This is a rush transcript from "Hannity & Colmes," November 14, 2008. This copy may not be in its final form and may be updated.

SEAN HANNITY, CO-HOST: And welcome to "Hannity & Colmes. We get right to our "Top Story" tonight. Now earlier today the unrepentant terrorist Bill Ayers, he sat down with Chris Cuomo of ABC News for an interview this morning on "Good Morning America."


CHRIS CUOMO, "GOOD MORNING AMERICA", ABC NEWS: Barack Obama was campaigning to be president. The analogy is if John McCain had an association, if somebody had a coffee for him in his house to launch his political career, who is blowing up abortion clinics, but never hurt anyone, you don't think that would be relevant?

AYERS: I think the content is relevant, but let's go back again, the content of the Vietnam protest is a content where there were despicable acts going on, but the despicable acts were being carried out by our government.

I never hurt o r killed anyone. I know I was involved in the anti-war movement. I was a militant — I was part of the militant faction of opposing the war. I have been quoted again and again as saying I don't regret it.

And frankly — and am saying I don't think we did enough, and I don't think we did enough.


Video: Watch part 1 of the panel discussion of Bill Ayres' interview | Part 2

HANNITY: I also spoke to Chris Cuomo of ABC News this afternoon on my radio show.


CUOMO: You're dealing with a very polished intellect in Mr. Ayers. I think that would be objectively true. I guess it could be that he does have his perspective on things and that that' s just his legitimate representation of him. It also could be that this is somebody who's trying to protect Barack Obama, the president-elect, that that is what he had decided to do.

I don't know that. I can only represent from what he said. But certainly when we got into the ground about his own past, and you and I have discussed this before, his relationship with Obama is one issue. His particular past is a separate issue at least for me.

And I was a little surprised that he did not draw more of a bright line distinction between wanting to serve people today with a message of what is healthy dissent and what is wrongful dissent. I was surprised that he did not condemn violence in all forms and manifestations under any circumstances.

I was surprised he didn't do that.


HANNITY: Joining us tonight with reaction are three men who know a great deal about Bill Ayers. Larry Grathwohl, a one-time FBI informant. He infiltrated the Weather Underground when Ayers was the leader. Stanley Kurtz of "The National Review." He has investigate the relationship between Bill Ayers and Barack Obama.

And John Murtagh whose childhood home was bombed by the Weather Underground because his father was a judge presiding over a trial involving the Black Panthers.

So, guys, welcome aboard. Thanks for being with us.

Mr. Grathwohl, you — you infiltrated this group. You were there when, in fact, Bill Ayers was there. He had given you — because I have talked to you before, he had given you specific details, even told you to pick the location of where to set off the bomb, showed you how to build bombs. Give us the details of your life with Bill Ayers.

LARRY GRATHWOHL, FORMER FBI INFORMANT: Well, when the group went underground in early 1970, Bill was one of the members of the central committee. He was assigned people to the cells in various cities throughout the United States.

I was assigned to Detroit and we were planning to bomb the DPOA building in the 13th Precinct. He told us what the bomb should contain, (INAUDIBLE) staples and nails in order to injure people and kill them. When I protested that one of the bombs would destroy a restaurant, Bill said, well, sometimes innocent people have to die in a revolution.

So his position that he never tried to intentionally hurt anyone is simply not true.

HANNITY: He's a liar. Yes, so, but.


HANNITY: In your time with them, he is, and as we can hear in this interview with Chris, and I thought Chris did a good job this morning, he is presently an unrepentant terrorist. He is a terrorist. There's no difference in sitting across, you know, the table from Tim McVeigh or an al Qaeda member, is there?

GRATHWOHL: Not in my opinion.


GRATHWOHL: And he had — the line he tries to draw that they simply were involved in property damage as I have indicated is simply not true. But even if that were the case, what's the justification for bombings? And that's a terrorism to me.

HANNITY: Well, it is. It is terrorism. I mean, as we heard in the interview with Chris this morning, you know, he doesn't regret it. He's — and he said that before. We have an image o f him stomping on the American flag.


HANNITY: Free as a bird, guilty as hell, what a great country. Then in "The New York Times" on September 11th, of all days, you know, that's a day he said I don't regret setting bombs. I wish we did more.

Now, you, John, your dad was a judge, presiding over the Black Panther trial. There were — how many bombs set outside your house?

JOHN MURTAGH, VICTIM OF WEATHER UNDERGROUND: Four bombs. February 21st, 1970. I was 9 at the time, Sean. The Weather Underground, New York cell, set four firebombs off at our house, two at the front door, two under the gas tank of the family car, trying to really create what today we call a car bomb.

HANNITY: Right. All right. And Stanley, let me go to you here for a second, because you've done great work on — I call it KaLo land, "National Review" online for Kathryn Lopez who runs the site.

Look, we know that the — look, he's been elected president. My question is do we really know the real Barack Obama? You've done a lot of investigative work. You know, his rationale, I was 8 years old. I thought he'd been rehabilitated.

These are all comments that he's made over time. But he did sit on multiple boards. He did give speeches with. His wife worked with Bernardine and they did start his political career in the home of this unrepentant terrorist.

