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"Murdoch's 'Most Humble Day'; What Lawmakers Learned from Murdoch; Murdoch Hacked; Interview with Parliament Member Louise Mensch; Piers Morgan Answers Charges of Phone Hacking; Obama: It's Time To 'Start Talking Turkey'; Gov. Perry 'Called' To White House?

Aired July 19, 2011 - 17:00   ET

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

WOLF BLITZER, HOST: And happening now, Rupert Murdoch tells parliament the phone hacking fiasco tainting his news empire is not ultimately his fault. This hour, the riveting testimony about the broken trust, the shattered ethics and those who should pay for alleged crimes. Stand by.

Hackers say they've turned the tables on Murdoch's company, tapping into internal e-mail and other corporate secrets. They're threatening to go public with what they found.

And President Obama embraces a bipartisan compromise that could -- potentially, at least -- be a way out of the looming debt crisis. He's urging House Republicans not to waste their time on a symbolic vote due to happen very soon.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Rupert Murdoch says this is the most humble day of his life. A titan of news business, he called -- he was called on the carpet before the British parliament today over the phone hacking scandal that shocked and appalled the world.

Along with his son and a former chief executive, Murdoch was hammered with questions about alleged crimes that brought down his popular tabloid, the "News of the World."

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Did you close the paper down because of the criminality?

RUPERT MURDOCH, CHAIRMAN AND CEO, NEWS CORPORATION: Because we felt ashamed at what had happened and thought we wanted to bring it to a close.

UNIDENTIFIED MALE: People lied to you and lied to their readers.

RUPERT MURDOCH: We had broken our trust with our readers.

(END VIDEO CLIP)

BLITZER: Let's bring in CNN's Richard Quest in London.

He's been following the scandal all day.

It was riveting, riveting, the hours that they were before these members of parliament.

Give us the -- the upshot, the headlines, Richard, on what we learned.

RICHARD QUEST, HOST, "QUEST MEANS BUSINESS": What we learned is that Rupert Murdoch said and admitted this was the most humble day of his life. He was ashamed, as you just heard. But we also learned that they don't take responsibility for what took place.

He said he had been misled by those people he trusted and people who they had trusted.

So we were not left with any greater understanding of how the people at the very top of News Corp and News International did not know about this scandal that was growing more and more.

Instead, I think what we did get, very much in their favor, both from Rupert Murdoch, from James Murdoch and Rebekah Brooks, they sat there for hour after hour taking the questions in good nature, in good humor. And, frankly, that alone, I think gives a certain amount of credit to their benefit, that they did go through this process.

Ultimately, though, tonight, as Rupert Murdoch did say, he doesn't take responsibility for what took place, although he will be the man who has to sort it out.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Mr. Murdoch, do you accept that ultimately, you are responsible for this whole fiasco?

RUPERT MURDOCH:

No.

UNIDENTIFIED MALE: If you are not responsible, who is responsible?

RUPERT MURDOCH: The people that I trusted to run it. And then maybe the people they trusted.

UNIDENTIFIED MALE: Can you name people?

RUPERT MURDOCH: I worked with Mr. Hinton for 52 years and I would trust him with my life.

(END VIDEO CLIP)

QUEST: Now, what I think, Wolf, is interesting in that exchange, the normal phraseology for people doing that is, I was not to blame, but I take responsibility, the buck stops here. And what we didn't get there was that phraseology or some version thereof. We also finally, Wolf, we did get, later on, in his final statement, the hacking was wrong, the payments to the police were wrong, no excuses.

BLITZER: And there was an incident there, at one point, where an intruder just showed up with some shaving cream.

Tell our viewers what happened.

QUEST: The pictures don't really tell the full magnitude of the story. As you can see on the screen now, the -- the intruder, an activist, a comedian, came in with -- and basically tried to -- well, he did. He successfully pied Rupert Murdoch with -- with shaving foam on a plate.

What was interesting -- and if you look at the picture again, you see close up, Wendi Deng, Rupert Murdoch's wife, she launches herself out of the seat, hits the guy with the pie, grabs the plate and shoves it in his face. James Murdoch launches himself out of his seat. And all of this disgraceful that anybody -- I mean Mr. Murdoch does get hit. Ten minutes later, they do re--- restart the hearing. He is without his jacket and apologies all around for what took place.

