This is a rush transcript from "Hannity," May 25, 2010. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Pennsylvania Congressman Joe Sestak continues to insist that the Obama administration offered him a job to bow out of the Democratic Senate primary. Now at this point, we face one of two possibilities: Either Sestak, a Democratic nominee for Senate, is lying, or the White House is lying and may have committed a crime.

Now to figure it out, let's go all the way back to the beginning on February 18th. Now, Sestak told Philadelphia radio talk show host Larry Kane that the White House had offered him a job. Now Kane asked, quote, "Is it true that you were offered a high-ranking job in the administration in a bid to get you to drop out of the primary against Arlen Specter?" Sestak responded, "Yes," but he refused to specify what job.

Now since then, Sestak's story has remained unchanged. He appeared on this network the following day and he said this.


REP. JOE SESTAK , D-PA., SENATE CANDIDATE: I was asked a direct question yesterday, and I answered it honestly. There's nothing more to go into. I'm in this race now.


HANNITY: All right, now on March 10th, he sat down with our own Bret Baier and repeated the accusation. Let's look at this.


BRET BAIER, HOST: Did the White House offer you a job to not get in the primary?

SESTAK: And I answered that yes, and I answered it honestly. But to go beyond that, Bret, doesn't serve any purpose.

BAIER: Was it Navy secretary?

SESTAK: As I said, there's nothing to be gained by focusing on this politics stuff.


HANNITY: All right, now meanwhile, the White House did its best to sidestep all questions surrounding the issue. On March 11th, reporters — well, they started to get frustrated with propaganda minister Robert Gibbs.


UNIDENTIFIED MALE: Last Tuesday, you told us, "I don't have the update with me on Sestak."


UNIDENTIFIED MALE: Things have happened since then.

GIBBS: I don't have any...

UNIDENTIFIED MALE: … sent a letter to the White House counsel.

GIBBS: I don't have anything additional on that.

UNIDENTIFIED MALE: Are you ever going to have anything additional on it?

GIBBS: I don't have it today.


HANNITY: All right, now, last week, Sestak defeated Arlen Specter in the Pennsylvania Senate primary, and he repeated his accusation again on "Meet the Press" over the weekend.


DAVID GREGORY, HOST: Yes or no, straightforward question. Were you offered a job? And what was the job?

SESTAK: I was offered a job. And I answered that.

GREGORY: You said, no, you wouldn't take the job. Was it the secretary...

SESTAK: Right. And I also said...

GREGORY: ... of the Navy?


GREGORY: Was it the secretary of the Navy job?

SESTAK: Anything that goes beyond that is others — for others to talk about.


HANNITY: All right, now Sestak's victory turned the tables on the White House. The administration is now forced to either back the Democratic nominee or accuse him of lying. Well, Robert Gibbs — he decided to admit Sunday that, well, maybe the White House did have a little chat with Mr. Sestak.


GIBBS: I'm not a lawyer, but lawyers in the White House and others have looked into conversations that were had with Congressman Sestak, and nothing inappropriate happened.


HANNITY: All right, so who's lying here? Joining me now with reaction to all this is Sestak's opponent in the November Senate election, former GOP congressman Pat Toomey. Congressman, it's good to see you. Thanks for being here.

PAT TOOMEY, R-PA., SENATE CANDIDATE: Thanks for having me.

HANNITY: Or should I say senator?

TOOMEY: Well, not yet. We'll get there.

HANNITY: All right, the White House lawyers looked at it, "There's nothing to worry about here."

TOOMEY: Oh, well, I — I — I beg to differ on that. And as I suggested, you know, Joe Sestak and I fundamentally disagree on just about every policy issue of the day. He's got 100 percent voting record with Nancy Pelosi, supports the whole big leftward lurch agenda. That's what we ought to be talking about, but this has become a big distraction. So I think he ought to come clean, clear the air, be forthcoming.

HANNITY: All right, I've read your statement from yesterday. It sounded benign to me. You said he should come clean, we should talk about the issues that matter. And I thought it would be — if it was my opponent, I think I'd be a little stronger. I think I'd say, "One of the two is lying. Either you were offered a job or wasn't offered a job."

