THE FIVE

Manhunt expands for Europe's most wanted terrorist

This is a rush transcript from "The Five," December 22, 2016. This copy may not be in its final form and may be updated.

ERIC BOLLING, CO-HOST: Hello, everyone. I'm Eric Bolling along with Kennedy, Juan Williams, Dana Perino, Greg Gutfeld. It's 5:00 in New York City, and this is "The Five."

The manhunt for Europe's most wanted terrorist continues tonight. German authorities confirmed earlier that fingerprints of the Muslim suspect at large were found inside the truck he used to kill 12 people in Berlin on Monday. Dozens were injured. We also learned today two of the injured were Americans. The suspect is a 24year-old refugee from Tunisia. The attack overseas has renewed concerns about immigration here at home.

President-elect Donald Trump says it proves the need to restrict some Muslim immigrants from coming to America. A man who interrogated the mastermind of 9/11 agrees. Dr. James Mitchell was assigned to question Khalid Sheikh Mohammed more than a decade ago. He says KSM warned back then about the very kind of attacks we're seeing today. Mohammed also predicted Islamists would try to take over the world through immigration.

(BEGIN VIDEO CLIP)

JAMES MITCHELL, FORMER U.S. AIR FORCE PSYCHOLOGIST: This is exactly the sort of thing that Khalid Sheikh Mohammed had predicted. He and I were talking about what he saw as upcoming trends in terror attacks, that the easiest way to win the long battle to take over the world with Sharia law was actually through immigration and by out breeding non-Muslims. He said that like-minded jihadi brothers would immigrate to western democracy and to the United States, then when the time is right, they would rise up and attack.

(END VIDEO CLIP)

BOLLING: So Greg, I can't say I warned it years ago. Isis promised it less fewer years ago. It's happening.

GREG GUTFELD, CO-HOST: Yes. And you said in the opening about it has people talking. It has us talking. What bothers me is that it really doesn't have enough people talking about this, you know. If the world were a jewelry store, America is the hope diamond and you don't have just a velvet rope around it in a glass box. You have to think seriously about how you keep that thing secure.

Our problem with America is everything is not team sport politics. You have -- you got to be either pro security or pro tolerance when actually they complement each other. If you want to have the world's most diverse country in the history of the world, it has to be safe. Why are people running from terrible places around the planet? Because this place is safe. It's less dangerous.

There's less rape and assault and murder so they come here in order to continue that relationship. But the people coming here, we have to make sure it is safe. So they pro security, pro tolerance together.

JUAN WILLIAMS, CO-HOST: But you don't want to change the nature of the country by saying that we are going to somehow build a wall around the entire united states. Not that we are ready --

GUTFELD: I would build a dome.

WILLIAMS: We are ready --

GUTFELD: You're talking about -- I would build a dome.

WILLIAMS: Well, I would not. I think --

BOLLING: Maybe a moat.

GUTFELD: And a moat.

WILLIAMS: I think we are blessed by the two oceans on either side. But even more, I think we are blessed by the idea that we -- I see ourselves as a refuge for people who are fleeing the kind of violence --

GUTFELD: You're doing the team sport thing.

WILLIAMS: No I'm not.

(CROSSTALK)

GUTFELD: I said pro tolerance, pro security, and you went to the pro tolerance part. I'm saying you can have both.

WILLIAMS: No, but the way that you bring them together requires that there be rigid kind of security that eliminates a certain class of people.

GUTFELD: No, I'm saying --

BOLLING: Why should the borders be completely open? I mean --

WILLIAMS: They're not completely open.

BOLLING: But your point, if you're saying we shouldn't restrict this group, should we restrict any group? Should we just have no border?

WILLIAMS: Of course not. We have limits on immigration.

BOLLING: Who draws the line and makes that decision?

WILLIAMS: I'm sorry?

BOLLING: Where do you draw the line and who makes that decision?

WILLIAMS: I think we as an American people make that decision. That's why we have limits on immigration. But we treat all people -- we don't even treat all people the same. I will say that up front. Our immigration laws initially clearly favored people coming from Western Europe. Only since 1965 have we opened the doors to the rest of the world, but we vet all people. We make sure that they are not coming here to threaten us.

LISA KENNEDY MONTGOMERY, GUEST CO-HOST: Don't tell that to the people from eastern Europe and China who came over to build the railroads and eventually the highways. It wasn't just 1965. I mean we definitely have a sketchy past as to who we've invited into this country. But here is who we shouldn't let into the country. We shouldn't let people in who want to kill us and people who hate freedom.

GUTFELD: And Justin Bieber.

KENNEDY: Justin Bieber hates freedom more than any Canadian who's ever lived. All right, Khalid Sheikh Mohammed also had a great dissertation, the poisonous toxicity of Justin Bieber. But to be completely honest, people who want to impose Sharia law violently absolutely abhor freedom. They are bad people. Is there a guaranteed way of vetting people and looking into their hearts? No. No more than a way we have of changing their hearts and minds.

BOLLING: So therefore --

KENNEDY: Therefore, you got to figure out a better process of keeping bad people out instead of keeping everyone out because that gives you a false sense of security.

BOLLING: And still you (inaudible) out that better process, Kennedy, maybe it is OK to keep a group coming from this area where there's a lot of terror happening.

KENNEDY: If that's what you want to do, but there's terror happening in Western Europe like Belgium and the U.K. Do you keep those people from coming in as well?

BOLLING: I think you picked the -- listen, I think the president is going to do what he wants to do but Dana, let's bring you in, pick the terror hot spots and say, until we find a better vetting system, maybe we hold off. Do you like or dislike that idea?

DANA PERINO, CO-HOST: I guess it's not foolproof. I mean it could help a little bit. I mean if you're constantly narrowing down the chances, I think that's helpful. The point about that Mitchell I think was making that is very interesting is that Khalid Sheikh Mohammed was saying that this is not something that they think is going to be done by the end of 2017.