BLITZER: A remarkable day in London in parliament today.

We're going to stay on top of this story.

Richard, thank you very much.

Lots of emotions, lots of tough questions in the Parliament. Was there more heat, though, than light?

(BEGIN VIDEOTAPE)

BLITZER: And joining us now from London, member of parliament, Louis Mensch. She's a member of the Conservative Party.

Mrs. Mensch, thanks very much for joining us.

LOUISE MENSCH, MEMBER OF BRITISH PARLIAMENT: My pleasure.

BLITZER: Did you get the answers from Rupert and James Murdoch you were looking for today?

MENSCH: Well, I think we got lots of answers that we were looking for. Some major questions remain to be answered, chief amongst them, if they really didn't know, why didn't they know, which was the thrust of my questioning.

But we did get very exhaustive answers to difficult questions over a sustained period of time.

BLITZER: What's the biggest question you still want answered?

MENSCH: I think it has to be if you didn't know, why didn't you know? And that would apply to all three of our witnesses today. Perhaps the single most unconvincing part of Mr. Murdoch, Sr.'s testimony was that he wouldn't have noticed the "News of the World" because it was such a small and insignificant part of his media operation. It may be small in terms of finance as part of News Corp's global balance sheet, but it certainly is not small in terms of reputation and in terms of being a major flagship British paper.

And you would think that if there was a threat to its reputation and integrity, it would certainly have been kicked up the line or it should have been kicked up the line to Mr. Murdoch.

BLITZER: Do you believe both Murdochs and Rebekah Brooks were telling you the truth during their testimony today?

MENSCH: I found them to be mostly convincing, with a couple of exceptions. As I've just said, I really don't buy the argument that they didn't know because it was too small, it was beneath their notice. That's one argument I didn't buy.

But overall, I have to say I found them to be credible witnesses and the failures that I saw today in News Corp were failures of corporate governance rather than failures of malice. So in that sense, I think I was mostly convinced by the evidence I heard today (INAUDIBLE).

BLITZER: So where do you, as a member of parliament on this committee, where do you go from here?

MENSCH: Well, I think I've said to Mr. Murdoch that I hope he will now take matters into his own hands, not rely on other people, the police (INAUDIBLE) or what have you and will institute a root and branch review into practices in his newsrooms across the world. And he clearly said to me today that he would, in fact, do that.

And what I think we need to see and what I'm sure the prime minister will be announcing to the Commons tomorrow is more of what we've heard from the judicial inquiry and a new relationship, certainly in Britain, between the press and politicians, whereby, of course, meetings will still go on, but now everything will be open, above board and logged every time, which I think is a reform that is very much overdue.

BLITZER: Do you have suspicions about the prime minister, David Cameron, that he may have known more than he's acknowledging?

MENSCH: None whatsoever. And even among the most rabid Labour Party supporters, I haven't heard a single question about the prime minister's integrity. People talk about judgment in hiring Andy Coulson. But hindsight is absolutely perfect. And there were many people in the British press at the time who thought it was an inspired appointment. I can remember reading about this.

Also, I should say that Mr. Coulson's guilt hasn't been proven so far, either. So, no, the prime minister -- his integrity is not in any kind of question. And I think you'll see, as you saw when he announced the inquiry, a very strong statement tomorrow and his MPs backing him. Indeed, we've had polling in this country over the last couple of days showing the Conservatives taking a lead over Labour and the Labour Party dropping by 3 points. So this isn't stirring the public.

BLITZER: You were asking the questions when that intruder came in with that shaving foam or the shaving cream and -- and started throwing it at Mr. Murdoch.

What was your reaction? What was it like in that room?

MENSCH: I was absolutely horrified, frankly, that the dignity of our witnesses could be compromised in that way. And I think the parliament's security authorities will have some very serious questions to answer. I know we're going to be referring it to the speaker.

I was absolutely furious, because this was a very lengthy, very serious session of parliament, with two of the most important media executives in the world in front of us. And we were asking very serious questions about phone hacking. And I thought, A, the protester was absolutely pathetic. But, B, that Mr. Murdoch, Sr., as I said, did himself no end of credit by being willing to go on and answer my questions, nevertheless. In fact, it was quite hard to -- to gear myself up to be -- to make those questions as tough and as hard as I -- I had originally planned them, because I admired his courage in -- sitting in front of me after that incident.

