This is a rush transcript from "Journal Editorial Report," March 17, 2012. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report," Newt's Southern strategy comes up short but he says he is taking his fight all the way to the convention. Can he make it that far?

And President Obama, the magician? He's trying to make the world and all of its troubles disappear until after the November election. Will it work?

And a just-released report shows how rogue prosecutors defeated Alaska's Senator Ted Stevens and helped to give Obama-care its 60th vote. We'll have the details.

Welcome to the "Journal Editorial Report." I'm Paul Gigot.

With double victories Tuesday in Mississippi and Alabama, former Pennsylvania Senator Rick Santorum seems to have solidified his status in the Republican race as a conservative alternative to Mitt Romney. But Newt Gingrich, who previously staked his campaign on winning those Deep South states, says he'll take it all the way to the August convention in Tampa.


NEWT GINGRICH, R-FORMER HOUSE SPEAKER & PRESIDENTIAL CANDIDATE: We will continue to run a people's campaign. I believe after the primaries are over, it will be obvious that the so-called frontrunner in fact didn't get there and, from that point on, we'll be in a whole new conversation.


GIGOT: And joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; assistant editorial page editor, James Freeman, and columnist, Mary Anastasia O'Grady.

Mary, what do you think of Newt Gingrich convention strategy? It looks like even he does not believe he can get enough delegations during the primary.

MARY ANASTASIA O'GRADY, COLUMNIST: No, Paul, it's absolutely bizarre that he's insisting that he's a viable candidate. He's not doing well anywhere. But I think that he may have -- be hanging on for three reasons. One, I think he doesn't think that Santorum can get the nomination.

GIGOT: Right.

O'GRADY: Secondly -- and he's not at that far behind in the popular vote from Santorum. Secondly, he doesn't think that Romney, because Romney hasn't been able to overwhelm anybody in any one of the states, is accepted by conservatives in the -- in the party.

GIGOT: Right.

O'GRADY: And, third, he thinks he can get to the convention, give a barn-burner of a speech and people will say, wow, the messiah has arrived. It's crazy.


It's crazy. It's really crazy, but this is the only way I'm able to rationalize what he's doing.

GIGOT: If he can deny Romney the majority of the delegates, isn't it plausible that you could have a brokered convention where the Gingrich, coming out of the blue strategy, could prevail?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: It's plausible in poker that if you draw to an inside straight you can win a hand.


It's also possible that Belmont College could win the NCAA.


Romney needs 1,144 delegates. The plan is to keep him under a thousand.

GIGOT: Right.

HENNINGER: Keep him about 150 delegates away.

GIGOT: So he wouldn't be able to cut easy deals?



HENNINGER: That's going to be very hard to do. We're pretty much finished with the South, other than Louisiana and Texas. We're moving into less conservative states for the primaries, now. And there will be no evangelicals to help Rick Santorum. Rick Santorum is going to have to make a case that he hasn't really done in Michigan and -- didn't win those states. He came close. So Romney is going to continue to grind out delegate wins. And I think, at this point, it's kind of interesting that these campaigns are now relying on a mathematical case against Mitt Romney.

GIGOT: Yes, the map case, James, doesn't look good for Santorum and it's going to be hard to get there. What does he have to do to break out and have a rally of the kind that Ronald Reagan had in 1976 against Gerald Ford starting in late March?

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: I think he does need to delegate the conservative vote and it's probably necessary for Santorum's path to victory for Gingrich to bow out. Gingrich's campaign does seem to have failed in his own terms in that set himself up as pursuing the Southern strategy and that didn't work out. Now, if you look at -- I think that the Santorum victory argument would be, if Gingrich gets out, he's able to grab most of those votes. And I know the polling suggests that's undetermined but --


GIGOT: And that's provided between Romney and Santorum.

FREEMAN: But if you have one conservative alternative, he immediately gets a bump in the polls. He looks more formidable. I think the idea is forget the delegate count for the moment. Romney at almost 500, Santorum at about 250, a lot of the Romney votes are people settling for him because they think he's the guy whether they like it or not.


FREEMAN: Every different calculation is one on one.

GIGOT: Every time Santorum has gone head to head with Romney in one of these big industrial states, where he's had the field, where Gingrich has not competed, Michigan and Ohio, being the two best examples, Santorum has come up short. What's failing in his message?

