This is a rush transcript from "Fox News Sunday," January 15, 2017. This copy may not be in its final form and may be updated.


Inauguration week is here.  As President-elect Trump deals with an unverified dossier linking him to the Kremlin.


DONALD TRUMP, R-PRESIDENT-ELECT:  I think it's a disgrace, and that’s something that Germany would have done and did do.

WALLACE:  We’ll discuss Mr. Trump's testy relationship with the intelligence community when we sit down with Vice President-elect Mike Pence just five days before he is sworn into office.

And we’ll find out why the nation's spy chiefs briefed Mr. Trump on the Russian rumors in an exclusive interview with CIA Director John Brennan.  We’ll also ask him about the hot spots the Trump team faces, from ISIS to China.  John Brennan, only on "Fox News Sunday".

Plus, the politics of why Hillary Clinton didn't win the election are still playing out.

REP. NANCY PELOSI, D-CALI., HOUSE MINORITY LEADER:  The American people are owed the truth.

WALLACE:  We’ll ask our Sunday panel about the Justice Department inspector general investigating FBI Director James Comey for possible misconduct.

And our power player of the week, the head of the presidential inaugural committee on pulling off this week’s big event.

TOM BARRACK, HEAD OF PRESIDENTIAL INAUGURAL COMMITTEE:  It’s quite (INAUDIBLE) putting on the Olympics in 60 days.

WALLACE:  All, right now, on "Fox News Sunday."


WALLACE:  And hello again from Fox News in Washington.

Donald Trump takes the oath of office in just five days, but on the brink of his presidency, questions about Russia's involvement in the election won't go away.  Today, we want to discuss that and of the agenda with the man who will be sworn in next Friday as vice president.

We are honored to be joined here in studio by Mike Pence.

Mr. Vice President-elect, welcome back to his "Fox News Sunday"."

MIKE PENCE, VICE PRESIDENT-ELECT:  Thanks, Chris.  It's good to be here.  It’s an exciting week.

WALLACE:  Democratic Congressman John Lewis, one of the icons of the civil rights movements, says that he is not going to attend the inauguration, and he has explained why.  Here he is.


REP. JOHN LEWIS, D-GEORGIA:  I don't see this president-elect as a legitimate president.


WALLACE:  What's your reaction to Congressman Lewis?

PENCE:  Donald Trump won this election fair and square, thirty of 50 states, more counties than any Republican since Ronald Reagan, and the American people know that.  And, while I have great respect for John Lewis, and for his contributions, particularly with the civil rights movement.

I was deeply disappointed to see someone of his stature question the legitimacy of Donald Trump's election as president and say he's not attending the inauguration, and I hope he reconsiders both positions.  You know, we'd even had recounts in this election where the numbers for the president-elect had actually gone up.  There's no question about the legitimacy of this election, and for John Lewis to make those statements is deeply disappointing.

This is also -- it's disappointing, too, because I truly do believe this is a time when the American people should be celebrating the peaceful transition of power.  That's what this week is really all about, Chris, and to know that four living presidents will be on the stage acknowledging that peaceful transition of power, the world will be watching, will hear the first remarks that Donald will make as president of the United States in his inaugural address.

I just -- I hope that John Lewis, and some others who have joined his plans to take a pass on the inauguration, will rethink that, will be with us and will celebrate this extraordinary moment in the life of our nation and the life of democracy.

WALLACE:  I like to ask you as well -- you talked about Lewis’ comments about Mr. Trump.  But also, I’d also like to ask about Mr. Trump's comments about Mr. Lewis.  I want to put up this tweet, because in response, the president-elect called John Lewis "all talk, talk, talk, no action."

Can he really say that about the man who got his head cracked open walking across the Pettus Bridge in Selma, Alabama, on Bloody Sunday, "all talk, no action"?

PENCE:  Well --

WALLACE:  Do you think that's appropriate?

PENCE:  I think -- I think Donald Trump has the right to defend himself.  When someone of John Lewis' stature, someone who is not only an icon in the civil rights movement, but also someone who by virtue of his sacrifice on that day that we know as Bloody Sunday, he crossed the Edmund Pettus Bridge and he suffered that abuse and it was -- it was true that that the voting rights -- for someone to use his stature to use terms like this is not a legitimate president, it’s just -- it's just deeply disappointing to me, and I hope he reconsiders it.

But what Donald Trump was talking about their was literally generations of failed policies coming out of Washington, D.C., that have failed to many families and too many cities across this country.  I will tell you, Donald Trump is a man who is profoundly impatient with failure.  And you saw in the campaign, he went to major cities in this country and said we are going to bring safety to our streets.  We’re going to bring school choice to our children.  We’re going to bring jobs and opportunities to our cities.

You remember that great line "what the heck do you have to lose?"  He’s committed to being president of all the people in this country and to bring new jobs and prosperity in ways that the failed liberal policies of the last several generations have not.

WALLACE:  Let me pick up on another controversy this week, because Mr. Trump has been going after the intelligence community, especially after they briefed him, and it became a public that they had briefed him both as unverified oppo research that the Kremlin allegedly put together on him.  On Friday, Mr. Trump sent these tweets, "Probably released by ‘intelligence’," intelligence in quotes, "even knowing there is no proof, and never will be."

