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American Morning
Rupert and James Murdoch to Appear Before British Parliament; Debt Ceiling Negotiations Continue; Hacking Hearing Underway; Gay Conservatives Reach Out to Bachmann; House to Vote on "Cut, Cap and Balance"; Atlantis Leaves Space Station
Aired July 19, 2011 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Rupert Murdoch is about to face Britain's parliament. Officials in London want to know what he knows about a phone hacking scandal that's rocking his media empire on this AMERICAN MORNING.
ALI VELSHI, CNN ANCHOR: Good morning. It is Tuesday, July 19th. Welcome to AMERICAN MORNING. Christine is off this morning.
CHETRY: And glad you are with us this morning because right now 7:00 in the morning here, there are hearings that are taking place in London and in just two-and-a-half hours we're going to hear more from the man behind the global media empire and how much of it will be on the line for Rupert Murdoch.
VELSHI: At 9:30 eastern, Rupert Murdoch and his son and his former top newspaper executive Rebekah Brooks will appearing at the hearing. They will be grilled about the phone hacking scandal that could topple Murdoch and his News Corporation. Richard Quest joining us live from outside parliament this morning as it's about to get underway. Richard, what are you expecting to see happen this morning?
RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: The Big Ben behind me just chimed the top of the hour. It is midday. And at this hour we have the former head of Scotland Yard, the man who resigned just a few days ago, Sir Paul Stephenson, and he is going to be before a Commons parliamentary committee to explain the nefarious relationships between the metropolitan police, Scotland Yard to you, and Rupert Murdoch's company.
What sort of payments were made by journalists at the "News of the World" and Rupert Murdoch's companies? Why were there so many investigations in 2007, 2009, and 2010? The police continually looking into allegations of phone hacking and saying again and again there was nothing there to investigate.
So the police are as much in this as Rupert Murdoch and his News Corp, and that relationship is very much under the microscope at the moment. The chief of police, the former chief of police, will be before the committee now. In two hours-time it's Rupert Murdoch, his son, and his former editor, Ali.
CHETRY: It seems to be growing. Every day there's something new, and the disturbing news of the death of Sean Hoare, who was one of the first whistle blowers about the hacking going on at some of the newspapers when he worked under Andy Coulson. What are details on that?
QUEST: All right. So Sean gives details to the "News of the World," Sean Hoare's gives details of what happened at the "News of the World," describing the hacking. He takes part in a "New York Times" expose in 2010 on the subject. And he is and one of those people who again and again and again says that top executives at News International, "News of the World," knew what was going on.
Now, he's also believed to be an alcoholic or was a drug addict. He lived a very lively, we should say, life. The police say his death is unexplained but not suspicious. He wasn't in good health. Whether that could mean suicide or just some form of death because of overindulgence we don't know.
But it shows the tentacles of this story, Kiran, that whichever way we turn, whether it's to Rupert Murdoch, who only last week in the "Wall Street Journal" said that minor mistakes have been made in the investigation, but then says to the British people, we're sorry for what has happened. Or James Murdoch, who says quite publicly now he didn't know certain facts, having told parliament behind me a few years ago they knew everything that was taking place.
Also, if you like on public scrutiny will be the politicians. They were so far in bed with Rupert Murdoch and his News Corp. And now they are being called to account for how they failed to do their jobs in keeping the media honest.
VELSHI: All right, Richard, we'll watch this go on. We'll be coming back to you to see how this develops. I think the whole world is interested in this right now. Richard Quest outside parliament as that testimony of the resigned police officers is about to start.
Well, there's a lot riding on Rupert Murdoch's performance this morning because his days of CEO of News Corporation may be numbered. Hard to know the veracity of this, but according to Bloomberg News, the company is considering replacing Murdoch with its current chief operating officer Chase Carey who you see on the right of your screen. Many insiders say if things don't go will on the stand today, that move could be made quickly.
(BEGIN VIDEO CLIP)
BRIAN STELTER, REPORTER, "NEW YORK TIMES": Clearly it will 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 for him. And the report from Bloomberg is that Chase Carey, who is not the COO, could step up to be CEO. It's not out of the question. Analysts have been thinking for days it might happen.
(END VIDEO CLIP)
VELSHI: According to the "Wall Street Journal," which is owned by News Corporation, the media empire's board has long had a succession plan in place for Murdoch. A spokesperson for the company says suggestions that the plan has now been accelerated or implemented are not accurate.
CHETRY: Because it is important to know that there was talk of this before any of this hacking scandal broke.
