This is a rush transcript from "The Journal Editorial Report," July 31, 2010. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report," Charlie Rangel's ethics mess. How much trouble will it cause fellow Democrats in November?

Plus, the WikiLeaks fallout. Did the document dump endanger innocent lives? And are the newspapers that printed them really serving the public interest?

Plus, giving bad teachers the boot. D.C.'s school chancellor, Michelle Rhee, does what was once unthinkable, and fires almost 200 for poor performance. The teachers union is howling, but will the idea catch on?


REP. NANCY PELOSI, D-CALIF., SPEAKER OF THE HOUSE: We'll keep our promise to drain the swamp that is Washington D.C., to let sunshine disinfect the Congress.


GIGOT: Welcome to the "Journal Editorial Report." I'm Paul Gigot.

Well, the swamp isn't quite drained yet. The House Ethics Committee this week charged New York Congressman and former House Ways and Means Chairman Charlie Rangel with 13 violations, including failing to report rental income from a vacation property in the Dominican Republic, using a rent stabilized apartment in Manhattan for his campaign office, and improperly soliciting donations from corporate officials and lobbyists for the Charles B. Rangel Public Policy Center in New York.

Joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; columnist, Mary Anastasia O'Grady; and Washington columnist, Kim Strassel.

So, Kim, starting with you, John Podhoretz, a New York Post columnist, this week wrote that the charges against Rangel aren't that big a deal, kind of small stuff, business as usual. Do you see it this way?

KIM STRASSEL, WASHINGTON COLUMNIST: He's right in this is not graft or corruption on a huge scale but, in a way, this is almost worse for Democrats, what they are. And if this was corruption, all the party could say, look, this is an isolated case of one guy doing something wrong. But instead, what the violations are emblematic about what the public dislikes about Congress. It's a sense of entitlement. It's a sense of arrogance, the idea that Congress doesn't play by the same rules as everyone else. And a great example is the rental income from his holiday home in the Dominican Republic. If anyone else had not reported that income, the IRS would be there with tax evasion, have them thrown in jail possible. But this doesn't happen in Congress.

GIGOT: But, Kim, are you saying that this is business as usual for Congress? Because if that's true, is this fair to single out Charlie Rangel?

STRASSEL: There's a perception out there in America, that this is business as usual in Congress. Maybe not to the degree of Mr. Rangel. and I think that these alleged violations, if you read them, are particularly long list of things of wrongdoing, but I think there's a belief out there in the general public that, yes, most of these guys, they don't play by the same rules.

GIGOT: All right, but on the merits, Mary, as you look at this, trying to make a judgment, as a citizen and as a journalist, is it fair to put Charlie Rangel in the dock for these allegations?

MARY ANASTASIA O'GRADY, COLUMNIST: Oh, I think it is. I think it's absolutely outrageous. and you know, not just that he did one or two things wrong, but as the investigative subcommittee report says, there's a pattern of inaccurate reporting, not just on taxes, but his financial disclosure reports. This is obviously a politician, 21 terms in Congress.

GIGOT: 20 terms, I think.

O'GRADY: Sorry, this will be 21 if he's elected in November.

GIGOT: Coming up, if I'm right.

O'GRADY: And thinks he's invincible. It's very clear. I mean, he thinks that he is above the law. And I cannot see how we could just say, well, everybody does it, you know, let it pass, if we expect to have any accountability in Congress.

GIGOT: Dan, business as usual?

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, I don't know. I mean, it's how do we know whether it's business as usual? But I think to some extent, they all do something like this. The John Murtha case, for instance, and the earmarks and just being above it all.

But I think to Kim's point, look, the Ethics Committee this week put up on its website the document of its lawyers' list of charges.

GIGOT: Right.

HENNINGER: There is not enough time on our program to read through. It is endless.


And anyone thinks this is just small change, should go through — there's hundreds of things in there. It's off the charts. This is exactly what people are upset about. The failure to put things on his disclosure report. The failure to report taxes for the income, soliciting donations for the Rangel Center from people who have to do business before his committee.

GIGOT: Yes, that's right.

