Gen. Flynn talks intel Obama received on ISIS; Carson addresses remarks about American Muslims on 9/11

This is a rush transcript from "The Kelly File," November 23, 2015. This copy may not be in its final form and may be updated.

MEGYN KELLY, HOST: Breaking tonight, a new warning for Americans as we head into the holiday season, as the State Department now issues a global travel alert, urging all Americans to use caution, avoid large crowds, and to be particularly careful at holiday festivals and events.

Welcome to "The Kelly File" everyone. I'm Megyn Kelly on assignment tonight in Washington, D.C. These types of alerts are usually issued when there is a higher threat level and specifically refer to overseas travel.  However, there have not been many of these over the past few years. Right now, it would seem that authorities believe the likelihood of terror attacks will continue. This of course follows the devastating attacks on Paris that claimed 130 lives. At this hour, an international manhunt is under way for fugitive suspect Salah Abdeslam. He is the man who stop -- was stopped by police after the attacks but was let go.

Earlier today, a French street cleaner found what appeared to be an explosive vest, similar to the one used in the November 13th attack.  Authorities now trying to figure out whether it belonged to this man, who is suspected of slipping across the French border into Belgium. And it was there late last night that some 21 people were rounded up in terror raids.  Most have since been released, but we understand four suspects have been arrested and charged with terror-related offenses in recent days.

Meantime, the Belgian capital remains locked virtually locked down.  The schools, the subways closed over what is being described as a serious and imminent threat to the city. We have a huge show for you tonight, complete with the very latest on this worldwide travel warning for Americans.

Plus, we'll look into just how safe we are here at home. The politics of the war on terror. And presidential candidate Ben Carson is here. But we begin with a troubling new report, suggesting someone tampered with the intelligence on ISIS that is being given to President Obama. And the question tonight is whether that was directed by Obama or his staff.

In moments, we'll be joined by Lieutenant General Michael Flynn, who served as the director of defense intelligence under President Obama, or the DIA. We'll also be joined by a former Islamic extremist Majid Nawaz who has a surprising take on the President's handling of ISIS.

But we begin with our chief intelligence correspondent Catherine Herridge reporting from Washington. Catherine.

CATHERINE HERRIDGE, FOX NEWS CHIEF INTELLIGENCE CORRESPONDENT: Well, thank you, Megyn. The investigation of the Central Command which oversees 20 nations including Iraq is expanding tonight. Fox News is told that the pressure on CENTCOM analysts from their supervisors included at least two emails suggesting the analyst should dial back on the negative intelligence reporting. A former Pentagon officials said, there was apparently an attempt to destroy these communications. Those familiar with the intelligence leading up to the ISIS land grab in 2014 say there were multiple intelligence reports from the CIA and military intelligence warning about the rapid rise of ISIS in Iraq, North Africa, as well as Egypt. The intelligence was stark and any manipulation of the CENTCOM report was not enough to justify the President's jayvee comments. Despite the warnings, the official who was part of the White House's discussions said the administration kept, quote, "Kicking the can down the road," adding the president didn't want to hear it. The charge described as baseless today at the White House briefing.


JOSH EARNEST, WHITE HOUSE PRESS SECRETARY: What the President has long said and what he said again in that news conference is that he has made quite clear to military leaders and to intelligence officials that he's looking for the best, most accurate assessment of what's actually happening that he can possibly get. Because that's only going to improve his ability to make decisions about policy to address the situation on the ground.


HERRIDGE: And tonight FOX News confirming that the chairman of the Joint Chiefs General Joe Dunford is requesting a new report from the Defense Intelligence Agency on ISIS, which reflects the recent air strikes by Russia, the Paris terror attacks and the bombing of a Russian jet last month. Fox News has told that Dunford wants an unvarnished report and the request is not connected to the controversy over the intelligence assessments -- Megyn.

KELLY: Hmm. Catherine, thank you.

HERRIDGE: You're welcome.

KELLY: Well, my next guest has been at the forefront of our nation's intelligence apparatus for decades, most recently providing direct intelligence to President Obama. He's aware of most everything the President received from 2011 to 2014, including intelligence on terrorism in the Middle East and the rise of ISIS. He's even sat down to speak with terrorists and he's seen a lot of dead ones too. Retired Lieutenant General Michael Flynn served as director of the Defense Intelligence Agency under President Obama from 2012 to 2014. Before that, he served as director of intelligence at United States Central Command or CENTCOM which oversees the Middle East. Great to see you, General. Thank you for being here.


KELLY: So, you were there. You know what President Obama saw every day from 2011 to 2014. You tell us what was said about ISIS.

