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Kelly File

Trump takes heat from both sides; Rubio looks to build on strong debate performance

This is a rush transcript from "The Kelly File," September 18, 2015. This copy may not be in its final form and may be updated.

MEGYN KELLY, HOST: Breaking tonight. New fallout in the growing scandal for Donald Trump as the Republican front-runner gets blasted by the media, angry Democrats even the White House for failing to defend the President from suggestions that Mr. Obama is a Muslim.

Welcome to our "Kelly File" special on the media in 2016. I'm Megyn Kelly. We have live pictures coming back tonight from Greenville, South Carolina where most of the Republican field showed up for the Heritage Action forum. This is a key gathering of conservative voters, most of the field, that is, except Donald Trump. He cancelled earlier today after an ugly moment at a town hall last night that has become the biggest story in the country today. If you have not seen it, here's what happened when Mr. Trump opened the floor to questions in Rochester, New Hampshire.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We have a problem in this country. It's called Muslim. We know our current president is one. You know he's not even an American.

DONALD TRUMP, R-PRESIDENTIAL CANDIDATE: We need this question.  It's the first question.

UNIDENTIFIED MALE: But, anyway, we have training camps growing where they want to kill us.

TRUMP: Uh-huh.

UNIDENTIFIED MALE: That's my question. When can we get rid of them?

TRUMP: We're going to be looking at a lot of different things. And, you know, a lot of people are saying that. And a lot of people are saying that bad things are happening out there. We're going to be looking at that and plenty of other things.

(END VIDEO CLIP)

KELLY: Well, the campaign started taking incoming almost immediately.  And by this morning, The Trump campaign put out this statement that reads, quote, "The media wants to make this issue about Obama. The bigger issue is that Obama is waging a war against Christians in this country." They need support and their religious liberty is at stake. That satisfied no one. And before the day was done, both the White House and Hillary Clinton had joined in on the debate.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, D-PRESIDENTIAL CANDIDATE: He knew or he should have known that what that man was asking was not only way out of bounds, it was untrue. If that person had been in my event, I would have called him out on it. And I would have said from the very beginning that has no place in a political discussion like the one we're trying to have here, and not only is it out of place and wrong, it is totally factually untrue.  

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: Mr. Trump isn't the first republican politician to countenance these kinds of views, in order to win votes. In fact, that's precisely what every republican presidential candidate is doing when they decline to denounce Mr. Trump's cynical strategy because they're looking for those same votes.

(END VIDEO CLIP)

We have a powerful line-up tonight with Chris Stirewalt, Howie Kurtz, and Senator Marco who just made some news on this story. But we want to start with Andy Dean, he's the former president of Trump Productions and worked with Mr. Trump for seven years. Andy, thank you for being here tonight.

ANDY DEAN, FORMER PRESIDENT OF TRUMP PRODUCTIONS: Thank you.

KELLY: So, what is officially is the defense being offered by the Trump campaign on this?

DEAN: Well, look, I think it was a question that was asked at a town hall forum, and Donald as you can tell kind of shrug his shoulders and laugh a little bit. Because it's a pretty aggressive question. But as far as what Donald thinks, I mean, we all know that President Obama went to Reverend Jeremiah Wright's church. And what religion that is, I'm not sure because we remember Reverend Wright saying, God damn America. That's in the Bible. I read the Bible. I have not seen that passage yet. So, I think more than anything, there's just confusion on our end as to why one tiny question is some sort of big media controversy right now.

KELLY: You know, it's because the guy -- a couple reasons. Number one, he seem today be condemning Muslims as a group, as opposed to radical Muslims. Number two, he said that Barack Obama --

DEAN: The questioner was, not Donald Trump.

KELLY: Yes. The questioner.

DEAN: The questioner was, not Donald Trump.

KELLY: Right. Exactly.

DEAN: Correct.

KELLY: And then number two, he said the questioner that Barack Obama is a Muslim and that he's not a citizen of this country. And Donald Trump did not correct him or challenged him on other one.

DEAN: Well, that's not correct. We know that Barack Obama is a citizen of this country, one of the reasons why we have definitive proof is that Donald Trump got Barack Obama's long form birth certificate.

KELLY: Why didn't he say that?

DEAN: And once he produced that, there's been no controversy since.  And it is, Megyn, for a second here. It's pretty impressive, if you look at Donald Trump's pure negotiating skill, then nobody on planet earth was able to produce this document until Donald turned this into an issue and then Barack Obama --

(CROSSTALK)

KELLY: So then, he's in the best position to turn onto that man and say, we know he's a citizen sir, we know that. Because I pushed for him in the release and he did. And that question has been resolved. Period.  Let's move on.

DEAN: Okay. Well, Megyn, he could have said that, but by that exact same logic, think of this, why didn't Barack Obama according to that same logic stand up at Jeremiah Wright's church and say, hey Jeremiah, not God damn America.

