KELLY FILE

Trump aide slams rumors of transition troubles; Mayor de Blasio details meeting with President-elect Trump

This is a rush transcript from "The Kelly File," November 16, 2016. This copy may not be in its final form and may be updated.

MEGYN KELLY, HOST: Breaking tonight, the media versus Donald Trump has now become the media versus the President-elect. And it's on.  After more than a dozen news groups join forces to challenge our next president on the issue of working with the press.

Good evening and welcome to “The Kelly File,” everyone. I'm Megyn Kelly.  The fight between the media and new administration as it's being assembled, ramped up sharply today with Mr. Trump and his team pushing back on reports that his transition is veering off course. With just 64 days left until he becomes president. Then the media fired back with a warning from journalists after Mr. Trump ditched the reporters and slipped away for a trip to dinner in New York at the 21 club with his family.

And he did not want the reporters tagging along. More than a dozen media outlets, been fired off a letter saying quote, "We expect that you as the new leader of the free world" -- how many letters begin like that, "will preserve long standing traditions that ensure coverage of the Trump presidency. We call on you to commit a protective press pool, commit to one, from now until the final day of your presidency."

In moments, we will speak with Jason Miller, who is the communications director for the President-elect, a man who has been mentioned as a possible press secretary and then we will speak to Hadas Gold, media reporter for Politico who has been covering all of this.

But we begin tonight with Trace Gallagher on the latest on this back and forth. Trace?

TRACE GALLAGHER, FOX NEWS CORRESPONDENT: Megyn, if Donald Trump were to announce any cabinet nominations by this Friday or even next Friday, he would be the fastest president to do so in 30 years. Yet Politico says it was told the transition was quote, "an absolute knife fight." The New York Times categorized it as improvising saying, quote, "American allies were blindly dialing into Trump Tower to try to reach the soon to be leader of the free world."

President-elect Trump is pushing back saying, the transition is going smoothly and today tweeted this, quote, "I have received and taken calls from many foreign leaders despite what the failing New York Times said.  Russia, China, Saudi Arabia, Japan, Australia, New Zealand and more."  Though it does appear Mr. Trump is having conversation with foreign leaders without traditional State Department briefings because the State Department says, it hasn't been contacted by Trump team. But Vice President-elect Mike Pence has reportedly counseled Mr. Trump to go slow. And make the right decisions. A short time ago Trump spokesperson Kellyanne Conway said the President-Elect is doing just that. Listen.

(BEGIN VIDEO CLIP)

KELLYANNE CONWAY, DONALD TRUMP SPOKESPERSON: I know the President-Elect -- since I talk to him regularly, he is very happy with how transition is going. And from his perspective, he has been presented with any number of choices within each of the agencies and department and he is making those tough decisions.

(END VIDEO CLIP)

GALLAGHER: The Trump camp is also knocking down reports that Jared Kushner, Trump's son-in-law is ridding the transition team of anyone allied with Governor Chris Christie who was taken off the team last week. Instead we're told Mike Pence has said the transition team should not include lobbyists making good on a Trump campaign promise. And just so you know, in 2008, President Obama didn't make a single cabinet announcement until week three. Nixon, Reagan, Clinton and Bush 43 waited until week six. If Trump waits five more weeks, the media might have to put reporters at all the restaurants near Trump Tower in case the president-lect sneaks out again.

KELLY: All right, Trace, thank you.

Joining me now, Jason Miller, he is the transition team communications director for the President-elect. Jason, good to see you.

JASON MILLER, COMMUNICATIONS DIRECTOR FOR PRESIDENT-ELECT'S TRANSITION:  Megyn, good evening.

KELLY: So, just getting this in my ear, "Good Morning America," is reporting that the Lieutenant General Michael Flynn has been selected as national security adviser. Is that true?

MILLER: No formal announcement yet for that position. General Flynn met with the President-Elect today. He has been a companion on the campaign trail quite a bit as we've seen. Over the past few months.

KELLY: Are you denying it? Will you deny it here?

MILLER: I'm saying he would be a fantastic addition to somewhere to the administration. I will let the President-Elect make that decision.

KELLY: When are we going to get the decision?

MILLER: I'm a huge fan of General Flynn and I'll leave that --  

KELLY: Tomorrow?

MILLER: I'll leave that to the president-elect.

KELLY: Okay. All right. It is exciting. Possible news. All right.  Knife fight allies blindly dialing in to the Trump Tower. Is that true?

MILLER: No, not at all. I think, I'm not sure if folks or certain people are bitter that the election is over and their candidate didn't win. But really, if you look inside a Trump Tower right now, you would see a very calm methodical plan to go and get our administration put together and really the President-Elect is bringing some absolute A-listers in to meet with him. And Senator Jeff Sessions in there today. General Mike Flynn.  Eva Moskowitz who is a charter school leader.

We had Congressman Mike Pompeo and Dr. Tom Price. You look ahead to tomorrow, you had South Carolina Governor Nikki Haley coming in to meet with the president-elect. Florida Governor Rick Scott. Ken Blackwell from Ohio. I mean, just some absolute A-listers that are coming in. Some folks will be coming in to give council on what an administration should look like and how to form things. Others might be under consideration for a certain policy.