FLYNN: Yes. So let me just start by saying that intelligence doesn't start and stop at Central Command. There are 16 intelligence agencies, there's five large ones and there's two that provide what we call all- source intelligence assessments. Those are the most important ones that go into the White House. And I will tell you that accuracy and the warnings that have been provided on the rise of radical Islamists over the last few years have been very, very clear. So what the President has actually received from the national intelligence system is pretty good intelligence.  And I would say it's very accurate. So what he's done with that intelligence, you know, from what we can tell right now is, you know, he's taken on this really lousy policy --

KELLY: But before we get to the policies, I want to stick to what they know. Because even today the White House was not refuting assertions that they had put out earlier that President Obama was surprised, he was surprised at the strength of ISIS. You were in a position to know. Is that true? Was he surprised when ISIS took off?

FLYNN: There was so much activity and so much I think accurate reporting coming out of all parts of our intelligence system that were going into the U.S. intelligence system and into the White House. So to say that "I'm surprised at the rise of this threat" is really -- it's gross understatement as to what reality is.

KELLY: What about this manipulation? This reported manipulation of the data, that the intel analysts were being told, we don't like that message, fix it to comport more with the narrative coming out of the White House?

FLYNN: Yes, I think --

KELLY: It's not that the Iraqi soldiers abandoned, it's that they redeployed.

FLYNN: I think that this issue of not meeting a narrative out of the White House, which meant, don't talk about radical Islam. Don't talk about this as being a form of a radicalization of the Islamic religion, which in fact, it is. It is a cancer inside of the Islamic religion and the White House and the President frankly has not wanted to say that. So, if you continue to get this pushback, which is really what happened, and I think that's what you're seeing from the analysts, the great analysts down at CENTCOM, which have been at this thing for a long, long time --

KELLY: Jumping up and down trying to say, pay attention.

FLYNN: Right. And many of them have been deployed for many years in Iraq and Afghanistan and elsewhere in their war. So, you know, I think that the focus of really this investigation, they'll find wherever they're going to find, you know, and some of the tactical issues at CENTCOM, but the focus of this investigation ought to start right at the top. Where intelligence starts and stops is at the White House. The President sets the priorities and he's the number one customer. So if he's not getting the intelligence that he needs and if he's not paying attention to what else is going on, then something else is wrong there between them and the advisers that he has.

KELLY: One person who was not underestimating this threat was you.  And I just, before I let you go, you have to tell the viewers back in 2006, there you were and you actually stood over the body of one of the most notorious terrorists we've faced, Abu Musab al-Zarqawi. Tell us.

FLYNN: Yes. So, just briefly I think when we kill al-Zarqawi in 2006, we felt good about it because we had been hunting him for a long time, almost three years at that point in time. But we knew that the problem was not going to end with his death and we felt -- as good as we felt seeing the accomplishment of that mission, we knew that this thing was far from over and we have been following that ever since. And it has not gotten better and it has in fact doubled or in some cases around the region tripled in terms of the size and scope of the problem. So nobody can sit here today, no one, and particularly though the amount of intelligence at the White House got and say, we didn't know this was a problem. I mean, give me a break.

KELLY: Great to see you, General.

FLYNN: Thanks, Megyn.

KELLY: Well, my next guest is a former Islamic extremist whose actions landed him in an Egyptian prison for about four years. He has since changed his ways and written a book. Maajid Nawaz is author of "Radical: My Journey Out Of Islamist Extremism" and he is also founding chairman of Quilliam, a globally active think-tank focusing on issues like extremism and immigration. Majid, thank you very much for being here. So, your thoughts on President Obama's strategy?

MAAJID NAWAZ, FORMER ISLAMIC EXTREMIST: Yes, Megyn. I mean, I think I would endorse a lot of what we just heard. Unfortunately, I don't think this current administration has this issue of Islamic extremism correct from day one. It's been from comparing them to the jayvee team all the way through to allowing the red line to be crossed in Syria, all the way through to the situation we have today where just a day before the France attacks, the President stated that ISIS is being contained in Iraq and Syria. The policy from day one has been a policy of obfuscation denial, and unfortunately a lack of action and a lot of strategy.

Now, I don't believe what we're facing, unlike what the Pope mentioned and what King Abdullah endorsed. I don't think we're facing World War III.  On the country actually what I think we're facing is a global Jihadist insurgency. And how an insurgency differs from a traditional war is that insurgencies by definition rely upon a certain level of support within the communities that they're seeking to recruit from.

KELLY: Uh-hm.

