This is a rush transcript from "Journal Editorial Report," April 25, 2015. This copy may not be in its final form and may be updated.
PAUL GIGOT, HOST: This week on the "Journal Editorial Report," new questions swirl around donations to the Clinton Foundation and Hillary's tenure as secretary of state. Could past deals derail her White House bid?
Plus, he's talking tough in New Hampshire and taking on the issue of entitlement reform. So will it help Chris Christie break away from the GOP pack?
And an Iranian convoy headed to Yemen changes course, averting a crisis in the Gulf of Aden for now. Did the U.S. show of force change Tehran's mind or are we still sending mixed messages?
Welcome to the "Journal Editorial Report." I'm Paul Gigot.
Hillary Clinton's campaign is shifting into defense mode after numerous reports this week raised new questions about donations to the Clinton Foundation as well as millions in speaking fees paid to former President Bill Clinton during her tenure as secretary of state. Among the allegations, that a Clinton family charity pocketed over $2 million from a donor tied to a business deal that gave the Russian government a big stake in American uranium production, a deal that was approved by a government committee that included Hillary Clinton's State Department. These details and others were first reported in a soon-to-be released book by conservative author, Peter Schweizer. So do they have the potential to derail her presidential bid?
Let's ask "Wall Street Journal" columnist and deputy editor, Dan Henninger; assistant editorial page editor, James Freeman; and Washington columnist, Kim Strassel.
So, Kim, you've followed the Clinton Foundation for your sins over these many years.
What is the most damaging revelation that came out this week?
KIM STRASSEL, WASHINGTON COLUMNIST: Well, it's probably this one about the uranium company, because what ended up happening here is this puts the focus on this question, this broader question of whether or not Hillary Clinton in her time as secretary of state was trading favors or doing anything unseemly on behalf of people who were donating money to the foundation. And the problem, Paul, is that there are hundreds of donors to the foundation.
STRASSEL: And she was at the center of all kinds of power as secretary of state. The conflict of interest here should have been apparent from the start and that is the fascinating question, why the Clintons think that didn't apply to them.
GIGOT: But here's the response from the Clinton administration. There's not a shred of evidence. And I think that's a direct quote. And I love the shred part. Not a shred of evidence --
-- saying that there is a quid pro quo here at all involved. And they say prove it. So what's your response to that?
STRASSEL: Well, the problem here is that -- I mean, even the Obama administration understood that the issue is the appearance of a conflict of interest.
STRASSEL: It just looks unseemly. The only people who don't seem to understand this, because they think the rules do not apply to them, are the Clintons. So they plowed ahead anyway. And the problem for Hillary Clinton is, whether or not there's a shred of evidence or not, these stories will continue to multiply because there are lots of them.
GIGOT: And Senator Robert Menendez, James, was indicted recently for alleged quid pro quo corruption. His defense is there is also no evidence of an actual quid pro quo. So the appearances that Kim mentions here are serious, particularly when you are talking about America's chief diplomat.
JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: In Mr. Menendez's defense, I don't think there's any evidence that he destroyed tens of thousands of e-mails that might include evidence of the quid pro quo. This is --
GIGOT: As secretary of state.
FREEMAN: As former Secretary of State Clinton has. So this is really going back to the '90s Clinton strategy, where if you cannot convict the Clintons of a felony, then really, what are you talking about here, it's not worth mentioning.
I think what is worth mentioning is that Mrs. Clinton has failed to meet the ethical standards she set with the Obama administration in 2008 on disclosure on accepting foreign donations. Didn't disclose the donations tied to the uranium mines, did not get disclose, did not get approval on an Algeria donation either. So this was a very low bar they set. A lot of people would say this is completely inappropriate for them to be accepting any foreign government money. Even with that low bar, she failed to meet it.
GIGOT: So, Dan, this is the question. Why did the Clintons cash those checks? The Clintons? Why would they do this? You had to know that this would look terrible if she ran for president of the United States. Bill Clinton accepting money, the foundation accepting money from foreign donors, companies while she was secretary of state.
DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Or a Moscow investment bank giving him a speaking fee for $500,000.
You know, I think the answer goes back to the 1990s. Back between 1992 and 2000, when they were in power, the modus operandi was stonewall, and they got away with it. I think with the Clintons, I truly believe they do not understand the media and information environment has changed dramatically. Now all these stories that are coming out feed into a system that includes social media, Facebook, Twitter, blogs, talk shows, and they have a kind of self-multiplying life. It exponentially expands. More people find out about it. And I don't think they quite grasp that you have to find a way to not be pushed over the falls by that force. And so they are just stonewalling. And, look, a lot of younger people who have no idea what Whitewater was, this is the only thing they are beginning to understand about the Clintons. I think it's going to have a damaging effect on her campaign.
