This is a rush transcript from "Special Report," March 26, 2019. This copy may not be in its final form and may be updated.


JUSSIE SMOLLETT, ACTOR: I want you to know that not for a moment was it in vain.

RAHM EMANUEL, D-CHICAGO MAYOR: This is an unbelievable not just whitewash of justice, this is a person now who has been let off scot-free.

SMOLLETT: I've been truthful and consistent on every single level since day one.

EMANUEL: Mr. Smollett is still saying that he is innocent, still running down the Chicago Police Department. How dare him? How dare him?

SMOLLETT: I would not bring my family, our lives, or the movement through a fire like this. I just wouldn't.

UNIDENTIFIED MALE: Do I think justice was served? No.


JOHN ROBERTS, HOST: Jussie Smollett, the Chicago mayor, and the Chicago police superintendent going back and forth over charges against Jussie Smollett being dropped. Let's bring in our panel, Steve Hilton, host of "The Next Revolution" here on Fox News Channel, Amy Walter, national editor for the "Cook Report," and Ben Domenech, the publisher of "The Federalist."

This was just a remarkable, stunning turning of events today. Let me read the Cook County State Attorney's Office statement. "After reviewing all of the facts and circumstances of the case, including Mr. Smollett's volunteer service in the community and agreement to forfeit his bond to the city of Chicago, we believe this outcome is a just disposition and appropriate resolution to this case." But they said there was no deal.

BEN DOMENECH, "THE FEDERALIST": This is a situation that has to damage your faith in the judicial system. The truth is that in this context, I think in the Chicago, in the Illinois context, this is a battle between Kim Foxx, who had to recuse herself from her position on this investigation, the State Attorney's Office, and the Chicago Police Department. This was done on a day when CPD was all at an event together, that they learned that this was happening during -- I think that this was clearly something that was internal politics played a role here.

Keep in mind, 18 people were killed with guns in Chicago during the time that this investigation was going on, using up resources that otherwise could have been brought to bear on that front. And the other thing is, frankly, Jussie Smollett is not out of the woods yet. The FBI's investigation into that letter that he purportedly sent, threatening one continues.

David Axelrod had a tweet this afternoon, though, about this, he's obviously a Chicagoan, that I think really speaks to the damage here. He says the lesson of this is you can contrive a hate crime, make it national news, get caught, and if you are a well-connected celebrity, get off for $10,000 and have your record expunged and record sealed.

ROBERTS: Which brings me to the next point, because Rahm Emanuel said this is a case of unequal justice and likening this to the Varsity Blues operation. Listen here.


EMANUEL: You cannot have because of a person's position one set of rules apply to them and another set of rules apply to everyone else. In another way, you are seeing this play out in universities, when people pay extra to get their kids a special position in universities.


ROBERTS: One thing that these two cases have in common is Hollywood.

AMY WALTER, NATIONAL EDITOR, "COOK POLITICAL REPORT": Yes. Again, no one should be surprised well-connected, wealthy people get away with things that poor people and not well-connected people don't get away with. And we just got another example of this, whether it is Varsity Blues, whether it is our justice system over and over again. This got an incredible amount of attention because of who he is, but there are a whole bunch of people right now who are sitting in the justice system that probably don't deserve to be there or can't afford their way out of something, whether because of the laws that are set up, cash bail system, et cetera. And there are people who are absolutely getting away from stuff simple because they are very well-connected, whether politically or because of where they sit with their celebrity.

ROBERTS: Steve, Smollett's attorneys and legal observers say that the Chicago Police Department blew this because they went too far with trying this case in the media. Listen here.


UNIDENTIFIED FEMALE: We have nothing to say to the police department, except to investigate charges and not try their cases in the press.

UNIDENTIFIED MALE: It was an overstep by the police department to come out. How does he ever get a fair trial when you have a superintendent going on "Good Morning America" blasting him?


ROBERTS: Is that true, because there are plenty of police officers and prosecutors who go on television saying we've got this case, and these are the bad things that this person did.

