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Murdoch Empire Under Siege; Wall Street on the Rebound; Elton John Awakens Atlantis; Debt Deal Stalemate; Obama: Social Security at Risk; Report: Three Bomb Blasts in Mumbai; Rodney King Arrested; Cheerleader Falls Four Stories; Weapons Recovered from Bulger's Apartment; Feds Find Cash, Guns in Bulger Apartment; Human Cashiers Make a Comeback

Aired July 13, 2011 - 10:00   ET


KYRA PHILLIPS, CNN ANCHOR: It's 10:00 a.m. on the East Coast, 7:00 a.m. out West. I'm Kyra Phillips. Thanks for joining us. The scandal deepens for Rupert Murdoch and his media empire rock by shame. Today, talk of new investigations from Washington to London.

We're keeping a close eye on Wall Street, too. What could be good news for your investments? Stocks appear ready to rebound.

The crew of the space shuttle "Atlantis" wakens to Elton John for singing then delivering a personal message of thanks.

We begin this hour with the national debt and a new reason for millions of Americans to worry. President Obama says if the debt ceiling is not raise by the August 2nd deadline, your Social Security check may be put on hold.

Some Republicans say the White House is using scare tactics. The GOP's top man in the Senate, Mitch McConnell is offering a plan that would guarantee there's no default.

He wants them to streamline the process by empowering President Obama to raise the debt before the congressional vote. Some Democrats and some Republicans that's a copout that only delays the tough decisions.

Now back to the Social Security checks. Dan Lothian at the White House. Dan, what do you think? How real of a threat is it?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, the White House certainly says that it's a real threat. You've been hearing this from the Treasury Department talking about the overall impact on the economy if a deal isn't reached, but also on individual Americans.

Jay Carney was spelling out how it would not only be just Social Security, but also veterans' benefits, disability benefits. President Obama painted that grim picture during an interview with CBS News yesterday.

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue because there may simply not be the money in the coffers to do it.


LOTHIAN: So what happens if they can't reach that agreement with all that's at stake here? Well, you're hearing this latest backup plan being floated by Senate Minority Leader Mitch McConnell.

It's unclear whether or not this is a real viable option, but nonetheless, it would give President Obama the authority to raise that debt ceiling in three different increments before the 2012 election.

And as you pointed out earlier, this is something that Senator McConnell is catching some heat for from his own party, conservatives saying that he is essentially caving to pressure from Democrats.

As for the White House, White House Spokesman Jay Carney put out a statement that read in part, quote, "Senator McConnell's proposal reaffirmed what leaders of both parties have stated clearly, that defaulting on America's bills are not an option. It is time for our leaders to find common ground and reduce our deficit in a way that will strengthen our economy."

So clearly there is a lot of work to be done as lawmakers come back to the White House this afternoon for the fourth straight day in a row. Kyra --

PHILLIPS: OK, Dan. Thanks. We're just getting word now, three bombs exploding in the congested area of Mumbai. That's India's financial capitol.

CNN's sister station, CNN IBN is reporting that at least 15 people were injured there. We're following it now. Once again, three bomb blasts in Mumbai. At least 15 people reported wounded. We're tracking it for you.

Rupert Murdoch built a media empire on the power of selling a scandal. And today, it's his mighty News Corporation that's under siege from London to Washington.

Now a prominent U.S. senator, Jay Rockefeller, wants to know if U.S. citizens fell victim to sleazy or illegal news gathering as well. He is calling for an investigation amidst reports that victims of the 9/11 attacks are among the nearly 4,000 people who had their phones hacked.

The outrage is crushing. Over the past week, the media giant has lost nearly $7 billion in market value, and the political damage is mounting. Today, Britain's prime minister meets with the family of a murdered little girl.

Murdoch's newspaper allegedly hacked her cell phone to gain an edge on that story. One target of the alleged phone hacking, actor Hugh Grant and he explains why all of us should care here in the U.S.


HUGH GRANT, ACTOR: Rupert Murdoch does own an enormous amount of your media, you know, with Fox News and Fox station and 20th Century Fox pictures, et cetera, and some of your newspapers.

And I think people need to ask themselves, you know, who is this man who owns such a large part of our media? And I think, you know, when you hear some of the new allegations about who the "News of the World" was phone hacking that may include -- just allegations at this stage -- some of the 9/11 victims. I don't know, that may strike a chord with Americans.


PHILLIPS: Now the British media scandal involving Murdoch's News Corporation has put Fox News in a bit of a bind, and the network has apparently gone out of its way to avoid reporting on its parent company's troubles. That may have been painfully obvious on the show "Fox News Watch."

