McCain: We Must Stand By Pakistan, Despite Questions About Bin Laden

This is a rush transcript from "On the Record," May 2, 2011. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: What about Pakistan? Our next guest says the United States needs to stand by that volatile country despite growing speculation of Pakistan's possible ties to terrorism. Why? Earlier today Senator John McCain went "On the Record".


SEN. JOHN MCCAIN, R-ARIZ.: How about those Navy SEALs? It's amazing what they have done and they really are the most professional people that I have encountered and we are very proud of their performance.

VAN SUSTEREN: Does the president get high marks?

MCCAIN: The president gets high marks. And obviously the president was heavily engaged and the president, Leon Panetta and Secretary Gates and everybody all the way on down. And everything didn't go as planned in that operation but they adjusted and it is an amazing accomplishment.

VAN SUSTEREN: What do you do about Pakistan? I'm very critical of Pakistan. I have been there, I have interviewed President Zardari, the former President Musharraf, and I'm not convinced that Pakistan plays it straight with us.

MCCAIN: I don't think there is any doubt that there are relations that exist between the ISI, the Pakistani intelligence people and the Taliban and the Haqqani network in Afghanistan that is actively opposing the government and us there. There is no doubt that there is a weak government with a lot of corruption.

We have to care not only because of what happens in Afghanistan but they are also in possession of a nuclear arsenal and to see that country collapse would have the possibility of radical elements taking over and that nuclear arsenal being compromised.

So there is a lot at stake there. And it is frustrating and but at the same time we need to do what we can to help that country. But in all candor, it has never been really a functioning government.

VAN SUSTEREN: Isn't there almost seemingly getting worse if Usama bin Laden was there and I don't know how long he has been there, and if the ISI was complicit or knew he was there, I suspect they were, and the military and you a weak government, that doesn't help us long-term in Afghanistan or fight the war on terrorism. Is there not something should we sort of change direction or foreign policy or do something differently, because this isn't getting better?

MCCAIN: If somebody could tell me how to change for the better, I would like to know what that change is. I have had conversations with General Kayani the head of ISI and said look, we have got to stop this and they say that they are not -- I think it is very clear -- it is clear at some level there is a relationship there.

The economy of Pakistan is in such poor shape, too. And there is corruption there. So, our options are very limited. But to try to assist them and try to move towards democracy in my view is a very difficult one path but extremely -- the other options are not really viable. For a ten year period we cut off relations with Pakistan, things got worse. And so to do that obviously would not be the answer. I hope that some of the military and military relationships would be helpful.

VAN SUSTEREN: Well, there is the in Pakistan there is the military and intelligence and government. And I traveled with Secretary of State Hillary Clinton awhile back to Pakistan and Afghanistan but while we were in Pakistan she made the announcement that the United States would give $7 billion in aid. The Pakistanis were outraged because we wanted to know how they would spend the aid. The read The New York Times to find out that the rich people in Pakistan don't pay taxes.

MCCAIN: We should demand accountability for American aid and if is not accountable we shouldn't extend it. I think that is just fundamental. That there is no doubt at the highest level they do not pay taxes. It's not so much corruption -- there is a corruption in Afghanistan as well, but it's not so much corruption as a way of life.