I think one of the things that is extraordinary here, Kim, is just how the degree to which this is extraordinary coming from the Ethics Committee, given Rangel's stature in the Congress and how beloved Charlie Rangel is in the Congress. He's a very well-liked member, he's been around forever. He's partisan, sure, but in the background, even Republicans like him. He's jovial, a good guy, a back slapper, hail fellow, well met. They like him.

STRASSEL: He's a war hero, yes.

GIGOT: To be able — yes, he's a classic pal (ph). To be able to do something like this, somebody that well-liked, means they felt, the Ethics Committee felt they can't do anything else.

STRASSEL: That's absolutely right. It goes to Dan's point.

Look, the Ethics Committee here is known for being a little toothless. Congress is a club and no members like to go after fellow members. But these charges were simply so charge they couldn't ignore them. And actually, in the end, you actually have to give the Ethics Committee a little bit of credit because when they decided to do this, they ultimately did a very thorough job.

GIGOT: What about his defense, Mary, Rangel's defense, particularly the tax issue, these were inadvertent. He didn't know how much income he had. He didn't pay enough attention to the reporting requirements.

O'GRADY: Well, again —

GIGOT: He should have paid more, but they were mistakes, not willful.

O'GRADY: Again, I would say that there's a pattern. You make one or two mistakes and you don't consistently fail to report all kinds of things. It's not just the puenta cana (ph) he didn't report. There are all kinds of things he didn't report on.

And you know, I think the things that's really going to bother the American people is this is a guy who is sort of symbolic of the Democrat's view that people don't pay enough taxes.

GIGOT: That's true.

O'GRADY: And he's always been — as the person who writes the tax rules, he's always been wagging his fingers —

GIGOT: Didn't apply to him, yes.

O'GRADY: — and say, you have to pay more taxes to help the poor. And then being in a rent stabilized apartment?


GIGOT: On the Charlie Rangel, center of the allegation, or the defenses, is that he cared about education. This wasn't about any benefit for him personally. This was just about his concern for this institution and the education of poor people.

HENNINGER: Sure, and so he solicits money from the AID Foundation, the Verizon Foundation and various — the Ways and Means Committee is in charge of foundation. And he's soliciting money on his letterhead, get the message, guys? I want —


And he wasn't asking for small change. He was asking for $30 million dollars.

GIGOT: Up to $30 million.


And, Kim, quickly, I want to ask each of you very quickly, is Charlie Rangel going to take the oath of office for the 112th Congress in January?

STASSEL: If he can get through his primary in September, there's a good chance, yes.


HENNINGER: Yes, I think that's right. You have to be cynical. That's the problem. You can't defeat these people.

O'GRADY: I think you can be elected, but I think, if the process works, he will not take his office.

GIGOT: Yes. I'm not sure he's going to survive this.

When we come back, the WikiLeaks fallout. Did the release of thousands of Afghan war documents put innocent lives in danger? And are the papers that printed them really serving the public's interest?



ADM. MICHEL MULLEN, CHAIRMAN, JOINT CHIEFS OF STAFF: I think we always need to be mindful of the unknown potential for damage in any particular document that we handle. Mr. Assange can say whatever he likes about the greater good he thinks he and his source are doing, but the truth is, they might already have on their hands the blood of some young soldier or that of an Afghan family.


GIGOT: That was Joint Chiefs chairman, Admiral Michael Mullen, condemning the website WikiLeaks and its founder, Julian Assange, for the release of more than 90,000 classified military files from the war in Afghanistan. Assange says he withheld or edited thousands of documents that gave the names of Afghan civilians who provided intelligence to NATO troops. But the British newspaper, The Times, reports that it was able to find the names and, in many cases, the villages and father's names of dozens of Afghan informants in the information that WikiLeaks published.

Wall Street Journal deputy editor and foreign affairs columnist, Bret Stephens; and editorial board member Matt Kaminski, join us with more on this story.

So, Matt, very strong words from Admiral Mullen. Defense Secretary Gates was equally as critical. Does Assange have blood on his hands?

