This is a partial transcript from "On the Record," April 18, 2006. It has been edited for clarity.

GRETA VAN SUSTEREN, HOST: John, there's another eight days that this man is going to be detained, "G.V.C." What do you think about that?

JOHN Q. KELLY, HOLLOWAY FAMILY ATTORNEY: Well, it's encouraging. It means that a judge determined that there was sufficient evidence to support the prosecutor's decision to hold him for another eight days.

VAN SUSTEREN: Do you have any idea why "G.V.C." is being detained? We have the public statement, but it doesn't tell us a whole lot.

KELLY: You know what, Greta? I actually do. The problem is — and I know you know that, you know, when I got involved, it's taken months to sort of build that bridge to the prosecutor's office and overcome a lot of obstacles. And she's very diligent now. She's sharing a fair amount of information with me for the family, and I can't discuss a lot of this right now.

VAN SUSTEREN: All right. Is it fair to say that when you were on the show the other night, you were sort of lukewarm on whether this was a huge step forward or not? And if so, what's the temperature tonight?

KELLY: It's risen a little bit, Greta. That's a good way of putting it.

VAN SUSTEREN: So you think this is more important than you thought earlier?

KELLY: It could be. I'm not saying it definitely is, but it could be significant, and you know, we're still in the wait-and-see mode, though.

VAN SUSTEREN: It's interesting because in the statement issued by the chief prosecutor's office, it talked about detained also in connection not just with Natalee Holloway's disappearance, but illegal narcotics. Had you heard about this before?

KELLY: I had from the prosecutor's office right after this broke. Yes, I had discussed that with Ms. Janssen.

VAN SUSTEREN: Is the illegal narcotics separate and apart, like an unrelated matter, or is it linked to Natalee Holloway? Because illegal narcotics, for all we know, could be from some drug deal seven months ago.

KELLY: Sure, it could. Once again, I can't say, Greta, but as I say, they're all related. He was charged with that when he was first told he was being arrested on Saturday evening.

VAN SUSTEREN: John, what I heard a little bit earlier today from someone I spoke to in Aruba is that the lawyer for "G.V.C." is also the lawyer — it's a woman — who represented Steve Croes, who is the man who came forward with the false alibi to the police which supported lie number one of Deepak, Satish and Joran. Do you know anything about the lawyer representing both Steve Croes and now "G.V.C."?

KELLY: I know that's the situation. It's a woman, and that is the person who represented Croes and would be representing this individual now. And actually, Ms. Janssen, when I talked to her today, she was just getting ready to turn over the dossier to "G.V.C.'s" attorney for review before they did go into court.

VAN SUSTEREN: Now, Steve Croes, John — it was sort of a curious thing. He came forward seemingly out of the blue and said that he witnessed Deepak, Satish and Joran dropping Natalee off at the Holiday Inn and stumbling, and then two security guards coming up. That was a complete lie that he sort of volunteered, went to the police. He was taken into custody. He was then released. Is he free and clear of all of this, or is he still somewhat in the mix?

KELLY: Actually, there's a rather large mix still. I mean, I know Joran's attorneys have been stating that he doesn't know this individual, which I have no reason to doubt. But I've also been told that GVC has involvement with other people that are involved with the three principal suspects. So if you sort of bridge the gap there and look at Croes, you can try to speculate a little bit there as to what's going on.

VAN SUSTEREN: Then it's bizarre that this lawyer would represent both Steve Croes and GVC because at least here in the United States, I think most lawyers would say that there is a potential for conflict of interest and a lawyer shouldn't be representing both.

KELLY: I think that's right. But you know, when you're talking about the first 48 hours, and you know, looking for counsel right way, I think that's what happened. Once she reviews the dossier, she herself may decide — and you know, rightfully so — there is a conflict there and have to advise him to seek other counsel.

VAN SUSTEREN: I mean, things are obviously done differently in Aruba, but you would at least hear — the prosecutor would give everybody the heads-up in court that there's a potential conflict. You wouldn't even get the dossier to the lawyer so another lawyer can be brought in before there's that problem.

KELLY: Well, I don't know if it's the prosecutor's obligation, especially down there. I think it's the obligation of the attorney representing the client to make that determination.

(COMMERCIAL BREAK)

VAN SUSTEREN: How are your clients, Beth and Dave Holloway — how are they taking this news?

KELLY: They're on pins and needles, Greta. You know, we try to downplay expectations. We try to be very cautious, to say the least, in how we view any new developments. But on the other hand, you at some point want to feel some encouragement. And you know, they're just in a "wait and see" mode. They hope that this develops into something. They hope for some resolution, and they want to bring Natalee home. And you know, if this is the answer or the start of getting some answers, then that'd be terrific.

