This is a rush transcript from "Special Report," November 22, 2010. This copy may not be in its final form and may be updated.


ADM. MIKE MULLEN, JOINT CHIEFS CHAIRMAN: This validates the long-standing concern we've had with respect to North Korea and the enrichment of uranium. I have been worried about North Korea and the potential nuclear capability for a long time. This gives that potential real life, visible life that we all about to be very, very focused on.

STEPHEN BOSWORTH, U.S. SPECIAL ENVOY TO NORTH KOREA: This is obviously a disappointing announcement. It's also another in a series of provocative moves by the DPRK. That being said, this is not a crisis.


BRET BAIER, ANCHOR: Not a crisis, but it's raising a lot of eyebrows here in Washington as the administration deals with North Korea.

This is about a facility at Pyongyang, a nuclear facility that Stanford scientist Siegfried Hecker went to on November 12. He was shown the facility. You can see satellite images showing the area there.

The American scientist, who used to head Los Alamos, was shown the state of the art facility with 2,000 centrifuges capable of spinning uranium into the fissile material needed for a nuclear bomb. This is more, better than the U.S. thought North Korea had, at least that's what everyone in the U.S. intelligence community is saying.

Let's bring in our panel about this -- Steve Hayes, senior writer for the Weekly Standard, A.B. Stoddard, associate editor of The Hill, and syndicated columnist Charles Krauthammer.

Charles, your thoughts.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think this is the final demonstration of the uselessness and the futility of our negotiations with Pyongyang.

The farce began 16 years ago when the Clinton administration concluded what was called the framework agreement in which the deal was they would freeze and dismantle their plutonium program in return for all kinds of goodies, including the two nuclear reactors that we would construct and a lot of economic support.

The problem is that there are two ways you can develop a bomb, plutonium or uranium. We assumed all they had was plutonium. Then in 2002, our negotiator in Pyongyang was told they had separate uranium program. They then denied it over and over again after that one instance. So we had no idea.

And now we discover they have, as you said, an advanced facility, thousands of these machines that look quite modern. This is not something that was done overnight. So they had a parallel program while they pretended under the Clinton and the Bush administrations to be dismantling or at least holding back on the plutonium program, which means they were not stopping at all on their development of nukes.

I think we will reflexively return to negotiations. The reason all of this is revealed because what they want now is another farcical deal in which this program is supposedly restrained in return for a lot of economic aid. Their economy is worse off than it ever was and they're now in a succession crisis.

The problem is everything they say, everything they sign is not worth the paper it's written on.

BAIER: A.B., Secretary Clinton traveling to Seoul, South Korea, February of 2009, talked to correspondent James Rosen. She was asked by James about a possible uranium enrichment operation. She said there may be some program somewhere but no one can point to specific location. And then she added this:


SECRETARY OF STATE HILLARY CLINTON: Do I believe the North Koreans if they could engage in producing highly enriched uranium would attempt to do so? I mean, that's seems to be their nuclear ambition. I don't have any doubt they would try whatever they could. Have they? I don't know that and nobody else does either.


BAIER: That was February of 2009.

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: I mean, she is admitting they're unstoppable. To describe this as not a surprise, not a crisis is implicit that the policy failed.

But it raises serious questions about what is North Korea current relationship with China. Is China actually supplying the technology and the equipment necessary to come up with a sophisticated facility like that to advance their nuclear program? If not, which companies are denying the sanctions to help North Koreans?

If the Obama administration concludes at this point that strategic sanctions and patience are not working and ultimately they can't work with Iran either, then what is the course for the U.S. in order to stop a nuclear arms race? And I think that no one is giving any answers right now.

BAIER: China here Steve, is the lynchpin. It always has been. It's the number one trading partner. It's how North Korea gets its food and its staples. Yet, here we are.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: China is huge. The whole premise of the Bush administration's engagement with North Korea was, I would argue, basically outsourcing China -- saying tell us what to do and we'll do it. It didn't work.

If you go back and as Charles documented and look at 16 years of failed diplomacy in North Korea, it leads you to the question, when are we going to get serious about this?

The problem I think in a weird way, North Korea doesn't get the attention it deserves from the national security establishment because Kim Jong-il is so weird. I mean, people dismiss him as odd or something we don't need to pay close attention to. And the fact is he is precisely the kind of leader, this is precisely the kind of regime that you have had successive presidents going back 30 years warning about -- an unstable, potentially irrational, potentially crazy dictator with nuclear weapons who has a history of proliferation. This isn't speculative anymore. It's a history of proliferation and he's proliferating to terrorist states.

BAIER: Charles, that's the question. Now there is a leadership transfer in North Korea to his son. There's evidence of proliferation with the Syrians and others. What can the administration do that is different than what they have been doing?

KRAUTHAMMER: I think we have to completely redirect the policy. It's not to aim at the leadership in Korea. It's to aim at the leadership in China.

We heard earlier in the show that the Pentagon is considering a request from the South Koreans for tactical nuclear weapons, which we have in the past.

BAIER: And the Pentagon says they haven't seen the request, they haven't fulfilled it. But South Koreans are talking about it.

KRAUTHAMMER: We ought to go one step beyond that, to offer South Korea its own nuclear program and to encourage the Japanese to arm themselves if they need to. The way to say it is to say look, all our negotiations including China -- with China have not succeeded. You have to arm yourself. That will get the attention of the Chinese.

Up until now the Chinese have played a double game. They have no interest in helping us on the issue. They like having it as thorn in our side. It's distracting us as China expands the influence in all of Asia.

What we ought to say is what they are worried about is Japan with nukes or South Korea with nukes. Let them imagine that will be the outcome of this double game and they will begin to act. They control what happens in Pyongyang. All the fuel and food comes through China and they can turn it off.

Steve is right. Proliferation is the real issue here. They could develop a lot of uranium bombs that could end up in the hand of Iran, Syria, Burma or Al Qaeda. That's why we have to ratchet up.

HAYES: We've hinted at this with China. We've raised the possibility that Japanese could go nuclear. We've raised the possibility, but doing it as a positive step is one way to confront the Chinese and force their hand to a certain extent.

But this also has huge implications with respect to Iran. The entire Obama administration policy on Iran is premised on the success or potential success of containing Iran, an international regime of sanctions, all of these things we have tried repeatedly with North Korea. And they have failed again and again and again.

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