CNN's Brian Todd joins me with more. Brian --

BRIAN TODD, CNN CORRESPONDENT: Kyra, many questions recently about the extent to which Rupert Murdoch's entities have covered the "News of the World" scandal. These are questions fuelled in part by a clip from that program you just mentioned called "Fox News Watch."

We're going to show you this clip. It's from this past Sunday. It's streaming video meant for the public, but it's during a commercial and not part of the broadcast. Panelists are talking about a certain news story. Take a listen.


UNIDENTIFIED MALE: Anybody want to bring up the subject we're not talking about today for the streamers?


UNIDENTIFIED MALE: I'm not going to touch it.

UNIDENTIFIED FEMALE: With a 10-foot turban.


TODD: Now, it may seem obvious that they're talking about the "News of the World" scandal. We've in fact confirmed that's what they were talking about. We did a search of Fox transcripts to double- check some of this.

Now despite the fact that "Fox News Watch" is about the news media, we found no mentions of the "News of the World" scandal on that program, no mention of "News of the World" at all since August of 2006.

Now as for the broader Fox News Channel coverage, the "L.A. Times" reports that Fox News stayed mainly silent on the scandal during prime time on Thursday. That's when it broke that Murdoch was shutting down "News of the World."

We found about seven mentions of the story on Fox News Channel over the past week, including one reporter piece and that's compared to other major news networks where covered was very extensive. We could not get spokespeople for News Corporation or Fox News Channel to comment on this.

We do have to say, though, our colleagues in Britain tell us that Sky News, one of Murdoch's other entities was not holding back in its coverage and in our search of mentions of the story on CNN, we should say, turns up around 100 of them over the past week. So a fair question could be is CNN maybe over covering this, Kyra --

PHILLIPS: And Brian, I mean, I believe "Wall Street Journal" also owned by Murdoch, it made the front page, right?

TODD: It did, and we kind of went on a review of some of his newspaper holdings. That is a mixed bag as far as his major U.S. papers are concerned. Now we looked at it the day after it was announced that "News of the World" was shutting down. That was the Friday papers after he announced it on Thursday.

Well, here's "The New York Post," one of his major holdings in the United States. Big Casey Anthony page here, but you don't really see "News of the World" mentioned until page 29 here in a short article.

That's compared to the "New York Times" on Friday, a big front- page story on it there, the "Washington Post" on Friday, pretty much the same thing, big front-page story on the right-hand side there.

We do have to say, as you mentioned, Kyra, the "Wall Street Journal," to be fair, one of the most distinguished newspapers in the United States. It does have a front-page story here, major story with extensive coverage on the jump page.

Also his paper, "The Times of London," in Britain, yesterday and today, has major front-page headlines, major front-page stories on this scandal both yesterday and today so two of his major newspapers and his Sky News Network not shying away from covering this story.

PHILLIPS: Brian Todd. Appreciate it.

I want to take you now live to the breaking news we told you about moments ago, the three bombs going off in Mumbai. Mallika Kapur on the phone with us right now as we just start to get in these live pictures. Monica, bring us up to date. At least 15 people injured, right?

MALLIKA KAPUR, CNN CORRESPONDENT (via telephone): That's right. That what's he hear that at least 15 people have been injured, and these explosions went off at about 7:00, 7:10 p.m. local time, it's now about 7:40 p.m. local time here in Mumbai, so about a half hour ago.

There have been three blasts in various parts of the city, two in the south, one up north and another bizarre area in the upper house, and one thing that's common in all three areas is that they are very extremely crowded, congested areas. It is rush hour in the evening, 7:00 p.m., people on their way home from work.

These areas are very, very crowded, and some places the roads are so narrow it's difficult to get cars in. In another area the roads are so narrow. It's just filled with hundreds and hundreds of people in the evening. It's close to a very important railway station so very, very busy commercial areas, all three of them.

One thing I do want to point out, Kyra, is that they have been very careful not to call these bombs. They're not saying bombs have gone of yet, because what we do know is there have been explosions that have gone off, but they've been careful not to call them bombs.

We do not know what caused these explosions yet. So they are being very careful telling people we don't know if they're bombs yet. They're investigating a meter box on top of an electric pole where there's been an incident could have taken place.

One eye witness is talking about a different box saying that there was an explosion next to a different. So it's very early, just about half an hour since the explosions went off, and we are waiting to see whether the government will say that they are indeed bombs, or whether for the moment they are just saying they're explosions.

PHILLIPS: Mallika, just real quickly, it's like we're having flashbacks from 2008 in those terrorist attacks in Mumbai killing so many people there.

And if you look at the -- I guess, where these explosions have happened, you could only assume, although we have not obviously confirmed it, that this could be a terrorist attack.

It's the drive home from work, it's near the railway station, as you mentioned. This is where, obviously, terrorists would know a lot of people are at a certain time.

