Will the Kavanaugh controversy impact the midterms?
Republican lawmakers accuse Democrats of scheming to push the Kavanaugh confirmation past the November midterm elections. Fox News contributor Karl Rove looks ahead.
This is a rush transcript from "Journal Editorial Report," September 29, 2018. This copy may not be in its final form and may be updated.
PAUL GIGOT, HOST: Welcome to the "Journal Editorial Report." I'm Paul Gigot
The White House Friday ordered the FBI to conduct a supplemental investigation into Supreme Court Nominee Brett Kavanaugh following a call from Republican Senator Jeff Flake, of Arizona, who agreed to vote Kavanaugh out of the Judiciary Committee on the condition that the bureau look into the allegations of sexual assault leveled against him.
(BEGIN VIDEO CLIP)
SEN. JEFF FLAKE, R-ARIZ.: I think it would be proper to delay the floor vote for up to but not more than one week in order to let the FBI continue to do an investigation limited in time and scope.
(END VIDEO CLIP)
GIGOT: Senator Flake echoing a familiar refrain from Democrats at Thursday's hearing on Capitol Hill with Kavanaugh and his accuser, Christine Blasey Ford.
(BEGIN VIDEO CLIP)
SEN. DIANNE FEINSTEIN, D-CALIF.: Each of these allegations should be investigated by the FBI.
SEN. PATRICK LEAHY, D-VT.: You want to reach the truth, the easy way to do that is ask the FBI to investigate.
SEN. DICK DURBIN, D-ILL.: Judge Kavanaugh, if he truly believes there's no evidence, no witnesses that can prove your case should be joining us and demanding the FBI investigation.
(END VIDEO CLIP)
GIGOT: Judge Michael Mukasey served as the 81st attorney general of the United States.
Judge Mukasey, welcome back. Good to have you back again.
MICHAEL MUKSEY, FORMER U.S. ATTORNEY GENERAL: Good to be here.
GIGOT: The focus is again on the FBI. And there's a lot of misunderstanding and just what the FBI does in circumstances of involving nominees. It's not a criminal probe, is it?
MUKASEY: No, it is not. This is the FBI conducting interviews with people with who know or know about person being considered for office. And they ask questions along various axis, having to do with the person's background, having to do with their character, reputation, having to do with finances, having to do with use of controlled substances. And then they take all of that and they turn it over to the Senate, because it's the Senate that has the job of deciding whether a person is fit or not, not the FBI.
GIGOT: It first goes to White House, right, to the general counsel's office. So the White House will nominate somebody, and if they see something that's untoward, they might not forward it to the Senate?
MUKASEY: Precisely.
GIGOT: OK.
MUKASEY: That's when it's done before a nomination.
GIGOT: Before nomination. That's right. In this case, it goes to the Judiciary Committee because the White House said turn it over.
MUKASEY: Right.
GIGOT: But does the FBI, do the agents reach conclusions about the credibility of the people they interviewed?
MUKASEY: No, they do not. They don't reach conclusions. They don't make recommendations. They present everything at face value. And they have, the Senate, do what it is constitutionally bound to do, which is to decide based on that and whatever new information they have, whether a person can be confirmed.
GIGOT: So if a witness, like Christine Blasey Ford, who has been before the Senate, or Judge Kavanaugh, has already been interviewed about these questions, by now many times, or some of the other people that Christine Blasey Ford has mentioned were at that party, is the FBI just going to be over the same ground the congressional staff has?
MUKASEY: Yes.
GIGOT: What do you expect them to find that's new, do you think?
MUKASEY: I can't see that they're going to find anything new, particularly in a situation where you have the press and reporters on this 24/7 in huge numbers.
GIGOT: Right.
MUKASEY: You also have the staff of the committee, that is one to have largest staffs on the Hill.
(CROSSTALK)
GIGOT: And it is a crime to lie, not only to the FBI but also to the congressional staff.
MUKASEY: Right.
You can't wink and nod and say, well, you're just a staffer. That's a crime.
MUKASEY: It's a false statement. That's a section of Title 18.
GIGOT: So in the end, after a week of these interviews --, I guess they could find more people to interview if they're name is related to this, although, no new names have come up to Christine Blasey Ford. I guess some of a couple of the other accusations against the judge they could interview people.
MUKASEY: Right.
GIGOT: Other than that, that is going to be well-tried ground is what you're saying?
MUKASEY: Probably. And it will not change the fact that as to certain matters there's simply no way of substantiating the stories that these people are telling.
GIGOT: The ultimate responsibility here is the Senators to make up their mind and decide. They're the judge, ultimately, of credibility and the fitness for this position?
