Updated

This is a rush transcript from "Your World with Neil Cavuto," May 24, 2007. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST: First the leak and now the fallout, neither the White House nor the Justice Department will say today if an investigation will be launched into an intelligence report that was leaked by ABC News. If the report is indeed accurate, it exposes plans for secret CIA operations inside Iran. ABC's decision to publish this sparking fierce reaction from Republican presidential candidate Mitt Romney today. The governor is with us now in an exclusive interview on the phone. He joins us from Lakeland, Florida.

Governor, good to have you.

MITT ROMNEY, REPUBLICAN PRESIDENTIAL CANDIDATE: Thank you, Neil. Good to be with you.

CAVUTO: What did you make of this, Governor?

ROMNEY: Well, I was really shocked to see that ABC News reported a covert action being taken against Iran. Obviously, I wasn't shocked that we were taking covert action against Iran, but that they would report something of that nature when Iran is engaged in developing a nuclear weapon, when they're supplying a support to people who are attacking our troops in Iraq, when you have leadership of Iran that is denying the Holocaust, that's trying to develop a weapon to potentially carry one out.

I mean, this reality suggests that disclosing a covert action is something which has the potential of harming our national interests and potentially affecting lives.

CAVUTO: Yes. The president, if we are to believe this report, was recommending "non-lethal action," I guess, a code word for something that would not involve the risk of any human lives. You still say releasing this info was, in fact, a risk to human lives?

ROMNEY: Well, I'm saying we may never know. Clearly, Iran is a nation which has the potential and most likely the intent to cost human life. The kinds of things that have been said by their former leader, Rafsanjani, suggests an interest in using a nuclear weapon.

And therefore the need to destabilize this government and hopefully have the people there recognize the peril that Ahmadinejad's government represents to them and to the world that that is noble cause and something which we should be encouraging.

And then for ABC News to release information which may jeopardize that effort is obviously of real concern. And, of course, at this time we also have U.S. citizens which are being held by Iran being charged with trying to destabilize the government with treason there.

And, of course, the report like this only can encourage and give credibility to the Iranian government in their effort to hold these people.

CAVUTO: Now, Governor, this comes on the same day — or the fallout from this report comes on the same day that the Iranian president was making some waves of his own, warning Israel that it may be uprooted, I'm using his words. What did you make of that?

ROMNEY: Well, the leadership in Iran has from time to time made comments which call for the elimination of Israel, and there have been veiled comments about the use of nuclear force. And so what is frightening here is that a nation which is speaking about Holocaust is working to develop a weapon that could potentially carry one out.

And so the interest of the entire world in preventing Iran from having a nuclear weapon is enormous. And therefore, any publication of a covert action which is being carried out by this country has serious national and world security implications.

CAVUTO: So let me ask you, Governor, it's hard to trace the steps that producers took when they released this report and told the world about it. But from what we understand, they did run this up sort of like the CIA flagpole — the White House flagpole just to let them know about it. And no one said, don't run it. What are you to make of that?

ROMNEY: Well, that was not what I heard but I'm not going to report on any conversations held directly with the ABC News folks who I did speak with. But I think that you have to have a process and we have to expect that the media in this country during a time of war when we have this war against violent jihad going on, now six years later, that we need to have the leaders of media either individually or come together and talk about responsible rules of reporting, and how to assure that nothing is reported that could be damaging to our national security.

This is — if there is a fault in the government, then we need to improve communications from the government. And if there is a fault in the reporting, then we have to do it there. But this strikes me as a very clear example of a decision to publish information which has the potential of being very damaging to our nation.

CAVUTO: Should ABC be punished?

ROMNEY: Well, I don't think that we believe in abrogating the freedom of the press, but with the freedom of the press goes the responsibility of the press. I'm not calling for punishment, I'm not calling for a censorship, of course, or government action.

I'm talking for corporate responsibility where the leaders of major news organizations take a good hard look at what their policies are and recognize that a quick one-day story, being the first to break a story about how we are carrying out covert action to destabilize the government in Iran, that that has enormous implications and that a nation must stand united against a foe that is developing nuclear terror.

CAVUTO: Let me switch gears a little bit, Governor, while I still have you. I know you are busy on the campaign trail, but on this immigration measure that has the president's support, apparently not your own. It does from Senator John McCain. How big of a wedge issue will this be among the Republican presidential candidates?

ROMNEY: You know, that is really hard for me to predict. I think that the people I speak with as I go to Republican events agree with me that there are three key rules that we have to follow.

One is, we have to secure the border. Two is, we have to have an employment verification system to know who is here legally and who is not here legally. That is only fair to the employers to know who is who. And then, finally, for those people that are here illegally today, while it may be fine for them to apply for citizenship and to apply for permanent residency, that they should do so in line with everyone else and they should be given no advantage, no special privilege by having come here illegally.

And to do so, while it may or may not technically qualify as amnesty, is de facto amnesty because you just can't give people who came here illegally an advantage over those who have waited in line.

CAVUTO: All right. But still, some prominent Republicans who think very highly of you, Governor, including the former Governor Jeb Bush of the State of Florida, are at odds with you on this particular issue. And I'm wondering whether it is in the long run potentially going to hurt you. What do you think?

ROMNEY: You know, I don't know whether it helps or hurts me politically but it is the position I have spoken of throughout this campaign. It is a position I demonstrated as governor of Massachusetts. My legislature passed a bill giving a tuition break to illegals in my state.

I vetoed that bill. I said, we should do nothing to encourage illegal immigration. I want to encourage legal immigration. Legal immigrants bring great vitality, culture, technology to our country. They are welcome. But illegal immigration threatens that.

And you know, I know we have some differences on this topic. It shouldn't be a heated topic. We don't need to make it a topic that gets people angry. But I do think that we should say that particularly with regards to this Z visa that is being described, that allowing illegal immigrants to remain in the country indefinitely and allowing all 12 million to do so is something which really puts those illegal immigrants in a position of advantage relative to those who are waiting in line legally.

CAVUTO: All right. Governor, thank you very much. We know you are a busy guy today. We appreciate you taking the time.

ROMNEY: Thank you, Neil.

CAVUTO: All right. Governor Mitt Romney.

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