(END VIDEOTAPE)

BLITZER: (INAUDIBLE) questioning, though, she was very tough on both Murdochs.

We're going to have more of my interview with this member of parliament, Louis Mensch. That's coming up.

Also coming up, are hackers now turning the tables on the British tabloids? We're going inside new claims alleging just that.

Plus, new signs of a potential breakthrough in the political stalemate over the debt crisis. Details ahead.

(COMMERCIAL BREAK)

BLITZER: Jack Cafferty is here with The Cafferty File -- Jack.

JACK CAFFERTY, CNN CONTRIBUTOR: It's a pretty safe bet, Wolf, that President Obama won't be sending billionaire casino mogul, Steve Wynn, an invitation to his next fundraiser in Las Vegas.

During his company's quarterly earnings conference call this morning, Wynn, who is the CEO of Wynn Resorts, went on a rant about the harm he thinks President Obama is doing to the economy and the business community. Wynn told listeners on the call, quote, "This administration is the greatest wet blanket to business and progress and job creation in my lifetime," unquote.

Since he was elected, President Obama hasn't had the strongest, warmest, fuzziest relationship with business leaders, who -- many of which strongly oppose his health care and Wall Street reform laws that he has pushed for since his inauguration.

Wynn says business leaders like himself, who have business opportunities and the capital to act on them, are sitting on the sidelines in fear of President Obama's policies.

Despite Wynn's tirade, his company, Wynn Resorts, did quite well in the second quarter. But Steve Wynn says he could be doing even more if it wasn't for this president's policies and overall philosophy as president. Wynn claims his company alone could add 10,000 jobs in Las Vegas if it wasn't for this political climate. Wynn is a self- described Democratic businessman, but he says he supports both Democrats and Republicans and he's not happy with anybody in Washington these days. He thinks Congress and the administration are so focused on holding their jobs for the next year, that the entire discussion in Washington right now is, quote, "nauseating," unquote.

I'd be inclined to agree.

The question is this -- Steve Wynn calls the Obama administration "the greatest wet blanket to business and job creation in his lifetime."

Is he right?

Go to CNN.com/caffertyfile and post a comment on my blog.

Various reports, Wolf, up to $2 trillion sitting on the sidelines in the hands of business owners across this country. And they're a little skittish and nervous about committing and putting that money to work because they don't know what the future holds.

BLITZER: If they did, there would be a lot of jobs out there, millions of jobs would be created, presumably, over the next few years.

But let's see what happens.

CAFFERTY: All right.

BLITZER: Jack, thank you.

Rupert Murdoch's media empire under the scrutiny of British lawmakers today. It's our top story. It's also under attack, at least by some hackers.

Brian Todd is looking into this part of the story for us.

What do you know -- Brian?

BRIAN TODD, CNN CORRESPONDENT: Wolf, the backlash against News Corporation is apparently not limited to that chamber of Britain's parliament. There are indications tonight that a notorious hacking group has targeted Rupert Murdoch's newspapers and at least one of the people embroiled in this scandal.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: One, two.

TODD: (voice-over): Rebekah Brooks opens with words of contrition.

REBEKAH BROOKS, FORMER CHIEF EXECUTIVE, NEWS INTERNATIONAL: I would like to add my own personal apologies.

TODD: As if she needed more to worry about, the former chief executive of News International may be wondering if hackers have turned the tables on her. Hackers, apparently from the notorious group LulzSec, claim to have breached e-mail servers at Rupert Murdoch's News International, specifically, "The Sun" newspaper and the now defunct "News of the World."

LulzSec boasts on its Twitter feed: "We have owned "Sun," "News of the World." One hacker linked to LulzSec and the hacker group, Anonymous, brags: "We're sitting on their e-mails."

The hackers threatened to release e-mails publicly. But some of the information appears out of date. LulzSec and its supporters Tweeted e-mail addresses and passwords like those of Rebekah Wade. That's Rebekah Brooks' maiden name, which she hasn't gone by in at least two years.

(on camera): What does it mean that they posted an old e-mail password file here for Rebekah Wade, who is now Rebekah Brooks?