KELLY: Let me ask you. I know you just got off of a conference call, what is that about?

MILLER: So, we're doing daily calls with the press corps to talk about what's going on with the President-Elect schedule. So, we went through the meetings that Mr. Trump had today.

KELLY: Okay. Were they saying, where is he? Where is he? Did he go back out to dinner? Does he understand -- I mean, listen, this is a big deal for the media. I don't know that the American people care that much about it. But in the media world, we get to follow the President and the President-Elect pretty much for every waking minute of his entire life. Is Donald Trump going to allow that?

MILLER: Well of course we're going to form a protective pool and there will be the press that will be covering him during his time as president.  We will start moving toward that even before he is sworn in on January --

KELLY: So you will going to do the traditional protective pool that we have seen with other presidents, including Barack Obama?

MILLER: Well, formal pool, the exact construct will get ironed out over this.

KELLY: They might not have the same access.

MILLER: So, our goal is to make sure that president-elect is -- that press knows what is going on within the White House and have an open line of communication. Now the one thing I would say just to push back a little bit is there are some in the press corps that quite frankly never will be happy, as I said earlier today, unless they know if he is having chicken or fish for dinner --

KELLY: Yes.

MILLER: -- and they are sitting right next to him at the dinner table. I think there has to be a little bit of degree of some boundaries and respect --

KELLY: Plus, you can't get into the 21 club unless you're wearing a jacket. And you know, usually with the press, you just kind of like, what would they say about this? Cover up for the love of -- you're looking good for the next one. Wait. I have Hadas Gold coming up. But I really want to ask you, because you were the one who tell us, you had a special role on election night.

MILLER: Well, I had a lucky role. I think that might be -- I had the opportunity to inform the President-Elect that he had been -- that the AP had called the race and he was going to be the next president. It was kind of a, at the moment I didn't quite realize it. And then afterwards, I realize, no, that is kind of a special thing. This is very cool. And we were waiting, some folks had called Wisconsin and some had called Pennsylvania but then AP was the first one to --

KELLY: Did you look at him and say, Mr. President-Elect -- I mean, did you get to actually use that language?

MILLER: You know, I'm not sure exactly. I think something along the lines of --

KELLY: Holy --

MILLER: Something like that. You're going to be the next president. And I think this is kind of a shock for a moment. This is a pretty exciting moment. Just all of the energy and excitement of last week's win and all of the people that worked so hard to put this together. It was pretty cool.

KELLY: Well, you know, we heard from Brad last night who explained that he is the data guy and he knew. He is like, I've been telling them all along, you know, for weeks at least, that he was going to win. But, you know, to the outside world, it was like, what? Stand by, because I'm bringing you back in a second.

MILLER: Okay.

KELLY: But I want to get to Hadas Gold, she is a media reporter for Politico. And with us now, Hadas, good to see you.

HADAS GOLD, MEDIA REPORTER FOR POLITICO: Great to be here.

KELLY: All right. So, explain to the people sitting at home why they should give a fig whether Donald Trump let the reporters follow him to the 21 Club while he goes to have dinner with his family.

GOLD: Listen, reporters don't expect to be sitting at the dinner table between Eric and Ivanka as Donald Trump enjoys a steak. What we're trying to do is just to keep an eye on where the President is and what he's doing.  We are the independent eyes that are not part of the campaign, not part of the government. Should God forbid anything happen to President-Elect Trump? It is so important to have independent media there who can verify what happened.

On 9/11, there were reporters with George W. Bush on Air Force One. And we knew that he was safe and what was going on. They weren't going to say where he was, they know how to keep secrets. But it is so vitally important. Because this is the new leader of the free world as that letter said and we need to know where he is and what he's doing.

KELLY: Do you believe, I mean, you know, when Jason was suggesting, he's going to will have, you know, press pool that we're going to have the press, but there may be some differences. There may be some changes.  Donald Trump has never been an elected politician. He is 70-years-old.  Used to having his privacy. What changes do you think we will see under a President Trump?

GOLD: I'm not sure. I mean, hopefully Jason can say but I'm not sure that we're going to see as much of that full on press access as we have had before. Now, don't forget. President Obama and Hillary Clinton both ditched their protective press pools at different times. This is not that unusual. However we really need that access and we need it sooner rather than later. We don't know. That is the thing. We don't know when it is going to come. It is going to be a week before inauguration day? Is he going to come tomorrow? Hopefully it will be tomorrow.

KELLY: You raise a good point about 9/11. Because that was supposed to be just any other day. And he was, you know, President George W. Bush was sitting there reading a children's book to an elementary school class. And no one knew that this was going to turn into 9/11. And it's good that we were there. Hadas, thank you for being here.

GOLD: Thank you.

KELLY: So, Jason, you know, you understand the importance, right? It's like, think about that. It is not that the press are just nosey, they are trying to do the people's business.

