Critics call for Attorney General Lynch's recusal from Clinton investigation

Former US Attorney General Michael Mukasey weighs in on 'The Kelly File'


This is a rush transcript from "The Kelly File," June 30, 2016. This copy may not be in its final form and may be updated.

MEGYN KELLY, HOST: Breaking tonight, the Obama administration is getting hammered with questions about Attorney General Loretta Lynch and her decision to have a closed-door meeting with President Bill Clinton in the middle of the FBI's criminal probe into Mrs. Clinton's behavior.

Welcome to "The Kelly File" everyone, I'm Megyn Kelly. This story exploded today, first in a White House briefing where the administration was forced to defend this meeting that even Democrats say looked bad, and then late today when news broke that the State Department is asking for a delay in releasing some of Mrs. Clinton's e-mails. A delay that would postdate the presidential election. These e-mails that are connected into one of the two investigations under way right now at the Department of Justice.

All of this comes just two days after Bill Clinton had what we were told was an impromptu private sit-down with the woman heading the criminal investigations into both Hillary Clinton's State Department communications and the Clinton Foundation. And when we caught up with Loretta Lynch yesterday, she insisted nothing untoward took place.


UNIDENTIFIED MALE: You don't believe that gives off the appearance of any impropriety while you're investigating his wife?


LORETTA LYNCH, U.S. ATTORNEY GENERAL: My agency is involved in a matter looking at State Department policies and issues. It's being handled by career investigators and career agents who always follow the facts and the law and do the same thorough and independent examination in this matter that they've done in all.


KELLY: Today, however, some top Republicans started calling for Ms. Lynch to step aside and to propose a special prosecutor to take over this Clinton probe. And the White House earlier found itself on the ropes over why Ms. Lynch thought this meeting was a good idea.


UNIDENTIFIED MALE: Is the White House concerned about even just the appearance of political influence because of that meeting?

JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: Well, listen, I'm not going to second-guess the way that this investigation should move forward or should be handled. Again --

UNIDENTIFIED FEMALE: Are you saying that the White House feels that it's fine that she has this meeting with Clinton? There's no problem with this?

EARNEST: I think what I'm saying is that the President believes that this principle of protecting any investigation from any sort of political interference is critically important. I think what should give people confidence is the 30-year career that Attorney General Lynch has in keeping the public's trust.


KELLY: In a moment, we will review the rules with former Attorney General Michael Mukasey.

Plus, two top White House veterans from the Obama and Bush administrations joins us. Marc Thiessen and Austan Goolsbee will take up the debate.

But first Trace Gallagher is in our West Coast Newsroom tonight with the newest developments. Trace.

TRACE GALLAGHER, FOX NEWS CORRESPONDENT: Megyn, the conservative legal watchdog group judicial watch is now calling for the DOJ inspector general to investigate the meeting between Attorney General Loretta Lynch and former President Bill Clinton saying it, quote, "creates the appearance of violation of law, ethical standards and good judgment," going on to call it an outrageous abuse of the public's trust. And despite the Attorney General saying she and the former president spoke primarily about grandchildren and golf, the presumptive GOP nominee was not satisfied.  Watch.


DONALD TRUMP, R-PRESUMPTIVE PRESIDENTIAL NOMINEE: When I first heard that yesterday afternoon, I actually thought they were joking. I thought the people that told me were -- you know, I said, no way. There's just no way that's going to happen. And it happened. And I am just -- I'm flabbergasted by it. I think it's amazing. I've never seen anything like that before.


GALLAGHER: Even some Democrats were baffled by the private meeting on board a parked plane. Delaware Senator Chris Coons said it sends the wrong message and former Obama senior advisor David Axelrod called it foolish.  The White House clearly thinks it's much ado about nothing, and New York Senator Chuck Schumer brushed off the meeting saying it didn't matter. A big change of heart for Schumer from 2006 when he called on then Attorney General Alberto Gonzalez to recuse himself from the Jake Abramoff lobbying scandal and its connections to the Bush administration.

Schumer even sent a letter to Gonzalez saying, quote, "We believe that public confidence can only be assured and that appearance of conflict can only be avoided if you recuse yourself." The letter was also signed by then Illinois Senator Barack Obama and then New York Senator Hillary Clinton -- Megyn.

KELLY: Trace, thank you.

Joining me now with more, former Attorney General of the United States Michael Mukasey. Judge, great to see you. Thank you for being here.


KELLY: So, you had this very post to that Ms. Loretta Lynch holds right now.


KELLY: Was she out of line?

MUKASEY: I think it was a mistake. People make mistakes all the time.

KELLY: Why was it a mistake?

MUKASEY: It was a mistake because you don't take a meeting with a spouse of somebody who is a subject of an investigation by your department. It's not that's a written rule any more than it's a written rule that a surgeon washes his hands before he operates. There are some things that are so elementary that you don't have to have a written rule to have them in effect.