KELLY: Not a good question. Not a good question.

DEAN: America isn't -- no, it's the exact same thing.

KELLY: Barack Obama is not running for office. Donald Trump is.

DEAN: Sorry, he wasn't running for office in 2007 and 2003 --

KELLY: See, he won the office. And he's now the sitting president.

DEAN: Correct.

KELLY: So that fish has swum. That ship has sailed.

DEAN: Okay, but it's a parallel argument. Megyn, I'm sorry. This is a rough night, I guess.

KELLY: Well, that's a deflection, Andy.

DEAN: That's not making any sense.

KELLY: That's a deflection.

DEAN: It's not a deflection. It's an exact parallel.

KELLY: You seem to be dodging. Are you uncomfortable on this issue?  Why can't you answer whether --

DEAN: What is it Megyn? Please get specifics.

KELLY: Okay. I will. Why didn't Donald Trump look at him and say he is not a Muslim. He is an American citizen. I'm the man who made him produce his birth certificate.

DEAN: I think that could have been an answer as to why, you know, and Donald answered the questions at a town hall. I think indeed the perfect politically correct answer at every moment to satisfy the media. You know, I'm not a genius. I can't figure that out.

KELLY: That's okay. That's a reasonable response.

DEAN: Thank you.

KELLY: All the stuff about, why didn't Barack Obama stand-up was a deflection. We got to it eventually.

DEAN: No, it's not. It's was an exact parallel argument, actually, Megyn.

KELLY: Oh, I'll let the viewers decide.

DEAN: When you re-watch this, we'll see that. Okay, great.

KELLY: I'll look forward to doing just that later.

DEAN: You got it.

KELLY: Joining me now with more reaction, FOX News digital politics editor Chris Stirewalt and host of Fox News "MediaBuzz" Howard Kurtz. Hi, guys. So, it all relates somehow back to Obama in Jeremiah Wright's church, Chris. That's what this story is really about?

CHRIS STIREWALT, FOX NEWS DIGITAL POLITICS EDITOR: I will say this, the long arc of this story definitely includes the 2008 campaign. And it definitely includes there was a candidate. Her name was Hillary Rodham Clinton.

KELLY: We're going to get to that in a minute. We're going to get to that.

STIREWALT: Okay. All right.

KELLY: But the point is, the Democrats and their hypocrisy on this is a separate matter, we're going to get to that in a minute. What we are focusing on here is whether this is a legitimate -- whether Donald Trump should have handled this differently, is this a legitimate area of inquiry that the campaign should be speaking to explicitly.

STIREWALT: The way that it was framed by the White House and by Hillary Clinton is not. Because they would not be satisfied unless Donald Trump got up and said that Barack Obama is CS Lewis and Billy Graham all rolled into one in the greatest Christian since Thomas Aquinas and marvelous thing, and all of this stuff and wept allowed that he was question. But from a point of --

KELLY: You, sir, are inappropriate.

STIREWALT: Right. But from a point of political practicality, what Donald Trump should have been able to do was quickly said eee -- as he did to Jeb Bush when he -- to the microphone when he went, nope. Do a Trumpian response to this guy to make it clear off the top, no, we're not doing this here. This is not what we're going to do. You know why? Because this is what happens. When you don't tell that guy, nope, he says he is a Christian, he produced his birth certificate.

KELLY: Okay. But the reason -- the reason many believed, Donald Trump gave that guy a pass is because he is on record, he is on record for years now as having raised some of these very same questions himself. I refer you just by one example back to this exchange he had on FOX News in 2011.

(BEGIN VIDEO CLIP)

TRUMP: He may have one but there's something on that birth -- maybe religion, maybe it says, he's a Muslim. I don't know. Maybe he doesn't want that or he may not have one. But I will tell you this, if he wasn't born in this country, it's one of the great scams of all time.

(END VIDEO CLIP)

STIREWALT: So, if you are, not just the birther, but if you are like the thunder birther, if you are the Thor of birthers, and he has never fully recanted of it. Right? So, he's been pressed about it several times during this presidential run.

KELLY: Recently.

STIREWALT: Recently. And he basically has said -- and answer the question, one time he said, well, he produced the birth certificate, Mr. Trump. What about that? And he said, well, if you believe that. But I'm not going to get into that right now. It's like, wait, what?

KELLY: Yes.

STIREWALT: So, it's possible that it's a forgery.

KELLY: Having said all of that, Howie, having said all that, the hypocrisy, from Hillary Clinton went out there today. You would have thought, I mean, you would have though he was insulting her granddaughter.  And I mean, it's like the indignant she showed over how inappropriate he is and totally and factually untrue what that questioner said. Quit impugning the integrity of the President. It is prejudiced. It is discriminatory.  Listen to what happened when Steve Kroft asked her about this issue back in 2008.

