Here is Nancy Pelosi and Congressman Cummings today at the press briefing.

(BEGIN VIDEO CLIP)

REP. ELIJAH CUMMINGS, D-MD.: Just this morning Flynn tweeted, and this is a quote, "Scapegoat," end of quote. "Scapegoat." He basically described himself as a scapegoat.

HOUSE MINORITY LEADER NANCY PELOSI, D-CALIF.: This I didn't know until I heard from our colleague that the tweet General Flynn today was "Scapegoat." So the inference to be drawn from his statement is that other people had blame that should be shared in all of this.

(END VIDEO CLIP)

BAIER: The problem is that it wasn't his statement. It was a fake Twitter account.

INGRAHAM: Not their best moment.

BAIER: And they had to come out and say, sorry, to correct the record, just learned like many others that the Flynn tweet this morning was fake. So we are reaching a point where this going to take a different political sense.

INGRAHAM: The Democrats want to try to connect this moment, and Charles is right. I don't think, from what we know, and, again, we don't all that much. We have a report about a transcript. We don't know what the transcript says. We understands that the issue of sanctions was brought up by the Russian ambassador and perhaps Flynn said something like, well, we're going to review all policies. If that's what was said, I don't see there's anything wrong with that.

And he maintains he did not lie. He said in his letter, and I'm just saying what he said, it was incomplete, he gave incomplete, inadvertent, incomplete information on the briefing. That's what he said.

So the fact that the Democrats want to exploit it, not surprising. They hated Flynn. They want to see if they can continue to hurt the credibility of the Trump administration on a wide range of issues using this as the battering ram.

Now, it means the Trump team has to be really careful with how they present their case on other issues, how they were allowed future initiatives, executive orders, pursue legislation, because the Democrats are going to keep going back to this as long as they can, and they have some willing partners in the Republican Party. Roy Blunt's comment that we're going to look at this exhaustively. I don't know what "exhaustively" means, but they will try to tar Trump with this. And you hear the "I" word being used the Democrats, just blithely throwing that around. So they better have their messaging on this correct and they better have the facts correct on what was said, when it was said, why was the FBI interviewing Flynn in his office about this at the end of January? And why did it take them so long to tell Vice President Pence about this? I bet Pence is really unhappy that it took them that long.

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