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CNN LARRY KING LIVE

Ling & Lee On Way Home Now; Shooting in Pennsylvania; Interview with Michael Jackson's Manager; Michael Jackson's Manager Describes Day of Jackson's Death

Aired August 4, 2009 - 21:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


LARRY KING, HOST: Tonight, breaking news -- American journalists Laura Ling and Euna Lee on their way home. President Bill Clinton secures their freedom from North Korea during a high stakes meeting with Kim Jong Il. Five harrowing months in captivity and a sentence of 12 years of hard labor are now behind them.

Plus, Michael Jackson exclusive -- his manager reveals for the first time how he told the children about their father's death, how they reacted and how they're going to make it without him, next on LARRY KING LIVE.

Good evening.

The words two families and a nation have been waiting to hear -- President Clinton has safely left North Korea with Laura Ling and Euna Lee. They are now en route to Los Angeles. There you see them at the airport in North Korea, where Laura and Euna will be united with their families. That's them boarding the plane. A long flight to L.A. They'll arrive in L.A. Tomorrow morning.

Joining us, three outstanding journalists.

In New York, Dan Rather, the anchor and managing editor of HDNet's "Dan Rather Reports."

In Beijing Games, Mike Chinoy, the author of "Meltdown: The Inside Story of the North Korean Nuclear Crisis," a former CNN senior Asia correspondent. He's been to North Korea 14 times.

And in Washington, Jill Dougherty, CNN's veteran foreign affairs correspondent.

Dan, on a personal note, close member of the -- of the Lee family told me early this morning that they knew this was a done deal when Clinton was on the way there.

Does that surprise you?

DAN RATHER, ANCHOR, MANAGING EDITOR, "DAN RATHER REPORTS": No, because you don't move a big asset diplomatically, such as Bill Clinton, without it being clearly settled in advance that he's going to get what he's coming for. So that doesn't surprise me at all, Larry.

KING: Do you think there was a quid pro-quo here, Dan? RATHER: I have no way of knowing, Larry. I do think that this could be a turning point in resuming some kind of dialogue with the North Koreans. Certainly -- and I say this based on my own reporting, talking to people in the North Korean government and others -- they certainly hope that it will be. As you noted and CNN has been reporting, the White House and the State Department are keeping very mum about this whole thing.

However, it could be a turning point in the dialogue. The North Koreans almost -- they badly wanted respect. And this shows respect.

I'm told that when the conversations first began about, well, whom should we send, if we're going to send anybody, vice president -- former Vice President Gore, perhaps Governor Richardson of New Mexico, who knows the North Koreans well.

But what I'm told is that the North Koreans said one of the Clintons. And, of course, it turned out to be Bill Clinton.

So point number one...

KING: All right, Jill...

RATHER: ...Bill Clinton still has it, that is...

KING: Yes, you're not kidding.

RATHER: ...in terms of his recognition, whether you agree with it or not, around the world. The North Koreans saw him as "the big guy."

KING: Jill...

RATHER: The big guy came, he got what he came for. We'll have to see where it goes from here. But there's no question in my mind, the North Koreans hope this will read -- lead to a whole new area...

KING: Jill...

RATHER: ...an era in negotiations.

KING: Jill Dougherty, do you concur?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: I do concur that that's the hope. But I don't necessarily think that it is going to happen, because there is a division in these two things. There is the personal story of these two journalists. And then there's the other story, and that is getting North Korea to come back to the six party talks, not just talking directly with the United States, but doing what the administration wants, which is coming back and talking with the other countries that are in these six party talks.

And the North Koreans, so far, are, it seems, willing and ready to talk immediately to the United States, but not to the other countries. And that's the problem. KING: There you see President Clinton greeting them as they arrive on the plane and get set for the flight to L.A. They'll be here in Los Angeles tomorrow morning.

Mike Chinoy, I guess nobody knows North Korea better than you.

Why did they take this action?

MIKE CHINOY, NORTH KOREA EXPERT: Why did the North Koreans take this action?

Well, I think, it's been clear ever since these two women slipped across the border and were captured by North Korean border guards that this was not a problem the North Korean leadership wanted. And the signals have all along been that they wanted to do a deal. These women were pretty well treated in captivity. They were kept in a guest House in Pyongyang, not in a prison. They were given consular access to the Swedish ambassador. They were allowed to call home.

And I think the North Koreans were waiting for the right moment and the clear signal that the United States was prepared to have a very senior official go and try and break the ice. And that moment has now arrived.

