This is a rush transcript of "Special Report With Bret Baier" from January 4, 2010. This copy may not be in its final form and may be updated.


JOHN BRENNAN, ASSISTANT TO THE PRESIDENT FOR HOMELAND SECURITY AND COUNTERTERRORISM: This president is determined, and I think it is demonstrated in his language. He says that we are at war with Al Qaeda. We will destroy Al Qaeda the organization, and we're going to demonstrate through our actions whether it be in Afghanistan or Pakistan, Yemen and other places, that Al Qa eda might be able to run but they are not going to be able to hide.

SECRETARY OF STATE HILLARY CLINTON: The instability in Yemen is a threat to regional stability and even global stability. And we are working with Qatar and others to think of the best way forward to try to d eal with the security concerns.


BRET BAIER, HOST: The focus is Yemen. Today the government of Yemen launched new attacks against a stronghold, Al Qaeda stronghold, just outside the capital city. This as the president met again with his counterterrorism adviser in the Oval Office, talking about the situation there.

The U.S. embassy remained closed for a second day as did the British embassy and Japan, Germany and France also sensing some peril there in the capital city of Sana'a, closing their embassies as well.

What about this situation? Let's bring in our panel: Steve Hayes, senior writer for The Weekly Standard; A.B. Stoddard, associate editor of The Hill, and syndicated columnist Charles Krauthammer. Happy New Year to all of you.

Charles, the situation in Yemen, where do we go from here?

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: There are two issues in Yemen. The first is how do you fight Al Qaeda there? And nobody is saying about opening a third front in the War on Terror. We had General Petraeus over at the capital today. The idea is to strengthen the weak central government and increase our participation in the air strikes, for example.

But the second issue is this — why, apart from weakening Al Qaeda directly, are we going to stop gratuitously and insanely strengthening Al Qaeda with the release of Yemenis being held in our custody?

We already know that some of those who were released in the Bush years are the leaders of Al Qaeda in Yemen today. There were six Yemenis released last month. And now we have apparently negotiated an agreement with the government that they will hold onto these, well I'm not so sure it's going to work.

We already know that all the attackers on the USS Cole, all of them who were held in Yemen are now free, either released or broke out of jail. So that is a rather weak straw that you want to lean on.

And the issue is with the 91 Yemenis remaining in Guantanamo, there is no way — and these are the worst of the worst, because a lot of them already are released — why do have a president who keeps maintaining again and again that his priority number one in the war on terrorism is the closing of Guantanamo?

I just want to ask one question, because what we heard on Sunday from spokesman after spokesman is it is a rallying cry and a tool of terrorism. Imagine if Guantanamo disappeared overnight in a tsunami today. Would that make any difference whatsoever on recruiting for Al Qaeda in Yemen, Saudi Arabia or Afghanistan? It would make none.

The list of grievances, excuses and causes of Al Qaeda is endless. Closing Guantanamo will do only one thing, it will strengthen Al Qaeda because it will help in the recruiting in the sense of sending them already hardened terrorists who will take up the fight again.

BAIER: A.B., John Brennan among others on the Sunday talk shows defending the administration's point of view, saying that a lot of these Yemenis were released under the Bush administration, and we heard the Bush administration mentioned many times. He did it again this weekend.

A.B. STODDARD, ASSOCIATE EDITOR, THE HILL: Sending John Brennan out to the Sunday shows to offer this sort of bold and firm and resolute response that initially did not come from President Obama a week ago was a clear signal that they recognize that that former Vice President Dick Cheney and others Republicans are driving and controlling this entire narrative about President Obama's terror policies.

As for Yemen, American's are learning just now that this administration has been working for some time to try to coordinate with the Yemeni government to share intelligence and, of course, that they coordinated on those air strikes on December 17th and 24th on Al Qaeda leaders there.