Now, David Axelrod said that this would constitute a — Axelrod's words — a serious breach of law. Is this politics or is this about law?

TOOMEY: Well, you know, if Joe is going to be the man of principle that he says he's going to be in this campaign, I think he would be more forthcoming. And I've said so, and I think he ought to do that.

HANNITY: Right. All right. So but — so he's admitted that they offered him a job. He said it repeatedly.

TOOMEY: Right.

HANNITY: OK, so now the question is — he won't tell the people of Pennsylvania or the country what job was offered. So is that what he needs to come clean on?

TOOMEY: I think he should relay this conversation. Who did he have the conversation with, and what was he offered? And then let the chips fall where they fall. If a crime was committed, then we ought to know that and we ought to pursue that. And if it wasn't, if it doesn't rise to that level because of the nature of the conversation, OK, then we can put this all behind us and focus on the important issues we ought to be focusing on.

HANNITY: All right, if, in fact, what Sestak is saying is true, and they offered him a job...

TOOMEY: Right.

HANNITY: ... a high-ranking job to get out of this primary, you know, what's your — you've been reading all about it.


HANNITY: I'm sure you're following it more closely than anybody. Do you see any legal issues?

TOOMEY: Yes. It seems to me if it actually transpired that way, there's a federal statute that forbids offering a job in return for political favors.

HANNITY: Yes. All right, now, Eric Holder is actually saying no special counsel.

TOOMEY: Well, you know, it — they're making it hard to get to the bottom of this, aren't they.

HANNITY: Well, they're refusing to appoint a special counsel. Darrell Issa is asking for one in this particular case. Do you think, at some point they're going to have to come clean, or does Robert Gibbs get to do his dance for another, you know, five months?

TOOMEY: You know, I think it's looking increasingly like there's something that they're trying to hide. And if they would come clean on this, I think we all would be better off. And so hopefully, that's what will happen, but I'm not sure what it'll take, Sean.

HANNITY: All right, we — we're going to get into the actual legal aspect of this. Do you think it would be possible — and I guess this is speculation on your part — that a high-ranking member of the Obama administration would be able to make an offer for a high-profile job to get Sestak out of the race without the president's approval? Is that possible?

TOOMEY: You know, it's a good question. I don't know. I don't know how they're operating within the White House. I don't know what sort of chain of command they're following. You know, I don't know, but it's a legitimate question.

HANNITY: Are we getting to the point — what did the president know and when did he know it?

TOOMEY: If he knew anything about it. But apparently, somebody at the White House did. They've acknowledged that a conversation occurred.

HANNITY: All right, let's talk a little bit about some of the differences. Pennsylvania — always a hard state for a Republican statewide to win. Why do you think that you have such a good shot this year? The polls have shown that you've done — so far, you've been doing pretty well.

TOOMEY: We're doing great, Sean. And the fact is, most Pennsylvanians understand that the federal government has gone off the tracks here — way too much spending, huge growth in government, you know, serial bail-outs of failing companies, nationalizing whole industries, unprecedented deficits and debt, cap-and-trade, card check, government-run health care.

And Joe Sestak supports that entire agenda. And his only criticism of the individual items on that agenda has been when they don't go far enough. That's not where Pennsylvania is. We need to get our fiscal house in order. We've got to get spending under control. We've got to create job growth in the private sector. As a guy who is a small business owner, I know how do that. And I think Pennsylvania voters want that kind of change.

HANNITY: When we go back to when you challenged Arlen Specter, when he was a Republican back in — what, six years ago...

TOOMEY: Right.

HANNITY: ... a lot of establishment Republicans didn't support you. You were the — by far, the more conservative candidate.

TOOMEY: That's true.

HANNITY: And we saw what happened with Arlen Specter. What are your thoughts on Arlen Specter today?

TOOMEY: Well, I think Arlen Specter stayed around a little too long. He could have gone out as a — you know, a widely respected man for having spent a lot of time and given a lot of service. But he, you know, had to go for one more race, and I think he overstayed his welcome.

HANNITY: All right, Pat Toomey, we're going to be watching this race very, very closely. Appreciate it.

TOOMEY: Thanks for having me, Sean.

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