I think critical here is going to be what Kim Jong Il and Bill Clinton talked about and whether or not in what Kim Jong Il said there's enough for Clinton to report back to the Obama administration and for the Obama administration to then try and move on that and see whether there's some hope for getting diplomacy underway.

If the administration remains fixated that the North has to agree now to the six party process, we're going to have trouble.

But I think there is -- I think Dan's right, there's a lot of potential here for the U.S. and North Korea to try and ratchet the tension down and get diplomacy going again.

KING: We have a statement, folks, from the families of the two journalists. And here's what they say, in part: "We are so grateful to our government, President Obama, Secretary Clinton the United States State Department, for their dedication and hard work on behalf of American citizens. We especially want to thank President Bill Clinton for taking on such an arduous mission and Vice President Al Gore for his tireless efforts to bring Laura and Euna home. We're counting the seconds to hold Laura and Euna in our arms."

Dan, why Bill Clinton and not the Secretary of State, Hilary Clinton?

RATHER: Well, number one, he is a former president of the United States.

Number two, he may be, with the possible exception now of President Obama, the best known American. This was the biggest piece on the chessboard that they could expect to get. And let me say, in reference to something that was talked about earlier, that I noticed today in pictures of the arrival of President Clinton -- and I think it should be underscored -- that there on the tarmac to meet them was Kim Kye Gwan. He was the Korean negotiator when the six party talks were underway.

Now, they have pulled out of it. But I think it should be noted he was at the airport to meet President Clinton, as were Madame Choi, who is an expert on Western media relations and putting forth a better image for the North Vietnamese, to say nothing of several other people there.

But I think the fact that this guy who was the chief negotiator for the North Koreans in the six party talks was there to meet him -- and many people think he is number two -- number three. He's two places away from the very top, Kim Jong Il himself.

So I don't want to attach too much to this. There's a lot we don't know. But I did find it interesting...

KING: Yes.

RATHER: ...that that man was on the tarmac to meet Bill Clinton when he arrived.

KING: We'll be right back with more on this fascinating story. It's not often in this business good news carries the day. Good news is carrying the day.

We'll be right back.

(COMMERCIAL BREAK)

KING: We're back.

The families of Laura and Euna were on this show back on June 1st.

Here's what Lisa Ling had to say at that time.

(BEGIN VIDEO CLIP FROM JUNE 1, 2009)

LISA LING, LAURA LING'S SISTER: We don't -- we don't know the details about what happened on March 17th. But if at any point the girls went into North Korea, we apologize on their behalf. They never intended to do so. And we are sorry. And we beg your government to allow my sister and Michael's wife and Hannah's mother to come home.

(END VIDEO CLIP)

KING: By the way, Al Gore and Joe Hyatt, the co-founders of Current media and employers of Laura Ling and Euna Lee released this statement tonight, reading, in part: "We want to thank the Obama administration for its continuous and determined efforts to achieve this outcome and President Clinton for his willingness to undertake the mission. All of us at Current are overjoyed that Laura and Euna's safe return. Our hearts go out to them and to their families for persevering through this horrible experience."

Jill, if they wanted to make a deal and they were not happy with any kind of imprisonment, why were they so tough at the sentencing?

DOUGHERTY: Because they believed that these women had broken North Korean law. And you have to note that right up until the end, that is what they said. And when Secretary Clinton, going back a couple of weeks ago, when she changed the message that she had -- initially, she was saying North Korean laws -- you know, this is a bogus charge. I'm not quoting, but this is a bogus charge.

And then -- and the women should be released on a humanitarian basis. And then later, she said it should be an amnesty. And there is an understanding of that. It was kind of an indirect way of saying that these women might have been culpable, might have broken the law.

So the North Koreans were able to kind of face right up until the end by saying, yes, she broke our law, however, we are magnanimous and we are going to forgive them and let them go home. So that was important for the North Koreans. And it was important for the US, too.

KING: Dan, is this a passing incident in the scene of things or is it historic?

Could it lead -- are you optimistic this could lead to bigger things?

RATHER: Well, I'm an optimist by nature, by experience, Larry. I simply don't know. But I do want to point out, if you've got just a second. I went through my notes -- that back in the forum here in New York City in March of 2007, Henry Kissinger and Madeline Albright, the former secretary of State, stressed that, in their opinion, that North Korea needed to have a deal in place before the end of the Bush administration, because regardless of the election, with a new administration, it would be tougher to get a deal.