KELLY: What of the fact that they say it wasn't really a meeting? It was a glad-handing moment. Their planes just happened to meet at the airport.  They talked about grandkids only.

MUKASEY: Yes. Megyn, the Attorney General is protected by a security detail of FBI agents. I assume she was traveling with staff since she was on government business. The President is protected by a detail of Secret Service agents. They don't even work for the Same Department. They don't encounter each other casually. That happens by design, and I think actually it was not her fault. It was the President's design from what I read in the accounts. He was the one who pushed this forward.

KELLY: What would you have done if you had been the Attorney General in this position and you got word that he wanted to come on board your plane to say hello?

MUKASEY: I'd like to think -- I'd like to think I would have either said no or that I would have insisted that one of my staff be there for the meeting. But you know what? If I hadn't, somebody would have tapped me on the shoulder and said, hey, boss, don't do this.

KELLY: Mm-hmm. Because --

MUKASEY: As in fact happened while I was --

KELLY: That's right. And actually you did say, I'm not going to hear certain cases in which there was just even the appearance of --

MUKASEY: My son was representing a defendant in the Bernie Madoff case -- not Madoff but somebody far down the chain. I didn't have anything to do with the Madoff case.

KELLY: And you recused yourself from having anything to do with it?


KELLY: Should she do that? I mean, does this meeting justify that or is it a combination because the White House has also come under pressure here because he has endorsed -- President Obama has Hillary Clinton while his Justice Department is investigating her criminally?

MUKASEY: The problem is, the whole set of circumstances undermines public confidence in the department and in the result. You have months of effort by hundreds of FBI agents, by dedicated prosecutors within the department.  John Carlin, who is the assistant AG in charge of the National Security Division is involved in this -- I mean National Security Division is involved in this investigation. He is a straight arrow. Everybody working on this case is a straight arrow, and you put a cloud over everything they're doing by having something like this take place.

KELLY: What should she do? How can she remove the cloud?

MUKASEY: She can remove the cloud by having -- by putting in place a procedure that is there for the taking. That is you take yourself out of it, and you put the deputy Attorney General, Sally Yates, who is a very capable lawyer, really has the same background that Loretta Lynch herself has. U.S. attorney on major city. An enormously capable. She's shown that.

KELLY: That doesn't even though Barack Obama has endorsed Hillary Clinton, you're saying that removes the conflicts or appearance of impropriety from this meeting, but does that get it done?

MUKASEY: Yes, it gets it done. We're talking about people. This is all about people. And the people investigating the case are, I assure you, investigating it with only the case in mind. Sally Yates, if she took over, would take over with only the case in mind.

KELLY: Mm-hmm. We shall see. So far, that's being scoffed at by all corners in Washington.

MUKASEY: It shouldn't be because you're putting in peril the work of professional prosecutors and the moral of the Justice Department. That is not something you should do --

KELLY: And an investigation an entire country is watching.

MUKASEY: That's going to have momentous results.

KELLY: Great to see you, sir.

MUKASEY: Good to be with you.

Also with us tonight, Marc Thiessen, a FOX News contributor and former chief speechwriter for President George W. Bush and Austan Goolsbee, President Obama's former chief economist and now an economics professor at the University of Chicago's Booth School of Business. Great to see you both.


KELLY: Marc, what do you make of it?

THIESSEN: Well, I mean, this shows a stunning lack of judgment on the part of both of these individuals, but we are used to bad judgment from Bill and Hillary Clinton. What is troubling and disturbing is the bad judgment showed by Loretta Lynch in this case. I mean they didn't just bump into each other in an airport lounge. They sat down and had a meeting for 30 minutes. Bill Clinton actually waited for her plane to arrive, the latest plane according to the news accounts, and then requested the permission to come on board her plane, was granted it, and they spent 30 minutes talking.

She is the Attorney General of the United States. You can't do that. And it's not -- he's not just a former president. This is a man -- he's not only just married to the subject of a criminal investigation. He's probably a witness in that FBI criminal investigation and could be a subject of the criminal investigation or at least possibly a target. He's a person of interest. The Attorney General does not meet with a person of interest to talk even about their grandchildren.

KELLY: That's the problem, Austan. I mean, if he were just a former president, you know, just saying hi as a former president, that's one thing, but he is a potential witness in this case, isn't he?

AUSTAN GOOLSBEE, ECONOMICS PROFESSOR, UNIVERSITY OF CHICAGO, BOOTH SCHOOL OF BUSINESS: Look, Megyn, you're a legal expert. I'm a business professor. You don't even want to know what I think about lawyers.