FREEMAN: You could say that Gingrich wasn't competing. Gingrich was competing enough that, if Santorum was able to take those Gingrich votes, He wins. Illinois on Tuesday is a great example. Santorum, we're out of the south and not so many evangelicals, running strongly against Romney. You take the 10 or 12 percent that Gingrich is showing, maybe then it's a Santorum victory.

GIGOT: He's got to win in one of those states, doesn't he, Mary? More than one, five, six, seven in a row?

O'GRADY: Absolutely. I think, if you get to the convention and, you know, that the numbers still look about like this, even if Romney is not over that magical number, the Republicans are going to look at that and say, who's done better in the swing states? It's Romney. The electability factor is an overriding factor. And I don't think, even at a birther convention, Gingrich or Santorum can get there.

GIGOT: That seems to be the dominate point among Republican voters. You look at the exit polls, Dan, it's electability. And that's why they're going with Romney. They're not thrilled with him, not elated, not overjoyed. Basically, they resigned, but at least he's got a chance to beat Obama.

HENNINGER: Yes, well, let's discover once and more all what Republican voters think and want. If the election in November is the finals, we need to get into the semis. We need the one team here and one team here. I think the answer, as James is suggesting, is probably Newt Gingrich should get out. And I think there will be a lot of pressure on him in the next couple of weeks for him to get out so we can discover whether Rick Santorum is going to be able to attract enough general voters in the election to beat Mitt Romney. I'm not convinced that all Gingrich's conservative voters would go over to Rick Santorum. I think some of them would go to Romney.

GIGOT: Good luck persuading Newt.



GIGOT: When we come back, from Afghanistan to Syria to Iran, the president's list of foreign policy concerns is growing by the day. But as the 2012 race kicks into high gear, can he keep it the world at arm's length until after November?



PRESIDENT BARACK OBAMA: We have applied the toughest sanctions ever on Iran and we've mobilized the international community with greater unity than we've ever seen. Those sanctions are going to begin to bite even harder this summer.

The best thing that we can do right now is to make sure that the international community continues to unify around the fact that what the Syrian regime is doing is unacceptable.


GIGOT: That was President Obama Wednesday in a joint press conference with British Prime Minister David Cameron. But as it highlighted, a growing list of foreign policy concerns for the president who, as the election season lights up, is hoping to limit America's involvement in any international conflict. But can the president keep the world at bay until after November?

We're back with Dan Henninger and Mary O'Grady. Also joining us, Wall Street Journal editorial board member, Matt Kaminski.

Let's talk about the Afghan strategy, Matt, because this week you had Afghan President Hamid Karzai saying he wants American troops out of the countryside and back to bases next year. Then the Taliban walked out of the negotiations with the United States that we've been seeking for quite a while now. How much trouble is this strategy in?

MATT KAMINSKI, EDITORIAL BOARD MEMBER: Especially because he lost control over the strategy they had. We had a perfectly good strategy until last year. That was the push with the surge, extra troops in the country, carry out a counterinsurgency, sort of strategy in ground. And last year, toward the election, President Obama said, we're going to pull out. We're going to set deadlines for pulling out. And he's discovering that retreat comes with its own problems. And you can't control the situation anymore. You no longer -- when all you're doing is sending signals that you really want to get out of this.

GIGOT: Everybody seems to be looking after number one, if you will. Pakistanis want to cut a deal with the Taliban. So they're not helping too much anymore. The Taliban saying we can wait out the Americans. And Karzai's playing his nationalist credential card because he knows he's going to have to survive, as a politician, after the Americans wind down, Dan?

HENNINGER: That's right. And I think Matt put his finger on it. Look, in December 2009 is when President Obama rather dramatically announced he was going to surge 30,000 troops into Afghanistan and pursue a counterinsurgency strategy.

GIGOT: And we supported it.

HENNINGER: And we supported it. By in large it has been effective in Helmand and Kandahar Province down in the south and they've been making gains. This past December, the president said he was going to start pulling the surge troops out, those 30,000 troops, and the expectation is they'll be out by this September. That's what the people understand. Now, if you're Karzai or if you're the Pakistanis, and you see that Barack Obama is pulling out 30,000 troops out by the end of this year, you've got to look to your own interest. And your interest is not standing with the Americans under those circumstances.

GIGOT: I guess the president would say, if he was saving it privately, the American people is souring on this war. Sixty percent of the people say it wasn't worth it in the first place, given all we've sacrificed, so I've got to show Americans we're on the way out and try to manage this retreat as well as we can.