KAPUR: That's absolutely right. As you said, when the three locations, it doesn't seem to be a coincidence and again, as you pointed out, it's very early for us to say what caused this, whether it is a terrorist attack by any chance.

They're being very careful not to even call it a bomb blast at the moment. But yes, when you look at the three spots, the one thing that is common in all three locations is that they are very, very busy.

And it is rush hour, and anybody would know that these are the three spots in Mumbai at around 7:00 p.m. that would probably be among the three most crowded spots in the entire city.

So it could be -- I mean, it could be that somebody has chosen these spots quite carefully for maximum impact.

PHILLIPS: All right. We will continue to follow this breaking news story with our Mallika Kapur joining us on the phone from India. Once again, three explosions in Mumbai, it looks like they're coordinated attacks reminiscent of those 10 coordinated attacks back in 2008 that killed more than 160 people. We're following this story for you to see if, indeed, this was a terrorist attack. More from the CNN NEWSROOM straight ahead.


PHILLIPS: Checking stories cross country, in California, police arrested Rodney King for suspicion of driving under the influence. You remember, King was brutally beaten by officers during a traffic stop in 1991, a case that sparked the infamous riots just a year later.

In Woonsocket, Rhode Island, police say a college cheerleader may have saved his own life by using a tumbling move after falling four stories off a building. Dylan Smith did a backflip and landed on his feet. He suffered a broken pelvis.

And take a look at this stash that FBI agents said they recovered in Whitey Bulger's Santa Monica, California apartment. In all, 30 weapons including hand guns and automatic rifle, even a grenade.

Then there's the cash. More than $800,000, mostly in Benjamins stashed away in the wall. That will give you an idea of the power that Bulger yields, but incredibly he's asking for a public defender.

Bulger has a rich, influential brother, Billy, a former state senate leader and one time the president of the University of the Massachusetts. So far the judge has not ruled on Bulger's request.

Holly Hughes, an attorney, legal commentator and also former prosecutor. When you hear about this, the guy's got the money. Does it matter?

HOLLY HUGHES, ATTORNEY/LEGAL COMMENTATOR: Well, he doesn't technically have the money anymore because the state has seized it. It's something we called active forfeiture under the law.

When you find money that you believe are the proceeds of a criminal enterprise, the state can start proceedings to seize that money and keep it and so what he is saying is, if you all give me back my $800,000, I'm happy to pay for my own lawyer.

But what the state is saying clearly it's not just what you had on you. They are pretty sure he's got money stashed all over the place, but if they can't prove it, Kyra, and he fills out what we call an affidavit, which basically means I'm too poor to hire a lawyer.

You guys have to pay for it, and you guys, as the taxpayers, if he swears to it on a financial affidavit and the state can't prove otherwise, guess who is footing the bill?

PHILLIPS: So no matter how much outrage there is over this. I mean, this guy can stash as much money as he wants anywhere, we still -- could pay for this guy.

HUGHES: And that's what's going to happen. We're going to end up rewarding his bad behavior. We're going to give him a prize because he's a good criminal. He has stashed away money, no doubt about it.

He was found with $800,000 cash and over 30 guns. This man knows what he's doing. But if we can't prove there is other money besides what the government seized, yes, the taxpayers are going to be on the hook for that bill, much as it sticks in our craw.

PHILLIPS: Well, it's interesting. You know, there were a lot of talk about -- was it a big deal they got this guy, they were old, these crimes happened so long ago?

Really, was it worth the money to go after him? And then you see these pictures, which are incredible, of all the weapons that were hidden behind the walls, the cash -- I don't know if we can bring these pictures up again. There they are, right there. Grenades, guns --

HUGHES: Yes and what we really have to refocus on, and we sometimes lose sight of this, there are 19 alleged murders. So what we're talking about is 19 families who have been waiting all these years for justice. This man has been on the run for 16 years.

He has alluded authorities, so if we were to sit down with any one of those family members and say, was it worth it, we know what they're going to say. Of course, it was, we want justice. We want our day in court. This man murdered our loved one, our father, our mother, our sister.

PHILLIPS: I bet you'd like to be on this case.

HUGHES: Understatement of the year, Kyra Phillips. I would love to have a crack at this fellow.

PHILLIPS: Thanks, Holly.

HUGHES: Thank you.

PHILLIPS: All right, but right after the scandal, he said he was putting his movie making plans on hold, but Arnold Schwarzenegger changed his mind. He's back!


PHILLIPS: All right, some showbiz headlines for you. Who is afraid of Kelly Osbourne? Apparently some would-be thieves. The 26- year-old tweeted that she single-handedly stopped two boys from stealing a car in the streets of London.

