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New Watchdog For Wall Street; CNN In Depth On The Hacking Scandal; Farewell For Shuttle Atlantis; Obama Speaks Live Today On Economy; Obama Nominates Richard Cordray; Atlantis Leaving Space Station; Nelson Mandela Celebrates 93rd Birthday; Rupert and James Murdoch, Rebekah Brooks to Answer Questions Tomorrow at British Parliament

Aired July 18, 2011 - 12:59   ET

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

RANDI KAYE, CNN ANCHOR: The White House Rose Garden. It's a long way from the boardrooms and back rooms of Wall Street, but what's about to happen here could have a major impact there. You'll see it live in just five minutes.

The Consumer Financial Protection Bureau is a cornerstone of post-meltdown bank reforms and the brainchild of a Harvard Law professor named Elizabeth Warren. She fought for legislation and spent months getting the bureau up and running ahead of its official start date three days from now, but when Obama steps out minutes from now, he won't be introducing Warren as the bureau's first director nominee, instead he's going with this man, Richard Cordray.

He is Warren lieutenant who came to D.C. when he lost his bid for re-election as attorney general of Ohio. There he was a critic of big banks in general and mass foreclosures in particular. Long before that he earned his rap as a brainiac with a five-day winning streak on "Jeopardy." If you take a look here, that's Cordray on the far left in 1987.

He used his 45 grand to pay off loans from law school. So what is the Consumer Financial Protection Bureau? Well, it aims to put a stop to predatory lending in part by simplifying mortgage applications. It will keep an eye on credit card fees and student loans and keep an ear on consumer complaints. But because a whole lot of senators don't like the bureau, Cordray's confirmation could be, dare I say, in jeopardy.

CNN's Dan Lothian joins me now from the White House, and Dan, tell us first why this nomination isn't going to Elizabeth Warren?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, certainly the White House saw her as someone who could set up this agency and had hoped that she was a person who could potentially could have led this agency, but as you pointed out, this is someone who is quite controversial and ran up against opposition from conservatives who would not support her nomination. And in fact, a senior administration official telling me, quote, "Republicans in Congress have made clear that they don't support the agency, and they would block all efforts to confirm Elizabeth Warren as the permanent director. So, while she was someone who essentially invented this agency, got it up and going, brought Cordray onboard to be the enforcement -- director of enforcement, she now will hand off to him to be the permanent director of this agency, because as I pointed out, it became clear that it would be very difficult for her to pass the nomination process up on Capitol Hill.

KAYE: And what about Cordray, Dan, do you think he will have an easier time getting confirmed or do you think that we might see some backlash from Dems?

LOTHIAN: Well you know, there's a sense that he'll have an easier time being confirmed but nonetheless, I mean, people who opposed Elizabeth Warren also opposed the agency in general. Wall Street not happy about it, concerns that it would be a whole new layer of new rules and regulations, and so there are still those who are pushing back on the agency itself, so any person who will be leading that agency would face some stiff opposition. But again, the sense is that he would have a better time than Elizabeth Warren.

KAYE: And specifically, what is the problem that Republicans have with this bureau?

LOTHIAN: Well you know, what I was just pointing out a while ago, there is just a whole new layer of what they -- some might believe on Wall Street, unnecessary layer of new regulations, in an agency or financial institutions that have already been hit very hard with new rules and new regulations in the wake of the financial meltdown. And certainly, the president has pointed out that he has been pushing very hard to prevent some of these problems that we saw in the past from happening again.

In fact, yesterday, when the White House put out a statement saying that this announcement would be made today in the rose garden, there was a quote from the president where he said, American families and consumers bore the brunt of the financial crisis and are still struggling in its aftermath to find jobs, stay in their homes and make ends meet, that is why I fought so hard to pass reforms to fix the financial system and put in place the strongest consumer protections in our nation's history.

So again, there are some in the banking industry who believe that in this effort to protect American consumers that the banking industry is getting hit hard.

KAYE: And what is the word on Elizabeth Warren? What is next for her?

LOTHIAN: Well you know, everybody has been doing a lot of reporting on this, and indications based on CNN's reporting that she will head back -- she's a former Harvard professor, so indications are that she will heading back to Harvard.

But you know, there's a lot of talk as well about her, and again, as far as we know, this is just speculation, about her taking on Scott Brown in Massachusetts for the Senate seat there, so that's something that is out there. She doesn't have a long political experience, so we'll watch to see if, in fact, that's something she will do. But again, based on everything that we know, she's headed back to Harvard.