(BEGIN VIDEO CLIP)

STEVE KROFT, "60 MINUTES" CORRESPONDENT: You don't believe that Senator Obama is a Muslim.

CLINTON: Of course not. I mean, you know, there is no basis for that. You know, I take him on the basis of what he says. And, you know, there isn't any reason to doubt that.

KROFT: You said, you take Senator Obama his word that he's not a Muslim, you don't believe that he's a Muslim and you're implying, right.

CLINTON: No, there is nothing to base that on as far as I know.

(END VIDEO CLIP)

KELLY: As far as I know. The New York Times called that one of the sleaziest moments in the campaign. Howie?

HOWARD KURTZ, HOST, "MEDIABUZZ": It's uncomfortable to watch, even now. So, of course Democrats -- a lot of the pundits that don't like Donald Trump are piling on. When I watched this moment, I was astounded by the way that Trump handled it. But what's equally surprising Megyn, is that he didn't do what he usually does afterwards which is sail right into the media hurricane, call into a couple of morning shows, try to deflect or defend what he did and pivot to some new controversy. Instead, Trump put out a statement blaming the media. And that usually works for him because Ari Elk (ph) it's not too popular with a lot of Americans. Not in this case because people have seen that clip over and over and over again and they can decide for themselves how Donald Trump should have handled that guy.

KELLY: And now Howie, are we seeing a coward at Donald Trump, as some of the headlines today suggests that he bailed out of this event tonight, cited some business reason that has not yet been produced publicly. And now we wonder why he didn't attend one of the important events of campaign 2016.

KURTZ: I think for the first time in the campaign, you're seeing a Donald Trump who is off balance. Who is sort of on the defensive over this. He doesn't want to reopen the past birther controversy because there are so many clips like the one you play where he's questioning, whether the President was born in the United States. Obviously, we know he was born in Hawaii. And so, I think they're just having quite figure out, how to deal with this.

KELLY: Hillary Clinton came out tonight and said, he's taking a time out. She's suggests that what she'd doing tonight is taking the time out to think hard about what happened. It's almost like she's accusing him of taking an unscheduled vacation.

STIREWALT: Oh!

KELLY: I've got to go. See you guys.

(LAUGHTER)

Also joining us tonight, Senator Marco Rubio who just made some news on Donald Trump and his comments.

Plus, Charles Krauthammer on the other big news, that came out of South Carolina. Those two are next.

And a 14-year-old Muslim student is arrested after bringing to school a mysterious electronic device that they said looked a lot like a bomb.  Now, some on the left are blaming profiling and trying to make young Ahmed into a national hero. But wait until you hear what our guest have to say about it.

And then, we have a "Kelly File" investigation into the group that staged what was supposed to be a big charity event for vets, except this group is no longer a charity and now folks are asking what will happen to the money. CNN's investigative reporter broke this story last night. We did some digging on our own today.

(BEGIN VIDEO CLIP)

TRUMP: An endorsement from your group with so many veterans.  Hundreds of thousands of veterans really appreciate that, Joy. I did not expect it.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. MARCO RUBIO, R-FLA., PRESIDENTIAL CANDIDATE: We restore American leadership by having the most powerful military in the world.

(CHEERS AND APPLAUSE)

These are serious challenges at a time when the world has gone nuts.  As I said the other night, there is a lunatic, a lunatic in North Korea with dozens of nuclear weapons. The Chinese are taking over the South China Sea. The Russians are trying to divide NATO. Radical Jihadists are in dozens of countries across multiple continents. Iran is also going to acquire a nuclear weapon and we're reducing our military.

(END VIDEO CLIP)

KELLY: That was Florida Senator Marco Rubio about an hour ago sharing a powerful foreign policy message as part of his speech to the Heritage Action forum hitting some of the same notes that won him high praise earlier this week at the republican presidential debate.

Joining me now, presidential candidate and Florida Senator Marco Rubio, fresh off of his appearance in South Carolina.

Senator, great to see you tonight. So, I want to get to what we were saying about the threats we face as a country in a moment which is important.

RUBIO: Right.

KELLY: And you get a lot of great feedback for your points on this in the debate. But let me just ask you since you haven't spoken to us here on FOX since the debate. What did you think of it?

RUBIO: Well, just one more stop in the process of electing a president. I was disappointed, we didn't talk about the national debt. We didn't talk much about the economy. And we had a three hour debate and those issues weren't touched upon. And I was disappointed by that.  Because these are important issues. For people trying to make up their minds about who to vote for, they want to know what your ideas are about the issues that are impacting their lives, not what named you're going to call someone.

KELLY: And then speaking of the issues that's impacting their lives, let's talk about the foreign policy. Because we've seen in so many polls in this election cycle, they want an outsider. Two-thirds plus of the republican voters are saying, we want somebody on the outside of Washington, not a senator, not a governor even. And you've been making sort of a counterpoints saying, you meet somebody who is ready on day one, especially when it comes to foreign policy, do you think that is the best - - your best retort to that argument.

