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Brit Hume: Comey's statement blew up Clinton's network of lies; Speaker Paul Ryan: Hillary Clinton clearly lives above the law

This is a rush transcript from "Kelly File," July 5, 2016. This copy may not be in its final form and may be updated.

MEGYN KELLY, FOX NEWS HOST: Breaking tonight, a historic moment in the
2016 presidential race. A year-long FBI investigation into Hillary
Clinton's e-mail server scandal is over, ending with a devastating account
of how the former secretary of state has systematically misled the American
people for 16 months about almost every facet of this scandal.

Good evening and welcome to THE KELLY FILE, everyone. I'm Megyn Kelly.
More than 16 months ago, Americans learned that Secretary of State Hillary
Clinton was conducting the business of the U.S. government from a private
e-mail account, managed on her own private e mail server, kept at her home
in New York. Outside the purview of the federal government or its
controlls for classified communications. Immediately sparking concerns
that the nation's top diplomat may have compromised America's top secrets.

Mrs. Clinton downplayed it all, and her top aides dismissed the people's
criticism of her actions as, quote, "absurd." The FBI launched an
investigation, and hours ago FBI Director James Comey announced his
agency's findings. The FBI director finding the evidence does not support
criminal charges against Mrs. Clinton, but absolutely supports a finding
that she misled the American people over and over and over again while
under federal investigation. For example, Mrs. Clinton argued right from
the get-go that she never, never sent or received any classified
information on her personal e-mail. Watch.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, D, PRESUMPTIVE PRESIDENTIAL NOMINEE: I did not e-mail
any classified material to anyone on my e-mail. There is no classified
materials.

I never sent or received any classified material. They are retroactively
classifying it.

JAMES COMEY, FBI DIRECTOR: From a group of 30,000 e-mails returned to the
State Department in 2014, 110 e-mails in 52 e-mail chains have been
determined by the owning agency to contain classified information at the
time they were sent or received.

(END VIDEO CLIP)

KELLY: They were classified at the time they were sent or received. This
is not a matter of retroactive classification. That was another misleading
statement from the Clinton camp. Next, Mrs. Clinton's repeated claim that
she turned over all official e-mails to investigators and that the American
people could trust her that there were none lurking on her private server
or inappropriately withheld from the State Department once she got caught
with the private server. That she was hiding nothing. Well, listen to
that.

(BEGIN VIDEO CLIP)

CLINTON: I have absolute confidence that everything that could be in any
way connected to work is now in the possession of the State Department.

COMEY: The FBI also discovered several thousand work-related e-mails that
were not among the group of 30,000 e-mails returned by Secretary Clinton to
State in 2014.

(END VIDEO CLIP)

KELLY: In any way -- in any way it was turned over except the FBI director
says, no. Some of these work-related e-mails she failed to turn over were
actually also classified according to Director Comey. Next, Mrs. Clinton
said that she only used her personal e-mail because she didn't want to
carry more than one e-mail device.

(BEGIN VIDEO CLIP)

CLINTON: I thought it would be easier to carry just one device for my work
and for my personal e-mails instead of two.

COMEY: Secretary Clinton used several different servers and administrators
of those servers during her four years at the State Department. And she
also used numerous mobile devices to send and to read e-mail on that
personal domain.

(END VIDEO CLIP)

KELLY: Next, Mrs. Clinton claimed her unprecedented e-mail setup was
permitted by the rules.

(BEGIN VIDEO CLIP)

CLINTON: It was allowed, and the rules have been clarified since I left
about the practice.

COMEY: None of these e-mails should have been on any kind of unclassified
system. They were extremely careless in their handling of very sensitive,
highly-classified information.

(END VIDEO CLIP)

KELLY: The FBI director went on to say that no reasonable person in
Secretary Clinton's position could have believed that they were acting
appropriately. Next, Mrs. Clinton has repeatedly assured the country that
America's secrets were safe despite their presence on her home server.

(BEGIN VIDEO CLIP)

CLINTON: It had numerous safeguards. It was on property guarded by the
Secret Service, and there were no security breaches.

COMEY: We assess it is possible that hostile actors gained access to
Secretary Clinton's personal e-mail account.

(END VIDEO CLIP)

KELLY: Director Comey found the world's most notorious hackers knew about
Mrs. Clinton's e-mail and said it is conceivable they have everything,
although the FBI is not able to prove that, he said. However, after all
that, Director Comey said he had to conclude that the former secretary of
state likely committed no crime here.

(BEGIN VIDEO CLIP)

COMEY: In looking back at our investigations into the mishandling or
removal of classified information, we cannot find a case that would support
bringing criminal charges on these facts.

(END VIDEO CLIP)

KELLY: The director explaining that in similar cases, there has been
evidence that the target intended to disclose classified material, that
there was obvious disloyalty to the United States or obstruction of
justice, none of which he found present in this case.

Joining us tonight on all of this, Republican Speaker of the House Paul
Ryan, who today said the FBI announcement, quote, "defies explanation" and
sets a, quote, "terrible precedent." He'll be here in moments.

Plus, former assistant FBI Director James Kallstrom is here with news on
what he's hearing from former and current agents who work for the FBI. But
we begin tonight with FOX News senior political analyst Brit Hume.

Brit, great to see you. Your thoughts.