STEVE HILTON, HOST, "THE NEXT REVOLUTION": I don't think that in any way excuses what seems to have gone on here, but it does actually bring out another connection, as well as being in some ways similar to the college admissions scandal and fueling that populist sense of the system is rigged and ordinary people can't get the perks that others can, the rich and well- connected. It also reminds me in a strange way of the Trump-Russia case, and for this reason, that regardless of the facts here, people are invested in a narrative. They want to believe what they want to believe. There's a story they are telling, and they're going to stick to it regardless of the facts. And that has been fueled by some of these details that have leaked out over the period, right from the very first details there about the MAGA hat and so on, that riled people up on both sides of that narrative.

And I think they're going to stick with that, just as with Trump and Russia. Regardless of what you saw in the Mueller report, people still all day long are going on about how the president colluded. And so I think it speaks to the way people just really want to believe what they want to believe regardless of facts.

WALTER: These things just amplify that, and we have an outrage industrial complex, and that's what we have going on.

DOMENECH: And the comment in particular that this was due to the fact that this was a nonviolent, that he was not going to be a violent offender. What do you say to the nonviolent user of drugs who is hanging out in this system right now who doesn't have the resources of someone like Smollett? It's just completely disingenuous. And again, it breaks down our trust in the exact kind of systems that you want to have faith in, those law- enforcement systems that are closest to you.

ROBERTS: It was pretty remarkable the way it all went down.

Stay right there. Coming up next, Trump and the Democrats battle over the Mueller report. You'll want to see this.



DONALD TRUMP, PRESIDENT: I think what happened is a disgrace. We cannot let it ever happen again. It went very high up, and it started fairly low, but with instructions from the high-up. This should never happen to a president again.

The Mueller report was great. It could not have been better. It said no obstruction, no collusion. It could not have been better.

SEN. RICHARD BLUMENTHAL, D-CONN.: There was clearly evidence of collusion. And I want to see the Mueller report, not the Barr summary, for all the evidence and see how close it came to proof beyond a reasonable doubt. That's the very high bar that is used to judge whether there is a - -


ROBERTS: Some Democrats hanging on to the idea that there was in fact collusion between the Trump campaign and Russia despite the fact that the letter that Barr sent up to Congress said that Robert Mueller found no evidence of it at all. And we are back with our panel. So Democrats, Amy, are saying that they want to see this report, the whole report, or whatever they can release, by April the 2nd. And Barr tells Lindsey Graham it's going to take weeks. Maybe not months, but weeks.

WALTER: It's going to take some weeks. We've got to go through and make sure we are redacting things that are not appropriate for public view, et cetera, grand jury testimony, et cetera, et cetera.

But there is a script right now, and it's a pretty easy script. It's not surprising. Democrats are going to go and again say we need to see the whole thing. We can't just trust what the attorney general told us in a short letter. And the other thing the attorney general did lay out was that the president was not exonerated, so the president cannot claim to be exonerated.

Republicans come out, I've gotten a lot of emails, we are now to the end of the fundraising period ends March 31st, a lot of emails from candidates saying no collusion. That is the Republican line, Democrats have been on this for so long, it's now send me money so I can stay here and defend the president.

But at the end of the day, voters have been pretty clear about this. They haven't been paying all that much attention to this, certainly not as much attention to it as the news, especially cables, have been paying attention to it. They have been pretty checked out, and we're waiting, just wake me up when you have an answer, and then I'll decide what I want to think about it.

ROBERTS: And there is a slight whiff of a pivot going on Capitol Hill, Nancy Pelosi telling her caucus to be calm. And this from James Clyburn earlier today. Listen here.


JIM CLYBURN, D-S.C.: I believe that the Mueller Report has been done. That's a chapter that's closed. And I think last night this administration opened a new chapter when it moved to completely invalidate the Affordable Care Act.


ROBERTS: Big pivot there from James Clyburn. The Mueller case is closed, let's move to Obamacare.

