'All-Star' Panel on Dennis Blair's Resignation and Rand Paul's Civil Rights Gaffe

This is a rush transcript of "Special Report With Bret Baier" from May 20, 2010. This copy may not be in its final form and may be updated.

BRET BAIER, ANCHOR: This is a Fox News alert. We just now have a statement from outgoing National Intelligence Director Den nis Blair. It reads in part, "It is with deep regret that I inform the president today that I will step down as director of national intelligence effective Friday, May 28. I have had no greater honor and pleasure than lead the remarkably talented and patriotic men and women of the intelligence commi ttee."

He goes on in the statement to call them true heroes.

This announcement that he is going to resign came today, and it came after many appearances on Capitol Hill where Blair was very blunt.


DENNIS BLAIR, FORMER NATION AL INTELLIGENCE DIRECTOR: The level of the political dimension of what to me ought to be a national security issue has been quite, quite high. I don't think it's been particularly good, I will tell you, from the inside, in terms of us trying to get the right job done to protect the United States.


BAIER: Congressman Pete Hoekstra, the ranking member of the House Intelligence Committee, had this statement late this afternoon, quote, "Blair's resignation is the result of the Obama administration’s rampant politicization of the national security and outright disregard for congressional intelligence oversight.

Blair's resignation is disturbing and unfortunate. The concerns I have come from how the Obama administration conducts national security, not over the director of national intelligence, who they never allowed to do it."

Let's bring in our panel, Bill Kristol, editor of The Weekly Standard, Mara Liasson, national political correspondent of National Public Radio, and syndicated columnist Charles Krauthammer.

Big news day, Charles. What do you think?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think one of the reasons he was let go was what we saw in video that you just showed. I'll give the background on that. Remember when Abdulmutallab was captured in Detroit for trying to blow up the airplane, he was questioned for less than an hour and then he got his Miranda rights, and he said nothing for over a month. After that, the family arrived and he started talking.

At that point the administration began leaking a lot of information as a way to undo political damage because they had taken a lot of attacks in the month when he wasn't saying anything for actually mirandizing him and losing potentially important information about terrorists he was with in Yemen.

So once he started talking there were all kind of stories about connections with Yemen, et cetera. What you heard Blair talking about was how displayed he was by all those leaks, because if you are in intelligence and you are getting all this information, you don't want it publicized in the way the enemies in Yemen will hear about it and take measures, hiding, running away, or whatever.

So this was a fairly strong attack on the White House for using intelligence as a way to tar up the political position, which had been damaged by the mirandizing issue and to actually jeopardize American national security.

Even though he said it in fractured syntax, it was a strong message and I think it hurt his standing inside the White House. I can understand why a president would be offended and want to fire him over that.

BAIER: Mara, it comes after a series of attempts and one attack. Faisal Shahzad, the Times Square bomber and Umar Farouk Abdulmutallab, the Christmas day bomber, Nidal Hasan, the Fort Hood shooter, a string of these.

And just this week, the Senate intelligence committee coming without a report on the Christmas day bomber and it was pretty scathing.

MARA LIASSON, NATIONAL PUBLIC RADIO: I think that more the reason than he over time lost the president's confidence in him, and much more than him speaking out of turn or making a criticism of the Obama administration.

I actually thought that chairman Hoekstra's statement was really, really, I don't know if I'd say over the top, but it was really quite something to attack the Obama administration national security and say somehow that Blair was the only thing right about it. I don't remember the Republicans being great champions of Dennis Blair before this.

But I do think it's an effort by the president to correct some problems. I think that is a good thing. He wants the national security apparatus to work better and to head off some of the attacks rather than merely respond to them afterwards.

BAIER: Bill?

BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: It's more an effort by the president to get rid of someone who wasn't entirely part of this tight little team he has running everything, which is John Brennan at the National Security Council and Eric Holder, the attorney general. Intelligence professionals have been cut out.

Leon Panetta, the head of the CIA, as everyone knows, is spending a lot of time in Monterey, California, and is not in the closest loop on a lot of intelligence matters.

And Dennis Blair really was thrown out. The statement is amazing. You read the first few paragraphs. It's five paragraphs long. He said the people in the committee are heroes, a great tribute to the intelligence community. Not a word of thanks to President Obama.

I've actually almost never seen anything of it. When I was in the White House I wrote the resignation statement and the gracious acceptance of the resignation statement. I've never seen, except when Reagan fired Don Regan and left a two-sentence note and walked out the door.

It does not say "I appreciate the opportunity that President Obama has given me to serve the country, and high regard for the administration..."

BAIER: You're right. Not one word about the administration, about President Obama, not a word.

KRISTOL: The word "Obama" is not in the statement. I informed the president that I'm leaving, not a word about Napolitano, Holder, colleagues at the level. There is a war going on beneath the surface between intelligence professionals on one hand and White House and the Justice Department on the other, and that's what this firing is about.

KRAUTHAMMER: And all that leaking of information about Yemen was coming out of the White House, and it was the intelligence community that was extremely upset about that and lost control of the process and seeing its information being used for political reasons. So I can understand all that tension.