MILLER: Absolutely. And they have a job to do. That's to keep the American people informed. And also I think there has to be that little degree of privacy. One thing to keep in mind with Mr. Trump is that he has one of the most public, one of the most visible lives probably in the world. There is a microscope on every single movement. There are folks who are watching every single thing. And I do think that when it comes to maybe a family dinner, that there can be that little bit of privacy.

KELLY: Let me ask you this. I want to get to this other thing.  Lobbyists, big move today in team Trump in fulfilling a campaign promise.  And why don't you tell them what it was?

MILLER: Well, one of the campaign promises was to make sure that there weren't lobbyists involved with the transition team. And so under the guidance of the leadership of the Vice President-Elect and with her executive director of the transition team, we are making sure that no federal or state lobbyists are involved with the transition team. And so folks have a choice. Be part of the transition team or they can be a lobbyist but you can't be doing both.

KELLY: Uh-hm.

MILLER: And this really goes to the broader package of some of the ethics reforms.  

KELLY: Drain the swamp.  

MILLER: Drain the swamp. The president-elect rolled out, where he said, if you serve in the leadership position in the executive branch, then you're not going to be a lobbyist for five years. And anyone signing up to go into the White House is going to have to live by that.

KELLY: That will come as a delightful piece of news to many of our viewers.

MILLER: Drain the swamp.

KELLY: Great to see you, Jason.

MILLER: Thanks, Megyn.

KELLY: All the best to you.

Also tonight, we have new developments on the controversy surrounding Congressman Keith Ellison. The possible next chairman of the Democratic National Committee.

Plus, just 24 hours after the Department of Homeland Security warns we're at risk of a new attack on our homeland, we will take a look at who might get tapped for the job of keeping America safe when Chris Stirewalt, Professor Alan Dershowitz, and Mo Elleithee joins us.

Look at that panel. We've never had those three together. And then new reports that the Trump administration is taking a look at the idea of a national Muslim registry. New York City Mayor Bill de Blasio is vowing to battle that idea. He met with President-Elect Trump just hours ago, he is here on THE KELLY FILE. Next.

(BEGIN VIDEO CLIP)

PRESIDENT-ELECT DONALD TRUMP: De Blasio has been a terrible mayor.  The police have no respect for him whatsoever. They dislike him tremendously. And in fact, for a long period of time, a long period of time and they would like to do it again, they turned their back whenever he speaks.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KELLY: Breaking tonight, new developments with one of the more controversial proposals from President-elect Trump. This is loosely referred to as so-called Muslim registry. But listen. According to Kansas Secretary of State Kris Kobach, Trump's policy advisors are now discussing a proposal to create a registry not for American-Muslims but for immigrants coming into America from Muslim countries with the idea of better tracking people from places where there may be a lot of terror activity.

Well, our next guest, he has been critical of some of Mr. Trump's policies and he met with Mr. Trump earlier today. He says, this is just one of the many issues over what he is willing to battle the new administration. Bill de Blasio is here, the Democratic mayor of New York City. Mr. Mayor, great to see you.

MAYOR BILL DE BLASIO, D-NYC: My pleasure.

KELLY: So, that -- why is it a problem if we create some sort of record of immigrants coming over from Muslim countries?

DE BLASIO: It is a problem because it doesn't conform with our American constitutional values and respect for all religions. If you say we are looking at people with a specific issue in their background, specific indicators that might be an issue or concern, you know, that's an individual matter, fine. If you say there are certain countries where there is such, you know, a propensity to an issue, we're going to look at those countries with extra care, okay. But to say we're going to treat people of a certain faith across the board as if there is something wrong with them, then are we going to have a Christian registry and a Jewish registry and where does this end?

KELLY: Uh-hm. You can't just say, for reinstated registry for immigrants from Muslim countries, that's too broad.

DE BLASIO: Of course it's too broad. You've got --

KELLY: But from Syria, from Iraq, I mean, now we're getting there?

DE BLASIO: Well, I think there is a specific condition we are looking at.  For example if someone comes from a region where there's --  

KELLY: Yemen.

DE BLASIO: But even more specific with that. I'm saying, if there so particular hometown where there has been an issue or people again --

KELLY: Wow! You have to really thread the needle?

DE BLASIO: I think you need to know the facts, not you personally, I'm saying, one needs to know the facts of how we do this. So, this could be our security personnel determining what causes them to want to look for extra information. But I'll tell you from NYPD perspective, we don't profile people. We don't assume. In fact one thing I talk about the NYPD, there are 900 Muslim-American members of the NYPD protecting all of us. We can't be talking about registries and threating people with a faith in one way. And think about the countries of the world. Indonesia is a very different Muslim country than a Syria or Morocco. So, I think that conversation, the language has to change immediately.

KELLY: Wait. So, did you say this to President-Elect Trump? Because you went to Trump Tower today, you had a meeting.

DE BLASIO: Yep.

KELLY: And at the meeting you said you raised concerns about the rhetoric and messages that for so many people have been hurtful and made so many New Yorkers fearful.

DE BLASIO: I expressed to the President-Elect that a lot of people in his hometown were worried very, very about what was going to happen to them and their family. And that a lot of people felt that there wasn't a place for them in his vision.