This is a lifelong generational war and we are talking as if, OK look, if we do this, then we're going to be done and then we can move on and everybody can have a great Christmas holiday and everything will be fine. This is just something that will last for our lifetime so generation X, millennials, and the baby boomers all working together, generationally together, as you were saying.

GUTFELD: Yes.

PERINO: And the other thing is that even Khalid Sheikh Mohammed could not have imagined the parade of horribles that would exist after the Syrian refugee crisis because what he was talking about in terms of using immigration to try to spread the terrorism throughout the world, it was basically because we didn't act to protect the situation as it was.

We put accelerant on the fire and now Europe has a gigantic problem. The United States a little bit more protected because of our policies, because of the oceans, but Europe is basically -- I was going to use a word but I won't use it.

GUTFELD: Go, use it.

PERINO: No.

GUTFELD: Come on.

PERINO: No, this is mean.

BOLLING: We have a bleep button.

PERINO: It's not a bad word, it's a mean word.

KENNEDY: In that case, yes.

PERINO: I will say it in a commercial break.

BOLLING: But can I be a little provocative at this. Khalid Sheikh Mohammed, we have this information -- call it information, call it what you want, opinion, but we have it because --

GUTFELD: Yes.

BOLLING: We didn't drone him.

GUTFELD: Yes. No, no, no. We didn't take him down to the, you know, a peaceful meadow and have cheese and crackers. There was water involved but it wasn't in a meadow. It was in a small room and it was very quiet. It's a new world. The battlefield is earth. We got to remember the key word crisis --

KENNEDY: Oh my God, that was a horrible movie.

GUTFELD: It was, John Travolta. But the key word for ISIS right now is technology. The next step is going to be remote controlled cars and bombs and drones and mines. There's a leaked memo from ISIS. They have leaked memos that (inaudible) had tweeted from Arabic Aleman TV (ph) that there is 19 new machines that they have created to unleash some kind of modern terror and they are almost all remote controlled and they tie in with technology. And these are the things that we're going to have to deal with.

KENNEDY: OK, but here's my point about this, is there's always going to be a work around. We can find systems. We can have vetting processes and we should have those. You know you can't just let everyone in and I don't think any rational person and even libertarians would say that. However, there's always going to be a way, because now they realize it's too expensive to put forth a plan like they had on 9/11 so they are relying on people who are mentally unstable and morally bankrupt to do horrible things and create so much panic and so much fear so what is the next thing they're going to do?

BOLLING: Yes, but the common denominator between all these people who are going to perpetrate this terror, they're here and they are likely -- they weren't likely born here, right. The issue is, are they coming to the country and how are they getting here, and if we have open borders and no vetting or minimal vetting, there are 110,000 refugees who are going to be settling in the United States this year alone. A 110,000, does anyone know that number? Because we heard 10,000 or 15,000 -- 110,000, I mean that's a massive number. If you're --

KENNEDY: About 20,000 more than we usually get.

BOLLING: If you're 99.9 percent effective, you have somewhere around 110 terrorists who want to kill us.

WILLIAMS: But hold on Eric. Are you suggesting how that we are a bunch of idiots, that we don't already vet people? And I think you are insulting us as an American people when you suggest that we don't already take measures. And not only is it our measures, I may say international bodies that--

BOLLING: I didn't say we don't vet, Juan. I never said that.

WILLIAMS: We're not letting anybody -- everybody in.

BOLLING: It's just unfair to say --

WILLIAMS: I thought you said we just let anybody in. We do not do that.

BOLLING: I said through the border. The border is wide open and we let people in.

WILLIAMS: The borders are not open.

BOLLING: All right.

PERINO: Well, the other thing is that we know Khalid Sheikh Mohammed was a liar as well. So that was one of the reasons people like James Mitchell were asked do really difficult things in interrogations. I mean we ask our intel community to do really tough things. So, he's there. They know that he lies. So then basically, they trap him and by giving him information -- that's when Khalid Sheikh Mohammed realizes that we have captured other Al Qaeda leaders, so then he starts to talk.

So what he did was use psychological terror to plant seeds for us. Now, I don't know all the things -- all the things that he said were true or not true. We don't know. But one of the things we risk is that the psychological terror continues to push us in a direction that we risk not protecting innocent Muslims who would help us in this war on terror. And that's where the balance is going to have to come. It's a much more complex problem than just banning or not banning or vetting or not vetting. It's just really complex.

KENNEDY: OK, but you raise a really good point and that is if you have people who are coming into this country or they're going to Belgium or Germany or Switzerland or Turkey and they're doing horrible things, there has to be an uprising within the Muslim community that squashes this because people in this country, you know, who tend to have traditional American values aren't going to change the hearts and minds.

But if you have Muslims in other countries who don't want to be categorized as bad people, who are kept from traveling to the western world, then they're the ones who have to work within their communities to change minds and also to stand up and say, we're not all like this. And you don't hear that. But they would be much more effective at what ultimately has to happen, which is keeping people from being drawn to this murderous lifestyle.

PERINO: That's why it's about targeting the radicalization and it's a long-term very complex generational war that we have to be prepared to put resources into to recruit some of the best American minds and to work with our allies overseas because we are going to rely on them just like in the Vietnam War.

We worked with the Vietnamese in order to help us protect ourselves and our national interest and then there was an influx of immigration. And that was a good thing for our country. I'm not saying that's exactly going to happen here but we know that we need their help so we have to figure out a way to do both.

WILLIAMS: And I think we need this on several levels, both in terms of people in the Muslim community and in terms of Muslim states in the global war. But I just wanted to make a mention. So I went to some Broadway plays this week. So I've been walking around the neighborhood, if you will.