O'GRADY: Right. You think that the enemy doesn't understand that? This is a guy who ran on basically a strong anti-war platform. Everybody knows he didn't want to be engaged in the conflicts. And Matt says he's finding retreat has costs, but he also finds at that retreat has certain political benefits. This is what he's playing to. It's not what's going to happen to Karzai in the next 12 months.

GIGOT: You said, you wrote this week, Dan, that you thought the president was trying to push the foreign policy issues off the table, mostly until November. Not engage in Syria very much but to make sure that the Israelis, for example, don't attack Iran. And it's surprising to me that a commander-in-chief says so very little about Afghanistan to try to persuade the American public at all that what he's doing is the right strategy.

HENNINGER: I would say that the commander-in-chief is going dormant for about eight months.


But there's also --


GIGOT: What is the calculation there?

HENNINGER: Well, the calculation is that he does not want to risk any of the hot spots blowing into something really volatile and explosive on his watch. You know, it's the Jimmy Carter example, the hostage crisis. you don't want an October surprise. Ironically, it may be a calculation on his point that if something big blew up, like Iran, I think the American people, under those circumstances, tend to go with the incumbent. It's a nerve-wracking situation to be in. But it's Obama's instinct not to engage in foreign policy, not to ask the United States to lead in any of these issues. As an ideological matter, they've always felt they wanted to go along with international institutions and our allies. So he's not ever been much of a leader in international affairs.

GIGOT: Can he hold off the world that way, Matt?

KAMINSKI: Given the way things have gone in the last 12 months in the world, you would think probably not. It's been a difficult period in foreign affairs. And as Dan points out, people do look to the president to be a leader in world affairs. We're still the leading power out there. I think that Iran, Syria, which is a scandal -- I mean, basically, we've let Assad decimate the civilian population without doing anything. Afghanistan and Pakistan, so three things, three hot spots that could potentially blow up in the next six months.

GIGOT: In the polls they show that the American public gives the president good marks for foreign policy. And the Republicans don't seem to be making much traction frankly on the issue.

KAMINSKI: They've been trying very hard. We've also had a great consistent sort of line on this. Pulse can be very cyclical. Americans sort of change their mind. I think in some ways, Obama's poll problems in the last week or so reflect the fact that people are anxious about the lack of American leadership.

GIGOT: Including Afghanistan? You think that that's rising to the top here as a concern?

KAMINSKI: I think it may. I think there's a feeling that no one -- who is really in charge of this policy?

GIGOT: Mary?

O'GRADY: Well, I mean, I think that one of the reasons why Americans feel like they want to get out is because the Bush policy of going after terrorists actually has been effective. and we haven't had more attacks. I mean, if you had a recurrence of what happened in 9/11, it'd be a much different appetite for trying to root out the bad guys around the world. But now people feel very comfortable, so, in a way, the Bush policies have worked to the benefit of President Obama.

GIGOT: OK, last word, Mary.

When he we come back, a bombshell report released this week shows how rogue Justice Department prosecutors defeated Alaskan Senator Ted Stevens and helped give the Democrats their 60th Obamacare vote. We'll have the details next.


GIGOT: He was the longest-serving Republican Senator in U.S. history and his reelection loss helped give Obamacare its 60th vote. Now a new report details the gross Justice Department misconduct that led to the prosecution of the last Senator Ted Stevens. He was found guilty in 2008 on lying on financial disclosure forms and failing to report hundreds of thousands in improper gifts. Weeks later, he lost a close race to Democratic challenger, Mark Begich. Attorney General Eric Holder moved to have the verdict thrown out in 2009, citing evidence of prosecutorial misconduct. And the 500-page independent report released this week shows just how widespread that misconduct was.

James Freeman has been looking at the case and the report.

What do you think about the conduct? How bad was it?

FREEMAN: It's appalling. "A systemic concealment of evidence" was the phrase used by the report to Judge Sullivan. And you don't have to be a constitutional lawyer, anybody who saw the movie "My Cousin Vinny," --


-- learned from Marisa Tomei that prosecutors have to share exculpatory evidence with the defense. And you see over and over again in this case, either not sharing it, not informing the defense or, even worse, misleading the defense about what evidence there was.

GIGOT: Would that have changed the outcome of the case?

FREEMAN: Definitely. The key to the case is a guy named Bill Alan (ph) and his testimony that sent -- convinced the jury to convict Stevens.