Does the president-elect really believe that the intelligence community is trying to undercut him and does he stand by his comparison of those tactics to Nazi Germany?

PENCE:  Well, I think -- and obviously, the briefing that the president-elect and I received a week ago was a classified briefing and I can't comment on anything that happened there.

WALLACE:  Well, the intelligence community has --

PENCE:  I never will.  But --

WALLACE:  They have verified that they did brief him on this oppo research.

PENCE:  But the very fact that a few organizations, not this one, trafficked in opposition research and this salacious garbage I think was deeply troubling to millions of Americans, and from --

WALLACE:  What about the intelligence community?

PENCE:  -- from whatever the source, and we don't know what the source was that put this into the traffic.  I know that the Director of National Intelligence said that it had been -- this information had been his floating around for months.

It -- I think the president-elect and I, it was an act of your responsibility by a handful of news organizations to actually traffic in and pay attention to these materials.  And again, I think the American people saw for what it was, and our focus is going forward.  When you see the team that the president-elect has assembled in the course of this transition, particularly when it comes to national security, in General Mattis and in Senator Dan Coats, and in Mike Pompeo, you're going to see an effort to reinvigorate our national security, national intelligence, and the president is going to see to that from day one.

WALLACE:  Let's talk about policy going forward, because the president-elect's seemed to suggest in an interview this weekend with The Wall Street Journal that he might dramatically change relations with Russia, and in fact lift sanctions against Russia if they begin to cooperate with us on ISIS and other areas.  I want to put a quote from that interview.

Mr. Trump said, "If you get along and if Russia is really helping us, why would anybody have sanctions if somebody’s doing some really great things?"

How quickly might he end sanctions on Russia?

PENCE:  I think -- I think the president-elect has made it very clear that we have a terrible relationship with Russia right now, and that's not all our own doing, but it really is a failure of American diplomacy in successive administrations.  And what the president-elect is determined to do is explore the possibility of better relations.  We have a common enemy in ISIS, the ability to work with Russia to confront, hunt down, and destroy ISIS at its source represents an enormously important priority of this incoming administration.

But I think what the American people like about Donald Trump is he someone who can sit down, roll the sleeves up, and make a deal.  And I think what you're hearing in his reflections, whether it’d be with Russia, whether it’d be with China, whether it’d be with other countries in the world is that we are going to reengage.  We are going to put America first.  We’re going to put America’s interest first.  But we’re going to reengage in a way that advances America’s interest in the world and advances peace.

WALLACE:  I want to ask you about two very specific questions briefly so we can move on to domestic policy.  We now know that the Trump’s national security advisor, Mike Flynn, had several conversations with the Russian ambassador, Kislyak, just at the time that President Obama was announcing new sanctions to the hacking of the U.S. election against Russia.

Number one: did Mike Flynn ever discuss lifting sanctions in any of those conversations?  Do you know?

PENCE:  I talked to General Flynn yesterday, and the conversations that took place at that time were not in any way related to the new U.S. sanctions against Russia or the expulsion of diplomats.

WALLACE:  All right.

Second question: can you flatly deny -- because this continues to be out there -- that there were any contact at any point in the campaign between Mr. Trump's associates and Russian operatives, including cutouts, as we know, about the hacking of the Democrats during the election?

PENCE:  This -- you know, some of this derives from this opposition research memo, I guess, Chris, that made its way around the Internet.  There was about 24 hours were Michael Cohen, who has worked in the Trump Organization for many years, was accused for having a meeting in Prague, and finally, some news organizations did a little checking and found out that it was a different Michael Cohen.  And Michael himself has never actually been to Prague.

WALLACE:  But I do want to ask you a question.

PENCE:  He was at a baseball game with his son in August of last year.  So --

WALLACE:  I understand that.  But there’s been other talk, and in fact, if I may, senators specifically asked FBI Director Comey about that.  He refused to answer.

So, I’m asking a direct question: was there any contact in any way between Trump or his associates and the Kremlin or cutouts they had?

PENCE:  I joined this campaign in the summer, and I can tell you that all the contact by the Trump campaign and associates was with the American people.  We were fully engaged with taking his message to make America great again all across this country.  That’s why he won in a landslide election.


WALLACE:  -- if there were any contacts, sir, I’m just trying to get an answer.

PENCE:  Yes.  I -- of course not.  Why would there be any contacts between the campaign?

Chris, the -- this is all a distraction, and it's all part of a narrative to delegitimize the election and to question the legitimacy of this presidency, the American people see right through it.


PENCE:  And truthfully, this is a week -- you know, I just sat on with our transition team in Washington yesterday, we have -- we've named 20 out of 21 of our candidate officials, probably have all of them named before we get to inauguration day.  The caliber and character of men and women that the president-elect has assembled, the hundreds and hundreds of interviews and conversations he himself has had, I think should be deeply inspiring to millions of Americans.  And they know when he raises his right hand on that inaugural platform this coming Friday, that he is going to be ready on day one to keep his promises to the American people to turn this country around.


WALLACE:  But let me ask you about this.  We’ve got about three minutes and I’m going to ask you three questions.  So, let's try to get them all in, OK?


WALLACE:  In a lightning round.


PENCE:  Yes.

WALLACE:  The president-elect he wants to see repeal and replace basically at the same time.  Here he is in his press conference.