And you see that the New York City police have out now people with, you know, automatic weapons, bullet proof vests and like, added security, added counter-terrorism on the ground. And I've read where this is true now in Chicago, L.A., Houston, Washington, D.C. during the Christmas season in particular, protecting against the possibility of that kind of drive-by or --

PERINO: That's not just 15 years.

GUTFELD: How outrageous that they would use guns. My goodness, Juan. I thought yesterday you were telling me that guns were responsible for more horrible terror --

WILLIAMS: They are. Wait a second.

GUTFELD: And now you're going, thank God we have them. We have law enforcement out there with guns.

WILLIAMS: No, no. I like law enforcement. I have no problem with that, but I'm saying --

KENNEDY: What about when law enforcement isn't there? What about a responsible citizen who is armed who can protect those --

PERINO: Like the one here, just in Times Square.

KENNEDY: Absolutely right.

BOLLING: What about what you all just pointed out, where are the moderate Muslims? Where are the moderate Muslims --

(CROSSTALK)

PERINO: Just a segment. We do it every day.

BOLLING: I know but why isn't it? Now we have more terror, we have more death, we have more destruction. We have more Nices' and Berlins' and Brussels airports and Turkey. And it keeps happening and you just don't hear -- you just don't hear that group saying, we vehemently push against this, we're not part of this.

(CROSSTALK)

WILLIAMS: First of all, I agree with you that you need to hear more of this voice. Where I disagree with you is, I think there are lots of people cooperating with American law enforcement in the Muslim community in mosques to try to combat this. And you know where I heard, you know, sort of a sad cry this week was from refugees in Germany who said, you know, suddenly we are being blamed --

PERINO: Vilified.

WILLIAMS: -- cataloged with this bad guy who perpetrated this horror. And we are just so grateful to be in --

GUTFELD: There's a longer-term question about this. Let's say, you know, we kill every single person who is involved in ISIS. Just kill them all and there's some other new thing that happens. What about the reality of assimilation in a culture like this? Do you accept those whose values undermine the balance of freedom and security, who see Islamism as an ideology that is greater than our republic? Because that's a first for us, that is a first. We have assimilated all sorts of cultures but none that says we are a superior ideological framework that we wish to.

BOLLING: On a religious level or legal level?

GUTFELD: Both.

KENNEDY: What he is talking about, they are intertwined. And that's when it becomes so problematic. But you know, you'll also look at young men and, you know, it happens to be people who are kind of bored and they don't have a lot to do. And you know, maybe they've got an anti-authority streak and those are the most fertile ones that crazy moms reach out to and change and radicalize.

BOLLING: That was a very interesting block there. Coming up, the liberal media falls for yet another Islamophobic hoax. This one was drummed up by a known prankster. Greg has the details on that one next.

(COMMERCIAL BREAK)

GUTFELD: It was big news: A Muslim man kicked off a Delta flight for speaking Arabic on the phone to his mother freaking out Islamophobic passengers and the evil, evil airline. This outraged celebrities, even actress Olivia Wilde vowed to boycott Delta. Yes! The great Olivia Wilde. And CNN's Brian Steltzer who rails against fake news all the time retweeted the victim's video which fanned the flames.

But hold on you heroic warriors of social justice. Stop indulging your assumptions for just one moment and you'll find that this so-called victim is a renowned hoaxer who fakes events on planes. On his YouTube channel are videos of him with titles like "Arabs on a plane," "Speaking Arabic on a plane" and "Counting down in Arabic on a plane."

I sense a trend here.

Recently he staged a fake video with a New York City cop harassing men in Muslim dress. It was fake. He even faked the story about boarding a plane in a suitcase. Fake. And there's the time he claimed the Boston bombers were framed. He's also a 9/11 Truther. And still celebs in the media buy his shtick.

This ghoul says that even though he's cried wolf many times before, this time it's real and he's consulting a lawyer. So should Delta. Sue this divisive alienating a-hole.

We must finally declare war on hoaxers because once again, without evidence, so many swallow an attention-seeking drama, happily smearing a company and the innocent people that it employs.

So who is worse: the hoaxer or his frothing enablers in the media? Hard to say. But in the meantime, until further notice, let's make all of them walk.

All right, Delta released a statement saying based on the information collected today, it appears the customers who were removed -- these jerks - - sought to disrupt the cabin with provocative behavior including shouting. This type of conduct is not welcome on any Delta flight. And then they go on to say that it became clear that these guys are pranksters, blah, blah, blah.

OK, he's claiming its sincere but he's been doing these pranks in the past, hasn't he lost the right for anyone to believe his shenanigans?

PERINO: I think so, yes. The thing is, what you might find on the left is people like Olivia Wilde who jumped on it initially, you know that whole thing, like, if there's a hate crime turns out to be a hoax --

GUTFELD: It doesn't act.

PERINO: -- but then the left says, well, it's still a valuable lesson because hate crimes do exist.

GUTFELD: Yes.

PERINO: So I think that you'll probably find it here like, well, do you think Muslims aren't discriminated against on airplanes?

GUTFELD: Yes, exactly.

PERINO: Well that's the kind of response you will get.

GUTFELD: Eric, aren't the victims here Delta and their employees and the passengers?

BOLLING: The victims are everyone because it's the piece of culture that enables this as you ably point out, the enablers in the media also enablers in the White House. Remember clock boy?

GUTFELD: Yes.

BOLLING: I mean, if --

KENNEDY: Ahmed.

(CROSSTALK)

(LAUGHTER)

BOLLING: OK. Well, also hoaxser -- if you make a clock this big in a suitcase that looks like a ticking time bomb, President Obama invites him to the White House and we find out later that there's a whole lot of stuff going on in his past. It feels like the same thing to me. Fake news is a real problem, I got to tell you. It's really, really difficult to figure out what's real and what's fake.

