Updated

This is a rush transcript from "Hannity & Colmes," March 20, 2008. This copy may not be in its final form and may be updated.

SEAN HANNITY, CO-HOST: We get to the top story tonight. It is the controversy that just will not go away for Barack Obama. Earlier today the senator spoke to a Philadelphia radio station and expanded on comments that he made Tuesday about his white grandmother. Take a listen to this.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIATE: The point I was making was not that my grandmother harbors any racial animosity. She doesn't. But she is a typical white person who, you know, if she sees somebody on the street, that she doesn't know, there is a reaction that's been bread into our experiences that don't go away and that sometimes come out in the wrong way.

(END VIDEO CLIP)

HANNITY: Now in just a few minutes we are going to show you the tremendous impact that this impact is having on the polls. But we start tonight with former speaker of the House, Fox News contributor, author of the New York Times best seller again, "Real Change" Newt Gingrich is back with us. Mr. Speaker, welcome back aboard.

NEWT GINGRICH, FORMER HOUSE SPEAKER: Good to be with you.

HANNITY: Just one point on this breaking news tonight. There are a couple things we do know that Bill Gertz has put into the Washington Times and one is that secretary of state Condi Rice is saying that the security measures that are used to monitor the records of high profile Americans worked properly in detecting the breaches and that these are contract employees. Seems to me Barack Obama is looking for anything to distract from the story of Jeremiah Wright. Your initial thoughts?

GNGRICH: Well, no. My first thoughts are to be totally with Senator Obama on this. I think your records are confidential.

HANNITY: I agree with that.

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GINGRICH: The government has an absolute obligation to keep them. I suspect these people have broken the law. I don't think it's enough just to fire them and frankly if the first break through was back in January, how can they say that the security system worked? And why didn't they ...

HANNITY: The only thing I might disagree on because immediately they make it a political statement by blaming the administration.

GINGRICH: Of course the Obama people can do what they want to. As an American citizen, I expect my government to protect the secrecy of documents that I give them. And I believe that they have — that this is probably a very severe penalty. It's not enough just to fire these people. I think that the Justice Department should look into this, not just because it's about Senator Obama. But because we have to sustain a very high standard of protecting the right privacy of Americans.

HANNITY: There you and I agree. And I think everybody's privacy have to be protected. We have had a number of breaches over the years. So we are in full and complete agreement about. Now that you just heard the tape that was played in this tape this was the interview of Barack Obama about the comments he made about his grandmother. But she is a typical white person.

GINGRICH: Well, I was going to say there is no racial characteristics there, is there? I noticed that Geraldine Ferraro spoke up today and made the point that she was pretty offended at being compared with Reverend Wright. And, you know, let's stipulate. Senator Obama's grandmother loves him as he himself says she has done everything she could to help him spectacularly good education. She cared for him, she nurtured him. I'm sure she doesn't care what he said. But Geraldine Ferraro made the point she found it very painful to watch somebody bring their grandmother into this. And that she personally felt very angry that he would compare her to Reverend Wright. I think Senator Obama is better off to just pull back. He is not going to win this argument.

SUSAN ESTRICH, FOX NEWS CORRESPONDENT: Newt, I pulled a quote tonight from Reverend Jesse Jackson that I remember because I felt it was an honest and striking quote. He said there was nothing more painful to me to walk down the street and hearing footsteps and think about robbery and then look around and see somebody white and feel relieved. Now, Jesse Jackson is not a typical white person. He is a respected African American leader who realizes that there is a real problem in the black community with crime. Are you back there, Newt? We lost you for a minute.

GINGRICH: No, no. I'm here. I'm listening carefully. I think you are making a very important point.

ESTRICH: Why is Barack stuck? And it seems, like you, that he is stuck on the fact that I'm not afraid of black men because they are black walking down the street. And I'm not a typical white personal being afraid. Every woman I know, black, white, green, or yellow gets a little bit nervous if she is being honest, when she sees an 18 to 25-year-old black guy dressed in gang attire walking behind her on the street. I'm not afraid of old black men. I'm not afraid of old white men. But yes, that's a stereotype that reflects a problem of disproportionate criminality in a certain community. Is that racism? Is that what we are saying now?

GINGRICH: Well, I think this is part of the challenge that Senator Obama is now going to find himself with. I wrote my news letter today saying we should take him up in his invitation. He has proposed a conversation about race and poverty in America. I think that's a (AUDIO GAP) You are making a very good case about it I think Bill Cosby has made some very important points about it. I think Oprah Winfrey in explaining why she built her girls school in South Africa and not South Chicago made (AUDIO GAP) we ought to get this out in the open. And I think his speech in some ways was much too one-sided, clever, well-executed. But, in fact, describing things that happened to fit a stereotype. I think that's wrong. It's not true about America and doesn't allow us to get to an honest conversation. I think what you just said, quoting Jesse Jackson, is much more accurate than what Senator Obama said.

ESTRICH: We'll get right back with Newt Gingrich and we'll get the technology right.

