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In the Arena
Britain's Scandal Whistleblower Found Dead; Media Empire Collapsing; Debt Ceiling Debate
Aired July 18, 2011 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DON LEMON, CNN ANCHOR: Good evening, everyone. Welcome to the program. I'm Don Lemon.
Tonight, the phone hacking scandal tearing through media is playing out like a summer movie thriller. With new developments exploding like robots in a "Transformer" movie.
First, the top two officials resigned from Britain's famed Scotland Yard. Then Prime Minister David Cameron cuts short a foreign trip as calls for his resignation appear in the British press.
Now, most disturbingly, Sean Hoare, one two of the whistle- blowing journalists who brought the story to public attention, was found dead in his home. Police say that the death is unexplained but not suspicious.
Murdoch's top lieutenant, Rebekah Brooks was arrested this weekend after resigning as CEO of News Corp's British newspaper business. She's expected to testify before the House of Commons tomorrow.
This isn't her first time appearing before parliament. The clip that I'm about to show you is from 2003. I want you to watch it very closely. Brooks is testifying together with her colleague Andy Coulson. Coulson went on to become Prime Minister David Cameron's spokesman. He has since resigned and has also been arrested in the scandal.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Can I just ask, (INAUDIBLE) pay the police?
UNIDENTIFIED MALE: The who?
UNIDENTIFIED MALE: Just the one element of whether you ever pay the police for information?
REBEKAH BROOKS, FORMER NEWS INTERNATIONAL CEO: We have paid the police and -- for information in the past, and it's been --
UNIDENTIFIED MALE: And will you do it in the future?
BROOKS: It depends on -- UNIDENTIFIED MALE: What person within the code and within the law, there is a clear public interest and within the same holds for private detectives, for subterfuge or video (INAUDIBLE), whatever you want to talk about.
UNIDENTIFIED MALE: It's illegal for police officers to receive payments.
UNIDENTIFIED MALE: No, no, no. I just said within the law.
(END OF VIDEO CLIP)
LEMON: All right. So what you see here is not only the beginning of the scandal. It's also the beginning of the News Corporation's attempts at damage control. Coulson stepping in to blunt Brooks' answers.
Moments ago I spoke with the other British whistleblower about the death of his colleague Sean Hoare and about the spread of allegations of illegal practices up the chain of command at News Corp.
But first here are the other stories we're digging into tonight.
(BEGIN VIDEO CLIP)
LEMON: Deadline, do they know what the word means in Washington? Two weeks to go, and no compromise in sight. So is this the week Congress finally strikes the debt ceiling deal. Time is running out.
And "Don't Ask, Don't Tell." The president repealed it last year. But it's still in legal limbo. This decorated West Point grad served his country in Iraq and Afghanistan, and was discharged for being gay. He wants to know, what's taking so long?
Then, Japan's reason to hope. Inspired by the women's soccer team that could. Defying a season of disaster, in a land of darkness. Is the sun rising again?
(END OF VIDEO CLIP)
LEMON: I want to get back now to our top story. Our in-depth look into the phone hacking scandal at Rupert Murdoch's News Corporation.
CNN correspondent Matthew Chance has been chasing after the spreading scandal all day and he joins me now from London.
Matt, you first, to Sean Hoare's death. Not suspicious, that's what police say, but certainly a strange turn of events.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, it's another bizarre twist, isn't it, Don, on this on-going saga with the phone hacking scandal.
Sean Hoare, one of the main whistleblowers in this whole scandal. He was the first journalist to go on record to accuse Andy Coulson, the former editor of "News of the World" and of course the former director of press and media for David Cameron, the British prime minister, of not just knowing about the phone tapping that he alleges went on at the "News of the World" but also condoning it and actually encouraging it of his journalists as well.
He also appeared in the press about a week ago as well with more controversy, suggesting that "News of the World" journalists had access to sensitive police technology for cash payments by using what's called pinging to pinpoint through mobile phone signals the whereabouts of people they wanted to track down. So that was another scandal that he blew the whistle on as it were, just a week before he wound up dead at his home in Watford, a short distance from the British capital London.
So again, nothing suspicious about this according to the people. We don't know the exact reason for his death at this point. There will be an autopsy I expect. But again another bizarre twist in this -- in this ongoing saga -- Don.
LEMON: You know, it's hard to keep up with it. By the time we finish this segment on the show, things could have changed already. Two top British police officials resigned. I'm talking about John Yates. He resigned today. Paul Stephenson resigned yesterday.
What's going on inside the police department that now two top officials have had to resign?
CHANCE: Don, it really has shaken the Metropolitan Police -- the biggest police force in Britain, one of the biggest police forces in the world, in fact -- to its core.
They've lost their leadership essentially with Sir Paul Stephenson stepping down 24 hours ago. Then his deputy John Yates doing the same thing, all because of the linkage that they have and the -- you know, the contact they've had with various officials from News International and with this phone hacking scandal.