TRUMP:  It will be repealed and replaced.  It will be essentially simultaneously.  It will be various segments, you understand, but will most likely be on the same day or the same week.


WALLACE:  I don't have to tell you that replacing is a lot more complicated than repealed, especially how do you pay for some of the provisions of Obamacare you want to keep, like the pre-existing conditions?  Can you really do the really two at the same time, and when will that be?  How quickly?

PENCE:  The short answer is yes.  We can do it at the same time.

WALLACE:  Repeal and replace?

PENCE:  The president-elect made it very clear to leaders in the Congress this week that he wanted to do both at the same time.  And we’re very grateful the House and Senate moved resolutions this week to begin the process of repealing ObamaCare.

WALLACE:  So, realistically, when could you do that, sir?

PENCE:  Lifting the enormous burden -- you are seeing an incredible increase in premiums on Americans.  ObamaCare has failed.  We are going to repeal it.

But at the same time, we’re going to pass the kind of legislation that will lower the cost of health encourage without growing the size of debt.  I would anticipate in the first 100 days that we’ll deliver on that promise for the American people.

WALLACE:  Does Mr. Trump still have confidence in FBI director -- did he ever have confidence in FBI Director James Comey?

PENCE:  Well, you will have to ask him about that.  I know it's been the subject of some commentary this week.

But, you know, at the end of the day, I know that whether it's our security at home or abroad, the president-elect is going to put the safety and security of the American people first in every decision.

WALLACE:  You’re not willing to give him a vote of confidence at this point?

PENCE:  Well, you’d have to ask the president-elect.  I know they’ve had conversations.  And that will be a good question for him after January 20th, Chris.

WALLACE:  And finally, one minute left -- central message, central theme that President Trump wants to advance in his inaugural address, the message he wants to send to the American people?

PENCE:  Well, I’ll let him speak for himself on Friday.  I think the American people will see the same Donald Trump they saw every day of this campaign step up to that podium.  He’s going to speak from his mind, he’s going to speak from his heart, and he’s going to -- he's going to lay out a vision to make America great again.

And I have to tell you, Chris, when I stand surrounded by my family and take the oath of office as vice president of the United States, all I will be thinking about is what an honor it is to stand next to a man who I know -- who I know -- can restore and revive this country, and I’ll also just be thinking as the grandson of an Irish immigrant, what a great country this is.

WALLACE:  I should also point out, you’re going to be taking the oath of office on the Reagan bible, which I -- and I gather that’s the first time it will have been used since Ronald Reagan put his hand on the Bible back in the '80s.  I know how much you revere Ronald Reagan.  That’s going to be a pretty emotional moment.

PENCE:  It will be, and to have the oath of office administered me by Justice Clarence Thomas, someone who I admire for his philosophy, for his courage on the bench in his 25th year on the Supreme Court.

Again, it's just very humbling for me.  We are approaching it with prayer, but with deep, deep gratitude to the president-elect for his confidence and deep gratitude to the American people who have elected Donald Trump and elected a man who I know is going to make America great again.

WALLACE:  Mr. Vice President-elect, thank you.  Thank you for joining us during this very busy time.  And it's always a pleasure to talk with you, sir.

PENCE:  Thanks, Chris.

WALLACE:  Up next, the outgoing chief of the CIA, John Brennan, on those Russian rumors, Mr. Trump’s relationship with the intel community and the hot spots he’ll face around the world.



WALLACE:  A look at the inaugural stage in the west front of the capitol where Donald Trump will take the oath of office on Friday.

Mr. Trump begins his presidency in an extraordinary split with the intelligence community, a split that only widened after they presented him with unsubstantiated oppo research the Kremlin allegedly compiled, a file that quickly went public.

Joining me here in Washington for an exclusive exit interview is the outgoing CIA director John Brennan.

And, Mr. Brennan, welcome back to "Fox News Sunday".

JOHN BRENNAN, CIA DIRECTOR:  Good morning, Chris.

WALLACE:  President-elect Trump has made it clear, as we just discussed, that he believes the intelligence community released, put out information about this unverified dossier in order to undercut him.  Here's what he said at his press conference.


TRUMP:  I think it was disgraceful, disgraceful, that the intelligence agencies allowed any information that turned out be so false and fake out.  I think it's a disgrace, and I say that and I say that, and that something that Nazi Germany would have done and did do.


WALLACE:  Mr. Brennan, your response.

JOHN BRENNAN, CIA DIRECTOR:  Well, I think as the Director of National Intelligence said in his statement, this information has been out there circulating for many months.  So, it's not a question of the intelligence community leaking or releasing this information, it was already out there.


WALLACE:  But it hasn’t been reported, though.  And one of the reasons it hadn’t is because it hadn't been verified.  And when you briefed the president on it, you collectively briefed the president on it, the president-elect, that made it news.

BRENNAN:  Well, nothing has been verified.  It is unsubstantiated reporting that is out there, that has been circulating in the private sector and with the media as well by a firm that pulled this information together.

But what I do find outrageous is equating the intelligence community with Nazi Germany.  I do take great umbrage at that, and there is no basis for Mr. Trump to point fingers at the intelligence community for leaking information that was already available publicly.