GOOLSBEE: What I would say is this. If we look back over the 2000s when the Bush administration was there, I like that in your segment you re- raised the bit about Alberto Gonzalez. There is a partisan nature in this that I think maybe we forget. We've had experienced that have established that friendship is not a conflict of interest. We had Justice Scalia was personal friends with Vice President Cheney. Vice President Cheney had taken him hunting, often took him to dinner.

There was a dispute that went to the Supreme Court about should Cheney's energy task force have to release all that information to the public? We decided that wasn't a conflict of interest even though they were friends and they had a meeting. Clarence Thomas' wife was working for a Tea Party activist unit while he was deciding the Citizens United case, while he was deciding the ObamaCare case.

KELLY: But don't you see any distinction in the fact that she is -- she's investigating his foundation.

GOOLSBEE: I understand.

KELLY: And his wife. And he might be a witness.

GOOLSBEE: She was there with her -- I don't know anything about legal investigations. You have a law degree.

KELLY: But that's a copout. You're too smart for that. You don't have to be. I mean, the people watching this show right now in Middle America, they are very smart, and they get it. They may not have a law degree, and they get that you don't have the would-be prosecutor in a case sit there glad-handing with the potential subject or a witness in it. I'll give it to you, Marc.

THIESSEN: You do not need a law degree to figure that out. It's basic common sense. And in the Bush administration, since Austan raised it, John Ashcroft recused himself from the case in the Valerie Plame investigation and allowed James Comey, who is now the FBI director, to appoint a special prosecutor. But here's the smoking gun in terms of the fact that they knew that this was wrong. It's that she didn't disclose it.

We only learned about this because a local news reporter, a local news reporter got a tip that the meeting had happened and asked her about it.  She had never disclosed this, and in fact they knew it was wrong because that local reporter reported that her security detail insisted no one take pictures. Since when does somebody meet with the former president and not take a picture? They didn't want any photographic evidence. They were trying to cover this up.

KELLY: Ah, he's got you there, Austan.

THIESSEN: If there was nothing wrong, give us a selfie. Give us a selfie.

KELLY: Where's the selfie, Austan?

GOOLSBEE: Look, I believe that's misleading. This is a meeting that, as I understand it, Loretta Lynch's husband was there with her. They met at the airport. It's true you have a security detail, so if you're going to bump into someone and you find out that your friend is going to be at the airport, it's not like if -- if Marc and I are stuck in the airport lobby, we just walk up and hang out and, you know, have some Chipotle.


KELLY: You got to go through layers. But even, I mean, Austan, even David Axelrod has come out and said, I mean, the appearance of this is just -- it's wrong. I mean the average Joe sitting at home gets it. Like Joe Smith sitting in Iowa right now understands that if his spouse were under investigation, there ain't no prosecutor in the land that's going to sit with Joe and glad-hand about grandkids and golf. And it just -- it smacks of elitism and how connected the Clintons are and how willing he may be to use his name and position to help her.

GOOLSBEE: If you look at the Alberto Gonzalez situation where he was the Attorney General and in the Scooter Libby case and as well as in those previous cases, he did not recuse himself. He did not --

THIESSEN: John Ashcroft did.

GOOLSBEE: -- as a prosecutor.

THIESSEN: John Ashcroft did. Schumer mentioned it in his letter today at the time.

GOOLSBEE: I'm not disputing John Ashcroft did. I would have to go look at what the facts are, his involvement with Valerie Plame.

KELLY: Now we're really going down the rat hole. But the thing is, can I just ask Marc --

GOOLSBEE: If they ask him to recuse himself, he did --

KELLY: Recusal is extraordinary. Recusal is extraordinary. I mean for one meeting with a guy, recusal is an extraordinary thing. But I mean I'm amazed that we can't even agree that this was a bad decision on her part.  Austan, you can't even give us that?

GOOLSBEE: Well, I don't know anything about it.

KELLY: He can't. The answer is no. I got to leave it at that. Joe Smith is not happy with you.

THIESSEN: Bad idea. And Bill Clinton, by the way, is a former State Attorney General. Austan, Bill Clinton is a former state attorney general.  He's a lawyer. He ought to have known that he shouldn't have had that meeting.

KELLY: And Loretta Lynch knows.

THIESSEN: He's hurting his own wife because she's the one person --

GOOLSBEE: I don't know why he would do that unless --

THIESSEN: He's just the one person who should not want this meeting to have taken place.

KELLY: Bill Clinton is not some bumpkin who is like, oh, there's her plane. He is one of the most skilled political operatives in modern American history, and he's also had a lot of dealings with accusations when it comes to violating the law. The man is not stupid.

THIESSEN: And boundaries.

KELLY: And if you want the viewers to believe it was an accident or just coincidence --  

THIESSEN: No boundaries with women, Megyn, that's the problem.

KELLY: Maybe I've reached too far. All right. I got to go. That was fun.