The IPCC, the Independent Press Complaints Committee here in Britain, which is obviously an independent body which examines police conduct, says that it's launching its own investigation into the way the police have handled this, its investigation into the conduct of those top two figures at the Metropolitan Place and also into the conduct of at least two other former senior officials of the Metropolitan Police as well as how they conducted themselves with this phone tapping and how they sort of interacted with journalists over the past several years -- Don.
LEMON: Hey, Matthew, let's look ahead to tomorrow, Rupert Murdoch, James Murdoch, Rebekah Brooks to testify in the House of Commons. What can we expect from this?
CHANCE: Well, the big box office is obviously going to be Rupert Murdoch, you know, one of the world's most powerful media moguls, sitting in front of members of members of parliament in the British House of Commons, being cross-examined essentially about his role about what he knew, about what instructed officials and his deputies at News International, at News Corp, to do about this phone hacking scandal which as we've been has really shaken the British establishment.
We're expecting to hear much less from Rebekah Brooks, the former CEO of News International, the former editor of "News of the World" as well, because she's already been arrested and so there is a police investigation into her conduct and her -- what she's been up to.
And so she's going to be much more constrained as to what she'll be able to see legally to the MPs, who will be asking the questions. Also going to be constraints somewhat on what the MPs can ask Rebekah Brooks because they don't want to, above all else, jeopardize the ongoing police investigation, the criminal investigation into what Rebekah Brooks may or may not have done. So it'll be a very, very interesting day to watch tomorrow.
LEMON: Matthew Chance in London for us tonight. Matthew, thank you very much.
Now more on our in-depth coverage.
Together with Sean Hoare, British journalist Paul McMullen was one of the first to go on record with allegations of illegal activity at Murdoch's papers. McMullen was a features executive at Murdoch's "News of the World" and whatever you think of his behavior as a tabloid reporter, he is one of the few journalists in Britain to blow the whistle on News Corp behavior.
But please keep in mind that McMullen used to work with Rebekah Brooks and that his professional relationship with her did not end on happy terms.
Also, we reached out to the spokespeople for Brooks, Andy Coulson and to the News Corporation for their response to McMullen's allegations. We haven't heard from them at this time, but when we do, we'll pass their response along to you.
I spoke with Paul McMullen earlier and asked him how being caught up in the story is affecting him.
(BEGIN VIDEOTAPE)
PAUL MCMULLEN, FORMER NEWS OF THE WORLD JOURNALIST: I've got at least one stalker. There's someone else keeps ringing me up trying to pretend to be someone else. I've got three people on Twitter pretending to be me, sending tweets out to my family and friends, who are now concerned about my, you know, mental health because other people are pretending to be me.
I bought a bar since I retired from journalism about six or seven months ago. I don't think it's safe for me to stand behind my own bar. Not just because I might be arrested but a little while ago someone tried to throw a glass in my face. I got quite a lot of abuse.
I got a spare (INAUDIBLE), I mean, so many people, particularly MPs in Britain, are taking credit for, you know, taking apart Murdoch's empire. It isn't. It was Sean Hoare who started with blowing the whistle in the "New York Times." He was a good guy. He stood up for good values in journalism and he was so disappointed that Andy Coulson, who regularly asked him to hack into people's phones, you know, the master of the dark arts, turned round when we started getting caught.
And so it wasn't us, it was -- so it wasn't me, it was the reporters, and the reporters now are getting, you know, arrested or was asked -- brought into Scotland Yard. Myself to be arrested three times. And time and time again, Rebekah Brooks said it wasn't us, we knew nothing about it. And Andy Coulson said it wasn't us. We knew nothing about it, it was just our reporters, that made Sean Hoare angry and it made me angry.
You generally shouldn't stick up for you. Not throw you to the wolves.
LEMON: Did this in some say you think lead to his demise? Was he concerned about something? Was he worried about something? Did he have issues because of the scandal?
MCMULLEN: He -- well, I mean, I felt quite stressed for the last two or three weeks particularly. I think my blood pressure is a bit raised. And if you've got an existing I believe heart condition, he looked a bit of a mess recently. And the stress of this wouldn't have helped.
I don't think he was bumped off. I don't think he committed suicide, although there was some suggestion from one of our friends who rang me up about two minutes ago, but I don't think that's the case.
I think he was in fading, ill health. He was disgusted of the way his boss and former friend, Andy Coulson, behaved. And he wanted that to be brought into the public domain. And you know he's well done. Sure. I mean the guy got sacked, as he indeed should be. Andy got arrested.
LEMON: OK.
MCMULLEN: And I carried on the good work, and Rebekah Brooks is now -- has been arrested and next guy up is that going to be Rupert Murdoch's own son? It looks it might be, and it's all thanks to someone who has crossed a boss who stabbed him in the back.
LEMON: Did Rebekah Brooks in your estimation know about these practices? Was she aware?
MCMULLEN: I've got to say yes. I have no doubt of that. I don't know anyone at the paper, including freelance photographers, no one who didn't know what was going on. I mean quite a few people were disappointed. This was going back to the 1990s, and if everyone knew in the '90s, when Rebekah Brooks was still features editor, before she even got promoted to editor. I mean did she edit the paper with her fingers in her ears and her hands over her eyes? I don't think so. I mean it's conceivable she didn't so.
