Terror response plan under President-elect Trump examined; Megyn Kelly reflects on her life in Chicago

This is a rush transcript from "The Kelly File," November 28, 2016. This copy may not be in its final form and may be updated.

MEGYN KELLY, HOST: Breaking tonight, new indications an attack on one of America's largest universities may have been the work of a jihadist with the top Democrat on the House Intelligence Committee suggesting this bears all of the hallmarks of terrorism.

Welcome to "The Kelly File" everyone. I'm Megyn Kelly reporting tonight from Chicago. The chaos all started shortly before 10:00 a.m. Local Time at the Ohio State University where students had just returned from Thanksgiving break. The man plowed his car into pedestrians, got out and started slashing innocent bystanders with a knife. Eleven people were hurt. The attacker would later be identified as Abdul Razak Ali Artan, an OSU student and Somali refugee who had legal permanent residence in the United States.

Fortunately his attack did not last long. Within a minute, a 28-year-old officer would shoot him dead. Still the campus was put on lockdown amid fears the suspect was not acting alone. Students were erroneously told that there was an active shooter on campus, ordered to run, hide and fight.  And now have fears those shots belonged to the responding officer alone.  All students, campus, all across the campus, the students sheltered in place as the police raced to the scene. And while the authorities have been careful not to disclose a possible motive here, they say terrorism cannot be ruled out.  


DEPUTY CHIEF CRAIG STONE, THE OHIO STATE UNIVERSITY POLICE: Based upon common knowledge, this was done on purpose, to go over the curve and strike pedestrians, and then get out and start striking them with a knife. That was on purpose.  


KELLY: In moments, we will discuss the evidence with Congressman Peter King and Lieutenant Colonel Tony Shaffer. And then we'll be joined by former Congressman Pete Hoekstra who has advised President-Elect Donald Trump. But we begin tonight with our senior correspondent Mike Tobin who is reporting live from Columbus, Ohio -- Mike.

MIKE TOBIN, FOX NEWS CORRESPONDENT: And Megyn, sophomore Jacob Bowers had stopped on a bench on campus just before 10:00. He opened up his laptop and put his head phones in. And because he had his head phones in, he didn't hear the initial car attack. But he saw out of the corner of his eye, people running around and he looked up to see the attacker flailing away at students with a knife.  


JACOB BOWERS, OHIO STATE STUDENT AND EYEWITNESS: It looked like a school of fish and a shark attacking it. Like he couldn't focus on one person and that's why like everyone got really lucky. Like he couldn't focus on one so he couldn't hit anyone.  


TOBIN: Now Bowers also says he heard Officer Alan Horujko give several commands to the attacker before Artan lounged at the officer and the fatal shots were fired. Officer Horujko has been given a lot of critic tonight with preventing further bloodshed. Now law enforcement sources tell Fox News that they're looking at a Facebook post from earlier in the day, possibly linked to Artan in which a decoration is made against what is described as unfair treatment of Muslims and that's being looked at as a possible link to a motive -- Megyn.  

KELLY: Mike Tobin, thank you.

Joining us now, New York Congressman Peter King, a Republican and member of the Homeland Security and Intelligence Committees along with Lieutenant Colonel Tony Shaffer, a CIA trained Intel operative and senior fellow at the London Center for Policy Research.

Great to see you both. Congressman, let me start with you. Do you believe this is terror?

REP. PETER KING (R), NEW YORK, HOMELAND SECURITY COMMITTEE: I believe it's all of the indicators of terrorism and I would be surprised if it's not.  Obviously we can't make the final conclusion. But everything is there, the Somali refugee, the type of attack, hitting people in his vehicle, using the knife. This is shortly after the President announced that Al-Shabaab which is based on Somalia is going to be declared a terrorist organization, right after ISIS encouraged people to use vehicle to crash into crowds and to use knives as a weapon as opposed to a gun. So, all of the indicators are there. Again, if I had to bet, I would say yes and there's a real problem with the Somali community as far as having a large number of Al- Shabaab supporters.  

KELLY: How does that change this then, Congressman if that's the way things are leaning. And even your Democratic counterpart is suggesting that they believe this is terror, that this has the hallmarks of terrorism.  How does that change the investigation right now?

KING: Well, the FBI will be coming in, Homeland Security. This will be focused as a certainly a real possibility of terrorism. We're also be looking for any type of overseas link to see if there's any connections here in the United States. You have Minneapolis, St. Paul and Columbus, Ohio, the two cities, the two areas, the highest concentrations of Somalis.  And we've had I believe up to 40 Somali Americans have gone over to Somalia to fight as ISIS terrorists.

