neil: all right, i just down a pint. welcome, everybody. i am neil cavuto. i knew this irs scandal was not about to quit because when they weren't so much on to say a word to those investigating guys over the notion of this scandal being short and sweet, that can be done because it doesn't appear to be happening. my advice, yo he may want to: a special prosecutor. a subject i raised with marco rubio seconds ago. neil: do we need a special prosecutor?

>> there is some downside to having a special prosecutor but we may need that. in way that will get to the bottom of it. neil: a guy who knows this very well, robert gray on this. should they have more cause for a prosecutor? >> when they take the fifth amendment, that spells trouble. more trouble than it was earlier in the week. it has been for at least eight days, they have to make a determination fairly quickly if they are in for the long haul or have to set in motion calling for the special prosecutor.

neil: what difference when a special prosecutor expecting information from anyone else? >> they will have all the powers department of justice will have witt one significant advantage, presumably public sentiment behind the fact they would be able to conduct independent investigation. if that special prosecutor or special counsel is appointed, decisions that would be made will be made by the special counsel. do you grant that witness immunity for what they might know about contact with higher-level officials within the irs? neil: is this a pattern you are seeing that people don't talk?

i don't want to talk. they hope it goes away. can it fuel what will be a lengthy, perhaps summerlong scandalous environment? >> sure. on the one hand personally for the witness on advice of counsel protect yourself serving a fifth amendment purpose. neil: i see that as just a naive person, but to the american people it looks like they are hiding something. >> schmidt statements under oath. because of the potential of inconsistency, but understand the purpose of the fifth amendment waa to protect the innocent, not just to protect the guilty.

it is not an insignificant step. i would also suggest to you it means her government career is over. neil: at the very least. the irs is doing this kind of stuff, hiding information and targeting groups, they should go to jail. >> it is not the underlining conduct, it is the cover-up which causes the problems. if they were obstructing justice or making false statements, that spells trouble and a protracted situation. neil: let's say we are not speaking unless we can get a deal. >> sure. on the one hand you try to make it worse, don't do anything that

will make it worse than they already are. since you don't know whose hands is going to be in. neil: you want me to sing like a canary. >> congress can't compel the testimony. if you do so, you will follow any future department of justice investigation of them and anybody else. neil: your account on this. usually where there is smoke, there is fire. something about it. >> this is a story that is not going away.

they are understandably concerned about what happened. i suspect the justice department will have ver a difficult decisn to make about whether or not it continues forward orbital ask fothe employment of a special counsel. neil: thank you very much. the man who used to head up that department, with the you make of the former top prosecutor saying right now it is looking more than it did before, we do have a need for somebody to step back. >> i'm not convinced based on what we know today is special prosecutor is necessary.

i have issue with prosecutor. people have this notion special prosecutors today are independent of the white house. the independent counsel statute expired ecause congress realized there are serious issues with the authority and scope of authority of an independent counsel. we can appoint a special counsel but how much independence i have from the department of justice under the independent counsel statute. i think the department of justice is in the process of evaluating what the case is in this particular matter. neil: i'm sorry, i just want to be clear, you would recommend what? get the response a lot of folks

hope, this seems like a kangaroo court what is going on now. would have to do something which would seem more effective, what would that be? >> engage in an investigation. in thiinvestigate and prosecute. that would be unwise at this juncture. you don't want to do anything in congress that could jeopardize the investigation. i still think we have to give additional time to make some decisions about the best way to% ensure justice. i do agree with your other guest, the assertion of the fifth amendment is it practices it up.

neil: did that happen when he pleaded the fifth? i see your point about c with a justice goes from this on its own, but isn't that against the fox pleasing henhouse? >> i have confidence in the department of justice, and they may make a decision that we can't move forward here, but if the department makes decisions contrary to the department of justice that visit with career prosecutors stepping forward with these becoming politicized at the department of justice. we have to be very careful making the decision. neil: someone always sings. normally deals are off if you

make them sing. but that is the next step. if that is the case, how soon? >> that is hard to predict frankly. it will depend upon what evidence ttey are able to communicate the case we can present to someone in terms of they can put pressure on the individual and that individual is willing to come forward for a deal that may be critical prosecuting somebody for wrongdoing. neil: very good seeing you again. thank you. what do you do when irs agents get out of hand? >> let's find out what happened here. either one is bad, we need to know the answer to that.