BRIT HUME, FOX NEWS SENIOR POLITICAL ANALYST: Thanks, Megyn. Well, you
did a very good job there of setting forth just how Comey's statement just
blew up this tissue of lies that has been told by Secretary Clinton
throughout this case, ending, of course, with his conclusion that while, as
he put it at one point, ‘there is evidence of potential violations of the
statutes regarding the handling of classified information’ -- then he goes
on to say ‘our judgment is that no reasonable prosecutor would bring such a
case.’ So, he didn't really find necessarily that she hadn't committed a
crime.

He just said that he didn't think it was a crime that should be prosecuted,
which is a different matter entirely and goes well beyond what one might
have expected an FBI director to recommend to the department perhaps or to
say publicly, which makes this whole procedure today more than a little
unusual, Megyn, because if you think about it, if he didn't think it was
worth prosecuting, all he had to do when you think about it is simply turn
over his findings to the Department of Justice and leave it to the
Department of Justice to make what he described as a prosecutive decision.

KELLY: Mm-hmm.

HUME: He declined to do that. In fact I think what he probably thought,
Megyn was, that if he did that, there wasn't any chance that the department
would bring charges. And if you start thinking about the Obama Justice
Department with Loretta Lynch at its head, formerly headed by, by --

KELLY: Eric Holder.

HUME: By Eric Holder, the most credible person in the whole place that
anybody has ever heard of is James Comey of the FBI.

KELLY: Mm-hmm.

HUME: And it's not too much to suggest here, it seems to me, Megyn, that
he has placed his credibility at the service of what he knew would be the
ultimate outcome of this case once it was referred to the Justice
Department. And in that sense, he did this administration, this Attorney
General, and perhaps it's unfair to say Hillary Clinton a very great
service, although as I say, he did blow up her whole -- her whole network
of lies that she told over time.

KELLY: Well, I mean, he seemed to be saying -- we're going to get into the
law after you. But he seemed to be saying to me -- this is how I
interpreted it -- that no reasonable prosecutor would bring a case like
this because the history doesn't support cases like this. When these cases
are brought, it's for intentional actions that undermine the security of
the United States. And if you look at the ones that have been brought,
it's where somebody intentionally stole documents.

HUME: Right.

KELLY: From the government agency, downloaded them on their personal
device, kept them at home, lied to the FBI when they got caught, tried to
throw the device into a river, that kind of thing.

HUME: Right.

KELLY: And he is right that there isn't a case that looks much like this
one.

HUME: That's right.

KELLY: However, the recitation of the lies, Brit. I mean, he didn't have
to do that.

HUME: No, he didn't. And I think in that sense, he did -- you know,
basically what he said is she did everything short of a crime and then lied
about it all the way.

KELLY: While she was being investigated. I don't know if she lied to him,
but she repeatedly told the American people a bunch of nonsense.

HUME: Well, that's true. I mean, this sets that forth completely. One
thing that he didn't quite get to is you notice along the way, Megyn,
Secretary Clinton changed her claim from there was no classified
information to there was no information marked classified.

KELLY: Mm-hmm.

HUME: And that was a -- that was a complete deception from the jump
because information is not classified because it's marked. It's marked
because it's classified.

KELLY: And he took that on directly.

HUME: Well, he basically blew that up too if you think about it.

KELLY: But, Brit, what do you think, you've been saying that all along,
and he agrees with you and not with Mrs. Clinton, who also knows better.
But my question for you Brit is whether this makes any difference. Her
dishonesty numbers are already through the roof. The Democrats, you know,
so far have not shown a huge inclination toward Trump. So, how does this
play in the political race?

HUME: Well, look, there's still a significant body of undecided voters out
there, enough to make the election go one way or the other. And this takes
out of Hillary Clinton's arsenal any effective weapon claiming that Donald
Trump is irresponsible and possibly reckless. She has now been found by
the Federal Bureau of Investigation to have engaged in extreme carelessness
in the handling of the nation's most sensitive information. That is really
damning. It would, under ordinary circumstances, it would rule out a
candidate for president.

But this is a peculiar year under peculiar circumstances. She's up against
a candidate who has got about 40 percent support. He seems to have
trouble breaking out of that. And is distrusted by many voters. But make
no mistake about it. She carries this burden into the fall, and it will be
with her all the way. And it is all kinds of fuel for the Trump campaign
if it uses it effectively.

KELLY: Uh-hm. All you need is Director Comey. I mean, all they need is
him. He should be in every ad Trump runs because Trump doesn't have to say
a word. He just has to point to the director of the FBI. Brit, it's good
to see you.

HUME: Thank you, Megyn.

KELLY: One of the fiercest reactions to Director Comey's remarks today
came from Speaker Paul Ryan. He will join us live in a KELLY FILE
exclusive on why he thinks this decision creates a very big problem in the
future.

Plus former FBI Deputy Director James Kallstrom has been talking with
former and current FBI agents today. He's next on what he's hearing from
inside the bureau on this decision.

And what about the investigation into the Clinton Foundation? That never
came up today, and we'll investigate the reason why when we come right
back.

