O'donnell responds to campaign-funds controversy

_What follows is Kudlow's Dec. 30 interview with Christine O'Donnell:_ LARRY KUDLOW, HOST: Former Delaware Republican Senate nominee and Tea Party favorite Christine

O'Donnell, she's being looked at by the US attorney for allegedly misusing campaign funds to pay for personal expenses--things like rent, gas, meals. A claim she strongly denies.

So is this just another attempt by the left to discredit the whole tea party movement? Joining us now for a prime-time cable exclusive interview is Ms. Christine O'Donnell. Christine,

thank you for this. I know you're on the hot seat. And let me just ask you right off the top. The charges are campaign finance misuse. Let me begin. Is there, in fact, a formal

investigation or is it just an AP story? MS. CHRISTINE O'DONNELL: We have not been notified of any formal investigation from the US attorney's office or anyone other than the FEC.

So I find it very suspicious that the Associated Press was notified before I or my attorney or anyone in my campaign was notified and given an opportunity to respond. So what it looks like,

after we heard--you know, started getting news calls about this, we conferred with our attorney, and what it looks like is that this is simply a re-emergence of the same CREW complaint that

was filed with the FEC several months ago. Again, basis of that accusations made by CREW, the left wing George... KUDLOW: Yeah. MS. O'DONNELL: George Soros funded organization that--you

know, the one who's leading this charge is Melanie Sloan, who is a former Biden staffer. KUDLOW: Yeah. I want to come back to that CREW business in a minute. MS. O'DONNELL: Yeah.

KUDLOW: But just let me clarify something. I'm reading The Daily Caller's discussion of your whole situation. That's a pretty reliable Web site, my pal Tucker Carlson. And it

said that the Delaware US attorney is investigating the complaint from CREW. And just for our own viewers, Citizens for Responsibility and Ethics in Washington. And yes, indeed, it is being

run by staffer Melanie Sloan, a former Joe Biden staff person. But is the Delaware US attorney looking at the complaint or is the FBI getting involved in this, Christine? MS. O'DONNELL:

From what I know, it's simply them looking at the complaint. We have not been informed of any FBI investigation or anything other than looking at the complaint that CREW filed. You

know, but if anything does materialize from this rumor, we will continue to fully cooperate as we have with the other complaints that were filed, because I'm confident that, you know,

we have done everything within our power to comply to all the very complicated rules and regulations that are, you know, really designed to keep citizen politicians out rather than to

encourage people to run for office. But still... KUDLOW: But it does seem--it does seem--and this is the problem that troubled me, OK... MS. O'DONNELL: Unh-unh. KUDLOW: You're

not--you're not allowed to use campaign funds to pay rent or pay mortgages. You used them to live in this town house because your own home was vandalized. OK, I understand. MS.

O'DONNELL: No, no, no. Wait. Wait. See, even that's a misunderstanding. That's not true. KUDLOW: You didn't use... MS. O'DONNELL: The... KUDLOW: No campaign funds

used to rent the town house? MS. O'DONNELL: The campaign rented town house, that is currently our office that currently out-of-town staffers were living in on the upstairs. I have a

separate residency. But because that residency was being vandalized, I changed my legal on-record residency to the town house, and that, for which I pay rent to the campaign to be able to

use that as my legal resident. KUDLOW: Well, have you... MS. O'DONNELL: So that's... KUDLOW: Did you clear that with the Federal Election Commission? MS. O'DONNELL:

Absolutely. Yep. Yep. We called the FEC. KUDLOW: And they're OK? They're OK with it? MS. O'DONNELL: They said that, you know, they'd never heard of that situation but it

seemed fine. And, you know, we ran the whole thing by a lawyer, calculated how much I should pay. And, you know, we checked with a lawyer about Delaware residency laws. This is a very unique

situation, because usually people who run for office live in gated mansions. They're not citizen politicians, you know, with their address on public record, living on a street that any

yahoo can walk up to. You know, so we got it all cleared. You know, these there--these were security measures that we took to make sure... KUDLOW: OK. MS. O'DONNELL: ...that we were

moving forward in the safest way possible. KUDLOW: All right, look it, a lot of friends of mine in the tea party--I myself, as you may know, have been a tea party supporter. That comes as no

surprise to viewers of this show. And we've interviewed lots of tea party people, and we've covered it. It's the most important political movement in the country. It's