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neil: recently filed an amendment that would call for punishment of irs agents who leaked. what would that embark upon? >> it would be a felony if they do that intentionally. you're turning over documents to a government agency, somebody cooperating with the press in an effort to embarrass you. separate from the nonprofit section, another thing that hasn't gotten enough attention. it has to be criminalized. neil: forget about if you should cut them, any agent who normally go through documents should know they should go to prison. what do you think of thaa? >> i think it is terrific. this is like irs agents gone wild. what we thought were a bunch of

frat boys causing his trouble, we're finding it goes all the way almost up to the top. why not hold them to a standard second to the military should be one that we give our most sacred of information, why should we sit there and allow them to get away with this type of trajan? neil: how do you know when you are targeting a group who are leaking a group that it is actually long term best of intentions to get either money or suspicious activity revealed out of a group. it is stifling that activity. >> whatever happened at the irs, we don't know how much was politically driven from the top or a culture the thought

departed groups were scary and we should follow them closely. different from choosing a group and selectively leaking to the press they have pretty interesting tax status you ought to look at. that is super creepy. not necessarily under discussion here. we just had the ministration going after fox reporters and other reporters using the espionage act. judy miller going under for the intelligent identities. both were designed to stop leaks. they give prosecutors more with those given information. i understand the sentiment, but it might just be another ruse to go after journalists and other citizens even more than we already are.

neil: in washington is seems rampant to pick everything apart, to strong-arm your way. if you're just trying to lay the foundation, without the boss saying anything. >> it is definitely intimidating. whether they let the irs at the time directed it. whoever is at the top is absolutely acceptable. unfair targeting of the tea party groups, the other thing could be cultural competence. to get tax-exempt status you cannot be engaged political activity. but it is not always clear. neil: media matters in texas. >> i don't work for them.

neil: i am not saying you do. >> if you contribute on your work-related blackberry, is that political activity? they say they sound political celebs do due diligence as opposed to groups who are cancer related or disease-related. >> it was like constitution, right-wing politically. president obama has acknowledged this, they improperly weighed the political terms, corrected for it anddthen they went back. >> cut your short load. neil: to these gentlemen's point

whether it was deliberate or accidental, if you are out of the loop, you know about it. i don't know if that is going to cut it. >> everybody tried the obama administration. he pointed out several times they hired 16,000 people to handle obamacare. we had to instruct these guys artothe same high standards we e the irs agents would have. iif you know how much we make as well as medical records, it is very dangerous. neil: somebody on the whole usama bin laden raid material, stuff that doesn't make them lo good, we will be on you.

>> go read the new yorker article. what part wasn't a leak? no idea if any of it was true. neil: where do you think this is going and as a compromise these institutions. >> what pains me is this is like a slow pitch across the home plate. obama needs to acknowledge the wrongs, move on and not let it compromise the agenda. >> he has lost his response to this. >> so far yes. why aren't we talking about dodging billions of dollars of taxes? i am fascinated and amazed we

are not talking about apples. neil: apple still paid close to 24%. legally using the tax code..% >> that is an unethical use. it is very much related. oh, my goodness. they are very much related. neil: we will have them all back. six out of 10 voters say the government has simply gone too far by seizing phone records. now kiss your internet privacy goodbye. it raises the price of fishmeal, cattle feed and beef.