VAN SUSTEREN: And it's so regrettable if everyone gets sort of hopped up that finally, there'll be a resolution, if it turns out that this was simply a false lead.

KELLY: Well, you know what, Greta? That's true. And I would hope, at this point, the Aruban authorities have learned their lesson from so many missteps in the past that they'd be acutely aware of the possibility of raised expectations and that they would not take such drastic steps, if they thought it would just be another, you know, deflated balloon at the end. So hopefully, we're onto something, but we've got to be very cautious and we've got to let it develop in the way they want it to.

VAN SUSTEREN: Except I can't fully blame them if this sort of gets hyped up because we in the media are sort of up to our eyeballs in terms of being interested and fascinated. I mean, they actually rather quietly went out and arrested him on Saturday, and they followed the procedure. They're not issuing any, you know — you know, huge statements out there. So if it gets sort of larger than life, this one isn't in the prosecutor's lap, I don't think.

KELLY: No, no, no. In fact, Greta, they did not go out and arrest this individual. They were just questioning him as a witness. And after about six hours of talking to him, they then made the decision to detain him and arrest him, so as a result of just the questioning, and not you know, forethought to go out and arrest him that resulted in this.

So they've been very cautious. Any time I've talked to Ms. Janssen, she's been very cautious in what she's told me, downplayed all expectations, told me to relay that to the family also. Their press release has been no more than a couple sentences. And they're playing it just the way they should. So I can't say anything, you know, bad about the way they've handled it so far.

VAN SUSTEREN: Do you know if Chief Deputy Dompig, who has resigned from the case — whether or not he know the father of "G.V.C.," the father who runs the security business?

KELLY: I don't have any direct knowledge. I've got to think that, you know, the deputy chief would have been familiar, at least, with the one who is responsible for the safety along the public beaches, the visibility patrol. Just a guess but, you know, I would think they would have had to cross paths at some point.

VAN SUSTEREN: Any information at all or any sort of suspicion that Natalee might have known or might know "G.V.C." even before the night of May 30 or the early morning hours of May 30, when she disappeared?

KELLY: I've got that answer, but I can't give it to you, Greta. I'm sorry.

VAN SUSTEREN: OK.

KELLY: Don't try the guessing game. It's not going to work.

VAN SUSTEREN: No, I'm not trying a guessing game, I'm trying to pry, trying to peel back. But you know, nothing ventured, nothing gained...

KELLY: Absolutely.

VAN SUSTEREN: ... in terms of trying to get facts. You know, it's all about asking questions.

KELLY: Of course it is.

VAN SUSTEREN: All right, so eight days "G.V.C." is going to be in custody. I assume he's going to be interrogated, right?

KELLY: He was actually being interrogated during the course of today, before they were bringing him into court.

VAN SUSTEREN: Do you know the substance of his responses? I know you can't tell us, but do you know the substance of his responses?

KELLY: I've got some general ideas, once again, but no specifics.

VAN SUSTEREN: Do you know if the prosecutor is encouraged by the responses that she's getting closer to resolving what may have happened to Natalee?

KELLY: I'd describe her as energized.

VAN SUSTEREN: And that's different from how you've typically seen her?

KELLY: You know what? She's been pretty good lately. You know, we've been pushing a lot, and she's felt that, you know, she's getting a little more support now. I think she's been working really hard, Greta.

VAN SUSTEREN: Any thought or any information as to whether there's likely to be more arrests in the very near future?

KELLY: That's a possibility.

VAN SUSTEREN: Is that just sort of a visceral gut reaction, or do you — or have you heard something that makes you — that leads to you believe that?

KELLY: It's more than a gut reaction.

VAN SUSTEREN: All right. So I guess that you've heard something. Any idea about this shirt that was found that apparently forensically was tied to "G.V.C."? Have you learned anything what that forensic tie is?

KELLY: Yes. None.

VAN SUSTEREN: None at all?

KELLY: None.

VAN SUSTEREN: Just his initials?

KELLY: The T-shirt has nothing to do with this arrest or what's going on right now.

VAN SUSTEREN: So what it was on Saturday that brought him in for questioning?

KELLY: All I can tell you is it was a combination of factors.

VAN SUSTEREN: A combination of factors related to the illegal drug that's mentioned in the public statement or something related to Natalee?

KELLY: A little bit of both, actually. And it was brought in, as I said, just from, for lack of a better term, chatter. And they wanted to follow up on things that were being said, and one thing led to another and it resulted in an arrest a little bit after 8 o'clock Saturday night.

VAN SUSTEREN: So the clock now begins to run, eight more days and interrogation. And maybe we'll learn some more information. John, as always, thank you.

KELLY: Sure, Greta. Thanks.

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