RUBIO: Well, I think the deeper argument is not simply what job title people have. I mean, the deeper argument is Republicans and Americans don't want to keep electing the same kind of people. And that's the reason I ran for the Senate in 2010. I was a private citizen. The entire establishment of the Republican Party was against me when I ran against the sitting governor of Florida for the Senate. And it's the reason why I'm running for president.

Because I know that we're not going to be able to change the direction of this country unless we have someone in that office that's in touch with what's happening with people's lives and closes this enormous disconnect between Washington and both parties and the lives of our people. And then when it comes to national security, look, that's the most important obligation of the federal government. It's the one thing only the federal government can do is keep us safe from foreign threats. And it quite frankly, under this president, is not doing a very good job of it.

KELLY: Uh-hm. But you see, somebody like, you know, Carly Fiorina made some very cogent substantive arguments on foreign policy the other night. Donald Trump says, I may not be an expert on foreign policy but I will appoint the best people. I have the best people advising me. Why couldn't that work just as well as somebody like you who's been steeped in foreign policy for the past five or six years, plus.

RUBIO: Well, I mean, again, that's the thing Carly demonstrated. If you take the time you can learn a lot about these issues. But what's important is, that you need to be prepared the late on the very first day in office. To make judgment decisions based on facts and issues and currencies that you don't control. Presidents cannot control foreign policy challenges. Often times, they're unexpected, they arise. And sometimes, your adversaries take advantage of you, thinking that there might be someone in the office that's unprepared. And so, my point the other night was whoever we elect, and I hope it will be me, obviously, better be someone who's prepared to deal with national security on their very first day in office. Because when it comes to that, there cannot be a learning curve.

KELLY: I have to ask you about Donald Trump today who was in the news because he did not correct someone who questioned him at a town hall when that person suggested that President Obama is a Muslim and that we have a problem with Muslims in this country. Do you believe that Donald Trump should have pushed back on that person and should have stood up for the President?

RUBIO: I do. I have before in the past, myself. First of all, I think that's relevant. And second of all, it's not true. And the President has made very clear what his faith is. And Christianity, if someone says that they're a Christian and that's what they are, we accept that. That's what it is. And I don't know why that keeps coming up. The truth is, my problems of the President are not personal. My problems with the President are his policy decisions. They're dangerous for America on National Security. And they're bad for our economy and for the individual lives of our people. And that is what my big concern is with this President and his policy.

KELLY: All right. Last, but not least, the news today is that allegedly, your deputy campaign manager Rich Beeson and Rich was accused of assaulting Rand Paul's National Political Director John Yob. There's video of it, he said he was punched in the face. The video kind of shows a shove. Here it is. Do you want to comment on this? This is sort of dust- up between --  

RUBIO: No.

KELLY: What's the story here?

RUBIO: Well, I don't know a tremendous lot about it. I know what I've learned in life, is there's two sides to every story. We'll let the local authorities figure out all the facts, it sounds like a dispute between two grown men. And we'll see where it plays out. We're focused on our campaign and on the things that matter to our voters.

KELLY: There's a competition for toughness in the republican field.  It could be that Rich took it too seriously. In any event, we appreciate you being here, Senator Rubio, all the best to you.

RUBIO: Thank you.

KELLY: Senator Rubio was just one of the candidates on that stage tonight. And up next, you will hear from some of the others. Along with Charles Krauthammer on what he thinks is the big story coming from this event.

Plus, wait until you hear the new shots against Fiorina. Also, we have new fall out tonight in the story of the 14-year-old who somehow scored an invite to the White House after his homemade clock was mistaken for a bomb.

(BEGIN VIDEO CLIP)

AHMED MOHAMED, ARRESTED AFTER BRINGING DEVICE TO SCHOOL: -- who built a clock and got in a lot of trouble for it. I built the clock to impress my teacher. But when I showed it to her, she thought it was a threat.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KELLY: Breaking tonight, you just heard from Senator Marco Rubio.  Just one of the GOP candidates speaking at the Heritage Action forum in Greenville, South Carolina. Most of the GOP field took the stage one after the other tonight with the exception of Donald Trump as we reported earlier. Each of the candidates trying to build on Wednesday's debate and score points with a key group of conservative voters. Here's just a little of what we heard.

(BEGIN VIDEO CLIP)

JEB BUSH, R-PRESIDENTIAL CANDIDATE: I was a disrupter in Tallahassee and I'll be a disrupter in Washington, D.C. We need a line- item veto power for the government. They called me Vito Corleone when I was governor of Florida for good reason because I vetoed 2500 separate line items in the budget.

SEN. TED CRUZ, R-TEXAS, PRESIDENTIAL CANDIDATE: If we're going to break the Washington cartel, the only way to do it is, we've got to take it on and we've got to bring power out of Washington and back to the people.