the most potent force in the November elections. Now, Christine, people are worried that you're making a lot of statements in these interviews, including this one tonight. And the hope

of the tea party rests with you because this is going to be used to discredit the tea party in its entirety. You are aware of that. I want to ask you something that people are asking me. You

have run for the Senate three straight times--'06, '08 and '10. All right. You lost each time. You raised $7.3 million, a Delaware record, in the 2010 campaign. Please answer

to your supporters and your critics, how do you earn a living? Have you been living on campaigns... MS. O'DONNELL: No. KUDLOW: ...and their financing for the past four years in these

three campaigns? MS. O'DONNELL: No. KUDLOW: That's what people are asking. MS. O'DONNELL: No. I have not. KUDLOW: And a lot of them--some of your supporters and some of your

detractors, everyone wants to know, Christine O'Donnell, have you been taking advantage of campaign financing... MS. O'DONNELL: No. KUDLOW: ...to...(unintelligible) MS.

O'DONNELL: You know, Larry, it's--no. There's absolutely no truth to that. And I'll tell you, today, as I've been doing these meter--media interviews, we've

received a flood of supportive e-mails and phone calls. People, especially in the tea party, are not worried. It's the establishment folks who are trying to put that out there.

There's absolutely no truth to that. And I also want to point out that... KUDLOW: But you're not earning a living by running for the Senate? MS. O'DONNELL: ...that what--no!

KUDLOW: Can you just say that? I mean, is that... MS. O'DONNELL: No, I'm not. KUDLOW: Can you assert that? MS. O'DONNELL: I'm not. Even though I'm legally entitled

to, I have never, ever taken a dime in salary from the campaign, even though I'm legally entitled to it. KUDLOW: Well, is there any unpaid... MS. O'DONNELL: Wait... KUDLOW: Is

there any unpaid balance from the 7.3 million that you raised? In other words, is there a bank account now... MS. O'DONNELL: Well, wait. OK. KUDLOW: ...that has funds in it? MS.

O'DONNELL: Yeah. And we are using that as the legal defense. But let me--let me finish. And we're not raising anymore. But let me finish, to point out a very important point about

the backbone of this complaint, is that CREW's number one witness is this person that we had to fire in 2008 who is making accusations saying that he was privy to stuff that went on in

2009. So, you know, if he was involved in the campaign for just about a week or two in 2008, how can he have firsthand knowledge of these accusations that they're making about 2009?

KUDLOW: I understand but--I hear you on that, but some people are asking these, the difficult, inconvenient questions that you've kind of run the table in the last three campaigns, in

'06, '08 and '10. And then, OK, if the guy... MS. O'DONNELL: Larry, you of all people should know what we did in... KUDLOW: Well, I just want to get the record straight.

MS. O'DONNELL: ...2008--and I'm setting the record straight. KUDLOW: And I'm a financial guy. MS. O'DONNELL: Well... KUDLOW: I'm a financial guy, Christine. MS.

O'DONNELL: Right. Right. KUDLOW: And that's why I'm coming at you for the bank accounts... MS. O'DONNELL: No, I... KUDLOW: ...and how you're living. MS.

O'DONNELL: Right. And I appreciate that. And if people were truly honest about that, they would see that, yes, I made a small living. You know, but the fact that I'm not a billion

and incumbent, that I'm someone who struggles to meet their bills, baffles their mind, especially because we were successful. But this is what this whole movement represents. And keep

in mind that in September, with a very limited amount of funds, we upset a 40-year incumbent that every expert on, you know... KUDLOW: Yeah. MS. O'DONNELL: ...both the Republican

establishment and the Democrat establishment said could not be taken out. That symbolizes the potential of the movement in Delaware... KUDLOW: Yeah, I understand. MS. O'DONNELL: ...and

across the country. KUDLOW: You don't have to talk--you don't have to convince me of... MS. O'DONNELL: But--well, my point is... KUDLOW: ...the free market populism of the tea

party and the constitutional restraints that they want. MS. O'DONNELL: You--right. And you can understand. They did this to Sarah Palin. KUDLOW: That--but I... MS. O'DONNELL: You

know, they... KUDLOW: I understand. MS. O'DONNELL: They... KUDLOW: But I want to know--I want you to be able to state categorically... MS. O'DONNELL: Yeah. KUDLOW: ...of the $7.3

million you raised, you have unused balances. Are you using any of those unused campaign fund balances... MS. O'DONNELL: No. KUDLOW: ...for your own personal use, Christine? MS.