KAYE: And what are the next steps in confirming Richard Cordray? I mean, this is a nomination, we should point out.

LOTHIAN: That's right. As you know, the president makes these nominations, sometimes they will sail through, although in this divided Congress, that becomes a bit more difficult. This process could be short or it could be an extensive process.

As you know in any review process, what will happen is his background will be brought up, Congressional leaders will be going through everything that he has done, and as you pointed out earlier, this was someone that was very tough on financial institutions in Ohio, specifically in their foreclosure practices coming down very hard on them as attorney general in Ohio, so no doubt some of that will also be reviewed as they look to have him confirmed here for the new position.

KAYE: And is there any word from Elizabeth Warren on this nomination for Cordray? Is she in support of it?

LOTHIAN: Yes, in fact, as part of this statement that was put out by the White House, she also has put out a statement, and also wrote an op-ed in the "Huffington Post," where she pretty much has said that she was with the president in terms of putting together this choice for -- to head the agency. So yes, very much in support of this nomination, even though everyone thought, and certainly liberals had hoped, that she would be the person to take the lead of the agency that she herself has set up.

KAYE: Dan Lothian at the White House. Dan, thank you, and we'll continue to speak with you as we also wait for the president to come out and make this nomination official.

Before we move on, you should know Elizabeth Warren is Wolf Blitzer's guest today on "THE SITUATION ROOM", that's at 5:00 p.m. Eastern, 2:00 Pacific, only on CNN.

CNN continues the in depth coverage of the British phone hacking scandal, now spreading well beyond the anything goes world of London's tell all tabloids. And if you haven't kept up with the developments, well we have some newsworthy of large type headlines. Yesterday, just two days after she resigned as CEO of Rupert Murdoch's British subsidiary, Rebekah Brooks walked into a police station for questioning and found herself under arrest. Hours later, Britain's top police officer, the chief of Scotland Yard resigned.

Police commissioner, Paul Stevenson, acknowledged that the original investigation into the hacking scandal several years ago, was inadequate. Today, Stevenson's assistant commissioner, John Yates, also announced his resignation.

Britain's home secretary has announced that a police review board will launch an investigation into the scandal. The scandal has been growing steadily even since reports that Murdoch's now defunct news of the world hacked the answering machine of a missing teenage girl. Now it's such a big deal, British prime minister, David Cameron, is coming back early from a trip to Africa. Tomorrow, Murdoch and his son James are scheduled to appear on a hearing on the scandal in parliament. CNN will bring you that testimony live.

CNN's Dan Rivers is in London. Dan, I want to ask you, Rebekah Brooks was also expected to testify tomorrow. Now that she was arrested, even though she's been released, what are the plans in terms of questioning her tomorrow?

DAN RIVERS, CNN INTERNATIONAL CORRESPONDENT: Well, politicians are going to have to be very careful exactly how they question her, how they frame those questions. In Britain, if there is a pending trial or the possibility of a pending trial, you have to be very careful what kind of news coverage is gained from that, because they don't want to kind of prejudge the trial here. They don't want to sway a potential juror one way or the other. And the politicians know that this testimony from Rebekah Brooks will be broadcast live not only here but around the world.

So therefore, they are going to have to be fairly careful about what they ask her and she will have to be very careful about what she says, I would imagine she will have lawyers sitting by her side. And it's now being decided that she's going to be questioned separately from Rupert and James Murdoch -- after Rupert and James Murdoch.

But it is going to be an incredible day tomorrow, it's the first time we'll have heard Rupert Murdoch being cross-examined about this whole affair in depth. I mean, he's tried his best to sort of stay out of the limelight as long as he can. But there will be no hiding tomorrow, the spotlight will be firmly on him.

KAYE: And what can we expect, do we think, that Murdoch's to say tomorrow? Do you expect any big surprises?

RIVERS: Well, that whole kind of party line, if you like, has been, we didn't know what was going on, we had no idea about the extent of illegal activities. But I think they will be questioned closely about, well, come on, guys, there was money being written out to these detectives doing some of the illegal work, you were signing the checks ultimately, didn't you have any idea where this was going on? That's the kind of line of questioning that is going to be difficult for them to dodge, because if they just say, well, we didn't know where the money was going, then that's makes them incompetent at best. If they say they did, then that clearly shows that they were involved and new about it and sanctioned it.