VELSHI: That's right. He's not a spring chicken. A big company like that, you would hope they have plans in place. I think that "Wall Street Journal," which came out with a remarkably defensive opinion yesterday, attacking those who attacked the company, it is sort of silly to say things like that wouldn't be discussed or accelerated. We know in the business world that obviously they are having these types of discussions. The "Wall Street Journal" is a newspaper I like, but sort of going off the deep end on this one.
CHETRY: And if he remains chairman, really, the question is how many symbolically changes. We want to take you inside right now. As we told you before what was taking place today, this evidence session as they call it for the unauthorized tapping or hacking.
VELSHI: It looks less imposing than we've been talking about, this big hearing. It looks like a small gathering.
CHETRY: And this is not taking place in a huge hall where you normally would see members of parliament for the big House of Commons. This is a select committee on culture, media, and sport. And there's room for 40 to 50 spectators in this room. They say that there will be spillover rooms where people can follow the proceedings on television.
VELSHI: That's Paul Stephenson that you're looking at right now. He resigned. He was the top police chief of the metropolitan police and he's resigned. And he is being given instructions.
CHETRY: That's right. He resigned July 17th after criticism of the police handling of this scandal and questions about the involvement between these reporters and police and potential payoffs. And these are questions they expect members of parliament to be asking about, some more aggressively than others. This is a political element as well. Some Labour Party members are expected to be extremely aggressive in denouncing the hacking and asking these questions of not only the police but later today Rupert Murdoch, his son James, and Rebekah Brooks.
VELSHI: And that testimony will start at 9:30 a.m. eastern. A lot riding on that. In about 20 minutes from now we'll be speaking to CNN's senior legal analyst Jeffrey Toobin about what to expect, what they are compelled to testify about when a parliamentary committee calls. Is that the same as being called before a congressional committee here in the United States and what impact it can have on any legal ramifications here in the United States.
CHETRY: The other question, since Rebekah Brooks was arrested earlier in the week, does she -- would she actually be compelled to say less on advice of her lawyers in legal team.
VELSHI: She hasn't been charged at the moment as far as we know.
CHETRY: Right.
VELSHI: She was arrested and questioned and released on bail. No charges.
CHETRY: So keep it on CNN all day for live coverage of the hacking scandal hearings. Once again, Rupert Murdoch, his son James, and former "News of the World" editor Rebekah Brooks are scheduled to appear at 9:30 eastern this morning.
VELSHI: Now to the showdown over the raising the nation's debt ceiling here in the United States. Just 15 days before the government faces default. Neither side is ready to blink. President Obama is hoping for a deal by the end of the week.
CHETRY: Still no deal yet, though. House Republicans are pursuing their own solution with a vote today on a controversial cut, cap, and balance, as they call it. They want to amend the constitution to say that we can't go over our limit and that we have to have a balanced budget sort of as a precursor to approving raising the debt ceiling. It's a plan the president has flat out said he would veto. Brianna Keilar is live at White House with details. So a lot of meetings, not a lot of movement. What are you hearing?
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: A lot of sort of back channel communications in the White House and congressional leaders staying pretty mum on that. I think the concern being that if there appears to be a lot of talks and there doesn't appear to be progress, that that's not going to look good.
But yes, Kiran and Ali, the president issued a veto threat yesterday on what the House is going to take up today. It's very much a political statement, though, because this cut, cap, and balance plan is not expected to see the light of day in the Senate. But House Republicans who want a smaller government who feel that they have mandate to do that through the last election where they swept into power in the House say that this is something that would show the U.S. is serious about keeping their fiscal house in order.
But the White House says this is something that will hurt the economic recovery. It would hurt the education system all across the nation and other programs as well. Here's what Jay Carney said yesterday.
(BEGIN VIDEO CLIP)
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: What we are witnessing here with this measure is classic Washington posturing, kabuki theater. This is a measure that is designed to duck, dodge, and dismantle -- duck responsibility, dodge obligations, and dismantle eventually if enshrined into law, which it will not be, but it would essentially require dismantlement of our social safety net, Social Security, Medicare, and Medicaid.
(END VIDEO CLIP) KEILAR: The hope of the White House here is that this vote will allow some Republicans to really sort of say that they really pushed for something very conservative, perhaps give them political cover so that some of them ultimately can vote to increase the debt ceiling.
But Ali and Kiran, you've been watching this. House Republicans have been very unbending in their demands. So it's uncertain if it's going to play out that way.
VELSHI: All right, Brianna, we'll stay on top of it with you today. Thanks very much, Brianna Keilar at the White House.
Well, closing another chapter in shuttle history. The crew of shuttle Atlantis and the crew of the space station exchanged goodbyes in a little ceremony yesterday. The shuttle crew attached an American flag to the hatch. That flag flew once before on the first shuttle flight and then the hatch was closed. At 2:28 eastern time this morning Atlantis undocked from the International Space Station for the final time. Atlantis is scheduled to touch down two days from now, 5:56 a.m. eastern time on Thursday.