So, this is a real threat, it's a real danger and again it's a community where the overwhelming majority are good people but there's a hard core within it. (INAUDIBLE) on Islamist terrorism five-and-a-half years ago, the first witness we had focused on the threat we have from Somali Americans.  

KELLY: Lieutenant Colonel Shaffer, so now there will be an investigation into this and a question about whether this guy was, you know, so-called self-radicalized, whether he has connection to ISIS overseas. Your thoughts on that.  

LT. COL. TONY SHAFFER, CIA TRAINED INTEL OPERATIVE: Well, look, I think we have to look at the training of this individual, his history. We know Megyn that terrorists are basically groomed from 11 years old on. We have to look at a pattern of criminal behavior. These folks are actually kind of put into the pipeline. And frankly, as the Congressman was saying, you know, you have a hard core within these communities. This is not just remote, this is not just Columbus, this is not just Ohio. It is in other places. Canada has had problems with this as well as Minneapolis.

So, we have to look at the whole. And frankly this is a pattern. Again as Peter was pointing out. ISIS has put out training videos. So the bottom line here is, this was an act of terror by everyone's definition. I think we have to accept at this point in time there are cells here. These folks are here functioning hidden within these larger communities. And Donald Trump and his team are going to have to go two ways on this. They're going to have to go and look at those who are already here regarding the fact that the door has been opened, Governor Kasich accepted an extraordinary number of folks of Somalis into Ohio.

He now has to accept the responsibility of allowing some, like this individual, let him in attempting to kill Americans. Secondly, we have to do a deeper screening of people coming in. We know the reference communities these folks come from. And again as Peter said, Al Shabaab is a terrorist organization. People go to Somalia and they get radicalized, they get trained and they come back. We had this issue right after 9/11.  We were dealing with the Somalis who are being radicalized back in the early 2000s. We had a very effective way of dealing with that combined with the military and law enforcement. And frankly Megyn, those mechanisms don't now exist to prevent this from happening. Remember, this did not happen after 9/11 because we took aggressive measures to protect the American people.  


KELLY: Right. Of course, but the question was, whether we overstepped our bounds when it comes to people's civil liberties. And it depends on where the country is in terms of war footing or whether the people are extraordinarily scared. And you've both lived through that Congressman Peter King, you especially as a congressman from Long Island and having known many of the victims on 9/11. But the question is, how far could we go? Because as far as we know, so far this guy had not been on the radar, there was no reason to question whether he might be a terrorist. And so, this could be one of the needles in the haystack type situations where the FBI can't really racially profile or religiously profile every Somali who comes into the country.  

KING: No. But it is important to have sources and informers within the community. I do believe you have to have surveillance, you have to know who's who to the extent you can. We're not certain on why it's happening, we're not talking about any Fourth Amendment violations. But to me, it is important just as you went after an organized crime, you go to the communities where the crime is coming from. Ninety nine percent of the people could be law abiding. If you know the crime is coming from there, if you know the terrorist act is going to come from that community, you have to have more surveillance. I think that's legitimate law enforcement and absolutely necessary.  

KELLY: Hmm. Great to see you both. Thanks for being here.

SHAFFER: Thank you.

KING: Megyn, thank you.

KELLY: Well as we await more information on the motivation behind this attack, the possible link to terrorism is raising new questions about how national security threats will be dealt with under a Donald Trump presidency.

For more on that, we're joined by Pete Hoekstra. Former Michigan congressman and an informal adviser to the President-Elect. Congressman, good to see you tonight. So, let's start there. How do you see things changing? This is the first possible terror attack we've seen since Donald Trump was elected as our next president. How do you see him changing the landscape that President Obama has put into place when it comes to fighting terror?

PETE HOEKSTRA, FORMER HOUSE INTELLIGENCE COMMITTEE CHAIRMAN: Well, I think the first thing that you're going to see is you're going to see a President Donald Trump along with his National Security adviser and defense team, is they're going to be much more aggressive overseas. They are not going to allow ISIS or al Qaeda or Al-Shabaab or these terrorists organizations to have safe havens in five different countries. There's a caliphate that was basically the size of Indiana in Iraq and Syria. Two failed states, Iraq and Syria. Libya is a failed state. Yemen is a failed state.  

KELLY: Well, but let me just stop you there. Let me stop you there. So we can get specific.


KELLY: Get specific because, you know, President Obama did fight ISIS to some extent late in the game and they've lost a bunch of territory in Iraq, as you know. But Donald Trump, he's largely non-interventionalist. As he put it, I'm the one who wants to keep us out of these wars. So, what specifically do you see him doing overseas to control ISIS. Because thus far he said he has a plan but he hasn't revealed it.  