NAWAZ: And as we know with ISIS, 6,000 fighters have gone and joined the worst terrorist group that we've ever known in modern times, from Europe. Now that 6,000 doesn't appear in a vacuum. Those 6,000 weren't radicalized overnight. I go so far as I say, ISIS didn't radicalize those 6,000 who joined them. ISIS plopped the low-hanging fruit --

KELLY: But to those in the administration who would have us to believe, oh, it's just a small, it's a smattering of people, you know, they're based mostly in Syria and we're after them in Syria. What say you?

NAWAZ: No. Absolutely, it's incorrect. I mean, those 6,000 that joined ISIS in Europe, ISIS plot below hanging fruit. And the reason they were already radicalized is because for decades in Europe, we have Islamist groups working within Muslim communities, who have been busy radicalizing Muslims in Europe. I know I was one of those being radicalized. They've been proselytizing, and preaching the idea or notion of resurrecting a theocratic caliphate. So along come ISIS, 10, 15 years later and declare that they've established this caliphate. People had already been primed in anticipation for the return of this so-called caliphate. In surveys, 33 percent of British Muslims have sympathy for the notion of resurrecting a caliphate. So we're not looking at ISIS as the main problem. We're not even looking at this now defunct term that the State Department used to say --

KELLY: What about radical Islam? I want to talk to you about that, because the President says, and his support as Hillary Clinton says, we don't say radical Islam, it's just going to alienate mainstream Muslims.  Your thoughts on that?

NAWAZ: Well, I think actually, you know, there's a danger if we don't name this, this Islamistic extremism and isolate it from mainstream Muslims and then undermine it, on the contrary exactly what the State Department is hoping to avoid will be brought about. Because, you know, when we don't name something, the vast majority of people that don't really understand these complex conversations would assume the problem is with the religion of Islam and Muslims themselves. It's only by naming it that we're able to isolate it from mainstream Muslims and say the problem isn't Islam, the problem is Muslim theocracy, the problem is Islamic extremism, those who wish to impose a version of Islam over a society.

Now, this idea that it has got nothing to do with Islam is as preposterous as saying, he's got everything to do with Islam. The truth is, Megyn, it's got something to do with Islam. That something is the fact that Islam is being politicized, it has been for decades within our communities. And it's about time we recognize that, name the problem, isolate it from mainstream Muslims, and then all of us together, Muslims included but everyone else as well. It's all of our responsibility, to then go about challenging this ideology and undermining it.

KELLY: I'll tell you what's extraordinary. Right here we have a former Islamic extremist making points, and the former head of the Defense Intelligence Agency is sitting right next to me shaking his head in agreement. These two men are on the same page with respect to a lot of --

FLYNN: Violent agreement. A violent agreement.

KELLY: Violent Unbelievable point on which to end. Thank you both tonight so much.

NAWAZ: Thank you.

KELLY: So what happens if it turns out that someone did cook the books on the Islamic State intelligence reports?

Chris Stirewalt, Steve Hayes, and Peggy Noonan detail how the fallout could be explosive.

Plus, on top of the new travel warning issued late today, we are getting new details on stepped up security for the busy holiday week ahead.

Trace Gallagher has that. And James Kallstrom, formerly of the FBI joins us to discuss the security challenge here at home for the FBI.

And then Dr. Ben Carson taking heat for reportedly insisting that he too saw American Muslims celebrating after the tragedy on 9/11. Joining Donald Trump in a very controversial claim. But now he is suggesting that's not how he feels at all. And you'll get the story right from him when he joins us in moments.


UNIDENTIFIED FEMALE: Dr. Carson, were American-Muslims in New Jersey cheering on 9/11 when the towers fell, did you hear about that or see that?



KELLY: Breaking tonight with just days to go before the start of the holiday travel season, the State Department issues a worldwide travel alert, due to a higher threat level around the globe. While it does not apply specifically to the United States, it does cover one of the busiest travel weeks of the year here, at a time when millions of American will gather in big crowds for holiday events and the start to the Christmas shopping season.

In a moment, we'll be joined by James Kallstrom, former assistant director for the FBI. But first Trace Gallagher reports from our breaking news desk. Trace?

TRACE GALLAGHER, FOX NEWS CORRESPONDENT: Megyn, the State Department warning says that everyone from ISIS, to al Qaeda, to Boko Haram are planning terror attacks in multiple regions using conventional and non- conventional weapons. And while the warning focuses on the holiday season, this alert doesn't expire until February 24th of next year. So it's not as if the worry is overcome January 2nd. The State Department points out that sporting events, theaters, open markets and aviation services had been targeted and then says, quoting here, "Be aware of the media surroundings and avoid large crowds or crowded places." Even though the State Department warnings say, they're worldwide, they do not cover the United States, because here at home we're getting very different advice from Homeland Security Secretary Jeh Johnson. Listen.


