This is a rush transcript from "Special Report with Bret Baier," May 17, 2017. This copy may not be in its final form and may be updated.
BRET BAIER, ANCHOR: Again, the news, breaking at the top of the hour that the former FBI director Robert Mueller has been named special counsel to oversee the investigation into the Russian activities to interfere with the 2016 election and, quote, "other related matters" which obviously deals with the allegations of collusion.
Let's bring in the panel early. We welcome back Fox News chief intelligence correspondent Catherine Herridge; Steve Hayes, editor in chief of The Weekly Standard; Anna Palmer, senior Washington correspondent for Politico, and Byron York, chief political correspondent for The Washington Examiner. Byron, your thoughts on this?
BYRON YORK, WASHINGTON EXAMINER: Well, a couple things. The thing about this, remember that most Republicans on Capitol Hill opposed the appointment of a special counsel. So I think there's two reactions now. One, if there has to be one, the choice of Robert Mueller is a good one. He's a very respected man.
But they are worried about a wild goose chase. The order creating this office does say that Mueller has the authority, one, to look into any possible coordination between Trump and the Russians and, two, any matters that arose or may arise directly from the investigation. So U.S. senator just said to me I guess it depends on what the word "matters" means and what the word "directly" means, because they remember the CIA leak case, if you remember that, that it was alleged perjury involved in that. What happened is the appointment of a special counsel was followed by years and years of investigation. If we follow the same pattern here, we will be talking about this investigation in 2020.
BAIER: Let's just put this in context. Robert Mueller has the power of the U.S. attorney. He has the power to convene a grand jury. He has the power to basically, Anna, say to the Trump White House I need to see the president's tax returns.
ANNA PALMER, POLITICO: I don't think there's a lot of thought that he's going to go there necessarily.
BAIER: Right away.
PALMER: But you could see this kind of be a wild goose chase. And I think right now you're seeing the political gymnastics of Republicans who for months have said they don't think there should be a special prosecutor, and now they are going to have to back this up. I think Mueller is going to be a good choice probably from their perspective, but certainly it's going to be something that were going to be covering for the next several months if not years.
BAIER: OK, this is Dianne Feinstein, obviously a Democrat from California, releasing a statement just moments ago. "The appointment of Bob Mueller a special counsel for the Russian investigation is a good first step to get to the bottom of the many questions we have about Russian interference in our election and possible ties to the president. Bob was a fine U.S. attorney, great FBI director, and there's no better person who could be asked to perform this function. He is respected, he is talented, and he has the knowledge and ability to do the right thing." Steve, it sounds like Democrats are saying this works for them.
STEVE HAYES, THE WEEKLY STANDARD: Some Republicans, too. I think he's been met early on with bipartisan approval. I think what makes it so interesting, if you look at his statement, the Rosenstein statement, he said that this should be read as a determination that any crimes have been committed, that anybody is going to be prosecuted. It's the launching of an investigation or the continuing of investigation.
But I think there are several reasons why Rosenstein had to take the step. Presumably he's not -- and you ask this of Senator Lankford. He's not seen just the one memo that was reported on in The New York Times yesterday, but presumably he has seen the other memos that James Comey authored, some of them classified.
Second, I think he knows the status of the investigation more broadly and thought that this was the next logical step. But you can't, I think, diminish the importance of public perception here. This has been this back-and-forth where nobody trusts anybody on any side. The Trump administration doesn't trust reporters, talks about fake news. Reporters don't trust the word that's coming out of the Trump administration. Republicans don't trust Democrats. Democrats don't trust Republicans. And I think this was an effort by Rosenstein to say we're going to isolate all of that and try to pick somebody with widespread personal appeal who is viewed as a man of integrity to say here it is. Give it a look.
BAIER: We should point out, Catherine, that a couple things we know. We know the president has said he was told he was not a target of the investigation. We know that Senator Grassley and Senator Feinstein indicated that Comey told them basically the same thing. We know that there have been subpoenas already for Michael Flynn's records, the former national security adviser. And we understand there are more actions on Paul Manafort, the former campaign manager for the Trump campaign. That's where we are, and we are also dealing with reports of these memos that we know are there from our own reporting.
CATHERINE HERRIDGE, FOX NEWS: That's right. One of the things that strikes me this evening is that given Robert Mueller's track record, he's not someone who engages with the media. He doesn't hold news conferences unless it's absolutely warranted. And he is certainly not someone who is known to leak information.
I believe the appointment of this special counsel may in some ways have the effect of drawing a line under this particular episode, at least in the short term, because there's not going to be this ongoing discussion of, should there be a special counsel, should there not be a special counsel?
The other point I would make is that buried in all of the news today is that we appear to be down to a short-list for FBI director. There are four candidates, and we could be looking at an announcement by the end of this week. And it is a strong choice that Republicans and Democrats can get behind, perhaps like former senator Joe Lieberman, that may too draw a line under that part of the story.
So I think we may be looking at a case going forward where a lot of the noise surrounding the story may go off to the side burner at least temporarily.
BAIER: So you think the people who met today are the final four candidates?
HERRIDGE: I believe that they are focusing in on those four.
BAIER: Let's put them up, I think we have full screens of them. Andrew McCabe, who is the acting FBI director, Frank Keating, former Oklahoma governor. We also have Richard McFeely, former FBI official, and, as you mentioned, Joe Lieberman, a former Connecticut senator and the chair of the Senate Homeland Security Committee, a good friend of John McCain's and Lindsey Graham's.