(CHEERS AND APPLAUSE)

GOV. SCOTT WALKER, R-WIS.,  PRESIDENTIAL CANDIDATE: I don't buy this nonsense about all the Senate rules, 60 votes out there. I got to tell you something, you know, what? The Democrats don't play by those rules. They passed ObamaCare with 51 votes. It's time we sent the President a bill that defunded Planned Parenthood with 51 votes in the United States Senate.

DR. BEN CARSON, R-PRESIDENTIAL CANDIDATE: The worst part is that the majority of Americans disagree with the tearing up of baby and the destroying of human life that this organization is engaged in. So, why should their taxpayer money be used to fund that kind of activity. What happened to America?

(END VIDEO CLIP)

KELLY: Joining us now, Charles Krauthammer, a FOX News contributor and author of "Things that Matter" which is now out in paperback. Charles, great to see you. What a difference to hear the candidates long form saying what they want to say and the messaging, the way they want as opposed to a debate stage where they're being pitted against one another with a goal of making them fight.

CHARLES KRAUTHAMMER, FOX NEWS CONTRIBUTOR: Exactly. I mean, that's sort of Roman Gladiatorial stuff that we saw in this CNN debate where it was, every question was set up as a fight between two Republicans. And I do think this is a better way to get at what these candidates are. Because it does allow them to say what they have to say without having to get personal and without having to do at home. And the other interesting part is when you set a debate up, as one republican against another, you rarely here about what the main argument in the election ought to be about. The two parties contending, arguing their political philosophies. So, you've had much less of a mentioned of Obama or Clinton in the debates than you do in a forum like this. You know, the Republicans have now spent the summer essentially in their -- warfare when they've allowed the Democrats to get away with sort of being shunned on almost. Not mentioned as much as you would like in the run-up to a general election campaign.

KELLY: Uh-mm. And even in the wake of the debate now, you'd think their message would be solely focused on Hillary Clinton or I guess Bernie Sanders. But what we've heard over the past day has been some of the candidates too, trying to, it sounds like, you tell me, diminish what many believe was a win by Carly Fiorina. Listen here to Walker and Trump.

(BEGIN VIDEO CLIP)

WALKER: I think going on, we knew the narrative no matter what was going to happen was that, they were going to say Carley had a big night no matter what and obviously they said that.

TRUMP: Well, I don't totally disagree. I think they wanted to have some kind of a narrative. They fed her softballs. You know, I don't get that whole situation. They fed her softballs. Some of the things that she was asked were, you know, ridiculous. Donald Trump said this, and she's practically didn't have to even answer.

(END VIDEO CLIP)

KELLY: It's an interesting tactic. Your thoughts.

KRAUTHAMMER: Well, it's called sore loser. You don't do well. You say that the other guy, the other gal got easy questions. There were no easy questions here. And I think what really happened is we had one instance where Donald Trump was challenged and Carly did it. She did it in a very concise and cutting way. And for the first time, Trump had no answer. And that was an electric moment. And I could understand why Trump would be upset about that. But it wasn't because she was a fed easy questions. And in fact, I think the other really great moment she had was when he referenced to no other candidate, she spoke about Iran and Planned Parenthood.

KELLY: Uh-mm.

KRAUTHAMMER: In a remark, you know, sort of an odd pair of topics.  In a single riff, which was riveting.

KELLY: Uh-mm.

KRAUTHAMMER: And that was her other moment. And that was a positive moment. It was not about attacking on the Republicans. So she clearly was a winner. The idea that she was set up, everybody was ready to declare her the winner is nonsense.

KELLY: Uh-mm.

KRAUTHAMMER: You watch the debate. It was clear. But I would add that Rubio, as I said on the night right after the debate on Wednesday night, he was a close second.

KELLY: What did you make of Rubio just now calling out Trump? I mean, some of the candidates had been asked about this today. Mike Huckabee said, I would handle it differently. He didn't expressly rip on Trump. But Rubio said explicitly, I do believe that Trump should have handled it differently. Is this going to be an ongoing thing? And how much damage, if any, did Trump do himself there?

KRAUTHAMMER: I'm not sure he did himself a lot of damage. I think the problem is that he is always -- ever since he got into the campaign starting with what he said about Mexican-Americans and what he said about John McCain. There's always the after story. There's always explaining what he really meant or what he said he meant. You know, what he said about Carly Fiorina's looks. So, he's always sort of cleaning up after himself. That's the problem. Now, in fact, he hasn't heard of that, sort of remarkable. He defies the laws of political physics and in fact his numbers have gone up. But I'm not sure how long that persists. I think the two dangers for him are that one, he gets boring, he's been very exciting, entertaining, you always want to see what he's going to say because you never know what's going to happen. But after a while, you have to come up with some substance and programs. The other danger is he implodes or explodes. That hasn't happened. Because I think people are kind of attracted to a guy who says what he means, and isn't afraid to say it and gets away with it. But there's a cumulative effect here where you're going to say yourself do you want to back a guy in the general election campaign who's going to have to -- collecting himself every three days. It's hard to get your message out if that's what you're doing.

