The email raises new questions about the Obama administration's role in the case against former National Security Advisor Michael Flynn, but Williams accused Republicans of looking to promote a nonexistent narrative.
"I think at the moment, what we are up against is people are trying to look for something here," he argued, "and I think that will get us all caught up in hall of mirrors, and conspiracy theories."
Williams took it a step further, comparing the story to Hillary Clinton's email scandal, which he said resulted in her being cleared of wrongdoing in July 2016.
"Reality is, when you get down to it, what is it that this is about?" Williams asked. "I think it's a big fat nothing, that's what it is."
"If you could just take what Juan said and replace it with everything the Right said for the last three years, you would have the defense of Donald Trump."
"If you could just take what Juan said and replace it with everything the right said for the last three years," Watters responded, "you would have the defense of Donald Trump: that this was nothing, that this was a conspiracy and this was all politics."
Rice's email documented a Jan. 5, 2017 Oval Office meeting in which then-FBI Director James Comey suggested to President Barack Obama that the National Security Council (NSC) might not want to pass “sensitive information related to Russia” to Rice's designated successor, Michael Flynn. That section of the email had been classified as "TOP SECRET" until Tuesday.
"I mean, Susan Rice, I almost feel sorry for her because she's always left holding the bag," Watters said.
"Remember Susan Rice was sent out [in 2012] to explain that Bengahzi was just a protest?" he continued. "... Hillary sends out Rice to lie to America and then what does she do? She gets caught in another lie because she was on TV calling Trump a traitor for three years and then you find the [House Intelligence Committee] transcript under oath and she says, 'I knew nothing about Michael Flynn.'"
Fox News' Brooke Singman contributed to this report.