This is a rush transcript from "Special Report," December 8, 2011. This copy may not be in its final form and may be updated.


REP. JIM SENSENBRENNER, R-WI, HOUSE JUDICIARY COMMITTEE: There have been statements so misleading that a letter had to be withdrawn. I think that some heads should roll.

ERIC HOLDER, U.S. ATTORNEY GENERAL: In response to an assertion that you made or hinted at, nobody in the Justice Department has lied.

SENSENBRENNER: Why was the letter withdrawn?

HOLDER: The letter was withdrawn because the information in there that was inaccurate, the Justice Department letter of February --

SENSENBRENNER: Ok, well tell me, what is the difference between lying and misleading Congress in this context?


BRET BAIER, ANCHOR: Attorney General Eric Holder up on Capitol Hill was tense at moments as the focus was operation Fast and Furious, the failed gun tracking program. Many Republicans saying they wanted him to, General Holder, to fire some of his staff, including Assistant Attorney General Lanny Breuer for allegedly deceiving Congress. We're back with the panel. Pete, highlights from this hearing, your take?

PETER WEHNER, COLUMNIST: Well, I think it was a bad day for the attorney general. I mean any time the attorney general of the United States is telling a member of Congress there is a difference between misleading and lying, that's not a good place for that attorney general to be. The fact is that there clearly was misleading going on. There seems to have been lying, too. We're gonna have to find out more. But the assistant attorney general seems to have knowingly misled the committee. And that's really quite serious. And Holder will have to do something about it.

I do think that Eric Holder is sort of the weakest link in this Obama chain in terms of cabinet members. He's fumbled many times. They wanted a civilian trial for Khalid Sheikh Mohammed, that didn't happen. They wanted to close Gitmo, it remains open. There was a threat to prosecute the CIA agents involved with the enhanced interrogation techniques, and they pulled back from that. I just think he's a lot of trouble. He should resign. If he doesn't right now, I think before the 2012 election he will, Obama doesn't want to go into this election defending Eric Holder.

BAIER: A.B., do you agree with that? I mean Holder pushed back numerous times, accusing Republicans of playing politics. But it seems like Fast and Furious is not going away.

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: Ya know, it was fascinating to me. I actually thought that maybe he would under the pressure and the promise of continued scrutiny, which there will be more of, that he would maybe perhaps resign. This is in the weeks and months we've been talking about this. He made it very clear today he thinks this is gonna blow over. He is doubling down. He is digging in -- and he has basically accused them of -- this is a political stunt. And he knows there is more coming. He'll be in that chair again testifying before long. I think Lanny Breuer could have some more problems on his hands, but it looks to me like the attorney general thinks that he's gonna get through this. And I thought that was pretty surprising.

BAIER: David?

DAVID DRUCKER, REPORTER, ROLL CALL: In a weird way, this scandal or problem, if you will, is overshadowed by the economy and everybody's focus on jobs and things of that nature. And I think that is why this isn't a bigger deal.

Now where it can be down the line, and I agree that Republicans are gonna keep hammering this and hammering it and hammering it until the end of the administration, whether that comes next November or four years after, if the election gets troublesome for President Obama and you go beyond an economic problem to a general government competency, do you know what you are doing problem, that is when the attorney general's job becomes in jeopardy. But until that time I think the president likes the attorney general. I think he is an ally of his, not just some appointment that he had to come up with and that he will allow him to work his way through this if and until it just becomes an overriding political problem.

BAIER: The other hearing that was interesting up on Capitol Hill today, Jon Corzine, former Democratic senator and former governor of New Jersey, the first senator to sit and answer questions in subpoena in more than 100 years, about the collapse of MF Global. This is the firm that declared bankruptcy. And there is a lot of money, $1.2 billion missing. Take a listen.


JON CORZINE: I remain deeply concerned about the impact that the unreconciled and frozen funds have on MF Global's customers and others. I simply do not know where the money is or why the accounts have not been reconciled to date.


BAIER: Doesn't know where the money is, David?

DRUCKER: Yeah, I'm thinking that voters in New Jersey probably don't have buyer's remorse. If they at all did, they look at this and they probably don't.

I think that politically this is one more hammer for the Republicans. These things usually don't amount to much because voters understand that Democratic fundraisers or big shots, Republican fundraisers or big shots sometimes, sometimes go astray. And it's not everybody's fault for being associated with them. But I think what this does do is get to how everybody looks at Wall Street as a big mess, something that's been rigged, and this only adds to that perception.

WEHNER: I agree with that. I think this is bad for Corzine above all, but also for the political class. Because this is the kind of thing that drives the public crazy. This guy was a senator, he was a governor, he goes through the revolving door, and then he's at Wall Street, and you have this enormous collapse and this, sort of, absolutely absurd statement. I mean, he doesn't know hundreds of millions or as much as $1.2 billion. I can understand losing your wallet, but losing $1.2 billion, you should be able track some of that.

BAIER: Does this put a cramp in the administration's and the president's ability to tap in anger of Occupy Wall Street?

STODDARD: No. I think it bolsters the argument --

BAIER: Even though it's his ally and his friends?

STODDARD: It doesn't matter. It feeds the perception to a very anxious public that these guys are not only in the financial services industry not only are not minding the store, they're pillaging the store. And people have not felt that this issue has been resolved since the crash of 2008. They're not comforted by the passage of Dodd-Frank.

And this is exactly the type of thing, someone standing up there saying I do not know where the money is. I can lose $900 million or $ $1.2 billion, no problem. I just don't know. I mean this is unspeakable to people who are nervous about where to put their money and they think that these banks always get a break no matter what they do. So I think it bolsters that political argument.

BAIER: And Jon Corzine will be testifying again on Capitol Hill very shortly. That is it for panel, but stay tuned for the politics of imitation.

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