KELLY: Charles, always great to hear from you.

KRAUTHAMMER: My pleasure.

KELLY: We also have a Kelly File investigation tonight into a group that staged a big, so-called charity event to help vets, except this group is no longer a charity. So what happened to the million bucks?

Plus, some of the presidential candidates are now weighing in on the growing debate over the teen arrested for showing up to school with a home- made alarm clock that some mistook for a possible bomb.

(BEGIN VIDEO CLIP)

AHMED MOHAMED, ARRESTED AFTER BRINGING DEVICE TO SCHOOL: I built to the clock to impress show my teacher, but when I showed it to her she thought it was a threat to her. So it was really sad that she took the wrong impression of it and I got arrested for it later.

(COMMERCIAL BREAK)

KELLY: Well, tonight, some of the left are celebrating a new cultural hero of sorts in America, a 14-year-old boy who got handcuffed and suspended from school after showing up at school with a home-made clock that some believed look like a bomb. Ever since, some have argued that the school went too far and the police did, as well. While others have argued that authorities were just acting out of caution. Whatever the case actually is, Ahmed Mohamed has now scored an invite to the White House, and Trace Gallagher has the latest from our west coast newsroom, Trace?

TRACE GALLAGHER, LOS ANGELES: Megyn, this was a not classroom assignment. Ahmed Mohamed invented the clock on his own and bought it to school to show his engineering teacher. The teacher said it was nice but told him not to show it to others. During English class, the clock beeped, the English teacher notified school administrators who notified police.  The police say Ahmed wouldn't give them any information except that it was a clock, listen.

(BEGIN VIDEO CLIP)

CHIEF LARRY BOYD, IRVING, TX POLICE DEPARTMENT: Under Texas law, a person is guilty of possessing a hoax bomb if he possesses a device that is intended to cause anyone to be alarmed or a reaction of any type by law enforcement officers.

MOHAMED: I tried to call my parents, but they were like you're in the middle of an interrogation right now and you can't call them.

(END VIDEO CLIP)

GALLAGHER: Ahmed was cuffed, arrested, and suspended for three days.  Now, the school and Irving Police are being villainized for overreacting.  And Ahmed is being praised for his ingenuity. Facebook Founder Mark Zuckerberg offered an internship for "Having the skill and the ambition to build something cool." President Obama agreed saying, "Cool clock Ahmed, want to bring it to the White House?" The White House even suggested that Ahmed was the subject of prejudice, listen.

(BEGIN VIDEO CLIP)

JOHN EARNEST, WHITE HOUSE PRESS SECRETARY: This episode is a good illustration of how predacious stereotypes can prevent even good hearted people who dedicated their lives to educating young people to doing the good work that they set out to do.

(END VIDEO CLIP)

GALLAGHER: Hillary Clinton also indicated that stereotypes played a role here, "Assumptions and fear don't keep us safe, they hold us back."  New Jersey Governor Chris Christie thinks the school did overreact, but that we live in extraordinarily dangerous times and people are concerned.  Groups are now fighting to get Ahmed Mohamed's suspension reversed. For the record, the Baltimore 7-year-old who chewed his pop-tart into the shape of a gun had his suspension upheld, Megyn.

KELLY: Trace, thank you. Joining us now, Mark Fuhrman, Former LAPD Homicide Detective and a Fox News Contributor, and Richard Fowler, a Nationally Syndicated Radio Host, I mean, you've got to feel bad for the kid and you've got to feel bad for the school. Richard, let me start with you.

RICHARD FOWLER, NATIONALLY SYNDICATED RADIO HOST: I definitely feel bad for the Ahmed and this particular situation. This is ingenuity at its finest, Megyn. Politics aside, this is what we want from America's kids, to go home and invent alarm clocks, go home and create new innovations, this is what -- he is the example of what makes America great. And sadly, because of over-policing, because of fear, because of stereotypes, because of xenophobia that we created in this country, he is now a victim for being really smart. And that is really bad.

KELLY: At the end, you really took it to a far out place. Because Mark, you've got to feel bad for the kid. The kid did not do anything wrong. But did the cops do anything wrong? Did the school do anything wrong? To a person, everybody who I talked to says the thing looked like a bomb. It looked like a bomb.

MARK FUHRMAN, FORMER LAPD DETECTIVE: Well, certainly, Megyn, there are not very many people, except for the bomb squad, that actually knows what an explosive time device looked like. So they were erring on the side of caution, you're talking about an English teacher, and you're talking about police officers that are put in the position that they have to do something. Now, I don't feel sorry for Ahmed because he offered no explanation to the police. He wouldn't cooperate. He was passive aggressive...

