This is a rush transcript from "Special Report," November 29, 2010. This copy may not be in its final form and may be updated.


HILLARY CLINTON, U.S. SECRETARY OF STATE: If anyone reading the stories about these alleged cables thinks carefully, what they will conclude is that the concern about Iran is well-founded, widely shared, and will continue to be at the source of the policy that we pursue with like-minded nations to try to prevent Iran from acquiring nuclear weapons.


BRET BAIER, HOST OF “SPECIAL REPORT”: Secretary Clinton reacting to one of a quarter million secret diplomatic cables released by the website WikiLeaks. That one deals with the Saudis concern about Iran and specifically a cable dealing with Saudi King Abdullah and a communication he had with General David Petraeus saying that the U.S. should strike militarily Iran's nuclear program, saying "cut off the head of the snake," according to this cable, King Abdullah urging General Petraeus.  Also, Yemen's President Saleh telling general Petraeus about the strikes in gentlemen, "We will continue saying the bombs are ours, not yours," about U.S. strikes on Al Qaeda in Yemen. And there are a number of frank assessments about U.S. allies. Italian Prime Minister Silvio Berlusconi is called a mouthpiece for Vladimir Putin in Europe, receiving lavish gifts and energy contracts from the Russian prime minister.  There is a lot more in there. We'll talk substance first, and then the hunt for the people responsible second. Let's bring in our panel, Bill Kristol, editor of Weekly Standard, Mara Liasson, national political correspondent of National Public Radio, and syndicated columnist Charles Krauthammer.  Bill, reaction, what struck you must of the substance of these diplomatic cables?

BILL KRISTOL, EDITOR, THE WEEKLY STANDARD: That the world really did not want Iran to get the nuclear weapons and that Iran's neighbors in particular don't want Iran to get nuclear weapons and they'd like us to act forcefully to prevent it.

They're not worrying about Israeli settlements on the West Bank.  They’re not worrying about Arab street disliking an attack on Iran. They understand that Iranian nuclear weapons changes the balance of power in the Middle East and call them to go nuclear. It would be an incredible setback for all American efforts to check the spread of radical Islam and of terror and of further nuclear proliferation in Middle East and around the world. That's the headline I think.

BAIER: And Secretary Clinton, Mara, was trying to downplay that, saying the Mideast is very concerned about Iran anyway. It seems these diplomatic cables harm the diplomacy and the ability for the people to talk with the U.S. candidly going forward.

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO:  I agree with Bill that that's the most important thing that has come out so far. For years we’ve been hearing that the Arab leaders want Iran denuclearized and would not be upset if Israel made a strike on them. And this backs it up. It turns out thats true.

The king of Bahrain saying that the consequences of them having weapons would be greater than the blowback from the Israeli military strike. I think yes of course this might complicate things, their ability to talk candidly, but now the cat is out of the bag.  And I really wonder if in some perverse way this isn't positive thing for the U.S. The U.S. has been trying to get tough sanctions and they've been having success. Now we know there’s actually a consensus in the region on Iran.

BAIER: Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: It's like the previous WikiLeaks leak on Afghanistan. It told us generally stuff we already knew but put meat on the bone.

BAIER: Like Iran acting on Afghanistan.

KRAUTHAMMER: Right, direct quotes and citing of incidents. Here we already had this -- I have been saying and a lot of people heard from the diplomats in private Arabs have been saying please attack Iran. Do anything that you have to do because a nuclear Iran is intolerable in the region.

And there was a hint of that this summer when the UAE ambassador at conference in aspen that we heard leader of Bahrain say, namely that even consequences of an attack which would be serious would be a lot less bad than having nuclear Iran.  And you get it's not just that Saudis would welcome an Israeli attack or American attack. They have been demanding, or begging for a U.S. attack, the king of Saudi Arabia, not just an underling, over and over again.  Because, again, unlike Israel, which has deterrent, is quite strong, these are defenseless countries sitting on huge resources and looking at a Persian adversary after millennia of Persian attempts to dominate the region.  This is something that for Arab states is historic, extremely important.  And now we have direct quotes and we know that the Arabs in that part of the world are almost united, except for Syria, which is an ally and a client of Iran in wanting us to do something about Iran nuclear weapon.

BAIER: Bill, what about the other revelations that don't seem as important, but perhaps are very embarrassing? British Prime Minister David Cameron is called a ‘political lightweight’ and other names in these cables, as well as the fact that Secretary of state Clinton and prior to her Secretary Rice ordered U.S. diplomats to spy on other diplomats, collecting their frequent flier and credit card numbers and other information?

KRISTOL: Well, diplomats from hostile nations and nations like North Korea and Iran, it's useful to more about them and who they are in case they want to deal with them later on, eavesdrop on them, bribe them. It's important -- it's a tough world out there.

There are a lot of interesting details and tidbits. Some interesting stuff came out an hour or two ago on North Korea and China, which suggests that North Korea is more out of control, or at least China claims to have much less control over North Korea, they made a claim to our ambassador, South Korea we thought.

But what strikes me the most is it's a dangerous world out there.  When you read these cables, all the notion that these are mostly from the Obama administration, and people hope, President Obama hoped things would change that things would change, outreach to the Muslim world and diplomacy.

And then you really read these cables and it's tough out there. It's great for the notion that the American strength is necessary to deal with the threats.

BAIER: Charles?

KRAUTHAMMER: There's one specific incident about China which again reinforces the idea that despite the pretense that it's a strategic ally or a coincidence of interest is not so.

And that was in November of 2007 when our secretary of state asked, had gotten wind of the fact that China was going to be a -- transmission point for long range weapon component from Pyongyang to Tehran. And it went through China, and we asked our ambassador to do everything we could to stop the shipment. We couldn't.