JEH JOHNSON, DEPARTMENT OF HOMELAND SECURITY SECRETARY: We encourage American's, as the holiday season approaches, to continue to travel, to associate, to go to public events, to go to public places.


GALLAGHER: So being in crowds is only recommended inside the United States. And to prep for the upcoming holiday events like the Thanksgiving Day Parade and New Year's Eve, hundreds of New York City first responders simulated a subway terror attack, including an attacker wearing a suicide vest. The three-hour active shooter drill was deemed a success, even though more than a dozen simulated commuters were mortally wounded. NYPD and Homeland Security say more practice runs are now being scheduled -- Megyn.

KELLY: Interesting point you raise there at the end. Trace, good to see you. Here with more, James Kallstrom, a former FBI assistant director who oversaw all matters relating to counterterrorism and security for the state of New York. He was also the point man in New York when it came to dealing with the White House office of Homeland Security. James, great to see you.


So, I mean, not to be too much of a cynic. But does this stuff work?  I mean, really, is there anything we can do to actually prevent an attack like we saw in Paris short of good intelligence?

KALLSTROM: Let me say it first, I think your two previous guests I agree with totally also. And General Flynn is a real patriot. But yes, I mean, it's a Herculean task. It's based on state, you know, local, federal, all working together. It's a bad time to have demoralized police departments. You know, they're really the first line of defense. NYPD does a great job. I'm sure the major departments and other cities do a great job. Looking for those types of things, I'm sure all the roll calls when the cops go out on the streets, you know, they'll going to emphasize things that look for the unusual, you know, look for something that doesn't belong. You know, after months and years of looking at these neighborhoods that they patrol, you know, things stand out to them. You know, are they bunking out in some state forest somewhere en route to New York, you know, or whatever? You know? So don't think that the benign is necessarily the benign.

KELLY: You know, it's a miracle James when you think about the fact that even this week, we have three million people coming to New York for the Thanksgiving Day Parade which everybody watches in the country.


KELLY: If you put it on a Thanksgiving morning. You have a million people coming to Times Square on New Year's Eve, not to mention those who just, you know, come in for the holiday season. It's amazing that nothing has happened at these events in the past, you know, 15 years.

KALLSTROM: Well, you know, the terrorist task force has done a huge job. You know, replete with all kinds of fantastic results and cases.  But, you know, they can only keep these fingers in the dam so long, Megyn.  I mean, think about it, you know, that's why we've been complaining, I've been complaining, others are complaining for years now, for a decade, that you know, we've got to close the border. These sanctuary cities have to go. I mean, we need the cooperation of the Muslim community. I mean, the first line of defense really, I've said the state and local police, but it's really the citizens, you know, that live in these communities and what did they see. And when the day comes that the Muslim community is turning in those to get radicalized, and they have to know when they get radicalized.

Look at the captain of the Boston police force just a few weeks ago.  They have to basically call up the terrorist task force and say his son was being radicalized and take a look at him. I mean, people know when their sons are being radicalized. You know, there has to be more cooperation coming out of that community. You know, the aviation situation is tough.  There's a lot of things at the airports I'd rather not go into them because that I don't want to disclose, you know, what my view is they've got vulnerabilities out, but there are many. And as we talked before on other nights, you know, the FBI is just so terribly undermanned and under-womaned that it's going to be really -- and they're going to be working 18-hour shifts believe me and that won't be enough either.

KELLY: I know. And I know you have got some questions about Comey's claims otherwise last week. I don't think that they let me speak for all women, but I think you can say undermanned. It's all inclusive.

KALLSTROM: I know, but I must say the FBI has some great women working in the FBI.

KELLY: Amen.

KALLSTROM: And I was proud to be, you know, to be the leader of some of them.

KELLY: I got it. James, it's great to see you as always.

KALLSTROM: OK, Megyn. All right. You have a good Thanksgiving.

KELLY: You too. Well, we're also investigating a new controversy tonight on the campaign trail as Dr. Ben Carson gets hit for remarks he made about American Muslims allegedly celebrating 9/11 on the day of the attacks. He'll join us next on that.

Plus, breaking news on overseas where a city of more than a million people is on complete on lockdown, imagine it, under threat of imminent Paris-style terror attack. We'll go live to that scene right after this break. Imagine it.


UNIDENTIFIED MALE (through a translator): We are fearing a similar attack to that which took place in Paris, involving several individuals who might launch an attack on several different locations at the same time.



