'This Week' Transcript: Former Maryland Governor Martin O’Malley

— -- This is a rush transcript and may contain errors. It will be updated.

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ANNOUNCER (voice-over): Starting right now on ABC THIS WEEK, breaking news: Secretary of State John Kerry hospitalized after an accident overseas. The very latest on his condition.

Also breaking overnight: remembering Beau Biden, the vice president's son, loses his battle with cancer. The tributes pouring in this morning.

Then candidate close-up: Martin O'Malley announces. Does he hold the secret to beating Hillary?

Ben Carson: why a big-time outsider could be a real contender.

And Bobby Jindal: is he about to jump in?

We have Carson, Jindal and an exclusive with Martin O'Malley.

Plus Hastert hush money? That stunning federal indictment against the former House Speaker. What was he really trying to hide?

From ABC News, THIS WEEK with George Stephanopoulos begins now.

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GEORGE STEPHANOPOULOS, ABC HOST: So much to get to this morning and we'll begin with that breaking news from Europe, where Secretary of State John Kerry has been hospitalized after a biking accident in France. The State Department just announced that he's calling off his diplomatic mission and ABC's Hamish McDonald has all the latest from London.

Good morning, Hamish.

HAMISH MCDONALD, ABC NEWS CORRESPONDENT: Yes, good morning, George. The State Department in fact just releasing that information that secretary of state has in fact broken his leg. It's a fracture to the right femur. He's now traveling directly back to Boston for treatment. Doctors are concerned because this injury is very close to previous hip surgery he's had; the same doctors are going to work on this.

Now the accident happened while Secretary Kerry was biking through the French Alps outside of a town called Scionzier. It's near the Swiss border. He was there as part of a four-country tour.

Now we're hearing from the State Department that doctors and paramedics were on the scene immediately. They were there as part of his motorcade. He was then flown to Geneva University Hospital.

Of course we know that Secretary Kerry is an avid cyclist. We've seen him out in his Lycra on the bike, around Lake Geneva during all of those Iranian nuclear negotiations. His plan was to travel on to Spain later today for meetings, then to France. But for now, not surprisingly, those travel plans have been canceled -- George.

STEPHANOPOULOS: Not surprising. OK, Hamish, thanks very much. We hope he gets back soon.

And now to that sad news we learned overnight that the vice president's son, Beau Biden, has died after a two-year struggle with brain cancer at the age of 46.

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STEPHANOPOULOS (voice-over): The vice president's family released this statement overnight.

"The entire Biden family is saddened beyond words. Beau Biden was, quite simply, the finest man any of us have ever known."

President Obama and the first lady also sharing their grief.

"Michelle and I humbly pray for the good Lord to watch over Beau Biden, and to protect & comfort his family here on Earth."

He was born Joseph Biden III, an Iraq War veteran, awarded the Bronze Star. After serving as Delaware's attorney general, Beau was planning a run for governor next year. He introduced his father at the last two Democratic conventions.

BEAU BIDEN, SON OF JOE BIDEN: He's the father I've always known, the grandfather my children love and adore and the vice president our nation needs. So to my father, my hero, Joe Biden.

STEPHANOPOULOS (voice-over): The Biden family has known so much tragedy. Beau's mother and sister killed in a car accident in 1972. Beau and his brother, Hunter, survived. Joe Biden's sworn in for his first term as senator just days later. At the 4-year-old's hospital bedside.

Out of that loss, a remarkable bond between father and son.

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: The incredible bond I have with my children is a gift I'm not sure I would have had had I not been through what I went through.

STEPHANOPOULOS (voice-over): And now, as the tributes for Beau flow in, that father's heart broken, the bond eternal.

JOE BIDEN: A father knows he's a success when he turns and looks at his son or daughter and know that they turned out better than he did.

I am a success. I am a hell of a success.

(APPLAUSE)

JOE BIDEN: Beauy, I love you. I'm so proud of you.

STEPHANOPOULOS: -- the vice president and the whole Biden family this morning.

We're going to switch gears now to that dramatic showdown over the PATRIOT Act, playing out this afternoon in emergency session of the Senate, where Rand Paul has vowed to block any effort to extend the National Security Agency's controversial collection of American phone records. That program will end at midnight if the Senate doesn't act, trying this warning from President Obama.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And heaven forbid, we've got a problem where we could have prevented a terrorist attack but we didn’t do so simply because of inaction in the Senate.

STEPHANOPOULOS: Let's bring in Richard Clark now, counterterrorism adviser to three presidents.

Richard, thanks for joining us this morning. We just heard that warning from President Obama.

But you actually served on President Obama's panel that reviewed the NSA surveillance program, essentially concluded that it wasn't necessary.

So is the president being a bit alarmist here?

What's really at stake?

RICHARD CLARK, COUNTERTERRORISM EXPERT: No. What the president is saying is he's willing to give up this telephony metadata program, where every call to and from information is recorded and kept by the government. He's willing to give that up because we found it did little or no value, had little or no value.

But if the bill expires altogether, the PATRIOT Act expires altogether, there are other investigative tools -- the lone wolf authority, for example; the roving wiretap authority -- that will go away as well. And that's probably going to happen tonight --

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STEPHANOPOULOS: And how serious would that be?

CLARK: Well, it depends on how long it goes on. What I think will happen tonight is the law will expire and then later in the week the USA Freedom Act, which is essentially the same as the PATRIOT Act with the exception of the telephony metadata program, that act will pass and most of the authorities will be restored.

So we're likely to be faced with only a few days where the FBI won't have a handful of tools that, frankly, they don't often use.

STEPHANOPOULOS: They don't use them that often.

What does it mean when you have this window that now the whole world knows the window is likely to be there for three days?

CLARK: Well, probably not much because the FBI does have other authorities. They can go to the intelligence court and get a warrant if they have probable cause. They can go to any U.S. court and get a search warrant under the criminal authorities.

So it probably is not as big a deal as the president is making out. But on the other hand, the PATRIOT Act authority, which is going to expire on the telephony metadata program is certainly not as big a deal as Senator McConnell is making it.

STEPHANOPOULOS: Right. And it is likely to get worked out, we think, in the next few days. Of course you know you can never predict Congress with any certainty.

I should also take the opportunity to congratulate you on your new book, "Pinnacle Event," putting all your experience to work into a great beach-reading thriller that had a lot of relevance in 2016 election. Look forward to reading it. Thanks, Richard, for joining us.

CLARK: Thanks, George.

STEPHANOPOULOS: And we're going to turn now to that stunning indictment of former House Speaker Dennis Hastert, the man who came to Washington with a squeaky clean image, a mission to clean up Congress, now facing the prospect of jail time. And this morning we have new information on the hush money scandal pursued by the FBI.

ABC's Jim Avila has that story.

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JIM AVILA, ABC NEWS CORRESPONDENT (voice-over): He came from practically nowhere, a high school teacher and wrestling coach from a small rural district outside Chicago to become the most powerful man in Congress. When he resigned, he seemed to disappear again. But then emerging this week in scandal.

Former Speaker of the House Dennis Hastert, accused of bank fraud and lying to the FBI, a long-time friend says the Illinois Republican is baffled.

UNIDENTIFIED MALE: There's no question he's been blackmailed. And I hope there becomes exposed and he's vindicated.

AVILA (voice-over): Sources tell ABC News Hastert reportedly agreed to pay $3.5 million as hush money to a former student he allegedly sexually abused sometime during his 16-year tenure at Yorkville High School in Illinois.

And sources say there is a second person who was allegedly victimized in a similar way by Hastert when he was a student. He did not ask for any hush money.

But one of Hastert's former wrestling stars tells ABC News that's not the person he knew.

UNIDENTIFIED MALE: I stand behind him 100 percent, 110 percent, 200 percent. I'd be in his back pocket in Washington until the end.

AVILA (voice-over): Hastert attracted federal suspicion three years ago after making 15 separate withdrawals of $50,000 from his bank. When questioned, authorities say he started taking out smaller amounts, more than 100 withdrawals of just under the reporting limit of $10,000.

Hastert told the FBI he kept the cash because he didn't think the banking system was safe. Prosecutors allege that was a lie.

This week, the longest serving Republican speaker in the history of the House, Denny Hastert, is expected to be arraigned.

For THIS WEEK, Jim Avila, ABC News, Washington.

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STEPHANOPOULOS: Thanks to Jim for that. Let's bring in our ABC News legal analyst Dan Abrams. So Dan, the FBI gets alerted to these withdrawals from Dennis Hastert's bank account. Walk us through how they decide to take a case like this.

DAN ABRAMS, ABC NEWS LEGAL ANALYST: Well, look, they want to know what's going on. They want to know is there money laundering, is this connected to terrorism...

STEPHANOPOULOS: The bank tells them these withdrawals are happening.

