This is a partial transcript from "On the Record," January 25, 2007, that has been edited for clarity.

GRETA VAN SUSTEREN, HOST: Take a young beauty queen, a pageant winner, toss in some raunchy photos, a few rumors, and what do you get? One racy scandal.

You know this one. When sexy pix of Miss Nevada surfaced, they landed Katie Rees in very steamy hot water.

The pictures? They were old. But Katie, out in the cold. Yes, the Rees reign ended. Donald trump took her tiara. She's fired. Not fair, Katie says. Miss USA, Tara Conner, got rehab and a second chance.

The scandal started last month, but it's far from over. Katie isn't just speaking out. She's now fighting back too. And the former Miss Nevada is right here to go "On the Record."

Joining us are former Miss Nevada, Katie Rees, and her attorney Mario Torres. Welcome to both of you.

Katie, what happened?

KATIE REES, FORMER MISS NEVADA: Gosh, I don't know. I just thought I was being a regular girl, having a good time with my friends. Next thing I know, it was the biggest, hot scandal.

VAN SUSTEREN: All right, let's get a few dates in this. First of all, when did you become Miss Nevada in the Miss USA pageant?

REES: October 7 was the evening of the pageant.

VAN SUSTEREN: When did you get fired by Donald Trump?

REES: Around Christmas time.

VAN SUSTEREN: Was that before Tara Conner got her second chance or after that?

REES: It was after Tara Conner got her second chance. I remember watching it on TV.

VAN SUSTEREN: All right, back me up. Let's talk about these pictures because that's what has gotten you in this dispute with Donald Trump. Where were the pictures taken?

REES: They were just at a local bar that my girlfriends and I used to go to in Tampa.

VAN SUSTEREN: How long ago were they taken?

REES: When I was about 19. I had just come home from college, so almost four years ago.

VAN SUSTEREN: How many pictures are there, about, that are the subject of this controversy?

REES: To be honest with you, I'm not quite sure.

VAN SUSTEREN: How old are you now?

REES: I'm 22.

VAN SUSTEREN: So the pictures were taken about three years before the pageant?

REES: That's right.

VAN SUSTEREN: All right. Did they end up on the Internet? Is that the problem?

REES: Actually, I'm told that the friend at the time, who had taken the pictures, sold them to a station or something.

VAN SUSTEREN: Was that sold after you became Miss Nevada or was that before?

REES: No, ma'am, it was after I became Miss Nevada. It was just around the time of Tara Conner.

VAN SUSTEREN: So obviously somebody got wind of the fact that it could stir up some trouble for you.

REES: Yes. I can imagine. I actually don't think that that was so much the reason as to maybe monetary value.

VAN SUSTEREN: How much do you think the person got for these pictures?

REES: I honestly don't know. But I can imagine that it would be worth it.

VAN SUSTEREN: Mario, how much money do you think that these pictures sold for?

MARIO TORRES, ATTORNEY FOR KATIE REES: Well, Greta, I would probably say they probably sold for somewhere in the neighborhood or a few thousand dollars, if that. Many of these tabloids, as you are well aware of, they try to emphasize these issues and get as much media exposure as they can from exposing these things that happen in many of the celebrities and Miss USA, Miss Universe in the past in order to make a quick buck. I would say somewhere in the neighborhood of $2,000 to $3,000.

I think the point we have to emphasize, though, with the pictures, is that Katie did not take those pictures for any keep type of monetary gain. She was out with a bunch of her friends, being a 19-year-old. Did they get out of hand? Likely. She was being egged on by her friends. She took the pictures. And now, obviously regrets them.

But again, isolated incident. It happened several weeks ago, way before she was even thinking about participating as Miss Nevada.

VAN SUSTEREN: Katie, when you signed up for the pageant for Miss Nevada, when did you first start the whole procedure?

REES: I'm sorry?

VAN SUSTEREN: When did you first get involved with the pageant? When? Was it last August? When did you get started with this pageant?

REES: It was around summertime that I started preparing for the pageant. I had always watched the pageant my whole life as a little girl. And I always wanted to be Miss USA. But it was around summertime that I really took it seriously and knew that I was going to go for it.

VAN SUSTEREN: When you signed up for the pageant, do they give you some kind of contract, some sort of morals clause. Did they ask you anything like nude photos or anything like that?

REES: To be honest with you, no. But after you do win a state, they do give you a contract stating those things. Yes, ma'am.

VAN SUSTEREN: But that's after you have won it?

REES: Right.

VAN SUSTEREN: And I take it — is the agreement — or maybe I should pay that back to you, Mario.

Is the agreement that, from the moment you become Miss Nevada, you promise to be — must hold up some sort of standards of Miss Nevada from that day onward? Is that the way the contract reads, Mario, or not?