And now that they're going to video, it used to be a story you couldn't figure is this real or not? Let me see the source. It looks real. And then you find out it's not, but now videos? You know, what's real and what's not? But by the way, Delta did say they have passengers who claimed he was talking really, really loud.

GUTFELD: It was staged and he was looking at people and saying Delta and he had it all setup and then he tweeted his website. By the way, clock by literally did create 15 minutes of fame for himself.

KENNEDY: And he can count it down with his own briefcase. Isn't that wonderful? See I think someone like this actually wants to be harmed. I think he's masochistic because if you get on a plane post 9/11 and we've all learned this and we have very low tolerance for people's shenanigans on planes. And who has the lowest tolerance we learn this week? Pop star Richard Marx.

GUTFELD: Yes.

KENNEDY: He single-handedly on a Korean Air flight subdued a man who was assaulting female flight attendants. And the flight attendants were standing there with taser ready to tase the man. The only reason they didn't is because they weren't properly trained on the devices. They couldn't figure out how to use them. So, they had to -- luckily, Richard Marx was right there waiting for them and he -- over a four-hour period.

BOLLING: First time that term has ever been uttered. Luckily, Richard Marx was there -- sorry --

WILLIAMS: As in don't taser me, bro.

GUTFELD: Yes.

WILLIAMS: Wait, what I want to try --

KENEDY: You could be seriously injured screwing around on a plane like that.

WILLIAMS: This guy -- what's crazy, and let me just say this gut I read also was revealed to be a jerk and antagonist (inaudible) on a flight. He said that he jumped into a suitcase to fly from Melbourne to Sidney and the Australians said, never happened. Again, I hope so.

I don't see how he can reach out to anybody, even if you have a legitimate concern. And believe me, I know, because I got big trouble for saying that when I see people dressed in Muslim garb on an airplane, I get nervous.

But I got to tell you something. There's a reality, I'm sure some people like me get nervous, OK. But when this guy does this kind of stuff, it undermines any legitimacy to the complaint. And so he damages people who think that they are coming together and standing for their rights and liberties as Americans. I think you undermine the cause. I think you're hurting your own side.

GUTFELD: I don't think he cares. I think he is in it for himself. He likes to be known as a successful YouTube prankster, which is a long way of saying loser.

BOLLING: Hold on -- hold on -- hold on. No, YouTube pranksters, YouTube stars are wildly paid well.

PERINO: Well, do you know how --

KENNEDY: Upwards of $2 million a year for the best ones.

BOLLING: You have tons of money for that stuff.

PERINO: On my book tour, you probably saw the same, so either right before me or right after me, the stores were preparing for the big YouTube star that was coming. And then there was this one from Australia and I thought, what does he do? They're like, oh, we just talk. And then he did a book and he's got a whole deal. And it's all because of YouTube.

GUTFELD: I meant him specifically being the loser.

PERINO: Oh yes. He is a loser.

(CROSSTALK)

PERINO: Does he get money for this?

GUTFELD: He get ads. Well, he would get ads, right.

PERINO: He's the latest balloon boy.

BOLLING: They get a lot. They make a ton of money.

GUTFELD: Balloon Boy, Clock Boy, another inflated story.

WILLIAM: Why do you think Clock Boy was a fraud? I don't think it was a fraud.

BOLLING: It was a hoax. He was purposely trying to look like he was --

WILLIAMS: I don't remember that was very --

GUTFELD: He was setting up an environment as a victim.

WILLIAMS: You don't think this was a kid who had a science experiment --

BOLLING: No.

GUTFELD: It was definitely an experiment.

(CROSSTALK)

WILLIAMS: No. I know that you might say but I also think it was a legitimate experiment.

BOLLING: His father claimed to be the president-elect of Afghanistan.

WILLIAMS: Yes, believe me, we have a lot of crazy people but I don't know that is what you, I mean I don't know it was a hoax --

GUTFELD: By the way, there were other hoaxes that were exposed. There was a church down south that -- whoever scrolled KKK on the church and it was linked to Trump, turns out it was a black member of the church. So this -- and there was like --

BOLLING: The cake. The racial --

GUTFELD: These are --

KENNEDY: There was the young woman who claimed a man forced her to take off her hijab. He said that he pulled out a lighter and said he was going to light her on fire.

GUTFELD: University of Michigan. That just came out. Terror (ph) was the one who jumped on that. It turns out, totally made up. They can't find anything so.

PERINO: So nothing is true.

GUTFELD: So I guess what I'm saying is in this day and age, shouldn't Brian Stelter hold off the retweeting just for a bit. Just look it up.

PERINO: I think so. I mean twitter is just --

GUTFELD: CNN has Google. They have computers. If you have a computer, you can go to Google. It's really simple. You can just type in somebody's name and just press search.

PERINO: But what benefit does he get or does any one of us get by being first?

GUTFELD: Yes.

PERINIO: To report those stories.

GUTFELD: It only matters when I'm drinking.

BOLLING: Did Stelter retweet or did he add commentary?

GUTFELD: He said like, wow, this is really catching on. So that was his way --

PERINO: Really big (ph) if true.

GUTFELD: I'm not saying it's real.

KENNEDY: I'm sorry but isn't he hosting the show that exposes media calamities like this? I mean isn't that what he's suppose --

GUTFELD: He lectured all of us.

KENNEDY: -- isn't he the person at the front line of the vetting police? I'm sorry. The one good thing about this is it ushers in a new age of skepticism because if you think that everything is fake, you're going to do more work trying to find what is absolutely real and what you can trust.

GUTFELD: Yes, I don't know though. I'm pretty lazy. I'm skeptical of that. Everything you just said I really don't believe.