I have my opinion. He has all these radical associations.

What do you — and with all your investigative work, what do you conclude?

STANLEY KURTZ, NATIONAL REVIEW: Well, Sean, I think it's very clear when you look into it that Barack Obama had close relationships to a lot of people on the very far, even radical political left during his years in Chicago.

Bill Ayers was a very big part of that. The amazing thing is as tremendously important and completely legitimate as the issue of Ayers' early terrorist history is, even if you set all of that aside, Ayers remained very radical during the years of his education work and foundation work.

This would be a big story even if the terrorism hasn't existed, just because Barack Obama was so — working so closely, even giving hundreds of thousands of dollars to Bill Ayers for education.

ALAN COLMES, CO-HOST: Stanley, it's Alan Colmes. We just had an election. And I know we talk a lot — about a lot of that stuff. And I'm not defending Bill Ayers. I want to ask you this, but people decided pretty much that this didn't matter too much in terms of who they wanted to be president of the United States, knowing to a large extent some of the things that you have talked about.

So is that still relevant? Is there some secret, dark mystery, as Bill Ayers put it tonight, that we don't know about his relationship with Barack Obama, that somehow if it were revealed, we'd have this brand-new opinion of the president-elect?

KURTZ: Well, quite honestly, Alan, I don't think the American public knows even a part of what's really been going on because the mainstream media hasn't been covering it.

COLMES: What don't we know?

KURTZ: For example, the (INAUDIBLE) Foundation. How many people have heard of that? The New Party which Barack Obama was affiliated with. How many people have heard of that? The news media haven't been covering a whole series of stories about Barack Obama's connections.

COLMES: But what — what these events you mentioned would be so damaging and hurtful and give — and instill more fear in us that we should be so fearful of this man who is about to become president.

Is there some piece of some nugget that we need to know that would instill fear in America about the president-elect?

KURTZ: Well, I don't think that's the way to put it. I don't think we're looking for killer, destructive piece of information, but a total pattern which shows that Barack Obama, as he portrayed himself during the campaign, as a moderate, pragmatic, common sense kind of person, that that's not really the true story. That his real sympathies are with the far left en d of the spectrum.

COLMES: Well, now that he's been elected should he not have a chance to spread his wings as president once he gets into office and be judged on what he does or should we prejudge him not — after only a wee k and a half of him being president-elect?

KURTZ: Well, I think we should keep in mind a whole bunch of stuff that the media hasn't reported because I think Barack Obama is not going to do all the most radical things in the world right away, but I think he sees his election based on his philosophy from the past as an opportunity to begin to shape the culture in a far more left toward direction.


COLMES: Twelve years as a legislator and he has not been a crazy, left- wing radical as has been portrayed.

KURTZ: Yes, he has.

COLMES: No, he has not.


KURTZ: His legislative record in Illinois is very far left and frankly I don't think the McCain campaign did a good job.

GRATHWOHL: Mainstream liberal.

GRATHWOHL: . of connecting the dots in all that.

COLMES: Mainstream Democratic. Anyway, we'll continue in just a moment . More with our panel after the break. And then as a new deal on the rise on this week's "TIME" magazine cover story says it could be and is even comparing Barack Obama to FDR. We'll discuss it coming straight up.



AYERS: Here we were in a situation where really a violent terrorist war was being waged against an entire population. We objected. We tried to end that war . And in trying to end it, we did cross lines of propriety, of legality, maybe even of common sense. But we never committed terror.

CUOMO: Why not? I have a tough time understanding this. How is what you did there, blowing up — detonating a bomb in the Pentagon, in New York Police Department headquarters, trying to target the Capitol, how is that not terrorism?

AYERS: It's not terrorism because it doesn't target people, it doesn't target people. Either kill or injure.


COLMES: That was William Ayers describing the actions of the Weather Underground, a terrorist group he once ran.

We now continue with Larry Grathwohl, Stanley Kurtz and John Murtagh.

Mr. Grathwohl, let me ask you. Why wasn't he prosecuted by the FBI? What happened to that case? If he's guilty of all these things, why isn't he or wasn't he locked up ?

GRATHWOHL: Well, the FBI had used illegal wiretaps in surreptitious entries. And because of that, the courts threw the charges out against Bill. So Bill got off on a technicality. Believe me, he is guilty of the things that I witnessed him do.

COLMES: You knew that he is guilty of things, yet the FBI basically blew the case by its actions is what you're saying.

HANNITY: Ayers admits it.


COLMES: Excuse me, go ahead.



COLMES: There is a statute of limitations. Do you still want something to happen to Bill Ayers ? I mean what do you want to have happened to him? Do you want to — should there be legal action? What do you want to do?

GRATHWOHL: Well, I think if Bill Ayers is going to get on "Good Morning America" and claim that he wasn't a terrorist that it's my obligation to stand up and say yes, he was.


GRATHWOHL: Not only was he.

COLMES: Go ahead.

GRATHWOHL: Go ahead.

COLMES: No, go ahead, sir.

GRATHWOHL: Not only was he a terrorist, but he tried t o kill people. And he claims that they didn't.