HOEKSTRA: No. Number one, you have to recognize, President Obama created this situation. When he came into office, there was, you know, Iraq was relatively stable state. Syria was a stable state. Libya was.  

KELLY: Yep.  

HOEKSTRA: I mean, this president created the circumstances where this countries, where Gaddafi, Assad and others were keeping the lid on the garbage can of radical jihadists --

KELLY: Right.

HOEKSTRA: -- he lifted the lid off by getting --

KELLY: Now here we are, almost 2017. So what is President Trump going to do?

HOEKSTRA: Well, President-elect has made clear, like I said, he's not going to allow these failed states to exist. And he will partner with people in the region. This current President, Obama has been reluctant to equip and train to Kurds, train and equip these tribes in Iraq to defeat ISIS in Iraq. He would not have taken out Gaddafi and yes, he has to develop a strategy to go back in and allow a stable government to come back into place in Libya and in Syria and it's a very deep hole for this president to dig out.

KELLY: What about --

HOEKSTRA: The second thing --

KELLY: I'm short on time but I've got to ask you domestically, I'm short on time but I got to ask you domestically what you see President Donald Trump doing differently versus Barack Obama?

HOEKSTRA: Barack Obama has created what he called countering violent extremism where he equates every threat potentially in the United States as having the same priority. Donald Trump will focus on the threat from radical Jihadism because that is the most significant threat that we face today and he will start doing some of the things that Peter King has outlined in terms of surveillance and police activities against this very, very specific threat and it will be a priority.  

KELLY: Surveil Muslim communities?

HOEKSTRA: He will surveil those groups that he believes are the threat and those are the groups that are linked to radical jihadist tendencies and radical jihadists philosophies and they are linked to the Muslim brotherhood.  

KELLY: Former Congressman Pete Hoekstra, great to see you. Thanks for being here sir.

HOEKSTRA: Great. Thank you.

KELLY: So we also have breaking news tonight on the possible new cabinet picks, including General David Petraeus, former Governor Mitt Romney and which one of these two might possibly become our next secretary of state.

Karl Rove and Trump transition team member Jason Miller are next.  

Plus, new developments with the recount efforts now spreading through three different states.  

And then, with two major papers suggesting the President-Elect could be in trouble over his business operations in foreign countries, Judge Andrew Napolitano weighs in on whether the legal risk is real.  


PRESIDENT-ELECT DONALD TRUMP: I would probably have my children run it with my executives and I wouldn't ever be involved because I wouldn't care about anything but our country. Anything.  



KELLY: Breaking tonight, we are expecting major news now on Mr. Trump's transition as Vice President-Elect Mike Pence tells reporters just a short time ago we can expect some, quote, "Very important announcements tomorrow." One of the announcements many are expecting and it's being reported right now by "The New York Times" we'll be hearing is the President-Elect's pick for the Department of HHS. We are hearing today, this is on the "The New York Times" right now, that President-Elect Donald Trump has selected Representative Tom Price.

He's a six-term Republican congressman, he's been very, very anti-ObamaCare and unlike a lot of the other Republicans in the House, he's actually submitted detailed proposals for how he thinks the Republicans could do better than ObamaCare. And now according to "The New York Times," he's been selected to lead as the Secretary of Health and Human Services. The other big pick being discussed we could hear as early as tomorrow is who is going to be the secretary of state.

Today the former CIA Director David Petraeus met with Mr. Trump in the middle of reports that David Petraeus is being considered for this job, Secretary of State. Another rumored pick is former Governor Mitt Romney, a man who opposed the President-Elect during the campaign and how. While Mr. Trump is reportedly having lunch with Mitt Romney tomorrow, some of his closest advisers are not Mitt Romney fans.


KELLYANNE CONWAY, DONALD TRUMP ADVISER: People feel betrayed to think that Governor Romney who went out of his way to question the character and the intellect and the integrity of Donald Trump.  

KARL ROVE, FORMER DEPUTY CHIEF OF STAFF AND SENIOR ADVISER TO PRESIDENT GEORGE W. BUSH: I think there is nothing Mitt Romney can say that doesn't sound phony and frankly pathetic. I think we would be enormously disappointed if he brought Mitt Romney in any position of authority.  

What do I know about Mitt Romney, I know that he is a self-serving egomaniac who puts himself first, who has a chip on his shoulder that thinks he should be president of the United States.  


KELLY: Fox News contributor Karl Rove joins us in moments along with Trump's transition team, communications director Jason Miller.

But first, we go to Chief Washington correspondent James Rosen with more.  James?  