So, I think there's going to be a lot of questioning about the detail of, you know, the payments that were going out to these private detectives and the paper trail. Among that, I think they're going to have a tough time.

KAYE: Dan Rivers for us in London. Dan, thank you. And once again, Rupert and James Murdoch and former Murdoch executive, Rebekah Brooks are scheduled to testify before members of the British Parliament, that's tomorrow morning and CNN will cover that live.

We also want to remind you that we're waiting for President Obama to speak from the White House to officially nominate Richard Cordray to head the Consumer Financial Protection Bureau. We will bring you that announcement as soon as it happens.

Hugs all around for the crew of Atlantis, saying good-bye to the space station but leaving something historic behind, that's ahead in just two minutes.

(COMMERCIAL BREAK)

KAYE: Once again, we want to show you this live picture from the White House there. The president is on his way out, we're going to listen to his official nomination of Richard Cordray to head the Consumer Financial Protection Bureau.

(BEGIN LIVE COVERAGE)

BARACK OBAMA:, PRESIDENT OF THE UNITED STATES: Good afternoon, everybody.

It has been almost three years since the financial crisis pulled the economy into a deep recession, and millions of families are still hurting because of it. They're trying to get by on one income instead of two, on fewer shifts at the plant or at the hospital. They're cutting expenses, giving up on a family night out so there's money for groceries. And for a lot of families things were tough even before the recession.

So we've got to get the economy growing faster and make sure that small businesses can hire again so that an entrepreneur out there can sell a new product, so that the middle class is getting stronger again, and so folks feel confident in their futures and their children's futures.

That's why we can't let politics stand in the way of doing the right thing in Washington. We can't stand in the way when it comes to doing the right thing on deficits. That's why I want to take steps like making sure payroll taxes for middle-class families don't go back up next year. That's why it's so important that we tackle the problems that led us into this recession in the first place.

One of the biggest problems was that the tables were tilted against ordinary people in the financial system. When you get a home loan, it came with pages of fine print.

OBAMA: When you got a credit card, it was as if the contract was written in another language.

These kinds of things opened the door to unscrupulous practices: loans with hidden fees and terms that meant your rate could double overnight, it led to people getting mortgages they couldn't afford. And it put honest businesses at a disadvantage. And it encouraged dangerous, risky behavior on Wall Street dragged the economy into the mess that we're still trying to clean up.

That's why we passed financial reform a year ago. It was a common-sense law that did three things.

First, it made taxpayer-funded bailouts illegal, so taxpayers don't have to foot the bill if a big bank goes under.

Second, it said to Wall Street firms, "You can't take the same kind of reckless risks that led to the crisis."

And, third, it put in place the stronger -- the strongest consumer protections in history.

Now, to make sure that these protections worked, so ordinary people were dealt with fairly, so they could make informed decisions about their finances, we didn't just change the law. We changed the way the government did business.

For years, the job of protecting consumers was divided up in a lot of different agencies.

OBAMA: So if you had a problem with a mortgage lender, you called one place. If you had a problem with a credit card company, you called somebody else.

It meant there were a lot of people who were responsible, but that meant nobody was responsible.

And we changed that. We cut the bureaucracy and put one consumer watchdog in charge with just one job: looking out for regular people in the financial system.

This is an idea that I got from Elizabeth Warren, who I first met years ago. Back then -- this is long before the financial crisis. Elizabeth was sounding the alarm on predatory lending and the financial pressures on middle-class families.

And in the years since, she's become perhaps the leading voice in our country on behalf of consumers. And let's face it, she's -- she's done it while facing some very tough opposition and drawing a fair amount of heat. Fortunately, she's very tough.

And that's why I asked Elizabeth Warren to set up this new bureau.

Over the past year, she has done an extraordinary job. Already, the agency is starting to do a whole bunch of things that are going to be important for consumers: making sure loan contracts and credit cards are simpler and written in plain English.

OBAMA: Already, thanks to the leadership of the bureau, we're seeing men and women in uniform who are getting more protections against fraud and deception when it comes to financial practices.

And as part of her charge, I asked Elizabeth to find the best possible choice for director of the bureau. And that's who we found in Richard Cordray.

Richard was one of the first people that Elizabeth recruited. And he's helped stand up the bureau's Enforcement Division over the past six months.

I should also point out that he took this job, which meant being away from his wife and 12-year-old twins back in Ohio, because he believed so deeply in the mission of the bureau.

