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American Morning

Hacking Hearing Set to Begin; Murdoch Out as CEO; Debt Ceiling Deadlock; Rep. Boswell's Home Invaded; Secret U.S.-Libya Talks

Aired July 19, 2011 - 06:00   ET

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

ALI VELSHI, CNN ANCHOR: Fifty-eight minutes after the hour. Back to our word of the day.

Pinging is a method of tracking someone's cell phone using technology that only police and security officials could access. It's the technology reportedly used by the "News of the World." The now defunct British tabloid is accused of hacking into the cell phones of celebrities and 9/11 victims.

Now to see how the world's money is doing this morning. Let's go to Carter Evans live from the Nasdaq market site.

Carter, how are futures looking this morning.

CARTER EVANS, CNN CORRESPONDENT: Hey, Ali. Futures still looking pretty good. Dow futures up about 72 points right now. Hopefully the focus today will be on companies reporting quarterly earnings. We've got a lot going on with that. A lot of big companies reporting this week.

VELSHI: Carter, we've got troubling news coming from at least a couple of companies though.

CARTER: Yes. Not unexpected though, Cisco previously announcing that it's laying off a significant portion of its workforce. That will now happen soon. It's laying off nine percent of its workforce. Another seven percent of its staff will also be leaving. They're included in the sale of one of Cisco's businesses. Sixty-five hundred employees will get pink slips. Twenty-one hundred already volunteered for early retirement.

Also, Borders is facing liquidation. It's scheduled to liquidate all 399 of its stores unless a white knight steps forward this week to buy the company. Borders now has the green light to sell all of its assets after its operations after a bid to buy the company fell through last week. Liquidation is scheduled to start on Friday. It could be very interesting there. Eleven thousand people could lose their jobs, Ali.

VELSHI: All right. We'll continue to follow earnings this week. Carter, good to see you. I'll see you tomorrow morning on AMERICAN MORNING "Wake Up Call."

That's it for us. AMERICAN MORNING continues right now. KIRAN CHETRY, CNN ANCHOR: And good morning. We're following the latest on the U.K. phone hacking scandal. I'm Kiran Chetry. In just hours, media giant Rupert Murdoch will face U.K.'s parliament with the entire world watching. His News Corp. empire on the line. We're live in London.

VELSHI: I'm Ali Velshi. Still no break in the debt talk debt ceiling talks but the White House insists that backstage progress is being made to reach a deal before the August 2nd default deadline on this AMERICAN MORNING.

CHETRY: Good morning to you. Thanks so much for being with us. 6:00 a.m. here in New York this morning. Tuesday, July 19th. I was hearing that in parts of Iowa the heat index felt like 130 yesterday. It's been brutal out there.

VELSHI: Even this morning here on the East Coast, it felt different. It felt hotter. It felt hotter.

CHETRY: Soupy, yes.

VELSHI: We'll be covering that. But we're watching that and millions are watching with a worldwide media empire hanging in the balance. Rupert Murdoch is just hours away from facing his defining moment. In less than four hours, Murdoch, his son and his former top newspaper executive will appear before the British parliament.

CHETRY: Yes. They'll be asked what they knew about this phone hacking scandal that seems to be growing wider by the day. It's threatening to take down News Corp. and perhaps Murdoch himself.

VELSHI: And the question is what they are going to be called upon to explain, what they're going to be compelled to explain, how that's different from being called before Congress.

Atika Shubert is live in London. Atika, who's going to be asking the questions today and do we have some sense of specifically what they'll be asking?

ATIKA SHUBERT, CNN CORRESPONDENT: Well, the head of the committee is John Whittingdale and he is going to be the one who's leading this. We do expect that lawmakers will basically be grilling Rupert Murdoch, James Murdoch and Rebekah Brooks on just how much they knew about these phone hacking allegations, when did they know it and why basically didn't they either put a stop to it sooner or be more forthcoming, especially with lawmakers. They told lawmakers earlier that it was basically just one rogue reporter, an isolated incident and it didn't go any further than that. We know now, of course, that it turns out thousands of people may have had their phone mail messages hacked and lawmakers want to get to the bottom of just how much each of them knew.

CHETRY: The other question, Atika, is this whistleblower who was found dead yesterday tragically. Police are looking into that, but what is the latest there? SHUBERT: Well, what we know is that basically police have confirmed that a man was found dead at his apartment. That man is believed to be Sean Hoare who was the whistleblower for News of the World. He confirmed that Andy Coulson, then the editor of the paper, not only knew about the phone hacking but actively encouraged it from his reporters. And he was the only whistleblower to really go public and confirm that this was the case.