(COMMERCIAL BREAK)

KELLY: We are getting some late breaking details tonight that suggest
Hillary Clinton may not be completely in the clear. Despite today's FBI
ruling on her e-mails, we are learning that the Clinton Foundation may
still be the subject of its own investigation. Director Comey made no
mention of the foundation today or whether the FBI is investigating it at
all. Former FBI assistant director in charge James Kallstrom is next on
what his FBI sources are telling him.

But first, we go to chief intelligence correspondent Catherine Herridge
with the very latest. Catherine?

CATHERINE HERRIDGE, FOX NEWS CHIEF INTELLIGENCE CORRESPONDENT: Megyn, the
Republican chairman of the House Government Oversight Committee Jason
Chaffetz spoke with Director Comey today after his statement at FBI
headquarters and pressed him on whether there would be no charges for
Clinton's aides, who mishandled classified information and whether all
investigations connected to Clinton are now closed.

(BEGIN VIDEO CLIP)

JASON CHAFFETZ, HOUSE OVERSIGHT COMMITTEE CHAIR: I specifically asked him,
what about the other people? What about the -- what about the inner
circle? What about the other things and he quickly said, I can't tell you
about that yet. So, I didn't mean to read that as yes, there's something
going or not there's not. He simply said he could not discuss that at this
point.

(END VIDEO CLIP)

HERRIDGE: FOX News first reported in January based on multiple sources
that the FBI was investigating the possible intersection of State
Department business and the Clinton Foundation and whether the public
corruption laws were violated. Cheryl Mills, Clinton's then chief-of-staff
at the State Department sent at least twice information to the Clinton
Foundation, later deemed classified in one case, the information was
specifically flagged to the foundation because of an upcoming trip to
Africa by Bill Clinton.

Today, Director Comey read his statement and un-characteristically did not
take questions from reporters he seemed to anticipate the backlash.

(BEGIN VIDEO CLIP)

COMEY: I know there will be intense public debate in the wake of this
recommendation as there was throughout the investigation. But I can assure
the American people that this investigation was done honestly, competently
and independently. No outside influence of any kind brought to bear.

(END VIDEO CLIP)

HERRIDGE: Three current or former FBI agents told FOX tonight that they
were surprised, even disgusted by the director's statement. One agent
recently retired said it was a very sad day when it comes to integrity --
Megyn.

KELLY: Catherine, thank you.

HERRIDGE: You're welcome.

KELLY: Joining me now with more, James Kallstrom, former assistant
director in charge of the FBI. Jim, good to see you tonight. Your
reaction to what we saw from Director Comey today, who you've said in the
past you think is a straight shooter.

JAMES KALLSTROM, FORMER FBI ASSISTANT DIRECTOR IN CHARGE: Yes, I do. I
have defended him in the past, but those days are over, Megyn. You know, I
thought the events of the last week, there was something fishy going on.
And, you know, here he does, he goes through the whole charging memo. You
know, he reads every paragraph of it, and then he comes to that nonsensical
conclusion that really wasn't his to make. And I talked to two prosecutors
today actually that would take that case in a heartbeat.

And I've talked to about 15 different agents, both on the job and outside
the job, that are -- you know, that are basically worried about the
reputation of the agency they love, that they worked hard for all their
life. And it's not Comey's right to sully that reputation or to soil that
reputation. And I don't know what got over the guy. I mean I don't
understand where he's coming from. I mean it's -- it really makes no sense
-- Megyn.

KELLY: What do you think? I mean, do you think he was under political
pressure because, you know, I don't have -- I don't know personally, but
the reports are this is a Republican guy, that he's been fair and tough on
both sides.

KALLSTROM: Well, I can only guess that. I don't know. I'm not a fly on
the wall inside the FBI headquarters. But I have to think that he -- he
got beat up, and he played the game. Probably they were going to hand it
off to the Justice Department for the decision without his comment.

KELLY: Right.

KALLSTROM: But that thing in Phoenix probably put an end to that.

KELLY: The airplane meeting on the tarmac between Bill Clinton and the
Attorney General Lynch?

KALLSTROM: Yes, exactly. So, you know, so they called on him to do it.
And I sure wish he hadn't done it. You know, lying has got to be quite an
act. I'm not saying he's lying. I'm saying he bent to political pressure.
But lying in Washington is a hard thing to explain to your children and
your grandchildren, and it's just something that goes on day in and day
out. It's not what this country was founded on. It's not what this
country is about.

KELLY: I mean, do you make any accounting, Jim, because we talked about
this. We're going to talk about it with the lawyers right after you. For
his statement that, look, I get it. And he went through what he said were,
you know, clearly, you know, he didn't call them lies or misstatements, but
when you match up what he said with what she said, it's clear. But his
point was in all the other cases they looked at -- and you got to believe
Comey is lying to reject this. He said all the other cases they looked at,
there was evidence of intent to steal the documents or intent to undermine
national security.

KALLSTROM: Well, when you tell your staff to remove the classified
markings, you know, in some of those, they don't even need intent. So, I
think that's a red herring.

KELLY: Jim, it's good to see you. Thanks for being here.

KALLSTROM: Good to see you.

KELLY: Well, Director Comey's decision not to charge Mrs. Clinton had
researchers scouring the Justice Department for the results from similar
cases. One that got a lot of attention today concerned retired Navy
Commander Brian Nishimura. Now, he pleaded guilty to transferring
classified data to a personal computer and got himself a fine and two
years' probation. Navy Chief Petty Officer Lyle White also moved
classified materials to a personal hard drive but admitted he knew he
should not, and he was fined $10,000, sentenced to two months in
confinement.

