Is It Legal: Investor Blames Government for Madoff Scandal

This is a rush transcript from "The O'Reilly Factor," December 23, 2008. This copy may not be in its final form and may be updated.

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JOHN KASICH, GUEST HOST: In the "is it legal" segment tonight, three stories: A New York woman wants to sue the Securities and Exchange Commission after losing nearly $2 million in the Bernie Madoff Ponzi scheme. The guy who threw his shoes at President Bush is planning a lawsuit against the Iraqi security guards involved in his arrest. And a California woman gets the green light to sue a Good Samaritan who pulled her from a car wreck.

With us now, of course, is the is it legal team, FOX News anchor Megyn Kelly and FOX News legal analyst Lis Wiehl.

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Beginning with the Madoff case, just today the head of a French hedge fund invested millions with Madoff was found dead in his New York City office. A French newspaper says it was suicide. Now we have this woman planning to sue the SEC. So, she got a chance?

MEGYN KELLY, FOX NEWS ANCHOR: I don't think so, no. She's got a seriously uphill battle. It's not that the SEC didn't - the Securities and Exchange Commission did not drop the ball here. Chris Cox, the commissioner has basically admitted that they didn't do everything that they could have. And that's obvious.

But it's very hard to sue the federal government for things like this. Why? Because guess who pays when you get a judgment against the federal government? You and I do. The taxpayers. So the system is not set up to let people like this woman, who has a bum investment with a bum guy, Bernie Madoff get recovery from a federal organization and commission like the SEC because they don't want the taxpayers to have to foot the bill.

KASICH: You know, there's this thing called sovereign immunity.

KELLY: Right.

KASICH: What is that, is that a protection for the government? Here's the story. Look, the SEC went in there to look at Madoff's books.

KELLY: Right.

KASICH: You know how they looked at them? They said Mr. Madoff could we see your books? He handed him — his books.

KELLY: And they.

KASICH: .it was full of lies. And then they went oh, it looks good to us.

KELLY: No problem.

KASICH: I mean, where do you get redress?

LIS WIEHL, FOX NEWS LEGAL ANALYST: Look, you can't. That's the unfortunate part. Megyn's right. I mean, look, I want to sue the SEC. I want to sue some congressman. I want to sue some senators who were.

KASICH: I want to sue some lawyers.

(CROSSTALK)

WIEHL: Yes, I want to sue everybody.

KASICH: Yes.

WIEHL: But sovereign immunity is an old English doctrine that says look, the government can only — you can only sue the government if, what, John, if the government says you can sue it. If the government says OK, you can sue us, that ain't going to happen here.

KASICH: OK. Right, OK so, but here's the deal. Everybody is saying now what we need is more regulation. We had plenty of regulation. The regulators failed. So why would we think they'll ever get it right?

KELLY: Well, because generally, there should be.

KASICH: You've got to fire (INAUDIBLE).

KELLY: Yes, there should be an administrative remedy. There needs to be a policing within the government of this organization.

KASICH: Yes. They're probably protected by civil service laws.

KELLY: But the answer is not more lawsuits. And by the way, she also didn't detect the fraud. The folks who invested her money didn't detect the fraud. There needs to be a introspection.

KASICH: Oh, I don't think — yes, yes, yes, but you expect the SEC to be able to go in. They just - they screwed the whole thing up.

KELLY: They've got the ball, correct.

KASICH: All right, Lis, what about the guy? Because he throws his shoes at President Bush, right? Now, President Bush said he saw the man's sole. That's what he did say about Putin, now he's seen a second sole, OK?

WIEHL: Well, and he was able to duck.

KASICH: What does this mean? What does this mean, the huge thing?

WIEHL: You know, I think we have exported American law to Iraq. Now this guy is saying I threw the shoe at the president. I supposedly said he's getting roughed up by the cops.

KASICH: Yes.

