This is a rush transcript from "Special Report," January 16, 2020. This copy may not be in its final form and may be updated.

DANA PERINO, FOX NEWS HOST: Obviously, I can't talk with this many hours a day. We're going to have to address this as impeachment goes on and on and on. But we'll be back tomorrow. Set your DVRs. Never miss an episode of THE FIVE. "SPECIAL REPORT" is up next. I bet Bret still has things to say. Hey, Bret?

BRET BAIER, FOX NEWS ANCHOR: What does Greg think about vaping? Thanks, Dana. The Government Accountability Office, the GAO says the Trump administration violated the law when it withheld aid to Ukraine the administration says the GAO is overreaching. The Senate accepts the impeachment articles from the House as the Chief Justice swears in his jury. And is it too late for the Equal Rights Amendment to become law? This is SPECIAL REPORT. Good evening. Welcome to Washington, I'm Bret Baier. Impeachment is now officially in the hands of the U.S. Senate. The man who will preside over the trial, U.S. Supreme Court Justice Chief Justice John Roberts swore in the 100 member jury which listened today in the Senate chamber as the charges were read aloud by the lead House prosecutor. Democrats insists their push for witnesses in the trial was boosted by news that a federal watchdog agency is accusing the Trump administration of breaking the law by withholding aid to Ukraine. Also this evening, a player in the drama with Ukraine is making new charges as Republicans question his credibility. All of this happening as the President gets his second major economic policy win of the week, and the biggest bipartisan legislative victory of his presidency. Chief White House Correspondent John Roberts starts us off tonight live on the north lawn. Good evening, John.

JOHN ROBERTS, FOX NEWS CHIEF WHITE HOUSE CORRESPONDENT: Bret, good evening to you. As the Senate prepares to begin the impeachment trial next week, a key player has now emerged in this controversy, a former associate of Rudy Giuliani, his name Lev Parnas who claims he was a key figure in the plan to put pressure on Ukraine to investigate the Biden's.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, thank you all very much.

ROBERTS: President Trump today denied even knowing Rudy Giuliani associated Lev Parnas despite Parnas saying the President was aware of everything he was doing in regard to Ukraine.

TRUMP: I don't even know who this man is, other than I guess he attended fundraiser so I take a picture with him.

ROBERTS: In interviews last night and again today, Parnas insisted Giuliani was directing his outrage to Ukrainian officials at the behest of President Trump.

LEV PARNAS, INDICTED RUDY GIULIANI ASSOCIATE: Why would President Zelensky's inner circle or the Minister, or all these people, or President Poroshenko meet with me? Who am I? They were told to meet with me, and that's the secret that they're trying to keep. I was on the ground doing their work.

ROBERTS: The White House dismissed Parnas who has been indicted on campaign finance charges as a liar.

KELLYANNE CONWAY, COUNSELOR TO THE PRESIDENT: Nobody on T.V. like that is under oath. And he obviously is desperate to get attention which you will all shower him with properly, I'm sure. And he's somebody who was arrested and indicted on some serious criminal -- I guess finance -- campaign finance charges.

ROBERTS: But Democrats use the new information illuminated by Parnas as more ammunition to allow new witnesses and documents into the Senate impeachment trial.

SEN. CHUCK SCHUMER (D-NY): In the coming days, each of us, every one of us Democrat and Republican will face a choice about whether to begin this trial in the search of truth or in service of the President's desire to cover it up, and let history weigh on every one of our shoulders.

ROBERTS: Parnas himself said he would be willing to testify, adding that former National Security Advisor John Bolton also knew what was going on.

PARNAS: I think Bolton is a very important witness because I think between me and Bolton, we could fit in all the dots.

ROBERTS: Another arrow in the Democrat's quiver to allow new evidence and witnesses is a legal opinion from the Government Accountability Office that the White House violated the law by putting a hold on aid to Ukraine.

REP. NANCY PELOSI (D-CA): The OMB, the White House, the administration broke -- I'm saying this, broke the law.

ROBERTS: The White House Office of Management and Budget fired back against the GAO. In a statement, spokeswoman Rachel Semmel saying, "We disagree with GAO's opinion. OMB uses its apportionment authority to ensure taxpayer dollars are properly spent consistent with the President's priorities and with the law.

SEN. CHUCK GRASSLEY (R-IA): The bill is passed.

ROBERTS: In the middle of all of this, the Senate today approved the new USMCA trade deal. It was a major victory for the president making good and a promise from the 2016 campaign. Though President Trump today lamented, it would take a backseat to impeachment in the news cycle.

TRUMP: And the USMCA will probably be second to this witch hunt hoax which hopefully everyone knows is not going anywhere. There was nothing done wrong. This was a perfect phone call.