And John Deutsch, former head of the CIA, needed to be pardoned by
President Bill Clinton to escape similar charges. But one major difference
between these cases and Hillary Clinton's was that these men ultimately
admitted they knew the classified materials were indeed vulnerable.

Joining me now, Shannen Coffin, former DOJ division assistant deputy
attorney general and he served as council to Vice President Dick Cheney.
And Matthew Miller who served as spokesperson to former Attorney General
Eric Holder. Good to see you both.

So, let me start with you, Matthew, as somebody who used to, you know,
defend this Justice Department, not Ms. Lynch's, but Mr. Holder's, on
whether you believe -- I mean because here's what the critics say. They
say that this statute requires gross negligence. That's what had to be
proven. And they say, you know, Director Comey's statement that they
couldn't prove intent, intent to harm the United States, intent to, you
know, transfer secrets, that's not in the statute. So they say he was
writing something into the statute that wasn't there. What say you?

MATTHEW MILLER, SERVED AS SPOKESPERSON TO AG HOLDER: So let's talk about
gross negligence. So, I think, you know, to show gross negligence here, if
you were to charge Hillary Clinton with gross negligence for receiving e-
mail that she didn't know were classified, you would have to charge
everyone else who received those e-mails, someone that sent those e-mails -
- let's remember, as we've said today, these were e-mail chains with
replies from a number of people. You'd have to charge them all under the
same statutes. Those would be career officials, those would be political
officials.

And you would set a precedent that anytime a government official received
or sent classified information that they knew -- or that they didn't know
what was classified, that they'd be subject to criminal charges. And I can
tell you having worked in the government, if you went back and looked
through my e-mails and I think this is true with most officials who
regularly deal with classified information, you would probably find things
that are arguably classified because the area is murky, it's gray at times.
And it's just not something that supports criminal charges, and I think
Director Comey was right when he said that no prosecutor would reasonably
bring such a case.

KELLY: Shannen?

SHANNEN COFFIN, FORMER DOJ CIVIL DIVISION ASSISTANT DEPUTY, AG: Look, you
don't have to charge anyone else. There may be someone else in her inner
core, but no one else, Megyn, established their own server for the entire
purpose of avoiding public scrutiny. As my friend Stuart Baker said to me
earlier here today, that Hillary Clinton was much more concerned about the
GOP getting her documents than the Chinese or the Russians, and that's the
problem.

KELLY: Uh-hm. But the issue is whether -- and I'll start with you on
this, Shannen. The issue is whether the courts have written this intent
requirement into the statute basically. Whether Supreme Court and case
history has basically said there's some 1941 case that her defenders are
citing. That look, this statute is kind of sketchy to begin with. And
they say, let me just say what they say, right? So, you can't bring a
prosecution against somebody if you can't show one of those -- that she
intended to compromise national security.

COFFIN: No, there's no judicial gloss on this statute. It requires gross
negligence. And, Megyn, 1924a, the other statute --

KELLY: The misdemeanor statute that Petraeus got indicted under.

COFFIN: That Comey mentioned doesn't require intent to profit, doesn't
require intent to harm the national security.

KELLY: But it requires gross negligence, right?

COFFIN: No, no, all it requires is that the intent to take this document
that's classified and put it somewhere where it shouldn't be. That's the
only intent that's required. You can prove that to a jury in a heartbeat.

KELLY: Matthew, why not, then? Why not charge her at least under that
misdemeanor statute?

MILLER: It requires knowledge that these documents were classified, that
you moved them knowing that they were classified. One, she didn't know
that here.

KELLY: Correct.

MILLER: Two, we hear a lot about the private server and it's fair to say
that it was a mistake to set it up. And it's fair to question it in terms
of records management. But really for criminal charges, it doesn't make a
bit of difference whether those e-mails were on a private server or whether
they were on a state.gov server that was unclassified.

KELLY: Let me ask you a question, Matthew, before we go. Did you hear the
open of the show?

MILLER: I did.

KELLY: So what about all those things she said that were not true? As a
defender of hers here, does that bother you?

MILLER: So, you know, I'm not ready to give full credence to what Jim
Comey said today. One of the things that really troubles me, when the
department brings these type of cases, they're supposed -- if they want to
make these kind of charges, they're supposed to put them in an indictment
and let them stand in court where they can be defended by the other party.

KELLY: So, he's lying on that talking these weren't classified?

MILLER: Jim Comey didn't give us that opportunity. I don't believe that
he's lying, but unfortunately by standing up and making this type of
statement, clearly outside the realm of -- outside the bounds of DOJ rules,
without actually providing any of that evidence, you know, he's put the
Clinton campaign in a really difficult situation in some points, you know,
with his statement --

KELLY: Director Comey has really put Hillary Clinton in a difficult --

MILLER: Absolutely true. Let me give you an example with this statement
that --

KELLY: I got to go. All right. I got to go. But you know what? Brit
Hume, our previous guest. You know what his saying is? Winners take
responsibility, losers blame others.

MILLER: And she has taken responsibility.

KELLY: She has. Has she, really?

MILLER: She has. She has a number of times. She's taken responsibility.