And early tomorrow morning the crew of the space shuttle Atlantis will join us from up there live on "Wake Up Call" tomorrow morning at 5:00 a.m. eastern. We'll be chatting with them.
CHETRY: Well, an invasion of bees at the ballpark -- it's hard enough to play baseball in the heat and then a swarm of bees come attack you, actually chased some players off the field. A lot more video coming up.
VELSHI: And a wall of dust more than half a mile high swallowing up the city of Phoenix. You're watching AMERICAN MORNING, another haboob. It's 12 minutes after the hour.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
SIR PAUL STEPHENSON, FORMER COMMISSIONER, SCOTLAND YARD: Let's make something absolutely clear. And I do agree with the prime minister when he says this was entirely different. Of course the employment of Mr. Coulson, the employment by the met (ph) of Mr. Wallace was entirely different.
Can I just correct an inaccuracy here? Mr. Wallace was never employed to be my personal assistant or provide personal advice to me. I know we'll go into this later. He was employed. It's a bit of a minor matter. He was employed --
CHETRY: All right, welcome back to American. These are live pictures taking place right now from questioning inside parliament in London. And you're listening right now to Sir Paul Stephenson. He was the acting commissioner, former head of Scotland Yard, until he resigned July 17th amid criticism of the police handling of this phone hacking scandal and he's answering questions today. He is one of many people called before this committee to answer questions as to their role in what they knew about the latest investigation into the News Corp. hacking scandal.
VELSHI: All right. So Paul Stephenson is testifying now. Later we'll hear from Dick Fedorcio. He was the director of public affairs and internal communication at the metropolitan police otherwise known as Scotland Yard, this London police.
At 8:30 Eastern, we'll be hearing from John Yates who is formerly the assistant commissioner of the metropolitan office. He has also resigned. And then at 9:30, the main event. Rupert Murdoch, his son, James Murdoch, and Rebekah Brooks, the former CEO of News International who has resigned and was arrested over the weekend.
Keep it on CNN all day for live coverage of the hacking scandal hearings. We will be dipping in from time to time as things develop during this hearing.
CHETRY: Absolutely. All right. Well, meantime, bees taking over PETCO Park in San Diego right before the Padres played the Giants on Sunday. They were crawling in players' jerseys, swarming all over the outfield. Giants outfielder Cody Ross doing a funky little dance on the field trying to get some of these bees out of his shirt getting a little help from teammates. There you see Ross --
VELSHI: And then you'll see him just sort of taking it on himself.
CHETRY: It's nice to be slapped with a baseball mitt while someone is trying to kill bees. No one got stung, I guess. It's amazing. The bees ended up leaving the field and they were able to continue playing the game.
VELSHI: And take a look at the giant dust storm that turned Phoenix a light shade of brown on Monday. The second time we've seen this in the last couple of weeks. It hit the city during the evening rush. The dust ball was 3,000 feet high driven by wind gusts up to 40 miles an hour. Flights were delayed. Traffic got snarled but the storm cleared within the hour. It is a storm otherwise known as a haboob, a wind storm like that.
Rob Marciano is in the Extreme Weather Center for us with the other stuff that we've got going on today. This heat mainly that we're concerned about.
ROB MARCIANO, AMS METEOROLOGIST: Yes. And no matter what you call that storm, it leaves your car pretty dirty.
VELSHI: Yes.
MARCIANO: And it shuts down traffic that's for sure.
Hey, guys, I was just counting number of states that are on heat advisory or warnings and watches. Over 20 at this point. So the heat wave is expanding. Heat indices up on over 110 to 120. That's dangerous levels of heat especially in this part of the world where, you know, it doesn't get that hot that often. Certainly not for this long. How long is it going to last? Here's tomorrow. 104 is the heat index expected for Minneapolis. We start to break it down. A little cool front kind of clip the northern tier and that will just really move the heat further down to the south and east and build it into the east as well as we get toward the weekend. The New York City area will get into this.
Some severe thunderstorms possible across this part of the world along a stationary boundary. And tropical storm Bret, by the way, winds of 50 miles an hour and it is motoring out to sea. Not to worry there.
Guys, back up to you in New York.
CHETRY: All right. Rob, thanks so much.
Meanwhile, still to come this morning, a gay conservative group asking Congresswoman Michele Bachmann to sit down and talk to them. Does she co-own a business that thinks you can convert people from gay to straight through prayer? We're going to hear what the group's founder wants to hear from the congressman coming up.
(COMMERCIAL BREAK)
VELSHI: Twenty-one minutes after the hour. "Minding Your Business" this morning.