ROBERTS: President Trump is trying to present a contrast from the White House of him doing the nation's business while up on Capitol Hill, there are all these political machinations. And he still plans to be out of the country addressing the World Economic Forum just as his Senate trial gets underway. That could change, but for the moment that is still the plan. Bret?

BAIER: John Roberts live in the North lawn. John, thanks. The market seemed to like the business part of all this. All three of the major stock exchanges hit new record highs today. The Dow finishing ahead 267, the S&P 500 gain 28, the NASDAQ jumped 98 today.

The Senate impeachment trial starts Tuesday 1:00 p.m. The pre-trial positioning though already well underway. Chief Congressional Correspondent Mike Emanuel has that part of the story tonight from Capitol Hill.

SEN. MITCH MCCONNELL (R-KY): John J. Roberts, Chief Justice of the United States.

MIKE EMANUEL, FOX NEWS CHIEF CONGRESSIONAL CORRESPONDENT: A historic moment. Chief Justice John Roberts escorted by bipartisan senators into the Senate chamber to preside over the third presidential impeachment trial in American history.

JOHN ROBERTS, SUPREME COURT CHIEF JUSTICE: Well, all senators now stand or remain standing and raise their right hand. Do you solemnly swear that in all things pertaining to the trial of the impeachment of Donald John Trump, President of the United States, now pending, you will do impartial justice according to the constitution and laws, so help you, God?


EMANUEL: Then senators signed the oath book pledging to deliver impartial justice. Majority Leader Mitch McConnell tried to set the tone.

MCCONNELL: This body, this chamber exists precisely, precisely, madam president, so that we can look past the daily dramas and understand how our actions will reverberate for generations.

EMANUEL: And McConnell noted the Senate will be quite different.

MCCONNELL: The House's hour is over. The Senate time is at hand. It's time for this proud body to honor our founding purpose.

EMANUEL: Senate Democratic Leader Chuck Schumer expressed the hope the magnitude of this moment would influence some GOP senators.

SCHUMER: We want the truth. And maybe some Republicans will rise to the occasion because it's the second one I've been through, it's different. It's different than day to day normal being a legislator.

EMANUEL: Some Republicans have countered, it isn't the Senate's role to fix what the House failed to address.

SEN. LINDSEY GRAHAM (R-SC): They had a chance to call the witnesses they're requesting today, they chose not to because they were in such a rush to do it. Executive privilege applies to these witnesses. I will not violate it.

EMANUEL: But Speaker Nancy Pelosi made this appeal for the Senate to consider some of the new revelations.

PELOSI: Any further evidence should not be avoided. And now it's in -- the ball is in the court of the Senate.


EMANUEL: It's expected the Republican majority will pass a resolution next week delaying a decision on witnesses until after senators have heard from President Trump's attorneys and the House impeachment managers. Bret?

BAIER: Mike Emanuel live on the Hill. Mike, thanks. In tonight's democracy 2020 report, a major bump in the political road for Democratic presidential candidates who are now jurors in the President's Senate impeachment trial. Two of those continue to mix it up as the days countdown to the Iowa caucuses. Correspondent Peter Doocy covering the campaigns tonight from Orange City, Iowa.


PETER DOOCY, FOX NEWS CORRESPONDENT: Elizabeth Warren's cold shoulder was caught on a hot mic.

SEN. ELIZABETH WARREN (D-MA), PRESIDENTIAL CANDIDATE: I think you called me a liar on national T.V.


WARREN: I think you called me a liar on national T.V.

SANDERS: You know, let's not do it right now. You want to have that discussion, we'll have that discussion. You called me -- all right, let's not do it now.

DOOCY: Warren insists Bernie Sanders told her privately a woman can't win the presidency. Sanders insists publicly that never happened.

Have you spoken to Senator Warren since the debate? Have you resolved anything there?

SANDERS: No, we haven't spoken.

DOOCY: Warren is also on Capitol Hill talking about her longtime friend Sanders.

UNIDENTIFIED MALE: Would you say your friendship is over with him?

WARREN: I have no further comment on this. We are here right now at an important moment in American history, and that's where we need to keep our focus.

DOOCY: Warren, Sanders, Klobuchar, and Bennett are all now stuck in D.C. for the impeachment trial.

SANDERS: I would rather be in Iowa today. There's a caucus there in two and a half weeks. I'd rather be in New Hampshire and in Nevada and so forth. But I swore a constitutional oath as a United States Senator to do my job, and I'm here to do my job.

DOOCY: While the senators are occupied as jurors, the others have the trail to themselves like Joe Biden.

JOE BIDEN (D), PRESIDENTIAL CANDIDATE: Today, it's not fire hoses and snarling dogs. We brought America again though to an additional inflection point. It's Donald Trump's poisonous and divisive politics.