KELLY: Passive aggressive?

FUHRMAN: By all news reports.

(CROSSTALK)

FUHRMAN: You have to talk to the police if you want them to understand what's going on. If you do not explain something completely, they have no choice but they have to take the device, they have to make notifications, and they have to take the child at least return the child to his parents and tell him what the situation is.

(CROSSTALK)

KELLY: We have been told by the authorities -- I mean everybody from President Obama on down, if you see something, say something. We live in dangerous times. We live in times where there are individual lone wolf radical Islamic terrorists who do try to kill us. And you never know when they're going to pop up. If you see something, say something. So why don't these authorities get the benefit of the doubt in a situation that obviously wound up terribly. But why don't they get some benefit of the doubt?

FOWLER: Well, there are a couple reasons for that, Megyn.  (Inaudible) in this particular school district, but let's just be real for a second, and take politics out of it. This is a kid who is showing ingenuity, and the schoolhouse should be a safe and welcoming environment for students. Not places where 7th graders and 8th graders get handcuffed.

(CROSSTALK)

KELLY: What if god forbid there had been a student who had been planning to do harm, and they didn't make a call because of political correctness.

FOWLER: I hear that, Megyn, I hear that. But listen, when he walked in -- he went into his engineering, he said look, I created an alarm clock.

KELLY: The teacher said don't show that to anybody else.

FOWLER: And right there alone was the wrong thing -- should have took him to the principal's office.

(CROSSTALK)

KELLY: The part of the reason that has people so outraged is because of pop-tart kid, pop-tart kid has to be kicked out of the school because he chewed a pop-tart to look like a gun. But this kid has something that objectively looks a little like a bomb. But because he gets in trouble, it's racism and he goes to the White House.

(CROSSTALK)

FUHRMAN: Well, what is the race of the pop-tart child? I believe he's male white. So he has absolutely no right if there's any profiling.

KELLY: There's the device.

FUHRMAN: What are we going to do here?

(CROSSTALK)

KELLY: It's Mark's turn. Go ahead, Mark.

FUHRMAN: I feel like there's a set-up going on here. This kid isn't stupid. So when the police are there, he could have easily explained. He says call my parents. They know I've been building this. I've been building it for a long time. But he didn't. And the police had no choice.

(CROSSTALK)

KELLY: The point is that he asked to speak with his parents.

FOWLER: He did. And they said no.

KELLY: In the school's defense, they do say that the media doesn't have the story right, and they say that they have no facts. No one is listening to me. The district is standing behind its teacher and says that the way the teen experience has been described in the media is unbalanced.  Great to see you both, thank you for being here.

FOWLER: Good to see you, Megyn.

KELLY: It's that time in the show where no one's listening.

Also, tonight, new challenges for Hillary Clinton, and up next, the Kelly File investigation into the charity group that staged a big event for vets earlier this week.  

(COMMERCIAL BREAK)

KELLY: Well, there's new fallout tonight from a charity event now getting national attention. A veteran's group sold tickets for a Donald Trump speech on a battleship. It was supposed to be fund-raiser for vets.  But now, media outlets have discovered that the group lost its charitable status months ago. Trace Gallagher live in our west coast newsroom with the story, Trace?

GALLAGHER: Megyn, Donald Trump delivered his foreign policy speech on the deck of the retired battleship USS Iowa to pick up the endorsement of Veteran's for a Stronger America or VSA, which claims to have more than a half million supporters across the country. Tickets ran between $100 and $1000 each. The head of VSA Joel Aaron says the money will go to help veterans but that's difficult to confirm because the group lost its tax exempt status for failing to file tax returns for three years.

VSA is appealing that decision, but those tax documents are supposed to be public so that we can find out where the money is going. And for now, VSA is note giving them up. There is also some question about the legality of the Trump speech aboard the USS Iowa. Election law limits organizations from giving candidates more than $2700, the event itself cost more than 10,000. During an interview of the South Dakota TV Station, Joel Aaron said his group is being attacked because of endorsing Donald Trump.  "This is what happens when a conservative group veterans takes a stand on an issue. In this case, the stand that we took was supporting Donald Trump and we are proud to make that endorsement."

The Trump camp is not exactly returning the love. "Mr. Trump was asked to speak as a guest at the Veteran's for a Stronger America event.  And, as an ardent supporter to veterans and veteran's causes, he agreed to attend. Mr. Trump and the campaign had no knowledge of any issues associated with the group or their chairman, Joel Aaron." Trump also claims to have not taken a single penny from that event, Megyn.

KELLY: Trace, thank you. Joining me now Pete Hegseth, an Iraq and Afghanistan Combat Veteran, President of Concerned Veterans for America, and a Fox News Contributor, so I mean, if this group is not legit and they're hosting some sort of a fundraiser or charity even for vets to the tune of $1000 a ticket, there's a problem.

