This is a RUSH transcript from "The O'Reilly Factor," July 12, 2012. This copy may not be in its final form and may be updated.
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BILL O'REILLY, HOST: And in the "Impact Segment" tonight, the "Kelly File" -- a new report on Penn State and the child molester Jerry Sandusky puts that university and the people of Pennsylvania in a very bad place.
Former FBI Director Louis Freeh headed up the investigation.
(BEGIN VIDEO CLIP)
FREEH: The most powerful leaders of Penn State University: Mssrs. Spanier, Shultz, Paterno and Curley repeatedly concealed facts relating to Sandusky's child abuse from the authorities, the Board of Trustees, the Penn State community and the public at large.
(END VIDEO CLIP)
O'REILLY: That, of course, opens up the potential for massive lawsuits against Penn State. Here now attorney and Fox News anchor Megyn Kelly.
So how did Freeh arrive at that conclusion?
MEGYN KELLY, FOX NEWS ANCHOR: Oh they've investigated it for months. They've reviewed over three million documents. They've interviewed several witnesses -- all but Joe Paterno who died after he was, you know, these allegations first surfaced last year.
And it's very clear. I mean they produced the e-mails in this report that show these four men knew or had reason to know exactly what was going on with this -- with this Sandusky and did nothing because of two things. Number one, they wanted to be humane to Jerry Sandusky, the molester; and number two, they were worried about the bad publicity for Penn State.
That is the conclusion of Louis Freeh. That these guys, when confronted with an allegation that this guy, Sandusky was raping a child in 1993, decided not to do anything about it, not to report it to the board of trustees and to move on. And in 2001, did the same thing when same allegations surfaced. And during that time and thereafter they allowed that man, who now they had two allegations of sexual abuse against, to come on the campus with an all access pass bringing with him young boys, allowing him access to the showers with the young boys.
O'REILLY: All right.
Now the three executives at Penn State -- obviously Paterno is deceased -- can they be charged with the crime?
KELLY: Yes they can. And --
O'REILLY: And they probably will be based on this.
KELLY: And reportedly they are looking into this. Yes this is the former president Graham Spanier, Shultz and the other guy Curley --
O'REILLY: Curley, right.
KELLY: -- are already facing charges for perjuring themselves allegedly before the grand jury trying to make it sound like they knew more than they did.
O'REILLY: But now -- but now it gets up in the sense that they could be charged with other crimes, felonies.
KELLY: Failure to report and so on.
KELLY: I mean it's -- it's clear now from this documentation and from the Freeh report that there was a consciousness of wrongdoing on their part when it came to Sandusky and a motivation to cover it up for the good of the football program and the University.
And not only that they now talk about there is anecdotal evidence about two janitors --
O'REILLY: But here's how bad it is --
KELLY: -- who allegedly witnessed it and didn't want to come forward because they said if you went in to Paterno to talk about Sandusky it was like talking to the President of the United States.
O'REILLY: Ok but here's -- but here is how bad it is. If they wanted to protect the football program and the University they could have just quietly fired Sandusky. Just get him out all right. I mean they should have, of course, reported him to the authorities when the first allegation came up. That's what any decent person would do.
O'REILLY: But they didn't even do that as you pointed out. They enabled him to do more of it.
KELLY: Right and more rapes happened. More rapes did --
O'REILLY: And more rapes happened.
KELLY: --- it wasn't theoretical; more rapes did happen.
O'REILLY: Right. Ok.
KELLY: At least and maybe as many as 20.
O'REILLY: So, on his conscience -- on his conscience and if there is an afterlife Joe Paterno is going to have to explain that, all right, because he's dead and his reputation is shot. And he was once one of the most respected athletic people in the country. He's done.
O'REILLY: And the other three may go to prison and they should go to prison.
O'REILLY: All three of them.
Now, this is almost exactly like the Catholic Church scandal -- almost exactly. Because the same modus operandi mind set was in -- we don't want to embarrass the church, all right. We're not going to report this to the authorities. We're going to move these guys around, these predatory priests all right and hope we can get away with it.
KELLY: This is the same thing as the all access pass that Sandusky was given.
O'REILLY: It's exactly -- it's exactly the same thing. But here's the difference. Whereas the Catholic Church paid tens of millions, probably hundreds of millions of dollars, the people of Pennsylvania are going to have to pay this bill because Penn State is a public college. And it's going to get into the hundreds of millions of dollars because anybody now can say I was molested and the university better settle with me.
KELLY: Yes and that is why the people at Penn State and in the community need to be even more angry with these officials.
O'REILLY: Oh, I think they are.
KELLY: But it's not just because it is. It's mostly and first and foremost about these little boys whose lives have been ruined.
O'REILLY: Of course.
KELLY: But it is also there's a reason we have these obligations -- I mean federal obligations. It's not just a moral thing for reporting duties. And it's to stop and protect a university like this and those who are part of it from having to make these huge payouts.
O'REILLY: Because the people in the commonwealth of Pennsylvania now -- I mean their tax money is going to go to these boys -- and they're men now -- who were molested. Ok? That university is shot; Penn State is not coming back. They're not going to come back athletically and they're not going to come back in the court of public opinion, in our lifetime. All right? They are done.
So it is such a disaster it is just almost beyond comprehension. Last word.
KELLY: I think that the report put it best when they said that these guys were concerned about the university and about the molester but never demonstrated any concern for the child victims until an arrest was made and they have to.
O'REILLY: And they were concerned -- and I will go a step further. And I'll go a step further they were concerned about themselves. Because they knew that -- Paterno knew he hired Sandusky and the others knew that this was it and they didn't want the scrutiny on themselves.
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