LEMON: Do you think that Rupert Murdoch was aware of these practices?
MCMULLEN: Actually I have to say I don't think he was, no. I only met him once in the office as a Saturday night as the paper was going to press, and he actually always come across to me as almost a decent man, above the kind of -- the "News of the World." Basically, it was all about people having affairs.
Sometimes it's almost written as almost soft porn, you know, the way a politician drops his trousers around his ankles and so on, and I almost sometimes get the impression that Murdoch didn't actually support that, but it made a sufficient amount of money for him not to interfere.
LEMON: So you have said in this interview, you said that you believe James Murdoch, he was aware of these practices, and by default, encouraged them?
MCMULLEN: Yes, I mean where I started on this and where I started blowing the whistle was -- actually I was -- it was from the point of view of the story, and I remember hiding in Rebekah Brooks' front garden. Yes. I positioned myself in the bush and for about two days. Quite rainy, it wasn't a very pleasant job, and I was just waiting for them to horse ride together.
Just to illustrate the point that we have James Murdoch, we have Rebekah Brooks, and we have a man who wants to be prime minister, in just a matter of weeks before the election, and this is how they plan it, and this is how close they are, and maybe someone should bring this to light.
Then I went to all of the pub restaurants and hotels where they have met and tried to get -- build up a picture of just how close these people were and maybe too close.
LEMON: You mentioned David Cameron, the current prime minister, who has you -- who has a cozy relationship, by all accounts, with the Murdochs.
MCMULLEN: Yes.
LEMON: And with the people at "News of the World."
MCMULLEN: Yes.
LEMON: What do you make of that? Was he aware of this? And was his relationship in your estimation too cozy?
MCMULLEN: Yes. I mean I have actually made my own submission to parliament. They requested my take on it. And I said, there's only two viewpoints of David Cameron's association with Rebekah Brooks. He's either a complete liar or a total idiot.
I mean there's no way that David Cameron is going to look good after this. He's either lying about knowing it, and if you lie in parliament, that's perjury, and that's a 2 1/2 year potential jail term. So you're not supposed to do that.
LEMON: You are making some pretty bold assertions here and some will say speculation. Have you told this to police? And do you intend to testify to all of these issues that you've spoken about to us here? The prime minister's involvement, Rebekah Brooks' involvement, James Murdoch's involvement. Do you intend to go on record with this?
MCMULLEN: I think I've gone on the record in parliament. I wouldn't go on the record to police because the police aren't exactly showing themselves to be particularly trustworthy in Britain at the moment. And my former colleague, Sean Hoare, the -- my fellow whistleblower, refused to cooperate with the police and I think that was a fair tact to take.
Nothing wrong with telling the truth. I mean we only really have freedom of speech in Britain in one place and that is in the Houses of Parliament. So I think I'll leave it for that.
LEMON: Paul McMullen, thank you.
MCMULLEN: All right, thanks.
(END VIDEOTAPE)
LEMON: Still ahead here tonight, the Murdoch way. When you're up against it, the best defense is a good offense. That tactic has worked in the past, but with Murdoch now facing the British parliament and the U.S. legal system, I'll ask legal expert and media critic Dan Abrams, will it work now?
(COMMERCIAL BREAK)
LEMON: More now on our in-depth story. The hacking scandal that's taking down a media empire on both sides of the pond. We've seen newspaper editors arrested and the resignations of two of London's top police officials. But is this just the beginning?
Joining me now is Dan Abrams. He's the founder of Mediaite.com and he's an ABC News legal analyst.
Good to see you, sir.
DAN ABRAMS, FOUNDER, MEDIAITE.COM: Good to see you, Don.
LEMON: Long time no see.
ABRAMS: Long time.
LEMON: In person. Yes, another day, another time.
You heard what Paul McMullen said.
ABRAMS: Yes. LEMON: What do you make of the newsroom culture?
ABRAMS: Well, look, I think you have to still evaluate it newsroom by newsroom. Right? I mean can you imagine if at Time Warner, everyone started evaluating all of the properties together as opposed to evaluating them individually.
Now some people say Murdoch is different. Is it culture at the Murdoch properties that make them different? That may or may not be the case. But as a legal matter, you've just got to evaluate it separately. "The Wall Street Journal," separate from "The Sun," separate from "News of the World," separate from FOX News Channel.
LEMON: But they're still part of the same company. And to -- you have to admit that Rupert Murdoch has had an influence on the world when it comes to media.
ABRAMS: No question.
LEMON: And of course here in the United States for the last 20 or so years.
ABRAMS: Enormously.
LEMON: So why wouldn't -- why wouldn't that trickle down in the company as well if he can do it around the world?
ABRAMS: Look, it's fair for us in the media to be asking about it, right? It's fair for us to be saying what's the culture there? Is this sort of indicative of a bigger problem in the media, but as a legal matter -- and you just laid this segment out by talking about the arrest. We're talking about serious stuff here.
LEMON: Yes.
