This is a rush transcript from "Hannity," June 12, 2012. This copy may not be in its final form and may be updated.
SEAN HANNITY, HOST: And today, Democrats blocked a resolution calling for the appointment of a special counsel to investigate the White House leak scandal. Now, the measure was struck down by left wing Senator Ron Wyden, who objected to the motion just moments after Senator John McCain had this to say. Let's take a look.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN, R-ARIZ.: Here we are with a very serious breach of National Security in the view of some, the most serious in recent history. And it clearly cries out for the appointment of a special council.
It obviously is one of the highest breaches of security that this country has ever seen.
(END VIDEO CLIP)
HANNITY: Now, as Senator McCain delivered that speech, Attorney General Eric Holder was also on Capitol Hill and he was being grilled by members of the Senate Judiciary Committee, namely over his refusal to allow an independent prosecutor to oversee the investigation. Now, Holder claims his decision to tap two U.S. attorneys is sufficient enough. But as Texas Senator John Cornyn explained to Mr. Holder, at least one of those attorneys happens to be a big fan of -- well, President Obama's. Now, his name is Ronald Machen. And well, wouldn't you know it? He was originally hired by Eric Holder way back in 1997. Let's watch this.
(BEGIN VIDEO CLIP)
SEN. JOHN CORNYN, R-TEXAS: Would it surprise you to know that he is a political contributor to President Obama's campaign and he served as a volunteer in Obama for America and assisted in the vetting of potential vice-presidential candidates?
ERIC HOLDER, U.S. ATTORNEY GENERAL: I am confident that he has the ability, the capacity to investigate this case in a nonpartisan, independent, thorough and aggressive way.
CORNYN: Well, I would suggest the question that that raises by your answer is whether you have the independence and ability to conduct the investigation.
(END VIDEO CLIP)
HANNITY: And joining me to discuss the cloud that is now engulfing the presidency is the former mayor of New York City, he is also a former U.S. attorney for the southern district of New York, the one and only Rudy Giuliani. How are you? If it wasn't so serious, it would be funny.
FMR. MAYOR RUDY GIULIANI, R-N.Y.: It is very, very serious. I think it's more serious than people realize. I mean, these leaks were massive. This is not a leak of a political piece of information, this is a leak of an entire program of attempting to interrupt the Iranian -- the Iranian nuclear surge, which they are involved in. It's the leak of how we -- how we found bin Laden. A man is sitting in prison for 33 years as a result of the leaks from the Obama administration. And I think -- President Obama is playing a word game with us. You know, what does "is" mean? He is telling us the leaks don't come from the White House. But when you read the articles, the articles say where the leaks come from, "High administration officials."
HANNITY: And by the way.
GIULIANI: High administrations officials. One of them, I think, talks about something like 22 high administration officials that spoke to the reporter. So, maybe they're in the State Department. Maybe they are in the CIA. But these are Obama administration people. It's his administration that is responsible for the man being in jail for 33 years. President Obama should be expressing a great deal of concern about that. President Obama should be, really felt terrible about it. Even if he didn't do it, if he didn't order it, but if somewhere below him, some man is now in jail because the people in his administration are so desirous of making him into a super hero, what this is all about, this is, you know --
HANNITY: Turn Obama into a super hero?
GIULIANI: Yes, that's right. They are trying to turn Obama into a super hero. You know, he got a worm into the computer of the Iranians. He snatched bin Laden. He's got a kill list and only he makes the decision, kill this one, kill that one, kill this one. This is outrageous, this is highly classified information. This is information that puts the lives of people in jeopardy. People are going to be killed as a result of this. One man's in jail already. Another man is in great jeopardy over this. And who the heck should do business with us? This requires an intense investigation by a special prosecutor.
When I was associate Attorney General of the United States in the early part of the Reagan administration, it was my job to oversee the independent counsel statute. I recommended a special prosecutor twice. I recommended against a special prosecutor once because the evidence was insufficient. And then when I was U.S. attorney, I requested the appointment of a special prosecutor. In every case, these were people that were in my administration, people I had great respect for. In some cases, I didn't even think they did what they said that was alleged about them. But I knew that the way this works is, you can't have the president and the president's people investigating themselves. They are investigating themselves.
