This is a rush transcript from "Glenn Beck," March 30, 2009. This copy may not be in its final form and may be updated.

GLENN BECK, HOST: A new day, a new week, a new scandal for Chris Dodd. This time, it's about shady campaign contributions from AIG. Oh, I never saw that one coming.

Washington Times investigative reporter, Jennifer Haberkorn. Did I get that right, Jennifer?

JENNIFER HABERKORN, INVESTIGATIVE REPORTER, WASHINGTON TIMES: You did. Thank you.

BECK: OK. I'm sorry. Jennifer Haberkorn is here and she has a story. Hi, Jennifer.

HABERKORN: Hi, Glenn. Just a couple of weeks before Sen. Dodd was named chairman of the Senate Banking Committee, one of AIG's executives, Joseph Cassano, sent in a message to employees that he wanted them to donate to the senator's campaign fund.

And within six weeks, they did so. They sent about $160,000 in campaign contributions to Dodd's fund. Now, Dodd, of course, says this was all above board and he's going to return any bonuses — I mean donations that were tied to AIG's bonuses.

But campaign watchdogs really have a problem with this and questioned the senator's objectivity, you know, considering that the ties between the donations and, you know, now that Dodd is responsible for overseeing AIG's industry.

BECK: OK. Thanks a lot. Now, we want to switch over to the same kind of story, really — the demands of AIG executives from some state attorneys. Our state attorney general reminds me of an extortion attempt.

So why do they get away with it?

Video: Watch the heated debate

Connecticut Attorney General Richard Blumenthal is with us now.

Hello, Sir. How are you?

RICHARD BLUMENTHAL, CONNECTICUT ATTORNEY GENERAL: I'm well. Thank you.

BECK: Are you going to demand that Chris Dodd returns this money?

BLUMENTHAL: Well, Chris Dodd is returning the money on his own. I think he probably regrets having taken it.

(CROSSTALK)

BECK: But if he didn't, would you demand it? If he didn't —

BLUMENTHAL: I would ask him to do it. I think it is appropriate that he do it.

BECK: Right.

BLUMENTHAL: The other question is why did Congress approve all of these bonuses which the entire Congress did, not just one senator.

BECK: Sure.

BLUMENTHAL: And why did the Federal Reserve enable it to go forward? Why isn't it taking action?

BECK: Are you going after Chris Dodd for writing that in?

BLUMENTHAL: I have asked that the Federal Reserve block these bonuses, which I think they have the power to do.

BECK: No, no. I'm asking you about Congress. I'm asking you about Chris Dodd, because he lives in the great state of Connecticut. Are you going after him?

BLUMENTHAL: We don't have the power to investigate, nor does any attorney general a federal official. So that would be an issue for the Congress.

(CROSSTALK)

BECK: Wait a minute. He is a resident in your state.

BLUMENTHAL: He is a resident of the state, but he is a federal official and no attorney general has this jurisdiction.

BECK: So because it's in Washington, you can't do anything about it. Kind of like if there is an AIG contract in New York, you really don't have any place...

BLUMENTHAL: Well, the AIG bonuses were paid in Connecticut.

BECK: From a contract that's honored in New York.

BLUMENTHAL: And that's why we demanded that they be repaid.

BECK: OK. You know, the one thing I was going through the interviews with you, and nobody has asked this question and I'm just dying to know. And I know you will have the answer: What law did the AIG executives break when they took those bonuses that were mandated by a legal contract?

Who's right? Join the conversation on the new Beck show blog

BLUMENTHAL: The AIG executives did not themselves break a contract.

BECK: So then why were you going after them?

BLUMENTHAL: Well, we're not going after them.

BECK: No, you were.

BLUMENTHAL: We're going after the bonuses. Now, we're never going after the...

BECK: No. Their bonuses, Sir. They are their bonuses. They earned that money. What right — what law did they break that gave you the ability in Connecticut to go after those bonuses?

BLUMENTHAL: Well, let's take it one step at a time. The money they received came from us, the taxpayers. It's part of the bailout.

BECK: Oh, I know how this works. I'm asking you, sir. You're the attorney general. I'm asking you for the law that they broke that gave you the ability — are you not the defender of the law in Connecticut?

BLUMENTHAL: The law that they broke...

BECK: Yes.

BLUMENTHAL: ...is the law that requires that they serve the public interests. The bonuses that are paid...