ABRAMS: So I'm not going to sort of -- you know, sort of look at this with a broad brush. Instead, I think it's really important when you're talking about these very serious allegations to look at it entity by entity, and you know there is no evidence up to this point that the American institutions, meaning "The Wall Street Journal," FOX News Channel, et cetera, were engaged in any of the kind of conduct we're talking about.
LEMON: I want to ask you -- because I want to know what are the legal implications for that culture, for Rupert Murdoch, for Rebekah Brooks, for Andy Coulson.
ABRAMS: Yes.
LEMON: For anyone who's going to testify, what are the implications?
ABRAMS: Again, I'm going to look at it person by person which is some of the British leaders of the organizations are facing some serious allegations.
LEMON: And James Murdoch, the son, as well.
ABRAMS: Right. Well, he's a separate issue. Let me first talk about the people who are directly responsible, which is that they're facing allegations with regard to intercepting communication. Hacking. Phone hacking.
LEMON: Right.
ABRAMS: If that turns out to be the case and people here did it, they could be investigated and prosecuted as well. That's a crime in England, that's a crime in the United States.
The bigger concern I think for the empire as a whole is that the U.S. authorities are now investigating, the FBI is investigating with regard to 9/11 victims, but there are also federal laws.
LEMON: Right.
ABRAMS: That basically prevent an organization from paying off foreign officials. So usually it means paying off for a contract. Like you want to get a special contract with a foreign government, you can't effectively give them bribes or you'll be prosecuted in the United States.
There's some saying that that law could be used to prosecute News Corp here in the United States, but I think that to do that, there's going to have to be some knowledge on the part of the U.S. officials that this was going on and you heard in your previous interview there, that even he was saying that he didn't think Murdoch had knowledge of this.
LEMON: Right. And I think it was probably below his pay grade, if you know what I mean. But this is the thing. You heard Rebekah Brooks in that 2003 testimony there, say -- being asked about that.
ABRAMS: Yes.
LEMON: She said, yes, did we pay police? Yes, yes. Later they tried to come back and clarify --
ABRAMS: But she's been arrested.
LEMON: Yes.
ABRAMS: I mean, you know, we can focus on Rebekah Brooks, and it's important, but she's now been arrested.
LEMON: OK. OK.
ABRAMS: So the point is that with regard to her, the authorities are going after her.
LEMON: All right.
ABRAMS: There's no question about it. LEMON: I want to get to some things quickly here because I'm sure you read "The Wall Street Journal" and you saw what their editorial board put in there today.
ABRAMS: Yes.
LEMON: So here's -- listen, the first quote that I want to read, it say, "Phone hacking is illegal, and it's up to British authorities to enforce their laws. If Scotland Yard failed to do so adequately when the hacking was first uncovered several years ago, then that is more troubling than the hacking itself."
Are they putting the blame on someone else?
ABRAMS: This is -- and this, in getting back to what we're talking about before, this is classic for a Murdoch operation.
LEMON: OK.
ABRAMS: Which is to go on the offense as a good defense. I don't think that's very smart right now. Meaning, if they were under less scrutiny and they were in less trouble, I'd say go for it.
LEMON: OK.
ABRAMS: Go after them.
LEMON: All right.
ABRAMS: But considering how much is going on now on the legal front, that's almost taunting people to say, yes, you know what? Bring it on. They -- you know, they're the problem.
(CROSSTALK)
ABRAMS: The authorities, not us.
LEMON: You're reporting on this, Mediaite, we're reporting on this, reporting on ABC, do you think this to be Schadenfreude behavior? Because I hadn't heard Schadenfreude in a long time.
Here's what they said --
ABRAMS: Good TV word.
LEMON: Yes, it's a good TV word. They said that any one basically who is talking about this, a competitor, is kind of gloating. "We also trust that readers can see through the commercial and ideological motives of our competitor critics. The Schadenfreude is so thick you can't cut it with a chainsaw."
ABRAMS: Look, I think they're right to some degree. I think there is a glee on the part of those who despise Murdoch and his operations. I think they're saying finally we've got some gut --
LEMON: Yes, but it's a good story. (CROSSTALK)
LEMON: But it's a big story.
ABRAMS: Let me finish. I'm saying that I think that there is glee, and yet the problem with making a statement like that is it suggests that it's not a real story.
LEMON: Yes.
ABRAMS: As you point out. It is a real story.
LEMON: Real story.
ABRAMS: It is a legitimate story, but that doesn't mean -- there are many stories --
LEMON: Yes.
ABRAMS: -- which are legitimate and real where the people reporting on it seem to have a great enjoyment or glee in reporting it.
LEMON: All right. I got to get on to this.
ABRAMS: Yes.
LEMON: Rupert Murdoch's future as CEO, as a head of his company?
ABRAMS: Yes. Look, there are reports tonight suggesting that maybe he could think about stepping down, et cetera. Look, I think that's going to be a business decision.
LEMON: Who would do it?
ABRAMS: Look, I think he would -- I think he felt --
LEMON: No, who would take his place if he stepped down?
ABRAMS: I mean that, you know, I think that some of the people who are currently in the leadership there would take over.
LEMON: Chase Carey?
