Updated

This is a rush transcript from "Hannity," March 8, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: If National Public Radio has not tarnished its image and reputation enough in recent months, the network has hit a new low in a shocking video tape that surface today. Now, fired NPR contributor Juan Williams would be here in reaction in just a moment. But first, the new video shows outgoing NPR executive Ron Schiller saying things about the GOP and the Tea Party Movement that you won't believe. Just listen to this.

(BEGIN VIDEO CLIP)

RON SCHILLER, NPR EXECUTIVE: The current Republican Party is not really the Republican Party, it's been hijacked by this group -- that is --

AMIR MALIK, MUSLIM EDUCATION ACTION CENTER TRUST, MUSLIM BROTHERHOOD FRONT GROUP: The radical, racist, Tea Party people?

SHILLER: And not just Islamaphobic but xenophobic, I mean, basically they are, they are, they believe in sort of, white, middle America, gun-toting, I mean, it's scary. They're seriously racist, racist people.

(END VIDEO CLIP)

HANNITY: All right. So, how was Schiller caught on tape making such bigoted statements? Now, filmmaker James O'Keefe of ACORN pimp video fame hired two men to pose as members of an organization linked closely to the Muslim Brotherhood.

Now the men told the NPR that they wanted to make a five million dollar donation to the company and that got them a dinner with Schiller. It was at that dinner that Schiller made these ridiculous claims and many more.

(BEGIN VIDEO CLIP)

SCHILLER: In my personal opinion, liberals today might be more educated, fair and balanced than conservatives.

IBRAHIM KASAAM, MUSLIM EDUCATION ACTION CENTER TRUST, MUSLIM BROTHERHOOD FRONT GROUP: I like it when you take your NPR hat off.

SCHILLER: Well, frankly, it is very clear that we would be better off in the long run without federal funding.

(END VIDEO CLIP)

HANNITY: All right. If that's the case, then why don't they pull the plug already? Now of course NPR is furiously backtracking from the situation, and they issued a statement earlier today which said in part, quote, "We are appalled by the comments made by Ron Schiller in the video which are contrary to what NPR stands for."

And joining me now with reaction, Fox News political analysts, by the way, former NPR contributor and they talked about him in this --

JUAN WILLIAMS, FOX NEWS POLITICAL ANALYSTS: Yes.

HANNITY: Well, I want to get to what they said about you which is equally outrageous, as a friend. I want to start with what we played first here. You know, that, you know, well, they are basically are, they believe they're white Middle America gun-toting, I mean, it is scary, they are seriously racist people.

WILLIAMS: They are!

HANNITY: Well, but that's what he's saying about Middle America. It reminded -- I don't want to bring Obama into this. But it reminded me of, you know, people clinging to their guns and religion with an antipathy towards other people. It sounded a lot like that to me.

WILLIAMS: Well, you know what? These people are so rude and condescending and they say that people like me are bigots because I tell you what I feel. These folks are not only attacking the Tea Party as anti- intellectual and racist and bias. They attack anybody that disagrees with their point of view, this elitist, this NPR point of view but the rest of us are bunch of dummies and a bunch of robs they were from that country, we don't understand what's going on. And he thinks that we lack education and only his group up there, the executive floor of NPR really understands.

These folks are doing damage, Sean, to real good journalists at NPR, the people who got there and gather the news because they are destroying the brand, these people are just destroying NPR.

HANNITY: But Juan, you were one of them. I mean, tonight's one of those nights we are going to agree on most things. But I got to tell you, most times when you are on the program we disagree. And you offer your opinion, you're well researched, you're well informed. But for them to go out there, I mean, what is this contempt? "You know, in my personal opinion, liberals today may be more educated and fair and balanced than conservatives."

WILLIAMS: Can you believe that? Can you believe this?

HANNITY: Yes, I can. I can.

WILLIAMS: This to me is finally a window into how they really think. It's like you were tuning your radio and just by accident, you got the right wavelength and now you are hearing the truth. Because just yesterday, Schiller was saying, oh, you know what? We made a mistake in the way that we handled Juan Williams' firing, and you know what? We do need federal funding. And then here's this guy saying, oh no, we are glad we got to bum out of here, he's a bigot and he has no credibility and guess what? We don't need federal funding from NPR.

HANNITY: One question that you probably -- didn't it sound a lot like Barack Obama? Bitter people, clinging to -- wait a minute -- it did sound a lot like.

WILLIAMS: It's true. I'm not arguing that. I'm not going to argue that. I mean, that's the same elitist center that Obama expressed about people in Pennsylvania. I think he was on the West Coast when he did it. If that's your point -- point taken.