All she said was, "Boy" and they run off. Then an hour later, Osbourne tweeted that she stopped two boys with lacrosse sticks from turning over a car.

And look who's coming to CSI? Ted Danson replacing Lawrence Fishburn as the new leader of the team. According to the Hollywood reporter, the show's executive producer made the casting announcement. Danson debuts on CSI Wednesday, September 21st on CBS.

Arnold Schwarzenegger returning to the big screen with "The Last Stand." The former California governor who created quite a scandal by fathering a child with his housekeeper plays a small town sheriff.

Big changes may be coming to your local grocery store. One major chain is getting rid of its self checkouts in favor of, get this, human cashiers.

Alison Kosik at the New York Stock Exchange, can I just tell you, this created quite a debate in our morning meeting. Some people saying those things don't work well, they take forever, they're longer than regular lines, and some people saying, are you kidding? We get right through them.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Let me guess where you fell on the other side of that equation. I bet you wanted the customer service end of it, right?

PHILLIPS: I actually go to a certain grocery store where I know that I can get the help if it's not working so it works faster for me, Alison. I'm the oddball.

KOSIK: See I know it. I know it so you know what, then maybe you'll want to shop at Albertson's now because you know what? Albertson's is going back to the future. It's phasing out self checkout.

It's reverting back to those cashier-run lanes. It's got 200 locations across eight states, but I want to make an important distinction here. Albertson's stores that are owned by Super Valu are keeping the self checkouts.

So why is Albertsons doing this? Well, they say the self checkout lane weren't providing enough personal customer service, Kyra.

PHILLIPS: All right, well, it seems like a setback, right? So is technology not always good for business, you think?

KOSIK: They may not be because many customers like you prefer the old-fashioned way. You know, it may also cut down on theft as well, but you know, this could be about being different. Most stores have self-checkout.

Albertson's wants to make a name for itself by offering all that human interaction. Allied Bank does it saying you can get a human on the phone every time. That sounds like a great deal for me.

Gosh, I hate getting on those endless phones you have to keep pressing those numbers on those banks. Love that customer service at banks, not so much with grocery stores, Kyra.

PHILLIPS: All right, market check real quickly. It looks like stocks are bouncing back?

KOSIK: They are bouncing back. Up 142 points on the Dow. Fed Chief Ben Bernanke is testifying on Capitol Hill. He's got some good news for the market. He says that the fed could provide more stimulus if the economy slows even more.

He did say the phase of the recovery will pick up and of course, investors are trying to keep an eye on what he says about the debt ceiling stalemate. We'll keep an eye on it for you as well, Kyra.

PHILLIPS: All right, thanks, Alison.

Barack Obama shattering first quarter fundraising records taking more than the entire 2012 GOP fields take combined. How much is that going to matter in the election? Our political buzz panel weighs in.

Coming up, my chat with Dr. Phil. It sounds like maybe he would like to have a Congress on his couch?


UNIDENTIFIED MALE: We need to understand, these people are working for us. These are the people that we hired and we brought here to do this job, and they need to do it.



PHILLIPS: More on that breaking news out of Mumbai. We're being told at least 15 people have been hurt after a trio of explosions are heard -- have been heard, rather, in Mumbai. Our sister network, CNN sister network, CNN IBN reporting this.

As of now, no claims of responsibility, but Zain Verjee definitely reminiscent of 2008 where we saw a series of coordinated attacks that killed more than 160 people, injured hundreds more.

It looks like what we're hearing here, Zain, and add to the information that we're getting, it looks like three of these explosions. They were coordinated as well. All in areas where there is a lot of people at a certain time.

ZAIN VERJEE, CNN ANCHOR AND CORRESPONDENT: Yes. These are really heavily populated areas. This has gone off during rush hour. Mumbai has a history of terrorist attacks. You mentioned November 2008 where gunmen were coordinating an attack, terrorizing the city of Mumbai in a three-day siege of two hotels, a Jewish center, an attack of a popular cafe called Leopold's as well as a train station there.

In 2006, there was also a series of attacks on local train stations, two in Mumbai. Also, Kyra, just remember a lot of the violence in different parts of India historically has been linked to religious violence also.

Kashamiri separatists have attacked cities in India. They claim it and Pakistan lays claim to it, so some of the violence stems from that. It's unclear if this is about that, but it does have a history with that.

The Indian parliament too, Kyra, back in 2001, was attacked in New Delhi. There were a lot of questions about the vulnerability and security of Mumbai. It's on a harbor so it's easy for people to come in on boats.

Security is a big question, whether they even coordinate information correctly. So this is something we need to keep our eye on is we're still waiting for information.

PHILLIPS: All right, Zain, stay with me if you don't mind. Mallika Kapur on the phone with us from India. Mallika, what are you able to confirm for us at this time?

