This is a rush transcript from "On the Record ," October 15, 2007. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, HOST: Lincoln Bain and Elizabeth Thompson, the lawyer for the two nannies, listened to the Rita Cosby's new audio tape and had a lot to say about what you just heard when they went On the Record earlier today.

Click here to listen to new Cosby audio tape

(BEGIN VIDEOTAPE)

VAN SUSTEREN: Elizabeth, Lincoln, thank you both for joining us.

LINCOLN BAIN, SPOKESMAN, ANNA NICOLE'S NANNIES: Thanks for having us.

ELIZABETH THOMPSON, ATTORNEY FOR ANNA NICOLE'S NANNIES: Thank you.

VAN SUSTEREN: Do you know if they met with former FBI Special Agent Don Clark in early May? Do you know if they met with him?

THOMPSON: Yes, they did — May 5, to be exact.

VAN SUSTEREN: Were either of you there, or both of you there?

THOMPSON: We were both there as well as the nannies and their husbands and respective boyfriends, yes. There was six us.

VAN SUSTEREN: About how long did the six of you sit and talk?

THOMPSON: That would have been for about two hours, more or less. It was not uninterrupted, it was interrupted meeting in that he went out of the room for awhile with his assistant. And we also had a meal. So it was quite a long meeting.

VAN SUSTEREN: Do you know the name of that assistant?

THOMPSON: Yes, I do.

VAN SUSTEREN: What is the assistant's name?

THOMPSON: Wilma Vice was the name she gave to me.

VAN SUSTEREN: Now, at any time during that May meeting, did you hear the nannies say that they had observed Anna Nicole Smith watching a video in which there was sexual conduct between Larry and Howard?

THOMPSON: No, at no time.

VAN SUSTEREN: How about you, Lincoln.

BAIN: No, I did not hear them say that at any time. The only time I heard the word "homosexual" come up was from the opposite side, was from Don Clark and his assistant.

VAN SUSTEREN: Did they put that question to them, do you remember?

THOMPSON: I didn't think it came up in a question form. I think it was raised as an aside — Oh, by the way, there was some allegation that the two of these persons, Howard and Larry, were involved in this type of activity. And we all looked at each other, shocked.

VAN SUSTEREN: You had never heard it before?

THOMPSON: Never heard it before. It was raised at that time.

VAN SUSTEREN: Now, Lincoln, let me jump ahead to the — you know that Rita Cosby has released a tape, and the tape purports to be a conversation, a phone conversation with you dated September 8.

And in that tape, which I know you have heard, you are, at least the tape says, it's your voice, that Nadine is the person you spoke to, that Nadine was the one who saw this tape, and that you have notes of it and the lawyer has notes about it.

BAIN: That tape, that tape, Greta, is just, that is just nonsense, and that is foolishness, all right?

To get this whole thing into perspective — that tape is a mixture of conversations that we have had, part of it from September 8 and a part of it from other conversations that we had while she was in the Bahamas — one. Two — she —

VAN SUSTEREN: Let me stop you right there. Are you saying that the tape that Rita has released is a doctored tape? We're not talking about the videotape supposedly of Howard and Larry, that thing, we're talking about the tape that Rita Cosby has provided to us is a doctored tape?

BAIN: Yes. Greta, think about it. She had all this time since this came up to produce a type. Why did it take so long to produce a tape? Why?

I produced my tape to the media immediately. In fact, I produced my tape to the media, including Associated Press, before my sting operation, which shows this was a sting operation and we had the intention of exposing her and taking it to the authorities before I let them hear it on the action the device it was recorded on so no one could say anything was tampered with.

And then we went forward and we did the sting operation. But the media was forewarned of what we were doing.

Now, what she is arguing now is that, oh, yes, I came to the Bahamas, I was caught in the room talking to them about deals, but they offered — they was asking me more money, or they told me that this tape existed.

What she is doing is equivalent to a drug dealer saying I got caught trying to sell drugs to the DEA, but they were going to buy it, and I produced the tape to show that they were going to buy it. It was a sting.

VAN SUSTEREN: I guess the way this is sort of resolved, Elizabeth, and maybe you can help me out, is that if May 5 — that seems to be the important date when Don Clark spoke to the two nannies with you and with Lincoln president and, of course, their husbands —

THOMPSON: Yes.

VAN SUSTEREN: — if at that time they had said that about the videotape of Howard and Larry, that would be significant, you agree? If that had happened, you are saying it didn't happen?

