This is a partial transcript of "Special Report With Brit Hume" from Jan. 11, 2006, that has been edited for clarity.

BRIT HUME, HOST: Now, we have kept FOX News correspondent Megyn Kendall glued to her chair and TV monitor to follow today’s hearings and offer some observations.

Megyn, first of all, there was much said again Thursday on this question of Roe v. Wade, the abortion decision, and the issue of whether the judge believes it is settled law. Why has that become such an important question?

MEGYN KENDALL, FOX NEWS CORRESPONDENT: Well, if you believe Senator Durbin, it’s because Chief Justice Roberts adopted the view that Roe v. Wade was settled law at his confirmation hearings.

And Durbin seemed to be suggesting that Alito ought to do the same. Now, the White House was quick to point out to reporters that Alito — I’m sorry — Roberts said that Roe v. Wade was settled law at his confirmation hearings to get on to the D.C. Circuit Court of Appeals in 2003, not at his confirmation hearings to get on the United States Supreme Court.

HUME: Well, what did he say during the confirmation hearing about this to get on — I do recall his being asked about it. And I thought he had said it was settled law. What did he say when he was asked about it in the Supreme Court hearing?

KENDALL: Senator Specter read to him his prior statement when he was trying to get on the Circuit Court, and said, you said it was settled law. Is it settled law now?

And what he said in trying to get on to the Supreme Court was, it is "settled as a precedent of the court."

HUME: Now, how does that square with what Alito has said?

KENDALL: Almost identical, word for word.

What Alito said was, Roe is — first, he said it’s an important precedent, so he is acknowledging, as Roberts did, that it is a precedent of the court. And then Alito — and then Durbin pressed him and said, “But is it settled law?” And Alito said, well, hold on. If by settled law you want me to say that it could never be revisited, that I would have to turn every plaintiff trying to challenge it away, the answer is no.

Basically, he said that’s one thing. But if by settled law you are asking me whether it is entitled to considerable respect, then the answer is yes. So, at the end of the day, what Chief Justice John Roberts said at his confirmation for the Supreme Court and what Alito said are pretty similar.

HUME: All right. Now, what else do we need to look back on today from the hearing as things that stood out to you as you were watching this? From your lawyers’ eye?

KENDALL: There was controversy over, again, the Vanguard issue, which we discussed last night, with Senator Kennedy.

HUME: All right.

Let me see if I can state this quickly. He owns shares of a Vanguard-sold, a Vanguard-marketed mutual fund. An issue involving the parent company came before him. He had told the senators in his confirmation hearing that if Vanguard interests came before him, he would recuse himself.

And he didn’t initially.

KENDALL: Right.

HUME: Then later, after somebody objected to his ruling on the case, said, you know, you’re right, I should have. It ought to be re-heard, and it was. The ruling ended up the same way. So what’s the big deal?

KENDALL: Well, what Senator Kennedy said to him today was, I was the person to whom you made that promise. I was on this committee in 1990 when you said — you promised us that you wouldn’t decide cases involving Vanguard.

Now you come before this committee, and you refer to, well, I only meant during my initial period on the 3rd Circuit Court of Appeals. How can you say that? When were you going to inform this committee that the initial period had ended and you were now going to start deciding cases?

HUME: Well, what does the initial period got to do with it?

KENDALL: Well, it’s interesting, because that refers back to the questionnaire that Alito had to fill out to get on to the 3rd Circuit back in 1990.

HUME: And this is where he made this — this is where this issue was raised?

KENDALL: Yes. Every judge has to fill out one of these questionnaires.

And his questionnaire asked him to identify the categories of financial arrangements that might require him to step down "during your initial service on the court."

So, Alito answered that question in the questionnaire and said, well, I don’t think there will be any, but to the extent I get cases involving Vanguard, I will step down. So, when he has been cross-examined on Vanguard at these hearings, he has pointed out, I did make a promise with respect to my initial service. And, by 2002, I had been on the court for 12 years.

HUME: But when it came down to it, he agreed with the plaintiff, who lost the case before him, and then objected to his having — having ruled on it, since he still had an interest in one of their mutual funds, and — and asked the case be re-heard. So...

KENDALL: Yes.

HUME: So, where does that leave us?

KENDALL: He said repeatedly today that, look, I didn’t think I had to step down as a matter of ethics, but my policy has always been to go above and beyond what the ethical rules required, and that’s what I did in this case.

HUME: And what have legal ethics — ethicists or experts said about his — his — well, do they give him a clean bill of health or not?

KENDALL: Senator Specter asked for two formal opinions. He got two formal opinions saying, this is no big deal.

HUME: Megyn Kendall, thank you, as always.

Watch "Special Report With Brit Hume" weeknights at 6 p.m. EST.

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