it will be a busy money. thank you, make jarrett for coming in, clayton, we hope you are feeling better, brother. right? >> alisyn: thank you. >> dave: get better, clayton. >> alisyn: we have a lot to talk about in the "after the show" show and suggest you join us at foxandfriends.com, so much to follow up on. >> dave: it will be good. foxandfriends.com. >> eric: we start this morning with a "fox news alert." good morning. iran reportedly dodging the full force of economic sanctions aimed at its nuclear program thanks to the help of a surprising ally. i think and there is news this morning even iraqi government officials are reportedly profiting from it all, a stunning new development, on the iranian nuclear fronts, that raised a lot of questions in washington. good morning, everyone, i'm air rake sean. >> jamie: a lot of question we'll get to it. i'm jamie colby, great to have you here, this is a brand new hour inside america's election headquarters. but, first, according to the new report, iraq is helping to keep cash flowing through into iran

through a network of financial institutions. and oil smuggling operations. the new report citing sources inside the white house on that and peter doocy has more information live in washington. good morning, peter. >> reporter: good morning, jamie. just to set the stage here the last american troops left iraq on december 18th last year and on july 31st, a little more than 7 months later, president obama approved an executive order imposing new sanctions against the iranian energy sector and, at the time he said the treasury department had also imposed sanctions on the islamic bank based in baghdad, because they, quote, facilitated transactions worth millions of dollars on behalf of the iranian banks, that are subject to sanctions for their links to iran's proliferation activities. but the "new york times" is reporting now, that in baghdad, the iraqi government is letting companies operate in spite of these sanctions and they are enforcing penalties on companies who violate them and some folks

on the ground, in iraq, are saying the iraqi central bank is still letting this islamic bank, the one president obama singled out a few weeks ago, take part in a cash option used by people connected to the iranians every day to beef up their reserve of u.s. dollars. while a public show down with the president of iraq, nouri al-maliki would raise public relations issues here in washington a treasury official told "the new york times" we'll pursue and are actively pursuing efforts to prevent iran from evading u.s. or international financial sanctions, in iraq, or anywhere else. "the new york times" also reports high-ranking officials in the iraqi government are profiting directly from smuggling and other trade with iran and they quote a former senior intelligence official who now does business in iraq as saying al-maliki's government is right in the middle of this, jamie. >> jamie: yet another concern, thanks so much. >> eric: after the blood, the

sacrifice, the dedication of our country, for the iraqis, the american spirit and soul costing the lives of 4488 of our own servicemen and women, with more than 32,000 americans wounded, is this the thanks we get from baghdad? for more on this, fox news contributor and former u.s. ambassador, to the united nations, john bolton joins us as he does every sunday, about this time. good morning, ambassador. >> good morning, eric, glad to be with you. >> eric: good to see you. is this an unbelievable slap in our face, an astounding insult to hurry country. >> it is certainly that but is also, with all due respect to the "new york times," nothing new. the iranian effort to evade sanctions through iraqi channels has been going on for quite some time and, in anticipation of both of the u.s. sanctions which took effect a few months ago, and european union sanctions, the activity inside iraq mass been ramping up for some time.

both in terms of hiding financial transactions, giving iran continued access to international financial circles, and, in terms of oil, smuggling iranian oil into iraq for export and importantly, smuggling iraqi refined petroleum products into iran where they have a shortage. so, this is a reflection of iran's influence over the al-maliki government and is yet another reason among many why we should not have reduced our troop presence in iraq and we have lost pretty much any influence, i think we have, at this point, over the al-maliki government. >> eric: how could he and his government officials smile at us and shake or hands after doing this? >> well, as shakespeare wrote a man may smile and smile and still be a villain. this is a broader problem with sanctions enforcement. you can announce new sanctions with great fan fare but if other countries are not following through, the sanctions have very little effect. take venezuela, another country that assisted iran for years in