MARK RASCH, CYBER SECURITY CONSULTANT, CSC: Well, what this means is that they were able to get into the security system at "The Sun" and obtain this password file. This is an older password file at "The Sun" from when Rebekah Brooks was at "The Sun." It means that they're storing this information at "The Sun" and it's still vulnerable to attacks.

TODD: (voice-over): Former Justice Department cyber crime prosecutor, Mark Rasch, says most companies are advised to destroy old data like that.

LulzSec also claims credit for this hack, steering users who wanted to go to "The Sun" newspaper's Web site to this fake story saying Rupert Murdoch was found dead in his garden after taking large quantities of the chemical element, palladium.

(voice-over): We Tweeted LulzSec to ask why they may have done this, called a number we had for them.

UNIDENTIFIED MALE: Bonjour. This is Pierre Dubois (ph).

TODD: We got no response.

News International would only say its aware of a hacking attempt and its sites are back up.

(END VIDEO TAPE)

TODD: And this all comes as we're getting word of a major takedown operation targeting another hacking group called Anonymous. Federal law enforcement officials telling CNN that at least 14 and up to 16 people have been arrested across the country, and possibly in Great Britain, as well, targeting the hacking group, Anonymous. This group is believed to be responsible for a disruption of service back in December, targeting MasterCard, Visa and PayPal, in retaliation for those corporations ending their affiliations with WikiLeaks.

Also, Anonymous linked to several other high profile hacking events over the past year. We're told that there has been a major takedown, at least 14 people, up to 16 arrested across the United States and in Europe. Search warrants issued in the New York area. These arrests took place in New York, New Jersey, California and we're told maybe at least one in London, Wolf.

So a major operation targeting that hacking group, Anonymous. There are loose links between Anonymous and LulzSec. Cyber experts tell us some members of one may be members of another. So, yes, there -- there could be some connection here. But --

BLITZER: And you're also getting some other details --

TODD: Right.

BLITZER: -- on these raids from witnesses.

What else are you picking up?

TODD: That's right. There was a -- a couple on Long Island who talked to CNN this morning after their home was raided. They didn't want to go on camera. But they said the FBI, several agents knocked on their door very early in the morning, were very aggressive with their search, very aggressive with their questions.

This couple has two teenage children. And they tell us that the agents asked them very aggressive questions about Anonymous. This couple says that their kids are not engaged in any hacking.

You know, this -- this could be a major operation, because cyber experts will tell you that once they get some of these people in custody, they tend to turn on others. It may not take down Anonymous. It's certainly not going to end hacking. But it's -- it's a major operation.

BLITZER: But it's a fascinating part of this story.

Thanks, Brian.

TODD: Sure.

BLITZER: Thanks very much.

We'll have more inside the British tabloids.

I'll also speak live with one man who's got a lot of experience in London dealing with those tabloids, our own Piers Morgan.

And on Capitol Hill today, two sides unveil their plans to tackle the debt. Only one got the White House seal of approval. We're going to tell you which one the president prefers.

(BEGIN VIDEO CLIP)

OBAMA: I was in contact with --

(END VIDEO CLIP)

(COMMERCIAL BREAK)

BLITZER: Lisa Sylvester is monitoring some of the other stories in THE SITUATION ROOM right now, including two Pakistani-Americans charged with deceiving the U.S. government.

What do we know?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf.

Well, the U.S. government says it has exposed an illegal campaign influence lawmakers over the conflict in Kashmir. Prosecutors charge that two alleged agents for Pakistan funneled millions of dollars as part of the plan. The complaint alleges the pair falsified and concealed information from the U.S. government. They face up to five years in prison if convicted. Pakistan and India have disputed the status of Kashmir for decades.

Israel has stopped another ship trying to break its blockade of Gaza. The navy seized the ship, part of a larger flotilla leaving from Greece, as it approached the coast. Israel says any supplies on board will be transferred legally to Gaza. Israel insists on controlling access to Gaza because it says otherwise, smugglers will try to ship weapons to Palestinian militants.

And the FAA says during a random test, a veteran Colorado air controller had a blood alcohol level exceeding the allowed limit. He reportedly works at a center that handles air traffic for several states. A family member says he was given the choice of resigning or entering rehab. And he chose rehab. No charges have been filed in that case.