WALLACE:  But it wasn't available publicly.  Various news organizations, if I may, various news organization had it, but they weren't reporting it because it hadn't been verified.  And this brings me to the real question, Director Brennan, why on earth within nations intelligence spy chief's brief President-elect Trump in your first meeting collectively with him on this unverified information?  First of all, it wasn't intelligence, it was rumors.  And secondly, my briefing him on it, you made it a news event and, therefore, gave news organizations an excuse to report it.

BRENNAN:  Well, I think news organizations should not assume what happened during that discussion with Mr. Trump.

WALLACE:  Well, it's been verified by the Director of National Intelligence that he was briefed on this information.

BRENNAN:  Chris, bringing to the attention of the president-elect, as well as to the current president that this was circulating out there was a responsibility in the minds of the intelligence directors, of the intelligence community to make sure that there was going to be no evaluation of it, but just making sure that the president-elect was aware that it was circulating.

WALLACE:  But shouldn’t you have done it a bunch of better ways, for instance, had a staff level person, give it to a staff level person, rather than the spy chiefs giving it to the president and the president-elect?

BRENNAN:  Well, I think anybody who has read the reports that are out there, I think there are some very salacious allegations in there, again, unsubstantiated, that were circulating.  And so, making sure that the president-elect himself was aware of it.  I think that was the extent of what it was that the intelligence chiefs wanted to do.

WALLACE:  One of the questions, though, is whether the intelligence community is going after -- or somehow is going to try to undercut by selective leaks the new president-elect.

Let me ask my question, because former top intelligence officials have been bashing Mr. Trump for months, and I want to put a couple of these on the screen.  Former acting CIA Director Mike Morell wrote, "In the intelligence business, we would say Mr. Putin had recruited Mr. Trump as an unwitting agent of the Russian federation."

And then, former CIA Director Michael Hayden said he’d prefer a different term, "That's the useful fool, some naif, manipulated by Moscow, secretly held in contempt, but his blind support is happily accepted and exploited."

Can you understand given that and given all these leaks that have been coming out for months, why the president-elect with think the intelligence community had it in for him?

BRENNAN:  Well, these are private citizens now for speaking about the current political environment about individuals.  So, I’m not going to try to defend or explain what they said.  But I can tell you that the intelligence community is prepared to support the president-elect and his incoming team, as we have done throughout the course of our history.

So, there is no interest in undermining the president-elect and the national security team that’s coming in.  It's our responsibility to make sure that they understand exactly the dangers that are on the world stage, so that as they can decide on which policy courses they want to pursue, they have both the full benefit of the expertise, the capability, the experience and the intelligence that we have so that they can make the best decisions for this country.

WALLACE:  You said you were offended, and understandably so, by his comparison to Nazi Germany.  What's the danger when a president-elect and an intelligence community are at such odds and such -- at least on the part apparently of the president-elect -- such distrust?

BRENNAN:  Well, there are many dangers.  I think the world is watching now what Mr. Trump says, and listening very carefully.  If he doesn't have confidence in the intelligence community, what signal does that send to our partners and allies, as well as our adversaries?

So, I think Mr. Trump has to be very disciplined in terms of what it is that he says publicly, he is going to be in a few days' time, the most powerful person in the world in terms of sitting on top of the United States government and I think he has to recognize that his words do have impact.  And they can have very positive impact, or they can be undercutting of our national security.

WALLACE:  I want to end this part of the interview with one more question, which is the same question of the device president-elect fence.  Does the intelligence community have any information -- I’m not talking about rumors, any information -- about contacts between the Trump camp and associates of the Kremlin about discussions during the campaign about hacking the Democrats?

BRENNAN:  The intelligence community collects foreign intelligence on foreign parties, entities or people.  If in the course of our intelligence collection, we pick up information related to U.S. persons or officials, which we refer to as incidental collection, we share that information with the appropriate authorities.  In most instances, that’s the FBI.

And so, if we did come into contact with that type of information, it would have been shared with the FBI, and we would make sure that our intelligence committees then were aware of it as well.

WALLACE:  So, is there such information?

BRENNAN:  I’d just say, if we came into -- if had that type of information, we would share it with the FBI.

WALLACE:  I mean, I just would say, that's not a denial, sir.

BRENNAN:  Well, I wouldn't confirm or deny something like that on your program, as much as I respect you, Chris.

WALLACE:  Thank you, sir.

Let's talk about some hot spots.  Mr. Trump said in this weekend, as we just talked about it in that Wall Street Journal interview, that he might lift sanctions on Russia if they start helping us.  And here’s what the president-elect said about relations with the Kremlin in his news conference.  Take a look.


TRUMP:  If Putin likes Donald Trump, guess what, folks?  That's called an asset, not a liability.


WALLACE:  Do you think that Mr. Trump understands the threat from Russia?

BRENNAN:  I don't think he has a full appreciation of Russian capabilities, Russia's intentions, and actions that they are undertaking in many parts of the world.  And that's with the obligation and responsibility of the intelligence community is.

I very much hope that our relationship with Russia improves in the coming administration -- absolutely -- because there are very important things we need to do, not just on counterterrorism, but trying to deal with political instability around the globe.  But here is a fair amount of responsibility on Russia's part to change their behavior, change their actions.  And what we need to do is make sure that Mr. Trump and vice president-elect. Mr. Pence, understand exactly what it is that we know, what we have intelligence about, so that when they make those decisions, it will be -- they will be informed decisions.