MUKASEY: Precisely. And they don't take any advice from the executive, including the FBI.
GIGOT: And they shouldn't, because this is advise and consent service.
MUKASEY: Their advise and consent.
GIGOT: Why would they delegate to some FBI agent, I guess, is the point?
MUKASEY: Right. And the notion that, somehow, they should all do it under an agreed-upon standard of proof, which has been suggested by Jonathan Turley, for whom I have enormous respect, and maybe in an ideal world, they would, but we are not living in an ideal world, number one. Number two, each of them is responsible to their constituency. They will make a decision, each of them, based on their own standard, for which they will then explain to their constituents why they did it.
GIGOT: We don't essentially elect FBI agents to go tell our representatives, oh, she is telling the truth, he isn't. That would be essentially the lack of accountability politically?
MUKASEY: We don't elect representatives to adhere to an agreed-upon standard. They adhere to whatever standard they think it's appropriate and then justify it to the voters.
GIGOT: All right. Let's talk about Deputy Attorney General Rod Rosenstein, who is, according to a story in the "New York Times" a couple of weeks ago, had said, in April -- May 2017, that he would be willing to wear a wire into the White House to overhear President Trump and might invoke 25th Amendment to take him out of power. What do you make of all of that?
MUKASEY: I hope, for the sake of his sanity and intelligence, he was joking. That's one possibility.
GIGOT: He's denied it, I should say.
MUKASEY: To not having said it at all or denied he was serious?
GIGOT: I think he has said he has never -- denied ever contemplating removing the president.
MUKASEY: Not contemplating, that's not necessarily saying it.
GIGOT: He might have said it in jest.
MUKASEY: Right. There's every reason to think that it was not serious, simply because, if you want to remove the president, it's a lot easier to do it by impeachment and conviction than it is under the 25th Amendment. Impeachment and convictions, all you need majority of the House and two- thirds of the Senate. Twenty-fifth Amendment, you need the vice president, a majority of the cabinet, the president can then say, no, I'm fit as a fiddle, in which case it goes back and they have to do it again, and then you need two-thirds of both Houses, much harder.
GIGOT: Well, if you truly think that the president is in such of state of incapacitation or inability to fulfill his duties that you're thinking of that, don't you have an obligation to resign and say so publicly to the American public?
MUKASEY: That's -- yes, that's one obligation. Although the anonymous author of the column in the "New York Times" hasn't resigned.
(CROSSTALK)
GIGOT: Should the president fire Rod Rosenstein?
MUKASEY: I don't think so. I don't think so. He's got enough going on without poking that particular hornet's nest. He has the Kavanaugh nomination. And there's no need. We are hard up on the midterms and there's no need at this point. There's nothing going on immediately that would -- that would necessitate that.
GIGOT: Judge Mukasey, thank you for being here. Appreciate it.
MUKASEY: Thanks for having me.
GIGOT: When we come back, an emotional day of testimony on Capitol Hill Thursday as both Brett Kavanaugh and his accuser, Christine Blasey Ford, appeared before the Senate Judiciary Committee. So did we learn anything new in that hearing? We will ask our panel, next.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
CHRISTINE BLASEY FORD, KAVANAUGH ACCUSER: I believed he was going rape me. I tried to yell for help. When I did, Brett put his hand over my mouth to stop me from yelling, it was hard for me to breathe and I thought that Brett was going to accidentally going to kill me.
LEAHY: Dr. Ford, with what degree of certainty do you believe Brett Kavanaugh assaulted you?
BLASEY FORD: One-hundred percent.
BRETT KAVANAUGH, U.S. SUPREME COURT NOMINEE: This confirmation process has become a national disgrace. But you're well-coordinated and well-funded effort to destroy my good name and destroy my family will not drive me out. You may defeat me in the final vote, but you will never get me to quit.
I have never done this to her or to anyone. That's not who I am. It is not who I was. I am innocent of this charge.
(END VIDEO CLIP)
GIGOT: A dramatic day of testimony Thursday from both Supreme Court Nominee Brett Kavanaugh and his accuser, Christine Blasey Ford.
Let's bring in Wall Street Journal columnist and deputy editor, Dan Henninger, and Columnists Mary Anastasia O'Grady and Kim Strassel, who was at the hearing Thursday.
Kim, let's start with you. You were there. What conclusions, at the end of the day, did you reach?