And my notes show here that the man I mentioned earlier, Kim Kye Gwan, a big man -- a big player in North Korea -- responded by saying here's a hint, "Send somebody who's high enough up to deal with our leadership and a deal will get done."

Now, it never got done. I think the best we can say about this, looking with some optimism to it, that the door has opened and we'll have to see where it goes from here.

But make no mistake -- the North Koreans are...

KING: All right...

RATHER: ...they're eager to keep their respect. But they're eager for the world to know -- this is their viewpoint -- that they're credible, that they will be tough negotiators on the nuclear weapons issue, but that they do want to deal.

Now, whether the United States government... KING: Laura...

RATHER: ...feels they can be trusted or not, of course, is a another matter.

KING: Laura called her family after she was detained.

Here's Lisa Ling describing a phone call from her sister.

(BEGIN VIDEO CLIP)

LING: She sounds scared, Larry. I mean she sounds absolutely terrified. You know, it's been almost three months. And the communication with her has been so limited. We got that one phone call. That was the first time I'd heard her voice in two-and-a-half months. And we've gotten one letter. Our family got one letter and her husband got one letter. And then that's it. The only people who have seen them, outside of the North Koreans, is the Swedish delegation.

(END VIDEO CLIP)

KING: Mike Chinoy, based on your vast experience with this, are you optimistic?

CHINOY: I'm not sure I would be optimistic, because this is a very, very complicated issue. But one of the things that was true over the last eight-and-a-half years has been that the United States government has not had contact with the people who make the decisions in North Korea, and specifically with the man at the top, Kim Jong Il. All the negotiations were done at a lower level. And in the North Korean system, he calls the shots.

And so to engage him directly, to figure out where he's coming from, what might be possible, what are his concerns, is a very important first step. And it almost doesn't matter about the nitty- gritty of the details he went over with Bill Clinton. If the overall impression is that Kim wants a deal, then there is something out there to work with, although the specific issues of denuclearization, stopping missile production and exports and so on, are very, very tough.

But I think there's a potential opening if the Obama administration can creatively build on what Bill Clinton has achieved here.

KING: Well said.

Dan Rather, Mike Chinoy, Jill Dougherty, I'm sure we'll be calling upon you again.

They're expected back home tomorrow. Governor Bill Richardson knows the territory. His insights next.

(COMMERCIAL BREAK) KING: Bill Richardson has held many key posts with regard to things foreign. He is now, of course, the Democrat of New Mexico, the governor of that great state.

When you heard, Bill, that former President Clinton was going there, did you know they were going to come back?

GOV. BILL RICHARDSON (D), NEW MEXICO: Yes. I'd been aware of this potential trip. And I knew that if somebody of President Clinton's stature was sent as a special envoy, that the North Koreans would receive him.

I knew, more or less, that it would be good news, that we'd get the release of the two American journalists. You don't send an envoy like Bill Clinton without some kind of a guarantee of a result. And so I felt very good about the potential release of the two American journalists. So I was very pleased when that had happened.

KING: Had the Obama administration kept you informed of this?

RICHARDSON: Yes. Yes, I'd been working with them. They consulted me. I've been working with the North Koreans, with the families. But I wasn't involved in the last intricate negotiations that sent President Clinton.

But I was very pleased when I learned that, number one, the word amnesty was being used by both sides. That means that the girls -- this would be the basis for the two women, that they would be pardoned and that they wouldn't serve the hard labor and that they would be released by a presidential pardon by Kim Jong Il.

But Kim Jong Il getting President Clinton to come, it solidifies his domestic base, because he's been sick. He wants to be succeeded by one of his sons. There seems to be some turmoil there internally.

So this was important for Kim Jong Il to get somebody like Bill Clinton, who he'd been trying to get for years, to visit North Korea when he was president.

KING: OK. Right back with Governor Bill Richardson of New Mexico right after this.

(COMMERCIAL BREAK)

KING: We're back with Governor Richardson.

Governor, have you talked to the families at all yet?

RICHARDSON: Yes, yes, I spoke to Lisa Ling, who had been in regular contact. And she was just ecstatic, because it's been nearly five months. The contact has been limited. But our sense was that the North Koreans were feeding them, treating them properly, they were in a guest house.

But what was the most damaging was the sense of isolation, that they were going to be sentenced to 12 years of hard labor, not knowing what was going to happen, limited telephone contact.

But Lisa and her family, obviously, are ecstatic. And they've done so much to raise awareness of this issue and be diplomatic. I know they've been on your show several times. And I think their behavior is a model of how, when you are dealing with these very, very negative hostage situations, how families can be diplomatic, yet strong, and raise consciousness of the plight of their own relatives.