evading the financial sanctions. this is a pattern of evasion and mitigation that iran has followed, they've anticipated these sanctions, they are working to reduce their effect and they have a lot of people who are willing to help them. >> eric: the iraqis are apparently letting iranians use the air space to help syria fly over and the president, say reports, called al-maliki and those flights stopped. what else should president obama and the separation be doing right now, to stop this? >> well, i think there has to be more pressure on the al-maliki regime, it is not like he rules with a super majority. the sunnis largely feel they have been disenfranchised by the way al-maliki ignored arrangements made at about the time of the last election. but, we have to be honest with ourselves, our ability to influence the al-maliki government is substantially reduced since president obama withdrew our forces there and it makes it much more difficult to counter the growing iranian

influence in iraq. >> eric: tell you about influence, iraq does $11 billion worth of trade with tehran, i mean, that is unbelievable and is only going up, you talk about the unraveling, mohamed morsi, the president of egypt is about to go to tehran for the meeting on august 30th there. is it all falling apart? >> well i think there is a general strategic deterioration of american interests in the region and i think our allies like israel and friendly arab states are gravely concerned about what we see here. and the fact that somebody from the sunni muslim brotherhood can be making nice with mahmoud ahmadinejad in shia iran shows how great the threat is. always remember the saying from that part of the world: i against my brother, my brother and i against our cousin, all of us against the stranger. that is what is going on here. >> eric: and i imagine, ambassador, that we are the stranger? >> indeed. >> eric: and how do we deal with this?

do you fear there could be a ra approachment after iraq and iran after 30 years and what dynamics can play into that when dealing with the iranian nuclear program? >> we have seen examples of that. let's not forget iran financed hamas and the gaza strip and a terrorist group a wholly owned subsidiary of the muslim brotherhood even before mohamed morsi came to power the military in egypt had ended the blockade of gaza and allowed iranian warships to transit the suez canal and he is building on steps that were already taken and share a hatred or israel and mohamed morsi all but threatened to eliminate the key land for peace provision of the 1979 camp david accords. so i'm afraid i see the situation getting worse, given the absence of american leadership and assertion of its own interests, under the obama administration. >> eric: ambassador john bolton, always good to see you. we'll be on this throughout the next coming months. thank you. >> thank you. >> eric: jamie. >> jamie: thanks, eric. dramatic new amateur video out of syria and so much of it has

been disturbing. rebel fighters reportedly are battling regime forces for control over the airport and the country's largest city, aleppo and it is a main hub of northern syria, a rebel victory would be a huge strategic and symbolic win against president assad's forces. it is also close to the countryside where the rebelsing or my and bring in supplies from turkey, we'll have more on this in our next hour and get a live report from steve harrigan along the turkish-syrian border. serving and he's back, embattled wikileaks founder julian assange made his first public appearance today in two months. assange and his supporters -- thanked his supporters when he stepped on a balcony of ecuador's embassy in london and as you may know is wanted for extradition to sweden forequestioning over sex crimes there but if he sets foot outside of the embassy on the sidewalk he fierce he could be arrested by british police and sent to sweden and they could extradite him to here, america.

and his shelter in the embassy, after exhausting appeals on the south carolin sex charges and, he was given ali judgment at the ecudorean embassy, he published thousands of diplomatic and military documents revealing secrets that some say damaged our security. >> jamie: the united airlines flight catches fire after departing new jersey's newark international airport and forced and energies land i emergency l. the boeing 757 flew around for an hour trying to burn off fuel while flames were put out. hundreds of people flooded the local police department with calls seeing the plane circle the area. frightening moments for the 173 passengers and crew on board. no one, thankfully was hurt and the faa is investigating. >> eric: wildfires out west. have you heard of this? one is now raging in the rosboi

national forest in idaho and there is a mandatory evacuation order issued for the whole town. meanwhile firefighters are struggling to control another large blaze in cle-elum washington and many are returning home to see if their homes were spared, sadly, some were not so fortunate. >> it is like a death in the family, you know? this is our home, to a lot of friends and... gosh. anyway... it is how we feel today. we have to start all over again with our stuff. >> such a beautiful, beautiful place. and most of it is gone. >> eric: your heart really has to go out to those people and crews hope to have the fire completely contained by tomorrow. ♪