KIM STRASSEL, WASHINGTON COLUMNIST: Well, look, when you started with Dr. Ford, she was certainly a very sympathetic figure up there. But the problem, at the end of the day, was that she was unable to marshal any new evidence that this had actually happened. And so you're left with her inability to say again where it happened, when it happened. And the three or four witnesses that she has said were there, all continue to refute that that was the case. Then you add in that Kavanaugh and his very strong denial, yet again, under oath, that any of this happened, and I think what you saw was a lot of the Republicans, including the holdouts, believed that the important thing was that they did not have a preponderance of evidence and that you could not ruin this man's life based on unsubstantiated allegation.
GIGOT: Mary, as you watched Christine Blasey Ford -- I concluded that she's sincere in believing what she says happened to her, something like that happened to her. But as Kim suggested, there's the question of, where is the corroboration. How do you see it?
MARY ANASTASIA O'GRADY, COLUMNIST: Well, I thought that her testimony about the event was believable, but I was a little bit disturbed about some of the holes in the rest of her story. I mean, when she talks about how she has this fear of flying, and she was hesitant to come back east because she has been traumatized about getting into planes
GIGOT: Claustrophobic.
O'GRADY: -- and then we find out that she's flown many, many times, including all over, it sounds like, the South Pacific and comes back and forth to Washington all of the time. That raised questions for me. I mean, what are we supposed to think about that? And she also said that she didn't know how to contact the Judiciary Committee. And, you know, she has two masters degrees and a PhD. I mean, that's not that hard. And so I started to wonder a little bit about what it was that she was trying to explain when those things just weren't adding up.
GIGOT: And, Dan, Brett Kavanaugh, passionate, as Kim suggested, forceful, indignant, angry, tearful at times. Some people say that that was wrong because it showed that he lacked judicial temperament. What do you make of that?
DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, I think it added frankly to Brett Kavanaugh's credibility. I mean, he believes, as sincerely as she believes her version of events, that it didn't happen. And I thought of Brett Kavanaugh's speaking full of emotion over this week as though you were giving a eulogy at your father's funeral. You can't get through it. It is just overwhelming. And that's what was happening to him.
And fundamentally, what has happened here is we have two version of events. What's interesting about it is not just the Democrats on the committee but there are people out in the country who will say, if she can remember what the house looked like, what the bedroom looked like, and if she thinks it was Brett Kavanaugh who did it, then he did it. Nothing else matters. Absolutely nothing else. They're willing to give -- you could not sustain that in a court of law. You simply could not. But in this circumstance, there's a large part of the country that thinks that's dispositive.
GIGOT: Kim, what about the decision by the judge, Judge Brett Kavanaugh, to call out the Democrats on their tactics? To say, look, this is orchestrated, this is a set-up, you want to destroy me? And he went right at them in a way that I can't recall any witness going at the Democrats in such a forceful way, maybe since Oliver North, you know, while you were still in high school way back in the 1980's. Well, you weren't in high school yet.
(LAUGHTER)
STRASSEL: Careful there.
GIGOT: OK. What do you think? Was the right strategy for Kavanaugh?
STRASSEL: The reason that Brett Kavanaugh is advancing in this nomination is because that was what he did. Look, at the point that he came in to do this hearing, not much had been -- Republicans were in a terrible position. They couldn't aggressively question Dr. Ford. The optics of that would have looked bad. If he had come in there and been meek and humble and differential to these Senator, who are essentially calling him a gang rapist, up on -- from the dais, he would have looked as though he didn't believe in himself. But calling this out reminded Republicans about how despicable some of this has been. And I think he also caused some of them to back off, which was notable viewing for those for those of us who were watching.
GIGOT: Maybe he gave the Republicans the courage of his convictions, Mary?
O'GRADY: Yes. I think they were also helped by the fact that the prosecutor from Arizona, who specializes in sex crimes, said that after doing that interview she would not be able to charge Brett Kavanaugh, she wouldn't even be able to get a search warrant because there's no probable cause. And that's why it's so unfair. I think it's really unfair for the Democrats to walk away from that and say that they know Christine Blasey Ford is telling the truth. That's just preposterous.
GIGOT: In my view, it's impossible to prove or disprove. The question becomes, are you going to disqualify someone to the Supreme Court based on an accusation that isn't corroborated, briefly, Dan?
HENNINGER: We shouldn't do that because, if we do, we will be disqualifying people in the future, not merely for the Supreme Court, but for any other high office, public or private.
GIGOT: Thank you all.
Still ahead, with some Democrats already pushing to expand the FBI's reopened investigation of Brett Kavanaugh, we will tell you what to look for as the probe plays out.