KING: This being a pardon, Governor, was it important that kind of both sides admit they made a mistake -- the girls made a mistake?

RICHARDSON: Yes. Yes. I think it was important, after the trial, that -- that the fact that they were in the country -- they crossed in -- in an illegal way. But it wasn't espionage. They were doing their jobs. They were journalists. But they crossed. And the North Koreans needed that kind of apology. This is why the word amnesty was used.

And after that, there was the view that the pardon could take place by Kim Jong Il. And that's what I believe triggered the visit by President Clinton. And I believe only somebody of his stature could have gotten this accomplished. So he deserves a lot of credit. But, also, Kim Jong Il needed this visit for his own internal political reasons.

KING: Do you think, Governor, this might lead to direct talks?

RICHARDSON: It might, because there are no talks whatsoever. In fact, I've never seen the relationship so negative. North Korea has refused to talk to us, to engage in the six party talks. There have been U.N. sanctions. So maybe this will open up some possible -- a process for either direct talks or them rejoining the six party talks or simply sending an envoy from the United States to really negotiate about how we can reduce the nuclear arsenal of the North Koreans in exchange for food, fuel -- although the North Koreans and the U.S. seem to think that maybe that's not the way to go, that the best thing is the North Koreans want face-to-face talks with us, because they think they're the major power in Asia.

They don't want intermediaries. They don't want the six party talks. They want to do it directly with us. And perhaps this trip was a signal. And this is, perhaps, the message that President Clinton may be taking back to President Obama, that the North Koreans are ready to talk, but only directly with us. I have no knowledge of that...

KING: No, I understand.

RICHARDSON: ...but I suspect that's what they may be saying.

KING: Governor, you supported the president.

Is this a big day for Obama?

RICHARDSON: It is a big day for Obama, because he skillfully sent an emissary -- well, agreed to send an emissary unofficially. He's not a spokesman for the administration, President Clinton, but he is a former president.

And credit should go to President Clinton, who, I believe, undertook the mission; to Secretary of State Clinton, who was very engaged in this; and I guess partially to the North Koreans, who maybe are sending a signal that they're ready to talk by this humanitarian release.

But the biggest victors are the families, Lisa Ling, the way they conducted themselves. And the best news about everything is that these two American journalists, these women who were only doing their jobs and doing it very well, are coming home after five months of very grueling captivity.

KING: Do you expect to meet with the families, Bill?

You've been so close to this.

RICHARDSON: Well, I've -- I've met with Lisa Ling. I suspect we will. But I was just happy to play a very small part. But I think credit goes to these negotiations and to the Obama administration, which I believe is behind-the-scenes, but not directly involved.

And the outcome is good. And now, hopefully, this will lead to talks that will lessen tensions. That's in everybody's interests, Larry. You don't want a North Korea with several nuclear weapons, with a million men and women in arms, with missiles, with a number of land mines next to 27,000 American troops in South Korea. We all should try to lessen tensions here, no matter how bad any actor is.

KING: Yes. It's realistic.

Thank you, Governor, so much.

We'll be calling on you again.

RICHARDSON: Thank you, Larry.

KING: Governor Bill Richardson, Democrat of New Mexico, former ambassador to the U.N.

The man who told the Jackson children that their father had died is here. He'll tell us what happened on that sad day when LARRY KING LIVE returns.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN breaking news.

KING: We've got some other news for you. Five people are confirmed dead in a shooting, including the shooter. Several others injured. It took place inside a fitness center in Collier, Pennsylvania tonight.

Police received a phone call at 8:16 p.m., reporting a shooting inside the L.A. Fitness Gym. It's about eight miles southeast of Pittsburgh. What you're seeing now is a live shot of that center. No further information was available about the victims or the status of the reported shooter.

We now welcome to LARRY KING LIVE, finally, Frank DiLeo, Michael Jackson's manager. He worked for Michael from 1984 to 1989 and was rehired by Michael earlier this year, calling you out of retirement.

Why did he bring you back?

FRANK DILEO, MICHAEL JACKSON'S MANAGER: Well, first of all, you should understand that Michael and I have been speaking for the last couple of years when he came back from (INAUDIBLE). We were talking primarily about movie projects. And then he just called me and said, listen, man, would you like to manage me again?

He says, I need somebody that understands the music business and the touring business. And I said, sure, love to.

KING: The day he died, tell us how you first learned.