So there's big news breaking in Baltimore tonight as we get some exclusive reporting on Marilyn Mosby. Her prosecution of those six officers in the death of Freddie Gray is very much under fire tonight, and she may be in real trouble herself now with the courts. That's just ahead.

Plus, we also saw a fierce showdown on Capitol Hill when Senator Ted Cruz went after the head of Homeland Security, the Secretary Jay Johnson, accusing him of trying to rewrite the record on terror. Stay tuned for that.


UNIDENTIFIED MALE: I think this is all very interesting, makes for good political debate.

SEN. TED CRUZ, R-TEXAS: You're entitled to give speeches other times.  My question was, if you were aware that the information has been scrubbed?


KELLY: Look who's here in the studio to discuss it. Tucker Carlson, Robert Zimmerman here on why this fight matters.

Plus, new drama from our special "Kelly File" debate between terror victims, former military and Muslim scholars over the threat of terror in America.


UNIDENTIFIED MALE: The problem is inconsistent Muslim leadership.

UNIDENTIFIED FEMALE: And I bet probably they have not responded. And the problem is, you are the minority. What we have right now is Muslim mosques in America radicalized, harboring terrorists.


ANNOUNCER: From the World's Headquarters of Fox News, it's "The Kelly File" with Megyn Kelly.


KELLY: Breaking tonight, new fallout from a heated hearing on Capitol Hill as the administration is accused of trying to rewrite history on some past terror investigations. Earlier this week, we heard testimony from former homeland security officer turned whistleblower Phillip Haney. We actually interviewed Mr. Haney on this show back in December. Here's proof. And on Tuesday, he testified that the administration removed references to Islam from his terror investigations, potentially missing warning signs, pointing to the San Bernardino and now the Orlando terrorists. Just hours ago, Senator Ted Cruz took up the issue with Homeland Security Secretary Jeh Johnson.


CRUZ: Was that testimony accurate?

UNIDENTIFIED MALE: I have no idea. I don't know who Mr. Haney is. I wouldn't know him if he walked in the room.  

CRUZ: Would it concern you if it was accurate?

UNIDENTIFIED MALE: I think this is all very interesting, makes for good political debate.

CRUZ: You're entitled to give speeches other times. My question was if you were aware that the information has been scrubbed. When you see the red flags of radical Islamic terrorism, you do not follow up on them effectively, and we have terrorist attack after terrorist attack after terrorist attack that could have been prevented but for this administration's willful blindness.


KELLY: Joining us now, Tucker Carlson, editor-in-chief of the Daily Caller and co-host of "Fox & Friends." And Robert Zimmerman, a DNC Committee member and Democratic strategist. Good to see you both.


KELLY: So the essence of Haney's allegation is that the administration has been scrubbing references to jihad, to Sharia, and other items, and actually reversed his own work on mosques in America in a way that undermined and he believes could have prevented potentially San Bernardino and possibly Orlando, right?

TUCKER CARLSON, EDITOR-IN-CHIEF, THE DAILY CALLER: We don't need his word for it. I mean they scrubbed the 9/11 call just the other day. They are -- and by the way, it betrays their position that words don't matter.  I mean, who cares what you call them? We know what the threat is. The words very much matter to them. They're monomaniacal about their utterly focused on scrubbing references to specific Islamic connections to terror, period.

ZIMMERMAN: Well, first of all, let's be honest and candid about this.  When we talk -- when Ted Cruz talks about the administration scrubbing, he's referring to his Homeland Security, the FBI, the Department of Justice, our leaders in first response to these outrages, these threats we face every day as Americans. Obviously things are going to happen.  Mistakes are going to be made. Issues are going to fall through. But by and large, I think the idea that Ted Cruz used his Senate panel to play partisan politics and attack the FBI and Homeland Security and justice, those who have kept us safe from so many dangerous threats that we faced, is just partisan politics at its worst.

KELLY: He's wondering whether political correctness is getting in the way -- Tucker is laughing at you.

ZIMMERMAN: Well, of course he's laughing. He couldn't respond.

KELLY: But he's wondering whether political correctness is getting in the way of honesty --



KELLY: Honest assessment of the enemy.

ZIMMERMAN: You are the reason that the Bush administration never used the word radical Islam or radical Muslims. It's because it wasn't about political correctness. It was about political strategy because from the right and the left, there's a recognition from our generals in particular, we have to connect better with the Sunni Muslims in the Middle East, with the Muslim community here, if we're going to --

KELLY: That doesn't mean scrubbing all of our documents from the term Sharia and jihad.