KELLY: We have breaking news tonight on the terror threat overseas with a city of more than a million people on complete lockdown. The French say, a key terrorist in the Paris attacks helped plot the carnage from Belgium. And now they're worried he is on the loose there and likely planning to strike again.

Reporter Benjamin Hall reports tonight from Brussels.

BENJAMIN HALL, FOX NEWS REPORTER: Well, Megyn, a very confusing day today here in Brussels. We had been optimistic this morning that this serious and imminent attack had been thwarted, but actually today it seems as if it's still ongoing and maybe getting worse. In Rome, 2,000 new security personnel have hit the streets and in the UK. David Cameron announcing that 10,000 people will be there as a rapid response force.  That as America issues a warning to its citizens worldwide. Yesterday, these raids involved multiple locations around the city, aimed at eliminating the threat. But then this afternoon the prime minister announcing that of the 21 people arrested, only one had been charged.

So the threat here continues and attacks remain imminent. Twenty two raids were carried out through the night as soldiers shut off streets in multiple districts. In particular, the Muslim district of Molenbeek as authorities sought to prevent another Paris-style massacre of which they had precise information and they were hoping to capture the Paris attacks and who is still at large. So today the country remains at high alert and will do so for some days ahead, with undergone rails, shops, schools, all closed as troops hit the streets, afraid of another ISIS cell waiting to attack. Now questions being raised about whether the mistakes were made and where the concerns were ignored.

Today also on the German-Belgium border, authorities are camping down and trying to find the attacker that still on the loose, afraid that he may be trying to escape. But it seems that they don't know where he is or where the next threat is coming from. The ease of movement around Europe has now also raised questions about security in the continent and many people are concerned about how easy it is for these attackers to move around seemingly a will, apparently hiding among refugees. But here today on the streets of Brussels, people are just concerned, they say they don't know what's happening, they say the authorities aren't talking to them and they're worried that the attack is imminent -- Megyn.

KELLY: Hmm. Benjamin, thank you.

Well, the issue of terror and radical Islam also leading to new controversy on the campaign trail, when Ben Carson today appeared to agree with one of Donald Trump's controversial comments that crowds of American Muslims in New Jersey celebrated as they watched the terror attacks across the river on September 11, 2001. Watch.


UNIDENTIFIED FEMALE: Dr. Carson, were American Muslims in New Jersey cheering on 9/11 when the towers fell, did you hear about that?


UNIDENTIFIED FEMALE: Yes. Can you expand on that?

CARSON: Well, you know, there are going to be people who respond inappropriately to virtually everything. I think that was inappropriate response.

UNIDENTIFIED FEMALE: Did you see that happening, though, on 9/11?

CARSON: I saw this, the film of it, yes.




KELLY: Joining me now, republican presidential candidate and retired Neurosurgeon Dr. Ben Carson, Doctor, good to see you tonight.

CARSON: You too.

KELLY: And so, do you want to walk that back then publicly?

CARSON: Well, what we were talking about is the reaction of Muslims after the 9/11 attack, and if they were in a celebratory mood. And you know I was really focusing on that it was an inappropriate thing to do, no matter where they were. They asked me did I see this film. I did see the film. I don't know where they were, but I did see a film of Muslims celebrating.

KELLY: So you -- but so you're.

CARSON: And I was making a point that it was inappropriate.

KELLY: But it's important whether they were American- Muslims -- it's important whether they were these are American Muslim in New Jersey versus, you know, folks over in Iran or in the Middle East, that's the most different stories. So do you admit to a lack of caution in answering that question?

CARSON: Yeah, yeah, I mean, I thought we were just talking about the fact that Muslims were inappropriately celebrating. I didn't know that they had an agenda behind the question.

KELLY: Well, I mean they were trying to see whether you agree with something Donald Trump has said very publicly, and he's been, you know --

CARSON: Which I --

KELLY: He's been fact checked by the Washington Post which he says, no.

CARSON: Which I had not heard about him.

KELLY: So do you, do you believe his claim?

CARSON: I had not heard about his comments.

KELLY: Do you believe his claim or do you mean to provide him with backup on his claim that he saw thousands of Americans in New Jersey, celebrating the fall of the Twin Towers on 9/11?

CARSON: No. It was had nothing to do with him or his claim. Really, it was more of a misunderstanding of what we were talking about, and me, trying to make the point.

KELLY: I understand.

CARSON: That celebrating that is totally inappropriate no matter where you are.

KELLY: The presidential contest has gotten less tight over the last week or so, with Donald Trump opening up a double digit lead over you in the latest polls. To what do you ascribe that? Many believe it's the Paris attacks and people not believing you have what it take to be commander-in- chief.