MATT KAMINSKI, EDITORIAL BOARD MEMBER: Absolutely, that's the real story here. WikiLeaks tried to manufacture the story of "this war going badly." It was embedded in this, but there were papers that decided to publish this and splash it on the front pages this week. But the real story is actually, why do we keep these documents confidential? Because we want to protect sources in the field. We want to protect our methods in intelligence.

GIGOT: This is battlefield intelligence in many ways. These are reports from the battlefield by units that go up the chain of command about what's happening in their area, who they're talking to and so on. So it's tactical battlefield information.

KAMINSKI: Absolutely. And it's very hard for anyone like us to know what is going on.

GIGOT: Right.

KAMINSKI: But if you're a smart Taliban operative, you're will spend the next couple of weeks going through, piecing together how Americans gather intelligence and who is helping where. And because there are names of villages, names of fathers —

GIGOT: And even of GPS coordinates in some places.

KAMINSKI: Exactly, you know exactly where to go.

GIGOT: What is Assanges' motivation here, Bret? Is it politics and fame and anti-Americanism? Or all of the above?

BRET STEPHENS, DEPUTY EDITOR AND FOREIGN AFFAIRS COLUMNIST: I think it's all of the above. He gave an interview to the weekly newspaper, "Der Spiegel," which also was one of the papers that published a lot of this material, saying, I like — or said, I love crushing bastards. And in his view, the bastards are — is the NATO, the American —

GIGOT: NATO and its allies.

STEPHENS: The people trying to defend girls, women who don't want to be under burkas, Afghans who want a better life. The bastards are not the Taliban or their allies in the radically Islamist groupings in Pakistan and Afghanistan who are throwing acid on girl's faces and the rest of it.

GIGOT: Looking at the big picture on this, not just the battlefield, tactical stuff, which we've just discussed, was there any information released in these documents that was warranted, in terms of the public interest, do you know, that we really didn't know that we're glad we now know?

KAMINSKI: Not at all. This has been one of the most transparent wars. Both this war and the Iraq war, we know exactly what was going on. The issue of the Pentagon papers back in Vietnam was that the government was not telling the full truth about our involvement. Everything that came out here has been reported, widely discussed.

And I think that the collateral damage here will be both to the possible Taliban informants, but also, after 9/11, we made great progress in getting the CIA to cooperate with the Pentagon, to cooperate with other intelligence agencies. And before, they didn't want to cooperate because they were afraid of this very sort of leak.

GIGOT: I want to read a section from a battle op-ed we ran, a terrific op-ed, by Noah Shechtman, this week, who was actually at a battle in Afghanistan that was then reflected in these documents. And he wrote for us, "That's not to say Echo company hid the truth. It's that these reports from a harried commander at the farthest edge of the war zone are, by nature, clipped, compressed, chunky and incomplete," end quote.

What he's saying is, instead of actually revealing what happened on the battlefield, these documents may distort it.

STEPHENS: Well, let's hope they distorted it enough so that it denied —

GIGOT: In terms of the incident.

STEPHENS: — the actionable information.

But picking up on something that Matt said, I think that people also need to talk about the responsibilities, not just of Assange, but of The Times, and the other two news organization that released this, because you could make a credible case that there was a compelling public interest or at least, some of this material, if it's revealing that the Bush administration or the Obama administration had effectively been lying to the American public, that things that were important about policy making towards the war had not previously been revealed. None of that.

GIGOT: But The Times does say that they vetted the documents, more than Assange did, and took and held different documents, including the names of those informants.

STEPHENS: Yes, that's true. But they also validated and amplified the leak and brought it to public attention in a big way that might not had happened if it had simply appeared on WikiLeaks alone.

GIGOT: So they, in a sense, say that what Assange is doing is good, useful. They're running formation. They're validating. They saying, look, what he's doing does provide a public service, even though we wouldn't publish everything that he does.

You've agree with Bret on that?

KAMINSKI: I do agree with Bret on that. I think the papers — we're all obviously looking at the papers, ourselves, believe in the First Amendment right to free speech and free press, but there's a responsibility that the media has. And they decided to take — there are millions of websites — WikiLeaks is one of them — they decided to take the site and turn it into a huge story. And that's why Assange went to them. He was frustrated that —

GIGOT: He thought it wouldn't be amplified.