KAPUR: Well, at the moment, our sister channel, CNN IBN is saying that there had been 15 people injured. Another local channel is reporting that sources say eight people have been killed, but we have not been able to confirm that information independently.

And throughout Mumbai, there is a sense of fear now gripping everyone in Mumbai. A lot of people still in offices have been told to stay indoors, not to venture out on the streets.

Those on the streets are frantically trying to get home. They're trying to reach each other to see if friends and family are OK, but that is turning out to be a nightmare because a lot of the phones and the cell phones are jammed. So it's becoming very difficult for people to reach out to one another. News is still sinking in. Three serial blasts that have taken place in Mumbai in three different locations, the one thing common in all three locations are they are all very, very crowded locations and all the more crowded because it was peak hour when the blasts went off. Kyra?

PHILLIPS: All right, Mallika Kapur, Zain Verjee, appreciate you following this story for us. We'll continue to stay on this breaking news. Three explosions once again in Mumbai, and we will stay on top of all the latest reports.

All right, time for "Political Buzz," your rapid-fire look at the hottest political topics of the day. Three questions, 20 seconds on the clock. And playing today, Democratic pollster Cornell Belcher, who worked for 2008 Obama campaign. Sirus XM political talk show host and comedian Pete Dominick. Conservative talk show host Dana Loesch also joining in.

OK, guys, first question. The Christian Counseling Center that Michele Bachmannn owns with her husband, under scrutiny now after they told a gay client claims that the therapist told him, quote, "God would perform a miracle and I could no longer be gay." Is this now a campaign problem for her? Cornell?

CORNELL BELCHER, DEMOCRATIC POLLSTER: Oh, it is a problem. You have two polls out this week that shows her, you know, surging ahead to the top of the field in Iowa. And this after the marriage vow incident. It kind of makes her come off as a flake, and independent voters don't like flakes. So it is a bit of a problem for her because she is becoming their front runner.

PHILLIPS: Ooh, Cornell bringing out the Mike Wallace word there. Dana?

DANA LOESCH, CONSERVATIVE RADIO TALK SHOW HOST: Yes, exactly. I'm trying to understand the drama here. So, we have an individual who actively seeks out a clinic, and in his own admission is told by the therapist at this clinic, you know, not everyone is able to stop being gay or whatever, and that's OK. They gloss over that entire part of his written account of this.

So, I'm trying to understand if they're -- if people are trying to get all dramatic against Michele Bachmannn -


LOESCH: -- because she's becoming a front runner in the GOP field? It's insane.

PHILLIPS: All right, Pete, before we go to you -- Cornell, I said Mike Wallace. Whew, Mike would be upset with me! Chris Wallace asked the flake question to Michele Bachmannn. I better watch myself there. Ooh, boy, I don't want Mike coming after me.

OK, Pete, your take?

PETE DOMINICK, SIRIUS XM RADIO HOST: Listen, it's not going to affect Michele Bachmannn at all, because the people who are going to vote for her agree with the hate and venom that she and her husband spread toward gay Americans. I think the question is how many closeted Republicans - closeted gay Republicans are going to choose to vote for Michele Bachmannn. The idea that homosexuality is a choice is ridiculous -


DOMINICK: -- It's like I chose to be straight. I think only people who choose are closeted gay people are shamed into thinking that that's wrong. They're choosing to try to be straight.

PHILLIPS: All right guys, question number two. Barack Obama takes in $86 million in the first quarter. That's more than the entire GOP field combined, by the way. How much will money matter in this race? Dana?

LOESCH: Well, money -- obviously money talks in politics. And he's got the backing of FCIU, FCIO, the teachers unions. He's got a lot of money going in this. Which kind of poses the question, I thought that Democrats were for the little guy?

PHILLIPS: Cornell?

BELCHER: Well, two things. First, going back to the other question, what's wrong with that gay guy who is going to go to Michele Bachmannn's clinic for counseling? That guy is kind of crazy.

But here's the thing. FCIU and all of those unions, 98 percent of the funding here came from small donors under $250. No PAC money, no lobbyist money. This is a grassroots that he built on in 2008 and continues today.



DOMINICK: Let's just get this story quickly. I have to go back to it now. The kid who went to Michele Bachmannn's clinic, he brought a hidden camera to prove that they try to cure people. He wasn't trying to be cured. He was trying to prove something. He's an activist.


LOESCH: -- they would have called them anti-gay for denying treatment.


DOMINICK: Cash is king on campaigns. Cash is king. It's all about the Benjamins. President Obama takes plenty of money from very wealthy people -


DOMINICK: $30,000 dinners here in New York. That will do it.

PHILLIPS: Your Buzzer Beater. Maybe I should have made that the Buzzer Beater. All right. Ten seconds each on this one. This is going to be fun, guys. We're going retro here. Let's play a little "Name That Tune."


