BILL O'REILLY: With us now to discuss those situations is the former Republican vice presidential candidate, Congressman Paul Ryan. Let's start with the IRS because you're on the House Ways and Means Committee. So you're going to be investigating this.
REP. PAUL RYAN (R), WISCONSIN: Yes, that's right.
O'REILLY: All right, what's going to happen going forward.
RYAN: Ok there are four things we know right now. Number one we know that they targeted people based on their political beliefs not just Tea Party groups but religious groups as well that were conservative in nature.
Number two, we know that they were intimidating and harassing donors to these conservative groups.
Number three, we know that the IRS leaked sensitive taxpayer information which was then used publicly to harass donors.
And number four we already know that the IRS mislead Congress.
O'REILLY: All right. But you don't know who exactly did it -- that's what you've got to find out.
RYAN: So our investigators started last week interviewing and doing depositions. So our investigators are interviewing low level IRS employees. We are working our way through the system.
RYAN: And we're starting to get the documents. We've requested thousands and thousands of documents which are now starting to come to the Ways and Means Committee and we're starting to pore through those documents.
O'REILLY: So they have to give you those documents.
RYAN: They have to give us those documents. We will subpoena them if they don't.
RYAN: So we will get those documents.
O'REILLY: But if they defy you -- I think people need -- people need to know the parameters. Number one if they lie to your committee that's a federal crime, right?
RYAN: That's right. That's right.
O'REILLY: Number two if they don't hand over -- they being the IRS the Internal Revenue Service the documents -- that you want that's a crime, right.
RYAN: And we'll subpoena them in that case if they don't.
O'REILLY: Ok but when you say we'll subpoena them they can say well, we're not going to do it anyway. That's happened before then they can be charged with a crime.
RYAN: That's correct.
O'REILLY: Ok so you have a criminal capability here.
RYAN: That's right.
O'REILLY: Now you are thoroughly convinced this is just not a Cincinnati deal or a couple of rogue IRS people going --
RYAN: No, that's pretty clear.
RYAN: It's pretty clear that it's more systematic from that.
O'REILLY: So you've got to find out whether it was just contained in the IRS, all right, and this Lois Lerner she's a big player her and she's gone. Or it was ordered from the White House, I mean basically that -- that's what you've got to find out.
RYAN: Yes we don't know the answer to that so we're going to let the facts take us there. We're not going to speculate.
O'REILLY: As you should. As you should.
RYAN: We're going to do our job.
RYAN: The legislator branch overseeing the executive branch. This is an arrogant abuse of power. It's really quite
O'REILLY: By somebody.
RYAN: By somebody, by the IRS for sure.
RYAN: The question is what we do not know and what this investigation will bear out. And that's why we are interviewing all these various IRS employees getting the documents. The IG is now doing an investigation not -- they did an audit.
RYAN: Now they are doing investigations.
O'REILLY: That's the Inspector General.
Now Lois Lerner you know her -- she is the one who took the Fifth.
O'REILLY: Right ok. So if you give her immunity your House and Ways Committee and say look Miss Lerner we're giving you immunity you can't be prosecuted, she then has to testify in front of you, has to. Compelled by law too; correct, am I right.
RYAN: Well then, yes that she -- therefore there is no reason to take the Fifth.
O'REILLY: Well no but if she says I'm still not going to testify, couldn't you charge her with something?
RYAN: I think that's the case. That's right.
O'REILLY: Right, that's what you should do. Just get her and give her immunity.
RYAN: Look we have a lot of people telling us do the investigation this way. Do the investigation that way.
O'REILLY: I know that but nobody as smart as me.
RYAN: I appreciate that.
O'REILLY: And Kelly is going to agree with me right behind you. All right, ok. But you could squeeze --
RYAN: We're doing this methodically. We are doing this the right way, we're not -- this is not a partisan. Which is -- this is get to the facts. Get to the truth.
O'REILLY: You have to. You have to.
