This is a rush transcript from "On the Record," October 6, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Republican congressman Darrell Issa is an outspoken critic of ACORN. We went to see Congressman Issa on Capitol Hill, and he went "On the Record."


VAN SUSTEREN: [The] CEO was speaking today, and she has said that it was like McCarthyism, what is going on vis-a-vis the Republicans versus ACORN. I take it you don't agree with that.

REP. DARRELL ISSA, R - CALIF.: Well, you know, I -- I understand that she would think of the chairmen (ph), but in fact, we're in the minority. We're simply able to put out the facts that we can find from publicly available sources, and ultimately, we've been vindicated by the facts of what happened at ACORN and what continues to happen with the majority making decisions to de-fund ACORN.

VAN SUSTEREN: ACORN still getting money from the government?

ISSA: Yes, they are. It's beginning to fall by the wayside because, obviously, when they ask for grant money, they no longer have the political clout to get that money the way they once did.

VAN SUSTEREN: Are you of the mind that all ACORN money spent so far has been waste or subject of fraud, or do you think some of it's been a legitimate expense for good purpose?

ISSA: Oh, absolutely, some of what ACORN has done has been in support of good causes, and they bring that up all the time. But you know, Bernie Madoff gave to charity. That doesn't necessarily make up for the bad work done. And there are lots of charity, non-profit groups out there who regularly compete against ACORN for those same grants. They would do them without the adverse side effects.

VAN SUSTEREN: What do you expect ACORN to do at this point, or do you think it should be the Justice Department going in and doing a full-scale investigation, or do you think ACORN should be doing something?

ISSA: Bertha Lewis has an opportunity even today to have outside auditors, real, live independent auditors, not a Democrat operative that makes a quick brush-over, which, by the way, we believe still shows the lack of firewalls. But if she calls in, as I said the other day, Price Waterhouse Coopers or some independent audit organization, says, Audit our books, figure out where the money went and tell us what we need to do, then she could begin to rebuild the organization.

VAN SUSTEREN: Why don't you think she's done that?

ISSA: I don't think she's done it for the same reason as we don't know whether $1 million or $5 million was embezzled more than eight years ago. This is a group that lives on its internal secrecies and doesn't want us to know where the money went.

VAN SUSTEREN: Are you satisfied that $5 million is the top lid (ph), or could it -- or are you suspicious it could be more?

ISSA: You know, embezzlement is a business of secrets, and it's very hard to know how much was misdirected in that case. But remember, A lot of money's misdirected as a matter of practice. Money is recruited from all kinds of sources that ends up in political activity.

VAN SUSTEREN: All right, now, I know you've been in Congress about eight years. I won't blame you for every ill of the Congress. You won't blame me for every ill of the media. But why did it take two young people with a camera? I mean, the Congress has been dishing this money out to them. Why didn't you check up and see where your money was going, or where our money was going?

ISSA: Well, I'm very thankful for those two whistleblowers because they did in a matter of minutes on FOX what my 88-page report and six months of work published in July couldn't do, it got the attention of media, so the media's beginning to look at all the sins ACORN, including one third of all their voter registration applications being fraudulent. There's a lot that we covered in July that only came to light really when it became salacious.

VAN SUSTEREN: Can we be confident that this has sort of lit a fire under Congress, and now the Congress is going to be more vigilant in terms of the money that's handed out, especially in these millions and billions categories? Can we feel a little better, sleep a little better at night?



VAN SUSTEREN: All right, thank you, Congressman! Thank you very much.


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