DOOCY: And Pete Buttigieg trying to give Iowans something to focus on other than impeachment.

PETE BUTTIGIEG (D), PRESIDENTIAL CANDIDATE: It makes you want to just switch to Ellen's game of games or something that make you feel better of the world on what's going on in Washington?


DOOCY: And Pete Buttigieg has Iowa all to himself today. He's the only top tier candidate trying to sway undecided Democrats even though there is no clear front runner here two and a half weeks before the caucuses. Bret?

BAIER: Peter Doocy, very respectful at the event there. Peter, thanks. We are learning new details tonight about what authorities say was an intricate human trafficking operation run by the late financier and convicted pedophile Jeffrey Epstein. Correspondent Bryan Llenas has details tonight from New York.


DENISE GEORGE, ATTORNEY GENERAL OF VIRGIN ISLANDS: The conduct of Jeffrey Epstein and his associates shocks the conscience.

BRYAN LLENAS, FOX NEWS CORRESPONDENT: The U.S. Virgin Islands newly filed civil lawsuit against Jeffrey Epstein's estate reveals stunning new accusations that Epstein trafficked and sexually abused girls as young as 11 and 12 years old, and as recently as 2018. The suit claims Epstein held his victims captive on his private island and when a 15-year-old attempted to escape by swimming away, "Epstein and others organized a search party that located her and kept her captive by, among other things, confiscating her passport." Prosecutors say he kept a computerized database of underage girls. He'd coerce them to travel promising modeling opportunities. But once on his Island, Epstein stripped them of their phones, threatening violence if they did not do sexual acts. Epstein also allegedly used LLCs, shell companies to discreetly buy little St James Island where he had his home and later neighboring great St. James Island, paying $86 million to ensure complete seclusion. The only way to his home was by private boat or helicopter from nearby St. Thomas.

GEORGE: The government of the Virgin Islands seeks to extinguish and recoup any and all financial and other benefits that flow to Epstein and his associates.

LLENAS: This as renowned pathologist Dr. Michael Baden hired by Epstein's brother Mark continues to make the case that Epstein was murdered and did not kill himself.

MICHAEL BADEN, PATHOLOGIST: There's been a total lack of transparency in what happened to Epstein.


LLENAS: Prosecutors in the Virgin Islands claim Epstein illegally transferred millions of dollars into a trust days before his death in an attempt to shield his $577 million estate from accusers. Brett?

BAIER: Bryan, thank you. Up next, is it too late for the Equal Rights Amendment to become the law of the land? We'll tell you why the fight is gaining new momentum, next.


BAIER: Pentagon officials say training for more than 800 Saudi Arabian military students couldn't be restarted in coming days inside the U.S. The U.S. stopped all flight and field instruction for the students following a shooting at a Florida naval base last month that left three sailors dead. Authorities labeled it as a terrorist attack saying the shooter was motivated by jihadist ideology. And there were fears other may -- others may have known about or been involved in that attack. FBI agents have arrested a former Canadian Armed Forces reservist and two other men who are linked to a violent white supremacy Group. The men were believed to be heading to a pro-gun rally next week in Virginia's Capitol. There are reports they were planning some kind of attack at that event. The Justice Department says the men are members of an organization called The Base. The Virginia state legislature is almost finished with the process of approving the Equal Rights Amendment. As of right now, legal experts contend it's a little too late -- too little too late to push the measure toward an amendment to the U.S. Constitution. However, not everyone agrees with that position. Here's Correspondent David Spunt.


UNIDENTIFIED FEMALE: For the women of Virginia and the women of America, the resolution has finally passed.

DAVID SPUNT, FOX NEWS CORRESPONDENT: The state of Virginia may be one step closer to changing the United States Constitution. This week, the House and Senate in Virginia passed the Equal Rights Amendment poised to become the 38th state to do so. To change the U.S. Constitution, it takes three- fourths or 38 states to be on board.

LISA SALES, FAIRFAX COUNTY COMMISSION FOR WOMEN: We are -- you know, finally have our right enshrined with the United States Constitution because we needed to ask for the right to vote.

SPUNT: The ERA as it's known reads, "Equality of rights under the law shall not be denied or abridged by the United States or by any state on account of sex." Introduced in Congress in 1923, then modified in 1971, it sits in limbo almost a century later. In 1972, Congress passed the ERA and sent it to the states for ratification. Five states voted to rescind. Virginia would become the 38th state. Governor Ralph Northam, a Democrat supports the ERA, but the amendment supporters may be out of time. In a Department of Justice memo obtained by Fox News, the Office of Legal Counsel says it's simply too late for the ERA pointing out the deadline was in 1982.

BRADLEY MOSS, ATTORNEY: It's an unsettled legal issue but at a strict, you know, constitutional sense. The DOJ probably has the upper hand here. Attorney Brad Moss says Congress could attempt to extend the deadline but supporters best bet, maybe a do-over.