ABRAMS: Yes, I think -- I mean I don't know. I mean purely my guessing based on what I've read would be Chase Carey. But I think that we should be careful that yes, I think they're probably considering that. I wouldn't be surprised if they are also suggesting that to tell the world, we're taking this really seriously.
LEMON: Yes.
ABRAMS: I promise you, we are not taking this lightly. So whether he actually steps down or not, I don't know. But I think if in the end it came down to saving his company or not, giving up the title at his age, based on what he's accomplished, would that be something he would consider? I would think absolutely.
LEMON: Good to see you.
ABRAMS: Don, as always.
(LAUGHTER)
LEMON: Thank you very much and as always, great analysis. Dan Abrams, we appreciate it.
Just ahead Senate leaders say they'll stay in session every day, even though -- even through the weekends until there's a deal on the debt ceiling. But is that enough to break what feels like a never- ending stalemate? We'll ask our experts David Gergen and Gloria Borger.
(COMMERCIAL BREAK)
LEMON: Another day, another step closer to Armageddon. At least that's what President Obama is calling it.
Leaders in Washington still haven't reached a deal on the debt limit. And the Senate today said they'll remain in session every day until they reach an agreement.
Meantime Congress and the country are spinning in circles. Is it just me or is this beginning to seem like the movie "Groundhog Day."
Here to look at how both sides are handling the negotiations, senior political analyst David Gergen and our chief political analyst Gloria Borger.
Good to see both of you. So let's talk about this cut, cap and balance pledge. It's the Republicans' proposal for ending this debate. It's up for a vote in the House tomorrow but there is no way that it's going to pass the Senate, and the president has also said that he's going to veto it.
So what's the point of doing it, David? Is it political grandstanding? Is it just ceremonial? Why do it?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, Don, both sides have been using these debates as ways to send messages to their base to try to generate votes for the 2012 election. There was a reason President Obama wanted a $4 trillion deal. He has said it was the right thing to do, but he also thought it was very important to send a message to independents.
And now Republicans are trying to send a message to their conservative base that they want to do something as radical in terms of cutting as a $4 trillion would have been. This proposal they're voting on is far more radical than anything we've seen so far. But it's important for them to send a message to the Tea Party in particular.
Look, we understand this is what we're basically for. We may ultimately have to compromise.
GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: And you know, Don, I think there a lot of House Republicans who don't want to go along with any kind of deal to raise the debt ceiling and a vote on this was what they say is a prerequisite for them to go forward with any kind of plan by Senate leaders to get something done.
So I think there was a sense on the part of the House leadership in many ways that look, this is a good way for us to get our folks on the record for what we want and then raising the debt ceiling in any way, shape, or form would somehow seem more palatable.
LEMON: This is just really about taking a stand, but let's talk --
GERGEN: Don, can I ask a question? I'm sort of wondering what the odds are of actually getting a deal by August 2nd. I remain optimistic that we'll get a deal.
I still think it's above 50/50, but I was disturbed and distressed to see Easton Callender (ph), who is an expert on these things for many years, gave an interview in "The Washington Post," and he put it less than 50/50. I wonder where Gloria is?
BORGER: Well, you know. It used to be, David, in the old days I'd always say that in, you know, Congress is a crisis-activated institution, and right up against it would get done what it needed to get done.
GERGEN: I agree with you.
BORGER: And I no longer believe that to tell you the truth.
LEMON: I don't know - I don't know if I would be taking odds on Washington because you never really know what's going to happen because there are a lot of things at play here.
And even presidential politics that's I want to talk to you about, Gloria. A number of GOP presidential candidates made a point to sign the CCB pledge. Representative Michele Bachmann today reverse course and signed it, after saying she wouldn't, because the pledge didn't go far enough.
There is also Grover Norquist pledge of no tax increases that candidates are signing. So it's not just the economy stupid here, but it's politics at play and presidential politics at that.
BORGER: Well, it is. It's kind interesting to me, because up until this week, I would have told you that the Republican presidential candidates were essentially irrelevant to this debate. Because they were off on their own, saying don't approve the debt -- Tim Pawlenty, Michele Bachmann don't approve the debt ceiling under any circumstance.
And then you have the Republican leadership in Congress saying, you know what, we have to approve the debt ceiling. The way this cut, cap and spend thing plays out is that it actually meshes the presidential candidates with the congressional candidates and the people in the Congress.
It's kind of the -- the missing link, if you will. Something that they can all join together and say, we all support this. You know, and as you said, Michele Bachmann wanted this to include the repeal of President Obama's health care plan and she still wants to go further and do that.
LEMON: Go ahead, David.
GERGEN: I must tell you, I've been very surprised that Mitt Romney has embraced this because --
BORGER: Right.
GERGEN: Whatever happens this week is not going to pass, but now that he has embraced this, he has got to defend it as a presidential candidate if he's a nominee. He's already embraced the Ryan plan on Medicare. Now he embraces this.
Just to give you some sense, when people really start to look at this plan, how much -- how far apart President Obama is from what the Republicans are proposing. The Republicans under this plan want to take spending down to 18 percent of GDP.