CARLSON: It has nothing to do with it. I mean, it has nothing to do with it. And by the way, I love that the Obama people are now setting Bush's president for --  


ZIMMERMAN: What I love is the hypocrisy of the right wing that predict --

CARLSON: Let's just be totally honest here. This has nothing to do with national security. The Obama people feel sincerely and it is sincere that the real threat lies here with our middle class, which is bigoted and scary and likely to rise up against Muslims living in this country if they're allowed to know that there's an Islamic component to the --


Hold on. Let me finish. This is true. This is how they think. They believe that if they say this is an Islamic threat, that there will somehow be pogroms against Muslims living here because they believe again that the real threat lies with the bigoted Americans --

ZIMMERMAN: We now have Tucker using Michael Morris talking points against George W. Bush --

KELLY: What he's --


ZIMMERMAN: Now, excuse me. To now use conspiracy against the Obama administration.  

KELLY: But Loretta Lynch did threaten people with criminal prosecution if they said things that were anti-Muslim. We saw a U.S. attorney just do this in Idaho, right? It's in Idaho, that case.

THIESSEN: Exactly.

KELLY: And she had to walk it back. That's not made up. There have been threats. And in both instances, the prosecutors had to walk it back because it's illegal to threaten people for what they say.

ZIMMERMAN: But the bigger point is this, the idea that is being spread by the right wing, and it speaks to the hypocrisy of the right and of Ted Cruz --

KELLY: What's the idea?

ZIMMERMAN: The idea that all of a sudden this administration is not dedicated to taking on Muslim threats and terrorist throughout the world.  No administration has launched more drown attacks, killed more terrorists in this administration.


But here's the point, Tucker. Excuse me. Hold on Tucker. Don't interrupt me. Here's the point. At the same time that Europe failed to bring up of course the Bush administration's policy that you're now condemning and the fact that -- totally irrelevant because at the same time you're talking about in fact protecting the due process of terror suspects to buy and collect arms and guns while yes --

CARLSON: You've lost me in your reasoning, but let me just restate the real point here. I do think that they recognize this threat. I think they recognize it as an Islamic threat. I think they fear if they say that out loud, the American public can't handle it because they have contempt for the public. Obama says it in virtually every public statement. This country is seething with bigotry, that is what he says.

KELLY: He says, that's not the reason he says, if we make it sound like we're at war with Islam at large and he thinks that's what saying radical Islam will do, it only --


TUCKER: These are sophisticated, smart people. They know that that's not true. They know the video didn't cause Benghazi. They know all of it.  Their prime concern is keeping our population from hurting Muslims who live here.

ZIMMERMAN: You have to understand. You have to understand. No administration has been more aggressive going after Hezbollah, going after al Qaeda, going after ISIS and made that clear. And that being said, if we unite as a country, we can beat terrorism. Happy July 4th.

TUCKER: Whatever! Happy July 4th!


KELLY: Whatever.

ZIMMERMAN: Whatever. And that's the partisanship I'm talking about.

KELLY: Stop it, stop it. You know you love each other. It's great to see you.


What the hell is going on here? Well, the FOX affiliate in Baltimore is breaking a big exclusive tonight. You're going to hear it right here. And it could spell some big trouble for the controversial D.A. at the heart of that case against the Baltimore six, those six cops. We'll go there live in moments.

Plus, the FBI wants to lock up the 911 calls from the terror attack at the Pulse Nightclub. We'll look into what it is they do not want getting out.  It's a chilling report.

Plus, our special group of terror survivors, including two from the Orlando attack, veterans and Muslim advocates are next on the real solutions to the threat of attacks on the homeland.


UNIDENTIFIED FEMALE: And when I look around and I don't see her father and I see my sister sitting there, crying, 15 years later, I'm -- I'm so angry, angry.  



KELLY: Developing tonight, big new information indicating that the FBI instructed agencies involved in the Orlando terror attack to withhold records from the public. This despite the bureau's request, we're hearing now that the city has released hundreds of pages of records from multiple agencies who did respond to this attack. And the pages tell a very grim story about what unfolded in the early morning hours at Pulse nightclub. Trace Gallagher has that report tonight, Trace.

TRACE GALLAGHER, FOX NEWS CORRESPONDENT: Megyn, there were 603 calls made to Orlando emergency lines during the shooting and three-hour standoff, including calls from the shooter himself. Twenty-five media outlets have sued the city of Orlando to gain access to all of those records, but the FBI is blocking the release, claiming it would hurt the investigation, telling local law enforcement, "immediately notify the FBI of any request your agency received so the FBI can seek to prevent disclosure through appropriate channels."

The media says the public has a right to know how police reacted during the most critical phases, and now the city of Orlando has released a tick tock or minute by minute account of what dispatchers for the sheriff's office heard and reported. And it appears to contradict Orlando police saying the gunfire stopped at 2:18 a.m. Watch this.


JOHN MINA, ORLANDO POLICE CHIEF: After that second exchange of gunfire, upon that initial entry of our officers, there was no other gunfire until the hostage rescue operation took place.