KELLY: Uh-hm.

DE BLASIO: And I say it respectfully. I will say it was a constructive meeting in the sense of a real give and take.

KELLY: Do you think he got that? He heard you?

DE BLASIO: I don't want to speak for him. I think, you know, we had an hour-long dialogue and it was a candid dialogue and it was a very substantive dialogue.

KELLY: What do you want him to do to assuage those fears?

DE BLASIO: To come out and clarify once and for all. That American Muslims is going to be treated with the same respect as all other Americans. And the people who want to come here are going to be looked at for who they are individually not because of their faith and we're not going to classify a whole -- there is 1.6 billion Muslims in the world.  Every one of them individually and different. If we have a concern about someone it has to be an individual and specific concern.

KELLY: Let's talk about illegal immigration. Because several mayors throughout the country are saying they will not comply if Donald Trump tries to crack down on sanctuary cities or sanctuary cities type policies.  Today, you were asked about some local reports that suggest you said you will delete any city records for people who have applied for New York State ID that would be given to some people who have -- who are undocumented or who have limited documentation. What's the truth on that? I mean, will you delete those city records? Or are you going to try to protect them like that?

DE BLASIO: We are looking at that situation. Here is the truth. When we went and set up our own municipal ID card which almost a million people have now --

KELLY: For undocumented --

DE BLASIO: For everyone.

KELLY: Okay.

DE BLASIO: For everyone. But many undocumented people wanted it because they had no other ID that they could use to go, to visit a loved one in the hospital, to go see their children's school and get in to see their teacher, to get a lease, to get a bank account. We thought with a city with half a million folks who are undocumented, we needed some way to give them, an opportunity to --

KELLY: What are you going to do? If the Trump administration comes in and says, I want that list, I want to see the records --

DE BLASIO: And we're going to make that decision well in advance of the administration coming up. But here's the thing, we never ask people for their documentation status when we gave them the ID. They had to prove who they were.

KELLY: So you don't have the information.  

DE BLASIO: We don't ask them overtly. We have information about who they are as individuals but not their documentation status. But to the bigger point, to the dialogue today is, here is an example where one of the things I said to President-elect is talk to law enforcement around this country.  Talk to Commissioner Jimmy O'Neill at the NYPD about how our police will be the first to tell you, they need to be able to have a good and honest and open relationship with people in the city including those who are undocumented.

If an undocumented person witnesses a crime, if an undocumented person is victim of a crime, you don't want them unable to go to the police because they fear that the next step is deportation. And law enforcement all over the country will tell you, we will be creating a whole new problem if we do mass deportation. Now, that's very different Megyn than if someone has committed a heinous crime.

KELLY: I got it. I have to run but I have to ask a quick question before you go. You're the mayor of New York City. Rudy Giuliani used to be the mayor of New York City. What do you think of his ascension to possibly Secretary of State under a President Trump?

DE BLASIO: Look, I have my differences with Rudy Giuliani. I really have.  I don't want to tell the President-Elect who to choose for his cabinet. I can say that in this city there were times when Rudy was not a force of unity. If he is going to be involved in the federal government, I hope he will learn the lesson of some of the things that happened here in New York City.

KELLY: Uh-hm. You had some moments of not being a force for unity yourself. You backed the Governor Cuomo when he made those remarks about conservatives not belonging in New York City.

DE BLASIO: I will say differently. I think the point here is that in a city that is the greatest cosmopolitan center in this country, the issue is, do we find a way to bring people together across all the different demographics across that make up this city. And I think if Rudy is going to be involved domestically or internationally, one of the things he has to focus on is to not go down the road that we saw too often in New York City.

KELLY: Mr. Mayor, great to see you.

DE BLASIO: Thank you, Megyn.

KELLY: Thanks for being here tonight.

Well, the idea of better screening certain Muslims immigrants first came up. One of the big defenders was Carl Higbie. He's a former Navy SEAL and a Trump supporter and he joins us now.

Carl, good to see you.

CARL HIGBIE, FORMER NAVY SEAL: Thanks for having me, Megyn.

KELLY: So, you heard the Mayor's position which is, you know, we don't do that kind of thing. We don't create registries based on religion.

HIGBIE: Yes. Well, we have in the past. We have done it based on race, we have done it based on religion, we've done it based on region. And the fact is he also brings us back is like a constitutionality issue. But people outside this country are not protected of the same constitutional rights as we are in America.

KELLY: So you think it's a good idea and you don't care that this is some sort of a slippery slope where Muslims -- are lump into some group, where they put in a registry and some, you know, some aggressive law enforcement actor in the future might abuse that list.