GIGOT: Kim, the Clintons say the Clinton Foundation is a philanthropy, and technically it's true. But you have also described it as essentially, functionally, a super PAC that has acted on behalf of the Clintons' political ambitions. Explain that.
STRASSEL: It is a super PAC, Paul, if you look at it. What ended up happening is when Hillary Clinton finished her last bid for the presidency, all those people who worked for her, all of her campaign staffers, that's where they went and parked themselves. And while they were there, basically, operating a "get ready for the next Hillary campaign," in essence.
STRASSEL: They were putting together all kinds of donors, the same donors who were giving money to the Clinton Foundation. Look at the list. They are the people that have signed up first for the Clinton super PAC that's supporting her for president. This is just a shadow political operation. It's very cleverly done because it's not necessarily subject to the same SEC and other IRS rules that every other campaign organization is.
GIGOT: James, what about Dan's point that they took the checks because they think they will get away with it, basically, and they think the Democrats and progressives, who usually hate pay-to-play politics, they hate big money in politics, they hate the 1 percent, that they'll just swallow all this, ignore it and give them a pass in the end. What do you think about that?
FREEMAN: I think they'll have to if there's no alternative. But it has me wondering why Elizabeth Warren is not running. This is her window. She is the person to exploit all of these ethical problems with the Clintons, with their big money ties to shady donors, influencing --
GIGOT: But let's say she doesn't run. What happens? Are they going to mute all this and say, you know what, partisan attacks, ignore it all?
HENNINGER: Yeah. I think Democratic professionals are asking themselves the same question, what's coming next. But they are just joined at the hip with the Clintons and they are rolling forward, not in control of their own destiny. I think they would be very, very worried.
GIGOT: High-risk politics.
When we come back, New Jersey Governor Chris Christie takes his tough talk to the Granite State and takes on the issue of entitlement reform. Will it help him break out of the Republican pack as he eyes a presidential run?
(BEGIN VIDEO CLIP)
GOV. CHRIS CHRISTIE, R-N.J.: If anybody comes up on this stage and wants to talk to you about national defense, wants to talk to you about education, research and development, tax cuts or anything else involving the federal government, you should ask them what they're going to do on entitlements, because if they're not going to do something to fix that problem, we're not going to be able to deal with any of the other problems or opportunities that we have in this country.
(END VIDEO CLIP)
GIGOT: Garden State Governor Chris Christie at the Republican Leadership Summit in New Hampshire last week, taking on his fellow GOP hopefuls over entitlement reform. Though his poll numbers in New Jersey have taken a hit in recent weeks, Christie is setting his sights on the Granite State, hosting town hall meetings and unveiling an ambitious plan to change Medicare, Medicaid and Social Security.
So, James, what do you make of Governor Christie's, I guess you could call it a presidential comeback strategy? Some people have ruled him out. Clearly, not him.
FREEMAN: Well, I think he does have to do something to set himself apart. He's looking right now like he's in that second tier of candidates. He's not -- he's going to struggle to get the money and the voters that are now going to Jeb Bush. So --
GIGOT: He's had some big donors step up recently.
FREEMAN: He has. And given super PACs, you don't need that many check writers as long as the checks are big enough this time around. But I think even in that competition, it's going to be hard with Jeb there to soak up those dollars.
GIGOT: OK, but do you like this strategy of saying, I'm the truth teller, I'm the guy who is not going to fool you, I'm going to go right at this major problem and, like I did in New Jersey, on pensions and property taxes, I'm going to solve that problem and tell you straight. You like that strategy?
FREEMAN: I like it to a point. I like that he is the guy who can make this case. He made the case against government employee unions better than anyone. He made the case for reform. I think the second part of it, though, is that it didn't go that far in New Jersey, and there's a question here. This is a start at what he's talking about but, to be clear, what he's saying now, he's talking about raising the retirement age a few years, he's talking about means testing Social Security benefits --
GIGOT: Which means that well-to-do retirees get fewer benefits.
HENNINGER: In the future.
GIGOT: In the future, yeah. Not right now, retirees, but in the future.
You, James, not Dan and me, but you.
FREEMAN: Theoretically, yes. The point is that this is not going to solve the Social Security problem, never mind the larger entitlement problem. I would like to see him go bolder, especially if he's thinking I'm a long shot, I want to get out there and try and stretch the debate with some big thinking. I would like him to go bigger.