GALLAGHER: But at 2:30, 12 minutes after police say gunfire stopped, the sheriff's dispatcher reports, "caller heard another gunshot from the front." Then at 2:34, the dispatcher says, quoting again, "caller can hear a male screaming and another gunshot." Remember, victims were also calling in, pleading for help. At 2:25, a dispatcher reports, "complainant pleading for police to come save her. Advises that she does not want to die. Advises there are people bleeding out inside the bathroom with her."

Twelve minutes later, quoting again, "complainant just keeps pleading, please come to the bathroom." Police didn't get to the bathroom for another two and a half hours. Orlando police have been criticized for waiting too long, but now the Orlando police chief says when he said the shooting stopped at 2:18, he was basing that on what the FBI's timeline was, Megyn.

KELLY: Trace, thank you. Well, this week "The Kelly File" assembled a powerful panel on the issue of terror, including some survivors of recent attacks in Orlando as well as Fort Hood as well as victims' families. Also in our group, veterans, liberals, conservatives, and advocates for the Muslim community, all here to discuss the battle against Islamic extremism.

It was extraordinary. Tonight, discussion begins with yours truly questioning one of the Fort Hood terror attack victims. Alonzo Lunsford was shot seven times, including once in the head. And I asked him what happens when he hears about another attack such as what happened in Orlando earlier this month. Watch.


KELLY: When you spoke with me a couple of years ago about some PTSD and just what that had done to you having been shot so many times, when you see something like this happen in Orlando or what we saw in Istanbul, does it bring that back for you? What does it do?

ALONZO LUNSFORD, FORT HOOD RETIRED STAFF SARGEANT: Oh, it does. It brings back the -- the actual event that happened that day to us in 2009. But also it makes one wonder what are we going to do to minimize the blow that these terrorists are doing to us on our own soil? And years ago we had talked about soft targets -- hard targets or soft targets. What they're trying to do is they're identifying soft targets because of the psychological effect it has on Americans.

So, what we need to do, in my opinion, is we need to work more closely together between military and law enforcement so we're all speaking the same language. We also need to practice response times. But we don't need to necessarily identify large cities. We need to look at small-town America as well because that's where the soft targets are.

KELLY: You feel like they've given up on that? I mean the messaging that we've gotten in recent days has been, you know, this is something that in modern day America we may have to learn to live with because we can't find all of the threats.

LUNSFOR: Well, we can find the threats, but I think that a lot of censorship has been going on whereas Americans they see, they hear it, but they don't really know exactly what it feels like. And this panel that we're having today is going to answer a lot of those questions.

KELLY: Rosa, when you, I mean, you suffered a loss on 9/11, and of course that was the terror attack of them all here in the United States.

ROSA LEONETTI, BROTHER-IN-LAW KILLED ON SEPT. 11th: You know, my niece just graduated from high school here in Manhattan and is going to Boston College and when I look around and I don't see her father and I see my sister sitting there crying 15 years later, I'm -- I'm -- I'm so angry. We have learned absolutely nothing.

CARL HIGBIE, FORMER NAVY SEAL: We need to look at this on multiple fronts, and one of the fronts is we have to be willing to fight this enemy head-on with force, but also we have to wage a social war too. I mean you have let's say 10 percent of Muslims are radicalized and willing to do harm, 20 percent are perfectly willing to live within our customs and our ideology.

But then you have that 70 percent in the middle that's unwilling to report the suicide vests that they see from their friend or report the radicalization of anybody they know. You also have America that is afraid to speak out. We need to fight this on all these fronts, and it's not going to be done through love.

KELLY: Anybody else? Go ahead, sir.

RON KUBY, LIBERAL CIVIL RIGHTS ATTORNEY: What's interesting hearing these made up statistics, 10 percent of Muslims are radicalized. I assume that was just invented because it sounds like a good number, 20 percent aren't willing to report. You can talk about criticizing political correctness, but that's a bumper sticker. That's a slogan. That's not a strategy. That's not a plan.

LENETTI: Why can't they call it what it is? How do you fight something that you can't call out? You need to call it out. You need to stop thinking about these kumbaya, and your bumper sticker is bleeding all over the place. So spare me.

KELLY: Kimberly, go ahead. Go ahead Kimberly.

KIMBERLY MUNLEY, FORT HOOD POLICE SARGEANT: I completely agree with you because we toss up the word political correctness. Well, I'm sorry, that's the problem because if we exclude his pledge to Isis during the attack, we exclude Hasan being able to go up in his own free will and announce his pledge to, at the time with the Taliban, and then he switched over to Isis, whatever is the going factor at the time, and we suppressed that information. That information is not put out to the public because it's politically sensitive.

MUHAMMAD CHAUDHRY, AHMADIYYA MUSLIM COMMUNITY: I think the solution here is to look at a proven model versus shallow theories. We've launched a True Islam campaign where we've looked at 11 points that the extremist are using to radicalize these terrorists and we're saying here's the counter narrative. So short term solution, law enforcement, all those things...

