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A potential key witness in the Hillary Clinton e-mail scandal was just granted immunity by the Justice Department.

That witness is Bryan Pagliano, the former State Department staffer who set up a private email server in Clinton's New York home in 2009, and who worked on Clinton's 2008 presidential campaign.

Judge Andrew Napolitano told "Fox and Friends" the development could be "enough to shake the American political system to its foundation."

He said that Pagliano being granted immunity means that DOJ lawyers want to call him as a witness to testify "against some person or persons north of him on the totem pole."

Napolitano said it appears the DOJ believes Pagliano was present at the creation of a "conspiracy" to violate federal laws requiring those who receive state secrets to keep them secure.

"He knows who led it and he knows who was in it, and he's about to spill the beans to a grand jury," Napolitano said.

If the proceeding leads to Hillary Clinton being indicted, Napolitano said, "it will shake the Democratic Party and the American political establishment to the core."

Napolitano also appeared on "Varney & Co," and said that Clinton "should be terrified of the fact that he's been granted immunity."

"Mr. Pagliano is their nightmare," he said.

Watch his analysis from FBN above and see more of his thoughts below.

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