KELLY: First she refused to say it was a mistake. Then she was like, oh,
it was a mistake.

MILLER: And she said it repeatedly.

COFFIN: She takes responsibility like my kids take responsibility.

KELLY: All right. I got to go. Thanks to you both for being here.

Speaker Paul Ryan is standing by. He's next to explain why he thinks this
causes big problems for the future. Plus, we'll ask him about a new
controversy for the Trump campaign.

Plus, while Democrats use the terror attack in Orlando to push new gun
laws, they're strangely silent about the horror that is unfolding on the
President's hometown of Chicago this weekend. That is just ahead.

(COMMERCIAL BREAK)

ANNOUNCER: From the World Headquarters of FOX News, it's THE KELLY FILE,
with Megyn Kelly.

KELLY: Former FBI assistant Director James Kallstrom just told us how some
folks at the bureau are in disbelief over today's announcement from
Director Comey.

And our next guest says, not only does he think the decision defies
explanation, he thinks it helps create the impression that some folks in
Washington believe Hillary Clinton is above the law.

(COMMERCIAL BREAK)

KELLY: Former FBI Assistant Director James Kallstrom just told us how some
folks at the bureau are in disbelief over today's announcement from
Director Comey. And our next guest says not only does he think the decision
defies explanation, he thinks it helps create the impression that some
folks in Washington believe Hillary Clinton is above the law.

Joining me now in a "Kelly File" exclusive, House Speaker Paul Ryan. Mr.
Speaker, good of you to be here tonight. Thank you for being here.

REP.. PAUL RYAN (R-WI), SPEAKER OF THE HOUSE: Good to be with you, Megyn.
Thanks for having me.

KELLY: So why do you say that, that people are going to believe she's above
the law, because the FBI director, by all accounts a straight shooter, says
no reasonable prosecutor would have brought this case?

RYAN: He basically spent a number of minutes walking through how she not
only mishandled classified information, how she was grossly negligent. It
seemed to me as he was going through his case, that he was going to
recommend prosecution, only then he recommended against prosecution. People
have been convicted for far less and the point is, yes, this certainly does
underscore the belief the Clintons live above the law.

And this is one of the reasons why people are so dissatisfied, so upset
about government. They think that people live by a different set of rules,
and the Clintons, they take the candle on this one. I'd say a couple of
things, Megyn. Number one, the FBI should give us all of their findings.
They should release all of their findings of this information. She's
actually, you know, competing for commander-in-chief here so I think
there's a whole accounting that needs to happen.

Number two, we're going to have hearings. Jason Chaffetz, Chairman of the
Government Oversight Committee is going to be calling up James Comey to ask
questions. He didn't answer any questions with the press. And our judiciary
committee has sent a number of questions. There are a lot of unanswered
questions here, Megyn, that need to get answers to.

KELLY: Do you think he caved to political pressure?

RYAN: I don't know the answer to that question. I don't know, you know,
I'll take him at his word, but what I don't really understand is after he
lists this laundry list of violations, he comes to that conclusion. That's
point number one. Point number two.

KELLY: Well, but that's what he said -- just before you get to point number
two, what he said was in the other cases, there was evidence of intentional
deception or intention to undermine national security or obstruction of
justice, and he didn't see her behavior rising to that level.

RYAN: Yeah, your legal background is certainly deeper than mine. I do other
things here but the point is she clearly lives above the law. Let me say
this. He shredded the case that she had been making all year long. He
shredded the things that she had been saying in her own defense all year
long about her case.

KELLY: So now that's a different issue. He put the lie to a bunch of her
statements.

RYAN: That's right, that's right.

KELLY: And that seems pretty clear. But you tell me, does that -- do
you think that's disqualifying for her?

RYAN: Oh, sure I do. I think she clearly said things that were not true,
and he basically gave us that. I think we need to know more quite frankly.
But the other thing that concerns me is that she's just going to get away
with this in the sense that she grossly was negligent. She mishandled
classified information and now she wants to be commander-in-chief.

Here's the other thing, you know, when I was Mitt Romney's running mate, I
got classified briefings every week by the CIA, by National Intelligence,
very sensitive information, which you get as a candidate once a convention
occurs. Comey said short of prosecution, some kind of administration action
should occur, bringing consequences. I think the DNI, the Director of
National Intelligence should block her access to classified information
given how recklessly she handled this during the presidential campaign.

If she becomes president, that's one thing. But I don't think she should
get classified information, and I think the DNI should block it given how
recklessly she handled this from the start.

KELLY: Let's take a look to see how President Obama feels about Hillary
Clinton and whether that is likely to happen if he has anything to say
about it. Here he is in October 2015. Listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, UNITED STATES PRESIDENT: This is not a situation in which
America's national security was endangered.

(END VIDEO CLIP)

KELLY: So, maybe or maybe not according to the FBI director. Does the
president of the American people, an update to his earlier statement
because Comey says it may have been?

RYAN: The president, I've heard him say things with such certainty that we
know later on aren't the case. Look, obviously as Comey said, people she
was contacting -- communicating with got hacked and therefore she clearly
could have been hacked.

It certainly raises that possibility. What really just mystifies me is the
case he makes and then the conclusion he draws and what bothers me about
this is the Clintons really are living above the law. They're being held by
different set of standards. That is clearly what this looks like...