There's one other reason, the administration has now had, as you said, three attacks, only one of which succeeded, but the others could have. It needs a fall guy. And he had already run afoul of them so why not have him walk the plank and say — to imply that he was at fault and because of him there wasn't coordination or connection of dots. And thus he's out of the way and the president is clear.

BAIER: This will be when the new person is chosen the fourth director of national intelligence since the agency was founded. Go to the homepage at foxnews.com/SpecialReport and vote for the first to pick the Friday lightning round.

Coming up next, Rand Paul's civil rights comments have him in some hot water.



RAND PAUL: I like the civil rights act in the sense it ended the discrimination in all public domains and I'm in all in favor of that.


PAUL: You had to ask me the "but." I don't like the idea of telling private business owners. I abhor racism. I think it's a bad business decision to ever exclude anybody from your restaurant. But at the same time I do believe in private ownership.

I think there should be absolutely no discrimination in anything that gets public funding. And that's most of what the civil rights act was about in my mind.

I'm not here saying I'm opposed to the civil rights act or for repeal of it. I'm not. I think ending all of that governmental racism throughout the 50s and 60s and before was a good thing.


BAIER: The Republican nominee in the Kentucky Senate race Rand Paul explaining a number of times today his stance on the 1964 Civil Rights Act.

He's not apologizing for his libertarian views. He does not care for the laws that dictate to private business but says he does support overall the Civil Rights Act.

This is causing quite the kerfuffle, as you can imagine. We're back with panel. Bill?

KRISTOL: He has a sort of sophisticated, complicated libertarian view of the Civil Rights Act. One of the ten provisions of the act applies to private businesses.

Look, the country decided 45 years ago we have to abrogate our normal deference to the private sector to do what it wants to insist on non- discrimination even in private restaurants and private hotels and the like because the segregation was so deep in the south, especially, and the injustice was so great.

I think that was the right thing. Rand Paul thinks it's the right thing. It's probably unwise if you're a Senate candidate to engage in some theoretical discussion of what might have been or could have been.

But I also have to say, and I'm not a huge fan of Rand Paul, but if you watch the clips with him, there is something attractive about him. I mean, he's plainspoken and seems like an honest and good-natured guy.

This could be one of these flaps that everyone in Washington has a heart attack about and if you are a voter in Kentucky you think, you know what, he thought about this and says he won't change the Civil Rights Act.

He's a thoughtful guy with a libertarian bent. You could do worse than having him in the Senate.

I'm not sure it hurts him at all with the actual voters in Kentucky.

BAIER: The Democratic National Committee sent out over a dozen e-mails to reporters all over the airways on all kinds of channels saying that Paul was an embarrassment to Kentucky.

LIASSON: Rand Paul is a libertarian and he wants to have a debate about first principles and about constitutionalism. This is what the race in Kentucky will be about and it will be fascinating. He will have to defend his position on all sorts of things like Social Security and federal government intervention in all parts of society he doesn't like.

And we will see if the voters like it or not. It's a libertarian moment among the conservative and Republican-leaning independents. Maybe that's why he has done so well. Even in the head-to-head match-up in the polls, he's still ahead of Jack Conway who is going to be his Democratic opponent.

But he will be pressed now. He has never run for anything before. I think a Senate race is not always a place for high-minded theoretical discussion about these things, but he is going to have one.

BAIER: But Charles, he won in part by saying he doesn't favor government solution for every problem. This esoteric argument is getting jumped on, but is there some way it could be positive for him in Kentucky?


BAIER: At all?

KRAUTHAMMER: This is not going to sink him, but it is a negative. If on the first day of the general election campaign you have to issue a statement saying I'm not in favor of repealing the Civil Rights Act, you have a problem. Why are you even discussing it?

There is a reason why in America that libertarians are admired and their ideas are current, but they get half a percent of the vote when they actually want to govern. People don't want this purist individualism actually in government.

And I think he should have had an easy answer saying the Civil Rights Act was one of the great achievements of our day and it made our country enormously better in every way.

But he says our real problem today in part because of the prestige that the federal government acquired as a result of the success on civil rights it thought it could solve everything, and for the last 50 years we have been injecting it in every area of life, and I'm saying it's not the way to approach things.

But to actually debate the first principles about desegregation on day one of the campaign, this is a huge unforced error.

LIASSON: He should have Charles as a speechwriter, but he doesn't.


BAIER: Let me turn quickly to another candidate who misspoke on the campaign trail. When Congressman Joe Sestak said in an interview that the White House offered him a job to get out of the Senate primary, said it numerous times. Now the White House won't comment on it. There are pushes by Republicans to get answers.

Mara, how big a deal is this in the race?

LIASSON: I don't think this is the biggest deal, but I do think if you are expecting to be a Senate candidate of the same party of the president of the United States, it's probably not a good idea to lob that grenade at him.

I don't think Joe Sestak did that in a calculated way. He was angry and feeling kind of aggrieved. The White House is throwing all of the clout behind Arlen Specter to no avail in the end. Now they're coming together.

Every insurgent who won on Tuesday, even though they were opposed by their party establishment, is being embraced as the new official champion. That's happening to Sestak. I think he should walk it back as quickly as he can.

KRISTOL: Don't lose the forest for the trees. Both these guys were disapproved of by the party establishment and both of them won.

BAIER: That's it for the panel, but stay tuned to see BP on the hot seat again.

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