KAMINSKI: Exactly. Of course.

GIGOT: What do you do just in terms of the American military to stop this sort of thing? Can you do something about Assange?

STEPHENS: Well, you can find and harshly prosecute whoever it was who —

GIGOT: Who leaked it?

STEPHENS: — who leaked this material.

GIGOT: But you can't do anything about Assange? Really.

STEPHENS: You can try to deny him, or the countries where he has the servers, to put on diplomatic pressure to shut those servers down. This materially damages American security. To the extent that those servers are in allied countries, it damages their —

GIGOT: Prior restraint against the press. You want that, the government to be able to say, you can't publish things, Bret?

STEPHENS: If people's lives are at risk, that's a genuine issue that we need to take seriously.

GIGOT: All right, thanks, guys.

When we come back, firing bad teachers. It's practically unheard of, even in the country's worst school systems. But that may all be about to change as Washington D.C.'s schools chief, Michelle Rhee, gives almost 200 of them the boot.


GIGOT: Washington D.C.'s school chancellor, Michelle Rhee, announced last week that she has fired more than 200 teachers in that troubled districts, the majority of whom received low scores in a new evaluation system that, for the first time, ties teacher performance to student achievement. And another 737 employees, rated minimally effective by the new system, have a year to improve or face dismissal. The Washington's teachers union says it will contest the firings, calling it Rhee's approach punishment heavy and support lite.

We're back with Dan Henninger. Also joining the panel, Wall Street Journal editorial board member, Jason Riley; and columnist, Bill McGurn.

So, Jason, this is miraculous news in any public school district. How is Rhee able to pull this off?

JASON RILEY, EDITORIAL BOARD MEMBER: You know, when a law firm fires bad lawyers or a newspaper fires bad journalists —

GIGOT: That'll never happen.


RILEY: — the world goes on. But when a school's chancellor, with 4,000 teachers, fires the worst four percent of them, it's front-page news because, in public education, not only in D.C., but nationwide, it is next to impossible to get rid of bad teachers.

GIGOT: And she can do this because of the recently signed and agree to D.C. schools contract?


GIGOT: Gives her that power to do this.

RILEY: Yes, a new contract — yes, to fire teachers for performance. And she also has the backing of the mayor of D.C., in doing this, which is important.

GIGOT: Indeed (ph).

RILEY: Politically — politically, what has allowed her to do this, Paul, is the conditions of schools in D.C. In 2006, the year before she took over, not a single teacher was fired for performance at D.C. This is a system where eight percent of 8th graders were performing at grade-level in math, despite the fact that the district was spending $14,000 per kid, which is more than double the national average.

GIGOT: So the system, the political system was ready to change.

But, Bill, there are a lot of districts around the country where the schools are — maybe not quite as bad, but are really awful.


GIGOT: And they've not been able to do this. What makes her and Washington different?

MCGURN: Well, I'd say I agree with Brother Riley here on the performance aspect.


Two things. One is, even when she came, there had been a charter initiative. There had been a voucher initiative. It has had given her leverage —

GIGOT: School choice.

MCGURN: School choice. More options for parents. And 38 percent of kids go to charter schools of D.C. now. That's leverage when she's sitting down to negotiate with them. And you can't underestimate this contract. What she did, quid pro quo, will give you more money for the good teachers. That's sort of gone unreported in this. There's a lot of opportunities —

GIGOT: There's something like a 20 percent increase —

MCGURN: That's right. And there is other merit pay and more pay for good teachers. But we're going to get rid of bad teachers. And what she had the contract that they don't have anywhere else, they can tie that pay to performance, so she's able to get these people off the payroll.

GIGOT: As the ability to do her, to have her and her designees do the evaluation.

MCGURN: Right.

GIGOT: As opposed to the unions doing some of them.