Obama wants to keep it around 23 percent. That may not sound very much. When you actually get down to dollars and cents, on today's dollars, it's $700 billion in difference, huge difference.
BORGER: And when you --
LEMON: And considering -- let me get this in and considering the lack of growth in the economy that makes these numbers even bigger. Listen, I want to talk about this because I'm wondering why these presidential candidates are jumping on board.
Here's why. It's more about politics of this debate. It seems that the president is still winning here. A new CBS poll today shows 71 percent disapproval of how congressional Republicans are handling the debt negotiations.
Meantime, President Obama has a 48 percent disapproval, but does translate to long term political boost by fighting against raising the debt ceiling and not being to come to some sort of consensus? Are they trying to win but losing?
BORGER: Well, I don't think either side looks good in that poll particularly. Honestly, I mean, the Republicans look worse, but President Obama shouldn't be happy with that kind of a rating in this also.
And I think what that says about President Obama, there's a question of his leadership and leadership style here and whether, in fact, he needed to step in earlier, needed to draw a line in the sand earlier. I think the questions about the president are could he have headed this off at the pass and could he have led differently from the White House on this? You know, we are used to seeing this president, as in health care reform.
He kind of sat back and said, OK, you guys work it out on the Hill and it didn't bode too well for him in the long term because lots of people didn't like the plan that got passed. So I think there's a problem here for the president also.
LEMON: David, quickly. I'm up against the clock here.
GERGEN: I agree with Gloria. I do think the president has come out better in the arguments. But at the end of the day, he also will be held as responsible as Republicans are for jobs and where we are in these deficits and be a punch on both houses if they don't watch it.
LEMON: David Gergen, Gloria Borger, thanks to both of you.
BORGER: Thanks.
GERGEN: Thank you.
LEMON: Over the weekend, the U.S. women's soccer team lost the World Cup Final in a stunning upset.
Up next, why you shouldn't feel bad if you felt good about the other team's win.
(COMMERCIAL BREAK)
LEMON: Americans hate losing, but sometimes a loss can feel like a win, a real lump in the throat bigger than sports moment, like yesterday in Frankfurt, Germany.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It is Japan's World Cup!
LEMON (voice-over): Japan's women's soccer team won the World Cup. They came from behind to beat the favorite American team, but this comeback was way bigger than that.
Four months ago, Japan was in shock, an earthquake, a tsunami a nuclear nightmare. Japanese society was shaken to the core, a proud people desperate for hope and inspiration. They found it in a team of underdogs who refused to quit.
Sure, we wish our side had won, even the president and his family were cheering for the USA. But as the Japanese team heads home to adoring fans, it makes you want to stand up and cheer for an entire nation that won.
(END VIDEO CLIP)
LEMON: And more than once during the tournament, the Japanese woman hoped out loud that a victory would inspire encourage in quake victims pride in their country. We'll be right back.
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LEMON: The fight for consumer rights, it's been a year since Congress passed legislation to protect consumers from deception by banks and other financial companies.
But there's been a fierce battle in Washington over who will lead the Consumer Protection Agency and how much power it will have. Today President Barack Obama nominated Richard Cordray for the top job.
He's already the director of Enforcement there and the former state attorney general, but the opposition promises to be stiff. Take a listen.
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OBAMA: There is an army of lobbyists and lawyers right now working to water down the protections and reforms 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 were trying to undo the progress that we've made. We're not going to let that happen.
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LEMON: All right. But does the president have the power to prevent it? I'm joined by Simon Johnson, he's the author of "13 Bankers: The Wall Street Takeover and the Next Meltdown" nice title.
SIMON JOHNSON, AUTHOR, "13 BANKERS": Thank you.
LEMON: Welcome. All right, so listen, a red-hot political fight. But Elizabeth Warren has a great resume. She's a Harvard professor and she really put this agency together. Why not her?
JOHNSON: That's a very good question. It's a very fair question. I think President Obama didn't want to fight on those grounds, and, of course, Professor Warren can go on and run for the U.S. Senate in Massachusetts in 2012.
LEMON: He sound very determined today, the president, but he really does not have the votes to get Cordray confirmed.
JOHNSON: Right now, it looks like all 44 Republicans in the Senate are holding together against having anyone confirmed as director on the existing basis, but there may be room for a deal. There are other deals being talked about in Washington in these weeks and this may be part of it.
LEMON: Forty four of them, you mentioned them. They sent a letter to the president saying they won't approve anything or anyone until the agency is restructured. So what do they want? What are the structures they want in place? Is this about control? Is this about appropriation of money? What is it about? JOHNSON: It's probably about having a board rather than a single director. So having five people on a board, the sort of structure you have for the SEC or FDIC. It could be a three-person board, for example.
There are some Republican representations there. Senator Richard Shelby who's the senior Republican on the Senate Banking Committee has said, relatively small adjustments could get somebody confirmed. And I think that's the kind of thing he's talking about.
LEMON: All right, so this agency, they believe, the people who are opposed to it are Republicans. The people in the financial services industry, they say that there is no accountability and they want more accountability and that's what this is about, correct?