Now, what we understand from police is that he was found dead at his apartment. While his death is unexplained, they say it is not suspicious at this point but a police investigation is ongoing.

VELSHI: All right. The other part of the story so many facets to it is the corruption allegations at Scotland Yard, the police agency. We're actually starting today's testimony with the police.

SHUBERT: That's right. In fact, two of the top cops in the country, Paul Stephenson was formerly the metropolitan police commissioner. He already resigned. Then John Yates who was in charge of the phone hacking investigation review, he too resigned yesterday. And this is just how far the scandal has gone. It has cast a shadow over Scotland Yard and everyone now especially lawmakers are trying to get to the bottom of just how much corruption was there, how cozy was the relationship between News of the World and Scotland Yard.

CHETRY: This could also have implications obviously for David Cameron's government. Andy Coulson, of course, worked for him in his press office and he is the one who the deceased whistleblower, Sean Hoare, is alleging Andy Coulson knew about all of this when he was heading up the newspaper.

SHUBERT: Well, exactly. This goes to show how it goes to the very heart of politics here. Basically Andy Coulson was the chief spin doctor for Prime Minister David Cameron so this is a major embarrassment for him and it's gotten so bad that he's actually coming back to England early from his trip to South Africa specifically to address these phone hacking allegations at a special day of parliament tomorrow.

CHETRY: Atika Shubert will be following the latest with you. Thanks so much.

VELSHI: We had great reporting from Atika and great reporting from Richard Quest who you can hear in the background there.

CHETRY: You can hear it.

VELSHI: If you're wondering what that noise was, that was Richard Quest.

CHETRY: His voice carries, doesn't it?

VELSHI: He's got a good, loud voice. That is to say we have a number of people covering this story this morning.

CHETRY: That's right. 7:30, some of the testimony -- 7:00, some of the testimony begins. 7:30, also we're going to be hearing from some of the police, the former police, who resigned amidst this scandal.

VELSHI: Yes.

CHETRY: And we're going to continue to follow the latest.

Meanwhile, there is a lot riding on Rupert Murdoch's performance this morning because his days as CEO of News Corp. may be numbered and this may have actually been before the scandal broke. According to "Bloomberg News," the company is considering replacing Murdoch with its current chief operating officer, Chase Carey. Many insiders say that if things don't go well on the stand today, that move could be pushed ahead quickly.

(BEGIN VIDEO CLIP)

BRIAN STELTER, REPORTER, "NEW YORK TIMES": Clearly it's going to be a tough day for Rupert Murdoch and his son, James, testifying. But the reality is Rupert Murdoch is a pretty elderly man. Whether he leaves this year or next year or five years, there's already been talk about succession plans, succession plans for him. And the report from "Bloomberg" is that Chase Carey, who's right now the COO, could step up to be CEO, but it's not out of the question. Analysts have been thinking for days it might happen.

(END VIDEO CLIP)

CHETRY: Murdoch would reportedly stay on as the company's chairman if he decides to give up his duties as chief executive officer.

VELSHI: News Corp. got a taste of its own medicine yesterday when hackers took control of the "Sun" newspaper Web site. The site has been restored but hackers were able to briefly post a fake news story announcing Rupert Murdoch had been found dead. Visitors were then redirected to the twitter feed of a well-known hacking group that has breached Web sites belonging to Sony, PBS and the U.S. Senate.

Keep it on CNN for live coverage of the hacking scandal hearings. Murdoch, his son, the former "News of the World editor, Rebekah Brooks, scheduled to appear at 9:30 a.m. Eastern Time this morning.

CHETRY: We want to hear from you. Our question of the day. Do you think that Rupert Murdoch knew about the phone hacking? We'd like you to send us an e-mail or a tweet. Let us know on Facebook and we'll be reading some of your comments throughout the morning.

VELSHI: Here at home, 15 days and counting until the deadline for a potentially disastrous government default. President Obama says he's still pushing hard for a deal to raise the debt ceiling and he insists that progress is being made.

CHETRY: And today, House Republicans will put their cut, cap and balance plan to a vote. It links a debt ceiling increase to a budget balance amendment. The White House has rejected the GOP plan. I don't think it's going to make its way out of the Senate.

VELSHI: Right. CNN's Brianna Keilar is following developments. She's live at the White House for us this morning.