All right, directly ahead, the president-elect cements another deal before taking office. This one will save taxpayers millions by lowering the cost of the new Air Force One. Details ahead.

(COMMERCIAL BREAK)

WILLIAMS: Earlier this month, President-elect Trump threatened to cancel Boeing's deal to build a new Air Force One over the hefty price tag, estimated at $4 billion. But after meeting with Mr. Trump yesterday, Boeing's CEO said he would build the jets for well under that price tag.

(BEGIN VIDEO CLIP)

DENNIS MUILENBERG, CEO, BOEING: I was able to give the president-elect my personal commitment on behalf of the Boeing company. This say business that's important to us. We work on Air Force One, because it's important to our country. And we're going to make sure that he gets the best capability and that it's done affordably.

(END VIDEO CLIP)

WILLIAMS: Here's what the president-elect had to say following that sit- down meeting.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The conversation with Boeing did produce some positive results?

DONALD TRUMP (R), PRESIDENT-ELECT OF THE UNITED STATES: I think so. We had the chairman of Boeing, the CEO. And I think they're looking to cut a tremendous amount of money off the price.

(END VIDEO CLIP)

WILLIAMS: Well, this is so interesting to me, because we talk about this billion-dollar price tag. But apparently, there is no deal. It's like there was 170 million, not billions. And then there's the question of what's on the jet. But the way it's being presented is that President- elect Trump is getting a better deal. Is this actually what's going on? Or is this politics at play -- Kennedy?

KENNEDY: Well, I think at this point it's OK for the president-elect to take a look at these deals when they relate to the office of the presidency. You know, it's vastly different than the Carrier deal, which you know, you could argue was more of a campaign tactic. But here, if we're spending $4 billion on Air Force One, I think he has every right to sit the person down and say, "Hey, man, what am I getting for this?" before he even has a chance to kick the tires.

WILLIAMS: In fact, you've got Lockheed Martin working on Marine One, the helicopter. So you have -- these folks have defense contracts, and Boeing -- Boeing has immense competition coming from Airbus in Europe. The question is, is everything going to be piece by piece for Donald Trump, Greg?

GUTFELD: I don't know. I think maybe he has time do this. By the way, he has more time than most people, because he never sleeps. And so -- I mean, he -- it's something that he likes to do.

But you're right, I mean, if there's a litter problem in our nation's parks, you know, our president shouldn't be flying to every park to pick up the litter. You've got to reform the system. You have to create laws, regulations and penalties so the parks are clean.

So in that sense, maybe he should focus on reforming the system so he doesn't have to go and twist arms every time.

KENNEDY: Maybe he should privatize the parks.

GUTFELD: Privatize the parks. Exactly right, Kennedy.

WILLIAMS: So let's talk--

GUTFELD: My favorite, Kennedy.

WILLIAMS: -- as someone who's flown around on Air Force One, Marine One.

Now, as I understand it, the big revisions in the costs, according to Boeing, has to do with, like, shields that would protect Air Force One in the case of a nuclear blast.

PERINO: Well, here's the thing. The best thing for all of us to do is to not talk about the capabilities of the plane.

WILLIAMS: Uh-oh. OK.

PERINO: Because that's one of the things about it, that it has to be beyond any of our wildest imaginations--

GUTFELD: It has a Keurig.

PERINO: -- from the protection.

KENNEDY: With K-cups and everything?

GUTFELD: Yes, K-cups. I love the K-cups.

PERINO: I do think in this situation, you might be able to say that everybody wins. So going forward, taxpayers win if the cost comes in under cost. The president, whoever it might be in the future, because these planes won't be ready for a while, will win because they'll be protected and have the latest technology. And Boeing wins in terms of being able to keep a contract that Air Force One -- they don't make a profit on it.

But I do think that this whole -- this idea of how do you restructure defense acquisitions? So how do you make sure that we are doing contracts that make sense? And one of the things that General Mattis could do, if he becomes secretary of defense, is to task his deputy with saying, "I will not accept any cost overruns. And now it's on you to make sure that doesn't happen."

WILLIAMS: You know, Eric, I love that point. Because this may be a message to the defense industry, big in Washington--

BOLLING: Oh, yes. Any contractor.

WILLIAMS: Right. Because the defense industry typically -- everybody says if you're patriotic, give the military what they want. But here is Donald Trump saying, "Hey, wait a second."

BOLLING: Well, they're still going to get what they want. They're getting Air Force One and Two.

Here's the deal. The deal is that we have a $170 million deal with Boeing currently. But for the Air Force One and Two, the estimate was going to be 4 -- so Boeing says, $4 billion, and the normal way to do business in D.C. is, "OK, $4 billion, here you go."

PERINO: Yes.

BOLLING: Donald Trump says, "Hold on a second. No. No. This can come in lower. This can come in under budget and on time."

And Boeing, they have a big meeting. The CEO comes out and says, "We're going to come in under budget and on time."

And now Donald Trump says, "You know, Boeing just did it. Every one of you defense contractors -- every other contractor--"

PERINO: On notice.

BOLLING: Of course. So it's not picking up every piece of trash. It's saying, "Hey, we want -- see how we cleaned up this park right here? Every park needs to look like this park right here."

KENNEDY: And by the way, stop building systems and weapons that the military doesn't need. It happens all the time.

BOLLING: You're going to -- look, you're going to get us in trouble, Kennedy. You're not going to--

KENNEDY: No. Give the military what they need, not what congressional districts want as favors.

WILLIAMS: I'm just telling you, that's the way -- Eric is saying the way the system -- that's the way the system works. Some congressman says, "It's my district. You've got to keep it."

KENNEDY: Yes, so let's build some tanks. Tanks for the memories.

WILLIAMS: Oh, boy.

GUTFELD: Tanks for nothing.

KENNEDY: Exactly right.

WILLIAMS: Frank Sinatra here.