(CROSSTALK)

BECK: Wait, wait. What law is that, sir? You are the chief law enforcement officer. What law is — say that again? I don't recognize that law. It sounds like a good policy. It sounds like a good rule of thumb, but I'm not sure I recognize that law. Could you give that to me again?

BLUMENTHAL: Well, you know, again, these funds belong to us taxpayers...

BECK: No, no, sir. Look, you know what you have done? You know what you've done? You are an insult to George Washington, sir. George Washington made it very clear that we are respecter of laws, not of men.

For your own political gain, you have decided to go after these people at AIG, because it is a popular thing. And while I may agree with you that it is obscene, I would like to know, sir, not what's right as a rule of thumb, not what makes us feel good. You, sir, are to protect people and to stand for the law in Connecticut.

So, again, I ask you, sir, what law gave you the right to go after them? What law did they break?

BLUMENTHAL: Well, I think you're wrong in the basic premise. We're not going after any individual. We're asking the United States...

BECK: You as the attorney general...

BLUMENTHAL: Let me finish. You have to let me finish if you want to know what law I'm talking about.

BECK: There is no law, sir.

BLUMENTHAL: We are asking the United States of America — our federal government — to ask that this money be returned or pursue it, because they were undeserving of it.

BECK: They were undeserving of it?

BLUMENTHAL: Now, I'm not reporting a law against them. They did not earn this money.

BECK: What right do you have to say that the people that work for $1 a year, sir...

(CROSSTALK)

BLUMENTHAL: They were bonuses that were given to people without services being performed.

BECK: Let me ask you this...

BLUMENTHAL: And the law here relates to the Wage Protection Act of the state of Connecticut which was used — unjustifiably — as a reason why the bonuses would not be returned.

BECK: No, sir. I will give you...

(CROSS TALK)

BLUMENTHAL: So the law is the statute of the state of Connecticut

BECK: That is so much bull crap, and you know it, sir. You know...

BLUMENTHAL: No, it's not.

BECK: Yes, it is. That is a very good reason to say that they were wrong — excuse me, sir. You better let me finish.

BLUMENTHAL: Well, I beg your pardon. But there is a statute in Connecticut.

BECK: If I have to let you finish, you will let me finish, too, sir, unless you're going to threaten me, because I do live in your state. Are you going to investigate me? Are you going to come and break my door down? Are you are going to come after me for anything that I have done because you disagree with me, or it might be popular? Or are you going to stand for the law, sir? May I finish?

BLUMENTHAL: I don't think you have received any bonuses from the taxpayers of the state or of our nation.

BECK: If I did — if I did and it were legal — would you have the right to come and tell me to return it? Would you feel it was right to - nothing to do with the law, just your bully pulpit to come out and say, "I have a right! This is an outrage!"

Sir, you are there to protect and defend people using the law, not a bully pulpit.

BLUMENTHAL: Well, first of all, you know, to repeat for another time, we are asking the federal government to pursue these bonuses because they were paid with taxpayer money to people who, very simply, were not required to be paid those bonuses by any Connecticut statute.

That's the statute that is important here. It's Connecticut law, the so-called Wage Protection Act, which protects wages, not bonuses. That's the basic legal distinction that's important here.

BECK: That is such...

BLUMENTHAL: Now, you may say that that doesn't mean anything to you...

(CROSSTALK)

BECK: No, no sir. I agree with you that the head of AIG should not have used that, but that does not OK you from going in.

Let me ask you this. When they were taking buses and they were shipping people to the houses of these people in Connecticut, and they were having a circus and frightening children in those houses, why wouldn't you go and protect those people? Why wouldn't you go take the state police out there and shoo those people away? Why wouldn't you do that?

BLUMENTHAL: Well, the police were there.

BECK: Did they shoo them away?

BLUMENTHAL: And we have been assessing threats...

BECK: Did they shoo them away?

BLUMENTHAL: They made sure that the law was enforced, our local state police...

BECK: Good for you. We're you involved in that?

BLUMENTHAL: Assess the risk...

BECK: See, you know what? It's really...

BLUMENTHAL: I was not directly there. I didn't want to be at the physical site. But I certainly was made aware...

BECK: Did your office intervene and say, "Let's make sure that we have state troopers?" Did you pick up the phone or did you get on television and say, "This is an outrage. There are children there and these people at ACORN and the unions should not be doing that."