HANNITY: Yes, well --
GIULIANI: They're not investigation you and me. They can't blame this on Bush, I mean, they would love to --
HANNITY: They might in the end.
GIULIANI: This is them. They are leaking it. Nobody else is leaking it but them. It's a joke to suggest that it is anyone else.
HANNITY: Peter King says, it's worse then Watergate. John Cornyn wants Eric Holder to resign over this, you are pointing out something that I think is the key to all of this, which is that, for whoever got that bug into that computer system at the Iranian nuclear site, they are probably dead. They will die. They are going to be caught.
GIULIANI: Iranians are slaughtering people, you know, left and right, right now! They're slaughtering the MEK (ph), they're slaughtering people from all of these groups that they feel are a threat to them. This other guy's in jail for 33 years sentence in Pakistan because he helped us. This is outrageous. And the reality is -- in a criminal investigation, I did many, hundreds -- it always begins with, you follow the motive, who has the motive to leak this? What's the motivation of these leaks?
HANNITY: Make the President look like --
GIULIANI: To make the President look like, I am tough, to insulate him against Republican attacks for being weak on National Security, for being weak on terrorism. So, it is, you would have to be an idiot not to realize where this is coming from.
HANNITY: Two things. Should Holder resign as Cornyn says? Is this worse than Watergate as Pete King says? What do you think?
GIULIANI: Is it worse than Watergate? We'll find out.
HANNITY: Could be.
GIULIANI: It could be worse than Watergate because it involves very, very sensitive, classified information about which people could be killed and that may be worse than Watergate in terms of, you know, the taking of human life. I don't care if Holder resigns or not. What I care about is an independent council should be appointed, a truly independent council that does not report to the Attorney General, that reports to a court because, how can he possibly be reporting to Attorney General Holder? Attorney General Holder may have had some information about this? He may know about this, he maybe, I am not saying he is a subject or a -- or -- or a focus of this investigation. But he may be and his boss might be. We don't know how high it went. The kill-list article sounds like it came right out of the White House?
HANNITY: Well, it had to. Because there were only so many people inside that room when the President was -- doesn't that tell us --
GIULIANI: Are The Times reporters lying when they say, it is coming from high administration officials, high Obama administration officials?
HANNITY: With direct knowledge.
GIULIANI: With direct knowledge and with tremendous motivation to do it.
HANNITY: All right. Last question. When you think of how the issue of Valerie Plame -- she wasn't even a covert operative. We knew who the leaker was, Richard Armitage, from the very beginning. When you compare for example, Joe Biden and Barack Obama and the Democrats, all wanted a special prosecutor appointed there, how much worse is this? How worse is this?
GIULIANI: The Valerie Plame case was like a traffic ticket in comparison to this. Valerie Plame was not a covert person on the meaning of the statute. She had been out of any kind of covert work, she never did it for more than five years. It's a five-year limit. The beginning of the investigation, they knew who the leaker was, Armitage, right? It wasn't Scooter Libby. It became a national scandal. New York Times wrote a hundred articles about it. And the reality is, if you ever need a demonstration of how unbelievably unfair the coverage is to a Republican as opposed to a Democrat, this is a great example of it. And much more is at stake here, the Valerie Plame. In that case, Valerie Plame's safety allegedly was in jeopardy. It really wasn't, but allegedly. Here, the safety of hundreds of people are in jeopardy. People have already been put in jail as a result of the gross negligence -- here you can do this for sure. Now, there is a man sitting in jail for 33 years based on the gross negligence of the Obama administration in keeping secrets.
HANNITY: It's pretty frightening. And who is going to want to trust us in the future?
GIULIANI: Israel? Trust us?
HANNITY: What covert operative would want to go into a nuclear facility?
GIULIANI: We are sticking worms in the Iranian computers with Israel. And they are going to do it with us?
HANNITY: How would you be feeling today if you were the guy who took the risk to do that?
GIULIANI: I would be so angry right now. Or if I were sitting in the Israeli government right now, I would have so little confidence in the United States, I mean, I would be --
HANNITY: It's frightening.
GIULIANI: I would be outraged.
HANNITY: We are going to continue to follow the scandal. Mr. Mayor, it's always good to see you. Thank you.
GIULIANI: Thank you.