This just in. Bank of America announcing nearly $9 billion in losses for the second quarter of this year. The bank says that's due to a recent mortgage security settlement. Wells Fargo, Goldman Sachs also expected to report earnings before the opening bell. Apple and Yahoo will release their earnings after the closing bell this afternoon.
Markets close lower to start the week as investors remain concerned about the debt ceiling talks in Washington and the continuing debt crisis in Europe. But U.S. stock futures trading right now boosted by those corporate earnings late yesterday.
News Corporation CEO Rupert Murdoch and his son, James, and Rebekah Brooks, the former chief executive of News International, will appear before parliament in about two hours from now. News Corp. shares closed 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 on Monday settling above $1,600 an ounce for the first time ever.
Borders is calling it quits. The bookstore chain could not secure a buyer in time to save it from bankruptcy and is announcing that it's liquidating. Seventeen hundred people will lose their jobs as a result.
Networking giant Cisco announcing job cuts. Six and a half thousand workers getting the ax. Fifteen percent of those cuts coming from the vice president level or higher. The company announced its layoffs as part of a plan to streamline its tech business.
AMERICAN MORNING back right after the break.
(COMMERCIAL BREAK)
VELSHI: I want to stop saying what that is because you should know by now. It's the White House.
Washington, D.C., cloudy, 80. And that means thunderstorms later this afternoon and a toasty 96. I wouldn't call it toasty. When it's that moist, it's more -- what do you call that, Kiran?
CHETRY: Soupy.
VELSHI: Soupy, yes.
All right. A conservative --
CHETRY: Sticky?
VELSHI: It's sticky. It's going to be hot and what it is in D.C.
A conservative group that also supports gay rights wants to meet with presidential candidate Michele Bachmann. Critics have accused the Christian counseling business of her and her husband's Christian counseling business, Bachmann & Associates, of encouraging gay clients to become straight. Bachmann also supports a constitutional amendment to make marriage something that is only between a man and a woman.
Joining us now is Chris Barron. He's the co-founder of GOProud. Play on words there, GOP and proud.
Chris, good to see you. Thank you for being with us.
You asked for a meeting with Michele Bachmann. I'm kind of curious as to why a group that supports gay rights wants to go as far as having a meeting with her. She's been pretty clear on where she stands.
CHRIS BARRON, CHAIRMAN, GOPROUD: One, we're a gay conservative group.
VELSHI: Right.
BARRON: And so, you know, obviously Michele Bachmann is somebody who's been important in the conservative movement.
VELSHI: Right.
BARRON: And so, obviously, we would want to meet with her. Secondly, I also think it's important that we have these conversations, that we have these dialogues. Far too many on the gay left in this country simply want to demonize everyone who disagrees with us.
VELSHI: Right.
BARRON: The fact is we're never going to see progress on issues that we care about unless we engage in a meaningful and heartfelt dialogue with folks and that's what we want to do with Congresswoman Bachmann.
VELSHI: OK. You've got 11 candidates now who are going to be in the race. Ten -- another one being added some of whom do not take nearly strong positions about gay rights and gay marriage as Michele Bachmann does. So there's no sense that you're meeting with her to possibly endorse her run. You're meeting with her because she's a presidential candidate. Maybe she'll be the nominee.
BARRON: Look, our number one goal between now and November of 2012 is defeating Barack Obama. And we plan on working with whoever the nominee of the Republican Party is, which means it's important for us to sit down and talk with, you know, every one of the candidates who are running for president and that's what we're doing. We're having some really phenomenal meetings with all of the candidates talking about issues that are important to gay conservatives, talking about how we can be helpful and about the future of this country.
VELSHI: Would you -- would you -- let me just play you this clip from the New Hampshire debate and then we can talk about it on the other side. Just listen to this first.
(BEGIN VIDEO CLIP)
REP. MICHELE BACHMANN (R), PRESIDENTIAL CANDIDATE: John, I do support a constitutional amendment on marriage between a man and a woman but I would not be going into the states to overturn their state law.
(END VIDEO CLIP)
VELSHI: OK. That's Michele Bachmann's position. If she were the nominee or someone with a view like that were the nominee, would you still work with that candidate to defeat Barack Obama? Does the fact that you're a conservative group overrule the fact that you might have to deal with somebody who does not support gay marriage?
BARRON: Well, first off, our organization doesn't take a position on marriage outside of saying that it ought to be left to the states. And so, therefore, we oppose the type of constitutional amendment that Congresswoman Bachmann supports. You know, it's too early at this point to be talking about whether or not who we would endorse or when we would endorse them.
