This is a partial transcript from "The O'Reilly Factor," Jan. 26, 2005, that has been edited for clarity.

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BILL O'REILLY, HOST: In the "Impact" segment tonight, another situation where the Bush administration has paid a journalist. Maggie Gallagher (search) is a columnist, who often writes about family issues. In 2002, the Department of Health and Human Services (search) paid her $21,500 for some consulting work. But Mrs.Gallagher did not tell her readers that. And so she's in a similar position to Armstrong Williams (search), who was paid far more by the Department of Education, as you will remember.

Joining us now from Washington is Dr. Wade Horn, the Assistant Secretary for Children of Families at HHS. And here in the studio is Maggie Gallagher.

All right, now they paid you 21 grand for what? What did you do for the feds?

MAGGIE GALLAGHER, SYNDICATED COLUMNIST: Let me tell you this. Bill, if you'll give me a minute to say, The Washington Post published what I consider an extremely serious charge against me, which is that I took money from the government in order to promote the Bush marriage policies. As far as I'm concerned, that's indefensible if I did that. You know, if you think I did that, then it's...

O'REILLY: Well, I...

GALLAGHER: No, I'm now telling you...

O'REILLY: Yes, I don't think (UNINTELLIGIBLE), I want to know what you did.

GALLAGHER: Right. Well, actually, it's not true.

O'REILLY: OK.

GALLAGHER: What actually happened is that in 2001, I was approached by HHS officials, who told me, Maggie, we don't have anyone here who's got the expertise. You have on the marriage and social science evidence on its importance. Can you do some brochures for our clients on what parents and why marriage matters? Can you write — help us draft an article for Wade Horn's signature on the social science evidence that marriage matters? And can you attend an in-house meeting with our regional managers...

O'REILLY: All right, so you were consulted.

GALLAGHER: ...on the social science effort.

O'REILLY: You were a consultant?

GALLAGHER: But the most important thing is I was paid for specific work progress. I have the invoice. I offered it to "The Washington Post."

O'REILLY: OK, all right.

GALLAGHER: And they were not interested.

O'REILLY: So you were paid to do a job by...

GALLAGHER: I was paid to do research and writing on marriage...

O'REILLY: ...the federal government...

GALLAGHER: ...which is the field of my expertise.

O'REILLY: OK.

GALLAGHER: I'm a marriage expert. You know, some people know me as a syndicated columnist, and I am one. But nine-tenths of the work I've done over the last 20 years is research and public education on the importance of marriage as a social institution.

O'REILLY: All right, here's where you made your mistake.

GALLAGHER: That's what I do.

O'REILLY: And I think you've already admitted the mistake, is that you should have, at some point along the line, told your readers that you were being paid by the government for some work.

GALLAGHER: Yes I think that's right.

O'REILLY: Simple as that.

GALLAGHER: When "The Washington Post" called me up and said — they didn't ask me what they later printed — which is should you promote the marriage policies...

O'REILLY: Don't worry about "The Washington Post."

GALLAGHER: Well, that's what's bouncing around the whole Internet and newspapers.

O'REILLY: OK. So just tell your story to the folks. We don't care about them.

GALLAGHER: What I — what I — when they asked me, should you have disclosed this government contract, I thought about it for 10 minutes after I got off the phone. And I said, Bill, yes.

O'REILLY: Yes.

GALLAGHER: The answer is yes, I should have.

O'REILLY: All journalists have to do that.

GALLAGHER: It had never occurred to me. It's not, in fact...

O'REILLY: Innocent mistake, you say?

GALLAGHER: Well, I mean, I was completely befuddled when I was asked the question because I had never really...

O'REILLY: OK.

GALLAGHER: ...they were completely separate things in my mind. It was a mistake.

O'REILLY: All right, Ms. Gallagher...

GALLAGHER: It will never happen again. That's all I can say.

O'REILLY: We will take your word for it, OK?

GALLAGHER: OK.

O'REILLY: Good.

Now Mr. Horn — Dr. Horn, I've got a bigger problem with you guys up there. You and the Bush administration and the departments shouldn't be hiring active journalists to do work for you because of the conflict of interest appearance, sir. Am I wrong?

WADE HORN, PHD, HHS ASSISTANT SECRETARY: Well, what we did is we hired Maggie Gallagher as a nationally-recognized expert in the field of marriage and marriage education. It was an expertise we didn't have in house. And in fact, what we do when we don't have the expertise in house is we hire consultants in order to build the capacity in house, as well as to help us develop materials.

You know, Barry Brazelton (search) is a pediatrician. —Very famous.— He's known as America's pediatrician. He also happens to write a syndicated column. Under the kind of new standard, which is really kind of new, it would suggest that if the government were interested in doing something around the issue of child health and development, Barry Brazelton's expertise would be barred from being accessible by the federal government.

O'REILLY: OK, but it's not a good policy for the federal government to be paying journalists, people who are practicing journalism, whether they have another profession or not, because of the conflict of interest, it looks bad.

Now my own situation. — I get offered a lot of money by political groups, all the time, to speak to them. And if it is a political group assigned to a party, Democrat or Republican, or libertarian or whatever, I say no. I turn it down. I don't want anything, all right? And if I do do something like that, I'll tell the folks right away. That was Ms. Gallagher's mistake. All she had to do was say, hey, Dr. Horn wanted me to write him up a brochure. I was happy to do it. I was compensated. Then there's no interview here.

But you guys in the Bush administration, this is Armstrong Williams, and now Maggie Gallagher. How many more guys do you have? Do you have any more?

HORN: First of all, I am not an expert on what happened with Armstrong Williams. That was in a different department. But I do think you make a valid point, that it is important for people in government to avoid even the appearance of conflict of interest.

O'REILLY: Yes, right.

HORN: And the fact of the matter is that we did not ever pay Maggie Gallagher to use her position as a columnist to advance the president's marriage issue.

O'REILLY: OK, and I take your word for that, doctor. But the appearance is no good. I'm going to give Ms. Gallagher the last word here, because I don't want to ruin your reputation. But I think you understand the big picture here.

GALLAGHER: I think...

O'REILLY: Journalism is special. We have special protections. And we have to be up front. Go:

GALLAGHER: Let's say this is a news — I don't disagree with it. I've already said that, you know, if it had ever occurred to me to disclose it, I would have and I should have, and in the future I will.

On the other hand, right now, every day, there are people who write for "The New York Times" and other major newspapers, who do op-ed columns, who are academics, who are scholars, who have done government-funded research.

O'REILLY: OK, if we find that they're in on getting paid by the government...

GALLAGHER: This is a new standard to say any time we do anything for the government, you have to disclose it.

O'REILLY: Good, good...

GALLAGHER: That's all I want to say.

O'REILLY: Just remember, we as journalists, have protections. We have protections that other people don't. We have to be above board. Ms. Gallagher, thanks. Doctor, always a pleasure.

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