Ghailani Verdict a Blow to Department of Justice?

This is a rush transcript from "Special Report," November 17, 2010. This copy may not be in its final form and may be updated.

BRET BAIER, HOST OF “SPECIAL REPORT”: Just moments ago Ahmed Ghailani, the first Guantanamo detainee to face a civilian trial in federal court in New York, was acquitted of most of the charges, in fact, cleared of 284 other counts. He was found guilty Wednesday, today, of conspiracy to destroy buildings and U.S. property and tied to the attacks and destruction on two U.S. embassies in Africa in 1998.

But the fact that he was acquitted of 284 counts, the terrorism charges, is a major setback for the Obama administration as it tries to move forward with plans to try the 9/11 terrorism suspects and detainees being held in Gitmo in civilian court.

So what about this now? Let's bring in our panel, Steve Hayes, senior writer for the Weekly Standard, Nia-Malika Henderson of The Washington Post, and syndicated columnist Charles Krauthammer. Charles?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: This is a huge embarrassment to the administration and it is a blow to the whole idea of having the terrorists tried in civilian court. This is a guy involved in a plot, and his defense was that he was an errand boy. He was a dupe. He had no idea what was happening.

But that was undermined by the one count on which the jury found him guilty, which was conspiracy. Now, conspiracy as the judge explained explicitly, he was asked to come in and explain the law; conspiracy is defined as knowingly, willingly being part of a plot. So obviously he knew he was involved in a plot which undermines the entire defense. And yet he is acquitted on 280-plus charges.

What this demonstrates is two things. Number one, in principle, we should never have these people who are acting as illegal combatants in a war against the United States, a jihad that Osama bin Laden had declared openly in 1998 to kill Americans everywhere in the world, ought not be treated like ordinary Americans who have these high protections under the constitution.

And, secondly, we see that when you do this in practice, there was a very important witness who was not allowed to testify. He would have said that he sold the TNT to the defendant. He couldn't because of the rules of evidence. And practically speaking, it undermines these prosecutions and we end up with this huge embarrassing setback.

BAIER: Nia, this comes, of course, as the administration is saying that it's getting ready, the Attorney General Eric Holder saying their getting ready to say what's going to happen to Khalid Sheikh Mohammed, the mastermind of 9/11. And the thought was that potentially he could be tried in civilian court.

Senator Chuck Schumer from New York said it's not going to happen in New York last week. What does happen now?

NIA-MALIKA HENDERSON, THE WASHINGTON POST: Well, that looks -- I mean, it looks like Schumer is right on this and that Khalid Sheikh Mohammed probably will remain indefinitely in military detention here.

This is obviously a huge blow to the Obama administration. It's also a huge blow to Eric Holder. You wonder now if the clock on his time at the Justice Department is ticking in that, you know, here is an administration in the middle of all sorts of changes internally at the White House, but you wonder if this gives them a chance to really turn the page from a lot of setbacks that they have had over the past years.

BAIER: And what does the left do to all of this, calling for the civilian trials, calling for Guantanamo Bay to be closed?

HENDERSON: Well, I mean this will be -- I mean this will really confirm the right's position, which said this was a real danger to put these guys in civilian courts and really afford them some of the laws and protections that Americans have.

But I mean I think even the left has in some ways tired of Eric Holder, at least, for different reasons. But you saw there has been a profile in GQ, Mother Jones has said maybe it's time for Eric Holder to resign.

STEVE HAYES, SENIOR WRITER, THE WEEKLY STANDARD: The left will say, look, if we hadn't ever held him without trial this wouldn’t have been a problem because the information we obtained in his enhanced interrogation would have never been the so-called fruit that poisoned the tree. So they will say we should have gone directly to trial, intelligence that we obtained from him be damned.

But I think it's really important to spend just a minute on who exactly this guy is. This is a huge, huge deal. People need to understand this.

A CIA document from June 3rd, 2005, said that he had provided new insights into Al Qaeda skills and networks. He was a top document forger since the 9/11 attacks, has reported on how he had forged passports with whom he supplied them. To the Obama administration itself, said the defendant was a, quote, rare find. And his then recent interaction with top level Al Qaeda terrorists made him extraordinarily valuable. So he was a big deal.

But also if you look at the evidence that was presented in this case, he was found with detonators in his possession. He was connected directly to the truck in Tanzania that blew up the embassy. His cell phone had been used by one ever the suicide bombers to make a flurry of calls before the attacks.

BAIER: This is evidence in the case.

HAYES: This is evidence in the case. But as Charles points out, there was one particular key witness who had sold him the TNT. Now Ghailani's defense -- he admitted in his combatant status review tribunal, he said, yes, I bought this, but I thought it was soap for washing horses.

BAIER: Charles, what's stunning and what Catherine Herridge has reported for weeks and going on months is that as we sit here right now, no 9/11 suspect is officially charged because the military commissions essentially were disbanded down in Gitmo. And now there is no one who stands charged of killing 3,000 Americans.

KRAUTHAMMER: It's the classic example of Obama who comes in to reinvent the world. We already had the military system in place. It was slow. It was new, so it took a long time to get it going. Khalid Sheikh Mohammed would have been subject to it. He asked for a guilty verdict in advance. He asked to be executed.