HIGBIE: Absolutely. Look, there is always a case for abuse in this thing.  But the fundamental problem here is, we have a large -- look, being part of the Muslim faith is not a bad thing. And there is plenty, there's, you know, 1.6 billion Muslims out there. Most of them are perfectly good people. But the fact is, there is a small percentage of people that have chosen to align with an extreme ideology within the faith and they're doing harm. And so, we would like to keep tabs on it until we can figure out what is going on. Trump has said, look, it's a regional base thing right now. If they're coming to our country, we need to know who they are, where they are and what's going on --

KELLY: Well, he is trying to stop. He is trying to stop immigration into the country from countries where there are major terrorist issues until we can figure out what is going on. This seems like something else which is, if you're coming over, I mean, this is just what I'm reading. Okay? This is -- that again, Secretary of State Kris Kobach who helped write the tough immigration laws in Arizona said today that Trump's policies advisers are discussing drafting, they're discussing drafting a proposal to reinstate a registry for immigrants from Muslim countries. For immigrants from Muslim countries.

HIGBIE: Yes. And to be perfectly honest, it is legal. They say, it will hold constitutional muster. I know the ACLU is going to challenge it. But I think it will pass. And we've done it with Iran back a while ago. We did it during World War II with Japanese. Which, you know, call it what you will --

KELLY: Come on! You're not proposing we go back to the days of internment camps I hope.

HIGBIE: No, no, no, I'm not proposing that at all, Megyn. But what I am saying --

KELLY: You know better than to suggest that. I mean, that's the kind of stuff that gets people scared, Carl.

HIGBIE: Right. But I'm just saying, there's a precedent for and I am not saying, I agree with it but in this case, I absolutely believe that --  

KELLY: You can't be citing Japanese internment camps as precedent for anything the President-Elect is going to do.

HIGBIE: Look, the President needs to protect America first. And if that means having people that are not protected under our constitution have some sort of registry so we can understand, until we can identify the true threat and where they are coming from, I support it.

KELLY: You get the protections once you come here. All right. Carl, good to see you.

HIGBIE: Thank you, Megyn.

KELLY: Still ahead, President Obama delivering his toughest remarks yet on President-Elect Trump. Chief Washington Correspondent James Rosen has all the fall-out.

Plus, lots of questions around who will be the next DNC Chair and why the chance it could be this congressman is causing some major controversy.  Next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

HILLARY CLINTON, D-FORMER PRESIDENTIAL NOMINEE: I know many of you are deeply disappointed about the results of the election. I am too. More than I can ever express. But as I said last week, our campaign was never about one person or even one election.

(END VIDEO CLIP)

KELLY: That was Hillary Clinton speaking in just the last hour with her first remarks since her concession speech. Speaking to a Democratic Party now being described as being in crisis after watching the GOP retain control of the House, and the Senate and then of course win the White House. With DNC interim chair Donna Brazile in hot water after multiple WikiLeaks revelations, it now looks like the party may need a new leader and this man, Congressman Keith Ellison is under serious consideration.

Trace Gallagher is live from our L.A. Newsroom on how Mr. Ellison's past is raising some questions. Trace?

GALLAGHER: Megyn, in his bid to become the next Democratic Party Chair, Minnesota Congressman Keith Ellison says, his focus will be to champion the challenges of working families and give them a reason to show up at the polls in 2018. Ellison, the first Muslim elected to Congress already has support from the party's left including Senators Bernie Sanders and Elizabeth Warren and by the party establishment like the outgoing and incoming Senate minority leaders.

All of whom believe Keith Ellison is the man who can reach out to working class white voters who went for Trump. But the congressman's past associations and comments may prove more concerning for moderate voters.  Ellison once identified with Louis Farrakhan Nation's of Islam referring to himself as Keith ex Ellison and Keith Ellison and Mohamed. And he defended Farrakhan against accusations of anti-Semitism though he later apologized for defending Farrakhan.

But 2017, Ellison compared George W. Bush and 9/11 to Hitler and the 1933 Reichstag fire being the German parliament building. Reichstag was blame on the communist and gave Hitler the power to do as he pleased. Ellison was implying that 9/11 did the same for George W. Bush. Keith Ellison also backs the movement to impeach Vice President Dick Cheney for the Intel failure dealing with weapons of mass destruction. Ellison appears to be the early favorite though he is facing competition from Former DNC Chair Howard Dean and former Maryland Governor Martin O'Malley, Megyn?

KELLY: Wow. Trace, thank you.

Joining us with more, Human Right Attorney and Author of "Law fare, The War against Free Speech," Brooke Goldstein. And Independent Political Analyst and former Bernie Sanders campaign staffer, Tezlyn Figaro, great to see you both. Wow, lot to impact on that report, let me start with you, Brooke, on why Democrats would even be considering someone that controversial?

BROOKE GOLDSTEIN, HUMAN RIGHTS ATTORNEY AND AUTHOR: Especially amid all the hoopla where they are accusing Bannon of being racist and anti-Semitic.  What do they use as proof? Some allegation by an ex-wife and divorce documents and yet they fail to look at the very clear connections of Keith Ellison to radical Islamic groups to anti-Semitism. I mean it is boggling why they would want it move to the hard left. And the intro, you know only touched the surface of it.

We are talking about man who sponsored a panel when he was in law school calling Zionism the same thing as white supremacy. Jewish students asked him to cancel that. He refused. He has spoken at numerous councils on American Islamic Relation conferences. This group has ties to Hamas, a designated terrorist group. He has spoken three times for the Islamic society of North America. At the conference of 2008, they were handing out materials, calling America a terrorist organization and calling for the destruction of Israel and the United States.