KELLY: Okay, so...

RYAN: ... and this is why we're going to have hearings, and this is why I
think that Comey should give us all the publicly available information...

KELLY: All the evidence.

RYAN: ... to see how and why they reached these conclusions.

KELLY: How does this play out in your view? I mean, because, you know, you
have been supporting Donald Trump. You know, there have been some issues,
but you've been supporting him. Do you believe this means that Donald Trump
should be our next president?

RYAN: Well, I endorsed Donald Trump about a month ago.

KELLY: I know, but then you kind of get a little -- you waver depending
on...

RYAN: And obviously -- yeah, when he says things that I don't agree with,
I'm going to speak with my mind. When he says things I don't agree with I'm
going to speak my mind. I see a binary choice in front of us. It is Hillary
Clinton or Donald Trump. Yes, Donald Trump is far better to be commander-
in-chief than Hillary Clinton in my mind.

I don't think Hillary Clinton is going to do any of the things that we need
to do to get this country back on the right track. More importantly, I
think she's been holding herself to a different set of standards and I
don't think that's representative of what we want to see in the White
House.

KELLY: How about Donald Trump today -- over the weekend he tweeted out a
picture that many have said includes an anti-Semitic slur. Here it is. They
believe this is improper use of the Star of David, and the suggestion here
is clear. He denies it. You came out and said it's not -- it's not
appropriate, the use of anti-Semitic images. Do you believe he did that?

RYAN: Yeah, I mean I can't see it. I didn't see it. But obviously if it's
an anti-Semitic image, we shouldn't be doing these things. I don't think he put this up or I think one of his campaign flunkies did this. I think
they've got to fix their new media strategies, and I think we should move
on.

But I don't think there's any place in a campaign for anything that can
look like is an anti-Semitic image and that's apparently what this looks
like. And so I don't think that that should be done. I think they should
make sure that they put controls in place so that they don't make this kind
of mistake again.

KELLY: Last question -- last question. Tonight at a rally, Donald Trump
said Saddam Hussein was a bad guy, but he was very, very good at killing
terrorists in response to which many people came out and started to go
through the litany of very, very bad things that Saddam Hussein has done.
Any thoughts from you on the praise he had for Hussein?

RYAN: He was one of the 20th century's most evil people. He was up there,
and he committed mass genocide against his own people using chemical
weapons. Saddam Hussein was a bad guy.

KELLY: Paul Ryan, any chance this convention is going to include some
surprises from you? Any chance if the Republican Party turns to you and
says, "We want you?" You'd do it?

RYAN: He got the votes. He won the votes. He won it fair and square. It's
just that simple as far as I'm concerned.

KELLY: Great to see you, Mr. Speaker.

RYAN: You too, Megyn. Take care.

KELLY: In moments, we're going to hear from Trump campaign's spokesperson
Katrina Pierson and Democratic strategist Julie Roginski on this new Trump
controversy. Plus, top Democrats captured national attention with their big
protests for new gun laws after the terror attack in Orlando. So guess what
they're doing after more than 60 people were shot in Chicago this weekend?
We'll show you.

(COMMERCIAL BREAK)

KELLY: Developing tonight, while most of the political world is focused on
what the FBI found regarding Hillary Clinton's e-mails, Donald Trump is
having to deal with some new fallout tonight over this tweet, hitting
Hillary for being corrupt. Almost immediately after it went out on
Saturday, some outraged critics suggested it depicts a Star of David and
that its message is anti-Semitic.

In a moment, Trump's campaign spokesperson Katrina Pierson and Democratic
strategist Julie Roginski are here on that. But first, Fox News
correspondent Peter Doocy has the latest. Peter?

PETER DOOCY, FOX NEWS CORRESPONDENT: Megyn, the debate boils down to
whether or not you think a six sided star looks more like a Star of David
or a sheriff's badge. This weekend, it all started when the verified
@realdonaldtrump Twitter account posted the image on the left with text
calling Hillary Clinton the most corrupt candidate ever printed on that
star. Once social media users started criticizing the post saying it looked
like a Star of David, it was taken down, then reposted with a circle in
place of the star.

The Clinton campaign called these both anti-Semitic and part of a pattern.
But Trump says the shape at the center of the controversy was not a symbol
of the Jewish faith. Instead a symbol of law enforcement, a badge, and his
social media director Dan Scavino now tells us that "The social media
graphic used this weekend was not created by the campaign, nor was it
sourced from an anti-Semitic site. It was lifted from an anti-Hillary
Twitter user where countless images appear.

The sheriff's badge, which is available under Microsoft shapes, fit with
the theme of corrupt Hillary and that is why I selected it." Trump himself
now also accusing Hillary Clinton of using this to try to change the
subject away from her e-mails. He says, "Clinton, through her surrogates,
is just trying to divert attention from the dishonest behavior of herself
and her husband," and it is worth pointing out that Trump's own daughter,
Ivanka, is Jewish. She converted a few years ago when she married Jared
Kushner, and Jared Kushner is now a major behind the scenes player at his
father-in-law's campaign. Megyn.

KELLY: Peter, thank you. And says he's never known his father-in-law to be
in any way anti-Semitic. Joining me now to respond, Katrina Pierson and
Julie Roginski. Julie, can you explain what is it about the tweet that is
anti-Semitic? What is it, you know, is it just the use of the Star of
David?