So here you have China collaborating with the two major nuclear rogue states, helping one arm the other. That's a major, serious development.

BAIER: Last word, Mara. How much damage control is Secretary Clinton doing around the world? And why not put President Obama out on this and say we're sorry?

LIASSON: Right now, I think the decision has been made to leave her in the lead. It makes sense at this point. This came from the State Department. She's been calling all the people she deals with. I think for now it makes a lot of sense.

I actually think the substantive stuff that comes out we talked about is more important than the ruffling of feathers of saying nasty things about other leaders. This is what people do behind their back. And but I don't actually think that, the personal stuff, will have a lasting impact.

BAIER: Secretary of State --

LIASSON: See her talking about it. Do you hear what they're saying about me?

BAIER: Hear what they say about the U.S.?

KRAUTHAMMER: Except it's not published. That is the difference.

BAIER: Tell us what you think will be the diplomatic fallout from the WikiLeaks release. Vote in the online poll at FOXnews.com/specialreport.

Next up, damage control and going after the leakers. 



ERIC HOLDER, U.S. ATTORNEY GENERAL: To the extent that we can find anybody involved in the breaking of American law and who has put at risk the assets and the people I described, they will be held responsible. They will be held accountable.

To the extent there are gaps in the laws, we will move to close the gaps, which is not to say, which is not to say that anybody at this point because of their citizenship or their residence is not a target or a subject of an investigation that’s ongoing.


BAIER: The attorney general talking about the investigation into the WikiLeaks release of all of these documents. Wikileaks founder, the former Australian computer hacker Julian Assange, has not been charged with publishing any classified documents. He has, incidentally, been charged with rape by two women in Sweden.

But the source of the leak is said to be Private First Class Bradley Manning, a former intelligence analyst based in Baghdad now being held in maximum security prison in Quantico, Virginia, charged with mishandling classified information. The Pentagon is saying he could face more charges ahead.

What about this, and how does he get access to all of this material?  We're back with the panel. Charles that is the biggest question. How does a private first class get access to all of this stuff and get on a computer, pretend to be listening to Lady Gaga on his CD, and download all of this material and then get it to WikiLeaks?

KRAUTHAMMER: Apparently, the reporting is it's in part a result of trying to make it easier for parts of the government to speak to each other, access information, as a result of 9/11.

I think the lack of emphasis on him and WikiLeaks was the real problem with the Clinton statement. Here she is speaking on behalf of the administration, and she gives a long explanation and apology basically about exposure or perhaps hypocrisy in our leaks. Hypocrisy and insincerity is the essence of diplomacy. This is what we do. Everybody does.

The real problem is helpless it exposed to the United States, the superpower where all its information is out there with everybody enjoying impunity. What she should have said is nothing about the leaks themselves, simply said we're going to ask the military justice and the Justice Department to try to prosecute the alleged leaker, the alleged guy who stole this on treason, not just on mishandling of information, but treason, and prosecute him to the fullest extent of the law, up to and including execution if that is warranted.  Secondly, WikiLeaks -- we should not have an attorney general saying to the extent "a" or to the extent that and if we find "a" -- this stuff has been leaked months and months earlier. This guy is the leaker. Why haven't we issued arrest warrants for him and extradition request?  And lastly, I think they ought to speak about the enablers in the American journalistic community, and to say that if you are unlike CNN and Wall Street Journal, who apparently turned down collaboration with WikiLeaks, and you collaborate, we are going to look into possible prosecution.

BAIER: Mara, what about the number of people who have classified access.

LIASSON: There are 3 million people who could have had access to this.

BAIER: And like 1 million have top secret clearance.

LIASSON: It's clearly too much and too accessible and too completely open. This is a big question, because you have to balance, as Robert Gibbs said today, the need to share, which everybody said was a big problem before 9/11, that the agencies didn't share enough information, and the need to keep these things secret.

They've already -- the first step they have taken, of course, making it impossible to download this stuff even if you see it. I think that the impact of this was the sheer bulk. I think if you just have written down, if you memorized a few lines about what somebody says about Sarkozy and told it to some journalist, it wouldn't the same. But the fact it was porous and so completely available, that will change and already has.

BAIER: Bill?

KRISTOL: It's the helplessness that hurts us more than a particular leak or document. The sense that -- and the private deserves he full prosecution that I hope he’s going get and he shouldn't have had access to this.

But Assange is the villain. This private was unhappy and this kid was seduced into doing this, but Assange is the villain. And we're treating this as if we have no ability to find him or snatch him or no ability to use cyber command set up under President Obama last year to disrupt all of his efforts, we have no ability to make his life miserable.

Maybe we are doing all that. I certainly hope we are. We have extensive eavesdropping operation around the world.


KRISTOL: What about that? Why is -- this is the third time they’ve released documents. The previous ones endangered our military.

BAIER: With a fourth coming, apparently.

KRISTOL: Why aren't we disabling the WikiLeaks sites, why aren't we disabling themselves documents? Why don't we say if you download the document, your computer is finished, so play around with the WikiLeaks documents if you want?

I just think the sense we're sitting back and unhappy and a little embarrassing, it makes us look -- to quote an earlier president, like a helpless, pitiful giant, or something like that. That's very bad.

Links have a direct effect. The image of that around the world, the greatest nation of the world with huge diplomatic interests around the world is important. We need to keep going because diplomacy for the military force often. We have huge interests around the world. We can't guard them and we can't safeguard them.

KRAUTHAMMER: And also as a deterrent, otherwise no one will say anything to an American ever again.

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