MOSS: Would it be easier from a practicality and a legal standpoint if they just started from scratch? Yes.


SPUNT: Advocates want to bring the issue before the Supreme Court hoping to settle it once and for all. Legal experts say it could take years for such a case to come before the court. Bret?

BAIER: David Spunt outside the Supreme Court, David, thank you. Former FBI Director James Comey reportedly is being investigated tonight by federal prosecutors looking at a leak of classified information. That's according to the New York Times tonight. That report saying prosecutors are scrutinizing at least two news or articles about the FBI and Comey published in 2017 that mentioned a secret Russian intelligence document. House Speaker Nancy Pelosi says Facebook is using shameful and abusive business practices in order to make money and she's calling that company out.


PELOSI: They don't care about the impact on children. They don't care about truth they don't care about where this is all coming from. And they have said even if they know it's not true, they will print it.


BAIER: Speaker Pelosi says Facebook executives schmooze the administration and Congress in order to get tax cuts and prevent antitrust action. Facebook has an office in San Francisco which is in Pelosi's Congressional district. Up next, what President Trump is accused of doing to pressure European allies to pressure Iran? First beyond our borders tonight, a roadside bomb struck a car with Afghan government employees in southern Zabul Province today. Officials say the driver and four passengers were killed. No one immediately claimed responsibility for that attack in Afghanistan. The provincial police spokesman accuses the Taliban of placing a mine on the road where that car was hit. A Philippine volcano erupted -- that erupted last weekend belch smaller plumes of ash today but it's still rocking the area with frequent earthquakes. Authorities are blocking access to nearby towns due to fears of bigger eruption. The death toll from a massive explosion and fire at a petrol chemical plant in Spain has climbed to three. Authorities say one person died in a hospital, another body was found in the wreckage, another seven people were injured in that blast. Just some of the other stories beyond our borders tonight. We'll be right back.


BAIER: Senior Pentagon official says the request from the Homeland Security Department for Defense Department help to construct 270 miles of border wall arrived yesterday and it will take about two weeks to assess feasibility. The Trump administration wants to use funds for counter-narcotics operations to help pay for the construction of the wall. The defense officials saying Homeland Security has declared the entire southern border a drug smuggling quarter. Now to foreign policy. New information tonight about the length President Trump went to -- in order to pressure European allies to come down hard on Iran over violations of its nuclear deal. It comes as Iran continues to thumb its nose to those countries and at the U.S. seeking to squelch its nuclear ambitions. State Department Correspondent Rich Edson has our report.


RICH EDSON, FOX NEWS STATE DEPARTMENT CORRESPONDENT: Iranian President Hassan Rouhani says his country now enriches more uranium than it did before it signed the 2015 nuclear agreement.

HASSAN ROUHANI, PRESIDENT OF IRAN (through translator): We have no limits about the nuclear energy. Absolutely none.

EDSON: After a U.S. Air Strike killed Iranian General Qassem Soleimani early this month, Iran's leaders responded saying, they were no longer bound by the nuclear deals limits. Iran began gradually violating the agreement last summer, a year after the Trump administration withdrew from it and restored significant sanctions against Iran. Publicly, President Trump has pushed the country is still in the deal to leave it. Privately, a senior European diplomat tells Fox, the Trump administration threatened Britain, France, and Germany, with tariffs on European autos if they refuse to officially charged Iran with violating the nuclear agreement, attack the Treasury Secretary refused to confirm.

STEVE MNUCHIN, TREASURY SECRETARY, UNITED STATES: We made it absolutely clear to them that Iran has violated the agreement. It's our expectation that they will enforce that.

EDSON: This week, those three European countries triggered a procedure that could eventually lead to a United Nations vote to restore sanctions against Iran. The European diplomat says those countries were already preparing their complaint regardless of the administration's auto tariff threat. European officials say they still want to salvage the deal. British Prime Minister Boris Johnson suggests replacing it with the new Trump negotiated agreement. Iran's President called the idea strange. And there are more international demands of the Iranian government from the countries whose citizens died when Iran shot down a passenger jet.

FRANCOIS-PHILIPPE CHAMPAGNE, FOREIGN AFFAIRS MINISTER, CANADA: Families want answers. The world is waiting for those answers, and we will not rest until we get them.

EDSON: Iran initially denied responsibility before admitting it accidentally destroyed the plane which kills 176.


EDSON: Canada, the U.K., Sweden, Afghanistan, and Ukraine all lost citizens in this attack, and their governments are demanding Iran take full responsibility and compensate the families. Bret?