What's it looking like, Brianna?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Well, Ali and Kiran, we're expecting this vote today and yesterday President Obama issued a veto threat on cut cap balance or CCB. And this was something that it was more of a statement because as you mentioned, this isn't expected to even see the light of day in the Senate but House Republicans who really have this goal of creating a smaller government and they really want to cut spending and they feel emboldened by the results of the last election feel like this is really what they would like to do even though maybe this is more of just a statement than anything. The White House's line on this is that it would hurt the economic recovery, that it would make substantial cuts to the education system and the like. And here's what Jay Carney said at yesterday's briefing.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: What we are witnessing here with this measure is classic Washington posturing kabuki theater. You know, this is a measure that is designed to duck, dodge and dismantle. Duck responsibility, dodge obligations and dismantle eventually if signed into law which it will not be, but it would essentially require the dismantlement of our social safety net, social security, Medicare and Medicaid.

(END VIDEO CLIP)

KEILAR: So the White House trying to put their own little spin there on exactly what House Republicans are trying to do. But I think the hope, guys, of the White House is that this vote will allow some conservatives really the ability to have some political cover so they can say that they fought for something very conservative and then perhaps they can vote for the increase in the debt ceiling. But at the same time House Republican have really shown that they're pretty unbending in their demands and so the White House, Ali and Kiran, can't be certain of that.

VELSHI: The White House -- the president has continued to say that he wants a deal by Friday so that they can get all the necessary legislation through. Is that looking likely? Because if that -- if we blow by Friday without a deal, it starts to look -- weaken the White House, I guess.

KEILAR: Yes. No, a big deal on deficit reduction I think obviously, that's feeling very elusive and the chances of doing something like that seem to be very slim at this point. In terms of the debt ceiling, they are very much relying on a plan being worked out by Senators Reid and McConnell, the top Democrat and the top Republican in the Senate, to try to move something forward so that the Senate can take the lead and perhaps the House can then follow suit maybe making some of its changes. I think right now that is the best hope. I do want to tell you looking at the president's schedule today, it's mighty bare. He just has one -- his normal presidential briefing and he has meetings with senior advisers but certainly there's a lot of room built in there for any sort of communication he needs to do with Congress.

CHETRY: Right. There was some talk that they're working through the weekend so they're doing everything possible to try to come to some agreement.

KEILAR: Really nights too.

CHETRY: We'll see what happens. Brianna, thanks so much.

Well, the U.S. and Libya holding secret face-to-face talks for the first time since the Libyan conflict began four months ago. U.S. officials say that the point of the weekend meeting in Tunisia was to send a clear message to Moammar Gadhafi that he must go. The Libyan side though seeing things differently. Gadhafi's government spokesman talking exclusively with CNN's Ivan Watson. Here's his take.

(BEGIN VIDEO CLIP)

IVAN WATSON, CNN CORRESPONDENT: Is this the first step?

MUSAS IBRAHIM, LIBYAN GOVERNMENT SPOKESMAN: This is a first step and we welcome any further steps and we are prepared to talk more and explain what is happening in Libya and take the matter forward. We don't want to be stuck in the past.

(END VIDEO CLIP)

CHETRY: The Gadhafi spokesperson also told CNN that Libyan troops will turn the strategic oil city of Brega into, quote, "hell," rather than let it fall into the hands of rebel forces.

VELSHI: Well, closing another chapter in the shuttle story. The crew of the shuttle Atlantis and the crew of the space station exchange goodbyes in a little ceremony yesterday. The shuttle crew attached an American flag to the hatch. That flag flew once before on the very first shuttle flight and then the hatch was closed. 2:28 this morning Eastern Time, Atlantis undocked from the International Space Station for the final time. Atlantis is scheduled to touch down in Florida at 5:56 a.m. Eastern Time on Thursday, two days from now. Early tomorrow morning, the crew of the space shuttle Atlantis will join us from up there. That's live on AMERICAN MORNING "Wake Up Call" tomorrow morning 5:00 a.m. Eastern.

CHETRY: Also new this morning, the FBI is teaming up with Spanish authorities to take down the biggest international drug ring that Europe has ever seen. Agents seized $35 million in cash, five dozen luxury cars and 25 real estate properties. More than 20 people are now under arrest, four of them here in the U.S. Authorities say this crime ring smuggled cocaine from Colombia to Spain and then laundered the drug money in South Florida. VELSHI: Congressional investigators putting the FBI and the DEA on notice. They have one week to turn over documents related to the controversial fast and furious gun-buying operation. The ATF program allowed thousands of assault weapons to fall into the hands of criminals in Mexico. Two weapons that were allowed to, quote, "walk," may have been used in the killing of a U.S. border patrol agent.

CHETRY: Add Buddy Roemer to the list of Republican candidates for president. He is the former Louisiana governor, four-term congressman. He'll be in New Hampshire Thursday to make the official announcement. He'll be the 11th GOP candidate to declare.

VELSHI: This morning, Japan's women's soccer team are World Cup winners. The team met with Prime Minister Naoto Kan today. He congratulated the women on their fairy tale finish. Hundreds of fans swarmed the airport in Tokyo when the team arrived home last night. Japan beat the U.S. women's soccer team in a stunning penalty kick shootout taking home the very first world title for any Asian team.

CHETRY: Congratulations to them. Also this year's World cup final made history in another way. Sunday's match set a new record on Twitter. Twitter users sent messages at the rate of 7,000 tweets per second during the World Cup finals. That's more twitter action than during the Super Bowl, the Royal wedding, or the death of Osama bin Laden.

VELSHI: Wow, that's fascinating to me.

CHETRY: How do you see the game if you're busy tweeting?

VELSHI: Exactly, particularly in these games where you're waiting for something very sudden to happen.

All right. Up next, a 77-year-old U.S. congressman talks about his face-to-face encounter with an armed home invader. He says no one should ever have to go through that what his family endured.

CHETRY: Also, police catching the so-called "thief of the faithful," accused of reaping off flyers who go into an airport chapel to say a prayer before their flight.

VELSHI: And an invasion of bees that had major leaguers doing the funky chicken. This is interesting.

Thirteen minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: Seventeen minutes past the hour.

Iowa Congressman Leonard Boswell is thanking God he's alive and he said he hopes no up has to go through what his family endured this weekend. An armed gunman broke into Boswell's home on Saturday night, confronted his daughter, demanded cash. The 77-year-old Boswell says he wrestled the masked intruder to the ground. Both of the men tumbled down a flight of stairs before the Congressman's grandson pointed a shotgun at the suspect forcing him to flee.

(BEGIN VIDEO CLIP)

REP. LEONARD BOSWELL (D), IOWA: The people that you love very much, you see they're in that kind of danger, well, you have to do something.

(END VIDEO CLIP)

CHETRY: Boswell says that when he saw the home invader put a gun to his daughter's head, he reacted like any father would. Boswell said that his doctor told him he cracked a couple of ribs but otherwise he's OK. Unbelievable.

VELSHI: It really is. That really is stunning. Glad that that ended properly.

All right. Police have arrested a man who they nicknamed the "Thief of the Faithful." He would wait for people to start praying at a chapel at an airport in Italy and then he would rip them off. Ironically, he was caught from above by a security camera. You can see the whole operation unfold. Police say that he would pose as a Muslim worshipper who just left the room and would wait for the right time to grab a bag while others working with him caused the - the distraction. Well, that's nasty.

CHETRY: It is. Well, Texas Rangers president and all-time great pitcher Nolan Ryan underwent tests in a Houston hospital last night. The hall of famer says he felt discomfort in his chest on Sunday morning. He had a double bypass operation in 2000 and has a family history of heart disease. He is expected, though, to be released sometime in the next two days.

VELSHI: This one is interesting. Bees took over PETCO Park in San Diego before the Padres played the Giants on Sunday. Look at that. We're talking serious bees. They were crawling in the players' jerseys. They even had Giants' outfielder Cody Ross doing a funky dance on the field. You can't really see him doing that much dancing. There we go. There we go. He's moving around trying to get those bees out.

Wow. They were getting at him. The bees finally left, by the way, and let the guys play the game.

CHETRY: What? They left to go and went to go watch another game?

VELSHI: Watched another game.

CHETRY: Poor guys.

Well, take a look at the giant dust storm that turned Phoenix into a light shade of brown on Monday. It hit the city during evening rush hour. Can you imagine trying to drive in that?

VELSHI: Wow. CHETRY: The dust wall was 3,000 feet high driven by wind gusts up to 40 miles an hour. Flights were delayed and traffic got snarled, but the storm cleared within the hour.

That's the second time within two weeks that this - what do they call it again? The haboob.

VELSHI: Haboob is what it's called.

CHETRY: Yes. Has paid a visit.

VELSHI: Rob Marciano in the Extreme Weather Center. Two haboobs in a couple of weeks.

ROB MARCIANO, AMS METEOROLOGIST: Yes. They happened. We're in a monsoon flow, which gives us those thunderstorms in Arizona. Haboob, of course, originating from the Middle East, which has those dust storms quite a bit. And you've got to get your car washed obviously being caught up in one of those.

No dust storms, juts a lot of heat and humidity. Right now, it feels like 90 in Minnesota, Minneapolis; 91 it feels like in Chicago. So you couple in that dew point which is way up there in some cases over 80 degrees and we've got some serious heat indices. It's going to feel like 110 to 120 in some spots in these red areas. Excessive heat warnings are posted for a good chunk of the Western Great Lakes and the Northern Plains as the humidity continues.

This front, which is making very little progress to get down to the south, along that front we'll see thunderstorms pop up and in some areas we saw some heavy rains down the south and along the Gulf Coast.

Yesterday, at this time, we just had a tornado warning across parts of Southern Mississippi and heavy rain across Louisiana including just outside of New Orleans. Here is some of the video. Torrential rains causing flash flooding there at least along the streets and folks had a hard time even just getting around by foot. So we'll see some of these pop-up thunderstorms from time to time today. In many cases, it will act to cool you off.

There were some heavy winds with some of the storms across Pennsylvania yesterday. It will be 92 degrees in New York City today and 96 degrees expected in D.C. Delays at San Francisco, Chicago, some thunderstorms in the afternoon expected. D.C. and Philadelphia as well.

And let's update you on what's going on with Tropical Storm Bret. It has - it strengthened and now weakened a little bit. Here's the satellite picture. It doesn't look healthy, does it? Got a lot of dry air in there. It's got some winds that are working against it. And it's being pushed off out to sea.

So there you go. Here's the forecast track as issued by the National Hurricane Center. Forecast to stay at tropical storm status. So that's good news there. And, of course, keeping it away from the U.S. is for the most part good news, although the southeast could use the rain.

Another steamy one today across much of the country. It's that time of year, isn't it? Middle to end part - end part of July. Don't worry. Fall will be here soon. Give it a couple months.

Guys, back up to you.

VELSHI: All right, Rob. Thank you.

CHETRY: I can't remember what it's like. I already forgot what it's like to be cool.

VELSHI: Yes.

CHETRY: You know, temperature-wise.

VELSHI: Yes. I know -

CHETRY: Not attitude-wise.

Ahead on AMERICAN MORNING, you're in your own little world, you're wandering down the street, texting while walking. Well, now in one city, it could be a crime and it could cost you.

VELSHI: And Superman, you know, well, he'll be flying solo when D.C. Comic relaunches. In other words, no ball and chain named Lois Lane. The Man of Steel back on the market.

Twenty-two minutes after the hour.

(COMMERCIAL BREAK)

VELSHI: "Minding Your Business" this morning. Twenty-five minutes after the hour.

Investors remain concerned about the debt ceiling talks in Washington and the debt crisis in Europe. Markets close lower to start the week yesterday, but U.S. stock futures are trading higher right now boosted by corporate earnings late yesterday.

And this morning, Bank of America, Wells Fargo, Goldman Sachs, all of them reporting their second quarter earnings before the opening bell. Apple and Yahoo! will release their earnings after the closing bell this afternoon.

News Corp CEO Rupert Murdoch and his son, James, will appear before Parliament in about three hours from now. News Corp shares close at a six-month low yesterday. The company has lost about $8 billion in market value since the news broke on July 5th.

Investors rushing to gold for security amid global concerns of mounting debt in Europe and the U.S. Gold prices set a new record Monday settling above $1,600 an ounce for the first time.

Borders calling it quits. The bookstore chain could not secure a buyer in time to save it from bankruptcy and announced that it's liquidating. Seventeen hundred people will lose their jobs as a result.

And networking giant Cisco announcing job cuts. Six and a half thousand workers getting the axe, 15 percent of those coming from vice president levels or higher. The company announced the layoffs as part of its plan to streamline its tech business.

AMERICAN MORNING back right after the break.

(COMMERCIAL BREAK)

CHETRY: Thirty minutes past the hour. A look at our top stories this morning.

Rupert Murdoch and his son along with former News Corp executive Rebekah Brooks all set to appear before U.K. Parliament about three hours from now. And they'll be facing questions about a phone hacking and corruption scandal that's threatening Murdoch's media empire, as well as potentially his role as CEO of the company.

The House is set to vote on a controversial Republican plan to address the debt crisis. It's called the "cut, cap and balance" plan. It calls for deep spending cuts. The White House rejects it as a way of raising the debt ceiling, referring to it instead as "duck, dodge and dismantle." The deadline for a deal to avoid government credit default is just two weeks away, although the president has been saying he wants to get some sort of agreement on the table Friday so that they can begin the process of getting legislation going.

The beginning of the end of the final shuttle flight in history. The crew of shuttle Atlantis is now getting ready to go home. The shuttle undocked from the International Space Station for the last time ever early this morning.

All right. The stakes couldn't be higher when Rupert Murdoch appears before parliament at 9:30 Eastern this morning, three hours from now. Reports are already circulating, suggesting that his days may be numbered as the CEO of News Corporation. But its former top newspaper executive Rebekah Brooks might be the one to steal the show today.

Here's Brian Todd.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): Arrested, questioned for nine hours and then released, Rebekah Brooks could play a key role in the investigations into the phone hacking scandal. For weeks, she was the firewall between the public's fury and Rupert Murdoch's family. Now that she's an ex-Murdoch employee who faces more scrutiny from police and the parliament --

(on camera): Can Rebekah Brooks -- will she bring someone else down in News Corporation?

SARAH SMITH, ITN REPORTER: It's difficult to see how Rebekah Brooks has any interest in blaming anybody else in News Corporation. She will fight very hard to clear her own name and make sure that she's not held responsible for knowing about any of the phone hacking that went on.

TODD (voice-over): ITN correspondent Sarah Smith says that's because Brooks still values her ties to the Murdochs or may have her eye on a future editing job elsewhere. Brooks' spokesman says she'll answer investigators' questions to the best of her ability. He wouldn't comment on reports that she's got several million dollars coming in severance pay.

In any case, the list of casualties in this scandal appears to be inching closer to News Corporation's powerful ruling family.

(on camera): From the outside, top police officials Paul Stephenson and John Yates have resigned over their handling of the scandal. There is Andy Coulson, out years ago as "News of the World" editor, out as Prime Minister David Cameron's spokesman this year, arrested earlier this month.

Les Hinton, chief exec of Dow Jones and publisher of "The Wall Street Journal," is gone.

"News of the World" has closed down.

Now that Rebekah Brooks has resigned and been arrested, many observers say James Murdoch, youngest son of Rupert Murdoch, chairman and CEO of News Corp.'s divisions in Europe and Asia, is on the firing line.

(voice-over): It may come down to where else James Murdoch's fingerprints can be found.

CHARLES BECKETT, LONDON SCHOOL OF ECONOMICS: Well, James Murdoch has already made it very clear that he paid off a huge amount of money to Gordon Taylor, who was a trade unionist who had his phone hacked, and James Murdoch has made it clear now that he regards that as an error on his part and he much regrets it.

TODD: If it's found that James Murdoch knew more about the hacking than what's been revealed so far, Smith says shareholders, board members may force his father's hand.

SMITH: If they were to really demand that James no longer be the heir apparent, that he changed the way the company is structured to stop James from taking over, he'd have to listen to them.

TODD: There are reports that independent board members of News Corporation are going even further, questioning whether a change of leadership is needed. In other words, replacing James Murdoch altogether.

Contacted by CNN, a member of that board called those reports total crap.

Brian Todd, CNN, Washington.

(END VIDEOTAPE)

VELSHI: All right. Japan has banned the shipment of cattle from its Fukushima region. Officials are afraid that radiation from the region could contaminate the beef supply. Now, the area is still recovering from that nuclear accident at the Fukushima Daiichi nuclear plant. Radioactive fallout was triggered by the March 11th earthquake and tsunami.

A bizarre divorce plot. FBI agents say a New Jersey rabbi and his wife kidnapped a man and threatened to bury him alive if he did not agree to a traditional Jewish divorce. According to court documents, the Israeli man was invited to the Rabbi David Wax's home to discuss work. Instead, federal prosecutors say, he endured hours of violence and threats. Wax and his wife face life in prison if they convicted.

He had to give them -- you know, in Judaism, when you get divorced, you provide each other with a document. He wouldn't give his wife these documents so she could get remarried. So, they threatened, showed him a body bag and said --

CHETRY: Pick a funeral or a divorce apparently.

VELSHI: I mean, I commend them for trying to facilitate the divorce, but that seems to be -- a little heavy-handed, yes.

CHETRY: Well, someone in North Carolina hacked into the Department of Transportation road sign over the weekend. Now, this has happened before. But this time, they changed the sign to read "Impeach Obama."

Several drivers stopped to take pictures of that sign. It's since been fixed. But you remember earlier this year, electronic signs in Rock Hill, North Carolina, were hacked with warnings about zombies.

VELSHI: I just don't know what to make of that. I mean, I think everything would be hacked now.

CHETRY: I know.

VELSHI: I wouldn't have thought that would be a priority for hackers. But whatever.

All right. Watch where you are going or you could pay. Philadelphia is planning to crackdown on texting while walking. Pedestrians would face $120 fine for looking down at their phones while they're walking. It's part of a larger program cracking down on bad behavior by drivers and cyclists, too.

I'm in trouble, if we can't text and walk?

CHETRY: You can't text and walk especially in Philadelphia where you spend a lot time. You're in deep trouble.

VELSHI: Yes, that's right.

CHETRY: New irony here, Charlie Sheen is apparently returning to television in a series entitled "Anger Management." It's supposed to be loosely based on the 2003 movie that starred Jack Nicholson and Adam Sandler. The sitcom still doesn't have a TV home, but there are some analysts say it's destined for basic cable. VELSHI: I think a lot of people will watch that.

D.C. Comics is planning a reboot of its superhero series in September, with one major change to "Superman" and longtime Lois Lane -- splitsville. They've been married in the comics since 1996l. The new series is supposed to feature greedier, more realistic story lines. But the Man of Steel is back on the market ladies.

CHETRY: Well, you remember Tang, right? Of course, the fruit- flavored drink made famous by NASA.

VELSHI: Right.

CHETRY: Why

VELSHI: Not invented by NASA.

CHETRY: Made famous, right. Velcro, Teflon, all that.

VELSHI: That came from NASA.

CHETRY: Well, why red wine could be the new Tang. All right. We'll explain that coming up.

VELSHI: Also, how one couple says the receipt saved them. We're not talking about money. Look at this picture. Is that Jesus Christ on a receipt from Wal-Mart? We'll show you more about this on the way back.

(COMMERCIAL BREAK)

VELSHI: All right. If you need to lower your blood pressure, try adding more soy or low-fat dairy to your diet. A new study published by the American Heart Association finds that replacing carbohydrates with protein from low fat dairy or soy can help reduce blood pressure. Researchers were able to compare the effect on hypertension without changing other dietary influences, namely sodium because that's the one most people think about.

CHETRY: Right. They tell you to avoid, the cause of hypertension.

Well, with the space shuttle Atlantis heading home, here's a tip for the crew. Drink red wine. Researchers say an ingredient in red wine called resveratrol -- they actually have resveratrol capsules that you can take now -- prevent negative effects of negative space flight and weightlessness.

Scientists say that astronauts don't get enough physical activity in space, low gravity makes that impossible. So, resveratrol is not a substitute for exercise but they say it could slow down deterioration until someone can get moving again. It's also -- they say it's the anti-ageing -- the fountain of youth.

VELSHI: You know, in space, they move around a lot, but they -- I guess they don't -- there's no gravity so you don't get the effect.

CHETRY: Right. So, the weight bearing nature of gravity isn't there.

VELSHI: Right.

CHETRY: But, I mean, you can drink wine. You think you need to be sober.

VELSHI: I'm sure you could drink a little. Or maybe you take the pills.

All right. New Mexico's governor saying, "Take it from me, beware of bears." And here's why -- one was caught on a security camera roaming around the governor's residence. I would imagine the governor's residence is bigger than --

CHETRY: Yes. He didn't know the governor live there. He was just looking for some food.

VELSHI: That's right. That's actually true.

New Mexico has warned some residents that those forest fires we've been reporting on for the last couple months have forced bears from their homes into neighborhoods. So, people are being told to take things like pet food, bird feeders and garbage cans inside.

CHETRY: We learned the hard way because of the raccoons. Raccoons are so smart. They know how to even if you bungee-cord if you bungee- cord the trash can, they know how to undo it.

VELSHI: They have pushable tabs (ph). And they can pick your lock.

CHETRY: Come right in and open the fridge and start eating.

VELSHI: Open a bear. Raccoons are a whole different business.

CHETRY: Well, another reason to always check your receipt. You may find an image that you believe is your savior on it.

VELSHI: I feel that sounds cynical from you. You don't think this people actually found the Lord on their receipt.

CHETRY: No, I like. I mean, look at that. That's pretty amazing. It's better than when people say it was seen on their toast, you know?

A couple here are claiming that Jesus appeared on their Wal-Mart receipt and say the image was extra spooky because it didn't show up until three days after they went to the store.

VELSHI: Three days. That's significant.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I was leaving the kitchen and I just looked on the floor and you could just see the receipt like it was looking at me. The more you look at it, the more like Jesus and it was just shocking. I was breathtaking.

(END VIDEO CLIP)

VELSHI: These people say they didn't mess with the receipt at all. They only plan to share their blessing with the world.

CHETRY: Very cool.

All right. Well, both the U.S. and Libyan governments are confirming that they held secret face-to-face talks over the weekend in Tunisia. But that maybe all that the two sides agree on.

VELSHI: They have got very different views of what was discussed and what is likely to happen next.

CNN's Ivan Watson exclusively talked with Moammar Gadhafi's spokesperson. Ivan joins us live from Tripoli.

So, if you want to take from this, Ivan, that there is some progress, it sounds like the two sides have very different views on this.

IVAN WATSON, CNN CORRESPONDENT: Absolutely. No surprise, Ali, when you have basically two warring enemies right now that have met for this round of secret face-to-face talks taking place in Tunisia.

U.S. State Department officials saying it lasted for three hours in Tunis on Saturday, a day after U.S. Secretary of State Hillary Clinton formally recognized the rebel government in eastern Libya as what Washington now considers to be the official representative, the official government of the Libyan people.

Of course, Moammar Gadhafi does not agree with it.

Take a listen to what his spokesman said to me about these talks last night, Ali.

(BEGIN VIDEO CLIP)

WATSON: Is this the first step of these rounds of talks?

MUSA IBRAHIM, LIBYAN GOV'T. SPOKESPERSON: This is a first step. And we welcome any further steps and we are prepared to talk war and explain what's happening in Libya and take the matter forward.

We don't want to be stuck in the past. We are people who want to move forward all the time for the good of the Libyans and the good of the international community.

WATSON: Who participated?

IBRAHIM: If I may, you know, it's not the time to name people. But, you know, it's the first step dialogue, OK?

WATSON: But it was direct face to face Libyan/American talks in Tunisia?

IBRAHIM: Yes.

WATSON: On Saturday?

IBRAHIM: Yes. OK?

WATSON: Thank you.

(END VIDEO CLIP)

WATSON: So, Ali, if you want to know who attended, the State Department says the U.S. ambassador to Tripoli who was recalled way back in December before this crisis took place, Gene Cretz, he was there, as well as the assistant secretary of state, Jeffrey Feltman, and an official from the National Security Council.

We haven't figured out who Gadhafi sent to the talks yet.

State Department is saying this was a one-off meeting. These were not negotiations and the point was to send a message: Gadhafi has to go to pave the way for a democratic political process. The regime here is saying no way, and until both sides can overcome this precondition, it looks like the grinding conflict here, a military stalemate has no end in sight -- Ali.

VELSHI: Ivan, it does seem that NATO and the U.S. has said repeatedly that they think the only solution, as you mentioned, is for Gadhafi to go. If that's not a point of agreement, do they have enough upon which they can continue negotiations?

WATSON: At this point, it doesn't seem to be one. If that is a precondition coming from Washington, you're stuck. And in the meantime, the fighting is raging. We've seen five days of bloody fighting in the strategic oil town in the east on the coast between rebel forces and Gadhafi, the kind of Brega. Last night, Gadhafi spokesman said that Gadhafi regime will turn that town into hell rather than give it over to its enemies, because they consider it to be vital for the future of Libya.

They claimed they've killed 500 (ph) there. No end to this fighting in sight. Let me just point out, this morning we heard an explosion, a leaflet bomb, apparently, dropping in the parking lot of this hotel, Ali, apparently dropped by NATO. The propaganda war also raging as the military conflict continues.

VELSHI: All right. Ivan, let us know if there appeared to be any breakthroughs in this discussion. Obviously, that will be a sense of relief to a lot of people if they do make any. Ivan Watson for us in Tripoli. It is 47 minutes after the hour.

CHETRY: Yes, and we're about 15 minutes away from this big day in the U.K. where there are several people who will be facing parliament today. I believe the chief of police, Sir Paul Stephenson, the acting commissioner who resigned, is going to be just about ten minutes from now.

And so, we're going to be listening in on what is said, and we're going to be just trying to figure out a little bit more about whether people are going to be forthcoming as to what they knew about this hacking scandal.