GUTFELD: We'll be right back.

WILLIAMS: Ahead on "The Five," breaking Trump transition news. President- elect's giving his former campaign manager, Kellyanne Conway, a key role in his administration. And a lot of other big announcements today from Trump. Stay tuned.

(COMMERCIAL BREAK)

PERINO: If you haven't caught Tucker Carlson's new show yet at 7 p.m. Eastern, I advise you to record it nightly. Last night, Tucker engaged in a fiery discussion, as usual, with a guest, this time about affirmative action.

The debate was over a lawsuit filed that alleges Harvard University sets a higher bar for Asians than other students to limit their enrollment. The guest, Jay Chen, an Asian Harvard grad himself, argued his alma mater isn't engaging in discrimination. He supports the school's affirmative action policy, and Tucker took him on.

(BEGIN VIDEOTAPE)

TUCKER CARLSON, CO-HOST: If you're against racism and racial discrimination, why are you supporting, explicitly supporting, a system that penalizes people for the color of their skin, which you are?

JAY CHEN, HARVARD GRADUATE: These students who apply are not being penalized because of their race. The application process is entirely holistic. Actually, affirmative action benefits Asian-American students. It recognizes that the Asian-American experience is not all the same.

CARLSON: OK. But that's all gobbledygook. When it comes right down to it, Harvard has a quota system for Asians.

CHEN: They don't have a quota system.

CARLSON: Is it racial discrimination to not let somebody into college based on his race?

CHEN: They are not admitting students based solely on race. There are other factors that are involved. And, you know, I've talked about a lot of others that have benefited people, such as legacies, such as whether or not you went to a private school, if you're from the Northeast.

CARLSON: But -- those are not--

CHEN: And there are a lot of advantages that white students can benefit from.

CARLSON: You're diverting from the question. If racial discrimination is wrong -- and I believe it is -- then it's just wrong.

(END VIDEOTAPE)

PERINO: That was your favorite part.

BOLLING: Yes, exactly.

PERINO: The non-sequiturs.

BOLLING: You're a Harvard grad. You know what a non-sequitur is.

So I listened to that. And I was listening to it on the radio, and I was trying to figure out who is this person that would come on and try and defend this.

Look, the bottom line is, Tucker is right. I mean, it is a discrimination, whether you like it or not. And this gentleman couched it in, oh, there are other factors. Legacy, meaning if you have a family member that attended Harvard, you bump up.

But the reality of the raw numbers are, if you're Asian American and you apply to Harvard, you need a higher entrance, whether it's SAT or ACT, to be -- to be -- actually to get in.

PERINO: I wanted to do this story back in October when the lawsuit was filed, Juan. But obviously, the election was--

BOLLING: Can I just add, I think Caucasian needs even higher than Asian, if I'm not mistaken.

WILLIAMS: No.

PERINO: No.

BOLLING: No?

PERINO: So Juan, I think that the students have a legitimate complaint, but I was curious what you think.

WILLIAMS: Well, I mean, to me, you know, I like Tucker's attack, because I think it's a direct line. It says if you believe that racial discrimination is wrong, then don't buy into this game.

Now, the counter argument -- and this has -- this is why you wanted to do the story earlier, because this is a really important argument. I mean, even this week in the newspapers there has been stories about how the big colleges, especially ivy leagues, are giving more preference to international students, because they want to be able to claim that they are preparing the global leaders of the future.

PERINO: They also want full out-of-state tuition.

WILLIAMS: And to get that. Right.

But when it comes to race, because there is a history of discrimination specific against blacks and Hispanics in the country, then people say, "Well, if you don't have that history, should you be entitled to any preference?" And then you come to Asians, and the discrimination against Asians might not be the same -- you know, it becomes too much of a game.

And at this point, I'm not even sure -- I'm not even sure that it's achieving the goals, when you look at the numbers in higher education in America.

So I would say, you know what we need do, is focus on the entirety -- and I think this is becoming more the case, because now there's a disinclination to focus solely on standardized testing. Is to look at the whole of the person. And that, then, becomes a whole different ball of wax. But that's going to change the way people look at getting into the best schools in America.

PERINO: What is the libertarian point of view on this?

KENNEDY: That you should have the best people--

PERINO: Meritocracy.

KENNEDY: Yes. Absolutely.

WILLIAMS: But what is merit?

KENNEDY: Especially -- in this day and age, it's grades; it's extracurricular activities.

WILLIAMS: Yes. That's the whole person. But some people see that as--

KENNEDY: It's hard work.

WILLIAMS: Did you get -- is it 1600 these days or whatever?

PERINO: Something impossible.

BOLLING: I think it's 24. They bumped it up to 24.

KENNEDY; Yes. So if you're a good test taker, and that happens to be the metric that schools use to allow people entrance, then the good test takers are going to get in. But at least that's some valid criteria that you can compete against, because there are ways of improving your score. There are ways of changing your grades. There are ways of adding more academic and extracurricular activities to your resume.

You can't change your race. Therefore, it's unfair if a certain number of people who have these immutable qualities are kept out of school.

WILLIAMS: So what do you say--

PERINO: Juan, can we get Greg in here, because we're going to run out of time? Because Greg, I was curious about your take on the specific issue. But yesterday on FOX News you posted a column about Tucker's show that kind of talks about interviews like that.

GUTFELD: Yes, he's terrible. He's just an awful person. It's never a good end of an evening if you're a guest on Tucker Carlson--

KENNEDY: I know.

GUTFELD: -- and you haven't done your research. It's like after that, just go to an empty bar. Don't go where people might recognize you, because it's not going to end. You're going to be sitting there going--

PERINO: Don't check Twitter.

GUTFELD: The Tucker interview is something you go over in your head, like I could have said that.

PERINO: Oh, yes.

