Updated

This is a rush transcript from "Hannity," April 20, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: All right, so just as the anointed one is gearing up to push for major financial reform, the SEC slammed Goldman Sachs with huge civil fraud charges late last week. So are the two connected?

Well, at least one Democrat seems to suggest so. Here's what Illinois senator Dick Durbin had to say on this very subject.

(BEGIN VIDEO CLIP)

SEN. DICK DURBIN D-ILL.: Timing was perfect. We're about to take up the Financial Regulatory Reform bill. The banks are saying this is totally unnecessary. We've had everything worked out.

Now we find out the Securities and Exchange Commission has stepped up and charged Goldman Sachs, one of the biggest, with involvement in some trading that really turns out to be very suspicious.

(END OF VIDEO CLIP)

HANNITY: All right, now the SEC is vigorously denying that the case is related in any way to the administration's political plans but in the voting process that determines whether the commission could pursue the case votes were cast down party lines.

Now the final vote was 3-2 with two Republicans against, two Democrats for, one independent who was appointed by the president casting the tie-breaking vote. Now, meanwhile, the president is gearing up to deliver a big speech to Wall Streeters on Thursday to pitch his regulatory reform.

Now there's some irony to that because he took nearly $1 million — that's $994,000 to be exact — from Goldman Sachs during his campaign. So now that his administration has made an enemy of the banking giant, is he going to return the money?

Joining me now with reaction from the Fox Business Network, the host of "Varney and Company," the one and only Stuart Varney, and the former White House press secretary, Fox News contributor, Dana Perino.

All right, there's a lot going on here.

STUART VARNEY, FOX BUSINESS NETWORK: Yes.

HANNITY: Why don't you explain? Because the SEC charges Goldman Sachs with fraud. Wall Street responds saying, hey, this is not coincidental, as evidenced by Dick Durbin's remarks, in terms of timing for the regulatory efforts. Explain.

VARNEY: OK. Goldman Sachs gets together a pool of mortgages, slices them up, sells little parts of that investment all around the world, and tells investors, good investment. Unbeknownst to those investors Goldman Sachs has asked for help in assembling that pool from a hedge fund. And the hedge fund is betting against that investment.

HANNITY: It's unbelievable.

VARNEY: Playing two sides of the fence. The investors were never told that the hedge fund was betting against those investments and made $1 billion doing it.

HANNITY: Because if the people knew that, they would say wait a minute, if you're betting against it, you don't have faith, trust and confidence in this.

VARNEY: Of course. Of course.

HANNITY: And so if they did that, it would mean that a major fraud was committed.

VARNEY: It's fraud.

HANNITY: OK.

VARNEY: If they did that as charged it is fraud and a very bad thing.

HANNITY: Yes.

DANA PERINO, FOX NEWS CONTRIBUTOR: I think they will — I think that's in dispute. And their lawyers will work it out. I think that...

HANNITY: Greg Craig will work it out. Yes.

PERINO: Well, that — we could talk about that.

HANNITY: Yes.

PERINO: But the audacity of timing, is what I call this. And it's amazing to me that the White House immediately went out and said nobody in the White House knew about this.

Just having worked there for so long, I find that really hard to believe and possibly irresponsible because of the way the market tanked that day.

HANNITY: All right. Well, let me ask you about Dick Durbin's comments, then we'll get back to you.

Dick Durbin — the quote is, "The timing was perfect." Timing is perfect? Why? So they can use this as a sledgehammer. The president will beat up Wall Street on Thursday, demonize capitalism even further.

PERINO: Sure.

HANNITY: And use it to pass their bill.

PERINO: Right. As I say, it's the audacity of timing. They say that there wasn't any collusion but it's just the timing is just so perfect. And the SEC has a press conference which, on this type of civil action, they usually don't do. It's not typical.

So whether or not, at the end of the day, I think the long term problem for Goldman Sachs, and possibly the other banks that are under investigation, is a long term reputational damage.

Remember, this is also the administration who browbeats the banks to try to get them to lend more money.

HANNITY: Supposedly.

VARNEY: And look, I think the administration has declared war on Wall Street and I think it's going to win. They are browbeating the bankers, demonizing the bankers, and they are going to get financial reform.

And you know what? The big banks don't mind financial reform in many ways. It's in their interests.

(CROSSTALK)

PERINO: Well, if I switch cheese, there are so many loopholes in this bill...

(CROSSTALK)

PERINO: It doesn't matter.

VARNEY: It's in bed with the administration. Goldman Sachs to some degree is in bed with the administration. You get this version of financial reform and the big banks are solidified in their elite position.

They can borrow money a whole lot cheaper because they've got a government bailout guarantee in the background.

HANNITY: TARP in perpetuity. This is it. It's forever.

PERINO: Not only that, but would you agree, Stuart, that the SEC actually had the authority to be able to stop what they're saying is fraud, that they had been doing their job at the time, that we don't need additional laws to be able to do it?

VARNEY: I believe that's correct.

PERINO: So I think this is another — it's an exercise in futility.