KELLY: You need to go to the mosques and get them to repeat that.

CHAUDHRY: And the problem is inconsistent Muslim leadership.

BRIGITTE GABRIEL, ACT FOR AMERICA: And I bet probably they have not responded. And the problem is you are the minority. What we have right now is Muslim mosques in America radicalized, harboring terrorists, knowing that they are radicals within the mosque, and they're not reporting about it.

CHAUDHRY: What we have is the largest organized Muslim community. We have over 100 sites and 70 mosques in America where they're wide open, police, law enforcement. We're open.

GABRIEL: The majority of mosques in America are not listening to moderates like you.


KELLY: You have to see the whole thing. Trust me on this. Set the DVR, presumably you already have us on DVR. It happens tomorrow night at 9:00 p.m. eastern time. Our "Kelly File Special, Terror In America." And our panelists were all spectacular and very honest.

Well, we also have new fallout tonight from a stunning report on Iran's capture of U.S. sailors, and this is making a lot of folks angry. Plus, we'll have the breaking news next on the Baltimore District Attorney, Marilyn Mosby. Her prosecution of the six cops in connection with the death of Freddie Gray and whether Ms. Mosby may soon find herself in a whole lot of trouble.


KELLY: Breaking tonight as the Baltimore D.A. gets ready to try yet another officer next week in the death of Freddie Gray. We are now learning that the Baltimore sheriff who signed off on criminal charges for all of these cops was never a part of the investigation. And our next guest is reporting that all of this combined with the previous reports about the prosecution withholding evidence from the defense may result in a very rough patch ahead for Marilyn Mosby's office.

Jeff Abell is a reporter and weekend anchor in our Fox affiliate in Baltimore. They've been doing great reporting in this case. Jeff, thank you so much for being here. So, Marilyn Mosby goes before the judge next week and what specifically will she have to answer for and about?

JEFF ABELL, FOX BALTIMORE REPORTER: Well, the primary problem here is what the revelation that came out of the system sheriff who claimed that, you know, he is the man whose signature is at the bottom of all six of those statements of charges, the documents that were used to arrest the six police officers. He's now saying that he actually had nothing to do with this investigation. He says he didn't collect evidence.

He didn't interview witnesses. He had nothing to do with the investigation. So, now the big question, who did have something to do with the investigation, and that's what's leading us to Marilyn Mosby, our state's attorney, who could be called to the stand herself.

KELLY: Because this is on the heels of another person coming out and saying that she didn't have anything to do with the investigation, detective Dawnyell Taylor said that the summary of case she was given to read to the grand jury, she disagreed with all of it and she felt that Marilyn Mosby shut her down in the grand jury proceeding because Mosby knew that if this detective was able to answer the questions honestly, her story about what happened would completely conflict with the theory of the D.A. This case is falling apart.

ABELL: It is. It does seem to be falling apart. You're right. She did testify in that last trial that she was basically given a script to read before the grand jury. And while she didn't agree with it, she had to pretty much self-edit as she was reading. She didn't want to give the grand jury information which she did not agree with. And all of this combined has raised a lot of questions about who did this investigation, and people want to know what's behind it.

You know, this is the same prosecutor that promised a thorough, complete, and independent investigation here when she walked down the steps of the War Memorial building, promising all of this investigation to be accurate. And now there are a lot of questions of where's the beef?

KELLY: And this judge has warned her office repeatedly that if they continue -- he's caught them a few times already, withholding evidence that they were supposed to turn over to the defense. And he's made very clear if he catches them doing that again, there's going to be hell to pay. She's 0 for 3 on these prosecutions. Brian Rice is up next. There had been a lot of pressure for her to not to proceed with the remaining three. She's going for it as of now, correct?

ABELL: She's doubling down, it appears. There appears to be no effort to drop these charges. There appears to be no efforts to dismiss them on the part of the judge. We're having a motions hearing here on Tuesday and that could be an explosive hearing, and we could see some kind of direction on that day.

KELLY: Well, fascinating. Thank you so much Jeff, good to see you.

ABELL: You bet.

KELLY: Well, one law professor who happens to have a background in some pretty high profile cases is now filing a complaint to have Ms. Mosby disbarred. And he's not even sure that Tuesday's trial or any of the remaining trials will ever play out. Professor John ----- is a public interest law professor at George Washington University Law School. Professor, it's great to see you.

JOHN BANZHAF, PUBLIC INTEREST LAW PROFESSOR: Thank you and I think you're right. Her case is not just falling apart, it has fallen apart. And that's one of the key parts in the complaint. As you know, a prosecutor must have a reasonable belief that she can prove beyond a reasonable doubt all of the elements of the case.

