This is a partial transcript from "The O'Reilly Factor," August 12, 2004 that has been edited for clarity.
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BILL O'REILLY, HOST: Now for the top story, the governor of New Jersey (search) is resigning, saying he violated his marital vows after having a homosexual relationship. And there's more.
With us now, Judge Andrew Napolitano, who once sat on the bench in the state of New Jersey.
Now look, there's got to be more to this. So he's gay. So what? He works it out with his wife. You don't have to resign the governorship because you're gay.
ANDREW NAPOLITANO, FOX NEWS SENIOR LEGAL ANALYST: Look, he's a lawyer and he knows the basic rules of how you deal with bad news. If bad news is going to come out about you — if serious allegations about your personal behavior about to be made public — state them first before your adversaries.
O'REILLY: But he didn't state them. He just said he's gay and had a consensual affair. That's not enough, in my opinion, to resign a governorship. I think there's some big scandal here coming up.
NAPOLITANO: Sources have told us that a person, formerly close to him, will soon commence a lawsuit.
O'REILLY: I got this guy's name...
NAPOLITANO: You have his name, yes. His name is Golan Cipal. He's a former Israeli agent, who the governor of New Jersey once named as director of homeland security for the state.
NAPOLITANO: He didn't get the job because he's not an American citizen.
NAPOLITANO: He couldn't get a security clearance.
O'REILLY: So apparently this guy, Golan Cipal, right?
O'REILLY: Is that his name, Cipal?
O'REILLY: He is the guy that McGreevey says he had an affair with?
NAPOLITANO: Yes, and apparently he will soon make some allegations that the governor felt if he is to defend these allegations, it would detract from his ability to govern.
O'REILLY: All right, sexual harassment allegations, is that what it is?
NAPOLITANO: That's probably the way they will be couched. What the specific physical allegations are, we don't know until we see them. They will be couched in the terms of sexual harassment.
O'REILLY: OK, so that's what you expect to come down the next couple of days? This sexual harassment, lawsuit against Governor McGreevey. And that's why he stepped down. That makes sense. Now Cipal's 33-years old, as you said, an Israeli citizen. And he was hired on the state payroll as McGreevey's lead security adviser in February.
O'REILLY: He resigned in March after questions about his background, but kept on the governor and payroll at $110,000 a year.
O'REILLY: $110,00, after he's got fired? This is blackmail.
NAPOLITANO: Well, think of this: If the governor puts his boyfriend on the payroll, the governor may very well find that indefensible.
O'REILLY: So now the No Spin Zone has come through once again, and cut through the spin that you've been hearing all day long. And that's what's going on here.
O'REILLY: All right. Now McGreevey is up to his eyebrows in scandal. His top Democratic fundraiser, Charles Kushner (search), is charged with hiring prostitutes to obstruct a federal investigation into Kushner's finances. Another guy, David D. Aminio, was arrested on charges he extorted campaign contributions. I mean, what's going on?
NAPOLITANO: Two of the governor's former closest advisers are also in the crosshairs of the U.S. attorney.
O'REILLY: You know all these guys. You hang with them?
NAPOLITANO: No, I don't hang with them.
O'REILLY: Come on.
NAPOLITANO: You know them. I live in New Jersey. There's a time when you knock enough people down around the guy in the middle of the circle and he's going to go down himself.
O'REILLY: What's going on here?
NAPOLITANO: Because the public will question his judgment about his personal life and about the people that he...
O'REILLY: He's got guys all around him getting arrested. He's got a guy he's paying $110,000 bucks. And this is the governor, by the way, who raised taxes on the working folks of Jersey, more than any other state in the union. He's paying his boyfriend, as you put it, $110,000 after he gets fired!
Why aren't we marching on Trenton with torches?
NAPOLITANO: Well, maybe we will be soon.
O'REILLY: Will you be there, judge?
NAPOLITANO: Only if you're next to me. We may find out soon exactly how this has affected the government of the state. We may learn that the Democrats forced him out of office so that he is not an albatross when Senator Kerry is elected in November.
O'REILLY: There's my next question. Can Lautenberg be senator and a governor?
O'REILLY: Because you remember, Lautenberg is 112-years old. And we loved it. He took Torricelli's placed after they threw him out because people were upset.
NAPOLITANO: You know what? Maybe they'll bring “The Torch” back and make him the governor.
O'REILLY: What's going on in Jersey? What's the deal? Is this Tony Soprano land real?
NAPOLITANO: A perception of Party bosses dominating the government without respect for the will of the people.
O'REILLY: Perception? This is one after another. It's got to be the most corrupt state in the union.
NAPOLITANO: You're making a good point. Does John Kerry want to deal with this in November? Or should they get McGreevey out of the way in November?
O'REILLY: Do you think that is going to influence the presidential choices?
NAPOLITANO: I think it puts New Jersey in play. And I think Republicans are considering that as we speak.
O'REILLY: Interesting. It's got to put the Republicans in play locally to run a governor. And now McGreevey's going to hang around until November. I don't think he's going to make it, by the way. I think he'd probably have to bail in a couple of weeks.
But that's interesting whether Bush will capitalize, because they need the electoral votes there.
All right, judge. You tell your buddies over there to clean up their act.
NAPOLITANO: I will.
O'REILLY: And I'm going to hold you accountable for that.
NAPOLITANO: All right, Bill.
O'REILLY: Judge Andrew Napolitano.
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