THOMPSON: I agree if that had happened that would be significant for Rita, if he were her source. But he states he is not her source.

VAN SUSTEREN: Here is what I don't understand is that, at least according to the September 8 transcript, which Lincoln now says is doctored, is that there were notes taken by you and by Lincoln — I haven't seen the notes, I don't know what the notes say — but Lincoln told us, and Lincoln, maybe you can help us out, that you taped that conversation so if we could at least listen to that taped conversation, it really would establish whether Rita could possibly have learned from Wilma, the investigator — Don Clark has denied it — but possibly have learned from Wilma, the investigator, whether or not this tape did or did not exist, or at least whether there was a discussion about it.

Do you have that tape, Lincoln?

BAIN: I don't have the tape as yet.

VAN SUSTEREN: Why not? Because that is actually an important tape.

THOMPSON: Yes, because we're talking about months and months ago, and I've had many, many meetings, and I'm checking into all of the tapes, and, like I say, I'm searching for them.

As soon as a get my hands on the tape from that meting, I will provide it. I have been speaking openly in the media from day one on this, from before the sting. I have nothing to hide.

VAN SUSTEREN: Just so you understand, I am not backing up — I will tell you straight up, the idea that someone would print anything without making an effort to get first-hand knowledge, and even Elizabeth, we're both in the same background, that rubs us both the wrong way really badly.

However, in terms of these lawsuits and allegations, if an investigator did tell her this, and it's reflected in this May 5 conversation, that would be hugely significant in the lawsuit. So that's why your tape is so important.

THOMPSON: Greta, the difficulty for Rita, everyone if any statements were made in May, Don Clark came on Geraldo's show and said that he was not her source. He was not the investigator of whom she speaks in the book.

VAN SUSTEREN: Which is why I asked you about Wilma, which is why the Wilma thing is why I asked you in the beginning.

THOMPSON: It's interesting. Wilma — I was very surprised to hear that Don considered myself and Mr. Bain to be unscrupulous persons. He stated that, I think right here on Geraldo's show, that he felt that we were both handlers of the nannies, we were unscrupulous, and we asked for money.

If that is the case, whey then would his assistant continue to contact me up until September 11, a day after I — ?

VAN SUSTEREN: Elizabeth, I heard flat out on the tape you reject money just the other day on behalf of the nannies. I'm not saying that because in the tape that Lincoln has provided us, throughout the whole tape you keep saying you don't want money, essentially you say that.

THOMPSON: Exactly.

VAN SUSTEREN: I'm not even suggesting that, I'm just trying to —

THOMPSON: What I'm talking about, Greta, the whole mess is very sordid.

VAN SUSTEREN: Indeed, that I agree on.

THOMPSON: It is a conspiracy amongst friends. He calls himself a friend of Rita's, but yet he is not her source. But all of a sudden we hear about homosexuality in a May 5 meeting, and it's now in a book released September 4, attributed to the nannies. Why use and hang on (ph) innocent people like this?

VAN SUSTEREN: Elizabeth, what I have lots of questions about too is in the tape, there is one point where there is a discussion about creating invoices and trying to create some sort of effect.

THOMPSON: Yes. That's fraud.

VAN SUSTEREN: There are a lot of things that I have a lot of questions about, and even on this tape, it's just that I'm trying to grab one area and try to at least figure out, could she have learned from a "investigator" some statement about the conduct or not?

THOMPSON: Greta, I wish Rita would come on your show and tell you exactly who gave her the information, and that would help her. But we are here.

BAIN: By not coming to the public, Rita is showing that she is guilty of something, because, come on, Rita, what do you have to hide? Rita was all over the media with her book before that sting operation. Now all of a sudden her lawyers won't let her speak?

We're here. We're talking. We're being grilled by the media, by whoever wants to grill us and ask us questions and check and double check. We presented our tapes. But Rita is hiding.

VAN SUSTEREN: There is an open invitation to Rita, as well as — I would like to have Wilma come on, because maybe we could say to Wilma, because she is the one who hasn't been on, Wilma, did you tell Rita? At least pick away at this story. I'd like — Lincoln, if you can get the tape. I will see if Wilma will join us, and I will continue to ask Rita to come her. And, believe me, she has an open invitation, and Rita Cosby knows that she does.

And I'm going to look into see whether or not there is any way there is a question about the September 8 tape. But we'll continue to stay on top of it.

(END VIDEOTAPE)

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