JAMES ROSEN, FOX NEWS CHIEF WASHINGTON CORRESPONDENT: Megyn, good evening.  If former General David Petraeus assumes the top spot in the Trump administration, perhaps the Secretary of State role, so wildly speculated for him. It would mark a stunning comeback for the former CIA director once hailed as the best and brightest public servant of his generation, forced in 2012 to resign and later plead guilty to having knowingly mishandled classified information when he shared it with his biographer and lover Paula Broadwell. And to admit that he lied about it to the FBI.  After a visit to the 26th floor of Trump Tower, General Petraeus this afternoon deflected questions about the roughly one hour he spent with the President-Elect.


GEN. DAVID PETRAEUS, FORMER CIA DIRECTOR: He basically walked us around the world, showed a great grasp of a variety of the challenges that are out there and some of the opportunities as well. So very good conversation and we'll see where it goes from here.  


ROSEN: And the President-elect stoked the intrigue with a 4:00 p.m. tweet saying, "Just met with General Petraeus, was very impressed. Still said to be in the running for secretary of state or former New York City Mayor Rudy Giuliani, the strongest Trump loyalist in the next. 2012 Republican nominee Mitt Romney who attacked Mr. Trump during the 2016 primaries and former U.N. Ambassador John Bolton. Senior Trump Adviser Kellyanne Conway has taken an unusually public stand against Romney in tweets and comments to reporters leading many to believe that an operative of her experience and savvy would not make the mistake of appearing to be trying to force her boss' hand.  


CONWAY: I'm all for party unity but I'm not sure that we have to pay for that with the Secretary of State position. But again, let me repeat, what Donald Trump decides, Kellyanne Conway and everybody else will respect.  It's just the backlash from the grassroots --


ROSEN: Still, Romney is up for that second session with the President-elect tomorrow -- Megyn.

KELLY: James, thank you.

Joining me now, Karl Rove, a Fox News political contributor and former deputy chief senior adviser and assistant to President George W. Bush.  Karl, good to see you.

What do you make of this public infighting or head fake? I don't mow what is going on. Because the reports are that Kellyanne Conway went rogue in speaking out against the possible pick of Mitt Romney and then the other reports by the AP tonight are that she did nothing of the kind and Donald Trump knew exactly what she was going to say and supported it.

ROVE: Yes. Well, look, I don't know which is true. I just think it's unseemly and unconstructive. It makes Donald Trump whatever the intention look weak. It makes him look like he's waffling, it makes him look like he's being pressured and that's not what a President-Elect or a president ought to look like. Second of all, it's not conducive to creating the right kind of atmosphere inside the White House to people feeling that they can give their private opinions directly to the President in front of their colleagues who might disagree with them and not worry about being, you know, outed in the newspaper, something leaked to make them look stupid.

I mean, imagine what would happen in a White House if a presidential adviser went out and said, well, I told him not to appoint so and so to the Supreme Court but to appoint so and so or I told him to pursue this policy action, not that policy action. That would be conducive to the smooth operation of the White House or to putting the President in the best possible light.  

KELLY: Uh-hm. So what is going on here? Because the speculation is that perhaps Donald Trump is looking to embarrass Mitt Romney who was a vicious critic of Trump's during the campaign. That, you know, this is like playing out like an episode of "The Apprentice" where he decides who goes forward and who doesn't in the most dramatic fashion. What do you make of it?

ROVE: Well, look, I don't know what to make of it. There are two options.  One option is that he authorized Kellyanne Conway to go do this in order to embarrass Romney, to be able to, at the end of the day, throw up his hands and say, you know, sorry my grassroots supporters wouldn't let you. But look, that's just too monkey villain, I think Donald Trump was so magnanimous on his comments on election night that caused a lot of people to say, I may not have voted for the guy but boy, that's the kind of president I want to see. And he's done that so often since the election and I think it would ill served him to be engaged in that kind of monkey villain.

But better to be magnanimous to Romney and decide to go someplace else if he wanted to really sort of, you know, score some points against Romney rather than going through this. The other option, of course is that she's gone rogue in which case she's not serving her principal well. He needs to look strong. The world is watching now. They're taking to measure the man. And this is not something that's going to make him look stronger.

KELLY: That doesn't sound like Kellyanne Conway to go rogue. We'll see.  Karl, great to see you.  

ROVE: Great. Thank you.  

KELLY: Joining me now, Jason Miller, communications director for the presidential transition team.

Jason, good to see you. So, what's the story? Did Kellyanne Conway go rogue with those comments or not?

JASON MILLER, COMMUNICATIONS DIRECTOR, PRESIDENTIAL TRANSITION TEAM: No.  Not at all. In fact, the President-Elect and Kellyanne and myself along with Hope Hicks were sharing a chuckle about that earlier this evening.  Kellyanne chatted with the President-Elect in advance of going out and offering her comments, and asked his permission if it was OK to go and voice her opinions on the matter and he said go for it. And I think that's one of the great things about what we're going to see with --

KELLY: So, the MSNBC report that Trump was livid, that he's furious with what she did, that's not true?