HILTON: I think that is definitely the right strategy, and it's certainly the one that the leadership would like to do, because they totally understand why he's talking about it, which is that most people, health care is the number one issue. And by the way, the president needs to remember that as well.

And I think one of the most interesting things that was said today was by the president in response to questions about their decision on the Affordable Care Act. He said, just you watch, the Republican Party is going to be the party of health care, wait and see. It was a bit of tease. We'll see what he means. Very important. But I think the problem for the Democrats is that the activists, where the energy is, the fundraising and so on, they don't want to move on at all.

ROBERTS: They want to dig in.

HILTON: And it all reminds me of Maxine Waters before the midterms, she literally said, she talked about, they were trying to pivot back then. And she said, Maxine, they keep telling me don't talk about impeachment, and every time they tell me not to talk about impeachment, I say impeachment, impeachment, impeachment. That captures what is going on with the most energetic part of the party.

ROBERTS: We were talking about this in the break. Is there a danger for Democrats to dig too deeply into this, because right now they have got that statement of ambiguity that this does not exonerate the president, but if they start to call Mueller up on Capitol Hill, maybe he destroys that whole narrative.

DOMENECH: And I think the leadership of the Democrats is well aware of that, and they'd like to have a situation where they can milk this opportunity to say the president was not exonerated for a while. The potential of bringing up some of these witnesses who could backfire on them is very real.

But we should keep in mind, the left flank here really is where the energy is. And the fact that Congressman Tlaib was setting around another letter on impeachment today on Capitol Hill should indicate to you that this is not going to go away. There is going to be a true, progressive drive to continue this and to even double down on the idea.

ROBERTS: But when you have people like Brennan saying, after all the things that he said about President Trump, saying I guess I got some bad information, what does that do to the narrative to try to perpetuate this?

WALTER: Yes. I think going back to what the leadership is doing in the House, they have been pretty clear from the very beginning that we don't want to do impeachment. Nancy Pelosi before this report came out and said we are doing impeachment. Unless something really big comes out from Mueller, we're not doing it, taking it off the table. And so I do think unlike where Republicans found themselves when they were in the majority and Speaker Ryan did not have as tight of a control over the Freedom Caucus, the leftwing of the Democratic Party in the House is not going to be able to really drive and roll Nancy Pelosi on some of these issues. And I do think that this focus on health care is the great unifier, and beating Donald Trump is what she has going for her.

DOMENECH: But we shouldn't let this moment pass without keeping in mind how much of a disservice Brennan did to the American people by engaging in the kind of speculation that he did. If you think that trust and faith in the American intel community was low before this, it's only going to go lower, and this is not going to be the end of the recriminations.

ROBERTS: We have 15 seconds left. Let me get you to put your advisor's hat on. George Papadopoulos has petitioned the Department of Justice for a pardon. Would you recommend to President Trump do it or not?


ROBERTS: You would?

HILTON: Definitely.

ROBERTS: Pardon Papadopoulos?


ROBERTS: Lindsey Graham says it probably wouldn't play well.

HILTON: I think it's incredibly important -- everyone talks about moving on -- if there seems to be fairness and equal justice here. And the way that some of these people were trapped into this process by what many people view as a conspiracy on the other side, that all needs to be looked into.

ROBERTS: Panel, thanks so much. When we come back, the catch of the day goes very bad in Australia. Wait till you see this.


ROBERTS: Finally tonight, fishing is supposed to be a relaxing activity, but for two freshmen in Australia it turned scary pretty quickly. Watch.


UNIDENTIFIED MALE: What is that noise?

UNIDENTIFIED MALE: Run. Run back! Run back! Run! Run! Run! Run Daniel, run! Run! Run! Run Daniel, run! No, he's got it. Pressure on. Keep the pressure. No! No! It is so big. It is so big he is swallowing it. The whole thing is gone, it's gone.



ROBERTS: And you thought the Washington swamp was a tough place to be. There in Australia, they do swallow you hole.


Thanks for inviting us into your home tonight. Good night from Washington. "The Story" hosted by Martha MacCallum starts right now.

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