WALLACE:  Are you concerned when you hear Mr. Trump in that interview with "The Wall Street Journal" already talking about a situation where he might lift sanctions?

BRENNAN:  I think he has to be mindful that he does not yet have a full appreciation and understanding of what the implications are of going down that road, as well as making sure he understands what he's doing.

WALLACE:  What are the implications of going down that road?

BRENNAN:  Well, when you look at what's happening in Ukraine, and what’s going on in Syria, and what is happening in the cyber realm, I think Mr. Trump has to understand that absolving Russia of the various actions that it's taken in the past number of years is a road that he I think needs to be very, very careful about moving down (ph).

WALLACE:  From your vantage point at Langley, as director of the CIA, what's the most immediate and pressing crisis?  Foreign policy, national security crisis that Mr. Trump will face?

BRENNAN:  The problem is, the challenges that he is going to face numerous ones immediately.  You have the problems of terrorism, clearly, the cyber challenge that we just are talking about in terms of elections and other types of cyber capabilities that other countries have.

North Korea, increasing development of its nuclear and ballistic missile capability, instability that has wracked the Middle East.  There are so many issues that the new administration is going to have responsibility for on day one, and that’s why we’re trying to make sure that he and his team are fully briefed on all of these issues.

WALLACE:  As you have heard, and I don't know if you’re able to say this, but you're five days from leaving office.  What do you think of his plan, of his prescriptions, what he saying about these various trouble spots, crises, challenges around the world?

BRENNAN:  Well, what I think Mr. Trump has to understand is that this is more than being about him and it's about the United States and our national security.  And he has to make sure that now he's going to have the opportunity to do something for national security, as opposed to talking and tweeting, he's going to have tremendous responsibility to make sure that U.S. national security interests are protected and are advanced.

And so, I am very much hoping that he has some very good people that he has pulled together, Jim Mattis, Mike Pompeo, John Kelly, and others.  I think they are the ones that are going to be able to give him some wise counsel about what he needs to do and not be very spontaneous in his words and his actions.  Spontaneity is not something that protects national security interests.  And so, therefore, when he speaks, when he reacts, just to make sure he understands that the implications and impact on the United States could be profound. Again, it's more than just about Mr. Trump, and it's about the United States of America.

WALLACE: Finally, you are ending eight years of service as one of President Obama's top national security advisors, both in the White House and then also as CIA director. What – looking back on these eight years, what is your greatest source of pride and what is your biggest regret?

BRENNAN: First, source of pride being part of an administration – part of an administration that really has tried to advance the interests of peace and stability around the world at a very challenging time, bringing bin Laden to justice, being able to prevent a recurrence of an 9/11 attack here in the homeland. These were things that the administration and the government, as a whole, really did some great work.

Regrets, when I look at the situation in Syria, I think my heart and a lot of hearts bleeds over what has happened to that beautiful country. And I – I regret that we were not able to find a way to arrest the growth of violence and bloodshed there so that we could make sure that Syria is going to have a future for the – at least the next generation of Syrians. And that's the one area that I'm very – very regretful about.

WALLACE:  Very briefly, in – is there a policy that you now believe with hindsight could have worked to stop the – the carnage and –and interrupted the civil war?

BRENNAN: Well, we – 20/20 hindsight is always, you know, quite clear. Looking back now over the last six years, the way some developments happened, the growth of ISIL, ISIL wasn’t – didn’t exist at the time. I think a lot of countries, including the United States, could have been more aggressive and proactive in terms of what we should have done to – to prevent the – the deterioration into so much bloodshed in Syria.

WALLACE:  Director Brennan, thank you. Thank you for your time. And we want to thank you for your years of service to this country, sir.

BRENNAN: Thank you, Chris. Thank you very much.

WALLACE:  Up next, we’ll bring in our Sunday group to discuss the Russian intel and this week's confirmation hearings where Mr. Trump's top cabinet picks discuss some surprising disagreements with their new boss.


WALLACE:  Coming up, some of Donald Trump's cabinet nominees split with him on Russia.


JAMES MATTIS, DEFENSE SECRETARY NOMINEE: With Mr. Putin, we recognize that he is trying to break the North Atlantic Alliance.

MIKE POMPEO, CIA DIRECTOR NOMINEE: Russia has reasserted itself aggressively.


WALLACE:  We’ll ask our Sunday panel what those different opinions mean for our foreign policy next on Fox News Sunday.



TRUMP: A thing like that should have never been written, it should never have been had, and it should certainly never have been released.

PELOSI: I always wondered, what did Russia have on Donald Trump?


WALLACE:  Mr. Trump and House Democratic Leader Nancy Pelosi reacting very differently to that unverified Russian dossier that supposedly has compromising information on the new president.

And it's time now for our Sunday group. Gerald Seib, executive Washington editor of The Wall Street Journal, Bob Woodward from The Washington Post, former Democratic Congresswoman Jane Harman, director of the Woodrow Wilson Center, and Washington Examiner contributor Lisa Boothe.

Well, Bob, what do you think – and this is something we discussed with both of our guests – of the way that the intelligence community handled the so-called Russian dossier? And, overall, how do you think of the way they’ve handle Donald Trump?

BOB WOODWARD, THE WASHINGTON POST: I think what’s underreported here is Trump's point of view on it. And you laid it out when those former CIA people said these things about Trump, that he was a recruited, you know, agent of the Russians.