CARSON: Well, I think as time goes on, if people really begin to listen to what I say, not the volume at which I say it, I think they will recognize it is exactly the right formula. And what we have to be thinking about is how do we stop this from occurring in this nation? And I've said for many months, we have to take the fight to them over there. And in order to do that we have to cut off their money supplies, don't allow them to transfer money through the system. Cut off their oil, take their revenue source. We have to utilize our special-ops people, along with the Kurds, and we really need to start working with the Iraqi forces, which we've kind of given up on because they ran away. But they ran away when ISIS attacked them because we didn't have the right kind of support for them. If we would provide the right kind of support for them, I think that they will actually be a formidable fighting force. And there, you know, those are the things that we do over there, but over here, we also must strengthen the TSA. You saw how many things got through there the other week. And the FBI, we've got to give them much greater capacity to follow people 24/7. And you know, I think that also we're very compassionate people. Some people say, to be compassionate, you must take all of the Syrians in. The fact of the matter is we've spent more money on the Syrian refugees, I think than any other country, and we shouldn't fall for the false narrative that there are only two options, that we take them over here or that we forget about them. We can provide safe zones for them over there. We can provide.

KELLY: Got it.

CARSON: Humanitarian services like we always do.

KELLY: Got to ask you to clarify one other thing, because you got hit for an interview gave to C-Span where you said that Thomas Jefferson helped craft the constitution, which I know you know he did not, because your book says it correctly, which is he crafted the declaration of independence and not the constitution. Now, to those who would say how could you make such an elemental mistake, what say you?

CARSON: I say Thomas Jefferson, even though he was an ambassador during the constitutional convention, was in communication. There are a lot of letters. He has a ton to say about it. So it's actually easy to find out.

KELLY: But you know he did not craft -- but he did not craft the constitution.

CARSON; No, he didn't craft it. But he was certainly, in communication with the people and had a lot of input and a lot of say about it. So, no, he didn't craft it, of course not. You know, people spend too much time, you know, looking at little words and phrases without looking at the implications or the big picture. That's part of the problem we've gotten into the minutia without looking.

KELLY: Yeah.

CARSON: At the big picture. And many, many of your colleagues, not you, but in the media, spend all of that you are time combing through something and say ah, gotcha. Rather than thinking about how do we correct the big problems that we're having in this nation today?

KELLY: Understood. I wanted to give you the chance to respond, because you've been get hit by that by -- you know how it is exact. You get hit a lot, and that's what we're here for, to either.

CARSON: Every.

KELLY: Beat up on you as well, I give you to respond.

CARSON: Everyday.

KELLY: Depends on the night. It's great to see you.

CARSON: Thank you very much, Megyn.

KELLY: Well, if you are just joining us, one of the former top Intel chiefs under President Obama, made some big news at the top of the hour tonight. And Chris Stirewalt, Steve Hayes and Peggy Noonan are next on how the fallout from it could get big.

Plus, an incredible twist in the story of Ahmed Mohamed, the teenager who showed up to a Texas school with what looked like a bomb. See what his parents are now demanding as the price for what they call anti-Muslim bias.



LT. GEN. MICHAEL FLYNN, FORMER DIRECTOR OF THE INTELLIGENCE AGENCY: The focus of this investigation ought to start right at the top, where intelligence starts and stops, is at the White House. The president sets the priorities and he is the number one customer. So if he's not getting the intelligence that he needs, if he's -- and if he is not paying attention to what else is going on, then something else is wrong here between him and the advisers that he has.


KELLY: Big news there, from the top of the hour as Lieutenant General Michael Flynn, former Defense Intelligence Agency director under President Obama weighs in on the president demanding an investigation into whether someone cooked the books on the Islamic state Intel that was being provided by the White House. There's an inspector general looking into claims to that effect by people who work for the government, for the Intelligence agencies. Joining me now Chris Stirewalt, our Fox News digital politics editor, Steve Hayes is a Fox News contributor and a senior writer for The Weekly Standard, and Peggy Noonan who is a former speechwriter for President Ronald Reagan, a Wall Street Journal columnist and author of The Time of our Lives. Great to see you all, so.


KELLY: Let me start with you on that, Steve. That -- it has this investigation has to start at the very top.

STEVE HAYES, THE WEEKLY STANDARD SENIOR WRITER: Yeah, it was very big news. You have, as you pointed out, the former head of the Defense Intelligence Agency saying on the record that he thinks that the White House needs to be looked at in terms of this question of manipulating Intelligence. And that was the first important thing he said. I thought he said something else was also important. There's been a lot of focus over the past couple of days about Intelligence on ISIS in particular, and the potential manipulation of that. What Flynn said was this goes back a lot further than that. This is not a three-week story or a three months story. This goes back years, and we need to be looking at that, as well.