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neil: this is getting weird. the government e-mails and messages, like irving is the leader of go daddy. he says washington has gone too far. it is a little unnerving. we are curious about who is on your side. >> i've never had that conversation with the irs. i would say we protect the privacy of the small businesses. there is overreaching. we're in the business of putting small businesses in business. when the economy is children a little bit people turned

themselves in america to say i'm going to go start my own business. they wwll take that step and the easiest place to do that is online. neil: became a cottage industry in and of your own. i assume you get powerful political attention. the government thinks a lot of people to your site, we want to know who they arr. just like essentially coming that way to google and to verizon. we want to get these phone records, i'm always shocked they just say yeah. >> i think it is not right.

neil: they are suspicious characters. >> and the evidence is? where is the proof that is actually happening, is there a subpoena? quite frankly we are trusted by these little businesses to protect them. protect them from hacking, protect them from themselves. trying to figure out how to make something real out of it. providing the service that does that for them. neil: two people overreact? i have people who have stopped e-mailing me the sources i used, by pizza guy, to make the point

is a chilling, corrosive effect doing quite well, but you might think twice and i really want to call these people were set up a site knowing they may be handing over valuable information. >> any policy that creates fear, worry, doubt in the heart of the brain, i want to try this. you can send mail back and forth. there are a lot of things you can still do to protect yourself. neil: as a human being, your

reaction to this, what do you think? >> it was very awkward for a government agency seeking the truth on all matters, i was surprised. neil: do you think the government is more intimidating or listen to it after this? >> after you supposedly taking pictures, taking pictures of the individual to take that position was rather interesting. neil: there might be a legal reason for it. >> we will see how that enrolls over the next couple of weeks.

neil: go daddy, what is behind that name? >> he was trying to figure out, this is interesting with domain names, it was not a very catchy name, big daddy was taken. go daddy was open, so we took that. all over the wall. they will do whatever they do to get a name that is unique and might be catchy. 800 new top-level names, their own unique name. neil: when we come back, another terror attack. this video today is very, very chilly.

those two guys might be behind it. it gets even worse after this. no. why? apparently my bit card is. what? i know. don't worr we have cancelled your old card. gre. thank you. in addition to us monitoring your accounts for unusual activity, you could alsoet up free account alerts. okay. [ female announcer ] at wells fargo we're working around the clock to help pte your money and financial information. here's your temporary card. welcome back. how s london? [ female announcer when people talk, great things hapappen.

>> we must fight them as they fight us. i apologize women had to witness this today. neil: an eye for an eye, but is a making of a nightmare in london as we speak. a terror attack, that is what the mayor of london is calling it.

an issue so serious they cut short a trip to france to meet with top security officials to find outtwhat went down. new paragraph beheading of a soldier at the hands of that guy who are now behind bars and being aggressively questioned by authorities. there in lies the route raising hackles again, they will do it and brag about it and even on video. what have you connected with this? >> it is something that is very mean, very vengeful and the perpetrators are asking to take out their aggression to punish

the british military for some support of u.s. the train line is homegrown in the uk. it has a huge hommgrown population where a high level of terrorist activity. it is very much point this whole thing. today's attack illustrates what it can do, make no mistake about it, these guys are probably motivated in part because they believe we're at war with them, they had been commanded. when i have issued this order, people to uuderstand this is a command.

this resonates with people like these two guys and the more christmas gifts, that is what they want. representing whether it is the british army or the u.s. army and people have to understand that is what this illustrates. it is not a random act. neil: the part of gruesome killings put on tape and sent out to the world. we are not only bad, we are awful. >> you can imagine how this visual resonates on the public. you could say for example the attack that took place at fort

hood could have gone another way. there is an attack in denmark not unlike this one and in france. where do we see this all coming? it is very difficult to stay ahead of these things. what is to be motivation? if they believe that, we believe we use drones indiscriminately, that is the way they view it, have to exact revenge. we look at it, his revenge does not end because the ceo says we

didn't have a good quarter. revenge goes for these guys five, 10, 15 years. it is not going to disappear. we have to be prepared for it. neil: thank you very much. meanwhile the foxbusiness alert, a rare dow jones industrial. he would never guess who is leading that effort. that you cat create the future... bylinging to the past. and with that: you'reto. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best periences below... to the finest comforts above. we're not simp saluting histy... we're mang it.

