This is a rush transcript from "Hannity," May 18, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: The Obama administration approved over 200 new Obamacare waivers just last month thereby granting select businesses with a one year exemption from the federal law.

Now what makes these issuances especially interesting is that almost 20 percent of them were from small businesses in Nancy Pelosi's district. Unlike the majority of other waivers like, say, labor union chapters or large corporations, according to The Daily Caller the recipients in San Francisco are mostly luxurious gourmet restaurants, hotels, spas.

And, of course, the House minority leader's office is denying that favoritism played any role, arguing, quote, "It is a pathetic thing that these are people who would be cheering for Americans to lose their minimum health coverage or see their premiums increase for political purposes. These waivers are reviewed and granted solely by the administration in an open and transparent process."

Joining me now with reaction, the author of "Culture of Corruption," Michelle Malkin is back with us.

Michelle, good to see you. Thanks for being with us.


HANNITY: All right, now, let's start with the utter hypocrisy here. You know, I thought this was good for every American. I thought she was saying this is good for every American. As you look at it, you know, 20 percent of the waivers in the month of April for her district. Why should I be concerned?

MALKIN: Well, it is very news worthy. I think it is indicative of a problem that has been a hallmark in the age of Obama since day one. And that is that selective enforcement has been the law or the lawlessness of the land for this administration and for the Democrats.

You're right, Sean, I think it's a very basic point, but it deserves to be reiterated. If Obamacare is so good for everyone why is this escape hatch keeps getting bigger and bigger and bigger for an increasing number of big labor unions, companies, many of them which were foremost at the vanguard there of crusading for Obamacare in the first place.

And many of these noteworthy businesses in the ground zero district of a woman who foisted Obamacare on everybody else. Now, as you say, Nancy Pelosi denies that there's any corruption, but I think it is inherently corrupt to have the system in place that is not transparent.

They can say it until they are blue in the faces that they are being transparent, but one thing we do not have is a list of all the people who applied for these golden tickets out of Obamacare and were denied.

Who else tried to get a pass and was denied for what reason? Are there any other members of Congress out there who have intimate knowledge about the waiver process? Did they intervene on any of these businesses or unions' behalf? We don't know and we need to.

HANNITY: Well, it seems particularly foolish to me because if they think that they are going to be able to hold this information from the public, we are going to know what it is. We are going to know who applied. We are going to know in the end who was denied. Then we are going to see whose districts benefited. I think if it can be shown that certain congressional districts or states like Harry Reid, benefited, I think they got themselves a big political problem for the very reasons you are citing here is that, you know, arrogant learjet limousine liberals. This law is good for you, but our friends get an exemption.

MALKIN: Yes, that's right. And of course, the question on every other American's to mind is dude, where is my waiver? The stench of waivers for favors is not going to be removed until they answer many of these questions.

Set aside what kind of political preferences or special treatment there might have been for some of these recipients. There's a basic point that also needs to be reiterated that Nancy Pelosi herself championed and cheered the very kinds of benefit limits that now so many of her constituents are exempted from.

People need to understand that in the waiver process what happened was there were a lot of businesses that employ seasonal workers, part-time workers, low wage workers, millions of them the Democrats say they care about.

And the restaurant industry from the very beginning of the Obamacare debate said you can't have these kind of artificial top down benefits limits because what it is going to do is jack up our premiums, which of course is what Obamacare critics warned about all along, or we are going to be forced to drop coverage.

That's right, so when Obama said that nobody is going to be affected, everyone is going to keep their coverage, what he didn't say was, yes, but you are going to have to beg to me for a waiver to make sure that you can keep that coverage in the first place.

HANNITY: Let me shift gears a little bit with you and ask you where you are in this presidential selection process? The primary is now getting going. We know Trump is out. Huckabee is out. This talk about John Huntsman and Mitch Daniels getting in.

We saw controversies recently with Newt and Rick Santorum, et cetera. It seems like these candidates are going to get a level of scrutiny that the president never got. But right now I'm undecided. I want to see this process unfold and I believe mathematically every day the economy stays in as bad shape as it is in, it becomes almost mathematically impossible for the president to win. But I want to know where are you in this process?

MALKIN: Well, I have some basic simple criteria for a GOP presidential candidate. I look at the last election and I look at the mistakes that the Republican Party made. And the primary mistake that the Republican Party made was putting up against Barack Obama someone who did not pose a clear contrast to the kind of big government meddling, fake transparency corruption that we've seen over the last couple of years.

We need somebody who was against things like massive intervention of -- in the TARP bailout, to the auto bailout, Obamacare, the stimulus and those positions need to be clear. We also need to have somebody who has demonstrated leadership ability who is able to face manufactured crises and say no and say it loud and say it proudly.

And this is where the Tea Party Movement comes in, the grassroots of the party to make sure that we are the ones that pick the Republican Party candidate, not the mainstream media, not the liberals, not the Beltway establishment.

HANNITY: Give me one or two or three names. Where are you looking right now? Michele Bachmann may get in?

MALKIN: Yes, well, I'll tell you who I'm not looking at. I'm not looking at McCain-ites like Jon Huntsman. I am undecided on people like Mitch Daniels who were nowhere to be found on things like TARP. I have problems with some of the environmental positions of someone like Tim Pawlenty.

Who I'm looking for is somebody who can bring together fiscal conservatives and social conservatives. And I know they are out there. I know there's a huge hunger on the parts of the grassroots to find that person. It is not going to be someone from the Beltway establishment. I'll tell you that much, Sean.

HANNITY: All right, I'm going to pin you down a little bit more each and every week until we get you just to give us an answer.

MALKIN: You got it.

HANNITY: All right, Michelle Malkin, good to see you.

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