This is a rush transcript from "Hannity," May 28, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: There is big breaking news tonight in the Joe Sestak affair that has gripped Washington all week. And after months of questions, denials and finger-pointing the White House version of events basically comes down to this: Bill Clinton did it.

Now White House counsel Bob Bauer who is married to former White House communications spin doctor Anita Dunn released a report this morning detailing what happened. Now it reads in part, quote, "Efforts were made in June and July of 2009 to determine whether Congressman Sestak would be interested in service on a presidential or other senior executive branch advisory board which would avoid a divisive Senate primary, allow him to retain his seat in the House, and provide him with opportunity for additional service to the public in a high-level advisory capacity for which he was highly qualified. The advisory position discussed with Congressman Sestak, while important to the work of the administration, would have been uncompensated. White house Staff did not discuss these options with Congressman Sestak. The White House chief of staff enlisted the support of former President Clinton who agreed to raise with Congressman Sestak options of service on a presidential or other senior executive branch advisory board. Congressman Sestak declined the suggested alternatives, remaining committed to his Senate candidacy."

So Rahm Emanuel got Bill Clinton to see if Sestak would take an unpaid advisory position not to run for the Senate.

Well, go away, that's all done. Now basically, that's what the White House is saying.

Now for his part after months of saying someone in the White House offered him a job, Congressman Sestak is backing up the story tonight having this to say about President Clinton.


CONGRESSMAN JOE SESTAK, D-PA.: He called last summer and during the conversation, he talked about how tough this Democratic primary might be if I got in.

He also said, you know, you've done well in the House. And your military background can really make a mark there. And then brought up that — during a conversation Rahm Emanuel had brought up about a presidential board of something, you know, if I were to stay in the House.

And I almost interrupted the president and said, Mr. President, I am going to decide to get in this or not only depending upon what's good for Pennsylvania's working families not — not an offer.


HANNITY: All right, but Republicans are not necessarily buying it. And once again tonight there are as many questions as there are answers. And we're going to have full coverage on this tonight including detailed legal analysis and Newt Gingrich, Dana Perino and our great, Great American Panel.

But joining me first is former Clinton adviser, author of The New York Times best-seller, "2010: Take Back America," the one and only, Dick Morris.

Dick, good to see you. Thanks for being here.


HANNITY: All right. Listen to how it's downplayed. Small advisory role. I want you to watch the very first interview back in February when first asked about this, Sestak said this to the host Larry Kane.


LARRY KANE, HOST: Were you ever offered a federal job to get out of this race?


KANE: Was is the Navy secretary?

SESTAK: No comment.

KANE: Was there a job offered to you by the White House?

SESTAK: Yes. Someone offered.

KANE: Yes. It was big, right?

SESTAK: It was — let me not comment on it.

KANE: Yes, but you're going all the way. You're not —

SESTAK: I'm in this all the way for the working family.


HANNITY: All right. Now wait a minute. You go — we've got to go through this closely here tonight. First of all your analysis based on what he's saying now versus then.

MORRIS: It doesn't matter who made the offer. If Bill Clinton made the offer he was acting on behalf of Rahm Emanuel.

You know this reminds me — I don't know if your viewers watch "24", the TV series.


MORRIS: You know how they're always bringing Charles Logan back to handle the dirty stuff.

HANNITY: Here comes Bill Clinton. Right.

MORRIS: Yes. But he was acting as an agent of Rahm Emanuel. And the statute says you may not offer something of value. Well, if it was valuable enough to possibly get him out of the race, it's valuable enough to qualify under that statute.

HANNITY: Yes. This is important, but was it high ranking? Yes.

MORRIS: Yes, of course it was.

HANNITY: What they're describing today by nobody's definition is it high ranking, correct?

MORRIS: No, no, no. It's — what they are describing today is high ranking. Being on the intelligence advisory board, yes. That's important. No, no, it's important. And I'm not — and if that offer were conveyed, I think that that would be, in my judgment, grounds for impeachment.

HANNITY: So in other words, you still —

MORRIS: If Obama knew about it.

HANNITY: All right. You're sort of jumping the gun. We're going to have full legal analysis of this. But you're bringing up 18 U.S. Code 600, whoever directly, indirectly promises any employment, position, compensation, contact, appointment or other benefit provided for, made possible in whole or part by an act of Congress, any special consideration in obtaining such benefit to any person as consideration, favor or reward for any political activity.

MORRIS: Verbatim.