JOHNSON: Well, that's one thing their people say, but what does accountability mean? They're regulators. They are supposed to be in charge. They're supposed to have clear and fair rules and that's where they are headed.
LEMON: I want to get this - correct because I saw Elizabeth Warren today and she was talking to our Wolf Blitzer. Here's what she says. She says these guys want to rip the arms and legs of this agency before it can ever get started. Is that true?
JOHNSON: Well, they want to de-fund it, and if they are able to de-fund it through various kinds of maneuvers that would be a very difficult problem.
You need to have money in order to hire people. The SEC is running to exactly this problem. The SEC is really got a very big funding problem.
This new consumer protection agency is not there yet and as long as the president comes out and fights on the grounds he laid out today, I think he's going to win.
LEMON: I want to talk about the work of the agency itself. In your estimation, how much do consumers need this? Because we're talking -- we're not just talking about credit cards and mortgages and -- we're talking about some unfair practices that consumers aren't even aware of because it's sort of inside baseball. Not reading the fine print.
JOHNSON: I don't think it's inside baseball, I don't know about you, but the last time I got my notification of my credit card terms. I opened it up. It was a little document. That's good. It's an improvement, but it was like concertina. I couldn't read it. I don't have the eyesight to read that level of fine print.
LEMON: Here's what I mean, though, just personally, in the middle of a refi, and the person on the other end, she may have been speaking another language because I had no idea what she was talking about. I think to the average person, they really don't know all of these parameters especially when you're dealing with money. Most people aren't that abreast of it. JOHNSON: So know before you owe is one of the agency's landmark items right now. I think it's a very good initiative, and a lot of people in the banking community also support it.
Legitimate, honest people in the banking community, yes, there are quite a few of them. They want transparency. They can make money even when consumers know what they're buying. Unfortunately, there are still a lot of unscrupulous players.
LEMON: Cordray, the right guy?
JOHNSON: I think he's a very good guy. I mean, he's coming from enforcement. He has a background in Ohio where he did bring cases against bankers and lenders who way out of line on mortgage practices. So yes, he can do a very good job.
LEMON: All right, thank you very much. Simon Johnson, appreciate it, sir.
"Don't Ask, Don't Tell," after years of debate, the president repealed it. Only to have the repeal delayed by the courts, a frustrating development for gays and lesbians wishing to serve our country.
Up next, the inside story of one American hero.
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LEMON: Gay soldiers are still in limbo. The repeal of the military's "Don't Ask, Don't Tell," was delayed Friday by a federal appeals court, frustrating news for my next guest who one of the casualties of that policy.
Former U.S. Army Captain Jonathan Hopkins, graduated fourth in his class from West Point, earned three bronze stars in Iraq and Afghanistan, but was outed and wound up with an honorable discharge.
He is now a board member of "Outserve," which is a group of thousands of gay soldiers currently serving the country. Jonathan Hopkins joins me now from Washington, D.C. Thank you, sir.
JONATHAN HOPKINS, FORMER U.S. ARMY CAPTAIN DISCHARGED UNDER DADT: Good evening, Don. How are you doing?
LEMON: I'm doing great. Listen, I've got some interesting question that I want to ask you. I think the day that you were told that you were under investigation. I'm sure at first it must have seemed like the worst day of your life, but ultimately, did it prove liberating for you?
HOPKINS: I thought it was the worst day of my life, but the days got a lot worse after that for a while. It was - actually, both parts of your question are right, though.
It was the beginning of both the worst year of my life and also the best. Because suddenly something I dedicated so much of my life to and sacrificed the opportunity to have relationships and be personally happy in order to achieve some sort of professional success.
That all seemed like it had gone away for nothing, but at the same time, it began a part of my life where I could live honestly and openly, I could be an open book. I could have a boyfriend and I could be personally happy and also seek to be professionally happy at the same time.
LEMON: When you think about what happened with "Don't Ask, Don't Tell." That they reinstated it, but not enforcing it, what does that -- what happens to you when you -- when you hear news like that? Do you think what is taking so long? What is going on here?
HOPKINS: Well, from our nearly 4,000 members in "Outserve," we have heard it repeatedly. It's kind of a start and go process. Like being stuck in a traffic jam, except this has to do with your career and your ability to stay and do something you love and be able to serve your country.
So there is certainly a degree of frustration. I think members -- members of the military were told this would happen in the summer or early fall, from the beginning of the year. So they expected that.
But once there was a court process and the Department of Defense process going simultaneously, but not on the same timeline, it starts to become frustrating. Once it says, OK, it's OK for you to be in the military. No, we're going to kick you out. Now, it's OK. No, we're going to kick you out.
LEMON: So you don't know what's going to happen next and I'm sure the thousands of people - and you are talking about, what did you say, 4,000 people?
HOPKINS: Well, we have 4,000 people in our organization.
LEMON: I am sure who are closet and who don't come out and there are many more members who are serving, many more in the military.
HOPKINS: Most studies say there are 65,000 to 75,000 people serving in the American armed forces who are gay, lesbian, bisexual or transgender.
LEMON: OK, so that day of reckoning, right now it's not being enforced, right? Even though they reinstated it, but that day of reckoning so to speak like you had, what is going through the minds of those men and women in uniform?