DILEO: I was having lunch at the Beverly Hilton. And I got a phone call from a fan who was...

KING: A fan?

DILEO: A fan who said, Frank, do you know there's an ambulance in front of Michael's house?

And I said, no, I don't, but I'm going to look right into it. And I hung up. I called Michael's assistant. And I said -- his name is Michael, also.

I said Michael, is there an ambulance at the house?

He said, that's what I heard. He said, I'm on my way. And I said, well, I'll be there in one second. I went in to get my ticket for the car. And I called Randi Phillips and said look, you're closer...

KING: Randi of...

DILEO: AEG.

KING: Right.

DILEO: I said you're closer to Michael's house than I am at this moment. Go there right away, I'll meet you there. Drove there, the ambulance had already left, asked Randy. He turned around. I came from the other direction. I went to pull in, they said, Frank, he left. I said where did he go? To the hospital. I drove to UCLA.

KING: What was the scene like? Where were the children?

DILEO: The children were in another room down the hall. They brought Randy and I back. We were the first two people there. And they were working on him in the room.

KING: They were still working on him?

DILEO: Yes.

KING: He was alive at that point?

DILEO: I don't know. I said to Randy, geez, I think he's alive. We have a shot here he'll be OK. When the nurse came out and I looked at her and she looked at me, I almost fainted.

KING: Because she said --

DILEO: She just looked at me and said he's not going to make it. He's gone. But we'll keep working on him until his mother gets here.

KING: Who finally told you he was dead?

DILEO: That nurse did.

KING: You had to tell the children?

DILEO: I had to tell Katherine first. And I told her with a doctor and a social worker. And it was pretty emotional. She grabbed me and cried and we hugged and cried together. And then I had to tell the children.

In the meantime, I called Joe Jackson in between. But he'd already known. I gave him my sympathy, and I went in and told the children.

KING: How do you do something like that? No experience is there?

DILEO: No, I've never lost somebody like that. It was very difficult. I went in with a social worker and a doctor. And just had to say -- they knew, they knew. And they got up and I said, I'm sorry, but your father's passed away. And they hung on to me for a while. We all cried.

KING: How did you take it?

DILEO: Very bad. I mean, I've cried for days, and it's a lonely feeling, because I'm not family, but I'm a friend.

KING: You were more than a manager?

DILEO: Oh, yes, he was my friend. Forget the manager part. He was my friend. And we were close. We talked a lot. Not as often as I wanted to. But we worked well together years before and we were working well now.

KING: Did he seem physically OK?

DILEO: Yes, he was physically OK.

KING: He was rehearsing, right?

DILEO: He was rehearsing well, eating well. We were making sure that he had the right protein shakes, the right food. We gave him chicken. You know, we brought him food to eat. He ate it. He'd say I'm not hungry, but he'd eat it.

KING: Was he insured, by the way?

DILEO: Yes, there's insurance, not on him, but on non- performance. Although, it's AEG and Michael Jackson's company.

KING: So they get money?

DILEO: They get -- the company goes towards the estate.

KING: Does the dispute --

DILEO: When it pays off. It hasn't paid off yet.

KING: There's a dispute, Frank, about how many shows he agreed to perform. Here's what Leonard Rowe, the long time friend of Joe Jackson, told us a few weeks ago, watch.

(BEGIN VIDEO CLIP)

LEONARD ROWE, FRIEND OF JOE JACKSON: Larry, the first conversation I had with Michael Jackson the night -- it was a Friday night, the night he asked me to come and go to work for him. This is what he told me. He said, I only agreed to do 10 shows for AEG. I never agreed to do 50.

(END VIDEO CLIP)

KING: Is that true, Frank?

DILEO: No. Michael knew there was more than ten shows. He knew there were 50 shows. Sometimes Michael would like to say, gee, I'm only doing ten. I woke up, now I'm doing 40 more.

KING: He might have said that to Leonard?

DILEO: Yes, but what he was saying was what by popular demand I have to do 40. And incidentally, there were enough ticket requests to do 85.

KING: Eighty five?

DILEO: Eighty five. And you have to understand this also, the manager at the time and three attorneys read the contract to him. He knew how many shows he had to do.

KING: You read that contract?

DILEO: I read it too. And I know what's in the contract. And there was a minimum and a maximum.

KING: What's the minimum?

DILEO: You have to ask AEG. I'm not allowed to divulge. Not from AEG, but Michael's sake.

KING: We'll be right back. Friday night, Jermaine Jackson's here. Don't go away.