Prior to this, as Ohio's attorney general, Rich helped recover billions of dollars in things like pension funds on behalf of retirees and stepped up the state's efforts against unscrupulous lending practices.

He's also served as Ohio's treasurer and has successfully worked with people across the ideological spectrum, Democrats and Republicans, banks and consumer advocates.

Now, last but not least, back in the '80s Richard was also a five-time "Jeopardy" champion...

(LAUGHTER)

... and a semifinalist in the Tournament of Champions. Not too shabby.

OBAMA: That's why all his confirmation -- all his answers at his confirmation hearings will be in the form of a question.

(LAUGHTER)

That's a joke.

(LAUGHTER)

So I am proud to nominate Richard Cordray to this post.

And we've been recently reminded why this job is going to be so important.

There is an army of lobbyists and lawyers right now working to water down the protections and the reforms that we passed. They've already spent tens of millions of dollars this year to try to weaken the laws that are designed to protect consumers. And they've got allies in Congress who are trying to undo the progress that we've made.

We're not going to let that happen. The fact is the financial crisis and the recession were not the result of normal economic cycles or just a run of bad luck. They were abuses and there was a lack of smart regulations.

So we're not just going to shrug our shoulders and hope it doesn't happen again.

OBAMA: We're not going to go back to the status quo, where consumers couldn't count on getting protections that they deserved. We're not going to go back to a time when our whole economy was vulnerable to a massive financial crisis.

That's why reform matters. That's why this bureau matters.

I will fight any efforts to repeal or undermine the important changes that we passed. And we are going to stand up this bureau and make sure it is doing the right thing for middle-class families all across the country.

Middle-class families and seniors don't have teams of lawyers from blue-chip law firms. They can't afford to hire a lobbyist to look out for their interests.

But they deserve to be treated honestly. They deserve a basic measure of protection against abuse. They shouldn't have to be a corporate lawyer in order to be able to read something they're signing to take out a mortgage or to get a credit card.

They ought to be free to make informed decisions to buy a home or open a credit card or take out a student loan. And they should have confidence that they're not being swindled.

And that's what this consumer bureau will achieve.

I look forward to working with Richard Cordray as this bureau stands up on behalf of consumers all across the country.

I want to thank both Elizabeth and Tim Geithner for the extraordinary work that they've done over at Treasury to make sure that a year after we passed this law it is already having an impact, and it's going to have impact for years to come.

Thank you very much.

And congratulations, Richard.

(END LIVE COVERAGE)

KAYE: Well, you can here there reporters would like to ask questions about the debt ceiling, but the president, all he wanted to speak about was his official choice to head the Consumer Financial Protection Bureau. And you just heard, Richard Cordray is his choice. That's the official nomination. He says the financial crisis was not the result of normal, economic cycles. They were abuses. He pointed out that there was a lack of smart regulations. And he says this bureau will protect middle class families and will make sure that these families who don't have corporate lawyers to protect them will not be swindled.

We'll have much more news right after this quick break.

(COMMERCIAL BREAK)

KAYE: Tropical Storm Bret continued to strengthen as it headed closer to the Bahamas this morning, but the forecast calls for this storm to begin moving out to sea. Here to tell us more, meteorologist Chad Myers.

Chad, how does Bret look to you?

CHAD MYERS, AMS METEOROLOGIST: Bret looks essentially like it's going to be maybe a Bermuda storm for that matter, you know. For the -- the whole system -- and if we get rid of a "b," we get rid of a named storm, I guess that's some good news. And it's right here. Right over the Bahamas. Here's Florida. It could spread a little bit of cloud cover back over toward Florida. And we're going to try to land the shuttle this week.

But as it moves away, there is Hamilton. So that would be Bermuda. And it heads out into the ocean and it's just another storm. That loses a name. The next storm will be the "c" storm and it's going to be -- there's all of the projections, 50, 60, 60, 55 miles per hour. Not even a hurricane. But it will make some decent waves if you want to be surfing maybe the Carolinas this weekend. The waves will still be there.

It is a heat wave, though, going on in the middle part of the country. There is no question that the 108 in Minneapolis, 100 -- the feels like temperature in Kansas City this afternoon will be well above where it should be for this time of the year.

And here's what it looks like. From this entire area, this map size, from Fargo all the way to Michigan and back down south even into Dallas, that's 25 percent of the entire United States under some type of warning. That is exactly the same size as the entire country of Mexico. So think about that. An entire country almost there under some type of warning. And it doesn't go away any time soon. For today and then into tomorrow, still going to feel like 110 in Minneapolis. Lake Minnetonka, you know where that is.