JULIE ROGINSKY, DEMOCRATIC STRATEGIST: On top of a pile of money, I mean, I
think if you're Jewish, your tentacles are incredibly raised by this
because this is a source, as he said, from an anti-Semitic tweeter. I mean
this is somebody who's tweeting this stuff who's had a history of anti-
Semitism, but more importantly than that, you've got people from David Duke
to now Paul Ryan saying this is an anti-Semitic image. Clearly the message
is very obvious to people who understand this.

And the history of this is so repugnant because if you know anything about
20th century anti-Semitism, this is the kind of imagery that was used
consistently in 1900's Russia, in 1930's Germany. So on and so forth. And
Donald Trump has a history of this. It's not just this tweet. It's the fact
that when he was asked to refute all the horrible anti-Semitic things that
somebody was saying about -- people were saying about a reporter that wrote
an unflattering story about his wife, he said, "I don't have a message for
my fans when they were saying those vile, atrocious, anti-Semitic things to
her.

When the Anti-Defamation League asked him to stop using the phrase "America
First," because of its horrible connotations for American Jews going back
to the1930's, he refused to do that. You know, where there's smoke,
there's fire. This is consistently a dog whistle and I would venture
to say not even a dog whistle but a very overt message to the vilest faces,
white supremacist, anti-Semites in this country and there's no excuse for it.

KELLY: Go ahead.

KATRINA PIERSON, TRUMP CAMPAIGN SPOKESPERSON: At first, you'd have to
really suspend all logic and reason to just say that this was obviously
anti-Semitic because it wasn't. The intent was definitely not there, which
was why you saw the image that was changed. But really I'm struck by
Hillary Clinton's response, calling this particular image anti-Semitic,
considering her hometown is Chicago, Illinois. Barack Obama's hometown --
county has a six-point star yellow badge. So, why is this all of a sudden
anti-Semitic?

ROGINSKY: Because you throw it on top of money. And you throw it on top
of...

PIERSON: Yes, sheriff, corruption, badge.

ROGINSKI: No, no, excuse me, Katrina, you source it from a bunch of
tweeters who have a history of anti-Semitism and horrible vile things that
they say about Jews. You have consistently, consistently...

PIERSON: No. The media and the pundits are saying the source was an anti-
Semitic.

ROGINSKI: But where was the source.

PIERSON: Someone else used it on an anti-Semitic website.

ROGINSKI: And you re-tweeted it?

PIERSON: This came from a Twitter account...

KELLY: Surely -- you heard the speaker say somebody's got to take control
of Trump's social media because he continues to get himself in trouble on
the Twitter.

PIERSON: Well, look, the speaker can say whatever he wants. This idea that
this was somehow anti-Semitic is false, period. Yes, it was a...

KELLY: But will there be any changes to who controls his social media?

PIERSON: I don't know. We have to ask Mr. Trump that if he decides to make changes?

KELLY: Did Trump re-tweet that or was it another...

PIERSON: No, this was Dan Scavino, who already came out and said there was
no intent here. Dan Scavino is married to a Jewish woman.

ROGINSKI: You know, that whole concept that Dan Scavino's married to a
Jewish woman, Ivanka Trump is Jewish, that's the last refuge of anti-
Semites and racists. Someone who might say -- some of their best friends
are Jewish. Give me a break.

PIERSON: This is a defense.

ROGINSKI: There is a consistent pattern here with Donald Trump. This is not
a partisan thing.

KELLY: Before we go, do we have time with a sound bite? I want to hear the
Donald Trump sound bite on Saddam Hussein. Watch.

(BEGIN VIDEO CLIP)

DONALD TRUMP, REPUBLICAN PRESUMPTIVE NOMINEE: Saddam Hussein was a bad guy,
right? He was a bad guy, really bad guy. But you know what he did well? He
killed terrorists. He did that so good, they didn't read them the rights.
They didn't talk. They were a terrorist. It was over. Today, Iraq is
Harvard for terrorism. You want to be a terrorist, you go to Iraq.
It's like Harvard, okay?

(EBD VIDEO CLIP)

KELLY: So Saddam Hussein, he killed and buried in mass graves about 300,000
people, and the rub on this Katrina is he should not be citing Saddam
Hussein in any positive way even if it's to kill terrorist.

PIERSON: Well, the idea is the destabilization of the Middle East from the
simple fact that we have terrorism running rampant today. But the last two
weeks it's quite obvious that we have a serious problem here, and Hillary
Clinton was a part of that.

UNIDENTIFIED FEMALE: Saddam Hussein has done horrible things.

KELLY: Don't just cite him in anyway, like when you gas your own people,
you don't get to wind up in the mouth of a U.S. presidential candidate.

PIERSON: This is why it matters -- this is why it matters. Because we're
going to continue doing illegal things, going into sovereign nations,
overthrowing governments, allowing terrorism to flourish if Hillary Clinton
becomes president. That's why it's important.

ROGINSKI: Donald Trump wanted to go in and "take Iraq's oil." How is he
going to do that? Go into a sovereign nation? Listen, Saddam Hussein went
and rained Scud missiles upon Tel Aviv. There were plenty of Jews in Tel
Aviv who suffered at the terrorism of Saddam Hussein.