GIGOT: I have to disagree with James on this. Nobody else is running on raising the retirement age right now. Nobody else is running so far on means testing.
GIGOT: Those things -- and Mike Huckabee, another potential Republican candidate, criticized him, how dare you --
GIGOT: -- this contract with the American people. Everybody knows that Social Security has to change. Doesn't he get credit for saying so?
HENNINGER: I think so. One of the knocks on him is that he's one of these eastern moderates. This sort of insulates him from the idea that he's a moderate. This is a very radical idea. It also sets him up as the anti- Democrat because they are proposing raising outlays for Social Security.
GIGOT: Yeah, that's right.
HENNINGER: And the thing you have to remember about Chris Christie is that people forget he's very lawyerly. He assembles his facts. He just doesn't bloviate. He comes in with a set of facts and he can really present it I think in an appealing way. So he's sort of assembling his persona in a way that I think maximizes what potential he has.
GIGOT: Kim, when Governor Christie came in probably about a month ago to talk to us, and he -- the thing that I recall was he said that as running the Republican Governors Association last year, their campaign, he said what I learned is it's all about the candidate. You have a good candidate, you have a chance to win. If you have a lousy candidate, you have no chance. The implication was the presidential race is going to be all about the candidate and I'm a good candidate. When I get on that stage with my fellow Republicans, the American public, are going to see somebody who can make the case in a way that these other guys can't. And he thinks that's going to catapult him back to the frontier. What do you make of that?
STRASSEL: Yeah. This is why I slightly disagree with James. I think that that is his best shot because, as Dan says, it fits with his persona, the truth telling, the talking. He is about to -- by the way, the entitlement reform bit is just the first step. He has said he will come out with a bold national security policy, with a big education reform, with a big tax reform, and that these are all going to be coming in the following months. And he is going to be trying to dare all of the rest of the Republicans who are up there on stage to match him on the big-idea platform. That's what a Republican electorate wants right now. And he's also taking moves, too. He is giving some checks coming in and he has also been assembling -- he's been hiring some veterans of the Bush campaign, trying to make himself a little less New Jersey insular, and run like a presidential operation. So he's taking this seriously.
GIGOT: It deflects the -- as Dan said, it deflects the point that he's just a mushy moderate.
FREEMAN: Yeah. I'm all for him going bigger on tax and entitlement reform. I think that would be great for the race. And I don't want to sound too negative. Speaking of him coming to visit us, I can't think of a politician who is more entertaining to spend an hour with.
So, yes, he is going to be fun to watch onstage, fun to watch in the campaign. And I wouldn't rule out him catching fire. But he does have a problem. He's got to show results.
GIGOT: You mean in New Jersey.
FREEMAN: Yeah. They are lacking.
GIGOT: Yeah. He's working on another pension reform.
When we come back, an Iranian convoy heading towards Yemen turns back, avoiding a potential showdown in the Gulf of Aden. Did a show of force by the U.S. change Iran's mind or are we still sending mixed messages?
GIGOT: An Iranian convoy believed to be carrying weapons destined for the Houthi rebels in Yemen turned around and headed north late this week, away from the port of Aden. The about-face came after the United States dispatched the aircraft carrier "USS Theodore Roosevelt" to the waters off Yemen this week to join other American ships preparing to enforce a blockade, a move that President Obama said Tuesday was a quote, "very direct message to Tehran."
"Wall Street Journal" "Global View" columnist, Bret Stephens, joins us with more.
So, Bret, why do you think the convoy turned around?
BRET STEPHENS, GLOBAL VIEW COLUMNIST: I think frankly, it had only partly to do with the arrival of the "Theodore Roosevelt." I think it had a lot to do with the resumption of Saudi air strikes on Aden, on other Houthi targets in Yemen, which told the Iranians that even if their ships got through the blockade, which was a possibility, that the Saudis would bomb them when they were unloading in port.
So, Dan, why should Americans care about this conflict in Yemen? I think a lot of Americans say, it's far away, long ago, who cares.
HENNINGER: You mean the conflict in Yemen --
HENNINGER: -- connected to the one in Iraq, connected to the one in Syria? Look, if you designed an experiment to see how badly the Middle East could spin out of control and get the results we're seeing right here, you've got the Saudis trying to initiate these strikes on their own, instead of going through diplomacy with the Yemenis. This is what happens when the United States pulls out, as we did in Iraq when Barack Obama pulled the troop level down there to zero. You get this result. And you get an impossible situation.