WIEHL: .in jail. And now he's going to sue, which of course an American thought, look, he has no chance in you know where for the suit going anywhere. He can't prove that the cops roughed him up. Maybe he just, you know, beat himself up a couple of times.

KASICH: You used to be his lawyer too? Is that what I'm picking up. But you know, one interesting thing about this, have we so now seen calm brought to Iraq that they're actually in a court trying to think about this?

KELLY: I mean, listen, there's definitely some progress made. Who knows what would have happened to that guy under Saddam's regime? But if you believe what he says, we.

KASICH: What would have happened to him if he had thrown his shoe at Saddam?

There wouldn't be any lawsuit.

KELLY: But listen, but listen.

KASICH: Are you kidding me?

(CROSSTALK)

KELLY: Before we get too jolly in patting ourselves on the back.

KASICH: Yes.

KELLY: Let me put a small asterisk on it.

All right.

KASICH: If it's true what he says, then he got the hell beat out of him by these guards who took him into custody. And that's why he's threatening a lawsuit. So that piece of it, maybe they need to work on that a little bit.

WIEHL: Never going to happen. It's not going anywhere.

KASICH: Anybody throws their shoes at you, you have at them.

KELLY: I mean, what kind of shoes are they?

KASICH: It depends. Are they Jimmy Choos? You know, would they fit?

KASICH: Only in California, I guess.

KELLY: Right.

KASICH: Although they do some good things out there. So this lady, OK, these two pals are out. One is in the car with her, I guess her boyfriend. This other lady is behind. They crash.

KELLY: Yes, right.

KASICH: So this lady who's trailing them, pulls this woman out of the car, thinking that the car might explode. OK?

KELLY: Yes.

KASICH: Now the court has said she can be sued.

KELLY: Right.

KASICH: I thought we had a Good Samaritan law.

WIEHL: Good Samaritan is supposed to protect people. And what the California statute said is look, you can go and you can rescue somebody if you're using a medical procedure. They kind of built that into the statute. This is absolutely ridiculous. Does that mean OK, if I see somebody drowning, I got to just let them drown? But if they somehow manage to pull themselves out of the pool, I can give them CPR? I mean, that's crazy.

KASICH: This is going to kill me if you two are going to agree on all three things.

(CROSSTALK)

KASICH: What has happened here?

KELLY: This is ridiculous. And let me tell you exactly what's happened. The Supreme Court of California came down on this 4-3, same as they did on the gay marriage case. Justices voted the same way. The same three are in the minority here as were in the minority in that case.

The majority is saying that unless you actually lay hands on the person and physically do CPR or some other medical procedure.

WIEHL: Right.

KELLY: .you're not covered. So, if she had pulled — if somebody else pulled the woman out of the car and then she did CPR, she'd be protected. But because she pulled the woman out of the car she's not.

KASICH: All right.

KELLY: No good deed goes unpunished.

KASICH: Now let me throw a little twist in here. Apparently, they were coming from a Halloween party.

WIEHL: Right.

KASICH: And they had been having a few pops.

KELLY: Not just that, had a few joints.

KASICH: Well, so what if they could prove that the woman was, you know, intoxicated, stoned, whatever and she — they said she yanked her out like a rag doll, OK?

WIEHL: Hey, you know what? My car, crashed into a tree. My car is about to explode. I'll take anybody to rescue me, OK? At least I'm still alive.

KELLY: You set the standard and discourage other Good Samaritans.

WIEHL: Right.

KELLY: Now people need to think.

KASICH: No, no, no.

KELLY: .twice before they pull somebody out of a car.

KASICH: This is lack of common sense.

KELLY: Right, it's crazy.

KASICH: This is complete nut so. So.

KELLY: Hopefully, the jury will see that.

KASICH: I, you know, every time we do this, we usually end up with a fight. It must be holiday cheer.

WIEHL: Feel the love.

KASICH: OK, all right, ladies. Thanks for being with us.

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