Am I going to be next? Is this a distraction for them, from them doing the work that they need to be doing when it comes to serving our country?
HOPKINS: Well, it certainly is. I mean, being in the military, sometimes it's a game of survival because you're worried about a mortar attack. You could actually die. But if you're gay in the military, two survival games you're playing. One, to not get injured or killed in the line of duty and second, just to be able to have the right to be able to fight for your country and perhaps be killed or injured in the line of duty.
When I was in the military, I always assume there is a 5 percent chance that anyone around me, my friends or not my friends could turn me in if they found out the truth.
That's why I spent three years, two of them as a company commander in Alaska and didn't tell anyone that I was gay, even my closest friends, even my roommates, I didn't tell them one word about it.
LEMON: Well, the interesting this that it's called "Don't Ask, Don't Tell," right? But if someone else tells then you're still in jeopardy, and chances are you're going to get kicked out at least with the original policy.
HOPKINS: Well, that was originally the way it was. For the most part, it's gone away. One, it's not being enforced right now due to the court order and really the Pentagon hasn't, while individual units have been investigating people for being gay and have processed paperwork, nobody's been eliminated out of the military, except for about four personnel.
I think they're all in the Air Force who actually specifically requested, no, seriously, to the service secretary, seriously I want out of the service. They only processed four out.
LEMON: I don't want you to just give that short shrift because it's not being enforced. Is it still meaningless?
HOPKINS: No, it's not meaningless when you are being told that you do the same job, but you're unequal. It's not meaningless at all. The only way we can achieve something meaningful is when basically the intentions of the court, which is to end "Don't Ask, Don't Tell" and the intentions of the Pentagon, which is to end "Don't Ask, Don't Tell," are united by the Pentagon certifying and repealing the law as quickly as possible.
So we don't have more time for continued back and forth. The both organizations want it repealed. They are disagreeing about the timeline. The way the Pentagon can get this to go faster, certify tomorrow. They will have training done on August 15th.
I don't know what else they can do, considering the training only covers, treat everyone equally. Not sensitivity training, it's telling everybody what the standard are. I don't see what they can do beyond that.
So given that once they certify, it's 60 days to repeal. It's unfortunate they didn't certify nearly a month ago.
LEMON: Why does anyone think rolling it back slowly is preferable? I ask that because it will have to take place among the men and women in uniform. That's where the real living is going to take place. Are they underestimating our men and women in uniform?
HOPKINS: Well, I think they are. If you look at our allies, United Kingdom, Australia, Canada, a bunch of other countries when they repealed their law, they did it immediately and didn't have any major negative events.
I think there are concerns out there, but it's really like if you're teaching a kid to swim, and you say it's going to be OK. You prepare the kid all you can, which is like training until August 15th. You prepare --, but the kid keeps on saying I don't want to jump in quite just yet.
Thinking that getting that additional time is going to make it better, but really the kid needs to get in the water and paddle. Well, the same thing applies to military. The training is going to be undone on August 15th. They need to get done with the repeal and lead.
That is what's going to solve this. And more than any company commander or squad leader saying treat everybody the same. It will have more affect than any of that, a gay service member, who's the best in his squad or best in her squad, who also happens to be gay, that's the best sensitivity training anybody in the military will ever get, are the facts.
We saw it under -- when desegregation happened, and we'll see it now. That will be the biggest impact of this repeal and that is the way we solve the problem.
LEMON: I think you're reading my mind because that was my next question I was going to ask you. Do you see a parallel here between integrating the military among races and also now among gay people and straight people?
HOPKINS: I definitely see a parallel in getting to a state of mutual understanding, and just basically making decisions based off facts instead of stereotypes. Where I think this is going to be different, we are much further along when it comes to acceptance of gays and lesbians now, today, than we were in 1947 when Harry Truman ended or started the end of segregation by executive order.
LEMON: Real quickly here, Jonathan. Is it generational, yes or no?
HOPKINS: Explain that.
LEMON: Is it generational? Do you think younger people in the military are more accepting of it?
HOPKINS: Totally. The biggest, most concerned people are senior personnel in the military.
LEMON: Would you be reinstated? Would you want to be?
HOPKINS: I think there are a lot of different ways I can serve my country. So I will explore those before I make a decision whether I actually go back in. But I know that there are other people that want to rejoin the military because that's what they love and I personally love it as well.
LEMON: Yes, what are you hearing from cohorts who are still waiting on this?
HOPKINS: Frustration and confusion. Those are the -- those are the bottom two -- main two things that most people are experiencing.
LEMONS: All right. Jonathan Hopkins, very interesting story. I really appreciate you joining us tonight, fourth in his class at West Point, earned three bronze stars in Iraq and Afghanistan, but outed and ended up with an honorable discharge.
Thank you so much for joining us tonight. Best of luck to you.
HOPKINS: Thanks for having me, Don.
LEMON: All right, and thank you for joining me IN THE ARENA. I'm Don Lemon. Good night from New York. "PIERS MORGAN TONIGHT" starts right now.