ABRAMS: Right, so the bank gives them the heads up. And then the potential crime is when he changes his behavior. So, it's not a crime to take out large sums of money, it is a crime to then structure your withdrawals to try not to trigger this...

STEPHANOPOULOS: So, if Denny had just a check, no problem.

ABRAMS: Checks are OK, wire transfers are OK, because there's more accountability there. This crime is targeted at accountability, to make sure that people can't take out enormous sums of money, large sums of money, without knowing anything about where it's going.

STEPHANOPOULOS: So, the FBI comes to Dennis Hastert, says, hey, look at all these withdrawals, what are his options when they come to him?

ABRAMS: Well, either he can come clean and he can say I'm being extorted. Here's what happened. He obviously didn't want to talk about that.

STEPHANOPOULOS: Kind of David Letterman did.

ABRAMS: Yeah, except in this particular case, he didn't want to admit it. He wanted to keep it quiet.

He could have said nothing. He could have hired a lawyer and said -- and this would have been the best thing legally for him to have done -- is to have said nothing. Or he could do what he's accused of doing, which is lying in this context.

But let's remember, these crimes that we're talking about -- lying to the FBI, and this structuring financial crime, are not crimes that are typically charged without more. Usually you charge these crimes because you're trying to bring someone down for something larger.

STEPHANOPOULOS: So, is this a form of a kind of like celebrity prosecution?

ABRAMS: I think this is a gotcha prosecution. I don't think if he was Dennis Higgins as opposed to Dennis Hastert they would have charged him here, because once you investigate, once you realize that this isn't about drugs, this isn't about terrorism, this isn't about money laundering, they typically drop these. That's why you have to wonder, does the underlying allegations of misconduct on his part weigh in to the prosecutor's decisions. It shouldn't.

STEPHANOPOULOS: And you think it must, though?

ABRAMS: It shouldn't as a legal matter, but it is hard to understand why you'd charge in this case, absent the fact that he's an incredibly famous, formerly powerful individual, and be the underlying misconduct, neither of which the federal authorities should be taking into consideratin.

STEPHANOPOULOS: And what are the chances that you'll actually see some kind of a prosecution for extortion of Individual A?

ABRAMS: You know, that's the big question. And this is one of those difficult choices prosecutors have to make.

We don't know if he's going to be charged in connection with this case. I'd expect the result here would be that Hastert would plea, because even though these are charges that typically you wouldn't see against someone else, it's going to be very hard for him to defend against. I mean, he's probably guilty of the crimes, but that doesn't mean that he would have been charged if he was someone else.

STEPHANOPOULOS: So, if he pleads can he avoid jail time?

ABRAMS: Very possibly, yeah.

STEPHANOPOULOS: OK. Dan Abrams, thanks very much.

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STEPHANOPOULOS: And we're back now with the roundtable. Going to get their quick pick of the headline of the week. Want to start with Kristen Soltis Anderson, Republican strategist and pollster, head of Echelon Insights. What's your headline of the week?

KRISTEN SOLTIS ANDERSON, GOP STRATEGIST: Soccer's governing board across the world, FIFA, found themselves in a lot of hot water this week with many arrests, but there was also a link to the 2016 campaigns. Yet another round of headlines about the Clinton Foundation taking foreign money, this time from both FIFA and the committee responsible for Qatar's bid for the World Cup.

STEPHANOPOULOS: You think that's going to play?

ANDERSON: I think it's the continuation of just another headline. It seems like every big story that pops up, there is some kind of connection back to Hillary Clinton and her money, and the question is when will the message be about something besides how the Clintons make their money.

STEPHANOPOULOS: Michael Eric Dyson, Georgetown professor, MSNBC analyst. Also have a new book coming out called "The Black Presidency." Your headline of the week.

MICHAEL ERIC DYSON, GEORGETOWN UNIVERSITY: The Cleveland Police Department has accepted tough enforcement on the use of force there in Cleveland. As you know, that city, along with Baltimore and along with many others, have been ravaged by an outbreak of unarmed, usually black people being assaulted or killed by the police. And in your interview with Martin O'Malley of course there in Baltimore, he defends his record, but the reality is that that kind of over-policing, or at least the inclination to be suspicious of so many African-American and poor people has led to what is essentially a form of terror for so many occupants of these major cities.

STEPHANOPOULOS: And that issue could play in the presidential race as well. Let me go to our Bloomberg political team, Mark Halperin.