WALLACE:  Useful fool.

WOODWARD: Yes, and a useful fool. I mean they started this. And in Trump's mind, he knows the old adage, once a CIA man, always a CIA man. And no one came out and said those people shouldn't be saying things. So then act two is the briefing when this dossier is put out. I – I've lived in this world for 45 years where you get things and people make allegations. That is a garbage document. It never should have been presented in – as part of an intelligence briefing. As you suggested, other channels have the White House Counsel give it to Trump's incoming White House counsel.

So Trump's right to be upset about that. And I think if you look at the real chronology and the nature of the battle here, those intelligence chiefs who were the best we’ve had, who were terrific and have done great work made a mistake here. And when people make mistakes, they should apologize.

WALLACE:  Well, let me bring in the former top Democrat on the House Intelligence Committee, Congresswoman Harman.

Yo know, there is this sense that – that – that an awful lot of information that the intelligence community developed about Russia hacking, the garbage dossier, new phrase, that it got public. And – and can't you understand how Donald Trump would end up feeling like these guys are trying to knife them?

JANE HARMAN, FORMER U.S. CONGRESSWOMAN, D-CALI: Yes, I can understand that. But from the other side, I can understand that very careful and highly trained intelligence professionals think they’re being dissed. John Brennen just said that in hindsight he might have done some things differently. I agree with Bob, there was another way to handle that salacious two page unsubstantiated dossier. But I think the intelligence community seriously has put out its case starting in early October when Jeh Johnson and I think it was Mike Rogers put out the case that there was Russian hacking.

And I think it's important for Donald Trump and his good cabinet picks, Dan Coats and – and Mike Pompeo, to end this war, for two reasons. Number one, we need –

WALLACE:  The war – the war, we should say, with the intelligence community.

HARMAN: Yes, yes, the war with the intelligence community, for two reasons. Number one, we need these guys. They’re on the front lines now in undisclosed locations. My – I have visited them all over the world. They’re fabulous. We need them. We need truth to power. But the second reason is, we need our allies to have confidence in the Trump intelligence relationship and not think that if they share information with us, which is crucial for us understanding threats to the United States, it won’t be compromised in some way.

WALLACE:  All right, I want to change dramatically.

Gerry, you were one of the two reporters for The Wall Street Journal that conducted that interview over the weekend with President-elect Trump. How dramatically does it seem to you he wants to reshape our relations both with Russia and China?

GERALD F. SEIB, THE WALL STREET JOURNAL: Well, that's not clear, but what is clear is that the mindset is totally different. This is a -- everything is open for negotiation kind of an approach to the two biggest countries outside the U.S. in the world. The two most important, Russia and China. And he literally said with China, everything is open to negotiation, including the One-China policy. This was the policy by which the U.S. has for years and years recognized Beijing as the one and only true representative government of the people of China, not Taiwan.

And on Russia sanctions, he said, I’ll keep the sanctions in place for a while, but we’ll see how the Russians behave. And it's very much a transactional kind of an approach to foreign policy. You’re nice to us, we’ll find ways to be nice to you, and vice versa. And it's going to be different. I mean people will argue the wisdom of it, but the one thing that's clear is that the mindset going in is going to be different.

WALLACE:  The Senate started holding confirmation hearings for Trump’s cabinet picks this week, and one of the things that everyone noticed is the sharp differences between the nominees and Mr. Trump. Let's put some of them up on the screen.

There were real differences over the threats posed by Russia, waterboarding, building a wall, and tearing up the Iran nuclear deal with.


TRUMP: My number one priority is to dismantle the disastrous deal with Iran.

GEN. JAMES MATTIS, DEFENSE SECRETARY NOMINEE: It is an imperfect arms control agreement. It's not a friendship treaty. But when America gives her word, we have to live up to it and work with our allies.


WALLACE:  Lisa, are we headed for a constructive debate, divergent opinions in the Trump cabinet, or we headed for chaos?

LISA BOOTHE, WASHINGTON EXAMINER CONTRIBUTOR: I think we are. I mean, look, Donald Trump came –

WALLACE:  Well, which one?

BOOTHE: Good point. No, I think it’s going to be constructive, so to answer that for clarity sake. But, you know, look, I mean Donald Trump can't win here because he got a lot of criticism during the general election that he wouldn’t take the advice of counsel, that he wouldn’t take the advice of his advisor, but he has surrounded himself with some very smart and capable people, as the CIA director pointed out in his interview with you as far as General Mattis goes. And I think he’ll have a lot more faith in the intelligence community when he does have some people there that he trusts, like someone like Mike Pompeo.

In regards to Russia as well, I think the biggest problem here is the distrust, the erosion of trust in – in just institutions at large when you have the fact that the media reported something that The New York Times said was very difficult to check. And even what could – can be checked is problematic when the fact that you have sitting members of Congress saying that they're not going to recognize President-elect Trump as the president because he is illegitimate. When you have individuals that are calling for the abolishment of the Electoral College and we’re calling for electors to defect. So I think the biggest problem that we are dealing with right now is the erosion of trust in all of the institutions, whether it's the intelligence community, the media, and the government at large.

WALLACE:  All right. We’re going to take a break here.