KAYE: I do.

MYERS: Lake Minnetonka, 119 degrees is what it felt like yesterday. Now, I really don't care whether you're on the lake or in the lake, that's still pretty hot.

KAYE: That is hot. I've been on a boat in that lake many times and that's way too hot.

MYERS: I know you probably have. You were there eight years something you lived there.

KAYE: Seven. Seven years.

MYERS: There you go. They call this hotlanta. That's hot Minneapolis.

KAYE: It sure is. All right, Chad, thank you.

MYERS: You're welcome.

KAYE: Well, NASA's Dawn spacecraft has reached its destination. A massive rock called Vesta. It is the first time NASA has been able to orbit an object in the asteroid belt between Jupiter and Mars. Vesta is about 330 miles across. Dawn will take pictures of Vesta for around a year before heading out farther into space. It took four years to reach Vesta, which isn't technically an asteroid. Because of its make- up, NASA refers to it as a, quote, " minor planet." NASA says this mission will help pave the way for future man travel into space, including a possible landing on an asteroid or a minor planet.

NASA has started wrapping things up on the last shuttle mission. This morning, the final four shuttle astronauts said good-bye to their counterparts on the International Space Station. Next stop, earth. Our John Zarrella has more from Kennedy Space Center on that historic farewell ceremony.

JOHN ZARRELLA, CNN CORRESPONDENT: Randi, 30 years of flying space shuttles came a little bit closer to the end today onboard the International Space Station. The six space station crew members bidding farewell to the four space shuttle crew members. In a brief ceremony, these space shuttle crew members left behind an American flag that they attached to the hatch leading from the Space Station to the shuttle. Now, that American flag flew for the very first time back 30 years ago on the very first space shuttle flight.

(BEGIN VIDEO CLIP)

RON GARAN, ASTRONAUT: And we close that hatch when these guys go by, we're closing a chapter in the history of our nation. But, in the future, when another spacecraft docked to that hatch and with crew members onboard, and we open that hatch, we are going to be opening a new era and raising a flag on a new era of exploration beyond low earth orbit. So it's a great honor to do that and it's a great place for us to put it.

(END VIDEO CLIP)

ZARRELLA: The shuttle and station crews exchanged hugs and then the shuttle astronauts got on board Atlantics and the hatch was closed. Now, that flag we were talking about, that will be retrieved by the next American astronauts who make it to the space station on a U.S. vehicle. Probably a commercial vehicle in three or four years. They'll bring that flag back to earth. And then that flag will next fly on the very first deep space mission by U.S. astronauts, perhaps to an asteroid or on to Mars.

Now, the space shuttle Atlantis is scheduled to return to earth on Thursday morning just before sun up here at the Kennedy Space Center.

Randi.

KAYE: Thank you, John.

The shuttle might be on its way out, but NASA isn't slowing down. We've got a preview of the new robotic lander that they're now testing. I'm going to talk with the woman in charge of that project, coming up. And Rupert Murdoch built the greatest international media empire the world has ever known. Well, in the wake of the British phone hacking scandal, can he hold it together? We'll try to find out.

(COMMERCIAL BREAK)

KAYE: It's about half past the hour. Let's look at some of the headlines and other news you may have missed.

Just a few minutes ago, President Obama nominated former Ohio attorney general Richard Cordray to head the new Consumer Financial Protection Bureau. The president passed over law professor and temporary bureau head Elizabeth Warren for the job. The agency was Warren's brainchild but several Senate Republicans said they would have blocked any effort to make her the bureau's permanent leader. Republican senators also said that they may block any nominee to head the bureau unless changes are made to how it operates.

Top administration and congressional officials are expected to keep working this week on a measure to raise the federal debt ceiling by up to $2.5 trillion, embracing a version of a fallback plan by Senate Minority Leader Mitch McConnell. The debt ceiling proposal stands in sharp contrast to President Obama's preference for a package of roughly $4 trillion in savings over the next decade made up of spending reforms and tax increases on the rich. If Congress fails to raise the current $14.3 trillion debt ceiling by August 2nd, Americans could be hit with rising interest rates, a plummeting dollar and increasingly jittery financial markets.

More fallout from the shocking phone hacking scandal involving Rupert Murdoch's media empire. British Prime Minister David Cameron returning home early from a trip to Africa to deal with a scandal. And the British home secretary now says a review board will examine allegations of corruption involving British police officers. The announcement comes after the resignation of Britain's top two police officials.