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neil: investors not getting homesick, he is getting sick of facebook and the shares are on a wicked streak. first up, issue one, hewlett-packard, the biggest gainer this year. boosting its outlook. numbers after the bell showing

hp is on a big role. bias? >> a big role on the side. it is a big part of it is make within. -- meg whitman. looking at what she has done with ebay, what she did at the pass corporations including disney. in my opinion you look at abc, consumer revenue down. it is about what the market is believing in. neil: pcs are going down, a straight line, everybody is using their mobile device. 20% comes from printing but this

is an interesting point that came out. hp cut the expenses by 9%. that is one of the reasons the bottom line looks good. neil: you are not a believer? >> we had one disaster after another in the past four yeaas. a good distanc businesswoman. neil: issue two, facebook losing his cool. david, is facebook ready? >> one thing about facebook that is clear, it has a guy running it who knows what he is doing. i know there's a lot of talk about teams trying to look for something else but there really hasn't been anything to replace it. we're hoping to to get into the social space but there hasn't

been anything to replace it. the problem with facebook is it is not making money. even though it has come down from the top price, it is still so overvalued. it is 2001 is the price equity ratio, it is ridiculous. the stock is overvalued. it will be here for a while, the stock is still overvalued. >> zuckerberg is still in char charge, but he will not have the control he has. cool kids are not using facebook. he is a drifter.

>> there are lots of alternatives that do not show the ads in your face. the valuation scarcity, but linked in is also high. neil: high-end homes, bouncing back? >> if you are lucky enough to be holding the stock it is at its top now. neil: to you by this? >> i don't. never buy another top of the market. i have been wrong past two weeks. the net income of americans had not increased, that eventually

comes back in terms of what they're able to buy. the fed getting ready to stop buying those mortgage bonds, interest rates will go up and that hurts the housing market. neil: even allowing for the fact americans have a much shorter income, the value of homes as such percolated of late, it is a far cry from 2006, 2007. what do you think? >> 18 year lows in homeownersh homeownership, 18 year lows. think about this, home prices have come off of 40%. those foreclosures were gobbled up by hedge funds and now they have gobbled up inventory are

now renting back to people who cannot afford to buy homes. the bottom line is this, if you're going to be a buyer, do it with the middle of the road home buyers. look at lumber. neil: you don't think it is back with a vengeance, right? >> no, i don't. a lot of the excitement will die down. >> i would love to see housing come back. neil: the viral video making conservatives absolutely livid. she will be my coanchor next week. until then, thousands of people

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>> every in cleveland got obama's vote, keep obama president. he gave me a phone. you sign up, you have low income, disability. neil: be careful what you wish for because 44,000 of those folks who did indeed get free phones got a very unpleasant surprise. personal information posted on the internet. investigating this major privacy mess. here we go again, but it proved that would be very loyal, loving

of the president. what happened? >> here we have a private sector company responsible for the data they collect, they make in india alone $370,000 per month off the contracts they promote. we are holding them responsible for securing the data they've collected. we don't look to others, we look for the people who've collected the data and they are responsible for maintaining security. neil: i guess the timing of this is such you wonder the irs getting stuff on conservative groups going beyond just conservative groups, the justice department cracking down, i was alarmed at the foxnews family. and on and on and on.

hitting up private companies. it is icky. >> companies who collect data have to be responsible for it. neil: is very intimidating. the irs knocks on your door and say we want some info. nine times out of 10 those companiee give the info because it is frightening when the government comes asking for stuff, you give it. >> we have a company pointing to the media saying they have been hacking their systems. i will not listen the argument we didn't do enough to protect, somebody hacked our servers.