O'DONNELL: No! KUDLOW: That's the question everyone's asking today. MS. O'DONNELL: No, absolutely not. Absolutely not. And, you know, I'm not even sure that we

raised $7 million. Last I heard it was less than that. I'm hearing this figure today from the news. We're meeting with our FEC compliance firm tomorrow to go over the year-end

reports, so we'll know exactly how much we did raise. But, no. No. Absolutely not. You know, I'm not using campaign funds. KUDLOW: And if you used any campaign... MS.

O'DONNELL: We're not using the balance. KUDLOW: And if you use any campaign funds for your own legal defense, is this not the Charlie Rangel problem? MS. O'DONNELL: My--no!

KUDLOW: You mentioned a moment ago that you're using it for your own legal defense. MS. O'DONNELL: No, no, no, no, no, no. No, no, no. Absolutely not. You can spin this however you

want. KUDLOW: I'm just asking a straight question. MS. O'DONNELL: The campaign is--no. KUDLOW: There's no spin coming from me. MS. O'DONNELL: No. KUDLOW: If anything,

because you're a tea party person, I'm inclined to be sympathetic. MS. O'DONNELL: I assure you... KUDLOW: But I am a financial--I am a financial guy, Christine. MS.

O'DONNELL: Listen, we've got--we have... KUDLOW: But I'm asking questions that a lot of my pro-tea party friends are asking you. MS. O'DONNELL: Right. Right. No,

actually, no one's asking me these things other than you. But let me say this... KUDLOW: They're coming to me first. MS. O'DONNELL: We have these... KUDLOW: They're

coming to me first. MS. O'DONNELL: Can you let me speak, Larry? KUDLOW: All right. Go ahead. Please. I'm sorry. MS. O'DONNELL: Thank you. KUDLOW: I beg your pardon. MS.

O'DONNELL: Thank you. We have the best FEC compliance firm in DC working on this with us. We have the best campaign lawyer working with us, and we have since the summer. Both of these

professionals are making sure that we are doing everything above board, and they are quite astonished at these accusations and they're merely accusations circulating to help create this

sensational buzz to discredit everything that happened in Delaware. They did the same thing to Sarah Palin. And it doesn't matter if six months from now I'm cleared. They're

hoping that the damage is done simply by launching this investigations, and then in the court of public opinion people aren't going to be paying attention... KUDLOW: Well, look--all

right, you're been very effective in rebut. Look, I think it will matter if you are cleared. MS. O'DONNELL: Yeah. KUDLOW: And I think it will matter for you personally, and I think

it will matter for the whole tea party. So I think this is all terribly important. Look, we're flat out of time. I just want to say this... MS. O'DONNELL: And we're taking

this seriously. Like I said... KUDLOW: Oh, I hope you are. MS. O'DONNELL: It's an investigation. KUDLOW: I hope you are because... MS. O'DONNELL: If anything does materialize,

we will continue to fully cooperate as we have. KUDLOW: This is a story bigger than Christine O'Donnell. This is a national story about the fate of the tea party... MS. O'DONNELL:

Right. KUDLOW: ...which I will say again is the most important and most powerful force in American politics today... MS. O'DONNELL: Absolutely. KUDLOW: ...with the chance of reforming

our whole federal fiscal system and Obamacare and whatnot. So, Christine, again... MS. O'DONNELL: And the message that... KUDLOW: I thank you for coming on. MS. O'DONNELL: The

message is saying by investigating me... KUDLOW: I want to wish you a happy new year, sincerely. I want wish you a happy new year. I'm sorry to be aggressive. MS. O'DONNELL: OK,

let me just close with this. The reason why I have to continue fighting this is the message that they're trying to say is if you challenge the system, you're going to be attacked

with these kind of phony investigations. And I'm here to say don't let that scare you off. KUDLOW: All right. I hear you. I hear you. And, again, thank you for coming on. I

didn't mean to be too aggressive. MS. O'DONNELL: No problem. No problem. KUDLOW: I will--I will wish you all the best of luck, and I will wish you a happy new year. Christine

O'Donnell, thank you very much. MS. O'DONNELL: Thank you. Thank you, Larry. _Questions? Comments, send your emails to: [email protected]_