VELSHI: No, no --
BARRON: Like I said --
VELSHI: It's not too early actually, Chris.
BARRON: Our running goal --
VELSHI: If you are gay and you believe in gay rights and there is a candidate -- they're a bunch of candidates who absolutely say they don't really support gay rights, it's not too early for me to ask if you would support them or not as a presidential candidate.
BARRON: Well, first off -- first off, I think -- no. Well, first off --
VELSHI: No, you wouldn't support them? Is that what you're saying?
BARRON: No, that's not what I'm saying. What I'd like to say is that there are a whole range of issues that impact gay people that go beyond marriage. Where does the candidate stand on things like the fair tax? Where do they stand on things like personal savings accounts and social security? Where do they stand on things like free market health care reforms. All those things that would improve the lives of average day people.
VELSHI: Most of the candidates running are views that you would share. I mean, you've got 10 points here, 10 legislative priorities.
BARRON: That's correct.
VELSHI: Most of which actually deal with fiscal issues. Most of which are pretty conservative views.
BARRON: Right.
VELSHI: And most of the candidates in the race support them. So why wouldn't you just not deal with that? Why wouldn't you pick somebody who actually says I can be fiscally conservative and I have no problem with gay rights?
BARRON: One, I think that everything that's included in our 10-point agenda affects gay people. And so, you know, when my partner and I sit down at night and talk about issues that impact us, we're not talking about hate crimes.
We're talking about is taxes and health care and retirement security and that's the types of issues that are impacting average gay families all across this country. So of course, we want to meet with all of the conservatives who are talking about those issues.
And quite honestly on the fiscal issues that impact gay people, Congresswoman Bachmann has a good record. Obviously, we're troubled by some of the things that's been purported that she said which is why it's important to sit down and talk with her.
We want to sit down and talk with all of the GOP presidential candidates. Our number one goal is defeating Barack Obama. At the end of the day, we'll work to defeat this president.
VELSHI: Chris, I understand you heard back from Michele Bachmann's campaign?
BARRON: Yes, we actually heard back this morning. So we're in the beginning of that conversation. I think that's a positive step forward. I think Congresswoman Bachmann should welcome an opportunity to sit down and meet with us.
VELSHI: Are you going to ask her about Bachmann and Associates, the company she runs with her husband?
BARRON: You know, we're going to sit down and talk about a wide range of issues that would be important to gay conservatives.
VELSHI: Is that one of the issue given that you're gay and she thinks she can make gay people straight through counseling.
BARRON: I think there are a number of things that --
VELSHI: Why are you dodging questions? I don't understand.
BARRON: I'm not dodging questions.
VELSHI: Are you going to answer the question. If she were in front of me, I absolutely 100 percent ask her about this business she runs with her husband to make gay people straight.
BARRON: Well, first of, I'm going to tell you what are issues that are important to gay conservatives and those are the issues that we're going to talk about with Congresswoman Bachmann.
VELSHI: Do you think you can counsel gay people into becoming straight?
BARRON: I think there are a lot of issues important to gay conservatives.
VELSHI: Do you think you can counsel gay people into becoming straight?
BARRON: No, I don't think you can counsel gay people into becoming straight. I also think that there are a whole bunch of issues. I know the media loves this issue. I know it's a side show that distracts from the real issues.
VELSHI: If you don't ask her, it's OK. You guys can support who you like. I'm just curious that you don't think that's the overarching issue.
BARRON: Do you think that's of the most important issue? You think at the end of the day the most important issues to gay conservatives is whether Michele Bachmann's husband thinks that you can counsel somebody from gay into straight? You think that's the most important issue facing gay conservatives?
VELSHI: I'm with you on that. All right, well, Chris, thanks for talking to me. Chris Barron is the chairman of the board of GOProud.
CHETRY: Good conversation. Top stories now. Rupert Murdoch and his son, James, along with former News Corp executive Rebekah Brooks set to appear before parliament.
It's just two hours from now that they'll be sitting there. Right now these are pictures taking place live right now. You are seeing Sir Paul Stephenson. He was the former head of Scotland Yard who also resigned a couple weeks ago after criticism of police potential involvement in this phone hacking scandal.
So he's answering questions now. He'll be answering questions as well. It's an issue that certainly threatening Murdoch's media empire and potentially as future role as CEO of the company.
VELSHI: Here in the United States, House Republicans are planning a vote today on cut, cap and balance plan that would link an increase in the debt ceiling to steep spending cuts and a balance budget amendment. It's not expected to get through the Senate and if it does, President Obama has already threatened to veto it.
CHETRY: The crew of the shuttle "Atlantis" waking up to Cold Play's "Don't Panic." I don't think they are panicking at all. I think they are getting ready to head home.