FREEMAN: What the prosecutors never told the defense was that they had evidence that Bill Alan (ph) had suborned perjury in a separate matter. It would have destroyed his credibility.

GIGOT: And it wasn't just Ted Stevens wrongly convicted. There were also two Alaska legislators?

FREEMAN: That's right. Fortunately, their convictions were turned aside and they've had their numbers more or less cleared. But, this is an awesome power that prosecutors have. and if not for, I think, an FBI agent saying, you know, maybe, wait a minute, some things went wrong in this case, we might not even know.

GIGOT: What are the implications for this, Dan? Here you have something in the Justice Department called the Office of Professional Responsibility, which is supposed to investigate people in public life who commit crimes. Here you have these people essentially abusing the process. It's the power over life and death. It's the power that could have ruined the lives of these two Alaskan of these two legislators and turned the tide in the American Senate.

HENNINGER: On the one hand, prosecutors will argue this happens in a small percentage of cases. On the other hand, there are very big cases, not just this one -- there was the Broadcom CEO, excuse me, whose back -- stock options back-dating case was overturned on appeal. KPMG, the auditing firm that went through the same thing.

We had a piece in our paper, an op-ed piece here this week, which I think made -- by two judges -- made a very good suggestion. These prosecutors can only be sanctioned if they're in violation of a court order. If the judge at the beginning of one of the trials tells the prosecution, I want you to reveal exculpatory evidence if you have it, otherwise in contempt of court, I think that could go a long way. The prosecutor can then decide, if I have exculpatory evidence, I should turn it over. It's a gray area, then they can take their risks.

GIGOT: But they're supposed to abide by this because of something called the Brady Rule.

FREEMAN: The Brady Rule, Supreme Court decision from the 1960s. You've got to hand over evidence to the defense. But it's even --


HENNINGER: Is it even exculpatory? That's a judgment call.

FREEMAN: OK, Stevens' case, one of the key facts was they found -- the case involved him getting some home renovations and the allegation that he had gotten someone to pay for it and hadn't disclosed it. Well, the prosecution found a foreman on the job site who backed up Stevens' story. Not only did they hide that, but they presented it as if he had contradicted Stevens.

GIGOT: Are those lawyers still working at the Justice Department?

FREEMAN: Many of them are.

GIGOT: And should they be sanctioned or thrown out?

FREEMAN: They should be. This is where Eric Holder still won't say for sure whether he's going to release the findings of his internal report.


FREEMAN: But it's amazing that they can continue in their jobs.

GIGOT: James, thank you.

We have to take one more break. When we come back, "Hits and Misses" of the week.


GIGOT: Time now for "Hits and Misses" of the week.

Mary, first to you.

O'GRADY: This is a miss for Hillary Clinton for equating the bravery and the risks taken by democracy activists in Burma with a Georgetown law student who doesn't want to pay $10 a month for contraceptives. Believe it or not, Secretary Clinton put those two in the same sentence in a speech admonishing extremists who are targeting women. And, Paul, I realize the Democrats need to sort of up the victimhood rhetoric for women ahead of the election, but I think that's going too far.

GIGOT: OK, Mary.


KAMINSKI: This is a miss to Lucy Bickerton, who, as a college student, was an unpaid summer intern for "Charlie Rose Show."

GIGOT: On public broadcasting.

KAMINSKI: That's right. It's not clear what part of what "unpaid" is --


-- but she has now gone to a state court in Manhattan to sue the show for breaking labor laws. I assume that she could have done a paying job at Starbucks fetching coffee, but there's probably a reason why she preferred having a different resume line.


GIGOT: All right.


HENNINGER: Paul, Energy Secretary Steven Chu is getting a miss this week for going before Congress and repudiating his previous call for gasoline prices to be raised to European levels, which is the only way alternative energy economics works. He now says, I no longer share that view. And I think what the Noble Laureate in physics is that politics ain't rocket science.

GIGOT: Yes, and he will hold that view probably right though, say, mid November.


And probably come back to where -- I've heard him say I favor higher gas --

HENNINGER: He's been on both sides of it now, so.


GIGOT: All right.

And remember, if you have your own "Hit or Miss," please send it to us at jer@FOXnews.com. And be sure to visit us on the web at FoxNews.com/journal.

That's it for this week's edition of the "Journal Editorial Report." Thanks to my panelists and to all of you for watching. I'm Paul Gigot. Hope to see you right here next week.

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