TORRES: It does read like that. And the prior contract that she signed, likewise asked her to reveal any type of pictures that are scantily — or that she was aware of that she had taken that, in any way, are scantily clad and/or reveal anything of here.

As previously noted, Katie did not recall taking these pictures. She was with friends. She was being silly. And it was a friend of hers that actually took the pictures.

VAN SUSTEREN: All right. Are these pictures — obviously, the ones we show have you in clothes, at least, the best I can see. We haven't shown them all.

Katie, are you scantily clothed in some of the pictures we don't have that were obviously disseminated?

REES: No ma'am. I just — I was wearing just a tank top and jeans, just out with my girlfriends.

VAN SUSTEREN: All right. We're going to take a quick break. And we're going to find out this whole — with Donald Trump, what you're going to do, what Trump said, when we come back. We have much more.


VAN SUSTEREN: Well Rosie, move over, Miss Nevada Katie Rees stripped of her title after some raunchy old photos surfaced, wants to take on the Donald. Her tiara may be toast but Katie, she is on the mission. Still with us, former Miss Nevada, Katie Rees and her attorney Mario Torres.

Katie, did you speak directly to Donald Trump after your pictures surfaced on -- in public?

REES: No, ma'am. I haven't had a chance to speak with Mr. Donald Trump.

VAN SUSTEREN: If he's watching tonight, what do you want to say to him?

REES: Well, I guess I'd just like to say that I really do admire him. I think he's a very smart businessman and he did what he had to do. I'm just -- you know, it's just a shame that I didn't get the capture the title of Miss USA, so he could really get to know me.

VAN SUSTEREN: do you think you were treated fairly? Now, Tara Connor who was almost stripped of her crown for some partying, went onto rehab and she's getting a second chance. Do you think that the two of you -- that both are treated correctly?

REES: No, I believe that there was a huge double standard given, only because my actions were not at the time of my title of Miss Nevada and also, you know, I wasn't caught doing illegal drugs or -- or you know, kissing Miss Teen Nevada at the time of my title.

VAN SUSTEREN: In terms of -- what do you think of those pictures?

REES: I'm not proud of them, but, you know, I think people are giving me a lot more heat for them than I really deserve. You know, most of my life I never got in trouble, so sometimes it is hard to interview knowing that -- this is something that I -- in some people's eyes something I did wrong. They're just perceived wrong, to be honest with you, it's just a bunch of girls being silly.

VAN SUSTEREN: Who told you that you're out?

REES: Actually my director, the director of Miss Nevada gave me a call and let me know that she had received a phone call from the Miss Universe organization stating that my crown was going to be taken away and she just simply asked how I would like the letter, if I wanted it FedEx or in the mail? I never actually heard from the Miss Universe organization, except for by letter.

VAN SUSTEREN: How do you react to all of this? I mean, how do you feel about all of this?

REES: I'm disappointed and you know, I'm not proud of the pictures and it's not a fun thing to go through, but I'm really just turning it around and -- and making the most out of it, I guess, just being strong.

VAN SUSTEREN: Mario, is it over or is there some sort of challenge that can be done to -- you know file anything or fight this at this point?

TORRES: To be quite honest, it has only just begun. We are -- let me clarify first, the points on the inequity argument, here. We are in a system where our legal system is always based in courts of equity, and that is nothing more than to be fair. The court systems try to be fair. In this instance we have a basic inequity. That is Katie Rees is being treated completely different than Miss USA, Tara Connor. We have circumstances where Katie Rees, during her reign as Miss Nevada, did nothing wrong, acted completely appropriate versus Tara Connor, which did not.

VAN SUSTEREN: Let me ask -- before we run out of time, Katie, assuming that your title doesn't get restored, what's in your future? What do you want to do?

REES: To be honest with you, I'd really like to pursue my acting career. I've been a sag actress since I was 7-years-old. I have the same agent, Randal Edwards at the Talent Network Atlanta, since I was 7-years- old, and he's been backing me the whole way and this Monday, my good friends at Jet, at The Mirage, Jet nightclub are throwing me a huge party and they're going crown me the queen of Jet Las Vegas, so right now, my friends are just celebrating the fact that I'm being so strong and they're proud of me no matter what.

VAN SUSTEREN: So we're going to see an acting career out of you?

REES: I hope so. That was the plan before all of this, anyway.

VAN SUSTEREN: And of course, now it has been aborted and we'll have to see what does happen to it.

Katie, good luck to you. Mario, thank you very much for joining us.

TORRES: Thank you of that.

VAN SUSTEREN: And we wish you the best. Thank you.

REES: Thank you.

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