Plus, what to expect when Deputy Attorney General Rod Rosenstein sits down with President Trump next week.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
SEN. LINDSEY GRAHAM, R-S.C.: If you wanted an FBI investigation, you could have come to us! What you want to do is destroy this guy's life, hold this seat open, and hope you win in 2020! You've said that! Boy, you all want power. God, I hope you never get it. I hope the American people can see through this sham. That you knew about it and you held it! You had no intention of protecting Dr. Ford. None!
To my Republican colleagues, if you vote no, you're legitimizing the most despicable thing I have seen in my time in politics.
(END VIDEO CLIP)
GIGOT: An angry and emotional Senator Lindsey Graham on Thursday decrying the tactics used by Democrats to try and sink the nomination of Supreme Court Nominee Brett Kavanaugh, calling the proceedings an "unethical sham."
We are back with Dan Henninger, Kim Strassel and Mary Anastasia O'Grady.
So, Dan, did Lindsey Graham call the strategy of Democrats correctly?
HENNINGER: I would say he did so with impeccable accuracy. This is what is going on right now, Paul. Look, the Democrats have gone off the grid. They are operating outside the legal system. There's no legal basis on which to reject Judge Kavanaugh based on this testimony. They are outside the political system of advise and consent. The game here is to defeat this nominee to the Supreme Court. And I think the Republicans, the White House should understand what Judge Kavanaugh understands, that this is a war, and over the next six or so days as the FBI takes on this sort of big- leap investigation, they should be prepared to have anything fired at them, any argument made, any new accusation, because the deal here is to stop this nomination.
GIGOT: And kick the decision on a Supreme Court nominee past the election and then, if they win the Senate, confirm nobody to the Supreme Court and maybe no appellate judges until 2021.
HENNINGER: You would have the Supreme Court at four-four for the next two years, an almost unimaginable situation.
GIGOT: Mary, let me ask you about the FBI probe that Jeff Flake asked for it, the leadership granted, Donald Trump said the FBI can do it. Do you expect to find out anything new?
O'GRADY: I don't think they will find out anything new because of the same reason that is you discussed with Judge Mukasey. But there's a real risk in doing it because, you know, you hear the Democrats now and they are no longer saying, OK, we want to investigate this. They are, all of a sudden, trying to investigate all kinds of things. They are saying, well, if there's a pattern here, a pattern of what, pattern of accusations that are unfounded? That's what they're looking for because their M.O. is to destroy his character, his reputation. They know they can't prove this particular case. What they want to do is raise doubts in the minds of the American people about his character more broadly, in a general sense, by just dredging up a lot of people saying things about him.
GIGOT: Kim, what is Jeff Flake and Lisa Murkowski -- they both asked for this FBI investigation. What is their motivation?
STRASSEL: I think their motivation is, well, they caved, put it that way. All right?
GIGOT: What do they want though? Do they want political cover in order to vote for it or --
STRASSEL: They want political cover. They want --
GIGOT: -- do they want to sink this nomination and find a reason to do so?
STRASSEL: Well, look, the bottom line -- maybe they probably prefer not to have to take this vote, right? There're many people in the Senate who would prefer not to have to take this vote. But Mitch McConnell, the majority leader, has made clear that they'll be a vote one way or another. I'm assuming this has to be political cover, in that they are want to be able to vote for the judge, but they don't have the courage of those convictions that you mentioned, and so they're out there trying to look, make nice, play with Democrats, look as though they are still being civil and bipartisan and fair to Dr. Ford, give it a week. But, as Mary said, there are all those risks and many more, too, of having this go on for a week. So it's a shame that they feel for it.
GIGOT: Debra Katz, lawyer for Christine Blasey Ford, Mary, said, right away, while no investigation -- that's just -- will be adequate.
O'GRADY: That's why it's so frustrating that Jeff Flake fell for this because it's so clear what their M.O. is. They don't -- they know darn well they are not going to find out the truth about this supposed evening, but they want more and more and more and he's playing right into the hands.
GIGOT: Dan, we also had a request for delay and an FBI investigation from the president of the American Bar Association, Robert Carlson, but the standing committee on the judiciary of the ABA had already issued a statement saying -- a study, expansive of 1600 pages -- saying that Kavanaugh was -- gained their highest rating. Was this a sandbag exercise?
HENNINGER: It was a sandbag exercise. Robert Carlson was not speaking for the ABA, albeit being president. He was speaking for himself. He wanted to participate in putting pressure on them to pursue this FBI investigation.
GIGOT: But Politico had a headline, "ABA calls for FBI investigation." It should have said one guy at the ABA, without the authority to do so, calls for an FBI investigation.
