SHANNON BREAM, GUEST HOST: Tonight we have been bringing you news about the latest in the prisoner spy swap between the Russian and U.S. authorities -- 11 spies you see there accused, alleged Russian spies. Ten of them have pled guilty today in court in New York. They are going to be deported.

And in exchange four people will be released from Russian prisons and sent home as well.

This is part of what we are hearing from the U.S. attorney's office that put together this deal today -- "Through this historic investigation and prosecution, we have achieved justice on an international scale that enhanced the national security of the United States of America."

Let's talk about this with the panel. We've got Steve Hayes, senior writer for the Weekly Standard, A.B. Stoddard, associate editor of The Hill, and syndicated columnist Charles Krauthammer.

A.b., I want to start with you. Does it sound overly optimistic to you? It's done, we made historic achievement, but we shoveled these people off very quickly?

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: Yes, it sounded like a real accomplishment, and I don't think it's been explained this sort of expedited, chaotic effort to get a guilty plea and get him on an airplane has not fully been explained.

Attorney General Eric Holder said today it was extraordinary case with years of work by investigators, intelligence officers and law enforcement and provides resolution in the United States interest.

If it's a case watching people who have been here, some of whom have been here for ten years, recruiting and spying, I guess attempting money laundering and everything else, we need to know more about their system. Why if it was such an extraordinary case we invested so many resources would we just quickly get a guilty plea and put them on an airplane?

BREAM: Steve, is there whiplash on this case?

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: A.B. brings up the right point. Either it was serious and we should have taken our time interrogating them -- there is no way we have exhausted everything we got from them and everything we could have possibly have gotten from ten years of the attempted recruitment.

So either it's a serious case and we should treat it as a serious case or it's not and it can be swept under. And I've been on the phone with people all day and intelligence contacts and law enforcement folks, and the interesting thing is there isn't a consensus.

You talk to some people normally critical of Obama administration, shrug their shoulders, saying they don't think it's a big deal. Then you talk to people who are normally supportive of the Obama administration on this thing and they say this is fast to be shoveling them off.

BREAM: This is coming in from the Associated Press, saying Russian news reports saying Russia's president pardoned four spies involved in the swap with the U.S. I'm assuming, and it is a bit of an assumption, that they are talking about the four they're releasing back to us.

With that news out there, Charles, if these people have been investigated for decades, do you think we could have mined all the information we needed from them in the last couple of weeks? Do we know how far it reaches beyond them?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Everybody treats this as a joke, Anna Chapman, the Bond girl and all that. The fact is they were here as sleepers for ten years. One of the charges was to recruit others.

It's true none of the ten were in the government, but who was recruited? Where were those recruits? Any of them in the government? Any information we get on them?

It is quite remarkable to kick them out overnight without any interrogation. If we stick them in jail and you have a plea bargain, you might be able to get information that we don't have today. Why are we not attempting that like we did with the Detroit bomber who got his Miranda rights in ten minutes? So that is number one.

The other part is this is not about justice. This is about diplomacy. This is a swap, but the odd thing is how the administration from the top, from State Department and the White House, was so eager to get rid of this right away.

On June 29th a State Department spokesman described all this as "some vestiges of old attempts at acquiring intelligence," said nobody is shocked, nobody. In fact, his only complaint seemed to be against Justice for getting in the way of the great reset.

He was asked about this investigation and the arrest. He said oh, Justice on its own track and we are on our track. This is extremely odd. Russia spies on us. We are the victims, we are the ones who will immediately dismiss it as nothing.

And the Russians who if anything are the aggressors here, are complaining about our arrest of their agents. We essentially say sorry about that, we'll get it off the table. It's very odd.

Look, if you want the good relations with an adversary and you give him everything and you roll over, of course the relations will remain good. It's a high price, though.

BREAM: A.B., we have had tense relations with Russia in recent years. So with that in mind, the diplomacy angle in mind that Charles mentioned, if these ten were from another country, say the Middle East, would it be a different situation?

STODDARD: I gather. I -- traditionally the trades take place between convicted spies who served time. Not just, I'm going to rush you into a courtroom, get a guilty plea, and send you off.

We are looking at this from a distance saying this must be Obama's investment in improved relations with the Russians. And so what would a trial, a lengthy trial of the spies have done? Just irritate the Russians? Is that what he was trying to avoid?

I don't know that we know just what this was going to spare him as he tries to work the new reset relationship. And that is the part that is so bizarre. I don't think we know really why this was a worthy investment to -- we're not bringing home any Americans, by the way. We're sending them off without prison time and without answers. I just don't understand it.

BREAM: There may be much more we don't know and maybe we'll find out. All right, panel, we'll come back on another topic. But coming up, we want you to go to the homepage at foxnews.com/specialreport. You can learn a lot more about past spy swaps between the U.S. and Russia. Stick around, the panel is going to talk about changes in policy and personnel, some big ones at the Pentagon.