MARK HALPERIN, BLOOMBERG POLITICS: Lots of political news right now. The biggest political story of the year I think is almost certainly going to be the determination of the Republican nominee. This week, a tale of two polls. A Quinnipiac poll shows five Republicans at 10 percent each nationally.

STEPHANOPOULOS: Including one of our guests coming up, Ben Carson.

HALPERIN: That's right. National numbers are interesting, but really what it highlights is it's a state by state race. And to me, our poll out today, Bloomberg Politics "Des Moines Register" poll, Scott Walker with a big lead in Iowa. No one is really a front-runner in New Hampshire. No one is really a front-runner in South Carolina. Scott Walker now is the man to beat, person to beat, in Iowa, and that is going to be a big thing. Can other candidates find states that they can claim to be their best chance to win a state?

STEPHANOPOULOS: John Heilemann.

JOHN HEILEMANN, BLOOMBERG POLITICS: Sticking with presidential politics. On the Republican side, actually trying to write an actual headline, which is everybody hates Rand Paul, and he loves it. Which is this week, where he's had - Rand Paul with his book coming out, getting into a lot of controversies on the Republican side by saying that the creation of ISIS, the Republican policies had something to do with that. Also obviously the NSA debate. He's now been criticized by everybody else in the field. They are all attacking him as either naive, not ready to be commander in chief, not strong enough on national security. It's really important for Rand Paul, but it also highlights the larger debate that's going to run throughout the Republican nomination fight over where the party is going on foreign policy, national security.

STEPHANOPOULOS: He's on the Senate floor today. We're going to talk about that later. We're just getting started right now. Ben Carson, Bobby Jindal up next, but first, our powerhouse puzzler, inspired by this week's Scripps National Spelling Bee. For the second year in a row, it was a tie, after one of the co-champs spelled Nunatak. We'll be right back with the answer, see if you guys can get it.

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STEPHANOPOULOS: OK, testing the round table. How do you spell the word “nunatak”, Mark Halperin?

“I got a D in spelling.” So he gives up. John Heilemann?

HEILEMANN: None of your business.

(LAUGHTER)

ANDERSON: I tried to add a lot of what I figured were silent vowels.

STEPHANOPOULOS: (INAUDIBLE) nunataks up in Cape Cod.

(LAUGHTER)

DYSON: That’s either A or U.

STEPHANOPOULOS: You got it right1

HALPERIN: No, he didn’t! He blamed -- he hedged.

(LAUGHTER)

DYSON: Oh, that’s all right.

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DYSON: I did win the sixth grade spelling bee at Wayne (ph) Elementary.

(CROSSTALK)

STEPHANOPOULOS: Coming right up, we’re up close with two Republican contenders, Louisiana governor Bobby Jindal, grassroots star Dr. Ben Carson, now at the top of the GOP pack.

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(At rally) O'MALLEY: I declare I'm a candidate for president of the United States!

GEORGE STEPHANOPOULOS: Why you? Why now?

GOVERNOR O'MALLEY: Because I believe our country's facing some very deep challenges. And I believe that we're not going to overcome our problems without new leadership. So what I offer in this race, George, is 15 years of executive experience accomplishing difficult things and bringin' people together to get them done. And the most difficult challenge we face right now is restoring the truth of the American dream that we share, making wages go up, and making our country work again and our economy work for all of our people.

GEORGE STEPHANOPOULOS: We've had Democratic presidents 16 of the last 24 years. How would a Martin O'Malley presidency be different from Bill Clinton's, different from Barack Obama's?

GOVERNOR O'MALLEY: Because of President Obama's choices, we were able to avoid a second Great Depression. But-- work remains when 70% of us are earning the same or less than we were 12 years ago. So I guess I differ, I would say, from President Obama in my background and-- and my experience. His was that of a legislator. Mine was of a big city, and also facing difficult challenges, and also of a state-- that we had to lead through the recession. And that's-- that's a big difference with his experience.

GEORGE STEPHANOPOULOS: Also, it could be a double-edged sword. You know, everyone's been focused on the issues in Baltimore coming out of the un-- recent un-- unrest. And you were mayor of Baltimore for eight years. Big drop in crime. But a lot of your critics say your tenure also sowed the seeds of distrust between the police and the community. I was struck by something the former he-- head of the Baltimore N.A.A.C.P. told the Baltimore Sun- He said, "Martin O'Malley's going around Baltimore as his claim to fame. I think this should be his greatest s-- embarrassment."