KELLY: And this is not somebody, Chris, who can be easily dismissed. I don't know the people are going to pay attention, because they seem to write off a lot of what President Obama's critics say when it comes to the Middle East.

CHRIS STIREWALT, FOX NEWS DIGITAL POLITICS EDITOR: Well, and now, we find out -- I remember during the Bush administration when dissent was the highest form of patriotism. That setting seems to have changed a little bit in the Obama era. But look, as much as we have been talking about republican racism, and as much as we've been talking about migrants and et cetera, et cetera. What the general said will stick because remember, we've had a substantial failure, not only as Steve talks about overtime with ISIS, and misapprehending what's going on, but also what happened in Paris. And now we have in real time the revelation of a problem with the Intelligence. This will linger and this will hurt.

KELLY: Peggy, it is extraordinary to hear somebody in a position like that held by General Flynn.


KELLY: Who has served this nation for his entire professional career goes on the record with an accusation like that.

NOONAN: Yes, I did find it extraordinary and I wrote very quickly some notes. I thought, all right, there's an investigation, it has been launched. A lot of people are going to do a lot of talking. I think what we want to find out is this -- who would have done this, tampered with Intelligence or cooked the books as they're saying? Why would they have done it? To what end, and with what impact? It seems to me those are pretty big questions if this investigation does pan out, as something covering such a serious subject at such a serious time.

KELLY: You know, Steve, the White House has denied it in saying, and President Obama said, "I tell my generals, I tell everybody give me all the information. I want it clean. I want it real." And yet, what we're hearing from people like Flynn is, our Intel got killed when it didn't fit, quote, "The narrative" that the White House wanted.

HAYES: That's right. And General Flynn told me just this last week that in the lead-up to the 2012 presidential election is when things were the worst. It's when the cooking of the books was really the worst, when he was reporting that al-Qaeda had doubled in size, doubled in strength, and the White House was going out at campaign stops in an official event saying, you know, al-Qaeda is on the run, al-Qaeda is decimated. But I think if you go back and you look at public Obama's -- President Obama's public statements, it contradicts his claim that he just wants it, you know, he just wants it as it is. Because look at the way that he responded to the Christmas Day bomber, to the Times Square bomber, to the Fort Hood attacks. The Fort Hood attacks were labeled as workplace violence. And they originally said that these e-mails between Nidal Hassan and Anwar al-Awlaki were benign. Well, that wasn't the case. We know that wasn't the case, and we now have this long history, seven years' worth, in which the president has downplayed this threat systematically, methodically, regularly.

KELLY: It's the same, it's the same president, Peggy, who came out and, you know, gave this off the cuff remark after the first American reporter had been beheaded. And he was on Martha's Vineyard and he ran, he went out and played golf and he later admitted, "Oh, I may have gotten the tone wrong." But as somebody who actually helps set tone in presidential speeches, including in times of crisis, I mean, has President Obama just -- he has just gotten it wrong in response to these Paris attacks?

NOONAN: You know, on this issue, terrorist attacks/ISIS I think he's been getting it wrong for a long time, really, essentially, from the beginning. Maybe this investigation will tell us more about why that is. But from famously, referring to ISIS as the junior varsity team, straight through suggesting they had been contained, right before Paris blew. His factual statements have been incorrect, as to tone. My goodness, you could hardly react to a thing, an incident like Paris with they almost a worse tone for a leader than what the president displayed defensiveness, a certain petulance that his strategy was being questioned. A shown anger or indignation towards his republican foes, but less in a way, less personal passion for ISIS itself. So this has been strange from the beginning. I think.


NOONAN: It's the only word I can use, both factually and in terms of tone.

KELLY: Before we go, Chris, this gonna play in 2016. We've seen Carson's numbers go down and we've seen terror go up to the number one issue people are afraid of. Do you think that there's a correlation there?

STIREWALT: Of course. I think Ben Carson's readiness for the Oval Office comes into question, but I also think this -- what the heck is Hillary Rodham Clinton going to do all about this when she has to go run for president in the general election? Right now, she can paper it over with democrats and say, "I think the president's strategy is working. I would make it 30 percent more excellent, but I think everything is going OK." Well, here's what the polls tell me. This is a garbage fire when it comes to public sentiment. Voters are furious about feeling this unsafe, and it is Thanksgiving Day on weekend.