MCGURN: She used to point out, further to Jason's point, the dismal performance of the school teachers before she — of the students. You know, it's one of the worst districts, if not the worst school district, in the nation and yet something like 95 percent of teachers used to receive the highest evaluations before Michelle Rhee came in. So that kind of credibility —

HENNINGER: Paul, let me put your question a little differently.

How many sanitation workers get fired in any city around the country? It's the same reason. All of their contracts are collectively bargained and they've been able to collectively bargain public union contracts for the last 30 to 40 years.

GIGOT: But, Dan, kids —

HENNINGER: Sorry, this is like —

GIGOT: They don't —

HENNINGER: This is like the miners union. It's the same thing. You cannot fire teachers for the same reason. You cannot fire sanitation workers or people at the Department of Motor Vehicles.

GIGOT: You're saying the politicians wouldn't dare take them on because the unions are too powerful and dictate —

HENNINGER: They haven't taken them on for 30 years. And that's how we got to this point. And that's what makes this case so special.

MCGURN: And they win. The unions win. And Dan's right. This is a jobs program. Now, in New York, Chancellor Klein spends $100 million paying teachers that he can take out of the classroom, but he can't get off the payroll. And the reason is, it generally goes to arbitration.

GIGOT: Arbitration?

MCGURN: And no one will get the arbitration cases unless they're friendly to the union.

GIGOT: How many did Chancellor Cline —

MCGURN: I think it was something like eight.

GIGOT: Eight.

MCGURN: I think, eight. And he would love to do what Michelle Rhee did, because part of thing is, we know getting good teachers in the classrooms — and that means getting bad teachers out of the classroom. And it's just been very difficult.

GIGOT: Jason, a lot of these school's chance chancellors, contrast to Michelle Rhee, they're also careerists. They bounce from one city to the next. They know they're going to get the next job. They have their eye on the next job. And the last thing they want to do is sit down and make a big fuss with the unions. And because they say, my gosh, I'm not going to get hired by Chicago or Dallas.

RILEY: And Michelle Rhee has distinguished herself this way. She said she's in it for the short run. And she's also said, interestingly enough, that if the current mayor, who backs her, doesn't win reelection — and he's in a tough election fight right now — she might not hang around.

GIGOT: So this could actually — is a big case to watch because, if they lose, then this will stop and the unions can breathe a sigh of relief. If it succeeds, then we could end up seeing this spread across the country. And let's hope that that happens.

We have to take one more break. When we come back, "Hits and Misses" of the week.


GIGOT: Time now for our "Hits and Misses" of the week.

Mary, first to you.

O'GRADY: This is a hit to Goldman Sachs, which announced this week that employees may no longer using profanity in e-mails. Now, don't be alarmed.

GIGOT: Of the hit?

O'GRADY: Goldman is not getting religious.


It just that I think it's been embarrassed quite a bit when e-mails made public over the course of the financial crisis. So from now on, it wants all its e-mails to look nice and squeaky clean for the public.

GIGOT: Choir boys, OK.


RILEY: Paul, at the urging of the Obama administration, the judge in Arizona blocked parts of the immigration law from taking effect this week. And Arizona is on the front lines of a new illegal immigration problem in this country. It's simply trying to reestablish the rule of law in the state. And the response from this administration is a lawsuit that has nothing to do with fixing the problem and everything to do with demonizing political opponents and riling up the base for November.



MCGURN: A hit to the Winston Churchill Archive Trust for reaching a deal that is going to put the Churchill archives online. You know, it has everything, from notes and correspondence, to George Bernard Shaw, to tests on his cigars by MI-5. Apparently, they were worried that someone —


British intelligence was worried that someone was going to blow them up by flipping him an exploding cigar or a poison cigar. You know, for ordinary people, it means if you want to sit at your laptop at home and look up Churchill notes and his "Fight Him on the Beaches" speech, you could do it from your home. A lot better way to use the Internet than WikiLeaks.

GIGOT: All right, thanks, Bill.

And remember, if you have your own "Hit or Miss," send it to us at jer@FOXnews.com.

That's it for this week's edition of the "Journal Editorial Report." Thanks to my panel and especially to all of you for watching.

I'm Paul Gigot. We hope to see you right here next week.

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