MILLER: No, not at all. In fact the President-Elect gave her permission to go out and do that and she did. And I think that's one of the great things about this White House is, the President-Elect and our future president will take in a number of different viewpoints and opinions and he'll form his own decision, decides how he wants to go forward. One thing I would want --  

KELLY: All right. Let's talk about that.  

MILLER: Let me push back on one thing that Mr. Rove side a moment ago though.

KELLY: Sure.

MILLER: There's a difference between going out in advance with permission and voicing your opinion as the President-Elect goes to collecting number of different thoughts on the matter and decides who me wants to go with particular position and then doing it after the fact.  

KELLY: Well, I think Karl would acknowledge that. He was responding to what I was telling him, which is this conflicting news reports. MSNBC was reporting that Donald Trump was furious with her and that she went rogue and then the A.P. was reporting that's completely wrong. So, he was going with me down those two scenarios. But I want to ask you about General David Petraeus. Because we've been, you know, told that it was almost decided that it would either be Rudy Giuliani or Mitt Romney for secretary of state and then up pops General David Petraeus. How do you like his odds?

MILLER: Well, as you noted, we still have Mayor Giuliani who's very strong and being considered for a top level pick within the administration.  Obviously Governor Romney is someone who would be a top flight contender if he were to choose to come into the administration if the President-Elect would offer him something. I think one of the important things to point out is that you have other folks who are coming in to offer advice, to give their different opinions. You know, General Petraeus is someone who's very highly sought after.

In fact, he was just, at the White House a few months ago. They were still bringing him back in to offer his opinions. And so, as the President-Elect brings everyone together and he starts to formulate his opinions, he's going to make his own pick here and make his decision. But obviously I'm a big fan of Mayor Giuliani having worked for him in 2008, Governor Romney has a very strong track record. But ultimately, one person is going to make this decision and that will be the President-Elect.  

KELLY: Can you give us any hint on the timing of that?  

MILLER: I would not expect that tomorrow. Governor Romney and the President-Elect will be getting together for dinner tomorrow night.  They'll still be continuing their discussion. I think another thing to point out is the two haven't spent that much time together previously. But tomorrow I would expect we're going to have some very exciting announcements. Not only what we have, I think first thing tomorrow morning, we'll have one cabinet level pick as well as another top administration official --

KELLY: Is it Tom Price at HHS as New York Times is reporting tonight?

MILLER: Stay tuned. You'll get official confirmation very first thing tomorrow morning. But I think we're going to have a second cabinet level pick coming tomorrow as well. So, again, as the President-Elect reaches his decision, I mean, to pick some really excellent people for his cabinet, then we're going to go and get those out.  

KELLY: Great. We'll look forward to that. Jason, thanks for being here.  

MILLER: All right. Thanks, Megyn.  

KELLY: All the best.

Well a couple of major media outlets suggesting that the President-Elect is going to end up in trouble over his business operations in foreign countries. We asked Judge Napolitano to review that argument and his ruling is just ahead.  

Plus, new fallout tonight from a series of recount efforts backed by Jill Stein and Hillary Clinton. Where is this going? That's next.


CONWAY: They have to decide whether they're going to interfere with him finishing his business, interfere with a peaceful transition, transfer of power to President-elect Trump and Vice President-elect Pence or if they're going to be a bunch of crybabies and sore losers about an election that they can't turn around.  



KELLY: We have new fallout tonight from the recount efforts sweeping a handful of battlegrounds states. It started last week with Green Party Candidate Jill Stein demanding a recount in the state of Wisconsin. The Clinton campaign then announced on Saturday it would be joining that effort as her demands, Jill Stein's for recounts then spread to Michigan and Pennsylvania. Critics including the President-Elect have slammed the whole thing as quote, a scam to raise money by Ms. Stein and then Mr. Trump took it a step further by alleging that he actually won the popular vote which he lost to Hillary Clinton, that he actually won it, he now claims, because of millions of people who he claims actually voted illegally. Carl Cameron has the latest details on this entire mess. Carl?

CARL CAMERON, FOX NEWS CORRESPONDENT: Thanks, Megyn. Few think it's going to make any kind of a difference, it looks like there will be one recount, and it might be in Wisconsin. First Michigan, the state board of canvassers finally certifies Trump's victory by more than 10,000 voted this afternoon. Green Party candidate Jill Stein has until Wednesday to file for a Michigan recount. If approved, Trump gets seven days to object and contest it.