Maybe she had that at the beginning, but now after you had these two judges' opinions where he has thrown out virtually every one of her legal theories, said there's no evidence, no evidence, no evidence on most of the facts. I think it's almost impossible for her to say that she has reasonable belief that she can succeed before the same judge, and if she goes ahead with it, that could be putting the nail in the coffin of disbarment.

KELLY: This judge has said explicitly that there's no proof of how Freddie Gray injured himself, you know, got the injury that led to his death. You haven't been able to prove that. That's going to be an issue on and on and on in the remaining cases. And, you know, she has different theories for the remaining guys, like it was an improper arrest for Brian Rice, you know, he was the arresting officer.

BANZHAF: I think there was...

KELLY: Go ahead.

BANZHAF: Yeah, I think there were all basically the same theories because they involved the van driver, Goodson. The most serious charges -- the most charges -- he's the central person. If you can't convict him, I don't think you can convict the others. And this is very reminiscent unfortunately of the Mike Nifong case. It was way back 10 years ago, the infamous Duke Lacrosse rape cases.

And I think you and I both had a hand in those. Mike Nifong continued to prosecute even as his case fell apart. In his case, he was eventually disbarred. He was also sued for $180 million, forced into bankruptcy. And there are already suits against Marilyn Mosby. I think they are about to be strengthened. And as you put it before, she's in big trouble.

KELLY: She's got some skin to gain now.

BANZHAF: And I think it may not be too late for her to back out. Just today, the head of the Baltimore delegation and the state assembly issued a statement saying she achieved justice just by filing the indictments. Whether or not they win or lose, she has already achieved justice.

And one interpretation of that is he's paving the way for her to step down, saying, "look, I stuck my neck out. I indicted these cops. I took three trials. But because of these rulings of the judges, i just can't go on." I think it's something that most of her followers would now accept.

KELLY: He's given her an off ramp and we'll see whether she takes it.

BANZHAF: But we don't know for sure. We won't find out until next week. But if she doesn't, if she goes ahead knowing that this judge has said all of her theories are no good, the fact that they weren't seat belted in, it's not a crime.

The fact that they didn't immediately call for medical attention, it's not a crime. As you said, nobody knows when this injury occurred. She can't possibly prove it. She's going to have to explain to a disciplinary committee how she could have reasonable belief that she could. And by the way, the same may apply to the other prosecutors also, not just Marilyn.

KELLY: Thank you, sir. Coming up, new reaction to a stunning report today on Iran. Don't go away.


KELLY: Developing tonight, a dramatic turn of events in Iran's January capture of ten U.S. sailors. A scathing new military report finds the conduct of some of those U.S. sailors did not live up to the Navy's expectations. Fox's Shannon Bream reports from Washington, Shannon.

SHANNON BREAM, FOX NEWS CORRESPONDENT: Megyn, today top naval officials said multiple things went wrong the day that two U.S. boats drifted into Iranian territorial waters, leading to that crew being held for more than 15 hours. During that time, Iran held the U.S. crew at gunpoint, blindfolded them, interrogated the crew, and then blasted out the images in a move that was viewed as an attempt to humiliate the U.S.

Two senior officers have been relieved of their command and reassigned elsewhere, and at least six others are facing discipline as well. According to the report, not only did senior officers fail to properly oversee the mission, but the sailors on the boats made a series of missteps and did not react properly when the trouble started. Navy officials say the sailors did not live up to expectations.


UNIDENTIFIED MALE: Under rules of engagement, the investigation determined that the rules of engagement in place are adequate but may not have been understood by the crews. The investigation also found that some crew members did not meet code of conduct standards while in custody.


BREAM: That code of conduct includes these oaths, "I will never surrender of my own free will. If in command, I will never surrender the members of my command while they still have the means to resist. If I am captured, I will continue to resist by all means available. I will make every effort to escape and aid others to escape."

The report concludes that one of the sailors failed to uphold the code of conduct when he directed the others to cooperate with the video the Iranians were producing and read a script that included an apology. In addition, other sailors revealed their passwords to laptops and cell phones. Megyn.

KELLY: Shannon bream, thank you. Up next, A-Rod.



UNIDENTIFIED MALE: I understand you got a chance to meet one of our stars in prime time, Megyn Kelly.

ALEX RODRIGUEZ, NEW YORK YANKEES: Megyn Kelly, she's one of the best. We were at the Met and had a chance to meet her and her nice husband.


RODRIGUEZ: And Doug and what nice people. I'm a big fan of hers and a big fan of the show.


KELLY: And we are big fans of A-Rod. Yes. Good taste. Good taste. We met him at the Met, and it was actually very funny because -- then we went to an after-party, and you know how you wait in a line to go in and we couldn't get in. It was like, oh, this was humiliating.

We turned around and there was A-Rod, and we felt better. And you know, even though he's a huge star, he didn't even complain. He wasn't like, "do you know who I am? I'm a New York Yankee for the love of -- we all got in eventually. Have a great 4th, everybody.

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