HANNITY: This — it's almost written for this law.

MORRIS: And, you know — first, I don't mean to pass over that. That is absolutely true and that is something we need to focus on. But there's a broader concept here. This is Chicago ward politics at its worst. This is literally taking it out of the hands of the voters.

And you have the same that apparently went on in Colorado with Romanoff trying to get him out of the race in order to get Michael Bennett's vote on health care. And I think that is just revolting.

Now a lot of people have said to me, hey, Dick, Democratic Congress, Democratic attorney general, Democratic president — how are you going to get this investigated? Well, Judge Napolitano, the Fox News analyst, and I wrote a column that's available now on my Web site DickMorris.com, where he says that he believes that Tom Corbet, the Pennsylvania attorney general, a Republican, now the party nominee for governor —


MORRIS: — has standing to impanel a grand jury to investigate this. And I believe that in light of these allegations, in light of these facts — in light of the fact they've admitted that an agent of the White House offered something of value in return for political considerations — I believe he should impanel a grand jury to investigate.

HANNITY: That's another case. But we even have a third case. We have the case of Romanoff who was going to run against the incumbent, Michael Bennett —


HANNITY: — in Colorado and Jim Messina, The Denver Post pointed out, went and it suggested a place for Romanoff might be found, according to several sources, in the administration if he would get out of race.

MORRIS: Now you —

HANNITY: So — it seems to me that we're looking a lot of pay to play and a violation clearly of a law that's written here.

MORRIS: But take the Romanoff-Bennett thing to its next step. Why would the White House want to help Marshal — Michael Bennett? He was an appointed senator, appointed by the governor of Colorado. Salazar's vacant seat. Romanoff would be a strong candidate, maybe even stronger than Bennett.


MORRIS: There's only one reason I can think that Obama and Emanuel would care that much about Bennett, and that was to buy his vote on health care.

HANNITY: Yes. It wouldn't surprise me.

All right. Let me go back to the very specifics on Sestak. He kept repeating, he was offered a job. Now my definition of a job is, you know, an activity in exchange for a payment of some kind.

This is not a — this is not by definition a job even though you're saying that doesn't matter, that it would still violate the law.

MORRIS: I emphatically disagree with what you're saying. The fact that it was unpaid doesn't mean a damn thing. The fact that it was offered by the President Clinton as opposed to by Emanuel himself doesn't matter.

HANNITY: Doesn't matter.

MORRIS: He was offered something of value. And how valuable was it? Valuable enough that Bill Clinton, Rahm Emanuel and maybe Barack Obama thought it would induce him to drop out of a Senate race.

HANNITY: That's valuable.

MORRIS: That's valuable.

HANNITY: No, that's a good point. But the only thing I was saying is, I was suggesting that I don't think Sestak is being particularly honest here. And we saw —

MORRIS: Yes. I think that's probably true. But I'm willing to take them at their word that Bill Clinton conveyed the offer and I'm willing to take them at his word that it was an unpaid position.

But as far as I'm concerned, not only doesn't that exculpate it, it lends the factual pattern that I think —


MORRIS: — means that Corbet should do his duty and impanel a grand jury.

HANNITY: All right, I got that.

MORRIS: And by the way, people in Pennsylvania should — everybody — should look at my article on, with Napolitano, on DickMorris.com and then tell Corbet what you think.

HANNITY: Let me ask you this last question. This is important. Bill Clinton was at the White House yesterday when they were dotting the I's and crossing the T's. There was contact made with Sestak's brother in this particular case.

Doesn't it seem like they were trying to get everybody's story in line?


HANNITY: And isn't that foolish on their part? It seems —

MORRIS: Obviously they were trying to do it and obviously they released it on a Friday because they didn't know you'd have a show.

HANNITY: I wasn't supposed to.

MORRIS: It was a special show you had —

HANNITY: Yes., we did.

MORRIS: They thought everybody would just go home for the weekend. They always —

HANNITY: I'm here. I'm on the case, Morris, I'm in.

MORRIS: They always dumb negative news the Friday of a four-day weekend.

But the point I'm making is that they have — is that if you take at face value what they're doing, number one, it's sleazy, number two, it's un-Democratic and Chicago Cook County machinist. But number three, in my opinion, it may be an impeachable offense.

HANNITY: Wow. All right. We have a lot to get to.

Dick, thanks for being with us on this special edition of "Hannity."

MORRIS: Thank you.

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