PHILLIPS: All right, Herman! None other than the golden- throated Republican presidential candidate Herman Cain. The album is called "Sunday Morning." I feel like we're all in church, kind of grooving. So, where will Herman Cain get more the votes, guys, "American Idol" or the ballot box? Dana?

LOESCH: I don't know! His voice is - his voice is smooth. I'm jamming to this. This is my new summer jam. His voice is smooth like butter. I like him.

I still think he'll have more people voting for him for politics, but the man's got a fine voice. PHILLIPS: Cornell, what do you think?

BELCHER: He should quit both of his jobs, the presidential ambition and his singing.


BELCHER: He should quit both of them.

PHILLIPS: Come on, it's a groovy tune. Pete?

CORNELL: It all depends now on the Ron Paul/Mitt Romney duet remixing of "Who Let The Dogs Out?" We'll see where that takes those two candidates.

PHILLIPS: I think Curt Franklin is calling now. He wants to cut a tune with Herman Cain. Now, that would be something to talk about.

All right, guys, always fun. Thanks so much.

All right, a gay rights accuses - or accuses, rather - that has problems with a clinic we just talked about that's run by Michele Bachmannn's husband. One young man who went to the clinic says he got this advice.


UNIDENTIFIED MALE: Not acting out on my same-sex attractions and living a life of celibacy.

JIM ACOSTA, CNN CORRESPONDENT: That was an alternative to being gay?



PHILLIPS: CNN's In-Depth report, right after the break.

Plus more of my talk with Dr. Phil. He's actually going to weigh in -


PHILLIPS: Questions and controversies surrounding the Christian Conference Center run by presidential candidate Michele Bachmann's husband. A gay rights group says that the clinic is using Christian- based psychotherapy to convert gays into heterosexuals. CNN's Jim Acosta investigates.



JIM ACOSTA, CNN CORRESPONDENT: In her campaign for president, Michele Bachmann touts her background as a small business owner.

BACHMANN: As a mom of five, a foster parent, and a former tax lawyer and now a small business job creator --

ACOSTA: That business is Bachmann and Associates, a Christian counseling service outside Minneapolis run by her husband, Marcus. They're both pictured on the clinic's Web site.

In recent years the clinic has faced accusations that it encourages gay and lesbian patients to change their sexual orientation, a practice that is frowned upon by mental health experts. Back in 2004 Andrew Ramirez at the urging of his mother turned to Bachmann and Associates to talk about his own homosexuality. The 17- year-old said he was skeptical of what one of the clinic's counselors told him.

ANDREW RAMIREZ, FORMER BACHMANN AND ASSOCIATES PATIENT: It was therapy that would help me change from being homosexual to straight.

ACOSTA (on camera): That's how he described it?


ACOSTA: He basically said if you do this, what? You wouldn't be gay anymore?

RAMIREZ: If I did this and worked his therapy program that could perform a miracle and could no longer be gay.

ACOSTA (voice-over): Ramirez said he was assigned a therapy program consisting of prayer and reading Bible passages. He also says he was told he would be mentored by an ex-lesbian minister. And if none of that, Ramirez said the counselor had another idea.

ACOSTA (on camera): He suggested to you what?

RAMIREZ: Not acting out on my same-sex attractions and living a life in celibacy.

ACOSTA: That was an alternative to being gay?


ACOSTA: After the second session, Ramirez told his mother he wanted to stop.

BETH SHELLENBARGER, ANDREW'S MOTHER: And I could just hear his voice quiver. I just said, you know, Andy, if you're good with being gay, then I am too.

ACOSTA: The American Psychological Association is sharply critical of what is known in the mental health community as "reparative therapy," saying in a recent report "There is insufficient evidence to support the use of psychological interventions to change sexual orientation."

But in a talk radio interview last years, Marcus Bachmann compared gay teenagers to barbarians who must be disciplined.

UNIDENTIFIED FEMALE: What do you say when your teenager says she's gay? What do you say to Christian parents who come up with this?

MARCUS BACHMANN, MICHELE BACHMANN'S HUSBAND: Well, I think you clearly say what is the understanding of God's word on homosexuality. And I think that this is no mystery that a child or preadolescent, particularly adolescents, will question and wonder. Certainly, there is that -- there is that curiosity.

But, again, we -- like, you know, it is as if we have to understand barbarians need to be educated. They need to be disciplined. And just because someone feels it or thinks it doesn't mean that we're supposed to go down that road.

ACOSTA: Back in 2006, Bachmann denied his practice engaged in reparative therapy, telling a Minneapolis newspaper "That's a false statement," and went on to say "If someone is interested in talking to us about their homosexuality, we are open to talking about that. But if someone comes in a homosexual and want to stay homosexual, I don't have a problem with that."