BAIER: Rich Edson at the State Department, Rich, thanks. Let's get some expert analysis of the Iran situation from Karim Sadjadpour. He's a Senior Fellow at the Carnegie Endowment for International Peace. Karim, thanks for being here.


BAIER: You know, Pew Research just recently had a poll where they asked the U.S. decision to conduct this airstrike again Qassem Soleimani was it the right decision or wrong decision? It came out right decision 48 percent, to wrong decision 43 percent. If that poll was taken, that question asked in Iran, what would the percentages be?

SADJADPOUR: You know, it's tough to say, Bret, because it's impossible to do true public opinion polling in Iran. But Iran is a is a polarized society. I think too many Iranians Qassem Soleimani was a war hero, and to many other Iranians he was the symbol of the police state which they've been living under for decades. So I would imagine it would be similarly mixed in Iran.

BAIER: So you wrote a piece for the Wall Street Journal and said the sinister genius of Qassem Soleimani. And among that, in those -- in that essay, you say his sinister genius in bridging sectarian divides has given Iran an asymmetric advantage over its great Sunni Arab rival in the Gulf Saudi Arabia. He also cultivated a 50,000 strong Shiite Foreign Legion to fill power vacuums in Syria, Lebanon, Iraq, and Yemen, and threaten the ruling establishment in Saudi Arabia, Bahrain, and other Gulf countries. He had his hand and a lot of things.

SADJADPOUR: You know, I think few individuals in the last 30, 40 years have been involved in more conflicts in more countries over a longer period of time than Qassem Soleimani. And as I wrote in The Wall Street Journal piece, I think what was very effective about him is he figured out not only (INAUDIBLE), Shiite radicals against the United States, but also Sunni radicalism, you know, in the form of at times al-Qaeda, at times the Taliban, at times Hamas in the Palestinian territory so he was unique in that respect.

BAIER: He drove a wedge essentially.

SADJADPOUR: Well, he drove -- he was able to utilize radicalism, both Sunni and Shiite, against the United States. And I think a misperception oftentimes is that Iran is Shiite, it supports Shiite radical. Saudi Arabia is Sunni, support Sunni radicals. The reality the huge asymmetric advantage that Iran has over Saudi Arabia is that all Shiite radicals will fight for Iran, whereas most Sunni radicals like ISIS and al-Qaeda want to overthrow the government of Saudi Arabia.

BAIER: Here -- I had the Secretary of State on earlier this week asking obviously about all this. Take a listen to what he said about Soleimani.


MIKE POMPEO, U.S. SECRETARY OF STATE: Soleimani has been someone who has been on the American radar screen for an awfully long time. We've known of the risk that he presented to the world and we had to reach the right moment where it was the case that we viewed the attendant risk associated that with the inevitable good that came from having him off the battlefield.


BAIER: There were several lawmakers up on Capitol Hill who said that Soleimani was much more dangerous as a martyr than he was alive. Do you buy that?

KARIM SADJAPOUR, CARNEGIE ENDOWMENT FOR INTERVIEW PEACE: Bret, I really think this is one of those decisions that we are not going to be able to understand the full impact of it years from now. If you talk to a lot of Syrians and Iraqis, they are very happy that Qasem Soleimani is no longer around to oppress them. The danger is that we may have radicalized some radical elements within the regime who now want to retaliate.

BAIER: We've seen some of these protests. A lot of brave Iranians taking to the streets, talking against the regime, and speaking out. Do you expect those protests to continue, and is at the beginning of something else that we are seeing on the ground there?

SADJAPOUR: I think protests are going to continue in Iran. I think many Iranians associated themselves far more with the victims of the plane crash than they did with the person of Qasem Soleimani. But this is a regime which is incredibly ruthless and committed to staying in power. So I think the prospects for major political change in Iran aren't great in the near term.

BAIER: And the prospects of sitting down at a table and possibly negotiating, as European is doing what it's doing and the U.S. is still pressuring on economic sanctions?

SADJAPOUR: I think Iran's Supreme Leader Ayatollah Khamenei is going to try his best to wait until November, 2020, and hopefully deal with a Democratic president. I think that is his strategy.

BAIER: Interesting. Interesting strategy. Karim, thank you so much.

SADJAPOUR: Thank you for having me.

BAIER: When we come back, the panel on impeachment and a new accusation the president broke the law over Ukraine and administration pushback to that.



SEN. MITCH MCCONNELL (R-KY): The Senate will receive the managers of the House of Representatives to exhibit the Articles of Impeachment.

REP. ADAM SCHIFF (D-CA): President Trump thus warrants impeachment and trial, removal from office, and disqualification to hold and enjoy any office of honor, trust, or profit under the United States.

SEN. CHUCK GRASSLEY (R-IA): You will do impartial justice according to the Constitution and the laws, so help you God.