And tomorrow Rupert Murdoch, his son James Murdoch and former Murdoch executive Rebekah Brooks are scheduled to testify before members of the British parliament. CNN will cover it live and bring that to you.

Classic rock band Cheap Trick got a scare last night at the Cisco Ottowa Bluesfest. Take a look here. The stage gave way after the band was playing after severe weather moved into the area. Luckily no one was seriously hurt. But, as you can see, it was quite a frightening moment.

Nelson Mandela turned 93 today and South Africans are helping him celebrate. These young students gathered to sing the former president a special happy birthday song. Other South Africans chose to pay tribute to Mandela's legacy by performing acts of public service.

In the wake of the British phone hacking scandal, what is Rupert Murdoch's next move? We will try to find out right after the break.

(COMMERCIAL BREAK)

KAYE: And now back to our continuing in depth coverage of the British phone hacking scandals. It started with reports that Rupert Murdoch's now defunct "News of the World," hacked the answering machine of a missing teenage girl. Now, it could have a severe impact on Murdoch's entire international media empire. Murdoch and his son James are scheduled to appear before the members of the British parliament tomorrow, so is Rebekah Brooks, who was in charge of Murdoch's British newspapers until she resigned just last week. CNN will bring you live coverage of that hearing tomorrow.

To give you an idea of what's at stake, we're bringing CNN's Jim Boulden in from London.

This is a pretty big deal that Rupert Murdoch and his son will be answering questions from parliament, isn't it, Jim?

JIM BOULDEN, CNN CORRESPONDENT: It is huge. It really is. I mean, this story keeps moving at an extraordinary pace and we're told that the two will only (AUDIO GAP) really depends on how they answer the questions.

Will they listen to lawyers and try to deflect some of the answers? Will they talk about what they knew about the phone hacking or the alleged phone hacking and the alleged payment of money to police? And in that time, of course, if there's any sort of problem with the answers, I think that the parliamentarians are going to smell blood.

KAYE: Certainly over the weekend with the apology ads in the British newspapers, there seems to be a bit of damage control taking place on behalf of Murdochs.

But how do you think this might affect the entire empire?

BOULDEN: Well, it is affecting the empire when you look at the share price. You look at the fact that they had to close one of their newspapers and the fact they could not take over the number one satellite broadcaster here, which many people thought they would be able to. And now they've hired Endelman, the big public relations firm.

Late last week I talked to the editor of the "Guardian," and the "Guardian" is the paper that's been breaking many of these stories. And he told me actually he has some sympathy for Rupert Murdoch.

Take a listen.

(BEGIN VIDEO CLIP)

ALAN RUSBRIDGER, EDITOR, "THE GUARDIAN": It's felt a bit out of control for the last 10 days, but I'm not surprised because the story was -- they were having so much thrown at them and the story was changing so much from day-to-day. I think it would test any organization. So I think there are signs now that they are beginning to get a grip. (END VIDEO CLIP)

BOULDEN: So get a grip for now, but we'll see after the testimony tomorrow, Randi.

KAYE: And I'm curious, what is your take on this? I mean, do you think that Murdoch -- Rupert Murdoch -- can survive this?

BOULDEN: Well, of course, he's 80-years-old. He's been an extraordinary man for newspapers and for the media. But, I think the question really is, is, he probably will survive, but will his son James become the heir apparent? Will he take over as many people thought he would? Or will he go to one of the Americans executives at News Corp and have them take over eventually?

That really will depend on how James Murdoch, who, of course, was more involved in the newspapers here more than Rupert was, during the phone hacking scandal and the times around this and the times leading up to these revelations over the last few weeks. was during the scandals.

We'll see whether James can survive, as well.

KAYE: And Jim, I want to ask you about Prime Minister Cameron. We're just getting word today that he's going to cut his trip to Africa short to come back home, deal with the scandal.

What do you know about his relationship -- and I mean this in the most professional of terms -- with Rebekah Brooks, the woman who really seems to be at the center of this?

BOULDEN: Yes. They are friends and you have to court people who run newspapers in the country and Mr. Murdoch hired Andy Coulson, who worked at the "News of the World" as well as Rebekah Brooks was a friend and then she took over all the newspapers and there are lots of photos of them together.

There is a very small group of people here in this country that sort of know each other and seem to control things. That's the way I look at it. And Rebekah Brooks was a very powerful, very young lady who rose very quickly through the ranks of the newspapers where she started as a secretary.