Did you do that?

BLUMENTHAL: Well, I was in touch with the state police, our commissioner of public safety, with various law enforcement officials. I didn't think it was appropriate for me to be out there at the site or on television directing what should be done. But let's come back to bonuses. You know...

BECK: Hang on just a second. No, no. I just want to make sure that everybody in the audience understands. You didn't think it was appropriate to do it that time but you did the other time. And I'm not suggesting that you should have shooed those people away because they have a right to do that. And as long as they have a right — under the law — then you shouldn't be involved, just like the bonuses.

BLUMENTHAL: Well, you know, let's be clear on what's happening with the bonuses. These bonuses are actually increasing in amount. Going into next year, they will be $200 million in bonuses.

BECK: Oh, my gosh. Is that against the law?

BLUMENTHAL: Well, it is against public policy and it is unsanctioned by law...

BECK: Is that against the law?

BLUMENTHAL: It should be against the law.

BECK: Is it against the law?

BLUMENTHAL: It's against the public policy...

BECK: It is a yes or no question.

BLUMENTHAL: ... and against the taxpayers — in my view, it is un-required...

BECK: Counselor, it's a yes or no question. Is it against the law? Yes or no.

BLUMENTHAL: It is not against the law and I have never said that it is against the law, and I have never said that we would take action.

BECK: Then you know what you should do? You should enforce the law. You shouldn't use your bully pulpit to gain popularity. Look, you're more popular than I'll ever be on this issue. This is not me having you on and doing this to you. It does not make me popular or a favorite.

Everyone is on your side on this issue. But it is not your place to do anything other than enforce the law. If you would like to change the law, then you can...

BLUMENTHAL: You and I disagree...

BECK: Really? What is your job?

BLUMENTHAL: Because I advocate changes in the law all the time. That is a — for example, changes in the regulatory system...

BECK: That is advocating changes, sir. That is not trying to chain people to get their bonuses back and twist the facts to make sure that people get their bonuses back. And quite honestly...

BLUMENTHAL: Well, one of the points here is that the law has been misunderstood and distorted. And that has been one of the points. I thank you for giving me this opportunity...

BECK: You're welcome.

BLUMENTHAL: ...to explain the Connecticut Wage Protection Law...

BECK: It has nothing to do with it.

BLUMENTHAL: You may say it has nothing to do with...

(CROSSTALK)

BECK: It has nothing to do with it, Sir. You are twisting it.

BLUMENTHAL: Because it's in you...

BECK: It has everything to do with the excuse that AIG used to say, "We had to do that." And you're exactly right.

BLUMENTHAL: That's right.

BECK: It has nothing to do with that. But that has nothing to do with the little vampire fangs that you, all of a sudden, sprouted and tried to grab on to, to make yourself — you and Andrew Cuomo — tried to make yourself the king of the world, and "Look at me, I'm the savior here. I'm going to help everybody, the little people."

All you're doing is trying to make yourself look good in a populist move. I think it's wrong.

BLUMENTHAL: Well, you know...

BECK: I think we're not a respecter of men...

BLUMENTHAL: No. We may talk about motives. The question is whether these bonuses were good public policy and whether they were acquired by law.

BECK: That has nothing to do with it.

BLUMENTHAL: The answer to the first is no, and the answer to the second is no.

BECK: OK.

BLUMENTHAL: And it has everything to do with whether they should have been done and what we should do now in blocking those future $230 million in bonuses and what we should do in exercising stronger oversight over the $173 billion that the country has...

(CROSSTALK)

BECK: Isn't that federal? Why would you be concerned with that? You can't do anything with Chris Dodd, because that's federal. Why are you involved in this? Why don't you worry about the 150 zone of silence?

BLUMENTHAL: Well, you asked me whether I would take action.

BECK: Why don't you figure out, you know, the no high-fiving at schools in Connecticut? Why don't you work on some of the things there?

Because you can't do anything, you told me before, on federal.

BLUMENTHAL: Well, I can't do anything directly in terms of prosecuting, but I can advocate like any citizen like you are doing...

BECK: That's right.

BLUMENTHAL: ...very effectively, right now.

BECK: That's right. OK. Thank you very much. I hope there are no investigations or any kind of ramifications for challenging a public official. I'll make sure to let you know if there is.

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