Updated

This is a rush transcript from "Hannity," May 21, 2013. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Joining me now with reaction of this breaking news story, former New York City Mayor Rudy Giuliani. And for those that don't know, you are a former prosecutor.

RUDY GIULIANI, FORMER NEW YORK CITY MAYOR: Fifteen years in the Justice Department. U.S. attorney, associate attorney general and assistant U.S. attorney.

HANNITY: All right. So, they are claiming that they got a case of espionage. So they want to find out where the leak came from. So they seize not only James Rosen's e-mails from his personal Gmail account, they go through his phone records and, you know, target him as quote, "an aider, abettor and co-conspirator."

GIULIANI: Sean, that is almost impossible to have happened. I can't imagine how you would name a reporter as an unindicted co-conspirator when all the reporter was doing was their job. The reality is, the obligation is on the government employee. They take the oath of office. They are the ones that have the obligation not to leak sensitive or classified information. A reporter is supposed to ask questions. It's the government official that knows the obligation that they have.

I can't imagine -- in all the experience I've had with the Justice Department -- ever, I never heard of a reporter being named as an unindicted co-conspirator. Basically saying, they committed criminal conduct. I think Mr. Rosen should seriously consider a libel suit against the Justice Department. I think they defamed him, I think they've defamed them unfairly. I think this is totally outrageous behavior but, you know, we're getting use to two or three at least a day now. I look at the Justice Department and I just saw the picture on television. And I feel like the wheels are coming off the Justice Department.

HANNITY: It sounds to me like they just decided to have carte blanche to just spy?

GIULIANI: They sure did. And there is no question that they did.

HANNITY: Yes.

GIULIANI: I mean, there are so many more surgical ways in which you could do this. This is obviously an attempt to pry into his records and into Fox's records. It's no different than what the IRS did in going after the conservative groups. He knows, he doesn't like Fox, everybody in the Justice Department knew exactly who's bidding they were doing in trying to go after Fox.

HANNITY: What do you make of these new developments tonight, they're going after Fox's hard lines, not having anything to do with James Rosen, at the Pentagon, at the State Department, the White House work space and Fox executives as if somehow they are --

GIULIANI: I don't know if there is an Obama administration enemies' list, but it sure sounds that there is, and that enemies list include the Tea Party and includes patriot groups and obviously includes Fox News. But to name this man as an unindicted co-conspirator is totally unethical, I think it's illegal.

HANNITY: Isn't the reason we need a free press -- as a conservative I want a free press. Isn't it to keep government in power in check?

GIULIANI: Well, sure. Absolutely. You know, and there are lines here that are clear. The press has every right to probe, to push, to ask questions. It's the government official that has the obligation. I don't know if this government official violated his obligation or he didn't. A trial will decide that. But a reporter asking for information certainly shouldn't be named as an unindicted co-conspirator.

HANNITY: Do you think it's a pattern, because they have this ongoing war with the Fox News Channel. An overall pattern, how can a target on the back of --

GIULIANI: How can you miss the fact that there is a pattern here? We also, we have the IRS going after right wing groups as well. It seems to me that the people in this administration got the signal from the top, you know, go after these people. It's like murder in the cathedral when Henry II said, rid me of this meddlesome priest and then he went on and killed Beckett.

HANNITY: Yes. What do you make of Lois Lerner going to plead the fifth tomorrow?

GIULIANI: Well, I think now we can say, this is a criminal matter. She is taking the Fifth Amendment. She is saying the answer might incriminate her. That has to be a valid invocation of a privilege. So the reality is, that can't be used against her in court of law, but we certainly have a right to draw the inference that there is some criminality involved here. Otherwise, she wouldn't be taking the Fifth Amendment.

HANNITY: We heard this -- there have been five separate stories, Jay Carney giving many of them that they knew nothing about it, that they found this out in the press. Then we find out the president's attorney knew, the president's chief of staff knew about this. But supposedly, they didn't tell the president.

GIULIANI: Well, I think, we should regard any statement from Mr. Carney as like the first attempt and never pay any attention to it. And then say, well, let's wait until tomorrow the next day and the day after and maybe we'll find out the truth. I don't know how long he is going to last. The president has to have a press secretary that people trust. I don't know how many more times he can misrepresent, hide the truth, obfuscate, turn out to be wrong -- or maybe they don't talk to him, maybe he's shut out from any information. I don't know.

HANNITY: I would think that for his own credibility he would want the information.

When you put together the shift in Benghazi with the shifting story about who knew what, when, and that's now changed five times. What do we -- what's emerging here? What pattern when you compare Benghazi to nobody knew to a number of people knew. What does that mean?

GIULIANI: Well, I mean, before you jump to any further conclusions, you certainly have an extremely incompetent administration.

HANNITY: On top of everything else. That's the best case though.

GIULIANI: They can't get their story straight.

HANNITY: Yes.

GIULIANI: When they have days of warning they can't get their stories straight. The president finds out about the IRS investigation by reading the newspapers? What does he have a staff for?

HANNITY: Yes.

GIULIANI: What is the chief of staff do? What about the people working in the White House? I mean, we should just get rid of all of them, you can just read the newspapers.

HANNITY: One other thing about Lois Lerner is going to plead the fifth. She originally -- the story originally was that this came out spontaneously. And then we found out this was a planted question.

(LAUGHTER)

GIULIANI: Well, I mean, I don't know exactly what the criminality is, but when you invoke the Fifth Amendment, to do it validly there has to be some concern that you can be incriminated. So now, people was saying a week ago, some Republicans are saying, there's criminality here, somebody should be prosecuted. Turns out that they're right. There is criminality here. Otherwise, she shouldn't be invoking the Fifth Amendment.

HANNITY: It seems to me the one common thread, abuse of power. And one other thing -- and this is not political for me. As a conservative, I want my government to be truthful. I think the families in Benghazi need the truth. I think conservative Tea Party groups deserve the truth. I think we need the truth about why James Rosen was targeted.

GIULIANI: Yes. I think the only thing that will save this, put everything in the right course, the president has got to explain all this. It has to come from the president. Exactly what did he know about Benghazi, where was he? Why weren't forces sent there as they should have been? Why wasn't security supplied in advance? Why did the IRS do this? Why did this information in his White House never seem to get to him?

We need an explanation from him so we can trust him. We should be able to trust our president even if we disagree with him ideologically, which you and I do, some people don't. We should be able to trust them. And now, we've gotten to the point where I can't imagine anybody is going to trust anything they say, because next day it turns out to be false.

HANNITY: I've never seen anything like it.

All right.

GIULIANI: It's up to him. He has got to straighten this out.

HANNITY: All right. Mr. Mayor, good to see you. Thank you for being with us. I appreciate it.

Content and Programming Copyright 2013 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2013 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.