I think Iran is sitting fat and pretty. Think of what they just did. Their standing in the region has risen. They got the United States to move an aircraft carrier all the way from the Persian Gulf through the Arabian Sea up into the Gulf of Aden just for them, all right?
STEPHENS: Well, look, all of that is right. We have strategic equities in Yemen. We don't want Iran expanding, continuing to expand its influence and starting a proxy war in the Middle East. That's what's happening in part of Yemen because the Houthies are a proxy of the Iranians. We do not want al Qaeda seizing large tracts of territory. Remember those attacks in Paris back in January. At least one of the brothers who had been an attacker had been trained by al Qaeda --
GIGOT: They had been targeting American targets here. They almost killed people in Times Square, an agent inspired by al Qaeda.
STEPHENS: Absolutely. Even Barack Obama had said that al Qaeda in the Arabian Peninsula, before ISIS, was the group that most directly threatened us here at home.
And also, if you look at a map of Yemen, you will see that it sits astride the straits that divide the Red Sea with the Indian Ocean, so a lot of maritime traffic crosses through it. We don't want that to be within range of Iranian guns.
GIGOT: So we are courting Iran on nuclear weapons, right? Yet we're fighting them, we're saying don't meddle in Yemen. We want the Saudis to be our ally against the Islamic State but we're telling them in Yemen, calm it down, slow down that bombing campaign. What's the U.S. strategy here? I can't detect it. Is there a consistent one, Dan?
HENNINGER: No, I don't think there's a consistent strategy at all, other than President Obama's obsession with getting the Iran nuclear deal. That's the tail wagging the entire dog in the Middle East. So you have -- I think the Saudis have been put in a position where they are attempting to do something that is above their pay grade. They couldn't do this sort of thing without the support of either Egypt or the United States, but the United States pulled out of Yemen, and they are doing it on their own now.
GIGOT: Do you detect a strategy here?
STEPHENS: This is part of the Obama approach of saying the nuclear deal is separate from Iran's regional ploys, its support for terrorism, its support for --
GIGOT: -- over here.
STEPHENS: You can't do that. Certainly, the Saudis aren't doing it. The Saudis can't separate the fact that Iran may be on the cusp of a nuclear capability with the fact that they are now increasingly surrounding Saudi Arabia. So this is going to draw us in willy-nilly whether we would like to pretend these are separate issues or not.
GIGOT: Should we get in more?
STEPHENS: I think we have to for a couple reasons. I think we have to show the Saudis that we support them. We have to show the Iranians that we are prepared forcefully to stop the Houthies and we have a vital interest in making sure that southern Yemen does not become what Afghanistan used to be for al Qaeda.
GIGOT: A sanctuary.
We have to take one more break. When we come back, "Hits & Misses" of the week.
GIGOT: Time now for "Hits & Misses" of the week.
Kim, first to you.
STRASSEL: Paul, another miss to the IRS, which just clocked one of its worst customer-service periods during tax time ever, a situation it blamed on budget cuts from Congress. We now have a new report from the House Ways and Means Committee saying that, in fact, it was the IRS that decided to cut its own customer service budget and spend its money instead on, for instance, $60 million in bonuses for IRS employees and to allow employees to continue spending loads of work hours working on union activities. So the IRS, the biggest mess it's ever been.
GIGOT: All right, Kim, thanks.
STEPHENS: This is a miss for William Jefferson Clinton, our former president. Just this week, the "Wall Street Journal" informed us on the front page that North Korea may soon be in a position to double its nuclear arsenal to 40 weapons. This is the result directly of President Clinton's misbegotten framework nuclear deal from 1994. That was an attempt to negotiate, to make sure that a rogue regime didn't get nuclear weapons. The deal went south, the north got nukes, and we are doing the exact same thing in Iran.
HENNINGER: Paul, a media miss. This week after the drone strike in Pakistan that killed two aid workers, unfortunately, the media went into kind of a weird frenzy of concern about re-looking at the drone program from top to bottom. Look, this drone program is killing homicidal maniacs who want to commit mass murder against Americans and the rest of the world. I certainly hope Barack Obama does not step back on the drone program.
GIGOT: It's a tragedy that those two men were killed but, as you say, they are targeting bad guys. We didn't know they were there.
And remember, if you have your own hit or miss, tweet it to us at JERonFNC.
That's it for this week's show. Thanks to my panel and to all of you for watching. I'm Paul Gigot. Hope to see you right here next week.
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