HENNINGER: At the end of this process, to Kim's point, the Senate has got to vote. This is the most important vote in 25 years. Every Senator will have to stand up and decide whether they are going to ratify what we have seen going on here the last 10 days or vote against it.
GIGOT: With his character assassination and -- I mean -- well --
(CROSSTALK)
O'GRADY: With a lot of help from the media. You talk about these headlines, I mean, he's being treated very poorly by the majority of the press, I think.
GIGOT: Briefly, Dan, let's go to Rod Rosenstein. When Donald Trump meets with deputy attorney general next week, should he fire him?
HENNINGER: No, I don't think he should, essentially for what Judge Mukasey suggested. We have the midterm elections coming up. That is going to be aftermath of what we are seeing with Judge Kavanaugh. It's very important that they hold the Senate. And I think if he were to fire Rod Rosenstein at this point, it could put downward pressure on Republican turnout. He shouldn't do that right now.
GIGOT: Kim, briefly, do you agree with Dan?
STRASSEL: Yes, I agree with that. And also, they're meeting with the House caucus, Rosenstein is, and it looks like it'll be handled that way, potentially, instead.
GIGOT: All right, thank you.
Still ahead, with the Kavanaugh confirmation delayed once again, the stakes in the November midterms just got higher. Karl Rove takes us through the races to watch, next.
(BEGIN VIDEO CLIP)
GRAHAM: Their goal, not Ms. Ford's goal, is to delay this past the midterms so they can win the Senate and never allow Trump to fill this seat.
(END VIDEO CLIP)
GIGOT: With the final vote on Brett Kavanaugh delayed, the stakes in the midterm elections just got even higher, with Republicans accusing Democrats of trying to push the confirmation past November when Democrats hope to retake the Senate.
Wall Street Journal columnist and Fox News contributor, Karl Rove, is a former senior adviser to President George W. Bush.
Karl, welcome. Thanks for coming in today.
KARL ROVE, COLUMNIST & FOX NEWS CONTRIBUTOR: You bet.
GIGOT: So what's the impact of all of this last week on the House and Senate races?
ROVE: Well, it depends on whether you're red, blue or purple. If you're in the red state, like Missouri or Indiana, where the two incumbent Senators, McCaskill, in Missouri, and Donnelly, in Indiana, have come out opposed to Kavanaugh, it could hurt you. You'll notice in a couple of red states, North Dakota and West Virginia, the incumbent Democrats are keeping quiet. Interestingly enough, so is a Democrat in a purple state. Kyrsten Sinema, in Arizona, is keeping quiet.
(CROSSTALK)
ROVE: And then also, in Tennessee, Phil Bredson, in a very red state, is attempting to stay out of this by saying he supports an FBI investigation, but not opining beyond that. It's interesting. You have Nelson in Florida, Tester in Montana and Rosen in Nevada, three Democrats who have come out against Kavanaugh. Their Republican opponents have come out in favor.
GIGOT: Yes. But I want to ask you a little bit more about McCaskill and Donnelly, in Missouri and Indiana, because it seems to me, those decisions, they didn't have to make those decisions now. They could have waited. It seems to me that they must feel that the mere accusations and all of the accusations against Judge Kavanaugh are enough to give them political cover to be able to declare themselves and it won't hurt them.
ROVE: Well, maybe not, because McCaskill, for example, announced before this last week and she placed it all on the fact that she worried that Brett Kavanaugh would condone dark money in campaigns. That is to say allow 501C4's to allow to spend money and --
GIGOT: And money in politics, how horrible. It never happened.
ROVE: Oh, how horrible.
(LAUGHTER)
How horrible, says a woman who has a bigger war chest than her Republican opponent. In Indiana, Donnelly tried to place it in a more -- you know, unfit because of a record. But, look, it will hurt them. It'll hurt them one way or the other. Think about Heidi Heitkamp, in North Dakota. If she supports Kavanaugh, it will enrage the left of her party and lose her a couple points over there who will go vote for Green Party candidate or throw away their ballot. So if you're a Democrat in a red state, there's no easy explanation to -- to be in favor of Kavanaugh, and you will pay a price if you're against him. Similarly, in a blue state, it's easy for a Democrat to say he's against him and very difficult to be for him.
GIGOT: I tell you what, Karl, my inbox e-mails is filling with people who say, if the Republicans reject Kavanaugh after these tax cuts
ROVE: Absolutely.
GIGOT: -- that they will lose, I will not vote for them. This is what they say. And -- and they will deserve to lose. Do you think that's, in fact, what will happen?