JOHN ROBERTS, SUPREME COURT CHIEF JUSTICE: I do. You will do impartial justice according to the Constitution and laws, so help you God. Senate sitting as Court of Impeachment is adjourned until Tuesday, January 21st, at 1:00 p.m.


BAIER: And so it begins. The Senate trial officially starts Tuesday, 1:00 p.m., as you heard there, by the chief justice, who is presiding over this impeachment process and this trial. There are some senators to watch on the GOP side as this question about witnesses and how it is going to all go comes out, and one of them is Susan Collins. And she had a statement today, "While I need to hear the case argued and the questions answered, I tend to believe having additional information would be helpful. Prior to hearing the statement of the case and the senators asking question, I will not support any attempts by either side to subpoena documents or witnesses. Instead, that issue should be addressed at the same point that it was in the 1999 trial. I have not made a decision on any particular witnesses. When we reach an appropriate point in the trial, I would like to hear from both sides about which witnesses, if any, they would like to call." That's essentially what Mitch McConnell has been saying. Let's bring in our panel, Byron York, chief political correspondent for the "Washington Examiner," Mollie Hemingway, senior editor at "The Federalist," A.B. Stoddard, associate editor at Real Clear Politics, and Jonah Goldberg, editor in chief of "The Dispatch." Byron, your thoughts?

BRYON YORK, CHIEF POLITICAL CORRESPONDENT, "WASHINGTON EXAMINER": That is the argument that got all the Republicans on board to start this impeachment trial, that they did not have to make a decision on witnesses right away. And I think that somebody like Collins and probably other Republicans, if they do support witnesses, they will want to create a sort of reciprocal agreement in which the White House gets to call whoever they want to, which could open up a whole can of worms. I think the bigger fear among some Republicans now, and we are seeing just this week, is that this will become kind of a rolling investigation, and the Senate becomes a fact-finding body, and there's this new revelation, and that new revelation, and it becomes more like the Kavanaugh confirmation than an impeachment trial.

BAIER: Speaking of which, during this time, today the Government Accountability Office, the GAO, found that the administration, it ruled, broke the law when it held back the aid to Ukraine. There is the GAO statement. Here is Chris Van Hollen and Lindsey Graham on this.


SEN. CHRIS VAN HOLLEN (D-MD): It just underscores the fact that this president was willing to break other laws as part of his overall scheme to abuse power and to cover up that abusive scheme.

SEN. LINDSEY GRAHAM (R-SC): They got the money. They got the money on September the 11th, so I don't know why that interim period of time would be a violation of the law.


BAIER: A.B., the administration pushes back, saying the GAO is overreaching and they have overreached before.

A.B. STODDARD, ASSOCIATE EDITOR, REAL CLEAR POLITICS: I don't think that the voters are really going to care that the OMB says that the GAO is out- of-bounds on this decision.


STODDARD: Right, exactly. I think it is part of the larger argument that I've continue to make that the Congress has very much abdicated its role as a separate and coequal branch of government. With congressionally approved and appropriated funds, if you allow a president to do whatever he wants to, build a border wall, withhold the funds for a shakedown for his personal political gain, you're President Elizabeth Warren or whoever else to do it again, and it's a mistake. But I think that the larger scene unfolding on Capitol Hill today was one where Republicans want to give themselves more space on witnesses because they watched Lev Parnas last night. That is the problem. Susan Collins said one thing before she heard what he had to say. She said another thing today. It was very intentional that John Barrasso, who is a member of the leadership, went on TV today to say we are open to whatever the House managers present in their case. He did not say it wasn't included in the original articles. They have no idea what else could be revealed. They don't like the fact that more keeps coming, and it's never exculpatory.

BAIER: Yes. Mollie, I mentioned the GAO, Lev Parnas, we've talked about earlier on the show is the former associate of Rudy Giuliani, faces multiple indictments, came out and gave an interview as well. Your thoughts?

MOLLIE HEMINGWAY, SENIOR EDITOR, "THE FEDERALIST": I don't think people who are knowledgeable find this person particularly credible, or someone who is under indictment for fraud and conspiracy and false statements. He gave interviews to multiple media outlets. I think he is seeking some help with the legal trouble he is in and thinking he might be able to get a deal by working with Democrats on impeachment. But even in the interviews he gave he was saying contradictory information. But it so reminiscent of what we've seen and what impeachment really in general is. We have been going through years of attempts to remove this president, first by saying that he was a Russian agent, then that he obstructed justice by firing an incompetent FBI director. The things keep changing and people keep thinking they are going to have some guy who rescues who is really going to get rid of them, but it is kind of a farce.

BAIER: Here is Lev Parnas on MSNBC and CNN, and the president reacting.


PARNAS: President Trump know exactly what was going on? He was aware of all the movements.