HANNITY: Frankly, why you don't sue NPR is beyond me and maybe over time --

WILLIAMS: You have suggested this to me repeatedly. And I keep telling you, I just feel like, you know, I would become emotionally involved and you told me in all honesty, as my friend, you said to me right from the start, and I must say to everybody when this started Sean Hannity is the one that calmed me down and came and said to me, I think you are down, something is wrong with you tonight, what is going on? You are the first person I had told I had been fired.

But anyway, I don't want my spirit, my emotions, to get locked up into some fray with those people. You know what? You can see who they are tonight Sean, in the way that you have -- may have not seen before.

HANNITY: All right. I got to play couple of them, we have to get this -- in here. Let's start with the one about you because your name came up in this conversation. Let's roll this tape.

(BEGIN VIDEO CLIP)

SCHILLER: In all of the uproar, for example around Juan Williams, what NPR did, I'm very proud of, what NPR stood for is non-racist, non- bigoted, straight forward telling of the news. Our feeling is that if a person expresses his or her opinion, which anyone is entitled to do in a free society, they are compromised as a journalist, they can no longer fairly report.

[Juan Williams] lost all credibility and that breaks your basic ethics as a journalist.

(END VIDEO CLIP)

HANNITY: Now, he just slammed Christians in an earlier part of this. He slammed the Tea Party Movement. And then he said this about you. Your reaction?

WILLIAMS: You know, this is unbelievable. And I might add, he later adds -- a slam on Jews, he says Jews control the newspapers, but not NPR.

HANNITY: I'm going to play that in a minute.

WILLIAMS: Can you believe this guy? This guy is unbelievable! And he called me a bigot, Sean, I'm the bigot! I'm the devil, Sean! Can you believe this? And he is up there, and he is going on about people in this diminished, this disparaging way. And he wants to make it out that NPR and he are really the good guys, they're the smart people, and isn't it sad that more people like them aren't running America?

HANNITY: Well, he's the bigoted one. Now let's listen to his comments about Jews on this tape, which are outrageous.

WILLIAMS: Man!

HANNITY: Roll the tape.

(BEGIN VIDEO CLIP)

SCHILLER: I don't actually find it at NPR.

KASAAM: What exactly?

SCHILLER: The Zionist or pro-Israel even among funders. No. I mean, it's there in those who own newspapers obviously but no one owns NPR. So, actually, I don't find it.

(END VIDEO CLIP)

HANNITY: Zionist and pro-Israel, I mean, it is there for those who want to own newspapers, obviously. Whoa!

WILLIAMS: This is too much. And then, you know, what? He also goes after women. He says, oh yes, in the way that we didn't have women represented in the media before, now it's the time for Muslims -- and so half or more than half the population, all women are represented by what is going on with Muslims today.

This guy is just smashing everybody. Jews, Christians, Tea Party people, me. He doesn't give a hoot, he just wants the $5 million. And he's willing to do anything for it. Because that non-profit fundraising and this is revealed here, is nothing, nothing but a scam and a lie. And, you know, it is just so -- it is an underworld Sean, it makes you feel greasy to see this guy -- and remember, he's dealing with people who have identified themselves as Muslim Brotherhood, right?

HANNITY: Sympathizers. Let me go to one last cut. And we might disagree here. I agree with one thing he said, time to defund NPR.

WILLIAMS: Yes, well, that's true.

HANNITY: Let's go to what Harry Reid said about this, because I think it's applicable.

(BEGIN VIDEO CLIP)

SEN. HARRY REID, D-NEV.: The mean-spirited bill, HR-1, eliminates National Public Broadcasting. Now that is really saying a lot, isn't it, madam president?

(END VIDEO CLIP)

HANNITY: It is time to take away money for National Public Broadcasting. You agree Juan Williams?

WILLIAMS: You probably think I disagree, I agree. Because now, look, it's obvious exactly the way they think. And they are locked into their liberal orthodoxy, they think they are better. The New York Times takes advertising, the Washington Post, takes advertising, Fox News takes advertising. We do our jobs. Let them go out there and satisfy an audience and convince advertisers to come and pay the bills.

HANNITY: Juan, my advice as a friend, I told you privately, I say it publicly, I would hire the best lawyer in D.C., I would sue them and stay emotionally detached. Let the lawyer do the work.

WILLIAMS: Thanks for being with me, Sean, on this one.

HANNITY: This is slander. And they slandered you once, now they slandered you again. And I think it is time -- you have every legal remedy I think available too. But Juan, good to see you.

WILLIAMS: Thank you, Sean.

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