This is a rush transcript from "The O'Reilly Factor," October 30, 2007. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: A viewer warning here, some of the video we're going to show you may be offensive.

Now take a look at this headline on the NBC affiliate's website. "Conservative O'Reilly Sets His Sights on San Francisco Again." As you may know, the worst thing you can call any American in San Francisco is conservative.

Every year, a big party is thrown at the Cow Palace, a facility owned by the state of California. Hundreds of folks showed up for the annual Exotic Erotic Ball.

Now this is entirely legal. And we are not objecting to the display which is permissible in a free society. We are simply reporting on the atmosphere in San Francisco since the secular progressives took over because down the road, the SP culture could arrive in your neighborhood.

Yesterday, I spoke with Katie Horgan, a journalist who was at the event.

(BEGIN VIDEOTAPE)

O'REILLY: Now Ms. Horgan, so you — you go this ball and you pay $100 to get in?

KATIE HORGAN, PRODUCER: About $100.

O'REILLY: OK. So pretty stiff tariff to get in there. And you walk in and describe to us what you saw?

HORGAN: I saw a whole lot, a whole lot I probably didn't really want to see. First off, there's a bunch of stages. A lot of concert type events, performers, dominatrix, that kind of acts going on, exhibits, if you will.

But the real draw was the people. People in costumes, but pieces missing, lots of parts hanging out everywhere. So there was a lot of nakedness and that kind of thing going on.

O'REILLY: All right, so the people who came to see the exhibits on the stage, they themselves are in costume. And a lot of them, I guess, were topless and bottomless and less less, and all of that. So there really were no rules at all. You could do whatever you wanted to do?

HORGAN: Exactly, it was a free-for-all.

O'REILLY: So you go there. And then people were acting out. That's a good word. Acting out.

HORGAN: Yes.

O'REILLY: Whatever they wanted to do. Now was there security? Were there people to say look, you can't have public sex? Was there anything like that?

HORGAN: No, there was security. And people were very friendly. Nobody was fighting. It was actually everyone there wanted to be there.

So there was - the security was just walking around to make sure nothing got out of hand, but there were no - there was nobody there to say, oh, you can't be doing that in public.

O'REILLY: All right. So there really were no rules for the people who paid the $100? They could go ahead, do whatever they wanted to do?

HORGAN: That's why the people were there.

O'REILLY: No, I know, but a lot of times in these kinds of expositions, because remember, it's in the Cow Palace. It's owned by the state of California. You're in an arena. And in most places, there would be rules of behavior, but you're telling me there were not any rules.

HORGAN: Well, of course. That's the reason for the Exotic Erotic Ball. That's why people buy the $100 ticket to go there, because they can do whatever they want.

O'REILLY: How many people do you estimate were there?

HORGAN: There were a lot of people.

O'REILLY: See?

HORGAN: And it was full, but not packed.

O'REILLY: When you were in there, did you engage in conversation with anybody? Did you say anything to them and asked them why they were there, and you know, how they felt about the whole deal?

HORGAN: They just wanted to have fun and see what this was all about. A lot of them there were for the shock value themselves. Just a spectator.

O'REILLY: OK. So there are a lot of voyeurism there. People who weren't participating. Just wanted to go see what it was. Was there a male-female ratio? Gay, straight ratio?

HORGAN: Basically, it was all even. I mean, young, old, everybody there is 21 year old, 80 years old, gays, non-gays, you know, males, females. Everybody was represented.

O'REILLY: OK, so it was a cross-section, no dominant group? There were 80-year-old people there, Ms. Horgan?

HORGAN: There were some old people. I was shocked by that.

O'REILLY: Wow. And was there an ambulance standing by outside with paramedics just in case?

HORGAN: I'm sure there were.

O'REILLY: (HAHA) All right. All in all, if your mom asked you, what was that experience like, Katie? You would say.

HORGAN: I would say the experience was like I was in a porn. It was an experience I didn't really want or probably ever do again.

O'REILLY: All right. And then mom, I think, would get the picture on that. Now we appreciate.

HORGAN: I think she would. I don't think I'd need to go any further than that.

O'REILLY: I appreciate you taking an eyewitness look at it. Thanks.

HORGAN: No problem.

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