neil: a poor woman who got a free phone for whatever reason trying to get info on her, that is a little weird. >> left temple as a studio they were showing me they literally found all his information in a google search. it has to begin with the people who make money off of these databases. the government comes in to verify. when there is a breach, now 26 attorney general's looking after this. most number of people are consumers who have the information accessed. we have a responsibility.

neil: it probably is too good to be true. thank you very much. >> so good to be with you. neil: now washington is snooping on everything. makinghem work. we oversee 20% of the world's financial assets. and that gives us scale and insight no one else has. investment management combined with investment servicing. bringing the power of investments to people's lives. invested in the world. bny mellon. but with advair, m breathing better. so now i can help make this a great block party. ♪ [ male announce ] advair is clinically proven to help significantly improve lung function.

unlike most copd medications, advair contains both an anti-inflammatory and a long-acting bronchodilator working together to help improve your lung function all day. advair won't replace fast-acting inhalers for sudden symptoms and should not bused more than twice a day. people with copd taking advair may have a gher chance of pneumonia. advair may incrse your risk of osteoporosis some eye prlems. tell your doctor ifou have a heart condition or high blood pressure before taking advair. ask your doctor if including advair could help improve your lung function. [ male uncer ] advair diskus fluticasone propionate and sameterol inhalation powder. get your first prescription free and save on refills at advaircopd.com. welwhere w york state islo... investing one billion dollars to attract and gr business. where companies like geico are investing in technology finance. welcome to the state where cutting taxes for business... is our busines welcome to the new buffalo.

welcome the new buffalo. welcome to the new buffalo. new york ste is throwing out the old rule book to give your busiss a new edge, the edge you can only get t in new york state. to grow our start your business, visit thenewny.com neil: it is snoopapalooza. this out-of-control, going on and on and on. >> i live in the south, we pride ourselves as being great snoopers. there is a reason james madison put the first amendment of the bill of rights because he realized if the freedom of the press is ever taken away all other freedoms would soon be taken away also. we're seeing this more and more.

this is being used as kind of intimidation to not ever think about going up against the administration. neil: you would think people would see this and say no more. i think they're even more intimidated by organizations like the irs. look at what they did. >> who is going to tell us what they can't do. i don't even understand it so i have to send a check to someone. neil: it is supposed to mean something. >> it is a punctuation. journalist go to the first amendment card for understandable reasons, but is the fourth amendment he voted with all this. expectation of privacy, the

rights to be protected against search and seizure. in a bipartisan way, especially with the drug war but the last 12 to 13 years with the response to 9/11. now happy to preside over an apparatus snooping into millions. millions of private individual phone records and cell phone records without us even able to know if the justice department or anybody else is doing it. both parties have legislated into being. nothing is safe. neil: do you think technology did this? >> it is funny imagined technology. when it goes right, you take it for granted. when it goes wrong, it pays

attention to itself. neil: we are not using it any less. >> snooppng does some good presumably hoping to catch the boston palmer suspects. neil: that is the battle. we have this tug-of-war, balancing act of keeping us safe and realizing in order to keep us safe we compromise along the way. >> i'm going to have to disagree. there's a huge difference between the government listening in and somebody talking about their grandmothers cookie recipe. and those who are known to speak out against the obama administration. you don't see this on other networks, you see this coming out against fox. have you checked your phones being bugged?

right now nobody is truly safe. neil: where is it all going? >> they will be a backlash because it's against the press. they are going to disband the flames of this for a while. neil: is make making a decisione this. we get targeted. >> they don't want to encourage the double standard. that is a bad thing. the press should always be against it. neil: it seems like ministrations taking a note of it.

>> nixon, if we had the same press back then as we have now, exactly. neil: good night. gerri: hello, everyby, i am gerri willis. tonight on "the willis report." a top irs official takes the fifth and denied misleading congress. i have not done anything wrong. >gerri: watch out, your cell phones tracking your every move. and our seri of special reports on youmedical privacy. the big business trading your medical records. re watching out r you tonight on "the willis report."