This is a partial transcript from "Hannity & Colmes," May 12, 2005, that has been edited for clarity.

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SEAN HANNITY, CO-HOST: As we continue on "Hannity & Colmes," I'm Sean Hannity.

Also coming up tonight, Operation Matador. Offense entered now its fifth day. Colonel North was there. He's got the pictures. He'll give us a live report.

Also, Charlie Daniels will stop by tonight.

But first, a former priest who served time for sexually abusing children has been caught on tape revealing disturbing details about how he succeeded in molesting kids and seducing them during his time as a parish priest in California. At one point, on tape, attorneys asked Oliver O'Grady to demonstrate how he would approach a hypothetical victim.


UNIDENTIFIED MALE: Just use the name "Sally."

O'GRADY: OK. Hi, Sally, how are you doing? Come here, I want to give you a hug. You're a sweetheart, you know that? You're very special to me. I like you a lot.

She might respond, "I like you, too." And that would allow me to give a better hug to you.


HANNITY: O'Grady was questioned as part of a lawsuit brought by his victims against a diocese of Stockton, California. The victims claim the diocese knew O'Grady was a sexual predator and that they failed to protect him.

Joining us now is the attorney who actually traveled to Ireland to depose O'Grady, John Manly is with us.

John, thanks for being with us. This is a chilling tape that I hope every parent sees, John, because as he describes this sick seduction of his, luring these kids in like that, what was it like to sit next to this man?

JOHN MANLY, DEPOSED FATHER O'GRADY: It was horrifying, but at the same time, you got a glimpse into not only the life of a pedophile priest, but unfortunately a glimpse into the ugly side of the American hierarchy, because as bad as what Oliver O'Grady did, the people who gave him access to children were my church's bishops, including Roger Mahoney. And it's just — it's stunning.

HANNITY: You know something? You're really looking in the face of evil, that anyone that would rob the innocence of a little child like this. And he talks about luring them in. And in this interview you do with him, you know, "Give them a hug, compliment them, tell them they're special." And this is a person in position of authority, somebody that parents would think that they can trust, which makes this evil more insidious.

MANLY: Well, more than just trust, as Catholic children, we were all educated that at the moment of consecration in the mass that the priest, Oliver O'Grady, is, in fact, Christ. And the thing that's interesting about what you said, Sean, is that you recognize it immediately. I recognize it immediately.

Why didn't Roger Mahoney recognize it when it was reported to the police in 1984? Instead of recognizing it, he made him a pastor. He promoted him.

HANNITY: And he knew about the allegations, knew about specific allegations. It's unforgivable to me. And I'm going to tell you, the church as an institution, they must get rid of this corruption at the root. And that means, if it's Mahoney, and he knew, and he promoted him, he should get out of there.

MANLY: The diocese of Stockton knew when he was ordained, they knew in 1976 when he wrote a letter apologizing for molesting a little girl to her parents. It was in the diocese files.

HANNITY: Unbelievable.

MANLY: They knew in 1983. They knew in 1984. And they did nothing. And what the church needs is regime change, and nothing has changed in the church but the rhetoric. And these men who let these men loose on little boys and girls should not only get out of office, but they should go to jail.

COLMES: Mr. Manly, it's Alan Colmes. Anybody ever ask them why someone like this was promoted? Do we have an answer to that question?

MANLY: Well, Cardinal Mahoney's deposition was taken in this case. And his testimony was that, in 1985, if he learned that a little — that a priest was sexually attracted to a little boy or a little girl, he would not have removed them from ministry or a parish.

COLMES: Why not?

MANLY: He said he wanted victims and evidence. Well, let's look at that. In 1984, this was reported by O'Grady's therapist, who was an employee of Catholic charities, who Roger Mahoney employed. And he reported him, because he admitted molesting a child in a therapy session.

And what happened is, is the diocese squelched the investigation, told the police they were going to put him in a parish without a school and he was going to get counseling. It was an isolated incident.

The dioceses did not tell the police that, in 1976, he had molested another little girl. They did not tell the police that the parish they put him in had catechism classes with 500 kids in it. And they did not tell them that he was already getting counseling.

The reality is, is not only did they do nothing, they put him in a position where he would molest more children. It's so bad that the pedophile himself was trying to get help. Father O'Grady was holding sex addicts anonymous meetings in his own parish that Mahoney sent him to try and cure himself.

These guys put a predator on the street, being morally certain he was going to molest. And it's disgusting. And more importantly, it's not Catholic, it's not the faith, and these bishops need to go.

HANNITY: I couldn't agree more. I hope you'll continue to pursue that corruption. Because if you don't, the church won't survive. John, thank you for being with us.

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