>> jamie: to politics and we're hearing a lot about medicare. president obama and republican vice presidential candidate paul ryan both on the campaign trail, yesterday, and both offering their fix to reform medicare. they traded very sharp criticisms. listen: >> medicare should not be used as a piggy bank for obamacare. medicare should be the promise that is made to our current seniors, period, end of story.> have been trying to sell this trickle-down snake oil before. it did not work then, it will not work now. it's not a plan to create jobs. it will not reduce the deficit. will not move the economy forward. >> jamie: how is the one issue shaping the campaign? let's bring in erin mcpike, national political reporter for real clear politics. erin, great to see you, good morning. >> you, too, thanks. >> jamie: how big an issue is

medicare, particularly at this stage of the game, so close to the election? and, the convention, the independents or the persuadables? >> it is a big issue specifically because of florida. as you know, florida has 29 electoral votes and by far is this biggest battleground state and it is the one that mitt romney has to win. and, so some republicans are a little bit nervous about this, because there is a heavy population of senior citizens in florida, that depend on medicare and some of the criticism coming from the obama campaign is under paul ryan's plan in the past, it would end medicare as we know it and therefore seniors could not depend on it in the the way they do. and, that is some of the things we'll be hearing from democrats. and the attack ads that could come in florida, from the obama campaign could be damaging to mitt romney and his prospects there. >> jamie: before you tell me what president obama is planning for medicare reform, if at all, is that statement true or false? does the romney-ryan campaign,

potentially residents of the white house, do they plan to end medicare as we know it? and does it fled to happen, anyway, in some form? >> well, that is the key. under previous iterations of paul ryan's plan a couple years ago, he has been very clear that medicare would go bankrupt in about ten years and he wants to change the system anyway, partially privatize it or make it a voucher system. so, in the past, paul ryan has argued for ending it in some respect. now, the current thing that mitt romney and paul ryan are both saying, is they want to preserve it. so the obama attacks are not particularly true but they can back it up with past statements made by paul ryan. so that is the problem there. now, as far as going forward, no, the presint has not really put out a plan for how he would approach medicare and the fact that it is going to be bankrupt if they don't do something about it in the next ten years or so. >> jamie: you and a are in the category of someday, we put money from our paycheck in all

the time and we hope someday we'll be able to take care of ourselves and get the health care and also the stipend we get, we don't know if it will be enough to live on but expect to get something which we won't if it is bankrupt? what is your feeling? i'm interested to understand better the voucher system. what is wrong with having the option of taking it from the government or going out in a competitive market and buying the coverage and care you feel you need? >> that is exactly what mitt romney is arguing. the issue that democrats see is that it would pass on some of the costs to senior citizens who don't necessarily want the government's plan and would have to buy their own plan and the idea that it would cost more to the individual, even if they were to have better health care in the future, that is the issue that is would just cost more out of your pocket. >> jamie: and a lot of people feel the plan as it is, the way president obama is talking about it, is more, more government

control. so, it is an issue for folks to consider. i find it interesting you feel it is important to all, not just seniors. thanks, erin, very much. >> thank you. >> jamie: we're now a little more than a week away from the first of the 2012 political conventions and, fox news channel, you know it is the place to be, if you want complete coverage of both the republican and democratic conventions. megyn kelly and bret baier will anchor when the republican national convention takes place, in tampa, florida, august 27th through the 30th. as well as the following week when the democrats hold their convention. september 3rd through 6th in charlotte, north carolina. >> eric: and we're waiting for that, as it starts and coming up right now here on the fox news channel a piece of american history, setting sail today in boston, the world's oldest commissioned warship marking a key victory from the war of 1812. we've got the heralded colonial action live from boston harbor, straight ahead. >> jamie: plus troubling new