Now back to Wisconsin, election commissioners who rejected Stein's request for a hand recount today. Instead they said local clerks will get to decide how best to recount starting this coming Thursday and after we finish by December 13. Stein filed for a Pennsylvania recount this afternoon too, but because the deadline is today and the requirements for approval are so difficult, she petitioned the court for more time. It actually requires affidavits at least from three voters in each of Pennsylvania's more than 9,000 voting precincts and the process requires a notary to stamp the affidavit which then has to be delivered to the country clerk's office for final certification.

Hillary Clinton's campaign joined the recount effort over the course of the weekend, saying it wasn't to overturn Trump's win, but to make sure that a fair process is preserved for all the parties. Trump tweet up a storm this weekend, and without any evidence alleged widespread voter fraud. In one tweet he said quote. "In addition to winning the Electoral College in a landslide, I won the popular vote if you deduct the millions of people who voted illegally." He also tweeted, "Serious voter fraud in Virginia, New Hampshire and California. So why isn't the media reporting on this, serious bias, big problem?" Election officials in those three states were Democrats are in charge have denied any wide spread vote fraud and criticized Trump's tweets as inappropriate and ill-informed, Megyn.

KELLY: Carl, thank you, joining me now with more, a former Trump campaign national spokesperson Katrina Pearson and Fox News contributor, Founding Executive Director of Georgetown University Institute of Politics and Public Service Mo Elleithee, great to see you both.


KELLY: So, Katrina, let me start with you, what is the problem with Jill Stein asking for a recount in these states?

PEARSON: Well, Megyn, there isn't a problem except for Jill Stein was nowhere close to winning in any of these states and recount are not uncommon. It's just quite odd at the timing of all of this as well and the fact that Hillary Clinton, someone who said, you know we really should accept the election results in the media for nearly a week criticized Donald Trump for saying we would have to wait and see what the election comes. So I think it real sinister what is happening here, not to mention that Clinton donors of the one piling money into Jill Stein, call for a second, I think it is all suspect.

KELLY: What about that Mo, because Hillary Clinton told Chris Wallace at the Fox News, at the debate that he hosted that it was horrible that Donald Trump's refusal to say that he would accept the outcome of the election was horrible and she was just disgusted by it. And now she is like, we'll participate. We would like to see about that recount, too.

MOE ELLEITHEE, EXECUTIVE DIRECTOR OF GEORGETOWN UNIVERSITY INSTITUTE OF POLITICS: Well, that is not exactly what she is saying, right? She conceded the election. Her campaign has said we don't think we're going to overturn, we don't think this election will get overturned. They've said that Donald Trump will be the president come January 20th and they've said that they did their own due diligence over the past few weeks, amid reports that there might have been some sort of interference and they did not find any actionable evidence of any sort of wide spread voter fraud. But if someone else is going to put forth these recount, they are going to have lawyers in the room. They would be stupid not to, frankly.


ELLEITHEE: They would be stupid not to have lawyers in the room, just to monitor the process, but here is why I don't understand.

KELLY: Yeah. Why even put a lawyer there. If they go through the process and something interesting happens, like somehow miraculously Jill Stein actually won Wisconsin, then she can go to that lawyer, to look at it herself, can't she?

ELLEITHEE: No. That is not going to happen. They're not putting any money into this. There are just going to have a lawyer in the room and I think that would be, I think that is prudent and it makes sense. What does not make sense.

KELLY: I don't know, Mo. You can see why team Trump is a little suspicious of Hillary Clinton's hand in this.

ELLEITHEE: Yeah, of course they are going to be suspicious. But I personally just think it's -- there's nothing untoward about having an attorney in the room, what I think it is odd. Is that, the President-Elect who won this election, Megyn you've heard me say this, almost every time I have been on since the election day, he won it, he won it fair and square, he is the next president of the United States and congratulation to the campaign for winning. Why is he the only one truly questioning the legitimacy of the election? Why is he saying millions of voters were illegal voters? That does not make sense to me.

KELLY: Because 2016. Cat, Donald Trump may be the first president in U.S. history to question the legitimacy of the election he won.

ELLEITHEE: That is right.

PEARSON: No, absolutely not. Mr. Trump is not questioning the legitimization of the election, he is questioning the popular vote, because that is the one thing the Clinton camp and the left are holding on to its dear life (inaudible) I could have won that too.


KELLY: Based on what? They're not hold on to say that she won.



KELLY: Yes, I know, but whatever side losses, always said that. Where does he get his evidence that millions of illegal immigrants voted in this election. That millions of people voted illegally?