KELLY: And he was speaking there?

GOLDSTEIN: He was speaking that conference. That was the third time he spoke at that conference.

KELLY: Tezlyn, Is this not a problem?

TEZLYN FIGARO, FORMER BERNIE SANDERS CAMPAIGN STAFFER: Well, you know, I appreciate her insight but what I would say is that the ties are not as clear as she would suggest. You know, let's not forget that Senator Bernie Sanders who in case counsel has forgot, is in fact Jewish is the one that actually nominated the congressman to be the possible DNC chair.

Secondly, the DNC will decide if this is someone they want to actually have represented them. Yes they are going to the far left just as Republican Party is going to the far right of what we call alt-right. What I think everyone needs to do is calm down, go in the corner, get a time-out, take a glass of water like Rubio and basically just take a step back and understand that Bannon is going to the White House regardless if people agree with it or not and Congressman Ellison will have the opportunity to serve the DNC if they choose to elect him.

KELLY: You're at the meeting and they are handing out terrorist literature and you say, I'm just going to -- I don't know. Should he be elevated to the party?

FIGARO: I don't know, like the KKK who endorsed Donald Trump. It doesn't mean that Donald Trump is a part of the KKK.

(CROSSTALK)

KELLY: Donald Trump didn't show up at KKK, he didn't take a look at the literature.

FIGARO: Saying I am not an associate, but I am still working for Bernie Sanders, so just because someone has the connections with someone possibly with a strange group.

KELLY: it is more than connections, I mean, ok, let Brooke talk.

GOLDSTEIN: Keith Ellison has been very vocal in her support for the nation of Islam for over a decade. It only was when he ran for office in 1998 that he came out against the Nation of Islam claiming he didn't realize their anti-Semitic. He was a supporter of a woman who said that Jews are the most racist people we know. He has gone on record supporting the council on American Islamic relations and Nihad Awad who fund-raise for him, who is a founder of council on American Islamic Relations.

KELLY: Ok. So there is a long list of controversial things.

FIGARO: Megyn, what Ellison did with the Nation of Islam is supports the Million man marks.

GOLDSTEIN: He did a lot more.

KELLY: Let her finish. Go ahead.

FIGARO: All he spoke against the anti-Semitic comments and people still believe that are not anti-Semitic. And again, I say again, is Senator Bernie Sanders not Jewish? Is he not the one that said he would be the best one to represent the party? Basically the DNC is, Megyn, is in complete disarray. They need to come back to the Bernie Sanders supporters and surrogates to try to get them involved in the party. They need to fix it, because they clearly got whooped all across the country. And so they are trying to what they need to do to get it together and it is not going to come by with someone who has essential attitude.

KELLY: Interesting, fascinating, nicely done. Good to see you both.  Thank you, Tezlyn. Thanks, Brooke.

Up next, President Obama delivering his toughest remarks yet on President- Elect Trump. We will show you what he said and what happened. Plus more on the breaking news reports that Lieutenant General Michael Flynn could be our next National Security Adviser.

Chris Stirewalt, Professor Alan Dershowitz, and Mo Elleithee right after this break.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: A lot of what George W. Bush tried to do was too ambitious, too transformational led to Iraq, and Barack Obama is going to be judged harshly by history most often for what he didn't do, too much retrenchment. This is space, here, for this new administration I think to get it right.

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(COMMERCIAL BREAK)

From the worlds Headquarters of Fox News, it's “The Kelly File” with Megyn Kelly.

KELLY: So breaking tonight, we got word at the top of the hour that Lieutenant General Michael Flynn former head of the defense intelligence agency and a frequent on “The Kelly File” is a strong contender to the National Security adviser to President-elect Trump. That comes just a day after the Department of Homeland Security put out warning that quote we remain concerned about homegrown violent extremists who could strike the homeland with little or no notice. For more on that we turn to our Chief Intelligence Correspondent Catherine Herridge. Catherine?

CATHERINE HERRIDGE, FOX NEWS CHIEF INTELLIGENCE CORRESPONDENT: Thank one Megyn. Also late today, the former New York City Mayor and a parent front- runner for Secretary of State, did not tip his hand to waiting reporters outside Trump tower.

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UNIDENTIFIED FEMALE: Haven't got any highlights today.

UNIDENTIFIED MALE: We discussed transition.

UNIDENTIFIED FEMALE: And how did it go? How is your transition?

UNIDENTIFIED MALE: Went really well.

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HERRIDGE: While supporters say Giuliani's integrity and steadfast leadership during the 9/11 terrorist attacks, critics say Giuliani lacks formal foreign policy experience and he may have conflicts with his business. The other leading candidate for Secretary of State is John Bolton, who is deep diplomatic ties, having spent four years as U.N. Ambassador under President George W. Bush. When the Senate refused to confirm Bolton and he got the job through a recessed appointment.