GUTFELD: "Why did I say this? Oh, my God! He got me on that." And then Tucker's face, he -- it's like he's watching two antelopes mating on "Wild Kingdom." You know? He just stays -- he's just watching.

PERINO: But slightly bemused.

GUTFELD: He's slightly bemused by it, but he's going, "This is interesting. I really don't have to do much but let this person bury himself in his silly words."

So it's highly entertaining.

I don't know. You know what? This is an interesting topic, because you're veering towards an unspeakable truth about racial differences. Asians, you know, why do they require no affirmative action, despite having the disadvantage of being outsiders coming from somewhere else, not being native speakers? And their language is vastly different. There's no -- not much overlap. And they come from vastly different cultures. And they come from countries that we were once at war with. And they come here, and they do fine.

PERINO: Not just fine.

KENNEDY: Maybe there's -- maybe there's cultural importance placed on doing really well in school. And to the credit of a lot of these families, they are actually fighting really hard--

GUTFELD: Tiger moms.

KENNEDY: -- for school choice, which benefits everyone.

(CROSSTALK)

WILLIAMS: Kennedy--

PERINO: But we have to go.

Ahead, a bunch of new announcements from the Trump transition team. We had a visit from one of them just a moment ago. We're going to show you the pictures. Stay tuned.

(COMMERCIAL BREAK)

KENNEDY: Fantastic. She was the first female campaign manager to help propel a presidential nominee to victory. There's been a lot of speculation about what role Kellyanne Conway might play in the upcoming Trump administration. Today, we got the answer. Conway will serve as counselor to the president. She appeared on "FOX & Friends" this morning.

(BEGIN VIDEO CLIP)

KELLYANNE CONWAY, APPOINTED AS COUNSELOR TO PRESIDENT-ELECT TRUMP: It's an honor, certainly, but it's also very humbling, the gravity and the responsibility of serving at a senior level for the president of the United States. It's difficult to pass that up. And I know I've got his ear and his trust. I think those are the two main criteria, and I very much respect the rest of the senior team that you've seen in action already.

(END VIDEO CLIP)

KENNEDY: And I've got the other ear, in my freezer.

There were other major announcements today about the Trump team. Sean Spicer was named press secretary; Hope Hicks, director of strategic communications; Jason Miller, director of communications; and Dan Scavino, director of social media.

Dana, of course, I'm going to you first. This is an important thing.

PERINO: I love these announcements.

KENNEDY: Communications team.

PERINO: If I can mention something about Kellyanne Conway that I think is a real asset, because she mentioned having his confidence and the ear. And I think she also speaks very well for him. So she's a good Trump explainer. She explains it.

And the other thing that she does, because of her background -- she's got a law degree. She's been a pollster. So one of the things that's going to happen at the White House is they're going to want to achieve big things. Like, say it's a big legislative thing, maybe immigration reform or Obamacare repeal and replace.

So if she's the kind of person who can look at that goal and then back up and figure out communications-wise, what do you need to do at certain points in order to make it to that goal. And you're not going to win every day's battle. But she has an ability to have a longer-term view--

KENNEDY: Yes.

PERINO: -- and look around -- and see around corners. So I think she'll be very good.

(BANGING SOUND)

KENNEDY: I'm not sure what that was.

PERINO: The tree fell out of anticipation for the holiday season.

KENNEDY: OK. But quickly, about the communications team, you've Hope Hicks, Dan Scavino and you've got others who have now been--

PERINO: You know what I'm happy about for them, is that they were announced right before Christmas. So they can go have a great holiday with their families. And then they're going to be working really hard.

KENNEDY: All right. So Eric, you have been a vocal supporter of this administration. You've also had many meetings at Trump Tower. And perhaps you've been privy to information and conversations that--

BOLLING: None whatsoever. I'll tell you the extent of my "privy"-ness. I was having dinner last night with my lovely wife. On a table right next to us was Kellyanne Conway and her beautiful family. Her daughters were wonderful. I talked to the husband. And I'm so thrilled that we're going to have Kellyanne close to the president, moving to D.C., because originally, she wasn't going to go. She was going to stay in New Jersey.

KENNEDY: Was she holding out?

BOLLING: Yes -- no, no. She was -- and I think -- and she'll -- she's going to -- she will be on "Hannity" with me tonight, by the way. We're going to talk about it. But three of the daughters are on board now. The fourth one, she's still working. Like she put an online petition, why not to bring the Conway family to D.C.

PERINO: Aw.

BOLLING: Check it out tonight. It's going to be great.

But here's the thing. She's going to be the senior most female in the White House. And I've got to tell you, every woman, my wife included, just think the world of Kellyanne Conway.

WILLIAMS: She did polling on women. So I think she's going to help Trump with a key constituency. But I was on Maria Bartiromo's show this morning- -

KENNEDY: Name dropper.

WILLIAMS: I'm sorry? What did you say?

KENNEDY: I called you a name dropper.

WILLIAMS: Well, no, no. I was saying this, because when I was on Maria's show they asked me about Conway. And I said, but she has four kids, and she's going to have to deal with this. And she said this to me. And then I was immediately lambasted, saying, "Oh, you're going after a woman and saying a woman with four kids -- shouldn't say--" But I remember when the attack was, "Oh, why is Kellyanne Conway not standing up for women by showing that a woman with four kids can take the job?" So congratulations.

KENNEDY: Well, now, she's showing that she can do it. Sean Spicer also has children. And Greg, when's the last time you saw Sean Spicer?

GUTFELD: It's been a long time. I noticed he's quite small.

KENNEDY: Well, look at this photograph we have of Sean Spicer.

GUTFELD: Do we have a picture? Oh, there we are.

KENNEDY: He stopped by "The Five" moments ago.