(CROSSTALK)

ROGINSKI: This is not a good day for Donald Trump and the Jewish community.
I'll leave it at that.

KELLY: And yes we will. Great to see you both. Thank you. So up next, more
than 60 people are shot in one deadly holiday weekend in Chicago. And
tonight, some want to know where are the anti-gun Democrats now? We'll hear
from radio host Kevin Jackson and Richard Fowler next.

(COMMERCIAL BREAK)

KELLY: Developing tonight, it's been less than two weeks since House
Democrats staged a 25-hour sit in aimed at forcing a halt on guns in the
wake of the Orlando terror attack. Today, Democrats took to the house floor
to deliver more speeches in the need for gun reform. But as the Democrats
go on about Orlando, gun violence in another city is being largely ignored.

Four people were killed, more than 60 shot over the July 4th holiday
weekend in Chicago, a city that's already seen more than 2,000 shooting
victims just this year and is expected to hit 700 homicides by year end. So
where is the outrage over events in the president's adopted hometown? Kevin
Jackson is a conservative radio host and Fox News contributor. Richard
Fowler is a nationally syndicated radio host. Good to see you both. You
tell me, Kevin. Where is it?

KEVIN JACKSON, FOX NEWS CONTRIBUTIR: Hey, 329 people killed so far. Black
Lives Matters protesting via gay parades. Black Lives Matter hasn't said a
word. Where is it? It doesn't exist because the outrage only occurs when
it's a cop shooting somebody or, you know, in particular, a white cop.

And it's a shame because you know what, Megyn, next weekend it will be more
killings -- the weekend after that, more killings. People build the entire
radio shows and entire TV programs over knowing that Chicago is going to
have massive murders all year long.

KELLY: It's incredible, Richard. What of it?

RICHARD FOWLER, SYNDICATED RADIO HOST: One, in a building behind me, John
Lewis held (ph) the speaker to demand a vote so we can have more gun
control in this country and joining John Lewis was the representative from
Chicago, who stated in an article to "The Hill," "When it comes to what I
believe in, I will get arrested because I'm seeing too much violence in
Chicago. Something has to be done..."

KELLY: Because one representative of Chicago was there? I mean, they're
talking about Orlando.

FOWLER: The whole -- that the entire caucus -- the entire caucus is trying
to get gun reform done. Sadly, Chicago is like something of a
Washington transmitted disease. The lack of an action from the building
behind me, when a majority of Americans, according to the Pew Research
Polls, 85 percent of the public believe in background checks, 85 percent of
the public believes...

(CROSSTALK)

KELLY: Anything they're considering that would stop the gun violence in
Chicago?

FOWLER: There are multiple bills.

KELLY: That's for Kevin -- that's for Kevin.

FOWLER: The bill that is on the floor right now...

JACKSON: No, no, no. Megyn, first of all, Rahm Emanuel, he nailed it.
Finally, he said, "you know what, we've got a problem where the same people
-- the gang members are committing these crimes -- we put them in jail.
Liberal policies allow these guys back on the streets. They take their
illegal guns and they go and do the same thing."

FOWLER: How do they get an illegal gun, Kevin.

JACKSON: It's a cycle of -- it's a cycle...

FOWLER: How do they get illegal guns?

KELLY: There's a black market, Richard.

(CROSSTALK)

FOWLER: No. Kevin, I'll tell you how they get it. According to the
Democratic nominee for the new state's attorney of Illinois, she indicated
they've only prosecuted three straw purchasers this past year where as a
person who can buy a gun who gives it to somebody who cannot buy a gun. So
if we want to have a conversation about getting rid of illegal guns...

JACKSON: Chicago has the strictest gun laws -- Chicago has the strictest...

KELLY: Let Richard finish his point and then Kevin.

FOWLER: Why can't we agree on that Kevin? Why can't we stop straw
purchases? Why can't we go after them?

JACKSON: Richard, the reason why you always come back with this type of an
argument, legal gun owners, the people...

FOWLER: Answer my question.

JACKSON: ...the law-abiding citizens of Chicago, who need to carry guns
with concealed carry or whatever, you don't care about them. The very
people that sat in the congress and did that sit-in, 26 of them have
guns...

FOWLER: I don't care about them either. I care about...

JACKSON: No, the only thing you care about -- the only thing you care
about...

FOWLER: I care about people.

JACKSON: You haven't even heard anything about what I said about the
criminals who...

FOWLER: I heard everything you said.

KELLY: I'm going to give you ten seconds, Richard. Go.

FOWLER: I'm perfectly okay with folks who want a gun to get a gun. I have a
problem with who go get a gun and sell it to a criminal, that's against the
law. They do it. Nobody cracks down on them because the NRA won't let them
do it.

KELLY: Nicely done.

(CROSSTALK)

KELLY: Great to see you both. We'll be right back.

(COMMERCIAL BREAK)

KELLY: Those who raise questions about Hillary Clinton's e-mail practices,
her campaign chairman said this in March.

(BEGIN VIDEO CLIP)

JOHN PODESTA, CLINTON CAMPAIGN CHAIRMAN: I think this is an absurdity.

(END VIDEO CLIP)

KELLY: This is an absurdity. Thoughts on that. Facebook.com/thekellyfile,
on Twitter @megynkelly. Thanks.

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