And then at the time she took over all of Rupert Murdoch's papers here, of course any prime minister would want to court her and talk to her and get to see what kind of influence he could have on her, but at the same time, you have to think about what kind of influence she may have had on him.

KAYE: Certainly so. All right. Jim Boulden, appreciate it. Thank you very much.

Once again, Rupert and James Murdoch and former Murdoch executive Rebekah Brooks are scheduled to testify before members of the British parliament tomorrow morning and CNN will cover that live.

Japanese soccer players surprised the world but not themselves at the Women's World Cup. Details coming up next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CHARLIZE THERON, ACTRESS: Madiba, happy birthday.

WHOOPEE GOLDBERG, ACTRESS: Happy birthday.

MORGAN FREEMAN, ACTOR: Happy birthday, to you. Happy birthday Happy birthday, Madiba.

(END VIDEO CLIP)

KAYE: Three celebrities are among the millions wishing former South African president Nelson Mandela a very happy birthday. He turned 93 today. Mandela is spending the day with family in his rural hometown, but across the country, South Africans are paying tribute to the anti-apartheid icon through song and community service projects.

General David Petraeus today handed over command of the war in Afghanistan. The fact the war is far from over is scored by more deadly violence. Another top advisor to Afghan President Hamid Karzai shot dead in his home, the killing of a district police chief and the deaths of four NATO soldiers.

CNN's David Ariosto joins us now from the Afghan capital, Kabul.

David, what did General Petraeus say about the war that he is leaving?

(AUDIO GAP)

(BEGIN VIDEO CLIP)

GEN. DAVID PETRAEUS, OUTGOING COMMANDER OF U.S. FORCES IN AFGHANISTAN: It has again been the greatest of honors to serve here, to witness the skill and valor of our troopers, and --

(END VIDEO CLIP)

DAVID ARIOSTO, CNN INTERNATIONAL CORRESPONDENT: Randi, the former commander reflected on some of the hard-fought gains of the surge of the past year down in Kandahar and Helmand province. He also thanked his Afghan colleagues, many of whom are going to be taking over as the United States' and NATO coalition forces begin transitioning authority for the security of many of the provinces, seven of which that began already. The first batch of U.S. troops actually departed just last week, 10,000 of which are expected to come home by year's end. And the full drawdown is supposed to take place by the end of 2014, but Petraeus mentioned that there are still some elements that will likely be supporting the Afghan government even beyond that time.

Now, incoming general John Allen said he was cognizant of the tough road ahead. John Allen served in Iraq during the surge there in 2007, and comes at this at really a critical time here in the terms of the transition and the security situation in the country.

What we have seen as of recent has been sort of an interesting shift by what some officials describe is a shift by Taliban and other militants in the southern/eastern parts of the country to focus more on high-profile attacks. We saw this yesterday with the killing, the gunning down of a top Karzai adviser. And also last week with the killing of the Hamid Karzai's - the Afghan president's - half-brother. All of this comes at a time of great transition, but also sends a message of who really is safe here in Afghanistan? Randi?

KAYE: All right, thank you very much. Appreciate that.

Time right now, 46 minutes past the hour. Checking some other top stories that we're following. A "CNN In Depth" story, the phone hacking scandal in Britain allegedly by newspapers owned by Murdoch. Prime minister David Cameron cutting short his trip to Africa and returning home due to the widening scandal.

The country's top police official, Paul Stevenson, has resigned -- yes, resigned -- over the weekend. That's him right there. His assistant commissioner followed suit today. Tomorrow, Murdoch and his son James Murdoch, are set to testify before the British Parliament. CNN plans live coverage.

In Italy, a judge today dismissed all defense motions in the trial of prime minister Silvio Berlusconi. He is accused of having sex with a minor. He is also charged with abuse of power. Berlusconi denies the charge. The next hearing date is in October.

The kick that brought joy to all of Japan. The winning goal in Japan's amazing victory over the United States in the finals of the women's World Cup. Saying they were playing for the victims of Japan's earthquake and tsunami, the Japanese tied the game in overtime and won outright on penalty kick.

Coming up, I want you to check this out. That's what NASA is testing right now. We'll tell you why it might be so important to the future of space exploration. The "Big I," coming your way next.