However, as they hear about it now, after the fact, after an attack was foiled by a passenger and some bad luck in the underwear of the would-be Christmas Day bomber, they are also learning about, as Charles points out, how dangerous the detainees who have left Guantanamo Bay in the Bush administration have become, directing this very Christmas Day attack. After attending a therapy rehabilitation program in Saudi Arabia, one of them became Abdulmutallab's trainer.

So I think that there is literally bipartisan panic in the Congress right now about sending any more detainees back to Yemen and it would be very hard for the administration to defend that policy.

BAIER: Steve?

STEVES HAYES, THE WEEKLY STANDARD: Look, what I want to know is what was John Brennan's point in raising the Bush administration? You had some of us, myself included, who have been critical of the Bush administration's release of these folks. But what is John Brennan's point?

His point is purely political. If he were actually going to correct the mistake and stop releasing people from Guantanamo Bay, he could claim that he is making a policy argument, a substantive argument. There is no other point for him to make other than a political one and say "I'm blaming my predecessor for this release," if he is not actually going to actually fix the mistake.

What you have seen from the administration over the past week is a complete revisionist history on Yemen. The first article that I wrote at The Weekly Standard under Barack Obama was a long piece about Yemen. The administration policy at the time was that a majority of the Yemenis kept in Guantanamo Bay were not only to be repatriated to Yemen but repatriated and released.

At the time there were about 100 of them, so you're talking about more than 50 people there — 75 percent of the Yemenis at Gitmo have been through an Al Qaeda training camp; 75 percent of the Yemenis at Gitmo have stayed in an Al Qaeda guesthouse, something that A.B. couldn't do if she just happened to come into contact with Al Qaeda.

This was a flawed policy from the beginning. This was nowhere in the president's rhetoric for a year.

BAIER: He didn't give any speeches about Yemen and didn't mention Yemen.

HAYES: He mentioned Yemen occasionally, but he said the centerpiece of the counterterrorism policy, as Charles said, was to close Guantanamo Bay.

This is revisionist history on Yemen, and I hope the mainstream media doesn't let him get away with it. There is a lot there.

BAIER: Charles, let me ask you about the possibility of U.S. military action in Yemen. What do you think about that?

KRAUTHAMMER: It is not a place we want to go and invade. It is like Afghanistan. It is a wild place. It's like the northwest territories of Pakistan. It's never had a strong central government. It's got secessionist in the south, Houthis in the north who are Arabian clients. It is so complicated it's almost incomprehensible.

All we can do is have our weaponry in place, like the Predators, gather intelligence, give intelligence, and work with the unreliable central government. It is not a place where you want to start a war.

But remember, the Saudis and Jordanians are in that area and they are on our side. I would rather have the locals involved in a war than a direct involvement of the United States.

BAIER: And A.B., quickly, General Petraeus was there this weekend and met with officials there, are saying that the U.S. would double, more than double the counterterrorism funding of $67 million. There's some questions about what they have done with the previous money and what additional money would do. Plus, Congress has to approve all that.

STODDARD: Right, that's true. I have a feeling with the news of this threat — which is news to many Americans — that Congress will approve it but there a always a question of whether or not the Yemeni government, which is weak, can be trusted to use the money for counterterrorism and not to pay off tribes and other people they depend on for political power.

BAIER: We continue this discussion. Should the man who authorities say tried to blow up that airline in Detroit, over Detroit, be tried as a criminal or an enemy combatant? The panel discusses that in a few minutes.



BRENNAN: I'm not going to address exactly what he did before or after he was — talked with his lawyer. He knows that there are certain things on the table and if he wants to in fact engage with us in a productive manner, there are ways that he can do that.

SEN. KIT BOND, R-MO., SENATE INTELLIGENCE COMMITTEE: Any criminal lawyer has to tell him he has to be quiet, he has to shut up until months from now or maybe years from now when they come forth with a deal, saying if you tell us who your handlers were and who the other people were, we will limit your charges.