(COMMERCIAL BREAK)

KING: We're with Frank DiLeo, Michael Jackson's manager. You wanted to add something about the dates.

DILEO: Just the fact that it came out to 50 was because he wanted to beat Prince's record of 21, and be in the Guinness Book of World Records. He wanted to do 50 to put it out of touch.

KING: Really, he was competitive that way?

DILEO: Michael's a very competitive person in everything he does.

KING: All right. Frank, what about this dispute now? You know Mr. Branca. Who gets to be the handler of the funds? Katherine is the -- she's in charge, but they've got 60 days. How do you read it?

DILEO: Well, I read it this way. Branca and Maclaine are in charge.

KING: For 60 days?

DILEO: For 60 days. I'm sure something will be worked out with Mrs. Jackson. It may be her. She may want to appoint somebody. I think they're going to try to work that out. Mrs. Jackson is one of the loveliest women in the world. I think she's going to make the greatest grandmother ever.

I had two grandmothers. If I can pick another one, I'd want to be her grandchild. Whether she wants to personally haggle with movie companies and record companies is another thing.

KING: What do you think of the Branca companies?

DILEO: Yes, Michael liked them. He wouldn't have put them in there if he didn't like them.

KING: Do you think they can work together with Mrs. Jackson?

DILEO: Yes, absolutely, absolutely. They can work with her.

KING: Joe Jackson and Leonard Rowe were on this show. And Joe said that they seemed to have -- not imply, they said that Michael was being controlled. Watch this.

(BEGIN VIDEO CLIP)

ROWE: Michael Jackson's life at the end was being controlled and manipulated. Michael Jackson was not allowed to make his own decisions. He was not allowed to hire who he wanted to hire to work for him. Michael Jackson was being told what to do. And people were controlling Michael Jackson. The same people that were controlling Michael Jackson financially.

(END VIDEO CLIP)

KING: Want to comment on that?

DILEO: Absolutely. That is as false as they get. Michael Jackson has done and always did what he wanted to do.

KING: No one controlled him?

DILEO: No one controlled him. Listen, when I worked from 1984, you want to see Michael, call up. Is Michael available? What time? You come over. Same thing now. You want to see Michael Jackson? What time? You come over.

If he wants to see you, he's seeing you. If he doesn't want to see you --

KING: was not controlling him?

DILEO: How could they control him?

KING: Or out to harm him?

DILEO: Absolutely not. Absolutely not. Listen, this is a devastating thing for everybody. You think AEG's happy they've got 50 empty dates? They're not going to fill them this year.

KING: The family also, father Joe and sister Latoya, have suggested foul play. Here's what Joe Jackson told me in July. Watch.

(BEGIN VIDEO CLIP)

KING: Do you frankly think that drugs were involved in your son's life?

JOE JACKSON, FATHER OF MICHAEL JACKSON: Something happened there, Larry. It wasn't only drugs. There's something else behind all of that.

KING: What do you mean? Where is -- what are you thinking?

JACKSON: Well, I'm thinking that there's foul play.

(END VIDEO CLIP)

KING: Frank?

DILEO: Listen, something happened to Michael Jackson. We really don't know until the toxicology reports.

KING: We don't know at all. DILEO: We don't know at all. We weren't in the room. No one was sent up there to do any harm to Michael that we know of. I'm not sure what he's talking about. Did the doctor make a mistake? I don't know. You know, that has to come out.

KING: You don't think there was some plot?

DILEO: No. Absolutely not.

KING: Did you know about Michael's drug problem?

DILEO: I knew about it in the past. I didn't know if anything was going on now and I still don't. Because you have to remember something, to get the Lloyds of London to give you an insurance policy, you have to pass an exam. It was a four-hour exam with an outside doctor that they picked. They sent the doctor from New York. They examined him.

KING: They did that at the home?

DILEO: They did it somewhere. I wasn't here for that, but they have the results. They're not allowed to give them to anybody. But they said he was in great health. Now, you know, I asked them. I asked them in March, are you doing anything? He got a dig. Why would you ask me that? I said I want to be sure --

KING: What do you make of the doctor in the house full-time, Diprivan, stories like that?

DILEO: I never heard of Diprivan until I heard it on your show, to be honest with you. And I didn't know the doctor was staying overnight. Because at the end of the night, he went to his house, I went to my residence.

KING: Back with more of Frank Delco. We certainly thank him for being with us tonight. Clearing up some things. Back in 60 seconds.

(COMMERCIAL BREAK)

KING: We're back. Were you going to go on the tour?