GUTFELD: He is tiny. Tiny little man. You know what? Tiny little people--

KENNEDY: He's like Herve Villechaiz.

GUTFELD: Tiny little people become huge spokespersons. Like, Dana was a very small person.

So Kellyanne is going to be a counselor?

PERINO: Yes, that's right.

GUTFELD: So--

KENNEDY: She's going to have a whistle and clipboard.

GUTFELD: Like a guidance counselor? A camp counselor? They never turn out well. They always wear the wrong shorts.

KENNEDY: Didn't you see "Meatballs"?

GUTFELD: Oh, I saw it. Yes. I know, I hear you. They're telling me to move. They're saying we've got to go.

KENNEDY: No, they want you to stand.

GUTFELD: So I have a few things I want to add.

KENNEDY: Very good. We're going to break.

GUTFELD: I want to talk about Dan Scavino, huh? He's a great tweeter. He tweeted his way to my heart.

KENNEDY: "One More Thing" is up next. Trust me.

(COMMERCIAL BREAK)

BOLLING: Time for "One More Thing" -- Dana.

PERINO: Time for this.

(BEGIN VIDEO CLIP)

PERINO: Dana's Corny Joke Of The Day.

(END VIDEO CLIP)

PERINO: I promise that in 2017 I will change that voice--

GUTFELD: Please.

PERINO: -- and Greg won't have to plug his ears.

OK, I've got three corny jokes. These are the final ones of 2016. Kennedy's first time--

KENNEDY: Yay!

PERINO: -- for "Corny Joke of the Day."

No. 1, what nationality is Santa Claus?

GUTFELD: Of course, he's white.

WILLIAMS: Oh, jeez.

GUTFELD: That's a callback. It's a callback to the show, people.

KENNEDY: What, your Klan meeting?

PERINO: We'll fill you in on a commercial break.

What nationalist is Santa Claus? He is North Polish.

BOLLING: Very good.

PERINO: Very good, OK.

GUTFELD: I like mine better.

PERINO: What did one snowman say to the other?

GUTFELD: Why are you white? Why is every -- why are we all white? Why aren't there any black snowmen?

PERINO: Good guess, but it's actually, "Do you smell carrots?"

KENNEDY: Aww, that's cute. I like that one.

GUTFELD: That's funny.

PERINO: All right. What does Santa say at the start of a race?

GUTFELD: White people up front.

KENNEDY: Oh, man.

GUTFELD: I'm going to -- it's just a trend now.

PERINO: It is--

BOLLING: Ho, ho--

PERINO: Ready--

BOLLING: Ready, set--

PERINO: -- set, ho, ho, ho.

BOLLING: -- ho, ho, ho.

PERINO: Very good, Eric Bolling.

BOLLING: All right, Greg. You're up.

KENNEDY: I think 50 Cent says the same thing.

GUTFELD: All right. Funny.

(BEGIN VIDEO CLIP)

GUTFELD: I hate these people!

(END VIDEO CLIP)

GUTFELD: All right, all right. Again, I've got to go back to the gym. Somebody is on a stair climber or bike and you decide, "Oh, I'm going to -- I want to watch something on TV," and there's, like, 12 TVs, you should turn around and you should say, "Excuse me. Are you watching this?" And maybe look around at the other TVs and see that the one you're going to change it to without asking is already on.

We don't need three sets on the Kardashians. We don't need three sets on plastic surgery mishaps. I don't want to see that that early in the morning. I don't want to see real-estate shows.

PERINO: You want to see Carol Costello.

GUTFELD: Yes, Carol Costello. "So, some people are saying that you are a racist. OK. We'll have to leave it there. We'll have to leave it" -- that's all she says: "We'll have to leave it there."

BOLLING: Juan is up.

GUTFELD: "We'll have to leave it there."

BOLLING: Juan.

WILLIAMS: Well, anyway, Bill O'Reilly is off delivering gifts to orphans, so I'm going to sit in tonight--

PERINO: Nice.

WILLIAMS: -- along with Dana. Dana Perino is there to hold my hand. Katrina Pierson and Bernie Goldberg.

PERINO: You're in good hands.

WILLIAMS: Anyway, I wanted to find out what was the hottest gift this Christmas season.

GUTFELD: A stove.

WILLIAMS: The first one -- the first one fascinates me. It's called Hatchimals. And this fuzzy little creature hatches before a kid's eyes. It's very hard to get. One dad in Dublin had to go to Spain in order to get it.

PERINO: I'm taking this.

BOLLING: They're young. We've got to get moving very quickly. Tonight, Kellyanne Conway on "Hannity." Also, Harvey Levin. We're going to talk about the JetBlue incident with Ron Cattrone (ph). TMZ broke that story. We're going to ask him about that.

Last night Adrienne went to a Santa -- an amazing, amazing group. It's called Santa's Response Team, Bergen County Law Enforcement. They raise presents for kids, terminally-ill kids and military families. Let me get that last picture in.

PERINO: Wow. Amazing.

BOLLING: Yes, hundreds of gifts.

And my good friend, Detective Kirk Glynn (ph), coming up right here. Right here. There he is on the right. Good people.

Kennedy, you're up.

KENNEDY: Love this story. The Durant Fire Department in Oklahoma, 33 people in that department. Six of the dads sired children this year--

BOLLING: Wow.

KENNEDY: -- and instead of doing a traditional Christmas card, they used all the new babies that were born between February and June.

WILLIAMS: Beautiful.

KENNEDY: Six of them. future firefighters.

PERINO: Oh, my God!

KENNEDY: So delicious. Look at those chubby cheeks. So cute.

They say the brotherhood and family are the most important things to that group.

BOLLING: All right. We're going to leave it right there. Don't forget, Juan Williams at 8, Eric Bolling at 10. Stick around. "Special Report" next.

Content and Programming Copyright 2016 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2016 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.