This is a partial transcript from "Hannity & Colmes," October 28, 2005, that has been edited for clarity.

SEAN HANNITY, CO-HOST: Lewis "Scooter" Libby has been indicted on five counts of perjury, making false statements and obstruction of justice in connection with the CIA leak investigation. He has resigned his post as the vice president, Dick Cheney's, chief of staff.

But in a statement released late this afternoon through his attorney, Libby says that he is confident that he will be exonerated. There is also no word tonight about the fate of Karl Rove. No charges were brought against the White House deputy chief of staff today, but Special Prosecutor Patrick Fitzgerald said that the investigation is not quite over.

A short time ago, we spoke exclusively with former counselor to Vice President Cheney and former adviser to President Bush Mary Matalin.


HANNITY: Mary, as always, welcome back to the program.


HANNITY: All right. You know Scooter Libby. You know him well. First of all, let's get your first reaction to the news today.

MATALIN: It's just incredible. I guess it's at the corollary to the old adage, "You can indict a ham sandwich." An indictment, when it stands alone, can make a ham sandwich look like a mass murderer.

You know, we have one side of the story. And because Scooter did what the prosecutor asked him to do, which is to not defend himself in public, we only have one side of the story.

But I defy you or anybody to find anybody in this town who would say that Scooter is anything but impeccably honest and a dedicated public servant who doesn't need to be in government, yet he's dedicated many years of his life, despite having a prosperous law practice, to public service, in bio-defense, Homeland Security, State Department, Defense Department, the vice president.

You know, and he's scrupulously honest and meticulous. So something doesn't jibe in this indictment. And, as even the prosecutor said today, "Let's, you know, take a step back and let the process go forward."

HANNITY: Yes, well, first of all, there is going to be another side told to this story, which is very important. There will be witnesses, now, finally, cross-examined. There will be discovery on the lawyers' part of Scooter Libby. So this is just the beginning, really, of the story.

I guess what is surprising to me — and I've read the indictments closely, and I listened to Fitzgerald very closely today. And he used terms like that "Valerie Plame's cover was blown," that it's important that a CIA officer's identity be protected, that, you know, she was not widely known.

That's not what he charged her with. Just about everybody that works at the CIA is classified, Mary. So if he couldn't get him on the statute - - so, in other words, there's no crime, really, even being alleged to have been committed until the investigation begins in this, no?

MATALIN: No. There is a lot of incendiary language in there, but none of it applicable to Scooter or anybody else in the White House. And that's what this whole 24 months was about.

No crime. Some sort of process here. And there is something wrong with the system when that happens.

But relative to Scooter, the notion that Scooter didn't completely comply with everything, turned over every document, waived any rights, didn't take, you know, a Fifth, waived his rights to the reporters and all of that, there's no billing records here. There's nothing hidden. He was completely complying with everything the prosecutor said.

So, you know, that's just not — and to attach — or to throw out that language and have it attached to no one — it's just sitting there — yes, that would all be horrible if anybody in the White House was guilty of any of that. They are not.

HANNITY: He's using incendiary language like, "This has been a damage to all of us. This woman's cover has been blown. We need to protect the identity of agents. The original purpose of the special prosecutor was to delve into whether or not there was an outing of a CIA agent."

Today, he couldn't even mention whether or not this agent was covert. If it's not covert, and the identities act is not relevant, and the espionage act is not relevant, one's got to question, why did this go on for two years?

MATALIN: One does have to question that. And if there's any damage done here, the victim at the moment seems to be singularly Scooter Libby and his family, who do not deserve this.

This is a dedicated public servant with an impeccable lifelong reputation for honesty. And, as has been said in previous cases, where does he go get his reputation? Well, we have every expectation he'll be exonerated of this stuff, but it is — you can say it's more than unfair to throw that language around in the same document that you are not charging Scooter with.

HANNITY: Let me ask you this. Is this then — can you use the term - - look, your husband, James, was very active in his criticism of Ken Starr. Can we say — do you feel in your heart — that there might be some overzealousness here in the case of this prosecutor?

MATALIN: I feel in my heart, for the moment, next to sadness, which is at the moment very overwhelming, there's something inexplicable in this. There's something not right, when all of that language is thrown out there, juxtapositioned with no charges for anybody. And it's — it doesn't — it doesn't feel right, whatever the legal ramifications are.

ALAN COLMES, CO-HOST: Well, Mary, we don't know yet if there are going to be charges against Karl Rove or other people. And, also, the reason they couldn't convict — or at least get an indictment, I should say — on the underlying statute is, as the prosecutor pointed out, was because of the lies that were told leading up to this.

Now, I know you want to defend Scooter, and he may be a great guy and a friend of yours, but are you saying the prosecutor made all this up, is just out to get him?

MATALIN: No, I'm not saying that. I'm saying that something is wrong with the system.

If he couldn't make the charge, he couldn't bring the charge, he couldn't prove the charge, then, yes, then say, "I exonerate people. I can't make the charge." Just because you have an investigation doesn't mean you have to charge somebody with something just to justify your existence.

COLMES: Well, that's true. But part of what he had to look at was perjury and obstruction of justice, as Comey said in his directive to the prosecutor. This wasn't just about the underlying statute, as whether or not — and, as you know, it's often said, "Cover-up worse than the crime." And that's what happened here, just as what has happened time and time in the past with others accused of similar situations.

MATALIN: Listen, Alan, if Scooter had any intention to cover up, he would not have turned over every single document. There's no sticking documents in his pants or billing records we're going to find later.

Everything was completely on the table, absolutely cooperated, complied with every request that — and willingly — and waived any rights that he had. So there's no — look, obviously, no intention, not even any common sense or logic, that Scooter would be in a cover-up.

I think there's something about these prosecutions where it's become standard operating procedure that somebody just gets tagged with something because we have to justify the existence of them.

COLMES: The prosecutor was clear today, and he used the baseball analogy, if you hit a batter, you don't know if you're doing it on purpose or you just happen to slip on the mound. So he's not saying that he's guilty, but he had reason to bring an indictment. And you think this prosecutor has some kind of political motive? You don't think he did his job properly?

MATALIN: I'm not saying that. I'm not saying that at all. I'm saying about a fellow human being who is now smeared for the moment that, in a process where you're not allowed to give your side, or you could give your side but Scooter didn't, because he was doing what Fitzgerald asked him to do, we're now sitting here with the guy, whose family and feels besmirched — he feels besmirched.

I think that is unfair. I think that's unjust. I think that is a ridiculous price to pay for public service, if you are what Scooter is, which is impeccably honest, a man of unquestioned integrity, and deep experience, and well-versed in issues for which he gets thanked, not by anyone in this country, and has gone a long way towards making us, and you, more secure by the work he has done for this government.

COLMES: We have only a moment left here, Mary. What I don't understand is, if indeed the prosecutor is right in the things that he said in the indictment, and he has the right — he has classified information, why would he lie about an honest conversation that he was allowed to have?

MATALIN: Well, I'm not — we don't know that he has lied. What we know is what the prosecutor is alleging. We have not heard the other side. And what he's laid out is just completely — doesn't hang together. It's inexplicable. So let's just let the process play out here.

HANNITY: Hey, Mary, and why will he hand over notes that would contradict his statement? Because he was doing himself in, in that sense. Doesn't make sense.

But, Mary, we always appreciate you being with us. Thanks for being back with us.

MATALIN: Boys, thank you.

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