ROVE: That's why I put exactly that sentiment in my column a week ago. The Republicans will -- if Democrats succeed in doing this, the Republicans will walk away from the battlefield demoralized and -- and their incumbent members will be discredited, and you can bet it would cost Republicans at the polls. Look, it will hurt either way. If you're in a tight race in a purple state, it may cost you a point or two, which may be enough to defeat you. But if you are getting hurt one way or the other, then do the right thing, and the right thing is to approve Brett Kavanaugh.
GIGOT: All right. Let's step back. Overall, where does the race for the Senate stand right now? I count three seats, Arizona, Nevada and Tennessee, that are close, too close to call. Those are Republican seats in four states, North Dakota, Missouri, Indiana and Florida, that are held by Democrats that are too close to call. Is that how you see it?
ROVE: Well, I'd add one more to too close to call on the Democratic side, Montana. For some strange reason, and people were thinking Tester was in great shape, but there have been now a couple of private and public polls showing the race close, so I add that add fifth one. I think you're absolutely right, three where Republicans are playing defense, five where they are on the offense. What's interesting to me is, if you look at it since 1998, last 10 midterms, if a race is a toss-up, and right now, we are talking about nine races that are literally -- almost every one of them considered by almost every prognosticator as a toss-up, those races, 80 percent of the time, have gone for the party that won that state in the last presidential election.
(CROSSTALK)
ROVE: And of the states we are talking about in nine races, only one of them is in a state that Hillary Clinton won. Now the lowest is 67 percent, the high is 89 percent, but the average is 80 percent that those are good numbers for Republicans to keep the Senate and maybe add one or two net seats to their total.
GIGOT: Here is another dynamic that, if you look at history, we've seen, which is that when you have that many close, tight races, what often happens is they all, or almost all of them break the same way. They break the same way as the party that has the energy in that election --
ROVE: Right.
GIGOT: -- 2010, 2014. You remember 1986 when it broke off for the Democrats. That happens sometimes. And it could -- that means this Senate campaign could go either way.
ROVE: Yes, look, control of the United States Senate, in any opinion, is going to be decided literally by a couple of tens of thousands of votes in four or five states, and it's going to be that close. We will have millions of votes cast in these nine contests and the results, at the end of the day, who keeps control of the Senate is going to be a fraction of that in a handful of states.
GIGOT: Wow. That means you have to go out and vote if you want to influence those elections.
ROVE: Absolutely.
GIGOT: Thanks. Thanks for being here, Karl.
ROVE: You bet. Thanks, Paul.
GIGOT: Still ahead, President Trump's U.N. appearance overshadowed by the Kavanaugh chaos. We'll tell you what you missed when the president addressed his fellow world leaders, next.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
PRESIDENT DONALD TRUMP: We cannot allow a regime that chants "Death to America" and that threatens Israel with annihilation to possess the means to deliver a nuclear warhead to any city on earth. Just can't do it.
(END VIDEO CLIP)
GIGOT: The Kavanaugh confirmation drama overshadowing President Trump's speech this week to the United Nations. The president using his address to the General Assembly to castigate Iran for sowing chaos, death, destruction in the Middle East.
(BEGIN VIDEO CLIP)
TRUMP: Regrettably, we found that China has been attempting to interfere in our upcoming 2018 election. They do not want me or us to win because I am the first president ever to challenge China on trade.
(END VIDEO CLIP)
GIGOT: We are back with Dan Henninger, Kim Strassel and Mary Anastasia O'Grady.
Mary, what did you think of the president's general impression he delivered with the speech? People are calling it America First speech.
MARY ANASTASIA O'GRADY, COLUMNIST: I thought he did a reasonably good job. I could have without the hyperbole about his government being the best in history. I think he did a couple of things very effectively. One, we just saw a couple there, calling out Iran, calling out China. Those are important things that need to be said, were not said during the Obama administration. I think I also was very happy with his comments on the International Criminal Court and the U.N. Human Rights Council, which, of course, is an absolute disgrace for anybody that cares about human rights.
GIGOT: Let's talk about Iran first, Dan. The president really taking Iran on. Meanwhile, the Europeans are basically trying to undercut U.S. sanctions, which are going to come in on November, in particular on financial sanctions against Iran. They are trying to find alternative mechanism that they can do trade and economic transactions with Iran. Is that going to be successful?
DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: It's not at all successful. If the payment mechanism is going to work --- it doesn't exist yet -- it's not clear how it's going to work. The administration argues that many European countries are not siding with their governments, they are willing to go along with the sanctions, but if they don't want to alienate the United States, too big a customer. I think the Trump administration is loading up a lot of expectation on its sanctions regime against the Iranians. They expect -- they do think the Iranian government is under a lot of pressure, and they are under both economic and political pressure from their own people. There's dissent about all of the overseas activities and Syria and so forth. And what the administration believes is if they can get the Iranians to pull back, it would help them resolve the situation in Syria as well.
GIGOT: Yes, Kim, you weren't here this week, but we had senior administration officials come through, and it's very clear that they think that if they put maximum pressure on Iran, they can cause them to pull back out of Syria and then maybe even foment a change of government in Iran. It's a big bet. I don't know if it will turn out. But that seems to be strategy.
KIM STRASSEL, WASHINGTON COLUMNIST: Right now, the 2,000 or so troops that we have in eastern Syria have been focused almost entirely on Islamic State. This has been one of the big debates within the administration, is do you expand that, focus, to be looking at Iranian government militias and troops that are backed by Iran there. Still not decided yet. But this general message of Trump seems to be deigning to say this is a possibility.
GIGOT: Let's turn to China, Mary. The president calling out China for interfering in our presidential election. And yet, he -- they're not saying, it's not through hacking, not through the kind of stealing records and releasing them like we saw with the Russians in 2016. It's running ads and newspapers.
O'GRADY: Yes.
GIGOT: It's free trade ads.
(LAUGHTER)
And --
O'GRADY: What they are really --
(CROSSTALK)
GIGOT: And people, professors of colleges.
O'GRADY: Yes. What they are really disturbed about is this kind of infiltration that China is doing through our academia, through the press, and basically through lobbying in different ways even politicians. And that's certainly true. I mean, what I find a little bit humorous about it is, you know, this has been going on with Cuba, with Russia. This goes on. This is what bad guys do.
GIGOT: We are an open society in that sense --
(CROSSTALK)
GIGOT: -- and they're going to be able to influence our democracy.
O'GRADY: Particularly in academia. This is an open secret that they are taking over and infiltrating and putting, you know, their side of the story on the table.
GIGOT: What you want to call out is when they, for example, say, if you don't agree with us on Taiwan, if you say anything bad about Taiwan, you can't get a visa, for example, then we will withdraw the money from your campus. That begins to be -- of course, that's part of - that is how China plays.
O'GRADY: I think it's excellent that the Trump administration is going after them. It needs -- they need to be called out on that.
HENNINGER: I think what we are seeing is an example of the Trump-operating technique, which is to find an opponent's weakness, then lean on it heavily. That's what he is doing with the Iranians. He's in a tariff war with China. He believes their economy cannot hold out under this kind of pressure. He's doing the same thing to Canada, incidentally, in the NAFTA negotiation. And in all three, it's lean in, and lean in hard. Will it work? I think it's a work in progress.
GIGOT: He thinks the United States, being the biggest market, biggest military, biggest country in the world, has the leverage on these bilateral deals. That's his bet.
O'GRADY: I think he would be more effective if he tried to form a group of countries that would go after China, for example. That will work a lot better than trying to pick countries off one at a time.
GIGOT: All right. Thank you all.
When we come back, the SEC suing Elon Musk for fraud over his now-famous tweet about taking Tesla private. What the charges could mean for the unconventional CEO and his future with the electric car company, next.
(COMMERCIAL BREAK)
GIGOT: The Security and Exchange Commission suing Tesla CEO Elon Musk for fraud this week, alleging that he misled shareholders with his August tweet saying he had secured funding to take his electric car company private. The SEC is also seeking to bar Musk from serving as an officer or director of any publicly-traded company, effectively ending his reign at his company he helped found 15 years ago.
We're back with Dan Henninger, Kim Strassel and Mary Anastasia O'Grady.
Kim, did Musk deserve this sanction suit from the SEC?
STRASSEL: No, I don't think so. This is overkill, to a certain degree, by the government. Look, did he make a mess of things? Yes. But I think what's lacking here is any proof that he was intentionally trying to mislead investors or he was trying to hurt short sellers or manipulate the stock price, which ought to be the bar of this. By the way, if I was going to see government take any action against Elon Musk and Tesla, I would rather see them take away the subsidies these companies --
(LAUGHTER)
GIGOT: We have gone around with Musk on that one before. He says he doesn't really like subsidies but his competitors are using them. That's what he says. He also says that he had, in fact, a verbal offer from Saudi investors to take the company private, and that's going to be his part of his defense.
O'GRADY: I think that Kim is being much kinder to him than I would be.