RYAN: And follow the facts. And that's why we're taking this investigation extremely seriously. We are merging two different committees to do this.
O'REILLY: How long is this all going to take?
RYAN: It's going to take months.
O'REILLY: All right so the rest of 2013 you're probably in.
RYAN: I don't want to put an end because I don't know where the facts will take us.
O'REILLY: Holder you want him to quit. Should he quit?
RYAN: Yes look (inaudible) who is a close friend of mine, one of the giants in the legal community, a member of the Judiciary Committee called for his resignation yesterday.
O'REILLY: And so did you after "Fast and Furious."
RYAN: And so -- and so, look, I think -- when a -- and when a legal giant like (inaudible) who knows this agency extremely well says this man has -- has gone beyond the pale of his office I agree with that.
O'REILLY: All right so you think he's going to resign. I mean --
RYAN: I don't know the answer to that.
O'REILLY: Well Axelrod said over the weekend -- Axelrod I mean that's speaking for the President.
RYAN: Yes I have no idea if he is going to resign or not. Look, we think what his testimony was before the judiciary contradicted the actions he made just like the testimony of the acting commissioner of the IRS contradicted what we now know he knew at the time.
So we see two instances here where -- where people from the administration came and misled Congress.
O'REILLY: Issa is -- Darrell Issa now the Congressman, you know is subpoenaing all the documents from the State Department to try to find out about Benghazi.
RYAN: Right, that's right.
O'REILLY: Right? That's a smart play because Kerry has got to hand them over, right?
RYAN: That's right. That's right. So you know the story on Benghazi. Most Americans don't know the story which is they knew right away because of the number two man in charge Gregory Hicks said that this was a terrorist attack.
RYAN: This had nothing to do with a video.
O'REILLY: But they didn't believe Hicks.
RYAN: Yes. Yet they pushed this story for -- for days and weeks. And the question is who made those decisions? Who made those decisions to mislead the country on these issues? And that's what we have to get to the bottom of.
O'REILLY: Well the night of the assassination and the three other Americans were killed as well. President Clinton called -- President Obama called Hillary Clinton.
O'REILLY: At night.
O'REILLY: We need to know what that conversation was.
RYAN: That's what -- that's what an investigation is all about. That's what the congressional investigators are doing. That's what the document --
O'REILLY: I don't know if you will ever get that because that's you know they're not going to --
RYAN: Well there is a -- there is a point at which they might invoke privilege and then we are going to have to have a big debate about that.
O'REILLY: Right. Do you see this damaging President Obama so that the Republican Party will take control of Congress in 2014?
RYAN: It's -- Bill, it's just way too premature to make a comment like that.
O'REILLY: Ok because this is a low point of the Obama administration now.
RYAN: The point is this is an arrogant abuse of power. You know one of the problems Mitt Romney and I had in the last election was we were debating against big government theory. We had to compete against the promise and the rhetoric of President Obama.
Well now in his second term, now that he's implementing his agenda we are seeing big government in practice.
O'REILLY: Ok but the bigger problem that you and the Governor had was you were not only campaigning against Barack Obama but the American press.
RYAN: Except for Bill O'Reilly and Fox News.
O'REILLY: Well, we're fair here and I think you know that.
RYAN: I know. No I'm just having fun with you. But --
O'REILLY: Right but -- but now, the press may be turning. Have you noticed that?
RYAN: I think when you see the James Rosen case, the AP case.
RYAN: The press understands the First Amendment extremely well and I think they take that one extremely seriously and you just can't hide from the fact that this IRS abuse is arrogant and obnoxious. The question is --
O'REILLY: It's dangerous.
RYAN: -- who knew about it, how systemic and how widespread was it and it's an abuse of power.
O'REILLY: Will you -- will you keep THE FACTOR posted here.
O'REILLY: All right, Congressman good to see you. Thank you for coming in.
RYAN: My pleasure.
O'REILLY: Next on the rundown Bob Beckel will reply to Mr. Ryan.