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KAYE: Everyday on this show, we do a segment called "The Big I." It's about big ideas, innovations and solutions to problems. And today, I've got to admit, when I saw this invention, I thought immediately of "The Jetsons." Check it out. That's NASA's new robotic lander, essentially an unmanned hovercraft being tested at the Marshall Space Flight Center in Huntsville, Alabama. Dubbed "the mighty eagle," it's being created to help explore moons, plants and asteroids.

The manager of the project, creating the lander, is NASA engineer Julie Bassler. She joins me now, along with planetary and lunar scientist Renee Weber. Thank you both for coming on the show to talk about this.

Julie, I'd like to start with you. This isn't NASA's first robotic vehicle, so what makes this one so special?

JULIE BASSLER, NASA ENGINEER: This vehicle we're building is a very small, smart, versatile lander. It will be capable for lasting six years on a lunar surface or other airless bodies.

KAYE: And Renee, what kinds of things can be done that aren't being done today?

RENEE WEBBER, PLANETARY AND LUNAR SCIENTIST: Well, there's still a lot left to learn about the lunar surface. We haven't had anything landed there since the '70s, so we still have a lot of scientific questions, like understanding the evolution and formation of the moon. And also looking at things like resource exploration for supporting future manned activities.

KAYE: And from what I understand, this is supposed to be really good at hovering. So, Julie, from what I understand as well, it didn't hover so well or certainly for any length of time yet. So, how long is it able to hover, and what is so important about it hovering?

BASSLER: OK. Well, so far we have been able to hover for 33 seconds. That was our longest test flight. In August, we'll be taking it outside to the range at the Redstone test arsenal here in Huntsville, and we'll be flying it for up to 60 seconds. And at that time, one of the main things we're going to be demonstrating is a closed-loop autonomous vehicle and that we can actually control it autonomously. So, once the engineers press the button, it flies all on its own. And it should last at least eventually 60 seconds. And we're attempting to go up to eventually 60 meters in height.

KAYE: Hmm. Renee, I have to ask because a lot of us are watching the space shuttle program come to an end. Yet now you have designed this sophisticated, unmanned vehicle. Is this the direction that we're heading in?

WEBBER: It's a possibility, but I would like to point out things like the unmanned mission's capability in terms of characterizing the lunar surface and also other bodies that we haven't visited yet like asteroiders or Mercury or the moon of Jupiter.

KAYE: And when, Julie, might we see this in space?

BASSLER: Right now, NASA is working on their five-year budget plan, so it could be within five years or it could be 10 years. I think once they understand their budget, fiscal realities, then they'll be able to forecast the future for the future robotic missions.

There are already orbiters in orbit around the lunar surface, and there are plans to go to other asteroids, so there's already plans to be doing orbits around other planetary bodies. And this would be the next phase of that sequence of missions.

KAYE: All right. Julie, Renee, we wish you luck with it. It's pretty cool. Thanks for coming on and telling us more about it.

And for much more on this, you can check out my Facebook page, facebook.com/RandiKayeCNN.

One congressman doing his own personal crimefighting, stopping a home invasion. We've got that ahead in our CNN Political Update next.

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KAYE: Time now for a CNN Political Update. Former New York mayor Rudy Guiliani hasn't decided if he will run for president yet, but he has decided to give his fellow Republicans just a little bit of advice. CNN's senior political editor, Mark Preston, joining me from Washington.

Mark, what's the message from Rudy Guiliani?

MARK PRESTON, CNN SENIOR POLITICAL EDITOR: Well, Randi, we know that Rudy Guiliani does not support gay marriage. He does support the concept of civil unions. But let's listen to what he said on "STATE OF THE UNION" yesterday as far as the issue of talking about gay marriage.

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RUDY GUILIANI, FORMER MAYOR OF NEW YORK CITY: I think that marriage should be between a man and a woman, but I think the Republican party would be well advised to get the heck out of people's bedrooms and let these things get decided by states.

(END VIDEO CLIP)

PRESTON: And there you have the former New York City mayor, Rudy Guiliani. He was on "STATE OF THE UNION" yesterday.

He also talked a little bit about why he might run and what the timeline might be, he would make a decision. He pointed out that the country is at a state right now that the city of New York was when he first took over New York. And look at the great things that he did for New York City.

Now as far as when he will make the decision to run or not, he said probably by the end of the summer he'll work things out. And of course, Rudy Guiliani there basically telling social conservatives right now, let's not talk about gay marriage. Let's talk about the economy, Randi.

KAYE: All right. Mark Preston, appreciate it. Thank you.

And your next update from The Best Political Team on Television is just one hour away.