Former Catholic priest and admitted pedophile Neil Conway spoke candidly Wednesday afternoon on the Fox Report With Shepard Smith.

Conway, 65, has spent several years in self-imposed exile to avoid any contact with children. Recounting his personal battle as a child abuser, he suggested structural changes were needed within the Church to end such abuses.

Below is a transcript of their conversation:

SHEPARD SMITH, HOST: A retired Catholic priest says the Church's new zero tolerance policy would have stopped him from molesting young boys. He's admitted to abusing eight children, but now Father Neil Conway says he's undergone therapy, and he says he's helping his victims personally and financially. Father Conway joins us now. Welcome.

NEIL CONWAY: Thank you.

SMITH: I understand you retired in 1986 and have been in therapy since.

CONWAY: Yes, that is right.

SMITH: How do you keep in touch with your victims?

CONWAY: No, I don't keep this touch with them, but I have kept in touch with a couple that I keep in touch with. But I made sure that I sought out everyone that had been victimized by me, to make sure that they understood this was not their fault it was mine, and that I was getting help. And to see what kind of help they needed, you see. So, but you know.

SMITH: Did you make your way through the legal system? Were there charges ever filed?

CONWAY: Yes, there was. In one case I was charged. In two cases there were charges filed. One dropped — that was not a real case. The other —

SMITH: It wasn't a real case? You didn't abuse that child?

CONWAY: Right, yeah. And the other one was a settlement with the Catholic diocese.

SMITH: Financial settlement — the Catholic Church paid money to your victim?

CONWAY: Yes.

SMITH: The Catholic Church now has a policy, or is discussing, what is now being called a "zero-tolerance policy." Many would argue it is not a zero-tolerance policy. What do you think of it?

CONWAY: Well, I think as long as lay people are in on it, it will work, you know what I mean? Because zero-tolerance, like you say, can be ambiguous especially the way they ... the key to anything in the Catholic Church is a guess because it is closed system, clergy run and dominated, you see? If the lay people are in on decision-making... A parish — this guy made a mistake once, they interview him, get all reports, everything else if they decide.

SMITH: Made a mistake? I don't think it's a mistake. Is it a mistake the Church allows someone to make? And continue to be within the priesthood?

CONWAY: Well, that would be ... see, that has happened, that happened in our diocese. One priest fessing up is — the people said we want you, and the law came in, interviewed everybody, and, it was one case. OK, so.

SMITH: The Church said 'we want you, we want you' — the priest, in whom all within the Church placed all of their faith, abused sexually a child there. That is — I don't understand that. I don't —

CONWAY: Well that is — I'm saying more of a caveat has to be of people in the Church, not the clergy. And, the problem with the Catholic Church is that the people have nothing to say about policy, really. And for this to change, that they have zero-tolerance or any kind of structure that would analyze things — they can't do it as a bunch of clergymen. They've got to have lay people in on it because they are the mothers, they are the fathers, you see...

SMITH: Yep. You have been living in a cabin in the woods, is my understanding, for many years, undergoing therapy. What is your life like now?

CONWAY: Well, you know...

SMITH: Since 1986, right?

CONWAY: Yes. Well they had work for me. I worked for eight years, because I had to build up my retirement, which I did. I worked as paralegal for my county...

SMITH: Are you undergoing therapy? Have you abused children since 1978?

CONWAY: No I have not.

SMITH: So has that been a very difficult process?

CONWAY: You know, I just have a rule — I'm never alone with kids. I'm taking therapy. I don't want to, but, it is just I'm never alone with kids.

SMITH: When you are alone with kids, is it very difficult for you?

CONWAY: Well, I just I won't allow that.

SMITH: That is why you live in a cabin in the woods?

CONWAY: Well, people who come out to visit and bring kids — they better be with them, I mean.

SMITH: You just know that.

CONWAY: Yeah. Just ... it is an easy way to do it, isn't it? Don't be alone with kids. But also, the therapy and, you know, my coming to Church with myself, I certainly don't want to do that.

SMITH: Did leaders of your Church know what was happening with you?

CONWAY: No they did not.

SMITH: Didn't know until — once they did know what happened then?

CONWAY: Well, they did all the right things. They came up with a confrontation, they knew I might have my own denial. They sent me for therapy. And, I stayed there for a year.

SMITH: Still in the Church?

CONWAY: In therapy I decided I shouldn't be a priest anymore.

SMITH: During the therapy did the Church allow you to still have contact with children?

CONWAY: None. I was away. I went to an institution.

SMITH: And is it baffling to you that the Catholic Church has moved priests around, and allowed this to happen, for lack of a better term, for so long? Are you surprised by that at all?

CONWAY: I really am. I really am.

SMITH: This was in the news in the early '90s — a similar problem. And the middle '80s before. Everybody talked as if this is something new. It is not new.

CONWAY: Right. That is right. That is why I say it can't be just clergy.

SMITH: Do you think the Church is just doing damage control now, trying to make sure it can still get its fund-raising going, or is it looking at this as a problem which could literally bring down the Church if not handled properly?

CONWAY: Yes, yes, well, there is among bishops who will meet — some feel very strongly, that the only way to make this real is to have lay people in on the decision-making of every aspect of the Church. Because otherwise it going to do what it's used to doing.

SMITH: Do you think it is a real effort to move forward if the Church, if bishops came together to say 'Well, if you have only molested a child one time in the past well there are conditions under which you may remain in the ministry.' Does that sound like the Church is going far enough to someone who was abused?

CONWAY: You know, I wouldn't go back. I wouldn't go back. I guess I don't know but all I know is that if lay people are in on it, they will be every check and balance system in the world and I think most cases, if they don't, it will — if the Church is a closed system it ends up closing this system again.

SMITH: So what you are saying then here in a roundabout way is if the Church is left alone the Church will look more how to protect itself than how to protect the children.

CONWAY: Yes.

SMITH: What does that say about Catholic Church?

CONWAY: Whenever you leave, whenever you separate yourself out from your shareholders, and your stakeholders and your customers, you become unrealistic. Right? You — your concerned — your concern becomes mechanism. Isn't that what we are finding out about Enron? Finding that happen in any society — and the Church is made up of people like any other institution — and also in there is a check and balance system. An institution always takes care of itself.

SMITH: Neil Conway thank you very much.

CONWAY: Okay.

SMITH: Good of you to come.