It's a very exciting time now as they undock from the International Space Station. That happened at 2:28 Eastern Time this morning. "Atlantis" is scheduled to touch down in Florida at 5:56 a.m. Eastern Time on Thursday.
VELSHI: We'll be speaking to them at 5:00 a.m. Eastern Time tomorrow if all goes well.
In less than two hours, Rupert Murdoch is going to face parliament with his global media empire and his CEO title at stake. The U.K. phone hacking hearing is under way as we just showed you, but there are going to be about three witnesses before we get to the main event.
That will be Murdoch, his son, James, and his former top newspaper executive Rebekah Brooks. The world is waiting to hear from them. That will take place at 9:30 a.m. Eastern.
CHETRY: Senior legal analyst Jeffrey Toobin joins us morning. So a lot of anticipation building about what exactly is going to be asked of them and also what Rupert and James Murdoch will say in return. Explain how it is a little bit different than a congressional hearing that takes place here in the U.S.
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, it's different in a lot of ways. The British constitution, which everybody talks about as the constitution is an unwritten constitution. So there is not the same kind of formal rules. There's not a fifth amendment.
So witnesses cannot simply refuse to answer on the grounds that it might incriminate them, but they can also avoid answering questions on the grounds that it is under inquiry. So it is sort of like a fifth amendment but not exactly. They also will not be under oath so no possibility of perjury charges the way there might be in --
VELSHI: They are asked to testify on their honor.
TOOBIN: Yes. Imagine if they had to do that in the United States. How much honor is there?
VELSHI: In fact, we've been talking to people who say very unclear what happens if they do something that's clearly dishonest or clearly a lie in response to a question asked of them by a committee member.
TOOBIN: It is - it's funny, you know. They are obviously an older democracy than we are, but they are not as -- the law is not as clear in a lot of areas there and what happens if their false statements are not clear.
CHETRY: So this is interesting. So you were telling us a little bit about what may happen today, but in terms of the larger investigation. I mean, you have the unexpected death of one of the top whistle blowers, Sean Hoare found dead. He's struggled admittedly with alcohol and drugs in the past.
Police are now investigating the circumstances of his death. There are other people are coming forward saying that this was a much larger situation than what was previously led to believe. There are questions about payments between police and between reporters.
Lay out just some of the legal scenarios of just how liable or criminally on the hook Rupert or James could be.
TOOBIN: Well, certainly this hearing is largely about the criminal or potential criminal liability of the three witnesses of News International. Rebekah Brooks, one of the three witnesses already been arrested in the hacking scandal.
James and Rupert have not. I think what's going to be so interesting about this hearing is the difficult task that these three witnesses especially the two Murdochs have because at one level they have to acknowledge what everybody now knows.
That this hacking was business as usual at the "News of the World." This is something that's impossible that they couldn't have known about. On the other hand, they can't get up there and admit to crimes and get arrested tomorrow. So how do you acknowledge the wrongdoing without admitting that you are part of it?
I don't know how you do that. I expect they will try to testify at a broad level of generality but these members of parliament know that and they are good questioners. A lot of these members of parliament especially those in the labor party have big axes to grind with the Murdochs so this could be an extremely contentious couple of hours.
VELSHI: And often you see whether it's here or there you see hearings take place because someone has an ax to grind or it's political as opposed to just leaving it to the police. But at this point the police have been implicated in this whole thing. It becomes complicated as to how important this testimony is.
TOOBIN: Sir Paul Stephenson, the head of Scotland Yard is testifying. He lost his job. I was actually in England for the last 10 days. Some people are calling this scandal Omnigate because so much of English society is involved, the news media, the police, the politicians.
All of these politicians, labor and conservative alike, David Cameron, the current prime minister, Gordon Brown, the previous prime minister. All curried favor with the Murdochs. I don't think we in the United States can quite understand the power that Rupert Murdoch had over there.
CHETRY: It's a smaller society. It's a smaller group of the elite and they are intermingled. But the interesting thing as you pointed out is this answering to the legal liability versus public relations.
I mean, this is a multibillion dollar company. The stock price when I checked this morning was down 17 percent since before this scandal broke. So it's easing minds of shareholders and reputation part that's at stake, but the flip side is also as you said they can't implicate themselves criminally.
TOOBIN: What would clearly help the stock price is getting the Murdochs out and getting Chase Carey, the current chief operating officer, an outsider, running the company.
Kicking Rupert Murdoch upstairs, but Rupert Murdoch has built this company to pass it onto his son, James Murdoch, and keep it in the family.
CHETRY: Is that really passing it on?