And it certainly is worth noting, I think that Barack Obama came into office on the same week with a – an approval rating in the 60s and Donald Trump’s approval rating is in the 40s. So there is – everybody’s at logger heads here in Washington.

All right, we’ll be back in a second.

When we come back, an inspector general announces he’ll investigate possible misconduct in the way FBI Director James Comey handled the Clinton e-mail investigation.

Plus, what would you like to ask the panel about the IG probe? Just go to Facebook or Twitter @foxnewssunday and we may use your question on the air.



JAMES COMEY, FBI DIRECTOR: There is evidence that they were extremely careless in their handling of very sensitive, highly classified information.

ROBBY MOOK, FORMER CLINTON CAMPAIGN MANAGER: If he has acted improperly and that the American people can no longer have faith in his ability to carry out justice, I think at that point someone should step down.


WALLACE:  Hillary Clinton's former campaign manager questioning whether FBI Director James Comey violated FBI regulations in being so public about the Clinton e-mail investigation. This after the Justice Department’s inspector general announced he’ll review Comey's actions.

And we’re back now with the panel.

Well, Bob, as someone who’s had a lot of dealings with the FBI over the last 40, 45 years, did Comey violate FBI regulations in going so public, and, frankly, should he step down?

WOODWARD: Well, I mean, he's got almost no friends right now. Lots of people are calling for his head. I – I – I wouldn't anticipate learning too much from this inspector general's investigation. He can't compel people to talk. And they’ll say, oh, yes, that’s confidential or that’s connected to something classified.

I – I think Trump and his people, having done reporting on this, have a lot of respect for Comey on the issue of counterterrorism. The FBI has done a spectacular job in preventing the mass casualty attacks in this country, which were much anticipated after 9/11. So that – it – it may hang on that.

WALLACE:  We asked you for questions for the panel and we got a bunch like this one from Lillian Murphy on Twitter. "I want to know why the IG is not questioning the tarmac meeting between Bill Clinton and Attorney General Lynch."

Lisa, how do you answer Lillian?

BOOTHE: I certainly agree. I think that should be under investigation. I'm glad to find as well that they will be looking at the FBI Andrew McCabe whose wife was a recipient of money from one of the FBI individuals, from Terry McAuliffe, who’s closely connected to the Clinton campaign.

BLITZER: Who was the governor of Virginia and gave a lot of money to this – wife of the – who – she was running for office.

BOOTHE: Governor of Virginia. Exactly. And I think FBI Director Comey was set up to fail with all of this because any decision he had made from the start would have been met with extreme criticism. If he had recommended an indictment against Hillary Clinton, can you imagine how that would have gone over in this country? And, of course, Loretta Lynch tied his hands by setting out – or by meeting with President Bill Clinton on the tarmac of that plane. And I think this is a continued scapegoating from the left. And if they want to look for reasons why Hillary Clinton lost, look no further than the fact that they elected someone who was under investigation by the FBI to begin with, or the fact that she spent more money seeing one electoral vote in Omaha, Nebraska, on TV, than Michigan and Wisconsin combined.

WALLACE:  Almost lost in all of the talk about Russia and the FBI this week is the fact that Donald Trump finally announced what his plan is to separate himself from the Trump businesses. But the head of the Office of Government Ethics immediately dismissed it. Here he is.


WALTER SHAUB, JR., DIRECTOR, U.S. OFFICE OF GOVERNMENT ETHICS: The plan the president has announced doesn't meet the standards that the best of his nominees are meeting, and that every president in the past four decades has met.


WALLACE:  Congresswoman Harman, the Trumps do business around the world and – which raises the question, every time that he makes a decision, or his administration makes a decision about policy in one of those countries, does it raise the – the likelihood that people are going to say, well, that’s to advance his business interests?

HARMAN: Well, I think he wants his issue to be over. And in this town, appearance and reality are conflated. And I think he could do more – I’m sure Gerry has some specific ideas – to stop this story.

I just want to say a couple words about Comey. He certainly had my admiration for intervening in – in former Attorney General Ashcroft’s hospital room to block a Bush administration effort to ratify or renew some surveillance standards against the standard legal procedure. But in this case, the – his actions this last year to me are inexplicable. Attorneys general are – or inspector general, are supposed to be independent. This guy maybe should investigate other actions of the Justice Department. But I think he’s within bounds to want to investigate this. And this guy, we just checked it, could be replaced by Donald Trump if he chooses to replace him, Comey, although he serves a 10 year term –

WALLACE:  Right. So – so should – should –

HARMAN: As Bill Clinton replaced the then FBI director, Bill Sessions.

WALLACE:  Very quickly, should Comey step down?

HARMAN: I think that’s Comey’s call. Should – I – and I – I don't pretend to make recommendations to Donald Trump.

WALLACE:  OK. All right.

Well you shifted the question about the businesses.

Gerry, what to think of this? I mean is this going to – you said – I think Congresswoman Harman’s exactly right, he wanted to end the controversy. Has he?

SEIB: No, absolutely. This is going to be a continuing feature. There’s no way around this. Look, the issue here is that Donald Trump says, I’ve set up a trust. My sons are going to run the business. They’re in charge of it. But the critics say it's not a blind trust. If you sons are running the business, you’re not blind to that by any means.