PEARSON: Well I think it's a combination of things. I mean you can look at the daily caller back in October wrote an article about showing what voter fraud looks like and they listed 23 states and the incidence that happen there. You can go back to the L.A. Times about a year ago, where they talked about Governor Jerry Brown's voter motor registration which automatically had people citizenship.


KELLY: It's a supposition without actual proof.

PEARSON: And they said there were 2 million. Well there have been incidents, like in Iowa there was a woman who was convicted and prosecuted for voting and she was in Iowa.

KELLY: That does not make millions.

PEARSON: Big things do happen.

KELLY: A woman, a woman does not equal millions.

PEARSON: That is what I'm saying.

KELLY: And millions possible, months or year earlier does not make it actually happen on November 8th.


PEARSON: Well I also think that is something we should look at. You know the argument here is that you can't prove it, how about we disprove it.

KELLY: Why is anyone looking at anything when your team won?

PEARSON: Well we don't. It's just the point of if you're going to say something like we won because of X, Mr. Trump is saying, no you didn't.  Look, Mr. Trump won this race, he is the President-elect, and he is going to be the President.

KELLY: But he should take it back in doing that. Why isn't it enough for him that he won the Electoral College? Why does he have to make up information that he also won the popular vote which he lost?

PEARSON: Because people know government is corrupt, that is quite obvious now.


PEARSON: America has voted. They don't trust the politicians. They know the media is not on their side.

KELLY: But they trust the Electoral College that but they don't trust the voting machines that tallied the other votes.

PEARSON: But it needs counting.

KELLY: I'll give you the last word, Mo.

PEARSON: But in this counties it matters because of the local elections and it should be validated.

ELLEITHEE: Katrina, Katrina, there were three people prosecuted who are Trump supporters for trying to vote more than once. We can see here in cherry pick isolated incidents but they're just that. They are isolated incidents, by saying that there were millions of illegal votes that questions the sanctity of our entire electoral process. That feeds -- when that comes from the President-Elect, not from a candidate, but from the President-Elect of the United States.


ELLEITHEE: That gives our foreign adversary.


PEARSON: But it is an insult to the people who work in these countries that see it every election cycle.

KELLY: All right.

ELLEITHEE: But they don't, not millions.

KELLY: We can't have it both ways, Katrina. If we're not supposed to have a recount, because we are so trust in the integrity of process and we can't go out there and say millions of people voted illegally, can't have both ways.

PEARSON: But we'd love a recount, we'd love a recount to win all over again.

KELLY: You know, I got to go, that is probably what's going to happen, because Jill Stein is insisting that there be one and there's no chance she won Wisconsin.

Up next, with two of Mr. Trump's least favorite newspapers now predicting legal trouble with Mr. Trump's foreign investments, we asked Judge Andrew Napolitano to review the case. His findings are next.


KELLY: Developing tonight, new fallout after both the New York Times and The Washington Post published lengthen and detailed reports over the weekend looking at President-elect Donald Trump's foreign business investments and predicting legal trouble ahead. Ina a moment, Judge Andre Napolitano will review the case but first up, Trace Gallagher details the reports. Trace?

TRACE GALLAGHER, FOX NEWS CORRESPONDENT: Hi, Megyn, Donald Trump acknowledges that his brand has never been hotter and said in theory he could run his business perfectly and run the country perfectly, because for the President there is no conflict of interest though. There is a constitutional ban on accepting foreign payments, but the ethical concern being raised by many is whether Trump will pursue policy that is best for the nation or best for his company.

Congressional Democrats are already calling for Trump's foreign business dealings to be investigated. The U.S. has never had a president with business operations in at least 20 countries. And even if Trump doesn't seek advantages from foreign governments, the worry is those governments will try to ingratiate themselves to Trump by offering special favors. In fact it's worth noting that several of Trump's real estate ventures in India are reportedly being built by companies with family tie to the Indian government.

And The Washington Post reports said in just the past few weeks, Trump Tower projects in VuenosAirez and in the former soviet republic of Georgia, which had been long been stalled are now back on track. Though Donald Trump says only the crooked media make this a big deal. And if being the U.S. President can boost the brand, it can also damage it. Experts say Trump properties around the world, especially in the Middle East are symbols of American capitalism and could be attractive targets for terrorists. The President-Elect maintains that his children will take over the company, the same children who are now working his day-to-day transition team, Megyn.

KELLY: Trace, thank you. So what are the legal implications of Mr. Trump's business dealings, joining me right now, our Fox News Senior Judicial Analyst, Judge Andrew Napolitano? Judge, good to see you. So what specifically do you see as a problem if any?

