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Justice Department Under Fire Over 'Fast and Furious'

This is a RUSH transcript from "The O'Reilly Factor," December 6, 2011. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: Thanks for staying with us. I'm Bill O'Reilly.

In "The Kelly File" segment tonight, the Justice Department on the defensive over the Fast and Furious investigation, as you know. And you may remember federal agencies under the supervision of Attorney General Eric Holder sent thousands of guns down to Mexico to try to track where they were going.

Well, the feds lost track of the guns, and a Border Patrol agent was killed because of the screw up. Now Congress zeroing in on the Justice Department. And with us to update the situation, attorney and FOX News anchor Megyn Kelly.

So what's it... Holder has to go back in front of Congress on Thursday, right of this week?

MEGYN KELLY, FOX NEWS ANCHOR: Yes. In advance of that, he had to submit a bunch of documents to Congress that had been subpoenaed.

O'REILLY: What committee, again, is doing this?

KELLY: House Judicial Oversight Committee, OK, headed by Darryl Issa. He's going to go before that committee. And on last Friday they did what's called a document dump of almost 2,000 documents related to this scandal.

And it shows the back and forth about -- from a lot of super high- level DOJ officials and U.S. attorney officials and ATF officials in Arizona. All in response to -- not all, but a lot -- in response to Senator Charles Grassley, who had written a letter at the beginning of the year 2011, saying, "What's the deal with these whistle blower allegations that you are intentionally letting guns walk into Mexico and putting them in the hands of bad guys?"

And they were apoplectic, everybody saying, "How are we going to respond? What are we going to say? Blah, blah, blah." They wind up writing a letter in response on February 4th of '11, saying, "We never let guns walk. ATF doesn't do that. We interdict weapons, blah, blah, blah, blah, blah."

O'REILLY: And it was a lie.

KELLY: Well, it was completely false. I don't know whether it was a lie.

O'REILLY: Completely false and a lie, I think they're the same thing.

KELLY: They say they were misinformed. The people on the top level say, "We relied on bad information."

O'REILLY: Yes. They can say whatever they want to say. But the first letter that they wrote to Grassley wasn't true.

KELLY: And now they've had to withdraw it, because it's so... it's so wrong they said, "We have to withdraw it."

O'REILLY: So it looks to me... and you correct me if I'm wrong... that they're in trouble. Now, they already got rid of the ATF chief, right? He's already out of there.

KELLY: No one has been fired. The one...

O'REILLY: They removed him, right?

KELLY: Everybody is still collecting a federal paycheck.

O'REILLY: They're still getting paid?

KELLY: Moved them to other parts of the DOJ or other federally taxpayer-funded positions except for the one U.S. attorney who oversaw in Arizona. He resigned. No one has been fired. We still have not one person who's actually been held accountable for this.

O'REILLY: OK, is there any smoking gun that shows Eric Holder, the attorney general? There isn't.

KELLY: No.

O'REILLY: Right now Holder, who claims that he didn't really know much about it...

KELLY: Right.

O'REILLY: ... he's still...

KELLY: Nothing to disprove that.

O'REILLY: OK.

KELLY: But let me tell you what the documents do show. They tightened the focus on a very close Holder deputy named Lanny Brewer who heads up the criminal division of the DOJ. This is no lackey. This is guy is high up in DOJ. And he went before the U.S. Senate in November, a month ago, and testified that he could not remember whether he'd ever seen a draft of that critical letter, which now has been so wrong they had to withdraw it. "I don't remember whether I ever saw a draft."

And then he doubled down on that testimony in written form. To the U.S. Senate. Well, these documents that just came out on Friday show that it was sent to him. And not only was it sent to him at least four times. At least four times. He forwarded it from his DOJ email to his private Gmail.

O'REILLY: So he lied. Can I say he lied? Is that fair?

KELLY: You tell me. Because when he's forwarding it to his private Gmail, he's praising his lieutenant, who is heavily involved in the drafting, who is complaining to him, "This is worse than drafting the Magna Carta." He praised him for his good work, forwarded to the private email. And now... and it was a big deal on DOJ and all these other agencies. He doesn't remember? He doesn't remember ever seeing the draft?

O'REILLY: So Brewer is going to take the fall then?

KELLY: That... I don't know whether he's going to take the fall or not. But they have good reason to be pressing on this, because the information on... from DOJ is coming out in drips and drabs and has been all along. This organization first told Grassley and everybody else, never happened. They kept pushing, and they kept saying this is a witch-hunt.

O'REILLY: Grassley is the hero here?

KELLY: Well, Grassley and Issa are the ones who have been on this from the beginning.

O'REILLY: OK. All right. So Holder comes in on Thursday. And of course, we'll see what happens there.

Now, Blagojevich, we know he's a thug, right? He's a thug.

KELLY: I think it's fair to say he is a thug.

O'REILLY: OK. The reason we say that.

KELLY: The jury has spoken on that.

O'REILLY: Yes, the reason... well, we say that, is because Blagojevich did what a lot of Illinois politicians do. Once he got elected, he looked for ways to make money for himself.

KELLY: What about me? What about me?

O'REILLY: Either by putting money into his campaign or direct or this, that, and the other thing. So...

KELLY: People who want contracts with the state and appointments.

O'REILLY: He wanted to sell Senator Obama's Senate seat.

KELLY: "Yes, I'll give you a contract. Give me some money."

O'REILLY: So when Obama left the Senate that seat was open. And Blagojevich could make an appointment. He wanted something for it.

KELLY: "This is a gold mine. Not just going to give this thing away for free."

O'REILLY: OK. So the first year he was hung and thrown out, or whatever. Didn't...

KELLY: Guilty on one charge.

O'REILLY: And then the second one came back.

KELLY: Guilty on, like, 18 counts.

O'REILLY: OK. So I say he's going to get five to 10. Is that... do you think?

KELLY: I think it's probably going to be a little more. Probably going to be 10 to 15.

O'REILLY: Ten to 15, of which he has to serve, what?

KELLY: Virtually all if not all of it. He is the... the prosecutors want between...

O'REILLY: That's a big stretch.

KELLY: Oh, yes. The prosecutors want between 15 and 20. He wants about 3 to 5. And it looks like he'll get between 10 and 15.

The other guy, Rezko, he got 10 and a half.

O'REILLY: Right.

KELLY: So I don't think they're going to be giving Blago less than Rezko. I would predict ten to 15.

O'REILLY: Ten to 15. What is it, 80 percent on the federal level? Eighty-five percent? So he's out for a while in prison?

KELLY: Yes. It's going to be a Long time. He's going to have a lot of time to contemplate.

O'REILLY: All right. And that should come down tomorrow right during your broadcast at 1 oclock.

KELLY: Yes. Thank you for the promo.

O'REILLY: All right. We appreciate you coming on.

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