Republican Senator Rand Paul former presidential candidate himself is speaking out tonight against both quote I'll do whatever it take to stop someone like John Bolton being Secretary of State, Paul said. I don't know how a president Trump could appoint someone who's diametrically opposed to everything Donald Trump ran on. Some of that goes for Giuliani as well.  And a seven-term Republican Congressman Mike Rogers is also out having criticism his House Intelligence Committee report on the 2012 Benghazi terrorist attack was incomplete. The congressman also faced allegations of a conflict between his senior staffer and Clinton's closest aides. A charge he has denied.

And a Senior Senator Republican John McCain seems to be sending a strong signal to Trump tonight that any effort to reset relations with Russian President Vladimir Putin, former KGB agent, would be quote an unacceptable price for a nation that has stood against tyranny, Megyn.

KELLY: Catherine, thank you.

HERRIDGE: You're welcome.

KELLY: Joining us with more, Chris Stirewalt, a Fox News digital politics editor, Alan Dershowitz, a Law Professor and author of "Electile Dysfunction" Are we still teasing that, now that election is over, and Mo Elleithee founding director of Georgetown University Institute of Politics and Public Service, great to see you all. So we have so many things in the mix right now. Is it going to be Rudy Giuliani for Secretary of State? Is it going to be General Michael Flynn for National Security Adviser? Who is going to be Attorney General? Stirewalt, in your view which of these is the most potentially controversial, that we're looking at?

CHRIS STIREWALT, FOX NEWS DECISION DESK CORRESPONDENT: Well, Flynn is NSA.  Whether that pans out or not, it is certainly a good fit, because Flynn is a bit of a hair shirt when it comes to the rest of the military.

KELLY: Hair shirt?

STIREWALT: He makes them itchy. They do not necessarily get along real well. And Flynn has been cantankerous with the brass. He can be at the White House and NSA is a good fit. He can advise Trump but doesn't have to run day-to-day. He is not at the Pentagon. So there's that. With Guiliani, there is a concern about the amount of business he has done overseas and all the work that he did is an international lawyer and dealing in influence. So there is that. That would stand to be potentially very controversial. But we would also remember that the president basically gets to make his picks if Giuliani has conflicts. They have a majority in the senate they could probably push one or two controversial picks through and as for the rest of it.

KELLY: They got to pick the ones that they want to fight out. Professor Dershowitz, your thoughts on Rudy Giuliani, who you know, as Secretary of State.

ALAN DERSHOWITZ, LAW PROFESSOR AND AUTHOR OF "ELECTILE DYSFUNCTION": Well I've known Rudy for 43 years. There is no one tougher, there is no one smarter. Whether he would be diplomatic is anybody's guess. But he certainly is Trump's guy. I mean, I think he is very much like Donald Trump. Now I think the arguments against are very inconsistent. He doesn't have enough foreign experience yet too much foreign business. You can't have it both ways. When he was Deputy Attorney General and U.S. Attorney he had plenty of relations with foreign countries. And in his business he has plenty of relations with foreign countries. So you know the president gets his man. President doesn't get Supreme Court Justice but he gets his cabinet. There is a strong presumption. I think if Rudy got nominated, the Democrats will have fuzz about it. But I don't think they have enough to stop it.

KELLY: Here is the scary thing, if you will MO, according to Donald Trump's detractors. They say there is one guy who bailed from the -- he was a leading voice of opposition to Trump during the campaign. And this guy has said, look, they view these jobs as lollipops. He came out and said, especially when it comes to National Security, you need to have people that know what they are doing and not just people who received a lollipop, your thoughts?

MOE ELLEITHEE, EXECUTIVE DIRECTOR OF GEORGETOWN UNIVERSITY INSTITUTE OF POLITICS: yeah, I think, look, I think that is right. I agree with the professor that, you know the president traditionally gets the person they want that every now and then there's a person that there is a big fight over. We will see who that person is in this transition. But the president is entitled to get who they want. What worries me.

KELLY: Can you stand Ambassador John Bolton as possible Secretary of State if he didn't choose Rudy?

ELLEITHEE: But this is what worries me, is I had no idea what Donald Trump wants to do. I have no idea how he is going to govern. When you listen to the names he is talking about, it highlights a significant amount of inconsistencies between some of the things he said he wanted to do during the campaign and some of the positions he held. And these people, right?  I'm old enough to remember when Republicans were attacking the Clintons for Clinton foundation alleged ties to foreign governments. Both Michael Flynn and Rudy Giuliani have ties to foreign governments in their businesses.  I'm old enough to remember when Donald Trump ran against everything that the Bush administration did in foreign policy and ran against the Iraq war.  John Bolton is one of the architects of the Bush administration's foreign policies.

KELLY: Maybe more of Neocon, may describe him as and Trump certainly does not sound like a neo. Let me talk about the National Security appointments, Chris. Because those are the ones we actually should be paying attention to.

STIREWALT: Yeah, my gosh, if you are regular, the president-elect has about 4,000 appointments that he is got to make but there are fewer than a hundred, about 80 National Security appointments that are absolutely crucial, because we remember this. During the transition and especially in the opening weeks and months of a new administration our enemies will test us. This is proven throughout time. They will take a sounding of the new leader to see what his response is. That is why this team and this hurry up restart on the Trump transition, this is so crucial. Because if they can't get the people in these jobs especially since Trump has add prickly relationship with the foreign policy establishment in the United States, this is crucial.