And Obama steps in; Holder steps in and says, oh, no, we are going to reinvent the wheel. We're going to put you in New York. Of course that's never going to happen. And the fall back is indefinite detention which I have no argument with. But if you could also have a military trial and you find him guilty, you ought to do it.  It was all there and these people decided they are all wise, omniscient, and they are going to redo everything.  And now we see this is really a calamity.

BAIER: So down the row, military commissions returned, Gitmo stays open.

KRAUTHAMMER: It stays open for sure. And I think they are going to have to resort to the military commissions.

HENDERSON: Yes, I agree with Charles.

HAYES: Yes, if not Gitmo then somewhere else. But I think it's more likely than not that Gitmo stays open and we go back to commissions.

BAIER: Not the end of this story. When the panel returns, we will talk about what looks like a major setback for the president's nuclear arms treaty with Russia.

In the meantime visit the show notes section of our homepage at FOXnews.com/"Special Report" for the latest on this issue.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HILLARY CLINTON, U.S. SECRETARY OF STATE: Some have suggested we should hit the pause button, that it is too difficult to do this treaty in a lame duck session. I strongly disagree. This is exactly what the American people expect us to do, to come together and do what is necessary to protect our country. We can and we must go forward now on the new START treaty.

(END VIDEO CLIP)

BAIER: Well, the START treaty, the nuclear reduction treaty with Russia that was signed by President Obama and Russian President Dmitry Medvedev in April, would reduce nuclear arsenals in both countries by about 20 percent.

The issue is the treaty has to be ratified by the U.S. Senate.  And some Republicans, including Senator Jon Kyl from Arizona, are standing in the way so far. Kyl relied a statement saying, quote, "When Majority Leader Harry Reid asked me if I thought the treaty could be considered in a lame duck session replied I did not think so given the combination of the other work Congress must do and the complex and unresolved issues related to the START and modernization.

I appreciate the recent effort and the administration to address some of the issues that we have raised and I look forward to continuing to work with Senator John Kerry, the Department of Defense, and Department of Energy officials."

So where are we on this and how big of a setback is it? We're back with the panel. Steve?

HAYES: Well, Hillary Clinton talked about the pause button and I think they want to get back to the reset button. Sometimes it makes you want to you reach for the mute button.

BAIER: Wow that was really good.

HAYES: That's probably too hard.

I think the real problem fundamentally is they’re trying to squeeze in too much. All of the sudden in the lame duck session the administration's top priority. I think that has to do in part what the president was saying overseas last week and what he hopes to be saying in Lisbon this coming weekend, talking about the fact that START is going to be ratified, that he said it is going to be ratified.

But there are a lot of things that the Senate has to do that Congress has to do, and there’s not a lot of time to do them. Chief among them is our tax cuts. There is also unemployment insurance. There are a series of things that need to get done. This is now a priority for the president, but I think Republicans are saying why wasn't this a priority earlier?

BAIER: We have had analysts look at this and say Senator Kyl, they believe, Michael O'Hanlon among others, is not playing a partisan game here. He really does have concerns about the complexity of this treaty going forward. What about this standoff that we are seeing, Nia?

HENDERSON: In some ways the Republicans this week very much about the Republicans flexing their muscle. They won. And you have seen them this week, for instance, you know, kind of say we're going to push back this meeting that they were supposed to have with the White House.  And so I think this is, in some ways part of that.

But in large part, I think also it's a very complicated treaty that they need to look at here. They’ve made some progress. They have made several over temperatures, the White House has to Kyl. They’ve had something like 29 or 30 meetings and briefings and memos.

But it looks like he is not just talking to hear himself talk.  He is not talking about himself. He comes with, you know, a huge caucus.  He is the point person for the GOP on this. And when he says it's not going to get done, I pretty much believe him.

BAIER: Besides Senator Lugar from Indiana, most Republicans are lining up behind Kyl.

KRAUTHAMMER: They are, and I think apart from the timing there’s a question of whether you want to have a serious, open national debate on this, which you can't have in a day and a half or even less in a lame duck session.

Look, normally these arms control treaties are useless. In Soviet times it was a way to talk about something, when we had nothing else to talk about. But now in post Soviet times, it's useless, 90 percent useless, because Russia is not an existential enemy. Who cares if the Russians want to waste all their resources to rebuild a huge inventory of nuclear weapons? It makes no difference to us one way or the other.

There are some restrictions on what we can do, which are somewhat of a liability. It's not enormous but it's significant. For instance, if you curtail the number of the bombers and the submarines and the launchers, you also are curtailing our capacity to use regular, nonnuclear weapons.

The B-2 bomber, for example, was used in Afghanistan and Iraq with nonnuclear weapons and was extremely effective. So if you curtail it, you kind of curtail our normal capacity.

And on the issue of interrelationship with defensive weapons, which the Russians insist on in the preamble and which we ought to reject and do reject, it's still in the treaty in the preamble and the Russians will insist on it. So I think it's 90 percent useless, 10 percent a liability. Let's have a debate about this and let's hear what's wrong with the treaty.

BAIER: Quickly, is this about President Obama overreaching before he was counting heads back on Capitol Hill in the Senate or is this something more than that?

KRAUTHAMMER: I think he wants to have a victory in something.  He has had a rough month. And I'm not sure the Republicans ought to give it because it ought to be debated.

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