ANDREW NAPOLITANO, FOX NEWS SENIOR JUDICIAL ANALYST: Actually, the problem for President-Elect Trump is a (BAD AUDIO) one and not a legal one. The reason it's not a legal one is that all of the ethics rules that the congress has written and his predecessors have signed into office regulating everybody that works for the federal government have two exceptions to them, the vice president and the president, so, none of the rules that govern everyone else govern him.

Stated differently, he can lawfully run the executive branch of the federal government and operate his businesses at the same time. He can engage in dealing which appears to be a conflict of interest and again the remedy is political, it's not legal. Look, he can't break the law, he can't accept payments from foreign governments in order to confer benefits on them and even his wildest critics have not accused him of that. But if he tows the line he can probably do what he says he is going to do, be a good businessman and be a great president at the same time.

KELLY: So it's fine for him, if he is on the phone with, you know the leader of Argentina as he reportedly was and sort of says, hey now that we're done with state business, what's the status with my approval on my hotel down there. Sure would help me out if you can get that pushed through quickly. That is legal? That is fine?

NAPOLITANO: That is legal. It may appear unlawful, it would be unlawful if a governor did it, and it would be unlawful if a senator or a member of congress did it, but it is not unlawful for the president. Candidly, Megyn when the statutes are written, nobody contemplated a Donald Trump. Nobody contemplated a billionaire with serious interests in 20 countries around the world, even countries that are currently not friendly with the United States. They wanted to give the president as much freedom as possible.

KELLY: So, what would the prudent thing be then, if it is not forbidden, what would the prudent thing be in the eyes of the legal experts, who are looking at it. Which is, it's an obvious -- you know, it makes you feel bad, I don't know a little concerned that our country shouldn't be a bargaining chip in business dealing.

NAPOLITANO: Here is why it is going to make people will bad. People will wonder -- as much as they want to trust him, as much as people want him to be successful, people will wonder is he making what the best decision for the country or is he making the best decision for himself and what happens when there's an exorable conflict between those two. It would be a lot easier for him. He would be a better president and a happier president, if he put all of his holdings into a blind trust and had no contact with the trustee. Does he have to do that? No. And if he doesn't do it, the remedy is criticism, investigations and political ramifications but no legal wrongdoing.

KELLY: That is what 2020 is for.


KELLY: Judge, good to see you.

NAPOLITANO: Pleasure Megyn.

KELLY: Coming up, we'll explain this.


KELLY: I soon realized that one of the glories of Chicago is the weather.  I soon realized.


I was thrilled to have my own (BLEEP) let me start over. I soon realized that one of the most amazing things about Chicago.



KELLY: So I'm on location in Chicago to promote my new book, "Settle for More" which is now a number one The New York Times best seller thanks to all of you. Part of the memoir discusses my time in Chicago which started off so happy, but changed over time leading to my realization ultimately that I could settle for more. Watch.


KELLY: It was 1995. Nearly 22 years ago to the day that I first laid eyes on the beautiful City of Chicago. I with us a third year law student in Albany at the time and a law firm put me up at the intercontinental. I remember looking out at Michigan Avenue and the twinkling lights on the trees, all of the busy professionals down below, hailing taxi's and carrying briefcases and thinking to myself with hard work I can get there.  I soon realized that one of the most wonder things about Chicago is the weather and that is still true today. I found an apartment building steps away from the beautiful Navy pier, steps away from Oprah Winfrey's building, whose show I used to watch late at night.

I moved in, glorified to find out that I had my very own washer and dryer.  And my TV was on a couple of milk crates. Between that and my white boxed wine and my Tina Turner CDs, I felt like I had arrived. I worked very hard as an attorney, first in this build and right here at a law firm called Bickel and Brewer and then for most of my career at the law firm called Jones day. I was on the best cases working with the best partners.  In fact all I did was work and soon I realized that just because you're good at something doesn't mean it makes you happy.

It was one night while driving home on this the Kennedy expressway with tears streaming down my face out of sheer exhaustion that it dawned on me how unhappy I was. I wanted to have an accident. Not because I really wanted to hurt myself but because I desperately needed a rest. I thought if I could break a major bone, you know like a femur perhaps I could get one. By the light of day the next morning, it finally occurred to me that perhaps I didn't need to break a bone. Perhaps I could make a career change.

So I resolved to change my life. But how, I was taking guitar class as a stress reliever. And in the class I met a TV News producer, she agreed to help me. Late at night, after my law job, I would come out to the streets of Chicago like this bridge and shoot stand ups with a photographer.  Within six month of that I got my first TV news job within 12 months of that I got hired by Fox News and the rest, as they say, is history.


KELLY: The book is called "Settle for More" and it will make an excellent Christmas gift and I do love Chicago. We'll be right back.


KELLY: Here's part of the outtake again.


KELLY: I soon realized that one of the most amazing things about Chicago --



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