COLMES: Yes. If you're going to bomb property, I mean, even threaten people or there is a possibility of people getting hurt, that is terror — people are terrorized by that.

Mr. Murtagh, you're proof of that. I mean you're.

MURTAGH: Well, let's face it, Alan.


MURTAGH: When he bombed — when he bombed property, in my case, they bombed property that five people were sound asleep in the middle of the night. You know for Mr. Ayers to say he crossed the line of propriety, let's go talk to the family of Officer Brian McDonnell who was murdered in San Francisco with a Weather Underground bomb four days before my family was attacked.

Let's ask them if that's crossing the line of propriety.

COLMES: Was he personally involved in what happened to you and your family?

MURTAGH: His wife took credit for the bombings in New York. The same night that my house firebombed, they firebombed a building at Columbia University. They firebomb the precinct in Greenwich Village. They fired firebomb — two military recruiting stations in Brooklyn.

And six months later, his wife, Bernadine Dohrn, who was also involved in the San Francisco bombing four days earlier, took credit for the bombings in New York.

COLMES: Where were you at the time of the bomb?

MURTAGH: Sound asleep in my bed at the age of 9.

COLMES: And how did you as a 9-year-old take in that information? What did you — what was your understanding about that?

MURTAGH: My understanding was that at 3:00 in the morning, my mother had to pull me out of bed, run downstairs to the kitchen where my father was waiting, and we were afraid to leave the house because we didn't know who was outside.

COLMES: Stanley Kurtz, I go back to what you've done during this campaign about this. I mean you've tried to tie all of this to Barack Obama.

Did Barack Obama — by the way, it was said and Bill Ayers said today he went to 20 houses that day. He was one of them. Should we investigate all 20 houses, all the families that were visited on that day to make sure all those associations?

How far do you want to take this?

KURTZ: Well, he didn't give hundreds of thousands of dollars to the people in those houses which he did to Bill Ayers and many millions more to the political allies of those people. He didn't plug their book on juvenile crime and work with them to defeat the juvenile justice bill in Illinois.

I mean this is a serious political partnership we're talking about here.

HANNITY: Hey, and by the way, Larry, he also dedicates his book, and kudos to Chris Cuomo for pointing this out, something we talked about here, dedicates another book to the murderer of Robert Kennedy, Sirhan Sirhan.


HANNITY: Well, yes, exactly. I guess this comes down to what should the American people — I know how I feel about it. I don't believe, I think it's a question of honesty and judgment. All right. But what should the American people — you're a part of this group.

Do you believe Barack Obama and what he's saying? We know Bill Ayers is lying because you were — you infiltrated the group. They bombed John Murtagh's home. You guys have testified. What he said this morning, this gutless, coward terrorist is a liar that we have o n our screen here.

But what does it say about Barack Obama? Do you believe him?

GRATHWOHL: Well, I think Bill has answered that question, didn't he ? According to Barack, he hardly knew Bill Ayers, but according to Bill Ayers, he was a family friend. And I think that at the very least brings into question Barack's judgment where people are concerned, and I don't think that he adequately answered that question during t he election .

HANNITY: John, I have in front of me, this is 60-some-odd questions, 63 questions that if you want to work for the Obama administration. Question 20, please provide the names and details of any individuals and organizations of which you or your spouse have been associated with that might present a conflict of interest with your proposed office or have the potential for embarrassment, or have you ever had any association with any person, group, or business venture that could be used to impugn or attack your character and qualifications?

He can't even pass his own application.

MURTAGH: You know, Sean, it's interesting. Listen, I didn't vote for Barack Obama, but Barack Obama won. He's my president and yours. And for our sake, we should hope he succeeds.

But you raised the point that someone raised during the campaign which is that if Senator Obama applied for a job in the Obama administration, he couldn't get it because of security clearance.

HANNITY: Wait a minute. Could — Larry, could he get a basic security clearance? Stanley, could he get a basic security clearance?


KURTZ: I don't know. And I don't think he needs to be challenged on that issue for us to see. Not that it — you know it's worth talking about. But there is so much of a problem even without getting to that level. There is a problem with his general political orientation and it's pervasive.

HANNITY: My last question is, Larry, you talked about this being a technicality. We're forgetting one thing here. He admits it. He brags about it. He says he didn't do enough. He is guilty as hell, free as a bird, what a great country.

So we have a terrorist, an unrepentant one, not sorry as he showed in this interview with Chris Cuomo out there on the streets . That's pretty frightening, in a post-9/11 world. That's pretty frightening to me.

GRATHWOHL: And claiming that he wasn't a terrorist.

HANNITY: No, but we all agree what he did to John Murtagh, what he did in all these bombings at the Pentagon and Capitol.

GRATHWOHL: Absolutely.

HANNITY: . that's terrorism, right?

GRATHWOHL: I'm sure when he woke up after those bombs went off, you know, he must have wondered if the world was coming to an end or what was happening to him.


GRATHWOHL: And he can thank Bill and Bernardine for that.

HANNITY: All right. Guys, thanks for being with us. Appreciate it.

GRATHWOHL: Thank you.

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