KELLY: He also is wearing a hair shirt. Good ahead, professor.

DERSHOWITZ: On the top job in the cabinet. In administration like this the key roles are going to be the deputies and the assistants, the career people, the people who have vast experience, the people who have been in other governments and other administrations. And they have an enormous impact in driving the policy. I think we should be focusing also if Giuliani gets the number one place at stake. Who gets two, three and four, the same thing with Attorney General, crucially important to this administration?

KELLY: Since I have you here and you are such a famous well known successful lawyer, any thoughts on who should be the attorney general?

DERSHOWITZ: Well there are many able people out there. I think he should probably reach across gender lines. He should reach across party lines, Joe Liebermann who would be a terrific choice.

KELLY: Someone whose name rhymes with Dershowitz.

DERSHOWITZ: No, I'm too old and I don't want to be in any government. He would be a very good choice, I think reach - doing something different for Attorney General, picking.

KELLY: Nikki Haley was there, meeting with him today, we don't know why, you know for what? But that would be an interesting choice for one of these positions. It is great to see you. Just a final question, Stirewalt, if I move to West Virginia, how long I have to live there before I pick up terms like that.

STIREWALT: We will get you a passport and you can have them for free counselor.

KELLY: Thank you. I'll be there. Thank you all.

STIREWALT: Thank you.

KELLY: Up next, President Obama and what he said today about President- Elect Donald Trump.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PRESIDENT BARACK OBAMA: Instead of celebrating your dynamic union and seeking to partner with you to meet common challenges, there have been times where Americans have shown arrogance and been dismissive, even derisive.

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KELLY: You remember that. To me, he looks so much younger there? That was President Obama in 2009 in one of his first trip overseas, an event that critics would label part of the apology to her since he shared sometimes harsh language of about America's treatment of our allies.  Today, on his last trip overseas as president, he delivered new criticism, this were against President-elect. Chief Washington Correspondent James Rosen, joins us with the details, James?

JAMES ROSEN, FOX NEWS CHIEF WASHINGTON CORRESPONDENT: Megyn, good evening.  Until today President Obama had spent a post-election period urging divided America to give Donald Trump and his team a chance, but after he toured the acropolis in Athens Greece, birthplace of democracy, the outgoing president delivered his toughest remarks yet about the president-elect and the meaning of his victory.

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OBAMA: As you may have noticed, the next American president and I could not be more different. Faced with this new reality where cultures clash, it is inevitable that some will seek a comfort in nationalism or tribe or ethnicity or sect.

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ROSEN: With the Democratic Party he has led for the last eight years now having lost the white house, remaining in the minority in both houses of congress and suffering deeper losses at the state level. Mr. Obama finds himself to yield to a successor, who campaign on dismantling the Obama legacy. This has created a tension in his final days between official duty and personal interest as president. Mr. Obama expresses continuity to reassure allies. As a political figure he seeks to avoid blame for his party's defeat and project confidence that his legacy will endure.

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UNIDENTIFIED MALE: He has talked about that his cooperation will be historic. Similar to what President George W. Bush did for him. And he will go overseas and he will stick his finger in the eye of the incoming president and talk about his hope that this nationalist spirit won't be divisive for our country.

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ROSEN: President Obama is now in Germany where the foreign minister of that country said after Donald Trump's election that rest of the world will just have to get used to the idea that U.S. foreign policy going forward will be less predictable, Megyn?

KELLY: James, thank you.

Up next, we are taking "The Kelly File" on the road. We will tell you where we are coming to a city near you. Stay tuned.

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KELLY: So we're taking "The Kelly File" on tour to share my book "Settle for More." which is now available. I recall lots of fun times here at fox including the launch of America's newsroom a show on which I appeared today.

(BEGIN VIDEO CLIP, “AMERICA’s NEWSROOM”)

KELLY: And the other thing I read about in the book is sort of breaking into TV from my law days and working my way up the ladder here at Fox News.  And a show by the name of “America's Newsroom,” would you pay attention -- I'm talking about you now.

BILL HEMMER, CO-HOST: I'm listening. I'm multitasking.

KELLY: I'm here with a man name Bill Hemmer when we launched this show back in 2007, and let me, tell you, I was scared witless. And this gentleman over here, he knew. He was an experienced professional. The breaking news would come up, Fox News alert and I would go like oh, my god, I don't know what to do. He was so kind. He would shoot me some copy. He would give me a couple lines. He never wanted the credit. He just wanted to help me. And all of that is documented along with it.

MARTHA MACCALLUM, CO-HOST: This is not a person I recognize at all.

KELLY: I'm telling you. You don't need his help. But it is all documented.

(END VIDEO CLIP)

KELLY: He is the greatest. So "The Kelly File" is going to Alsea, Kansas, Fort Hood Texas, Naples, Florida, the villages and Washington, D.C. to start. Hope you will join us and settle for more. Buy it now. Thank you.

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