TOOBIN: That's the question. Can he still pass it on to James? In many respects, all of us know Rupert Murdoch and he's the most celebrated witness here, but James Murdoch is really in many respects the key figure today because Rupert is at 80 years old cares most about keeping the company in the family.
VELSHI: All right. It's fascinating. We'll be really watching closely as you will as well. Thanks, Jeff.
TOOBIN: We'll be on it all day.
CHETRY: We want to know what you think about the situation as well. Did Rupert Murdoch know about the phone hacking? E-mail us, give us a tweet or tell us on Facebook and we'll read through some of your comments a little bit later in the show.
VELSHI: Still ahead, our live coverage continues of the phone hacking scandal rocking Britain and beyond. More live pictures right now. You're looking at Paul Stephenson.
He was Britain's top police chief until he resigned on the 17th. Next up, where will media mogul Rupert Murdoch - what will he say when he faces questions over ties to the scandal in less than two hours. Will his protege Rebekah Brooks steal the show? Our Brian Todd has a look.
CHETRY: Also ahead, a secret meeting with Moammar Gadhafi's regime. What was discussed and could this be a step toward Gadhafi's exit?
VELSHI: A radioactive beef scare in Japan. We'll tell you about what to look out for and what the Japanese are doing about it. It's 40 minutes after the hour.
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CHETRY: Happening now. Japan bracing for heavy winds and a strong flooding as a huge typhoon heads for the country. We talked about this and they are trying to make sure they secure the nuclear plants.
It's packing winds of 100 miles an hour. The storm is 450 miles wide. Forecasters say that parts of Japan could see close to three feet of rain over the next day.
So crews are rushing to install a cover over the damaged reactor at the crippled Fukushima Daiichi nuclear plant. Right now, the storm is far south of that plant, but a forecast track from the U.S. Navy shows that it could pass over the Fukushima prefecture on Thursday.
VELSHI: Japan has banned a shipment, by the way, of cattle from its Fukushima region. Officials are afraid that radiation from the region could contaminate the beef supply.
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. It's a bit surprising they are sort of taking this action now.
CHETRY: You're right. Message delivered but apparently not received. U.S. and Libyan officials met secretly over the weekend face to face in Tunisia, but they have different reactions to exactly what this meeting was about.
The U.S. says the sole purpose was driving home the point that Moammar Gadhafi must go as Libya's leader. The Libyans though describe the meeting as a first step toward negotiating an end to the NATO campaign that's taking place in their country.
VELSHI: But they pretty much stayed firm until now that Gadhafi going is not on their negotiating table, but at least they're talking. That's good.
London's parliament is holding a hearing right now to get to the bottom of the News Corporation phone hacking scandal. You're watching a live feed of the proceedings.
The city's top cop, the outgoing Scotland Yard commissioner, he's just resigned. That's him, Paul Stephenson, appearing before British lawmakers. He announced his resignation on Sunday.
CHETRY: So the stakes couldn't be higher when Rupert Murdoch appears before parliament. This would be taking place at 9:30 Eastern this morning. Reports are already circulating suggesting that his days may be numbered as the CEO of News Corp.
But as Brian Todd reports, it is his top -- former top newspaper executive Rebekah Brooks who might steal the show today.
Take a look.
(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 face scrutiny from police and parliament --
(on camera): Can Rebekah Brooks -- will she bring someone else down in News Corporation?
SARAH SMITH, ITN CORRESPONDENT: It's difficult to see how Rebekah Brooks has any interest in blaming anyone in News Corporation. She'll fight 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 investigator 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 Corps 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.
CHARLIE 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 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 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 change the way the company is structured to stop James from taking over, he'd have to listen to them.
TODD: There are other reports that independent board members of News Corporation are going 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)
CHETRY: Our morning headlines are next, including the California bounty hunter who now says he will sue Casey Anthony.
VELSHI: Also ahead, can a simple eye exam detect Alzheimer's disease up to 20 years early? Elizabeth Cohen is live with details on that and it could revolutionize the treatment of Alzheimer's.
Forty-eight minutes after the hour.
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CHETRY: Forty-nine minutes past the hour. Here's a look at your headlines this morning.
Rupert Murdoch, his son, James, and former news -- former chief newspaper executive Rebekah Brooks are about to appear before parliament. They'll be facing questions about the News Corp phone- hacking scandal at 9:30 a.m. Eastern Time. Right now you're looking at live pictures of the hearings that started about 45 minutes ago and we'll continue to bring you the latest as we find out more about what exactly is going on and the line of questioning that's taking place at the hearing.
All right. Well, corporate earnings for the second quarter giving markets boost this morning. U.S. stock futures trading higher right now as investors try to shake off concerns over the debt ceiling talks in Washington and also the debt crisis in Europe.