DILEO: Yes.

KING: As manager, you'd have to go.

DILEO: Absolutely. I was going for eight months.

KING: Do you know if Dr. Murray was going to go?

DILEO: Yes, Michael wanted Dr. Murray to go. When I came in March, he said, Frank, make sure they get a doctor for us.

KING: Didn't you question that?

DILEO: I said, why do you need a doctor? He said because after the shows I want to make sure that I get the right fluids, you know, and I eat right, and I want somebody to help my health.

KING: Do you know Dr. Murray?

DILEO: No, I never met him until one day we had a meeting.

KING: For the record, by the way, a spokesman for Dr. Murray has told us previously we're not going to respond to any statements made by the Jackson family or anyone else at this time. Dr. Murray continues to cooperate with Los Angeles investigators in their efforts to determine the cause of Michael Jackson's death.

What do you make of raiding his house, though?

DILEO: Well, I'm sure they should have done it. The cops should find out. I'm curious too. But to this -- this communication here is that -- that was Michael's doctor. AEG, we asked AEG to pay for it while we were in Europe. He didn't even have a contract. He's never gotten a check.

KING: AEG was going to pay the doctor?

DILEO: Well, they were going to give the advance. It would be an advance against Michael's earnings, because Michael demanded that. It wasn't like he was on AEG's payroll. But there was the contract was being negotiated. He wasn't --

KING: While you were his manager, did you ever feel the sense to have to warn him about medications and stuff?

DILEO: No, because in the first time there wasn't any.

KING: In '84?

DILEO: Right.

KING: We'll be right back with Frank DeLeo and my good friend Jim Moret will join us, as well. We thank Frank for being with us tonight. We've been waiting for this for a long time, Frank.

DILEO: Thank you.

KING: Don't go away.

(COMMERCIAL BREAK)

(NEWS BREAK)

KING: Frank DiLeo is our special guest with us tonight, exclusive with us. Michael Jackson's manager; he worked for Michael from '84 through '89 and was rehired earlier this year. Joining us now, a man atop this case from the get go, Jim Moret. He's chief correspondent for "Inside Edition." He also on many occasions has hosted this program. Has Frank DiLeo impressed you tonight?

JIM MORET, "INSIDE EDITION": Yes, he has. He's really done a good job of explaining what happened that day. We never really got inside.

Frank, we just discovered, had to break the news to Michael's children, to his mother.

He also said something interesting earlier, that Katherine can work with the executors, opening the door to perhaps a deal to be worked out. There is no question that the two administrators are very well qualified to do this job. They guided Michael Jackson's career.

I talked to one biographer of Michael Jackson today and said -- he said, without John Branca, there wouldn't even be an estate to deal with. That is how good these people are.

KING: Do you think they will work it out, Frank?

DILEO: Very optimistic. Mrs. Jackson is very level headed. Our attorneys are very level headed. There will be a resolution.

KING: Was Michael difficult to manage?

DILEO: No.

KING: All talent has some quirks.

DILEO: They all have some quirks. But Michael was great to manage. He would have a wild idea and I would have maybe a different idea. He would be like Steven Spielberg and I'm Martin Scorcesi. In some way we would blend and then it would work out. He used to laugh about that. He enjoyed that.

KING: How did you feel during the accusation period, with little boys and that story?

DILEO: I know that's not true.

KING: Know it?

DILEO: I know it. I know Michael. I know what he felt about people. He was a kind soul that wouldn't touch or harm a child. In that first one, I told him to fight it. If he was alive today, he would tell you. He told -- Frank DiLeo told me to fight it. I should have listen to him.

When the second time came around, I knew he was innocent. I knew what happened. The people were moochers.

KING: Jim, has that gone away?

MORET: The allegations.

KING: The story itself sort of faded.

MORET: I think that what we're seeing when you hear people like Frank talk, and you hear from Brooke Shields, you hear from his own daughter at the memorial -- we are seeing a different side of Michael Jackson. We clearly saw him as a strange guy, odd. He was odd. But he was very talented and we are seeing more of a human side to him.

DILEO: Sometimes odd can be confused with he was a great marketer of himself. You should look at it from that point of view.

MORET: He was unusual.

DILEO: He knew what he was doing, and he knew what would cause publicity.

KING: He did?

DILEO: I think so.

KING: In the Madonna vein, knowing how to sell tickets.

DILEO: Absolutely. I learned a lot of things from Michael.

KING: Was he a -- some people say a terrific businessman.

