Bill O'Reilly weighed in last night on the growing scandal involving Sen. Bob Menendez (D-N.J.). A report from The Daily Caller, citing a high-level Dominican government official, claims that Menendez and a wealthy campaign donor, Dr. Salomon Melgen, have hired prostitutes for numerous sex parties while on trips to the Caribbean nation.

The alleged parties were at Melgen's villa in Casa de Campo, where Menendez has visited several times a year for the past three years, according to the report. Menendez has denied the allegations, including one that at least one underage prostitute was hired. His office called the report, "politically motivated by a right-wing blog."

The FBI has now begun investigating Melgen for fraud. Menendez has reimbursed $58,500 to Melgen for the private jet trips to the Dominican Republic, but he did not

report the trips to the Senate as required. O'Reilly said it's becoming clear that Menendez, who chairs the Foreign Relations Committee, is in a lot of trouble, saying "the whole story is beginning to unravel."

"All fair-minded Americans will presume that Senator Menendez is innocent until proven guilty of any criminal allegation. But in general, exploiting children is the worst possible scenario for any politician and Menendez has to know that. The evidence clearly shows that he was not up-front about the jet trips, but that's a trifle compared to the underage prostitution allegation," said O'Reilly.

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O'Reilly then discussed the scandal with Fox News contributorLaura Ingraham. He said that for now, he's willing to give Menendez the benefit of the doubt on the prostitution allegations.

Ingraham said it's clear that Menendez has violated Senate ethics rules by not disclosing the private jet trips as significant gifts.

"It reminds me a little bit of what happened with the John Edwards story. Of course, one publication, The National Enquirer, was covering the Edwards story. Pretty much everyone stayed away from it or poo-pooed it and then a significant amount of time later it turned out that The National Enquirer was right and they had done some pretty good reporting. I don't know the background on the reporting done by The Daily Caller, but there is some fairly significant reporting it looks like from multiple women who have dates, times, places and specific information about what was paid, what wasn't paid, what he liked, what he didn't like. ... I certainly hope that it's not true." she said.

Ingraham said if Menendez is telling the truth, he should hold a press conference and address the reports.

Watch the discussion: