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In the Arena
British Lawmakers Grill Rupert, James Murdoch; Scotland Yard Dragged into Murdoch Scandal
Aired July 19, 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, welcome to the program. I'm Don Lemon.
Our top story, a day of dramatic confrontation in the Murdoch scandal. British lawmakers grilled Rupert Murdoch and his son James for hours in a hearing televised all over the world.
Murdoch's media empire has been rocked by accusations of police payoffs, phone hacking and corruption at his British newspapers. And throughout the hearing, all of the charges kept coming back to one central question. Take a listen.
(BEGIN VIDEO CLIP)
TOM WATSON, BRITISH CULTURE, MEDIA AND SPORTS COMMITTEE: Mr. Murdoch, do you accept that ultimately you are responsible for this whole fiasco?
RUPERT MURDOCH, CHAIRMAN AND CEO, NEWS CORPORATION: No.
WATSON: You're not responsible? Who is responsible?
RUPERT MURDOCH: The people that I trusted to run -- and then maybe the people they trusted.
(END OF VIDEO CLIP)
LEMON: The Murdochs did their best to distance themselves from the worst allegations, but the question still remains what exactly did they know? And what actions did they condone?
One lawmaker thinks they know more than they let on.
(BEGIN VIDEO CLIP)
ADRIAN SANDERS, BRITISH CULTURE, MEDIA AND SPORTS COMMITTEE: Are you familiar with the term willful blindness?
JAMES MURDOCH, CHAIRMAN, CEO, NEWS CORPORATION INTERNATIONAL: Mr. Sanders, would you care to elaborate?
SANDERS: It is a term that came up in the Enron scandal. A willful blindness is a legal term. It states that if there is knowledge that you could have had and should have had, but chose not to have, you are still responsible.
JAMES MURDOCH: Mr. Sanders, do you have a question? Respectfully, I don't know what you'd like me to say.
SANDERS: My question was, whether you are aware --
JAMES MURDOCH: I'm not aware of that -- I'm not aware of that particular phrase.
SANDERS: But now you are aware of the term because I've explained it to you. Thank you, Mr. Chairman.
JAMES MURDOCH: Thank you, Mr. Sanders.
RUPERT MURDOCH: And we were not ever guilty of that.
(END OF VIDEO CLIP)
LEMON: And it got more interesting. At one point, the hearings turned chaotic as a man inside the hearing room attacked Rupert Murdoch with a plate full of shaving cream.
(VIDEO CLIP)
LEMON: I want you to take a look at this again. You can see on the far left of your screen someone breaking out of the seats and heading straight for Rupert Murdoch. And the first to act? His wife who comes out swinging. You see her to the left of your screen there. While his son James and a police officer seemed frozen in action.
Well, Murdoch may not have the reflections he once did, but he was still able to dodge some verbal attacks today. We will go in- depth on the Murdoch hacking scandal tonight. But first, here are some other aspects of the story we're drilling down on tonight.
(BEGIN VIDEO CLIP)
LEMON: The fall of Scotland Yard? Britain's beacon of law and order, rocked by allegations of bribery. Top brass resigning in disgrace, and today, a stunning breach of security. Time to call in Sherlock Holmes?
And death of a whistle blower. Sean Hoare lived the tabloid life to the limit. Drugs, booze, and cell phones. That's how he got his sensational stories. Looks like he saved the best one for last.
Then News Corp and politicians. We've seen the cozy connection in Britain, but here in America, for political contributions, you'll never guess who gets the most Murdoch money.
(END OF VIDEO CLIP)
LEMON: Back now to our in-depth report, the Murdoch hacking scandal and a key question, how deeply involved were the police and exactly why did they shut down their original phone hacking investigation back in 2007? My guest tonight worked with Rupert Murdoch as senior editor for "The Times of London" and he has insider's knowledge of the close or perhaps too close relationship between the police and the tabloids.
Welcome, Nicholas Wapshott.
NICHOLAS WAPSHOTT, SR. EDITOR, THE TIMES OF LONDON: How do you do?
LEMON: I want to quickly get to the investigation, but this was fascinating to watch.
WAPSHOTT: It wasn't an extraordinary piece of -- I can't think of anything since the Watergate hearing which has been so gripping and on the expectation that something new was going to come out. But it was watching the Murdochs wriggling on the end of the hook which was the thing which was the thing which kept everybody gripped on it.
LEMON: James Murdoch said today that from his perspective once the police investigation was closed back in 2007 that was it. But do you think that News Corp executives had some hand in closing that investigation? Were they influential in that?
WAPSHOTT: Well, it's very difficult to know entirely. And I guess we're going to have to wait until the police to do their proper job rather than to abandon the case right in the beginning.
What we do -- what we do know is that the senior policeman who was in charge of that investigation, ended up first of all being smeared with information about his private life. We'd like to know I guess where those rumors came from in the first place. So he was headed up on by people who specialized in finding out dirty tricks about people.
And then shortly afterward, he was given a column on the "London Times."
LEMON: I was going to ask you where he is now. Right.
WAPSHOTT: A column that he still has today.
LEMON: Right.
WAPSHOTT: So this guy, the man who called off the investigation is the man who's now employed by the sister publication (INAUDIBLE) the investigation that he was meant to be looking after.
And you don't have to completely stupid to work out that something smelly was going on. And if Rupert Murdoch really says that he didn't know anything about it, don't you think he might have at least asked that single question, how come this guy is now being paid?
LEMON: It is a really -- sometimes too-close relationship it appears to be, but it's a tangle web of the same people who are working for the police department, then go into government and then they work for News Corp. WAPSHOTT: Absolutely. It's sort of a revolving door. It turns out there were 10 people that were in the public relations department of Scotland Yard who came from News International. So the people who used to give report tips were the person who ended up giving tips, and who pays whom?
And in a way it doesn't really matter. This is sort of chump change. The actual details of who was paid. The fact is, they were same personnel going round and round.
LEMON: Round and round. Did you -- did you see that?
WAPSHOTT: I didn't know. I think actually the "London Times" has been kept insulated from many of the tabloid tricks that "The Sun" and "News of the World' were up to.
LEMON: What is it like to have a working relationship with Rupert Murdoch? And then -- and then was he the same man that you knew? Is he the same person with all of his faculties?
WAPSHOTT: I must say I was rather saddened today because here he is, 80 years old, and he's definitely been dented by this. I mean he looks as if somebody has come across him with a cricket bat or baseball bat. In Australia, a cricket bat. He looks very down in the dumps. And I would guess that he was saying it's the most humbling day of his life. I mean there's no doubt that this is a very low point of his career.
LEMON: Yes.
WAPSHOTT: On the other hand, it's very difficult to feel entire sympathy for someone who has -- who can give it out but can't take it. The fact is I've known Rupert for -- 1980s when I met him so it was over 30 years I've known him. And he's always been the cock craw on the marquee, if you know.
LEMON: Right.
WAPSHOTT: He's been strutting around and doing pretty well. He doesn't with a combination of personal charm, but then he has an organization that spends it's whole time looking into dirty little secrets of politicians, and every time that he needs a business favor done, lo and behold, politicians fall in with his plans.
LEMON: But does it surprise you? He mentioned that thousands of employees he has around the world. But does it surprise you that he seems so out of touch with the organization, especially when you're paying so much money to make things go away? Is this -- I was watching him saying, "The Emperor Has No Clothes."
WAPSHOTT: This doesn't ring true to me. I mean he made a great play of the fact that only 1 percent of News Corp.'s business that they came from "News of the World". Well -- and he also blamed everybody else. That is, he wasn't told. He delegated power and people abused him. But the fact is that he delegated some -- large parts of his empire, he delegates to TV which he doesn't particularly understand. He doesn't understand FOX -- movie studios. He moved to Beverly Hills and came back with his tail between his legs. He just didn't get the business. He's very bad on online. He bought MySpace, which was a most peculiar thing. But when it comes to the newspapers --
LEMON: He loves newspapers.
WAPSHOTT: He loves newspapers.
LEMON: And is that because of his father? You know, hang on, let's play -- he spoke about his father today and I stopped --
WAPSHOTT: This is interesting.
LEMON: And really paid attention to it. I want you to watch it.
(BEGIN VIDEO CLIP)
RUPERT MURDOCH: I just say I -- perhaps addressing -- I just wanted to say that I was brought up by a father who was not rich, but was a great journalist. And he just before he died bought a really small paper, specifically he said give me a chance to do good.
And I remember what he did and what he was most proud of and for which he was hated in this country by many people for many, many years which was exposed the scandal (INAUDIBLE), which I remain very, very proud of.
(END OF VIDEO CLIP)
LEMON: So I'm wondering, as you said, since, you know, his newspapers are such a small part of the business.
WAPSHOTT: Yes.
LEMON: And at a time when newspapers are losing really their profitability, he hangs on to them. Is this his motivation? His father? To be in the media business? To hang on to the newspapers and to become this wealthy?
WAPSHOTT: Well, I wouldn't like to speculate entirely upon the relationship with his father because it's a complex one. Here today he spoke very affectionately about him. His father, Sir Keith, was a real establishment figure. He was knighted, he was old money.
If Dame Elizabeth still alive, over 100 years old, and they were pillars of the community. But somewhere along the line, Rupert decided not to be old money and an established figure, and he decided to be an outsider. And he considers himself an outsider.
When he went to Britain, he hated the very people that his father came from, if you like. He hated all of those landed people, all those moneyed people, that did so well purely because of their families. And yet actually of course he runs one of the tightest-knit family organizations in the world.
LEMON: But if you listen to him, it seems like, you know, my father was poor. I think he sort of alluded to that, and I built this from nothing, but that's not exactly --
WAPSHOTT: Not quite. But at the same time he did -- I mean there's no doubt the story of News Corp is astonishing.
LEMON: Yes.
WAPSHOTT: He inherited -- he was at Oxford University when his father died and he inherited a very small newspaper in Adelaide.
LEMON: We were talking before the show and you said it's over in the UK. It's over. What do you mean by that?
WAPSHOTT: I think he doesn't quiet get it yet. And that is the resentment that's gone on for years about the influence that Rupert Murdoch has had over the world of politics, in particular. The way that he has managed to advance his business empire by heavying up on politics.
After all this stock and trade is the "Sun" and "News of the World." These are newspapers which use personal stories of the most vile kind very often.
LEMON: Yes.
WAPSHOTT: In order to humiliate people in power. Now in a way, of course, he's right. All journalists should give people in power hell.
LEMON: Yes.
WAPSHOTT: But the motivation in this case always turned out to be slightly different. I don't think what he doesn't get is that actually people in Britain are just sick of it, and that pie in the face, you know, I think that in America, why is a poor old man getting a pie in the face? This isn't funny. I got sympathies for him. Not in Britain. I think a lot of people in Britain will say that's exactly what he deserves because he's done that to us.
LEMON: Yes.
We're going to have to end it there. I kept watching it today thinking Citizen Cane as I was watching it. The last of the great media barons. This is happening.
Nicholas Wapshott, thank you very much.
WAPSHOTT: It was a great pleasure.
LEMON: A pleasure. Thank you.
Still ahead here tonight, Tony Blair's press secretary with a behind-the-scenes look at how the Murdoch media empire had Britain's most prominent politicians battling for its blessings.
(COMMERCIAL BREAK)
LEMON: Rupert Murdoch was not the only one to appear before parliament today. Rebekah Brooks, the former editor of "News of the World," also testified. Brooks was arrested Sunday amid allegations the tabloid was paying off police. And this isn't the first time she's been questioned.
Police payoffs have come up time and time again over the years. I'll play you her testimony from today in just a moment, but first let's look at what Brooks had to say back in 2003.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Can I just ask of whether you ever pay the police?
UNIDENTIFIED MALE: Excuse me?
UNIDENTIFIED MALE: Just the one element of whether do you ever pay the police for information?
REBEKAH BROOKS, FORMER EDITOR, NEWS OF THE WORLD: 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: We operate within the code and within the law. And there's a clear public interest and within the same holds for private detectives, for subterfuge, for video banks, whatever you want to talk about.
UNIDENTIFIED MALE: It's illegal to pay police officers --
(CROSSTALK)
UNIDENTIFIED MALE: No, no, no. We don't -- as I said, within the law.
(END OF VIDEO CLIP)
LEMON: Over the years, Brooks has tried to back away from that testimony. But it came up again today when the former editor was asked to clarify exactly what she meant by the statement. Here is what she had to say.
(BEGIN VIDEO CLIP)
BROOKS: I can say that it -- I have never paid a policeman myself. I've never sanctioned or knowingly sanctioned a payment to a police officer. I was referring if you saw at the time of the Home Affairs Select Committee recently, and that you'd have various crime (INAUDIBLE) from Fleet Street discussing that in the past payments have been made to police officers.
I was referring to that wide held belief, not wide spread practice. And in fact, in my experience with dealing with the police, the information that they give to newspapers comes free of charge.
(END OF VIDEO CLIP)
LEMON: All right. Well, that seems like more than just a clarification. More like a contradiction. But believe it or not, the alleged police payoffs may not be the scariest part of this story.
These very newspapers, the same ones excused of payoffs and hacking, are also seen as vital allies for any politician to win an election and that's led to what some call a poisonous relationship between the elite and the media and the politically powerful.
Brooks was asked about her close relationship with the prime minister.
(BEGIN VIDEO CLIP)
BROOKS: I'm afraid in this -- in this current climate, many of the allegations that are putting forward, I'm trying to answer honestly, but there is a lot out there that -- that just isn't true. And in particularly around this subject and my relationship with David Cameron.
The truth is that he is -- that he is a neighbor and a friend, but I deem the relationship to be wholly appropriate, and at no time have I ever had any conversation with the prime minister that you in the room would disapprove of.
(END OF VIDEO CLIP)
LEMON: My next guest says there is nothing appropriate about the relationship between the British media and politicians. And he should know.
Alastair Campbell was press secretary for former Prime Minister Tony Blair. I spoke with him earlier today from London. We talked about that so-called poisonous relationship. But first, I asked him how he thought Murdoch handled the hearing today.
(BEGIN VIDEO CLIP)
ALASTAIR CAMPBELL, FORMER PRESS SECRETARY TO TONY BLAIR: I think what people would have been maybe a bit surprised by in terms of his whole tone of the appearance before the MPs in parliament today was the sense of an almost being divorced from a lot of the events that have been convulsing part of his company, an important part of his company here in the UK, and the metropolitan police and the British government and the British political system.
And yet even questions that you really would have thought he'd have answers to, he didn't. I mean there was one point, for example, at which somebody raised -- one of the MPs raised a previous select committee report into activities at his newspaper, and he honestly looked like he was being informed about this for the very first time in his life.
And I think people would have been quite surprised by that, and I thought with James as well, although he was clearly much more on top of the detail, that he too, there are areas where frankly I think he should have had more to say and he should have been more on top of the details.
LEMON: Do you have any examples of political influence by Rupert Murdoch or anyone who worked for his companies to political leaders, i.e., Tony Blair or any political leaders?
CAMPBELL: I think there's a conversation I remember that we had with Paul Keating when he was prime minister of Australia, and he used to talk about the fact that with people like Murdoch you could do deals, but you never said that deal was being done.
And I think that Rupert Murdoch himself today talked about after the last election, he went around to see David Cameron, because David Cameron wanted to thank him for his coverage during the election, when Rupert Murdoch's papers had supported the Conservative Party.
Now we thought at the time that maybe it was -- that wasn't totally wise given that he did have this very important decision about the BSkyB takeover coming into his entree. But I think there's always been a close relationship between politics and media, the (INAUDIBLE), and all democracies.
I hope that what emerges from this is an understanding that we'd have a better, healthier system if the politicians could do their job without fear or favor. And the media could do their job without fear or favor. And I think when the relationships do get too close, that becomes difficult.
LEMON: All right. I want to talk more about the relationship between the press, political leaders and the police. You're at Rebekah Brooks' wedding. I want you to tell me about the interactions there and who else was at that wedding.
CAMPBELL: Who else was there? Gordon Brown was there. He was then the prime minister. David Cameron was there. He was the leader of the opposition. George Osborne was there, Chancellor of the Exchequer. Lots of main media figures were there. Piers Morgan, now one of your colleagues, has gone very quiet, I've noticed, on this issue. He was there as well.
LEMON: Yes, listen, and I want to say that Piers Morgan has spoken about it. He's done a show on the topic. And he has -- he has not been quiet on it.
CAMPBELL: OK. OK.
LEMON: OK? David Cameron is speaking to parliament tomorrow. Can he survive this? CAMPBELL: Yes, I think he -- I don't think there's any -- I don't have any doubt about that, but I think he would be in a much stronger position if he came out and admitted he made an error of judgment in hiring Andy Coulson, he was the editor of "News of the World" when the known phone hacking was going on, as his communications director.
And he's now sort of busy saying, well, I wanted you to give the guy a second chance. But you know he's the prime minister, he's not a probation officer. And there are lots of people in the world that would like to get a second chance for things they've done. That is not the point.
The point is his judgment in appointing somebody to that position, when so many people were saying this is not going to go away because there were too many unanswered questions for News International, for the police after the first inquiry, which is a complete joke, and also now for David Cameron himself.
LEMON: Alastair Campbell, thank you.
CAMPBELL: Thank you.
(END OF VIDEO CLIP)
LEMON: I want to bring in CNN senior legal analyst, Jeffrey Toobin, and Frank Sesno, director of George Washington University School of Media and Public Affairs and former CNN Washington bureau chief.
All right, you, guys, we have seen -- we have been talking about this cozy relationship between the press, how powerful they are in Britain. If they're really that cozy, there are a lot more people here, a lot more guilty parties than the handful that have been arrested or the Murdochs, right? Frank?
FRANK SESNO, DIRECTOR, GW UNIVERSITY SCHOOL OF MEDIA AND PUBLIC AFFAIRS: Well, that's the danger. The danger is what the -- part of the iceberg you see suggests that there may be a whole lot more of the iceberg that's under the waters and what you don't know.
I mean imagine if Andy Coulson or Jay Carney at the White House, and we were having this thing going on this country? Or had something like that. And that you've got the FBI is filled with people who, you know, are refugees from this organization that has been so out there in pursuing the indiscretions of the rich and the famous and the powerful.
I mean we don't really know where this is going to go. And it -- it can undermine both journalism and the political discourse. It's really a fascinating and amazing thing.
LEMON: Yes.
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: The week before the Iraq war, Tony Blair spoke to Rupert Murdoch three times. I mean that's juice. That is power. You know, Rebekah Brooks' wedding, both the prime minister and the leader of the opposition, these are powerful people. There's no comparison between how powerful the journalists are there and how they are here.
LEMON: Yes. It's like having the president come to your wedding.
TOOBIN: And, and the leader of the Republican Party as well. I mean it's -- I don't think that would happen here.
LEMON: All right. All right. Jeffrey, Frank, thank you very much. There's much more to talk about. Don't go away. We'll be back with more on the Murdoch hacking scandal right after this.
(COMMERCIAL BREAK)
LEMON: More now on our in-depth report. The hacking and bribery scandal consuming Rupert Murdoch's media empire.
I'm back now with senior legal analyst Jeffrey Toobin and George Washington University's Frank Sesno.
Guys, before we get back to our discussion, I want to play you this sound bite of Rupert Murdoch today. He's being pressed on claims that his staffers bribed police. Take a listen.
(BEGIN VIDEO CLIP)
WATSON: Did you or anyone else at your organization investigate this at the time?
RUPERT MURDOCH: No.
WATSON: Can you explain why?
RUPERT MURDOCH: I didn't know of it. I'm sorry. I -- I need to say something. And this is not an excuse, maybe as an explanation of my laxity. "The News of the World" is less than 1 percent of our company. I employ 53,000 people around the world who are proud and great and ethical and distinguished people, professionals in their life, and perhaps -- and I'm spread watching and appointing people in my trust to run those divisions.
(END OF VIDEO CLIP)
LEMON: Almost painful to watch him struggle there. Seems like he is trying to dig himself out of this mess, Jeffrey.
TOOBIN: It is --
(CROSSTALK)
TOOBIN: It was fun to watch his wife, because you can tell she was kind of embarrassed by that answer. She's like, OK, stop, stop digging yourself a hole there. You know the idea that Rupert Murdoch didn't know what was going on at these newspapers because he was so busy with the rest, it's not because he was watching the "Simpsons." You know he doesn't care about the "Simpsons," even though that's a FOX product.
He cares about newspapers. And it wasn't just one mistake that this newspaper made. They hacked thousands of different people. That's what record shows. Thousands of people. This was how the "News of the World" reported the news. By hacking people's phones. So the idea that he didn't know about it, just seems preposterous to me.
LEMON: Similar question, Frank. Can Murdoch really see responsibility here for wrongdoing? Can he be this hands-off, this unaware?
SESNO: Not in the industry that he's supposed to be in, in journalism. I mean let's just step back for a moment and think about what he's just said. That he was unaware that one of his most high- profile, public, journalistic properties, if you accept that "News of the World" is journalistic, is accused of bribing police, and he says he didn't about it, nobody brought about it to him.
Does that make sense that a CEO shouldn't or wouldn't know such a thing? There was a similar moment later on in the testimony when his son, James, was talking about the 700,000 pounds that paid off to the footballer association head, who was -- who had his phone hacked and, you know, that started a lot of this, and he said he made that payment, that $700,000 pounds, without taking that to his father, to the CEO.
You're paying somebody off whose phone was illegally hacked and you don't tell the CEO? I don't get that.
LEMON: $700,000 -- yes, $700,000, let's just say he knew none of it. Maybe he didn't know. Is he still culpable though?
TOOBIN: Well, I don't think he's culpable legally if he didn't know. Certainly not -- that's not a criminal defense. And I think in fairness to the Murdochs, I didn't see any evidence of any violations of American criminal law. But the real issue now, I think, is does the board of directors of the News Corp, which is famously sleepy and docile in the tool of the Murdoch family, do they step in and say, look, this family is ruining this company --
LEMON: OK --
TOOBIN: -- and they have to get -- and they have to be replaced.
LEMON: OK. Let's just be honest. Today was a wakeup call for them. I mean do you think it was? Everyone else said --
TOOBIN: You know, I don't know. I don't know. Remember I mean again, this is their candy store. They own 40 -- *
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: -- family is ruing this company and they have to be replaced.
DON LEMON, CNN ANCHOR: Let's be honest. If today wasn't a wakeup call to them, I mean, do you think it was? Everyone else was transfixed.
TOOBIN: Again, this is their candy store. They own 40 percent of the voting stock, the Murdoch family as a group. So the board of directors nominally has power, but the Murdoch family retains the real power. But, you know, they are on the board and they could make a stink if they wanted.
LEMON: It's a public -- nominally public company, because the Murdochs really have the control here and they'll get to decide.
FRANK SESNO, DIRECTOR, GW UNIV. SCHOOL OF MEDIA AND PUBLIC AFFAIRS: That's right. And you can't take away from Rupert Murdoch family what they created here. This is an empire and a big, bad thing to rip the empire away from the emperor who built it.
And we should say this. Look, there have been plenty of other journalistic scandals in the past and the reason they've been scandals because people haven't done their jobs and run things up the chain of command and haven't been aware of them.
And whether that is, you know, Jason Blair at "The New York Times" or problems that CNN has had the past with the famous tail wind situation, where people didn't know what they should have known, that's what happens.
But at some point, people have to take responsibility and decide what kind of company they're running and how accountable they're going to be.
LEMON: I think that, you know, you make a very good point. I have never run a company, but I've worked -- and you talk to the boss many times. Usually the standard answer, you know, when it's trouble is, I hired people and let them whatever do their thing, and I just stand back.
But in this day and age, when you have these sorts of scandals and so many people under you, and big conglomerations, you can't be that hands off, you cannot not have clothes.
TOOBIN: Well, you know, I do think the person who runs a big company can't be responsible for every individual decision.
LEMON: This wasn't an individual -- the buck stops with the person at the top.
TOOBIN: What makes this different from say, tail wind, which many people may forget, a long time ago, a CNN documentary that had all sorts of problems and people lost their jobs over it. But this was a policy. This was how the "News of the World" reported the news. It wasn't just one aberration, and that is not something --
LEMON: Yes. TOOBIN: And it was a policy. And there had been previous parliamentary testimony and there had been payments. I mean, it was not some shrouded thing.
LEMON: Let's talk about it. Compare this, Frank to what happens here in the United States and what happened in parliament? Is this more of a grilling than someone would get in the United States?
SESNO: No, no, no, no, no, no. You can imagine what would you have had if this was a congressional hearing. You would have had outrage expressed. I didn't hear that. You would have had - I mean, there were some good, tough questions, but mostly there were questions that I thought the Murdochs either answered or they sort of dangled on. They weren't really grilling and drilling.
TOOBIN: I thought it was actually similar to a congressional hearing in that the politicians are really good at talking, but not very good at asking questions.
LEMON: There was an interesting part though that I thought that -- I don't if we have time. Do we have time to play James Murdoch? We don't. Well, James Murdoch would try to jump in for his father and save him and basically the MP would say, listen, I want to get back to your dad, because he's the one that's responsible for this.
TOOBIN: Yes, I mean, James Murdoch sounded like he's been to too many Tony Robins seminars. We have to be proactive. We have a code of conduct, but there was no substance to much of what James, you know -- he didn't know anything more than his father about the substance.
SESNO: Dynasties are hard things to watch, especially when the king is 80. You want to leave at the top of your game and what was so painful about this, was watching Rupert Murdoch insistent, slow off the mark in some cases, either disconnected or willingly ignorant about certain things and you know, it's 38-year-old sitting next to an 80-year-old. On so many levels this was just very sad.
LEMON: Yes, he's 82 years old, I mean, in that respect, I would say we should cut him some slack, not for the mishandling of this. He'll be a little slow.
TOOBIN: You know what, so he can retire. If he's -- anyway, I'm not inclined to cut him slack maybe because I'm closer to 80 than you are.
LEMON: No. Thanks to both of you.
TOOBIN: Thanks.
LEMON: Still ahead here tonight, the House has just voted on a plan to cut spending and balance the federal budget. We'll go to live to Washington for the latest, next.
(COMMERCIAL BREAK)
LEMON: Breaking news to report to you tonight out of Washington. The House has just voted on that controversial cut, cap, and balance bill.
I want to bring in now CNN's congressional correspondent Kate Bolduan on this story. So Kate, first explain exactly what this bill is and its meaning or lack of meaning?
KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: Absolutely, Don. Well, just to give you our viewers an update. It's 234-190 and largely party line vote. Not a surprise to anyone who's been watching this debate.
This is cut, cap and balance measure that is supported by House Republicans, specifically pushed by conservative members. It would dramatically cut spending and strictly caps any future spending and also this is the important part to this debt ceiling debate it would make raising the debt ceiling contingent upon the Congress passing a balanced budget amendment to the constitution, a very tall order.
And what happened just now, what we kind of all expected to happen. The House passed this measure, but the reality is, it's not going to go anywhere. Because this is not -- this measure is not likely to pass a Democratic-controlled Senate, and even if it did by some chance, President Obama has already said that he would veto the measure.
So this tonight is becoming a largely symbolic vote for House Republicans, allowing them, Don, to show their constituents that they support much deeper spending cuts, more stricter spending caps than is likely to be part of any compromised deal to raise the debt ceiling on going forward, Don.
LEMON: All right, Kate Bolduan, thank you so much. Joining me now from Washington is CNN's chief political analyst, Gloria Borger and chief White House correspondent Jessica Yellin.
You know, the White House called this whole plan Washington posturing, Kabuki theater. Is that really all this is, Gloria?
GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Well, it is a lot of theatre and it is a lot of posturing. Look, there are Republicans particularly House Republicans who want to go on the record saying that they are voting for a balanced budget amendment, if in the end the debt ceiling gets raised without the amount of spending cuts they might have liked.
So this is something I think that the leadership believed that it had to do, as sort of step one to get to the final step of getting the debt ceiling through in one way or another. And I think we kind of heard the president say that today a little bit when he came out and said, OK, do what you have to do.
But do it quickly so we can get on to the important stuff. You know, make your political points, but we've got to get this debt ceiling done.
LEMON: Let's move on. So Jessica, where do we go from here? JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Well, the White House is expecting that after this, they can start negotiating or hoping with the House Republican leadership and figure out a deal.
Whether it is to move on to one of these other deals that they have been talking about, or more likely, the so-called Reid/McConnell plan that we've been all been talking about, which is that last option to raise the debt ceiling.
And that those conversations will either begin tonight or tomorrow, and that -- it has to move quickly. The one other point I would make here, Don, that I find fascinating is Michele Bachmann, the Republican presidential candidate who is known as a Tea Party activist voted no on this bill tonight.
LEMON: What does that say?
YELLIN: That says there are so many cuts in this that someone in her campaign or she herself has calculated that this is not going to ultimately be popular with enough of the American public, to be a successful candidate she can't go on record supporting this.
BORGER: Or conversely it's not conservative enough, Jes. You know, it doesn't call for the repeal of health care reform and all the rest.
YELLIN: That's true. That's another way to see it.
BORGER: It could be -- it could be -- they are not mutually exclusive. It doesn't go far enough, and on the other hand, let's protect ourselves.
LEMON: So, listen, Gloria, does this vote now gives Speaker John Boehner any room to maneuver? Can he get his party to play ball on a compromise plan now that his colleagues got this vote on this one?
BORGER: I'm not so sure even he knows the answer to that question. I think this is one way of herding the cats and getting them to the finish line, and over the finish line, and I think this is something they believed was kind of a prerequisite.
It allows conservatives to kind of let off some steam and be able to say we voted for this, and I think it's something that he felt he really had to do to allow them to say I voted for a balanced budget amendment. I think it will help him in the end, but does it guarantee anything? Absolutely not.
LEMON: So Gloria, you said you think it was too conservative. This cut, cap, and balance plan and that may be why Michele Bachmann didn't vote for it.
BORGER: No, not conservative enough. Maybe not conservative enough.
LEMON: So is there any part of this cut, cap, and balance plan that can be incorporated into a final deal then? BORGER: No.
YELLIN: This wasn't the final deal.
BORGER: Go ahead, Jes.
YELLIN: This is something for the conservatives to go on record and say this is something we'd like this is where we stand. And then they can move on to something --
LEMON: What I'm asking is, is there any part of this that can be incorporated into the final deal they make?
YELLIN: Some cuts. Some of the cuts.
BORGER: Some cuts, but these cuts --
LEMON: Gloria, go ahead first.
BORGER: Go ahead, Jes. These cuts are big. They are really big and so it wouldn't be on this scale at all.
LEMON: OK. So, Jessica, listen. Time is running out here in the U.S. if we default on the August 2nd deadline, if we don't come up with it to raise the debt ceiling, what realistically can lawmakers pass in this time? There's not a lot of time left.
YELLIN: The likely option is this -- this Reid/McConnell plan, which is being worked out in the U.S. Senate right now, it will have to -- it's nobody's ideal option. It's not even necessarily going to please some of these ratings agencies that grade our credit.
But it will get the debt ceiling raised and it could get done in the amount of time we have left and that seems like the final fallback position for everybody.
LEMON: All right. Gloria, I'll give you the final word here.
BORGER: Well, just to follow up on what Jes is saying, I was talking to a senior Republican today who described this backup plan as kind of the break glass kit, when have you an emergency, you go and break the glass, you pull it out, and you have something there to put out the fire. And I think they'll have to break the glass.
LEMON: Gloria Borger and Jessica Yellin, thank you.
BORGER: Sure.
LEMON: Just ahead, the political fight and the toll it's taking on all of the parties involved. Our all-star political panel weighs in, next.
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LEMON: Now to the debt ceiling. The president has said that Friday is the deadline to resolve the fight. So there is time to take care of all of the details. Tonight, that deadline, well, it seems to face an almost impossible outcome.
Joining me now is Ari Melber, he is a correspondent for "The Nation" and Republican strategist Nicolle Wallace. She's also the author of the book, the novel, "Eighteen Acres." Thank you both for joining us.
OK, so this cut, cap, and balance act passed, the president said he will veto it. He said I just want them to have their moment. So why -- shouldn't they be in a room, Nicole, working on things, instead of doing something that doesn't have a chance of passing? Instead of leaving the American people in limbo?
NICOLLE WALLACE, REPUBLICAN STRATEGIST: Well, there are some people in a room and they include Republican Senator Tom Coburn and they include this gang of six who's been working on this problem for a long time.
But there is a long history in Washington of both parties taking principled stands when it's something truly near and dear, and I remember working in the Bush White House during the wars in Afghanistan and Iraq.
Plenty of Democrats took principled votes against war funding, whatnot and there was no chance we would ever cut off funding for the troops on the battlefield. But I don't remember the press indicting those principled stands the way they seem to be indicting Republicans taking a stand for smaller government.
And before we single out for criticism the Tea Party members of the House republican caucus, they believed that they were truly sent there to shrink government and lower taxes.
LEMON: Listen, I understand all of that, but when you have a deadline. That's what I'm saying. A deadline is a deadline. This show goes on air 8:00 p.m. Eastern. I can't keep pushing the thing back. I'm not going to go on the air until I get this. Either I do it or I don't when there is a deadline.
ARI MELBER, CORRESPONDENT FOR THE NATION: Don, if you were having your show run by this elements of this Tea Party, they would be backstage telling you, no, we think it will be fine. We think we can push it back until 8:30.
There won't be black air on the TV. Somehow it will work out. They would say things that are not true, and that's where I really strongly disagree with Nicolle. I think her heart is in the right place.
I think you probably don't want the United States to default on its obligations. I don't think either of us wants that, but here's the difference. When you worked for President Bush, he got it raised seven times, right?
WALLACE: Without Barack Obama's vote.
MELBER: Maybe and if that's the case, the people who voted against it, if they were trying to have us default on our credit were wrong, and that's the problem.
LEMON: Let's stop talking about this side of the aisle and that side of the aisle. Let's talk about compromise. Everyone I speak to, there is no room for compromise.
WALLACE: There has to be. Maybe this is why I write fiction these days. There has to be, and I think that's why you see the gang of six being cheered on by President Obama, who I think is still -- I think we should admire anyone in Washington who is still trying to do something big.
And I thought it was a great disappointment when we went from this aspirational talk -- only a week ago, they were talking about doing a $4 trillion deal to everything falling apart.
LEMON: The reason I asked this question, let's put up this poll. Because there's a poll that shows a full 2/3 of people saying they want both. They want cuts and they also want revenues or taxes. So they want a compromise, but --
MELBER: But I'm sorry. But this is one of those situations where we can't just -- as Jon Stewart says we can't just leave it there and pretend there is an equal kind of split. If you look at that poll and what you see is Democrats more than the median voters want compromise.
And the Republicans led I think by some people who aren't looking out for the long-term interests of the United States and our credit are driving us up to the brink. And it's unnecessary crisis. I agree there are areas where we can cut spending, but not like this.
One point, I'll make about - you know, you just had a prior segment about the proposals looking at tonight, the CBO, the Congressional Budget Office, won't even have time to score these before we vote on them. That's not how you reach a reasonable compromise, when you can't get factual numbers.
LEMON: Listen, I want to know if we're having the wrong conversation here because you tweeted me today the link to your article. And I found this line very interesting.
Here's what it says. It say Pew estimates that about 85 percent of the economic coverage, talking about in the media, is about the debt battle, not the unemployment and recession that form the real threat to most Americans concerned about the economy. Should the real talk be about jobs, jobs, jobs and not necessarily about debt and deficit?
MELBER: Yes. We're in a jobs crisis and one area where I think Republicans have a very legitimate criticism of this administration is, they haven't found the jobs.
They haven't created a jobs boom and we need one. So I don't think it has to be a political point, but yes, jobs right now are far more important than a manufactured, fake, Republican Tea Party debt crisis. LEMON: A quick follow up for you.
WALLACE: The debt crisis is in large part because of the massive government spending we saw under President Obama and the reason he doesn't talk about jobs is because he hasn't created any. His spending has made it harder to create them.
The burdens he placed on employers in this country, the massive health care mandate that he placed on every employer in America, these things cost him Democratic control of the House. He is in the situation he is in, because he has made the economy so much worse.
LEMON: So they are equally important?
WALLACE: I think jobs are more important to most people sitting at home. The 20 million Americans who are unemployed or underemployed would say that jobs are more important. This is more about incompetence in Washington. This is something that Washington is expected to just hand all. This is a story about a broken Washington.
LEMON: You were the communications chief for President Bush, if you were advising the candidates, many of whom are saying I'm going to not -- Michele Bachmann, not going to vote to raise the debt ceiling and talking about deficits, would you advise them to talk more about creating jobs than talking debt and deficit?
WALLACE: I think if you were to watch any of them on the trail in Iowa or New Hampshire, I bet that that's what the bulk of their conversations are about, and I bet that's why you don't see them pull too deeply into this debate.
Because this is not where, at least the grassroots Republicans voters are. This is a no brainer for grassroots Republicans. The federal government is too big, we should do everything we can to shrink it.
But I think it's important to give Republican legislators credit. They are all talking about how we find a way to make sure that America doesn't default.
LEMON: My last question to you is what happens now? Is this gang of six, do they go back to the drawing board? And why should the American people even have confidence that something is going to get done by the deadline?
MELBER: Well, I think we should have confidence that the ceiling will be raised by the deadline, because, A, cooler heads will probably prevail. And, B, there is a financial interest in the Republican Party to try to tame some of this fantasy talk that it's OK to default. It's not OK.
Number two to your question, if you look at the nine-page plan. I have it here in my hands. What you see in the Senate plan is a lot of kicking the can down the road. Another area where I think Nicolle and I will agree, that's going to be a fight.
WALLACE: You're going to write fiction too one of these days.
MELBER: You are going to see him running for office because in this plan I have right here --
WALLACE: Could be waving around anything. It could be a takeout menu.
LEMON: What did you watch today? Did you watch Washington or were you watching London?
WALLACE: I watched London.
MELBER: London.
LEMON: There you go. Nicolle Wallace, Ari Melber, thanks to both of you.
Coming up, campaign contributions from the Murdoch Empire here in the good old USA and some politicians cashing in might surprise you. That is next.
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LEMON: Welcome back to our in depth report. The Murdoch hacking scandal. You know, at its heart are money and influence in Great Britain. But what about here in America, where does Rupert Murdoch's money go?
Last year, News Corp gave $1 million to the Republican Governor's Association and much has been made of how many GOP candidates like Newt Gingrich, Sarah Palin, and Mike Huckabee wound up on the Fox payroll.
But listen to this, the non-profit Sunlight Foundation has published a report that revealed that personal donations made by those working at News Corp tell a different story, 51 percent went to Democrats.
Even more surprising, the three top recipients since 1989, number three, John Kerry. Number two, Hillary Clinton and the number one recipient of Mews Corp political donations, there you go, that's right, President Barack Obama.
So it turns out for all of Rupert Murdoch's efforts to influence America, even his own employees are like many in our political system, split, right down the middle.
Thanks so much for joining us IN THE ARENA tonight. I'm Don Lemon from New York. Have a good night. "PIERS MORGAN" starts right now.