HERRIDGE: That's right. The one thing we've heard consistently in our reporting is that they want somebody who can really get into that job almost immediately, not have a steep learning curve. So you need someone with strong Justice Department experience or a strong experience dealing directly with the FBI. Many of those candidates have that kind of experience, at least half of them, and that would be to the advantage of the administration, and also to select someone that both sides can get behind.
It was somewhat surprising today that Alice Fisher, former Justice Department official under President Bush, withdrew from selection. She was seen as someone who really had the roadmap for the FBI, could jump right in. And it's not lost on the decision-makers based on my reporting the significance of nominating a woman to the job. But gender was never going to be the deciding factor here.
BAIER: And we obviously saw John Cornyn and Trey Gowdy pull their names out as well.
But Catherine makes an interesting point. Does this move put everything on hold for a little while, that maybe Washington exhales, and the president gets ready for a big foreign trip that the White House is suggesting it's going to change the dynamic of his foreign policy?
YORK: You mean we all calm down?
BAIER: Just a little.
YORK: I don't think so. I think that there could be a turf effect between the investigations that are going on Capitol Hill, specifically the Senate intelligence committee investigation and now the new start-up Mueller investigation, because when you are running the Senate investigation, and they are very proud of how they are doing in a bipartisan way and all that. I think they're making a lot of progress. When there's this new investigation going on, if witnesses are not already lawyered up, they are going to get lawyered up. They are going to be more hesitant to talk to the Senate because they are facing an interview under oath probably with these new investigators. So I think it actually could create some sort of conflict, even though the Democrats on the committee have been saying they wanted this to happen. Not sure it's the best thing for the Senate investigation.
BAIER: What does it do for the mood at the White House, Anna, which has been, I think it's fair to say, chaotic behind the scenes.
PALMER: I think that's an understatement probably from what we've been talking to people working there. I think this may be a reset moment. Certainly Trump is looking to have that happen abroad, and this ongoing scandal I think in the short term this probably helps them. There is this stability about what's going to happen. They can move on to the FBI director position. But I think there's got to be some nervousness about where does this investigation go.
HAYES: The one thing that's an unknown at this point that will I think determine the answer to your question is, how does President Trump react? What does he do? What does he tweet? Does he tweet anything? Does he attack Bob Mueller? Does he attack the process? You are monitoring this. That's good. What does he say? Does he try to preemptively undermine this process? We know that he said he thinks this is all -- he has called it a hoax. He thinks this is all baloney. And now this is escalating the process. It's taking the investigation to another level.
BAIER: But he also did tell Lester Holt that no one told Jim Comey to stop the investigation. That's what he said. And he also said I wanted speed up, make this faster. Does this make it faster?
HAYES: No, I don't think it makes it faster. And I don't think it creates space for the Republicans in Congress to implement their agenda. I think the other major implication from this, besides the fact itself, is this has a devastating effect for the Republican agenda. I can't imagine that they're going to be able to focus on tax reform. Even if it's true, and Catherine is certainly right that Bob Mueller doesn't have the reputation of being somebody who goes out and glad hands that press and leaks and gives a lot of -- this is going to be in the news and it's going to dominate the news.
BAIER: It will dominate the news.
And I want to point back to Robert Mueller, and this is some sound from 2013, talking about James Comey.
(BEGIN VIDEO CLIP)
ROBERT MUELLER, FORMER FBI DIRECTOR: I have had the opportunity to work with Jim for a number of years in the Department of Justice, and I have found him to be a man of honesty, dedication, and integrity. His experience, his judgment, and his strong sense of duty will benefit not only the bureau but the country as a whole.
(END VIDEO CLIP)
BAIER: So that's just an interesting dynamic to this whole thing, Catherine, that he is now the special counsel that is picking up the ball from the guy who was fired who was then his deputy.
HERRIDGE: It's a small circle when you get to that kind of senior executive level within the law enforcement community. And Director Mueller released a side-by-side with his then deputy James Comey, and they threaten to resign with the Bush White House over the warrantless wiretapping or the surveillance program.
And we talked about this at the beginning, but I think it's worth emphasizing to people that when Comey's position about how events transpired was challenged by the White House, it was Robert Mueller's notes that vindicated Comey's position. And believe me, if you've ever known a lawyer or lived with a lawyer or worked with a lawyer, they take notes like they wash their hair every morning. This is just in their bloodstream.
And so the idea that former FBI director Comey was documenting or memorializing these conversations with the president at the White House is significant. And just as an aside, the head of the Senate Judiciary Committee, Chuck Grassley, is now asking for any memos that go back under the Obama administration and that may be relevant to the Russia case. So what we see is sort of an expansion of the avenues that we're going down this evening.
BAIER: Which is kind of what I brought up with Lankford earlier, the whole Clinton and tarmac and Loretta Lynch. It kind of opens up a lot of doors.
YORK: If you read this letter from Charles Grassley and Dianne Feinstein, they want all the Comey memos having to do with Trump, and they want the Comey memos having to do with the Clinton email investigation, assuming there are some. They want all of this stuff. And a request when it comes from the Republican and the Democrat really has quite a lot of strength to it.
BAIER: Meanwhile, the White House desperately tries to turn the page to the foreign trip and all that's going to happen on that?
PALMER: Yes, I think that's what they're doing. Treasury Secretary Steven Mnuchin was up on Capitol Hill. They are trying to plod along on tax reform among this swirl of news even though no one is actually paying attention to it. He is moving ahead. He had a series of meetings today and my understanding is they continue throughout the week.
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