This is a RUSH transcript from "The O'Reilly Factor," February 05, 2013. This copy may not be in its final form and may be updated.
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O'REILLY: "Impact Segment" tonight, as you may know, Senator Robert Menendez is under heavy pressure because a friend of his is being investigated on corruption charges by the FBI. There have been allegations that Menendez tried to help that friend with government contracts and also cavorted in the Dominican Republic with prostitutes, that's what's been alleged. When we initially reported the story, I said this about the alleged hookers.
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O'REILLY: The problem is that they are in the Dominican Republic, they are in a shadowy industry. These are not law abiding citizens coming forth as you know. A lot of money changes hands in these things. You can bribe criminals to say anything.
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O'REILLY: According to the "Washington Post" today. That's exactly what happened some woman was bribed to make false charges against Menendez who again today denied having anything to do with prostitutes.
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MENENDEZ: Nameless, faceless, anonymous sources through right-wing blogs drove into the mainstream a story that was absolutely false, that these were smears that began during my election process. And that increasingly become obvious that that's what they were. Smears in an attempt to affect the results of an election.
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O'REILLY: But now there is another wrinkle to the situation. And joining us from Washington Tucker Carlson the editor of the "Daily Caller" first broke the Menendez story. It's rather complicated and I want to walk through this with you.
I have a lot of trouble with the prostitution angle of this story because you put forth some allegations but you don't have a name attached to them. You know, it's an anonymous source.
TUCKER CARLSON, EDITOR-IN-CHIEF, DAILY CALLER: Right.
O'REILLY: And you know what this world is. They will say anything for money. There might be people trying to set up Menendez. And I think that has to be taken into consideration. And the "Washington Post" basically says it's a bogus story about the prostitutes. And you say?
CARLSON: I say the "Washington Post" story is ludicrous. The "Washington Post" story was an attempt to take down our story but if you read it carefully and trust me, we did. It doesn't achieve that. They hold up an affidavit in their piece as evidence that the woman we interviewed was lying.
We're not mentioned in the affidavit. It has nothing to with the story we did. And in fact, it's not at all clear that the woman they're talking about is the same woman we interviewed. I read the "Post" piece. I don't recognize anything. She said she talked about in our interview. I was there for our interview. She didn't say these things.
She, for example, told the "Washington Post" that she was surreptitiously taped. That we had a hidden camera, she looked right into the camera into a video camera in our conversation with her. It was absurd.
O'REILLY: Is this an underage --
Carlson: -- it's not at all clear what happened. But I know the Post piece did not prove our piece wrong.
O'REILLY: Is this an underage woman that you talked with. An underage prostitute.
CARLSON: No it was not. She identified herself as 24.
O'REILLY: So she's just a regular -- a regular prostitute
Ok so -- but -- how do you know the woman is telling the truth? I mean I just -- I want to give all Americans the benefit of the doubt and the presumption of innocence.
O'REILLY: And when a journalist parades somebody through, it makes a heinous allegation about a public figure.
O'REILLY: And that person is pretty much protected, they are anonymous. I don't know. It makes me a little queasy, Tucker.
CARLSON: I get it. This is one of the basic conundrums of journalism it's something we deal with every day. People come forward and make allegations. Can you know the metaphysical truths of them?
O'REILLY: But if they come forward and there's a face on them and they are out there and they are taking the bricks that -- that come with an allegation I can understand that. But a protected criminal?
CARLSON: But -- but Bill, I mean I have been doing this 22 years, not as long as you, but you know the truth, which is 90 percent of our sources have agendas, they are anonymous, they are working for reasons you don't fully understand.
O'REILLY: Why do you believe this?
CARLSOON: There were a couple of reasons and here is why.
CARLSON: Because she did -- she and her partner did an on camera interview with us for quite some time that was quite specific. And by the way it comports with other stories we have done. We interviewed a prostitute in the United States who said she had contact with Senator Menendez. This was not out of left field.
And again, by the way this is part of a much larger story about the Senator's trips down to the Dominican Republic with the campaign contributor who as you noted in the intro is now under FBI investigation. This is not a random one off that we did.
You would have gathered that from reading the "Washington Post" piece. But it wasn't. And it's part of a much larger story about this senator's activities in the Dominican Republic which we think deserve scrutiny. Many in the press disagree. They batted this down as if it was entirely illegitimate to air the claims of human beings on camera, you know, it's not. That's straightforward, traditional journalism. And that's what we did.
O'REILLY: Is it possible though that this story was manufactured by people who don't like Menendez and want to get him? You know, you give the woman a grand or two and she comes on and tells you all this stuff when she is protected. You know, I just don't know.
CARLSON: Well, I can tell you this. Our source, the person who brought this story to us, I am satisfied entirely received no money from anyone for the story. When the "Post" piece came out, the first thing we did was reengineer the story. Report it, go back to our sources, check everything we reported the first time to make certain.