PETE HEGSETH, CONCERNED VETERANS FOR AMERICA CEO:  There is a problem. I mean, I've been involved with veteran's nonprofits for a better part of nine years of my career. There are a lot of regulations that go with running a 501(c) (4), which is the type of organization this organization is. But there is a pretty clear guideline like you have got to file your tax returns, and if you don't you lose your status. And also the primary function of a group cannot be endorsing candidates. These are advocacy organizations on issues, not just endorsing candidates. You can, but if it's the primary thing that you're doing, or a big chunk of what you're going, you're going to run into issues.

And in this particular case, this was a marriage of convenience. This group needed relevance. And Donald Trump needed a vet's group. He's been talking a lot about vets and vets issues, no specifics, a lot about vets.  And so this was a marriage of convenience. And, I think at this point, the Trump campaign probably regrets that convenience.

KELLY: Well, I mean as far as Trump is concerned, this is -- you know, I'm sure he did not know anything about tax filing issues of this group. I mean, one of the things people love about him and one of the things that has been difficult for him is he doesn't have the full campaign apparatus around him, which leaves him exposed at times, like here. So it's not his fault. But is this guy legitimate? Do you know this guy?

HEGSETH: I do know him. I worked with him with Vets for Freedom years ago. Personally, I have no issues with him. However, a quick Google search would have shown that there have been some recent issues with him and the organization and different things. And I'm not here to judge whether those issues are right or wrong per se, but the track record is out there. And a quick Google search would've vetted that and laid that out there and showed that -- as far as members -- listen, I run a membership organization. It's hard to build a real grass roots advocacy group.

Just like it's hard to build a real plan to reform the V.A., which is a plan we put together at Concerned Vets for America, if you want to do that, you can find groups out there fighting for real reform with real grassroots membership out there. We got 75 paid employees -- kicking and hooking and jabbing.

KELLY: He says he's got hundreds of thousands of supporters and he's legit.

HEGSETH: You can claim that because of email lists or whatever, they've got 50,000 on Facebook, that's fine. Groups like ours have far more than that. Email lists are not members, members are real people who do work for you, Megyn. It's grassroots...

(CROSSTALK)

KELLY: If these people donated -- CNN was reporting last night -- it could been up to seven figures in donations they took in. If they donated to a charity that is not actually a charity, what's going to happen to the money?

HEGSETH: Well, it's going to sit. It's going to sit there in a holding pattern right now. Because if they're able to get their status again, that money can be used, there is a little bit of gray area there.  So it's not immediately going down a rat hole. The question would be what will the status be and what will the future hold. I think Donald Trump is going to move on, he's going to keep talking about vets and vets issues, I hope he gives us a call because we've got a great plan.

KELLY: We recommend you. I have got to go. And we'll leave it at that.

Up next, big news out of New Hampshire.

(COMMERCIAL BREAK)

UNIDENTIFIED MALE: From the world headquarters of Fox News, it's the Kelly File, with Megyn Kelly.

KELLY: Look at that -- came in from my office out there, such a long journey. Back in 2008, Hillary Clinton won New Hampshire in the Democratic primary. The crowds loved her, this time around, huh. Ed Henry is in Durham, New Hampshire with the story.

ED HENRY: As Hillary Clinton's poll numbers continue to sink here in New Hampshire, the lights going out at a town hall meeting was not the best image. Electricity was restored before Clinton walked in to the gymnasium, though other kinds of energy and enthusiasm seemed to be in short supply for the campaign as these photos reveal, which is why Clinton today went out of her way to highlight the fact there were no empty seats at the University of New Hampshire.

What Clinton did not mention is it was a relatively small room. The local fire chief said there were about 350 people. Meanwhile, her chief rival, Democratic Socialist Senator Bernie Sanders is coming to the very same campus in New Hampshire on Sunday. And today his staff told Fox there were already 1,300 RSVP's. Today, in New York at a reception for small campaign donors, Sanders also drew more than 1,000 supporters and declared he's catching fire because the Republican debate so far have had very little discussion about the middle class.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS, D-VT., PRESIDENTIAL CANDIDATE: Our campaign is doing well.  Doing a lot better than people anticipated is in fact we are talking about the issues.

(END VIDEO CLIP)

HENRY: Sanders is also rising because Clinton has been pinned down over the email controversy. The conservative group Judicial Watch has obtained a document revealing the State Department has asked FBI Director James Comey to give the department electronic copies of emails on the Clinton server that may have been deleted, but are now being recovered by the FBI, in Durham, New Hampshire, Ed Henry, Fox News.

KELLY: We'll be right back.

(COMMERCIAL BREAK)

KELLY: Big programming note for you, next week, Kentucky Court clerk Kim Davis will sit down with yours truly in a cable news exclusive. We hope you keep it tuned to "The Kelly File." See you then. Have a great weekend.

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