A bounty hunter says that he is suing Casey Anthony for $200,000. He helped in the search for Casey's missing two-year-old daughter Caylee back in 2008. After seeing the trial, he says he was conned and misled.
You're caught up on the day's headlines. AMERICAN MORNING is back after a quick break.
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VELSHI: New York City. Partly cloudy. Looks pretty foggy out there. Seventy-six degrees, going up to 92. Thunderstorms later today.
CHETRY: That's what -- this time of year. The way weather's been. Yes. Boy, some storms in our forecast.
Well, could an eye exam one day help doctors detect early signs of Alzheimer's disease in the brain? Scientists from around the world are meeting in Paris this week to discuss emerging research about the disease and they're trying to find clues about who may be at risk long before the disease sets in.
VELSHI: Our senior medical correspondent Elizabeth Cohen joins us from CNN Center in Atlanta.
Elizabeth, we think of Alzheimer's as a disease of the brain.
What's got people so focused on eyes?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Right. This -- I got to tell you, Ali, this is so cool and really may change the way that doctors figure out if someone has Alzheimer's.
So I'm going to show you a picture of the back of the eye. These are vessels in the back of the eye and what they found is that folks who early Alzheimer's disease, those vessels changed -- the width of those vessels changed. And so if -- it's really -- it allowed them to say, hey, we think this person is headed towards getting serious Alzheimer's disease. And it's easy to see these vessels. It's not a tough thing to do.
CHETRY: So the key then is that it seems like it's relatively easy as you said. And secondly, how big of a -- I mean, how soon can they detect these changes?
COHEN: Right. They can detect the changes pretty early in the course of the disease, Kiran. And also, it seems to be a better alternative to PET scans or MRIs, which is what they use now, because those are pricey, they're technically challenging to do. This is just looking at back of the eye so it's easier, it's less expensive. If this really pans out, if it really works, it's a much more effective screening tool.
VELSHI: To help people who already have Alzheimer's?
COHEN: Right. It's for people who are in the very early stages of Alzheimer's. Alzheimer's can be a tough thing to diagnose because it would be a whole bunch of other things, as well. And so they want to sort of tease out who has Alzheimer's and who doesn't.
VELSHI: They're also learning things about what makes people get Alzheimer's. There's some connection to brain injuries increasing your risk for Alzheimer's?
COHEN: Right. They actually looked at folks when had brain injuries, whether they were veterans or athletes and they found the folks who had a serious brain injury were more likely to go on to get Alzheimer's.
And this is really important because I think a lot of times we think of Alzheimer's just like a stroke of bad luck, you know, there's nothing you can do. But what they found is that folks who had brain injuries were more likely to get Alzheimer's. And also that folks that had certain lifestyle issues, for example, if they were overweight, or if they smoked, they say that half of all Alzheimer's cases may be attributable to things like smoking or obesity.
So if you want to avoid Alzheimer's, exercise, don't smoke, lose weight And if you have depression or you have high blood pressure, treat it. And what's great is if you take a look at these things, these are things you ought to be doing anyhow. I mean, they're better for your heart, they're better for everything.
So it's really interesting that this computer model picked up on these same things for Alzheimer's.
CHETRY: That's amazing, though, that whole connection with depression and making sure that you do get treated for that, especially, you know, for men going to the doctor and talking about that is not always easy.
COHEN: Right. It isn't always easy. And so I think that sometimes if we talk about depression, if you bring it up with someone, not as a, it's your fault and why are you acting like this, but depression is like any other disease. I mean, there's no more shame in having depression than in having a cold or having cancer. And if you bring it up as a disease, I think that that helps people actually. It takes some of the weight off of them.
CHETRY: All right. Well, good advice.
Elizabeth Cohen, as always, great to see you. Thanks so much.
COHEN: Thanks.
VELSHI: Hey, look at the bottom right corner of your screen. We're staying on the testimony that's going on in British parliament right now and it leads to our question of the day.
In just about 90 minutes, media tycoon Rupert Murdoch will face questions from British lawmakers about his company's alleged phone- hacking scandal that targeted thousands of people, ranging from celebrities to murder victims.
We want to know what you think. Did Rupert Murdoch know about the phone-hacking?
Here are some of your responses.
CHETRY: We start with Krista (ph) on Twitter. "Yes, this is now bigger than hacking. It's about Murdoch's press controlling politicians and police with fear and bribes."
VELSHI: On Twitter, KahunaHawaii (ph) says, "He should not have been put in a position to have to know or have to apologize for idiots."
Keep your comments coming. We'll read more of them through the course of the show.
CHETRY: Meantime, we're going to take a quick break. It's four minutes until the top of the hour. We'll have your top stories in just a minute.
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