This is a rush transcript of "Special Report With Bret Baier" from August 28, 2009. This copy may not be in its final form and may be updated.


FORMER VICE PRESIDENT DICK CHENEY: The approach of the Obama administration should be to come to those people who were involved in that policy and say "How did you do it? What were the keys to keeping us, the country safe over that period of time?"

Instead they're out there now threatening to disbar the lawyers who gave us the legal opinions, threatening, contrary t o what the president originally said, they will go out and investigate the CIA personnel who carried out those investigations.


SHANNON BREAM, GUEST HOST: That was former vice president Dick Cheney telling Chris Wallace exactly what he thinks about the Justice Department's criminal investigation into alleged abuses by CIA interrogators.

Let's get reaction from our panel: Fred Barnes, executive editor of The Weekly Standard; Juan Williams, news analyst for National Public Radio, and the syndicated columnist Charles Krauthammer.

Welcome all.

Fred, I will start with you. As the former vice president suggested, the Obama administration should go to those interrogators and ask for their advice. That's not going to happen but where do you think the administration goes with this now?

FRED BARNES, EXECUTIVE EDITOR, THE WEEKLY STANDARD: They are going forward with an investigation to see if they want to prosecute, criminally indict the CIA interrogators.

And I believe they are emasculating the entire CIA, which at one point was an important intelligence gathering operation, and it doesn't seem to now.

I mean, the CIA director Leon Panetta has suffered more losses this year than the Washington Nationals baseball team.

BREAM: That's saying something.

BARNES: There is supposed to be some tension inside the administration, and yet he has lost every fight to the Justice Department and Attorney General Eric Holder.

And I don't see how he can stay in the administration much longer. I mean, the CIA no longer even has the obligation of actually interrogating, doing the interrogation of terror suspects anymore. That has gone to the FBI.

And the other thing you have to remember is this is not a new case. You know, there was a task force in the Justice Department in the Bush administration done by the full-time, professional prosecutors who looked into all the interrogations by the CIA interrogators and said there is not enough evidence, there would be no conviction here, and that the case should be dropped.

So this case is being reopened by Eric Holder, and I think entirely for political reasons.

BREAM: And Juan, as we're learning more and more about what happened behind the scenes that led up to this point, what do you make of the way that it was handled by the administration?

JUAN WILLIAMS, NEWS ANALYST, NATIONAL PUBLIC RADIO: Well, there is a great deal of reports now coming out that indicate there is a civil war within the administration over this very topic.

The key players, as Fred just said, would be CIA Director Panetta and the Attorney General Eric Holder, Holder feeling that he has to represent the notion that you follow the facts and then enforce the law without favor. But Leon Panetta making the case that, listen, the administration, and in particular, Rahm Emanuel had said that the administration wasn't interested in pursuing legal action against the CIA operatives who were engaged in these interrogations. But in specific response to Vice President Cheney, who said the administration should be coming to people and asking for advice, I would say it is a two-way street. He should be, instead of saying the country is less safe, which he said a while back, under the Obama administration, he should be offering himself up as someone who is saying here is what we think worked, and we understand that there were problems.

And they were real problems in terms of violating U.S. laws against torture.

BREAM: Charles, of the players here, who survives? Fred suggests maybe Panetta is not going to. What do you make of it?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: Even if he is nominally in power he is completely marginalized. Juan says it is a civil war. If it's a civil war, we already have seen that it is over. It's over, and Panetta handed over his sword.

Everything he has fought over he has lost, and these aren't just marginal territorial turf disputes. These are core interests. Number one, he opposed the release of documents, and twice he lost on that. Secondly, he opposed the appointment of a prosecutor. Of course, a prosecutor has just been appointed.

And lastly, and most importantly, the interrogation of high-level enemy terrorists has been removed from the CIA. It's now in the hands of the FBI and White House.

Now, what's left? Signal intelligence is not CIA, it's NSA. Human intelligence, any important intelligence is not CIA anymore. It's in the FBI and the White House.

So it is Central Intelligence, but it doesn't gather intelligence. All that's left is analyzing intelligence. Well, you don't need $30 billion a year for analysis. You can hire the RAND corporation who will do it at 1/100th of the cost and save billions of dollars that you waste on the cash for clunkers an purchase every secondhand car in America.

This is a real institutional problem. And what has happened is that the Obama administration has relegated the CIA to the role it had pre- 9/11, and we know what that resulted in.

BREAM: And there were walls there. There weren't great relationships and communication between the different agencies. Do you see the walls going back up — Fred?

BARNES: I think there were already up. As Charles said, Panetta has been marginalized.

And here this case is being investigated now by a special prosecutor appointed by Holder when there is no new evidence. It was investigated by the Justice Department before fully. They came to a conclusion. And now that conclusion is being upset by Eric Holder.

It does tell you something about the Obama administration. I think Holder would not be moving ahead on this, and I think you will agree, Juan, unless the president agreed. If the president didn't agree, he would tell him not to do it, because it is not just that there are new facts out there that Holder has to pursue. They are no new facts. There are the old facts, and they've been looked at before.

And this is being done, I assume, with President Obama's full approval.

WILLIAMS: Well, there is a difference between approval and not telling him to stop. And I think that President Obama's position is the attorney general should be an independent force when it comes to the law, that the problem the Bush administration got into was when it was perceived that Alberto Gonzalez was simply following marching orders coming from the White House.

And I might add, there is a problem with politicization of the CIA — don't forget the arguments about whether or not Vice President Cheney and others were demanding that the CIA give them certain information to justify preexisting ideas.

BARNES: Juan, we know that's not true! That's a canard. You shouldn't repeat.

