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This is a RUSH transcript from "The O'Reilly Factor," June 29, 2010. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: In the "Impact" segment tonight: Gen. Stanley McChrystal says he'll retire from the Army because of the embarrassing Rolling Stone article. The central question remains: Did the magazine treat the general dishonestly? Did it use off-the-record quotes to destroy the man?

Joining us now from Washington, Gen. Anthony Tata, who served in Afghanistan and knows Gen. McChrystal.

It's hard to believe that a guy as smart as McChrystal, savvy, been around, knows the turf, would open himself up to this kind of who horror, destroying his career, which it did. I'm sure he was a dedicated patriot in Afghanistan. I don't think he wanted to leave that theater. Some people have conspiracy theories saying he wanted to leave. I don't believe that for a minute. So what do you think happened there with the Rolling Stone thing? Was it McChrystal's fault? Was it the magazine's fault? What happened?

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RET. BRIG. GEN. ANTHONY TATA, U.S. ARMY: Well, I think it was a combination of things, Bill. He was completely sandbagged by this weasel Hastings. But even larger than that, I'd like to dispel a few of the myths.

You know, it's been reported that he banned Fox News Channel from Kabul. Well, that's just not true. It's not even -- that package, the armed forces network package isn't even offered in the NATO headquarters in Kabul because the NATO contractors have BBC and Sky and all the other European international programs for the folks at Kabul to watch.

O'REILLY: All right, and we said yesterday we couldn't confirm that the -- that erroneous report that you say is erroneous that McChrystal had a grudge against Fox News. We said we couldn't confirm that. But the central question remains, as I said in the lead, did Rolling Stone do something untoward, dishonest? Did the magazine do that?

TATA: Yes.

O'REILLY: What did they do?

TATA: Yes, absolutely. I have confirmation on background from a senior official in Afghanistan that without equivocation that they used -- Hastings used off-the-record comments in that. One hundred percent of the off-the-record comments or the damning comments were off-the-record in that Rolling Stone article. So…

O'REILLY: OK, so Hastings and this isn't unusual, unfortunately, in the media. Hastings violated his -- now, Hastings, of course, denies that. So do his editors at Rolling Stone. But you say that your sources -- now are your sources primary people? Were they there?

TATA: It is a primary source that does know, and it is without equivocation.

O'REILLY: OK, so that means…

TATA: It is factual information.

O'REILLY: …that McChrystal and his guys told Hastings you can hang around with us in Paris at the bar, the Irish bar, but what we say to you is not to be used in any article. Are you 100 percent positive that statement was made to Hastings?

TATA: I'm 100 percent positive that my source told me that all of the damning comments were off-the-record that Hastings used.

O'REILLY: OK. So that means Hastings is beneath contempt, and a liar, and did a tremendous amount of damage to McChrystal personally and his aides, all of whom are patriots whether you agree with them or not. Served their country, put their lives on the line for our country. This weasel, Hastings, came, in destroyed their careers, according to your source, because I want to be quite clear about this. Is that what you're saying, General?

TATA: That's exactly right, Bill, that Hastings talked to aides, com guys, drivers, one-off type of people, isolated them, befriended them, and then actually then wove together a thread that made it seem like this continuous thing. And so this was, as you call it, beneath contempt. It was dishonest, and it was without journalistic ethics whatsoever.

O'REILLY: OK, and I'm not surprised. I have to tell the audience I'm not surprise about Hastings. If you know his history, if you know what he's done in the past, it's perfectly consistent. The man admitted in another magazine article that he's in the business of f-ing people. And he certainly did that to the general. Now, that being said, this is certainly immature conduct on or off the record from McChrystal and his guys. Wouldn't you say that, General?

TATA: I would say that, Bill. But, you know, combat is tough. It's hard work. And when you get a little bit of a break, and particularly I think his staff let him down here, as the boss tries to relax, your vigilance as a staff officer needs to go up. And so they should not have let this weasel inside the headquarters, inside the inner circle.

But, you know, Stan McChrystal is kind of a counterculture guy. He is a legend. He is an icon. And I think what the military was trying to get out of this is to show Stan McChrystal through Rolling Stone magazine to that readership. Here's a hero that gets in the foxhole. He's a trigger puller. He's a commander.

O'REILLY: Yes, but it wasn't worth it. But I made the same mistake. I mean, Fox News, we said, well, we'll get the Rolling Stone readership to think…

TATA: Right.

O'REILLY: …see what we're doing on "The Factor." And they hosed me, too. I got one more question for the -- so we're going to hold the general over for another minute.

Look, it looks to me that the Obama believes -- the president believes that he's better off in the theater with Petraeus rather than McChrystal. And I think that was part of his thinking, that we're not happy with the way it's going over there under McChrystal. Let's get the big guy in there and see if we can pull it out. That's the way it looks to me. Am I wrong?

TATA: Well, I think you're right that Gen. Petraeus is going to do a tremendous job there. He's got to get in, in my opinion, we need boots on the ground in the Pakistan sanctuary. He's got to increase the velocity of training, the Afghan national army and the Afghan national police. And quite frankly, I think we need a change of civilian leadership. Amb. Eikenberry needs to go. And somebody else needs to come in that can work with Gen. Petraeus, because the military is making these gains, but the civilian side is not making the gains commensurate with the military gains.

O'REILLY: There's no doubt about it, but my question is Obama was losing confidence in McChrystal. And he's doing a last-ditch with Petraeus. Would you say that would be inaccurate?

TATA: I would say that's an accurate statement in that it's a shot in the arm to get Gen. Petraeus in there to…

O'REILLY: That's what I think it's all about.

TATA: …try to revitalize this effort.

O'REILLY: In the end, that's what it was all about.

TATA: Right.

O'REILLY: Hey, General, you're a stand-up guy. Thanks for coming in and helping us out. We really appreciate it.

TATA: Always a pleasure.

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