BREAM: This is a Fox News alert, a federal appeals court in New Orleans denied the Obama administration bid to reinstate its six-month moratorium on deepwater oil and gas drilling. The court says the Interior Department failed to show any likelihood that drilling would resume before a full appeal could be heard.

Oral arguments in that case have been set in August 30. That means for now the moratorium has been lifted.

All right, today there was news out of the Pentagon, chiefly about the man who has been tapped to head up Central Command, general James Mattis. Here are comments he made that are coming back to haunt him a bit today in 2005.


GEN. JAMES MATTIS, CENTRAL COMMANDER NOMINEE: It's a lot of fun to fight. You know, it's a hell of a hoot. It's fun to shoot some people. I like brawling. You go into Afghanistan, you got guys who slap women, so it's a hell of a lot of fun to shoot them.


BREAM: Let's bring in the panel to talk about this again. This is a general who was called "Mad Dog Mattis." He is a Marine. He's a tough guy. Is he the right guy for Central Command?

HAYES: I am so untroubled by those comments I can't even tell you. He's the perfect for this. He has a representation being a brawler and the comments support that, but he's known as an intellectual. He helped co- write the counterinsurgency manual with David Petraeus. He's a deep thinker.

The most important and interesting thing about the pick suggests David Petraeus had a strong hand in sending him to Cent-Com. Mattis had been opposed in the past to the withdrawal timelines. In 2006 in August he said this, "If we put a timeline on it, then the enemy knows exactly what we will do and will wait until the deadline comes." He was asked by an Iraqi when he is going to leave Iraq and he said -- I'll read the quote. "I said I'm never going to leave. I said I found property on the Euphrates River and I was going to have a retirement home built there. I did that because I wanted to disabuse him of any sense he could wait me out."

That is in stark contrast to what the president's policy is in Afghanistan. I think Mattis is right and I expect he will make the argument behind the scenes unless he's really changed his mind.

BREAM: A.B., is that confusing at all, the apparent conflict that the administration has been so strong about the timeline and the man who may head up Cent-Com sounds opposed to that?

STODDARD: It will be quite a confirmation hearing, because Steve makes an important point. If Petraeus had a hand in the pick, Petraeus was known to have said last week the progress will be measured in years, don't expect any in any six months. In six months from now, it's past the December review time.

I think Petraeus talks a good talk in front of the microphone about being unified behind the president's strategy, but I think there is clearly tension behind the scenes about withdrawal dates. And I think that this General Mattis is qualified and vast experience. But again at the hearings, those comments he made are seriously controversial comments.   It's also so illustrative of the downfall of Stanley McChrystal. You can have an impeccable resume and say a few things and it can go wrong. I don't know if he'll ever be allowed to say anything again once he's in this job. But I think the administration can ill-afford another embarrassment like that.

BREAM: That was something brought up today. Defense Secretary Gates was asked immediately about that, the 2005 comments, and he said at the time appropriate action was taken. We know he was chastised a bit. This is also what Gates added about the comments.


 ROBERT GATES, DEFENSE SECRETARY: Obviously, in the wake of the Rolling Stone interview, we discussed this kind of thing. And I have every confidence that General Mattis will be respond to questions and speak publicly about the matters for which he is responsible in an entirely appropriate way.


 BREAM: All right, we know Steve is not bothered by the comments. Charles, do you think it will cause him friction on Capitol Hill?

KRAUTHAMMER: It's obvious that Gates had all of that prepared and his message to Mattis was you get one shot, one mistake, one gaffe. A decade and you already had yours.

In his defense and what I think mitigates this is two things. The date of that comment was a lot closer to 9/11 and to the fury all of us were still in the grips of T that time. So I think it's understandable in that context.   Secondly, there is an element among the swaggering of gallantry in defense of the abused women of Afghanistan, which I think is his way of saying you are going after people who have been really bad.   The idea of the pleasure he gets is another issue, but I don't think it will bring him down. He's a very good general. As Steve indicates he is an ally of Petraeus. It isn't only the hand of Petraeus. This is Petraeus in control. Obama cannot fire three Afghan commanders in a row. Petraeus is the man who now implicitly, quietly, diplomatically is in control of the policy.   And on timelines, the winking that we have seen is that there is going to be a review in December, and we all know that Petraeus is going to say in December we can't start a withdrawal at that time or it's going be completely a matter of symbolism and not real. And Obama is going to have to acquiesce.   I think that is what they are winking now. I think everybody here understands that. The problem is I'm not sure that the Afghans know that. So I think it does hurt us in the field, but it's clear the administration is getting ready for a retreat on the timeline. That is all Petraeus doing and it will be also the doing of General Mattis.

BREAM: These confirmations hearing are an opportunity to end the winking. Enough with the winking. We need to say it clearly, and Mattis is just the person to say it. He can say this is I said in 2006, this is what I believed then. It worked in Iraq. Say it here and in this context.

KRAUTHAMMER: Remember, Democrats have elections, and that's why it's won't happen until December. It's cynical party politics.

BREAM: Panel, thank you very much.