UNIDENTIFIED MALE: What would you suggest to me like a treatment plan type of thing?

UNIDENTIFIED MALE: You definitely pray.

ACOSTA: This week a gay right group, Truth Wins Out, released its own hidden video camera recorded by one of its activists who posed as a patient at Bachmann and Associates.

UNIDENTIFIED MALE: Can you actually leave homosexuality completely and become heterosexual?

UNIDENTIFIED MALE: Oh, yes, definitely. I have seen it. It has happened. It really has.

ACOSTA: In the full five sessions of footage captured by Truth Wins Out, while the counselor at time suggests homosexuality can be treated at the clinic, he also concedes he is not an expert on the subject.

Michele Bachmann has a long history of views on homosexuality. She recently signed a pledge to defend marriage that compared same sex couples to polygamist. That's a comparison Bachmann made as a state lawmaker in 2004 when she called for amendment to block gay marriages in other states from being recognized in Minnesota.

MICHELE BACHMANN: If we allow this to happen, group marriage, polygamy, and things much worse may not be far behind.

ACOSTA: Both Bachmanns declined a request for interviews. Her campaign released a statement to CNN that says "The Bachmanns are in no position ethically, legally, or morally to discuss specific courses of treatment concerning the clinics patients." When a local TV station in Iowa tried asked Bachmann whether her family clinic engages in reparative therapy, she dodged the question.

UNIDENTIFIED FEMALE: Is it something that is conducted at that center?

BACHMANN: Well, I'm running for the presidency of the United States and I'm here today to talk about job creation and also the fact that we do have a business that deals with job creation. We're very proud of the business that we have created.

ACOSTA: The latest polls show Michele Bachmannn has a serious shot at winning the Iowa caucuses where social conservatives will be a decisive factor and who just might consider the Bachmann counseling center a potent political asset.

Jim Acosta, CNN, Washington.


PHILLIPS: Now, if you watch Dr. Phil, you probably know he has a Ph.D. in psychology. So when I was talking to him earlier this morning -- he's testifying on the Hill today talking about domestic violence, I actually asked him to weigh in on this gay-to-straight counseling.


DR. PHIL MCGRAW, TALK SHOW HOST: If that is the case, then I would hope this campaign would maybe be a stimulus to revisit that. I think there is so much information out there that reparative therapy, as it's called, is anything but therapeutic and can, in fact, be very stress inducing and real difficult, particularly for a young gay or lesbian individual or even a questioning youth. So, I certainly hope that if that is the case and that is what they're doing that they'll revisit that at this point.

PHILLIPS: What kind of damage do you feel programs like reparative therapy, these gay-to- straight counseling programs, ministries, do to young people?

MCGRAW: Well, you know, I think those that advance that kind of approach in dealing with someone that is gay or lesbian is ignoring so much of the scientific evidence that we have to acknowledge. And to ask somebody to make a choice where a choice is simply not an option can create a whole lot of problems for that person. I mean, it would be like asking that person to get taller. That's just not something that they have the ability to do.

And I think that as a result, you can come away with a lot of frustration, a lot of guilt and a lot of sense that things aren't - that they're doing something wrong. And I think that sends a terrible message to these young people.


PHILLIPS: Straight ahead, one more win and they're in. The U.S. Women's World Cup team getting ready for a noontime showdown. We're going to take you live to New York where soccer fans are tearing up the bars with excitement already.


PHILLIPS: World Cup Soccer, the U.S. women's team faces off against France in less than 90 minutes. On the line, the chance to play for the championship.

Our big sports fan, Richard Roth, of course joining us live from New York, talking to all the people getting fired up for today's match. Hey, Richard.

RICHARD ROTH, CNN CORRESPONDENT: Hi, Kyra. Yes, it's the big match, and with me are two women who have played soccer at the university level. Ma'am, let me ask you, what's your thinking as this game occurs? Is there going to be a mental falloff after the big win?

UNIDENTIFIED FEMALE: I don't think so. I think they're going to perform up to the level they've been performing to so far. It's going to be a great game.

ROTH: How good was that last match with the rally and the last- minute goal?

UNIDENTIFIED FEMALE: That was so stressful, but it was absolutely amazing the way that Wambach finished that goal, and it just speaks to America's resilience.

ROTH: Amy Wambach, the captain. Now here's Susan that shows -- she wasn't in that match but you got that injury when?

UNIDENTIFIED FEMALE: I got that injury Saturday playing soccer.

ROTH: And is that because you put more enthusiasm in following the U.S. match against Brazil?

UNIDENTIFIED FEMALE: Actually, it was the day before the match, but I went in to score the goal just like Abby Wambac did, and I scored it.