KELLY: And we're getting warnings from the State Department. Maybe hers a campaign position will be, I will read the Intelligence and not tell anybody to change it before if -- anyway, we don't know. It's an investigation ongoing, great to see you all tonight.


KELLY: And a big development in the story of the Texas teenager who showed up to school with what looked like a bomb, remember? He said it was a clock that he made. He was arrested as a result, and up next, big news on what his family is now demanding for their pain and suffering.


KELLY: A major development in the story of the Texas teenager who showed up to school with -- it was -- he said it was a clock. It looked like a bomb. And then he was arrested as a result. He claimed that it was a science project. And many called this a clear case of anti-Muslim bias. Trace Gallagher has the latest on what the family now wants for their pain and suffering. Trace?

TRACE GALLAGHER, FOX NEWS ANCHOR: Megyn, the family of Ahmed Mohamed now wants $5 million in damages from the Irving School District and $10 million from the Irving Police Department. The family also wants formal apologies from both the police chief and mayor threatening a lawsuit if their demands are not met within 60 days. In a nine-page letter to the school district, the lawyers claimed that Ahmed was illegally questioned without his parents present. That during questioning, the principal threatened to expel Ahmed. He didn't admit that his clock was a hoax bomb. And after the charges against him were dropped, the city and the school devised a plan to trash Ahmed to the media. The school district claimed that Ahmed wasn't telling the truth about his arrest, and that because of federal privacy laws, the school was unable to tell its side of the story. Remember, he built a clock, he says, but electronics experts say he simply took an old clock apart and put the guts inside a pencil case. Some believe he left the wires exposed to make it look more threatening, others say authorities overreacted because of Ahmed's race and religion. The Irving School District by the way, said it's reviewing the letter and will respond as appropriate -- Megyn.

KELLY: Trace, thank you. Join in me now to react, Saba Ahmed, president and founder of the Republican Muslim Coalition. Saba, great to see you again.


KELLY: So 15 million bucks for, you know, a dustup with school officials and the local police that round up with the kid going to the White House. What do you think?

AHMED: Well, Megyn, unfair arrests do cause emotional distress. So, I mean, he can have a claim. I know it's exaggerated with the $15 million and you know that kind might dilute his thing. Obviously, what he went through was not acceptable. And I hope that, you know, he will -- I mean, he left a country, he got a scholarship, he got.

KELLY: He was a scholar, right?

AHMED: Yeah.

KELLY: The day after he met President Obama. But what about -- because a lot of people who don't have bias against Muslims say, what about if you see something, say something. He's got this -- it looks, it does look like a bomb. So the teacher says, I think I better say something.

AHMED: Right. But like once they saw it, like you know, they thought it was just like, you know, they didn't evacuate the school. They didn't do any of the bomb procedures. Even if it was a threat, they usually take if it was serious. Like you know, that's why our community was much more concerned about it because the way the school never responded with, they only got that student punished. Like it was not like a real threat because if it was, then they would evacuate.

KELLY: They were wondering whether it was a hoax bomb. They never thought -- the charge was that he's trying to commit a hoax on people by trying to scare people.

AHMED: Right, right. Well, I mean either way, but like obviously, whatever has he and his family went through. And you know, they left the country, we lost an American family.


KELLY: He decided to move to Qatar.


KELLY: Let me ask you this before you go. Last time you came on, you had the hijab in the American flag and we saw it. You looked amazing. And all these people picked up on it and said sort of, that there was some sort of issue between you and Fox News. Do you have some issue with Fox News?

AHMED: No. Well, I'm really excited to be here. You know, being a republican, I think Fox Network has provided us with a platform, and I'm really excited about it. I don't think that was, that was my patriotic self. It was not meant to be in any way, you know, reflecting badly on anyone.

KELLY: Good. You had a good experience here.

AHMED: I just have a great time. And I'm so glad to see you. I mean, I think I'm seeing you weekly. I'm very happy to be here and I'm grateful to Fox for giving me this opportunity.

KELLY: I'm glad to hear it. I thought we had a nice time and you know.

AHMED: I know.

KELLY: Some mean people on the left said we didn't. I said.

AHMED: I know.

KELLY: You were not here -- great to see you.

AHMED: I know and I thought.

KELLY: I got to go.

AHMED: All right.

KELLY: We'll be right back.

AHMED: Thank you.


KELLY: Well, tune in tomorrow, Senator Ted Cruz is here. Also former al Qaeda member turned CIA Operative Martin Storm will be here. He's analysis is always fascinating. Go to with your thoughts, thanks for watching. This is "The Kelly File."

Content and Programming Copyright 2015 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2015 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.