(COMMERCIAL BREAK)

ESTRICH: Welcome back to "Hannity & Colmes." I'm Susan Estrich sitting in for Alan Colmes. Some good news tonight for John McCain. This is difficult for me. A new Rasmussen poll has the GOP presidential nominee and good friend of Sean Hannity way ahead of his Democratic opponents. He has a 51 to 41 percent lead over Hillary Clinton. And a 49 to 42 percent lead over Barack Obama. We continue now with former speaker of the House Newt Gingrich. Newt, I'm being asked by some of my friends who are Obama supporters whether I think, whether you think that Barack Obama's speech on race put this issue behind him or opens up this issue for the future. What do you think?

GINGRICH: Look, I think he has now opened this up in a way which I am going to try to explore with the American Enterprise Institute next Thursday. He has invited the country to a dialogue about race and poverty. I think it's a dialogue we do need in that sense he is doing us a service. But I don't think he realized that there was another side to the dialogue. I'm not sure he has read Bill Cosby's new book or Shelby Steele's work or the work of many other people who suggest that there are alternative answers that he is going to find very difficult. So I think he has begun a conversation that is going to go on maybe throughout the rest of this campaign. And it's not necessarily conversation that is to his advantage.

ESTRICH: That's what I want to follow up with you on. What I fear, as a Democrat but also as an American, is that a lot of his supporters, especially his black supporters believe they have this thing won or they had this thing won and now they worry that it's going to be taken away by the white man. Now, that, to me, is a very dangerous way to look at a very tough campaign. But do you hear any of that and do you think that is a reasonable perspective that is out there?

GINGRICH: Look, it certainly fits the automatic paranoia of some of the elements of the community. But, on the other hand, look at California. In California, Senator Obama carried African Americans and Caucasians but he lost Latinos and Asian Americans. You can hardly argue that Senator Clinton was beating him with the white man, as you put it. She was beating him with other people of color to use the phrase that would be acceptable on the left.

I think you are right psychologically. Senator Obama, up until last week, had run such a brilliant campaign, that his supporters, I think, were pretty confident he was going to be the nominee. Now I think that's increasingly in doubt. I'm in Pennsylvania tonight. And as I talk to people here, there is overwhelming belief that Senator Clinton is going to beat him and possibly by a decisive margin.

HANNITY: But it's still going to be difficult for her to both come back and win the popular vote and win the delegate count. That may mean that she is going to have to make a case that he is not electable to the superdelegates. I want to ask you this, Mr. Speaker. You brought up the other night this issue really for you comes down for you as honesty and judgment of somebody who wants to be the president of the United States. When you look at the polls, latest CBS News poll shows among independent voters John McCain now has a 10 point lead. But Barack Obama, among independents, just in the last week, had an eight point lead. It is an 18 point swing. Can we — and other polls have similar numbers. It's a freefall. Can we interpret from that people do not believe he is honest in his explanation?

GINGRICH: No. I wouldn't overstate where he is tonight. I think if this were to go away tomorrow morning and he could go back to being a rock star and giving a structured speech and having 10,000 and 15,000 people in the arena, he would probably rebound fine. The problem for him which is what you just played for the audience. Which is he is out giving interviews. He is answering other people's questions. People are writing commentaries. This is going to go on and on and on. And if it continues for three or four weeks, then I think he begins to have a potentially fatal problem.

HANNITY: Do you remember when I first brought up the issue of Reverend Wright? I remember you saying to me you weren't quite sure — you weren't sure on the issue. I had been staying on this. I had interviewed Reverend Wright back in March of 2007. There were other issues out there. We pointed out and showed video last night of another spiritual advisor of him with equally divisive language. We haven't begun to touch nationally a debate over his political pilgrimage to William Ayers one of the heads of the Weather Underground that admitted to bombing our Pentagon. He hasn't dealt with that issue to this particular point. It seems to me his judgment, his associations is going to be major factor and we have only begun to touch the surface here and the believability issue.

GINGRICH: Well, let me confess, first of all, that when you first raised this on your radio show, I frankly, greatly underestimated it what made a difference was seeing the video, seeing the intensity, seeing the audience reaction because suddenly it was live in my living room and boy it had 100 times the impact of your description. I mean, you know, so that has changed it.

HANNITY: Never doubt your friend Sean Hannity. We have been friends a long time.

I would never let you down.

GINGRICH: Here is my only point. If this continues and grows, and I think it probably will, he could face a critical erosion that suddenly said to all of the political leaders of the Democratic Party, this guy is simply going to go down in flames this fall. We can't afford to nominate him. I don't think he is there today. And I don't think what's happened to him up until now has changed that. But, as you point out, if more stuff comes along, he could be there in three or four or five weeks.

HANNITY: I know there is more stuff that the country has not heard of or examined. And I can tell you we are going to stay on those issues. And then if he wins the popular vote and the delegate count and Hillary persuades the super delegates there is going to be a lot of angry Obama supporters and a lot of infighting in the Democratic ranks. It's going to get interesting.

GINGRICH: You can see Obama supporters for McCain.

HANNITY: You may be right. Mr. Speaker, thanks for being with us. Congratulations on the success of "Real Change."

GINGRICH: Thank you.

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