ROTH: All right, one word to sum up this match?

UNIDENTIFIED FEMALE: It will be exciting and tough.

ROTH: Thank you very much, Susan. And man, they'll be watching it in a local establishment. Kyra, back to you.

PHILLIPS: OK, Richard, thanks so much. We'll be following the excitement.

Checking other stories Cross-Country now. Now the Metrodome roof in Minneapolis has been reinflated. It collapsed under the enormous weight of tons of snow last December. The repairs cost $22 million.

And the Girls Gone Wild tour bus had its air conditioner ripped off by a low overpass in Delaware, Ohio. Surprise, surprise, the bridge is called the Can Opener. The driver said he just couldn't see the low clearance sign in the heavy rain.

And after the triple meltdown of Japan's Fukushima nuclear plant, the U.S. wants stepped-up safety measures of America's 23 operating reactors. The focus is keeping nuclear rods cool in case of a blackout.

The race for the White House cash. President Obama takes a big lead. We've got the new fund raising totals.


PHILLIPS: All right, first making news later today. At 12:20 Eastern, the funeral procession for former first lady Betty Ford departs Palm Desert, California. And there's a welcoming ceremony at 5:15 Eastern in Grand Rapids, Michigan and a prayer service that follows at 6:00 Eastern.

And prior to that, at 4:00 Eastern, President Obama and vice president Biden will meet with leaders of Congress at the White House for debt reduction talks.

Well, coming up in the NEWSROOM with Suzanne Malveaux, the stars of the reality show "Sister Wives" will soon be involved in another real-life drama. Cody Brown and his four wives are suing to overturn Utah's anti-polygamy statute. We'll ask our legal expert if this means polygamy could eventually be legal.

Plus, a commentary in a leading medical journal suggest that parents of obese children should lose custody of their kids if the children become dangerously overweight. A closer look at the controversial proposal. That and more in the CNN NEWSROOM, straight ahead.

All right, but first, President Obama takes in more than $86 million, breaking a fundraising record. We'll talk about that in our Political Ticker, right after the break.


PHILLIPS: Mark Preston, the president raising a lot of fundraising cash.

MARK PRESTON, CNN SENIOR POLITICAL EDITOR: Yes, no doubt, Kyra. Look at this: $86 million in just 90 days. You know, the Obama presidential campaign, their whole goal was to try to scare off Republican candidates from challenging him. Well, I don't think they're going to scare him off, but they really sure have some earth- shattering numbers. $86 million in 90 days from more than 550,000 individuals.

The average contribution that President Obama took in in the past 90 days is only $69. That's very significant, Kyra. The reason being is, that that's so far below the legal limit, the Obama campaign can keep going back to these people and asking them to give money.

Now, just in comparison very quickly, $35 million combined has been raised by the Republican candidates up to this point. Kyra?

PHILLIPS: All right. What's going on with Newt Gingrich and Mitch McConnell? Getting into it.

PRESTON: Yes, getting into it. Well, look, Newt Gingrich talks a little bit about shutting down the government. He had that big fight with President Clinton back in the '90s, mid-90s. Well, Newt Gingrich is very critical of Mitch McConnell's plan of trying to avert this whole debt ceiling crisis. In fact, he tweeted yesterday that the McConnell plan is an irresponsible surrender to big government, big deficits, and continued overspending.

What's the McConnell plan? Basically it's a plan that would allow President Obama to raise the debt limit in three different increments, but all of the responsibility would be placed on the president for doing so and not on congressional Republicans. That's a very big issue as we're heading into the 2012 election. The problem is for Mitch McConnell, there are a lot of conservatives that don't like the idea and they think congressional Republicans would just be abdicating their responsibility.

So Newt Gingrich has some tough words for Mitch McConnell. Problem is, Newt Gingrich isn't on Capitol Hill, Mitch McConnell is. Kyra?

PHILLIPS: And a little lighter note - got about 20 seconds here -- Herman Cain, did you hear his gospel CD? Tucked away for more than ten years, comes out on the Internet? The guy has got some some talent.

PRESTON: He does. He's got some pipes. I tell you what, really nice guy as well. But look at this: presidential candidate, successful businessman and an entertainer. He might have it all when it comes to the Republican nomination.

PHILLIPS: The next American Idol. All right. Mark Preston, thanks so much. We'll have your next political update in about an hour, and a reminder of course, for all your political news, you can always go to

Suzanne, you've got to hear it.


PHILLIPS: Yes, it was all over the Internet this morning. We played a little bit. It's not bad!

MALVEAUX: You think he's got the pipes?

PHILLIPS: He -- he can sing. He's got some talent.

MALVEUAX: All right! We'll check it out. Thank you.