(CROSSTALK)

VARNEY: You've got to point out — if you get this version of financial reform it is a massive expansion of executive branch power without a vote. Without the legislative branch voting.

The executive branch of government will be able to say you're too big, we're breaking up, shareholders lose everything. Management is out. The Treasury will pick up the bill for your lousy debts and there will be no vote in Congress at all.

HANNITY: How does this play into the narrative because it seems to play into the end narrative about corporate...

(CROSSTALK)

VARNEY: They are the good guys. And the bankers are the bad guys.

HANNITY: All right. But capitalism...

(CROSSTALK)

HANNITY: Capitalism is bad. Insurance companies are bad.

VARNEY: Precisely.

HANNITY: Banks are bad. Car companies are bad.

VARNEY: Profit is bad.

HANNITY: Wait a minute. But if we — if we're going to examine corporate malfeasance, don't we have to look at government malfeasance? Social Security bankrupt, record-debt deficits...

PERINO: Well, also there's the politicization of the so-called independent agencies. I really think that we need to take a step back and look. Just take a step back in time with me.

Imagine if it had been the Bush administration that had taken this stand actually on a Friday, on a day when they're about to lose ground on a big vote. They would have demanded Karl Rove's head on a platter.

HANNITY: Yes, but now — all right. Darrell Issa, congressman, has demanded the records of the SEC...

PERINO: Sure.

HANNITY: ...Goldman probe. So he wants to examine that a little bit further here. I think it goes deeper. If you talk about an incestuous relationship, how did Greg Craig, who just up until recently — and we'll get into this in some specificity in a minute. But he represented the White House. Now he's representing Goldman Sachs. Now he's going to the very same people he was doing business with and he was involved in the bailouts...

PERINO: And there's supposed to be a two-year ban on representing clients back to the executive branch.

HANNITY: Well, we've got some tape we're going to bring up later in the program.

VARNEY: It's no accident it's called "Government Sachs." There is...

(LAUGHTER)

VARNEY: There's an incestuous relationship between the very, very big banks of Wall Street and the government.

HANNITY: Yes.

VARNEY: And they are closely linked. In some ways...

PERINO: Remember, it's Greg Craig who actually was forced to leave the White House because of an inability to perform the way President Obama wanted him to when it came to Guantanamo Bay.

HANNITY: Here's what I want to understand here. Because the administration — I think they're up to their eyeballs in this scandal inasmuch as the president himself got almost a million dollars from Goldman. About four or five million from Wall Street in total. Himself.

PERINO: Look at how that worked out for Goldman.

HANNITY: Yes. A lot of good did them.

PERINO: Really.

HANNITY: Blanche Lincoln. She got money. She was asked about it. She said she is not going to return her money.

I would think that anybody now in Washington that received any money from any Wall Street firm has got to excuse themselves by returning the money, no?

PERINO: I think it's going a little bit too far. I really do.

HANNITY: Why?

PERINO: Well, I'm just for full disclosure of — you can give as much money — I believe you should be able to give as much money to any politician as you want.

(CROSSTALK)

PERINO: As long as you disclose it.

VARNEY: If you are demonizing them, if you're saying you're a bunch of bad guys and you've taken their money...

PERINO: Well, maybe they'll make another bad bet like they did with the CBO.

VARNEY: Did you not give it back? You know? I think Sean's got a point.

HANNITY: Let me ask one last question. What does this mean to the average person who is watching this, who is going to watch the person beat up Wall Street on Thursday? What does it mean to them?

VARNEY: Vindication. Voters will think this is right. Those bankers, they did this to us. They are guilty. They took our money. They got big bonuses. They sold us down the river.

HANNITY: Wait a minute.

VARNEY: They're getting their comeuppance. I think they'll be happy.

HANNITY: But government has sold the American people down the river.

VARNEY: Yes.

HANNITY: There's been more government malfeasance...

(CROSSTALK)

PERINO: I think this is why...

HANNITY: ...than corporate malfeasance.

VARNEY: Seen as an Obama political victory, financial reform will be...

(CROSSTALK)

PERINO: I don't know.

HANNITY: I think you might be right.

PERINO: Maybe in the short term.

HANNITY: Why?

PERINO: But in the long term I think it's a problem. If you look at the poll yesterday from Pew Research Center, eighty percent of the American people don't trust the government, nor do they trust the other big institutions that are in their lives, including the banks.

And at the end of the day, when you stepped back and you start peeling back the layers and anybody paying attention, they might watch President Obama's speech on Thursday and be impressed. But then also they might realize that he was the one who was defending Fannie Mae and Freddie Mac that led to this crisis in the first place.

HANNITY: It gets too complicated. I think it's — the simple slogan is going to resonate more than we think. Unfortunately.

PERINO: He wins either way.

(CROSSTALK)

PERINO: He wins either way.

VARNEY: I think...

HANNITY: I've got to run here.

VARNEY: President Obama will prefer this victory in September or April.

HANNITY: Guys, good to see you both. Appreciate it.

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