WILLIAMS: But that is the whole notion of politicization if you want to get into the CIA and their problems.

But Steve Pressman, the CIA lawyer went to Holder directly and said to him, these things have been investigated, as Fred said, and they have been found not to be the basis for further investigation. Why do we need John Durham to come in at this time and start a new investigation?

Apparently Holder is of the mind that Congress will have their own investigations, and you can't have the administration get caught a step behind while Congress is running off, and this possibly could be a moderating force.

KRAUTHAMMER: If you have career prosecutors who have looked at this and decided it was not something you would want to prosecute, and they are not political, and you have no new evidence, as everybody agrees, then you have to assume that the Holder decision itself is political. And Obama, as president, ought to exercise authority over a political decision like that in the name of the national interest. He pretends it is out of his hands. It is not. It is in his hands, and his pretension is cynical and cowardly.

BREAM: We will give Charles the final word on that, but much more coming up. An unwelcome dictator, the deadliest month in Afghanistan, and who is willing to fill Ted Kennedy's shoes? All that coming up with the panel in the lightning round.



REP. JOHN ADLER, D-N.J.: I'm very hopeful that the State Department will limit his travel. He can go to international territory at the U.N. He should land by helicopter and then get out of our country.


BREAM: That pretty much sums up the feeling of many in New Jersey and elsewhere about the prospect of Libyan leader Muammar Ghadafi coming to the U.S. next month to address the United Nations.

It's the first topic in the Friday lightning round, and Charles, we'll start with you. We have a unique problem with the U.N. because when people come in they're coming to U.N. territory whether we like them or not. What do you think of this latest dustup?

KRAUTHAMMER: And we have a treaty under which we have to welcome these miscreants.

This is not the first time. It happened with Castro, with Iranian leaders, with PLO leaders. There is only one solution, and that is to terminate the agreement to have the U.N. and U.S., kick them out, and have them in Kinshasa where they won't get a lot of press and the damage done in the U.N. will be vastly decreased.

BREAM: Juan, too much hype?


WILLIAMS: That's pretty amazing what Mr. Krauthammer just said. That is pretty stunning.

I think there is tremendous advantage to the U.S. and prestige and value to having the United Nations in the United States of America. Let me just said that to be clear. But what we have here is a situation that's kind of curious. I don't hear anyone saying Gordon Brown, the British or the Scottish leadership, the people who let this miscreant free, should somehow not be allowed to come here. But I think when you think about what Ghadafi has done, the U.S. is within its rights and the American people are within their rights to let it be known that we don't approve of this.

BREAM: And Fred, as James Rosen reported tonight, it looks like he will not try this big the campout in Englewood, New Jersey. They are looking for a five star hotel for him in Manhattan. It has to be first floor because he doesn't do elevators. What do you think of him staying in Manhattan?

BARNES: He is going to come. There is no way to get around it. Was it last year or the year before where Ahmadinejad from Iran came and he spoke, and weird things happened to him? He said later when he was up there speaking, so that's going to happen.

But I agree with Charles. Years ago, it was an old right wing saying, you know, get the U.S. out of the U.N. and the U.N. out of the U.S. And now Charles has popularized it, and I agree.

WILLIAMS: This will be terrible for the U.S., damage our international reputation. And it was the U.S. that requested that the U.N. there.

But go right ahead. We're in the lightning round.

BREAM: We are in the lightning round.

KRAUTHAMMER: It would free up a lot of parking spaces.

BREAM: There is some very valuable real estate there.

All right, let's talk about Afghanistan. As Jennifer Griffin reported today, there is this NATO policy that is forcing marines to turn over insurgents and detainees they have captured before they have a chance to interrogate them.

And often they say when they return over to Afghan authorities, they are just releasing them back out onto the battlefield. Juan, what do you make of that?

WILLIAMS: It doesn't make sense. Essentially that's handicapping U.S. forces and our efforts in Afghanistan at a time when we just went through the deadliest month in terms of death there.

So this is all part of what General Stanley McChrystal is up against. He has to figure out how to handle the strategy, how to protect people to make people feel confident in U.S. force's ability.

And part of it maybe that you at least temporarily have to raise the number of troops.

BREAM: Charles, your take?

KRAUTHAMMER: I wouldn't respond in that way. What I would do, you go to the government of Afghanistan. You change the policy. If not, you abrogate it unilaterally. What are the Afghans going to do? Expel us? Absolutely not.

This is costing American lives. It can't be tolerated.

BREAM: Can we make it workable in any way, Fred?

BARNES: You cannot make it workable. You have to pretend it's not there and go ahead with what you would do if you really wanted to win the war.

What I worry about, though, is not so much that rule as what's going to happen with President Obama when he gets a request later this year to send in more troops. They're needed, but support for that in the United States is sinking very quickly, and I'm not sure what he will do.

BREAM: All right, true lightning round, only a few seconds left, so I will ask each of you to talk about Senator Kennedy passing, who is going to get the health care legislation done?

I will just ask each of you to tell me, do you think he is overrated as a negotiator and a compromise artist, or do you think it's accurate and anyone can step in — Charles?

KRAUTHAMMER: He was a great negotiator, but Obama-care is such a wreck that it would not have succeeded with Kennedy or without. It is absolutely irrelevant.

BREAM: Juan?

WILLIAMS: No, he was a negotiator, and, given his personality and the Kennedy legacy, he would have been able to wrangle some of the conservative Democrats and would have made a difference.

BARNES: He was a good negotiator on smaller things. On big ones like immigration and health care, no.

BREAM: Thank you, panel.

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