TRUMP: I don't know him at all, don't know what he's about, don't know where he comes from, know nothing about him. I don't even know who this man is, other than, I guess he attended fundraisers, so I take a picture with him.

PARNAS: I welcome him to say that even more. Every time he says that, I will show him another picture.


PARNAS: He's lying.


BAIER: So is this guy going to be a witness on the Senate floor?

JONAH GOLDBERG, FOX NEWS CONTRIBUTOR: I don't know. I think he probably scares the bejesus out of a lot of senators about having him being as a witness.

BAIER: Democrats or Republicans?

GOLDBERG: I think a little bit of both. And I agree with Mollie that anything he says should be taken with several spoonful of salt. He is not a reliable person. He's a bit of a grafter, which is a damning indictment of Rudy Giuliani for associating with him in the first place. But at the same time, it's not really what he says that is the biggest issue. It's that he allegedly has contemporaneous communications, documents, and that kind of thing. So taking what he says at face value is sort of dumb, but if he actually has stuff to back up what he says, that is serious.

BAIER: What about the argument that somebody says, listen, it's the House's job to make the case, they are they grand jury. Now they are essentially, to Mollie's point, rolling in and trying to do the grand jury and the Senate, which is the jury?

GOLDBERG: And I think Byron raises a good point, is that turning this into a movable feast of new allegations is a problem. My friend Andy McCarthy argues that the House should take these issues back up and get their act together. I think that is an understandable position to take. At the same time, as a political calculation, I think it is much harder on Republican senators than people think right now to have them actually forthrightly say, yes, I know there is other damning evidence, I know people are talking about it. I just don't want to hear it.

BAIER: Go ahead.

HEMINGWAY: I think there is a responsibility for the media as well. The first time we really heard about this guy, Lev Parnas, is because he claimed he had evidence of some super-secret meeting in Vienna with Devin Nunes, the man who uncovered so much wrongdoing with the FISA process. And it turned out that he didn't have that evidence. In fact, CNN is getting sued for reporting that information. We have all these --

BAIER: That he went to Vienna, but now Nunes is saying he may have called him.

HEMINGWAY: Clearly Lev Parnas is calling everybody in the House and the Senate, trying to play with these people. But the point being, he said a false thing there. He's been interviewed by these other people, and nobody is even asking him about these false claims that were made. You have to have some accountability from the media.

YORK: Also, Parnas apparently turned over this huge, undifferentiated computer file of stuff, and Republicans and Democrats have this stuff on Capitol Hill. It is not classified. It's clearly not relevant to his criminal case or he wouldn't have just given it all to Congress. They should make it all public now. There is no reason we shouldn't be able to see all of it instead of having a drip, drip, drip process as this trial starts.

BAIER: But A.B., the argument about witnesses, let's say Republicans get to this point. But do they then do the reciprocal one-for-one witness, and that's the deal?

STODDARD: I think that's what they have to do. I think Senator McConnell has made that clear, the majority leader, that he has met with everyone from the most rabid defenders of the president down to people who were skeptical and worried, and that they are going to have to do an exchange. And that deal is going to be brokered in the days and weeks to come. It's going to be incredibly challenging politics for the leader because he actually I think personally doesn't want Hunter Biden to be called, and this is going to be a very tough deal to make.

BAIER: Very quick.

HEMINGWAY: Very hard to have witnesses and not have Hunter Biden or the whistleblower who got everything started, and a lot of people are not going to want to go down that road.

BAIER: Next up, new North American Free Trade Agreement, the USMCA, new China trade deal, and the United States economy, the politics of that.



TRUMP: I did the biggest deal ever done in the history of our country yesterday in terms of trade, and that was the second story to a total hoax. Today we just passed the USMCA. It's going to take the place of NAFTA, which was a terrible deal. And the USMCA will probably be second to this witch hunt hoax.


BAIER: OK, the impeachment, definitely leading a lot, but there are big things. China deal, and today, the USMCA, the biggest bipartisan legislative victory for this president. We always put up the economic changes since the president took office. GDP down, but unemployment, consumer confidence, average hourly earnings up, unemployment rate changes African-Americans, Hispanics, and women down significant since the president took office. And the stock market changes since election day, 2016, look at that, 59 percent, 80 percent, 55 percent, records across all three indices again today.

Back with the panel. Jonah, it's the best argument that the president and the administration have.

GOLDBERG: Absolutely, the economic numbers are a dream for most incumbent presidents, and it says something about the state that we are in that he still can't break 50 percent in the polls. I'm less enthusiastic about USMCA and the China deal for various reasons that are too complicated to get into here, but it would be better clearly politically for him if that is what he was talking about, rather than talking about the impeachment stuff.

BAIER: Mollie?