DILEO: He was very smart. When you get back to the number of shows; Michael Jackson knew that if you spent 27 million dollars to create a stage and a production, ten shows weren't going to cover it.

MORET: To that point, Michael Jackson knew there were 31 shows originally. AEG told me there were 31 shows. They rolled out the first ten. They said this is going so well, we've got to add more. They agreed to 19 more. That is how they got to 50.

KING: We'll be back with more right after this.

(COMMERCIAL BREAK)

KING: We're back with Michael Jackson's manager Frank DiLeo, in our exclusive appearance. Jim Moret, chief correspondent of "Inside Edition." What can you tell us about a meeting at the Beverly Hills Hotel, attended by Michael and his father Joe, before the concert tour? What was that all about?

DILEO: Here is what happened. That was the one day I happened to be out of town. Joseph wanted to have a meeting with Leonard Rowe, Michael, Randy Phillips and me, and Paul Gumbaway (ph). Katherine came to the meeting. It was at the Beverly Hills Hotel in a bungalow.

They got there early. Michael stayed in his car until Randy and Paul came. I was out of town. They went in. They had a meeting. Joe asked all these questions, him and Leonard. Randy answered them.

KING: You heard all this from Randy?

DILEO: I heard it from Michael.

KING: Oh.

DILEO: OK. This is May 15th. That is a Friday. I get back Sunday or Monday. Michael says, we have to get rid of Rowe. I said OK. He tells me everything that happened. May 20th -- KING: That letter went out.

DILEO: That letter went out and he received it.

KING: He said he didn't.

DILEO: I know he did. He got it. He also said that that meeting was three weeks before Michael died and that's not true. His timeline is way off.

KING: So Michael was kicked after that meeting?

DILEO: He forgot that he signed it. He signed it under pressure. But he forgot to send a letter out earlier. When they had the meeting and he saw how they acted, he said, Frank, we forgot. We have to remove Leonard. I said OK.

KING: Is this ever going to go away, Jim?

MORET: Not for a while. The criminal aspect --

KING: Where is that going?

MORET: Well, you know, with Anna Nicole, you didn't see charges for more than a year after she died. I think you may see a similar situation here. The attorney general is involved. The DEA is involved, the LAPD. It could take months before we see criminal charges.

KING: Anything you want to ask Frank?

DILEO: I'm just curious why it is that there seems to be these two camps between the family and the management? It seems like you all have the same interests at heart, really that's to grow what is now an estate.

DILEO: Right. It's not as big as people make it out to be. But the one thing you have to remember, Michael liked to have his business separate from his family. He didn't like his family interfering in his business.

KING: Really? Any of the family?

DILEO: Any of the family. Now, he did put Katherine as a trustee on certain things, because he trusted her. He didn't want them knowing what he was doing.

KING: Wasn't he close with his brothers and sisters?

DILEO: They are close as brothers and sisters. That has nothing to do with business. You could be close with your brother. You don't want him to looking at your contract.

KING: Do you think Michael's kids are going to go in business?

DILEO: I think they are very talented. KING: They've got good genes, right?

DILEO: Absolutely. They are very well mannered. They're very polite. They are very smart. I wish I could read as good as they do.

KING: Any idea where he is going to be buried?

DILEO: No.

KING: Why the mystery?

MORET: The mystery, because the toxicology report is not done and that brain tissue has not been released back to the family. They can't really bury him until he is whole. Simple as that. I think there is still a division in the family between Neverland and somewhere else.

KING: Yes. That's going to go on.

MORET: That's going to go on.

KING: Ad infinitum, Frank. Are you now back to being retired?

DILEO: No. I'm not going to stay retired very long.

KING: Thank so much for being with us. Thank you, Jim. Frank DiLeo, Michael Jackson's manager and Jim Moret.

On last night's show, Griffin O'Neal alleged that Alana Stewart sold Farrah Fawcett's things on eBay on the day of Fawcett's death. We were contacted by Stewart's lawyer, Howard Wiseman today, who told us the allegation is categorically false, and went on to say that as far as Griffin is implying that there was or is an inappropriate romantic relationship between Alana Stewart and Ryan O'Neal, that is absolutely false, as well as an unconscionable fabrication. That is a quote from Howard Wiseman.

And before we go on, our good friend Bob Barker has written a blog, exclusive for us, about his number one cause, animal welfare. He is calling attention to a situation involving some captive bears. You'll want to read this. Go to CNN.com/LarryKing.

Right now it is Erica Hill and "AC 360." Erica?