This is a rush transcript from "Hannity," August 19, 2009. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Democrats like Barack Obama and Nancy Pelosi have accused concerned citizens attending health care town halls of being funded by special interests. And they have made those accusations despite having no evidence to support their claims.

But now shocking details have been uncovered that revealed that the people actually profiting from this debate are, in fact, high-profile members of their own party. And that is our headline tonight. "Conflict of Interest."

Now according to an investigation by Bloomberg News, a firm with close ties to White House senior adviser, David Axelrod, has received upwards of $12 million to produce ads supporting the president's health care plan. Now the company known as AKPD Message and Media was headed by Axelrod until he departed to join the Obama administration in December of '08.

And according to Politico.com, the company still owes him $2 million. Now another advertising firm that also received hundreds of millions of dollars from the Obama campaign is cashing in on the health care debate as well. Now that company known as GMMB employs a number of former Obama strategists.

And for more on this unbelievable story that is just beginning to unravel, I am joined by the author of "The Culture of Corruption: Obama and His Team of Tax Cheats, Crooks and Cronies," Michelle Malkin is back with us.

Video: Watch Sean's interview

Michelle, by the way, congratulations. Number one New York Times bestseller. Three weeks in a row. Way to go.


HANNITY: All right. This story fits right into a lot of what you chronicled in the book here. Now if this — with David Axelrod being owed this money and these firms now being so closely connected to this debate, is a clear conflict of interest in my mind. I wanted to get your thoughts on it.

MALKIN: Most definitely. This case is a perfect illustration of so many of the things that I hit on in "Culture of Corruption." The self-dealing, the sanctimony and the Chicago pay-for-play politics that Barack Obama and his team have brought to the Potomac.

David Axelrod is the master of Astroturf. That's what AKPD and another of his secretive firms ASK Public Strategies have specialized in. And here we have the pot calling the kettle black.

You have Robert Gibbs and the entire Democrat majority leadership going out there and smearing the grassroots tea party and taxpayer counterinsurgency movement as the ones who are directed from the top down, when it's people within their own White House, starting with the senior adviser, David Axelrod, who have been profiting mightily off of this.


MALKIN: And it's — both AKPD and GMMB raked in $344 million combined last year doing advertising for Barack Obama. And now, of course, it's revealed by Bloomberg, by the Associated Press that these two firms have raked in between $12 and $24 million doing advertising that is funded, not only by big pharma, but also by the SCIU, AARP, AMA, and Families USA.

HANNITY: All right. Now, beyond the obvious conflict of interest and the appearance of impropriety here, don't we need an investigation into very specifically whether Axelrod and his friends and associates negotiated any part of this? Because, certainly, the American people would need to know, right?

MALKIN: Yes. We need full disclosure and the kind of transparency that Barack Obama promised when he was ushered into office. We need to know why there weren't recusals or disclosures from David Axelrod every time he went on TV to push Obama-care at the same time that his former firm was getting money from big pharma to advertise for it.

And we're getting a lot of denials, blanket denials now from the White House. But look, every time the White House denies something, then they turn around and admit that their accusers were right. That certainly was the case with these White House e-mails and FOX News being the first and only one to question them on that.

And I think that all of this requires a White House reality check. Where are those people who — to investigate fishy deals and...


MALKIN: ... fishy information, or lack thereof?

HANNITY: Well, we have more evidence, though, of the Chicago thug-style politics and the Chicago way. I don't know if you saw this, but we know that Henry Waxman, for example, sent out a letter. 52 insurance companies are the recipients of this and they're demanding in great specificity documents about compensation, about their business practices.

Clearly an effort that they want to go up there and intimidate, harass and use this as a form of demonization of the health care industry that they have now focused their attention on in terms of hating. This is health insurance reform. This is not, you know, government-run health care.

So does that concern you, these intimidation efforts?

MALKIN: Well, yes, because it's a case of double dealing and distraction. Because at the same time you have Waxman and Pelosi out there demonizing these health insurers and these private corporations, you've got the Obama administration officials with their hands out collecting money from them.

And David Axelrod is only one of many officials who have taken money from what they consider the evil drug industry and health insurance industry.

Sean, a couple of weeks ago we talked about the health care czar, Nancy DeParle, who made upwards of $6 million as a consultant, as a member of the board of directors of many of these insurance firms and health care companies. Many of which have met in secret with the White House.

There is also Eric Holder, the current attorney general, who made a lot of money representing the maker of Oxycontin in past litigation with the state of West Virginia. So who were the corporate shills? Who were the ones being paid? Who were the ones in the pockets of the insurance industry?

I would like Robert Gibbs to get up at the next White House press briefing and be indignant about questioning the motives of the people within his own administration who are taking money.

HANNITY: I got to tell you, very well said. Michelle, I saw something on your Web site that I was totally and completely in agreement with. We've watched this — this entire week we saw the trial balloon that was floated over the weekend that maybe the government option is on the table. Maybe we can change gears a little bit. And they started talking about these cooperatives.

And you're warning the readers on your Web site don't get caught up in this con job because it's basically the same thing. And it's a point that I've been making. Explain.

MALKIN: Yes. I think it could be public option by another name and of course the devil is always in the details. And we've learned that over the last six months of the Obama administration. And many smart people who have looked at the details are very concerned that it is yet another Trojan horse since the single-payer.

HANNITY: You know — but isn't it the case, if they supply the means of services, pricing, and supply, which ultimately, I don't care whatever name they want to give it, either the government-option or some type of co-op, if the government controls that then they still control the prices.

They control what services you get — you will get or won't get, that ultimately means rationing. They're not talking about real reform, which would be tort reform or medical savings accounts or tax credits for people who really need assistance.

Isn't this still government control? I think they're trying to bamboozle people into believing a co-op is different than a government option when it's the same thing.

MALKIN: Right. Again, it's all in the details. And there may be some legitimate proposals out there of health insurance co-ops that would have some semblance of market-based reform. But I think you can't trust this administration. You certainly can't trust the kind of Astroturfing propagandists that are trying to sell it to us. And co-op may more properly be called co-opt.

HANNITY: Co-opt. All right. Well, Michelle, good to see you and congratulations again on the book. Appreciate you being with us.

MALKIN: Thanks, Sean.

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