This is a partial transcript from "The O'Reilly Factor," May 4, 2006, that has been edited for clarity.

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BILL O'REILLY, HOST: In the "Personal Story" segment, millions of Americans take their children to McDonald's. There are often playgrounds at those restaurants, as you may know. And now there are charges that the McDonald's company does not screen its employees for criminal sexual offenses.

A report by Phil Williams, who works for a CBS affiliate in Nashville, Tennessee, uncovered evidence there are dozens of child sex offenders working at McDonald's around the country.

Now the company would not appear this evening and sent a statement saying they have strict hiring standards. Joining us now from Nashville is Phil Williams. The headline of your report is what?

PHIL WILLIAMS, INVESTIGATIVE REPORTER: The headline of our report is that we found dozens of convicted sex offenders, many of them offenders with offenses against children, who are working at McDonald restaurants around the country.

I mean, this really began with one local case here in Nashville. We had a convicted sex offender who had been radioed a high risk. He was someone who actually had a long history of sexual misconduct with children, some as young as 10.

He had been ordered not to accept any employment around children, and then he was hired by a local McDonald's, even though he was listed on Tennessee's sex offender registry. His face, his name was up there for everyone to see.

So that caused us to start questioning, what are the policies? And as we started looking at state sex offender registries around the country, we found about five dozen offenders who were listed on about four or five states, because most states don't list the names of the employees.

O'REILLY: OK. Now, is it — could you do this to any company? Could you do it to Wal-Mart or any company and come up with the same amount, do you think? Is it just guys not being checked out by the managers of the stores?

WILLIAMS: We could have done it, and you find lots of different companies who are listed. We looked at McDonald's because part of McDonald's marketing strategy is to convince its customers that it's a safe, fun environment.

O'REILLY: No, I understand that. It's a kid-friendly environment, come here, and this and that.

WILLIAMS: Right.

O'REILLY: But what I'm trying to get at is this — is it a flaw in the McDonald's company that they don't check backgrounds? Or is this an American problem?

WILLIAMS: Well, McDonald's Corporation specifically does not require its franchisees to do any sort of background checks.

O'REILLY: Is that right?

WILLIAMS: They have no prohibition against hiring of sex offenders, including child molesters, in their restaurants. The company at its corporate restaurant says it does not "knowingly" hire sex offenders, but it does not guarantee that it will do background checks even at its corporate-owned restaurants.

(CROSSTALK)

O'REILLY: All right. This is what — I've got a statement — Bill Whitman — because I want to be fair to McDonald's, obviously. Bill Whitman, corporate, says, "We do not hire people with felony convictions. If we find out they are felons, they are fired. We are encouraging the same policies with our franchisees."

So, I mean, there's some stores that are owned outright by McDonald's, and there's some that they franchise out to other people.

But you say there is no requirement to check criminal background histories for any McDonald's employee, is that what you're saying?

WILLIAMS: That's right. In fact, we found one incredible case in the New Jersey area.

You had a McDonald's manager, an assistant manager, who molested several boys who worked in his restaurant. The police began an investigation, and he was working for a corporate-owned McDonald's restaurant.

He was fired once the police began investigating this molestation. Six days later, he was hired and began working at a franchise restaurant less than 10 miles away.

O'REILLY: Oh.

WILLIAMS: He was prosecuted, he was convicted, and at his sentencing he had a letter of recommendation from the franchise owner. He went to jail for 90 days.

O'REILLY: What part of New Jersey is that?

WILLIAMS: This is in Hillsborough, New Jersey.

O'REILLY: OK.

WILLIAMS: He went to jail for 90 days, got out, and went to corporate headquarters, to their McDonald's University — Hamburger University, to be...

O'REILLY: So even after he went to jail for this child molestation, he got out and they accepted him at McDonald's University?

WILLIAMS: That's right, to become a full-fledged manager of a McDonald's franchise restaurant.

O'REILLY: All right. So, I think the way it stands now — and again, we want to be fair — the way it stands now, there's chaos within the hiring structure of McDonald's. That chaos is leading the company to accept employment applications from child predators.

Would that be fair to say?

WILLIAMS: There are child molesters and sex offenders in the restaurants today.

O'REILLY: All right, Mr. Williams. Thanks very much.

And McDonald's is welcome to appear here to rebut any time it wants.

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