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>> jamie: got blesses -- paefpaef. >> jamie: god bless america, folks, a cruise around boston's harbor, a warship that will sail under its own power in the second time in more than a century, part of the event that mark the war of 1812 when the warship was victorious against a british ship during a fierce battle and during today's sail. the uss constitution will unfurl, just four of its 36 sails, tug boats will stand by, as a precaution and old ironsides was first launched in 1797, and is a fixture in boston harbor and popular with locals and tourist and we can see why. >> fox news sunday, senior campaign advisors to president obama and governor romney, fox news's chris wallace sat down

and pressed them on major campaign issues of medicare and tax reform. >> they are funding obamacare by taking $716 billion out of medicare now. current beneficiaries affected by it. and, people who paid into the program for guaranteed health insurance are seeing the money go to other purposes, and, that is wrong, and, we welcome this debate. if mitt romney proposes to be president of the united states and lead us through tax reform, shouldn't the american people understand the offshoring and the outsourcing and the tax havens that he takes advantage of in his tax return and understand how those values would govern the tax reform decision s that he might make a president? >> eric: joining us as he does every sunday is was, with fox news -- chris wallace, with fox news sunday. >> in both cases i came back at both of them, you reallywant to watch the interviews.

>> eric: medicare leapt to the forefront of the campaign. >> and what is interesting about it, democrats as a default position think if it is medicare it is good for us because people generally perceive democrats as being more protective of the social safety net and on the other hand, i think, romney and, particularly, ryan have been effective this week in bringing up things that people may not have known, which is, the main thing is that under the president's health care reform law, just as ed gillespie said, they would take $716 billion, they will, because it is law, take $716 billion over the next ten years, out of medicare to help pay for obamacare, as romney says, in ryan -- an ryan, treating it as a kind of piggy bank and that does two things, first of all, it says maybe the democrats are not quite the protecters of medicare you say, also, it is a way to get back into the debate over obamacare, which according to the polls is not a popular program. >> eric: can you analyze for a second, explain it because it is so confusing and as you say the

republicans say the president takes $716 billion, puts it into another government program, obamacare and the ryan plan takes the $716 billion, to pay down the deficit, but, the romney plan apparently takes the 716 and restores it to medicare. so, how do we all sort it out, to figure out what they really want to do? >> well, basically, you have to forget about the ryan plan, because he's the running mate, so he doesn't decide the policy, romney does and so it is -- the president -- the real contrast is, the president's plan which takes the $716 billion out, which even washington is a lot of money, out of medicare to help pay for obamacare, now they say it's not taking it out of benefits, it is taking it out of reduced payments to providers and insurance companies, even the medicare actuaries say, you cannot take $716 billion out and not have any impact because a lot of those providers are going to go broke. without that money. meanwhile, romney would not take any of the money out, the only

problem is without the spending cuts, the -- it is confusing, the medicare part a, the hospital insurance program, runs out of money, 8 years earlier. runs out of it in 2016. so, romney will have to figure out a way to counter the argument, what do we do, because under the romney plan, the insurance plan becomes insolvent in 2016. >> eric: chris you nailed it down to the clearest, crispest, direct-est explanations we heard so far. >> thank you, i'm not sure i understood it! but, anyway, thank you. it is' great debate and i think the fact that the republicans seem to be on an -- even terms so far in the debate is a little bit surprising and i think democrats realize that it isn't going to be a gimme for them, the medicare debate and who will protect the program. >> eric: looking forward to the interview, chris, thank you so much as always and of course the interviews and explanations of medicare and the whole issue,

well is on chris's program, robert gibbs and ed gillespie going at it. fox news sunday airs on the fox news channel later on today at 2:00 and 6:00 p.m. or check your local fox station. jamie? >> jamie: there is alarming news to tell you about, about the west nile virus. we haven't heard about it for a while but there are new reports potentially deadly disease is spreading faster in this country than before. one state in fact seeing the worst outbreak now in decades, a state of emergency declared. who is most susceptible? how do you protect yourself? sunday house call has answers. >> eric: and there's a new study, have you heard about this one? about possible factors behind the growth of prostate cancer. the doctors will be here to give us details about what could spread that disease, what men need to know... >> jamie: women, too. >> eric: and the women who love them. stay tuned.

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