This is a rush transcript of "Special Report" on October 21, 2021. This copy may not be in its final form and may be updated.

REP. STEVE CHABOT, (R-OH) HOUSE JUDICIARY COMMITTEE: Not in a million years did we dream that one day we would see the Justice Department treat American parents as domestic terrorists.

TOM TIFFANY, (R-WI) HOUSE JUDICIARY COMMITTEE: Will FBI agents be attending local school board meetings?

MERRICK GARLAND, U.S. ATTORNEY GENERAL: No.

TIFFANY: Are we, my friends, neighbors, constituents, are we domestic terrorists?

GARLAND: No.

The Justice Department supports and defends the First Amendment right of parents to complain as vociferously as they wish about the education of their children, about the curriculum taught in their schools. That is not with the memorandum is about at all, nor does it use the words "domestic terrorism" or "Patriot Act."

(END VIDEO CLIP)

BAIER: The attorney general on the hot seat on Capitol Hill answering questions about this memo in the Justice Department, he called it a memorandum, about increasing harassment and intimidation and threats, and instructing the FBI to work with school boards.

"The Washington Free Beacon" reported this. "The country's largest school board association collaborated with the Biden White House before sending a controversial letter calling on the FBI to investigate parents as potential domestic terrorists according to previously unrecorded emails. The letter makes clear that the White House was aware of the letter before it was released while raising questions about whether the White House colluded with the association on the letter to prompt federal action."

We'll start there with the panel, let's bring them in, Mara Liasson, national political correspondent of National Public Radio, former White House press secretary Ari Fleischer, and Katie Pavlich, news editor at Townhall.com. Ari, a lot of questions from Republican lawmakers, obviously, on that committee to the attorney general. What about that back and forth and what he was saying?

ARI FLEISCHER, FORMER WHITE HOUSE PRESS SECRETARY: Bret, today is a day that I am so grateful to Mitch McConnell for keeping Merrick Garland off of the Supreme Court. He comes across with such soothing words, never in a million years would we ever do this. And he meanwhile is very political behind the scenes. Otherwise why would the Department of Justice ever have issued that letter in the first place? They had to be aware that when you are told somebody should be treated as a domestic terrorist, and then you say the FBI is going to look into this and we are going to convene meetings with U.S. attorneys within 30 days of receipt of this letter, they mean action. So he can't have it both ways.

It really was not a good day for impartial, nonpartisan justice. And he never heard about the insurrection that took place last week at the Department of the Interior, where climate activists, 55 of whom got arrested, injured the police to occupy the Department of Interior? He said he never heard of it. Bret, that was reported in "The Washington Post," it was reported by MSNBC, by FOX, and by the Associated Press. How could he not have known?

BAIER: Yes. Here is another exchange on that school board letter.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, FORMER SECRETARY OF STATE: One of the worries that I have about the way that we are talking about race is that it either seems so big that --

REP. JIM JORDAN, (R-OH) HOUSE OVERSIGHT COMMITTEE RANKING MEMBER: -- Justice department communicate with those organizations, FTA, NEA, National School Board Association, prior to the letter. Did you help the National School Board Association put together the letter?

MERRICK GARLAND, U.S. ATTORNEY GENERAL: Again, I have had no such conversations. I would be surprised if that happened, but I don't know.

JORDAN: When did you first review the data showing this so-called disturbing uptick?

GARLAND: So I read the letter and we have been seeing over time threats --

JORDAN: Whoa, whoa, whoa. I didn't ask you -- so you read the letter, that is your source?

GARLAND: From the National School Board Association which represents thousands of school boards and school board members, says that there are these kinds of threats.

(END VIDEO CLIP)

BAIER: Obviously Condi Rice wasn't at the hearing, Mara, but Jim Jordan there pressing on what was the initiation, and basically the attorney general saying it was that letter.

MARA LIASSON, NATIONAL POLITICAL CORRESPONDENT, NATIONAL PUBLIC RADIO: The National School Board Association appears to be reporting that there is this uptick of threats. It's the job of the Department of Justice to look into things that could be a crime, acts of violence, not protests, as Merrick Garland said, or any kind of freedom of speech rights that are exercised at the school board meetings. We'll wait and see what the Department of Justice does, but the Republicans on the panel are clearly trying to say that that they are going to be going after parents and squelching their free speech rights.

BAIER: Katie?

KATIE PAVLICH, FOX NEWS CONTRIBUTOR: Bret, if you look at the timeline of this, now that we know the White House did have knowledge of this letter days before the Department of Justice came out with their memo, and Merrick Garland said today that the memo they released had nothing to do with domestic terrorism or the Patriot Act. But the letter from the national board of school boards did use that language, did ask the Justice Department to do that. It was given to the White House, addressed to President Biden, and then a few days later coincidentally, the Department of Justice releases this memo saying that they're going to keep a closer eye on this despite the fact they haven't investigated whether these are federal crimes or not. They simply got this letter, as admitted to Merrick Garland today.

And the broader question here is, President Biden said he wanted an independent Justice Department. Well, the sequence of events here doesn't indicate that. And more broadly speaking, the Department of Justice under Democrat presidents has a history recently of going after political opponents and using the federal government and law enforcement agencies to do that, whether it was IRS targeting of Tea Party groups in 2010, whether it was the FBI going after Trump administration officials and getting an illegal FISA warrant to spy on Carter Page. And so this is a bigger question now of what the Department of Justice is going to do on behalf of the White House to get ahead politically on behalf of powerful teachers' unions.

BAIER: A couple things from that hearing. One was that the A.G. saying they will consider the attempt that was voted on in the House against Steve Bannon, and all contempt charges, and that the Durham investigation is in fact continuing, and he is fully funded as he continues that investigation. Panel, stand by, if you would. When we come back, tomorrow's headlines with the panel.

(COMMERCIAL BREAK)

BAIER: Finally tonight, a look at tomorrow's headlines with the panel. Ari, first to you.

FLEISCHER: Media that praised John McCain for being an independent vote to tank the repeal of Obamacare get ready to condemn Joe Manchin if he's an independent vote that tanks Joe Biden's spending spree.

BAIER: He says it's going to take a long time. We'll see. Katie?

PAVLICH: The NBA sanctions Celtics forward Enes Kanter for speaking out against Chinese President Xi for being a communist dictator.

BAIER: Mara, your headline?

LIASSON: That's a pretty straight forward headline.

My headline is Democrats say again they are close to a deal. This time they might be right -- or not.

(LAUGHTER)

BAIER: Or not, question mark. That might be in the headline. All right, panel, thanks so much.

I'm here in Dallas again tomorrow. I've got a couple of events for the book tour, "To Rescue the Republic." Thanks again for making it number two on "The New York Times" list just out. And then I'll be back after tomorrow to Washington, D.C., all next week.

Thanks for inviting us into your home tonight. That's it for this SPECIAL REPORT, fair, balanced, and still unafraid. FOX NEWS PRIMETIME hosted by Will Cain this week early because I want to give you extra time, Will, to improve this show. It's amazing.

WILL CAIN, FOX NEWS HOST: I didn't know you were in Dallas.

BAIER: Yes, Dallas.

CAIN: I didn't know you were -- I'm right across town, Bret. After the show, what do you say we meet up?

BAIER: Let's go.

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