(LAUGHTER)
I'm not exactly sure where I would come down on the -- on penalizing him. But you cannot have CEO's doing that kind of thing on Twitter. I mean, the SEC has to send a message. And I think it was absolutely reckless for him just to put that out. His board didn't even know about it.
GIGOT: No, his board didn't know about it. Turns out, he didn't have secured funding, Dan.
HENNINGER: There's an old saying, you pays your money and you takes your chances. And I think that's what a lot of investors are doing with Tesla. They think this guy is a genius. Right?
GIGOT: Right. He probably is, in many respects for.
HENNINGER: Yes, well, there's another old saying, he's like all the other nuts, except he was right.
(LAUGHTER)
Look, this is a publicly-held company. The SEC has to enforce regulations. They should create a separate category or company where investors can say, we are investing in this guy, we don't care what he does, we want to get rich. That's not the same as investing in Procter & Gamble or even Apple, for that matter.
GIGOT: The former CEO of Theranos, former CEO, Elizabeth Holmes, she's been indicted for fraud and the SEC only barred her only 10 years for - as a director and officer. He's getting -- Elon Musk, if this succeeded, he would get banned for life.
HENNINGER: This is the opening bid of negotiations and there will be a settlement, I think, between Tesla. They are not going to put him out of business. But at the least, perhaps, Tesla ought to think about setting up a succession strategy in case, for some reason, Elon Musk gets set aside in the future.
GIGOT: Kim, Tesla still has a market cap of about, I think, even after the big 14 percent plunge on Friday, I think it's still 45 billion, which, believe it or not, is bigger than Ford's, which sell a lot fewer cars, yet they are bleeding cash. They have a lot of bonds coming due in the next six months and we don't know if their production capacity can meet the profits they need in the cash flow to make those payments.
STRASSEL: Right. By the way, to Mary's point, I'm not suggesting there shouldn't be a penalty for Musk. But I think this is a little extreme coming from the SEC.
You know, this is a really important point that Dan just made, though: How did we get to this point? And you touched on this, Paul. This is a company that has never turned a profit. It doesn't hit its production goals. And 50 of its managers and senior executives have left over the last couple of years because of mayhem. You know, the board should never have let it get to this point. And they should have somebody in line to replace Musk or simply take a hard look about whether or not his leadership is still correct and so what's necessary there.
GIGOT: Can Tesla -- we don't very lot of time, Mary. Can Tesla pull this off with management other than Elon Musk?
(CROSSTALK)
O'GRADY: The company would probably do better, I think.
(LAUGHTER)
GIGOT: You agree with that?
HENNINGER: No. I think probably he's the driving force. He needs support but it's a visionary stream, and that's the way it's going to be with Tesla.
GIGOT: The board has to impose some discipline. They need somebody, a COO or somebody, then.
We have to take one more break. When we come back, "Hits & Misses" of the week.
(COMMERCIAL BREAK)
GIGOT: Time now for our "Hits & Misses" of the week.
Kim, start us off.
STRASSEL: A miss to Facebook, which had to admit that its computer security network was attacked this week, exposing the private information of 50 million of its users. You know, Paul, you have to wonder how much more Facebook can beg Congress to regulate it. They've had issues with fake news, about protecting the privacy of its users, about supposedly political bias. But it's security that's always bragged that this has been the best that's out there. They are not even doing that. Again, message to all social media, you better move quick to clean up your act.
GIGOT: All right.
Mary?
O'GRADY: A hit for Jacob deGrom, the Mets right-handed pitcher, not only because he threw eight scoreless innings with 10 strikeouts to beat the Atlanta Braves, 3-0, this week, but also because he finishes the season with having pitched 217 innings, 269 strikeouts, and an earned run average of 1.7. Only six other pitchers in history have done that. He deserves the Cy Young.
GIGOT: Long suffering New York Mets fan.
Dan?
HENNINGER: I will give a miss to New York Governor Andrew Cuomo, who thought he had to address the fact that so many people are moving out of the state. Usually, it is because people are complaining about the taxes. He said it is because the weather is so bad, that's why they moved south. Let's look at what the Tax Foundation has to say about New York State's tax level currently. Its corporate rate does, indeed, rank 7th. Its personal income rate is number 48. Its sales tax is 42. And its property tax ranks 47. If you're not a corporation in New York, you're going south.
GIGOT: All right.
And remember, if you have your own hit or miss, be sure to tweet it to us, @JERonFNC.
That's it for this week's show. Thanks to my panel. Thanks to all of you for watching. I'm Paul Gigot. Hope to see you right here next week.
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