HEMINGWAY: It is just so interesting how many times over the past couple of years we were told that Donald Trump's trade bluster was going to wreck the economy and it was going to be a disaster, and here we have the two biggest trade deals of the century. We have a stock market that every few days seems to be breaking a new record. And a lot of people predicted it would be utter doom, sound like Paul Krugman the day after the election saying that the stock market would never recover. A lot of people who make prognostications are not very good at them, and this week's news tells us about that.

BAIER: A.B., what about the politics of this? If you look at the RCP average, obviously his approval on the economy is up significantly, 12.8 spread approve, disapprove. Is it tougher for Democrats in this environment to make the case against the president as the economy soars?

STODDARD: Right, well they are counting on these unprecedented gaps in some polling where he gets high marks from a set of voters on the economy but then low marks overall. And they've been looking at fresh polling, I believe it's Emerson out of Michigan yesterday, where you see these voters who are not willing to support him despite the fact that they give him good marks on the economy. I think the politics of the trade deals are interesting also, Bret, because Republicans are not happy about phase one. They are looking for a phase two, but they're not going to say it out loud. They're very worried about the fact that it didn't meet the mandate of the original purpose of the trade war, and it doesn't have real enforcement in it. So as we look at whether the farmers are really happier in April or in August, you might see more of a push for a phase two with meat in it as we approach the election. And Republicans worry, when the president says often, I might not need another deal.

BAIER: I pressed the treasury secretary about that, and he insists that phase two was in the works and that one of reasons they held the tariffs back on $250 billion was to force the leverage on phase two. Go ahead.

YORK: To keep leverage. The other thing about the Democratic race is the primary race is being conducted before an electorate that does not view the economy as the top issue. If you look at polls of the Democratic primary electorate, they will put climate change, they'll put health care, they'll put guns, they'll put a lot of issues way above the economy. If the economy were to tank that would change, but it hasn't. So right now, the candidates who are vying for this nomination don't really have to address it. They will when we get to a general election.

BAIER: But to the president's point about the story leading, and obviously it's historic, the impeachment and all of the pomp and circumstance and the seriousness of the charges, but is it easy to paint Democrats, as he often tries to do, as focusing and being obsessed with that and not doing other things for the economy?

GOLDBERG: I think if the White House had more message discipline that would be a smart way to go. But Donald Trump often will go off and tweet and say and change the storyline away from things that are to his benefit, so it's very hard to get a coherent, straightforward message along those lines. But it's just obvious. If the economy weren't doing as well as it is, he would be in much more trouble. A majority of people think he should be impeached and removed. That is a weird thing when they approve of how he is doing on the economy.

HEMINGWAY: I think impeachment is sort of like pornography for the Trump deranged, but it really does point out this week the difference between how certain people are handling their power in Washington versus others. You have Republicans, Mitch McConnell confirming justices. You have Republicans in Congress working with deregulation as is the president and whatnot. And then you have Democrats who said they were going to come to D.C. and work on health care and all these other issues instead spending their time really freaking out about Donald Trump.

BAIER: But to circle back to where we started in the first panel, A.B., we don't know. It's pretty fluid how this trial is going to go.

STODDARD: That is really a problem, because we have no idea. He wants it concluded by the State of the Union on February 4th. We have no idea what the process is. We are going to see this start on Tuesday in earnest, but as they swore themselves in today, they have no idea where this is going and how long it's going to take.

YORK: They have total control. The Senate has total control over this, contrary to people who would like the chief justice to have that. And the Clinton trial began, I believe, on January 7th and lasted until February 12th. This trial could last longer than that, well into Iowa, New Hampshire, possibly into Nevada.

BAIER: Down the road, do we keep the State of the Union on February 4th?

YORK: Yes.


STODDARD: I think he would want to go into the well and fight.

BAIER: During the Senate trial?


GOLDBERG: It will be a spectacle, but yes.

BAIER: All right, panel, thank you.

When we come back, you will be surprised what one dad does to get his little girl to laugh.



BAIER: Finally tonight, something to make you smile.




BAIER: Sando Reapa Louis of Fort Lauderdale, Florida, posted a video of his six-month old daughter Jamila, hysterically laughing while he shadowboxes next to her. Each time he throws a punch, she seems to really enjoy it. Jamila is winning the hearts of fans on the Internet. That video has been viewed about 2.5 million times. I could just play that on a loop. Maybe I will make it to my cell phone ring or something. We need that, don't we? Thanks for inviting us into your home tonight. That's it for this SPECIAL REPORT, fair, balanced, and unafraid. "The Story" hosted by Martha MacCallum starts right now. I could play that video again.

MARTHA MACCALLUM, FOX NEWS ANCHOR: What is better than that, an uncontrollable laughter from a baby. I do expect that to be on your cell phone when I get there on Tuesday.

BAIER: It might. It might.

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