We should have held him as an enemy combatant and tried him under the military commissions.


BAIER: U.S. officials say the 23-year-old Nigerian Umar Farouk Abdulmutallab was talking to American authorities before he was given a lawyer, and then he stopped talking. There are still obviously questions about how he was able to board the plane ten days after that failed attempt.

But now there are questions about whether he should be charged as a criminal or an enemy combatant, as you heard on the Sunday talk shows. We're back with the panel. Steve?

HAYES: I thought Brennan's statement was rather stunning. Here you have a guy but for a faulty detonator would have killed 300 people on Christmas Day, and we are talking about a plea bargain.

And one of the things I think you have to do is stop and think about what a plea bargain means. It is not sort of a notional plea bargain, some vague plea bargain. It's actually trying to entice him to tell us what he knows by giving him things, by giving him leniency potentially or giving him years off, giving him a better jail cell.

You are going to be negotiating potentially with somebody who tried to kill 300 people encompass day. I find that absolutely stunning.

But the bigger problem for me is what aren't we learning from him today? What don't we know that we might have otherwise learned? He told the FBI apparently that he knew of others being sent to the United States. Who were they? Where were they trained? What techniques were they going to use? Were they trained in other techniques?

There was a battery of questions that we could ask him and could be asking him right now if we hadn't read him his rights. But now, all we will get from him in response to the questions is silence because we told him that he has the right to be silent, which I think is rather amazing.

BAIER: A.B., the political fallout here, what about this? Brennan said on "Fox News Sunday" there isn't an upside or downside to this decision. It is the decision we made.

STODDARD: Because it was already made.


STODDARD: And he can't argue that it would have been wrong to treat him as an enemy combatant. I think this will be very tough for Democrats to swallow, the idea, as Steve, is pointing out, plea bargaining and making offers to a terrorist.

I think when you see members return, that decision has been made, but the decision on Guantanamo, that is an open question. And so that's why you're going to see — although Democrats in Congress can't reverse the White House's decision, you see Senator Dianne Feinstein and Congress Thompson and Congressman Harman, Democrats on the intelligence committee who are their party's experts saying we have to halt the transfers of detainees from Yemen back to Yemen. We can't move them from Guantanamo back to Yemen. They will not be held there.

And so while it might be a possibility to keep them in the facility in Thompson, Illinois, while some of them may disagree with plea bargaining, I think that Guantanamo is going to be where the party comes down.

BAIER: If Abdulmutallab, Charles, said to the FBI or whomever that there is a long line of others like me, it is disconcerting if he is not talking now and can't tell us about the line.

KRAUTHAMMER: It is beyond disconcerting; it's insane. Here is a guy who, as Steve has said, the administration has admitted was trained, armed in Yemen, recruited in London. We closed our embassy this week, presumably because there are active threats emanating out of Al Qaeda, the same people involved in his mission.

Here is a guy who presumably knows stuff. At least he knows who trained him and who armed him and who was around him. He says there were other plots. The idea that you give him his rights is simply unbelievable.

And it isn't as if you have to decide in advance that he will get a civilian or military trial. You can seize him now as a military combatant as just as about everybody in Gitmo was and later decide if you want to put him in a military court or civil one. You don't have to decide that now. I'd prefer military, but it's irrelevant.

The question is how do you hold him at the beginning when you need information? And to give him a lawyer and know he is going to shut up and not say anything, and you give him chips with which he can bargain is absolutely unbelievable.

And this is what shows the un-seriousness of this administration on the war on terror. It is not that a guy slipped through the cracks. There are mistakes that have been made in the past that allowed a guy on an airplane. That can happen, it's a complex bureaucracy.

The un-seriousness is not how he got on the plane. The un- seriousness is what happened after. And the reflexive reaction of this administration which instantly gives him a lawyer, a guy who isn't entitled to any protection under the Geneva Convention or the U.S. constitution.

BAIER: Much more on this, I assure you.

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