The Trump response to that is, these aren't liquid access. I’m not a guy who has a -- $100 million in stock. I own buildings and a brand. And you can't just sell that. If you sell all those things, it's a fire sale, the value that I’ve built up goes out the window automatically. That is the tension in this question. And it's not going to go away. And I think they realize it’s not going to go away. They’re going to live with it and everybody in town is going to have to question – deal with questions we haven’t had to deal with before.

WALLACE:  Is there something reasonably that he could have done? I mean as – as – as somebody pointed out, he can't un-know the fact that he owns the Trump Tower or that, you know, un-know whether it – it still is in his property – his portfolio or not. What could he reasonably have done?

SEIB: I think he could have legally separated himself from the Trump Organization more than he has. But he hasn’t done that, and so we’re – as I said, we’re going to have to deal with that.

I think the other option would have been to take his family entirely out of the ownership and leadership of the – of the company, but that wasn't going to happen. This is the Trump family, and so they weren't going to go there.

WALLACE:  And I kind of wonder when he says he's not going to talk to his sons about the business, I’m thinking, boy, that’s going to be an awkward holiday, huh? So, how – how about them Redskins?

SEIB: Yes. Well, you –

WOODWARD: Every time the Trump Organization make some deal in – in the Middle East, then people are going to be asking him, have you talked to your sons about this? How does he –

WALLACE:  Well – well, in fairness he has said – he’s said there are not going to be any new deals with foreign countries. But, you know what?


WALLACE:  We've got to end.

Thank you, panel. See you next Sunday. To be continued.

Up next, our "Power Player of the Week." The man Donald Trump picked to run his inauguration gives us a surprising preview.


WALLACE:  A look at the National Building Museum, site of the salute to our Armed Services Inaugural Ball this Friday.

Whether you like him or not, Donald Trump always likes to do things big, but it turns out that's not how he wants his inauguration. Here’s our "Power Player of the Week."


TOM BARRACK, CHAIRMAN, PRESIDENTIAL INAUGURAL COMMITTEE: We need to thank the people who were faithful to us, we need to encourage those who weren’t, but do it simply, do it quickly, do it elegantly, and let's get back to work.

Where is the stage?

WALLACE (voice-over): Tom Barrack is chairman of the Presidential Inaugural Committee, in charge of organizing 19 events over six days. And he says Donald Trump's marching orders may surprise some people.

BARRACK: In its simplicity, the idea is to organize what's already here and available, rather than focusing on a coronation of the man.

WALLACE (on camera): Are you saying that Donald Trump wanted to deemphasize the celebration of his victory?

BARRACK: He wanted to deemphasize at the celebration of him.

WALLACE (voice-over): But even a simple inauguration is a big deal. Barrack has a staff of 360, backed by a security force of 35,000, handling events for as many as 750,000 people. He's running everything, except the swearing in ceremony.

BARRACK: It comes together just for that moment, to allow that peaceful transition of power. But it's – it’s – it’s quite an ordeal. It’s putting on the Olympics in 60 days.

TRUMP: We’re going to have a very, very elegant day. The 20th is going to be something that will be very, very special.

WALLACE (on camera): Donald Trump is a pretty good producer. How involved, how micro-managing has he been about this?

BARRACK: He makes me crazy. I had blonde hair and blue eyes when this started. He wants to know the color of the napkins, where’s the linen, how many people are coming, what’s the play list.

WALLACE:  Are you being serious?

BARRACK: Yes. And I said, would – could you go back and just manage the free world and leave me alone?

WALLACE (voice-over): One of the president-elect's ideas, do what Andrew Jackson did in the 1820s, open the White House to the public.

BARRACK: Of course I had no idea what Andrew Jackson did. I went back and researched it and said, by the way, they absolutely –

WALLACE (on camera): Trashed the place.

BARRACK: Trashed the place. So this – it – it –

WALLACE:  It's not a good idea.

BARRACK: It’s not a great idea.

WALLACE (voice-over): But other ideas are going better.

Where Barack Obama had ten inaugural balls in 2009, Mr. Trump said he only wanted three.

BARRACK: It’s not appropriate after what we went through. We need a more healing kind of an inauguration. We don't need a celebration of me, the victor.

WALLACE:  Of course there will be protests, but Barrack says as long as they’re not violent, that's fine.

BARRACK: Us remembering the dialogue is alive is a good thing, not a bad thing. And – and that comes from the president himself. So it’s – it’s people getting hurt that’s the issue, not – not protest.

WALLACE:  Barrack and Trump have been close for more than 30 years. Barrack runs a private equity real estate firm with $58 billion in assets, but they've always known where to draw the line.

BARRACK: He’s one of my best friends. And – and the reason I'm not going into the administration is I intend to keep it that way.

WALLACE:  Still, Barrack is ready to defend his buddy.

BARRACK: What I tell everybody is, give him a chance. He's not even president yet.

WALLACE:  But first things first, there's an inauguration to put on.

WALLACE (on camera): What’s the weather forecast, which is the all-important thing, for Friday, January 20th?

BARRACK: Forty-six degrees and sunny.


WALLACE:  And the forecast continues to be good weather on Friday.

Be sure to tune to this Fox station for coverage of the inauguration anchored by Shepard Smith, or all day on Fox News Channel where I’ll join Bret Baier and Martha McCallum on the National Mall.

And that's it for today. Have a great week. And we’ll see you next "Fox News Sunday."

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