And 764 lucky couples get to tie the knot Sunday in New York City. But first, they'll have to win a lottery that closes Thursday. Sunday is the first day for New York City's recently passed Marriage Equality law. Demand on the city clerk for weddings is through the roof from both same and opposite sex couples. City officials expect to break the single day record for ceremonies on that day -- Wolf.

BLITZER: Thanks very much.

We'll be back. Piers Morgan, by the way, is getting ready to join us live. We'll get his insights on the hacking scandal in London. It's a huge day in that story. And new signs of a potential breakthrough in the political stalemate over the debt crisis. We have details coming up.

(COMMERCIAL BREAK)

BLITZER: Rupert Murdoch says he was absolutely shocked, appalled and ashamed when he learned about the phone hacking that brought down one of his most popular newspapers. The media mogul defended his company and himself during today's emotional hearing before parliament.

Listen to some of the more compelling exchanges.

(BEGIN VIDEO CLIP)

JAMES MURDOCH, DEPUTY COO AND CEO, NEWS CORPORATION: It is our determination to both put things right, make sure these things don't happen again and to be the company that I know we have always aspired to be. As for my comments, Mr. Chairman, and my statement, which I believe was around the closure of -- of the "News of the World" newspaper --

RUPERT MURDOCH: Before we get to that, I would just like to say one sentence.

(CROSSTALK)

RUPERT MURDOCH: This is the most humble day of my life.

JAMES MURDOCH: The question of what's acceptable and what isn't in terms of investigative techniques, is -- is an important one. But let me be very clear. The codes of conduct of News Corporation globally, for our employees, journalists or otherwise, are very clear, that breaking the law is a very, very serious matter. And it should be, you know, people who are lawbreakers should be held to account. And -- and in the matter of something like phone hacking or, topically, payments to police and things like that, we just don't think they should have any place in our business.

JIM SHERIDAN, BRITISH PARLIAMENT MEMBER: Mr. Murdoch, do you accept that ultimately, you are responsible for this whole fiasco?

RUPERT MURDOCH: No.

SHERIDAN: You're not responsible?

Who is responsible?

RUPERT MURDOCH: The people that I trusted to run it and then maybe the people they trusted.

SHERIDAN: You must be horrified by the scandal and the fact that it's cost you the BSkyB transaction and led to the closure of the "News of the World." Who do you blame for that?

RUPERT MURDOCH: Well, a lot of people had different agendas, I think, in trying to build this hysteria. All our competitors in this country formally announced a consortium to try and stop us. And they caught us with dirty hands and they built hysteria around it.

UNIDENTIFIED MALE: We've been very clear that serious allegations of wrongdoing have been leveled about the "News of the World."

UNIDENTIFIED MALE: Did you close it because of the criminality? Did you close the paper time because of the criminality?

RUPERT MURDOCH: Yes, we felt ashamed of what had happened and wanted to bring it to a close.

I, then, was absolutely shocked, appalled, and ashamed when I heard about the Milly Dowler's case.

REBEKAH BROOKS, FORMER CEO, NEWS INTERNATIONAL LTD: Of course, I had no idea that Milly Dowler's phone was being accessed by someone being paid by "News of the World" or even was authorized by someone at "News of the World" is abhorrent to me as it is to everyone in this room.

(END VIDEOTAPE)

BLITZER: There was also a footnote to today's hearing that we found worth noting here at CNN, I followed up on that with the British Parliament Member Louise Mensch. Here's more of that interview.

(BEGIN VIDEOTAPE)

BLITZER: Mrs. Mensch, you caused quite a stir when you asked this questions, when you made this statement about our colleague here at CNN, Piers Morgan. I'm going to play what you said in Parliament today.

Listen to this.

(BEGIN VIDEO CLIP)

LOUISE MENSCH, BRITISH PARLIAMENT MEMBER: Piers Morgan, who is now a celebrity anchor at CNN, you do not appear to have asked him any questions at all about phone hacking. There's a former editor at "The Daily Mirror," he said in his book, "The Insider," recently, and I quote, that "that little trick of entering a standard four-digit code allows anyone to call the number and hear all your messages."

In that book, he boasted that using that little trick enabled him to win the scoop of the year on a story about Sven-Goran Ericksson. So that was a former editor of "The Daily Mirror" being very open about his personal use of phone hacking.

(END VIDEO CLIP)

BLITZER: All right, what evidence do you have to make that kind of accusation against Piers Morgan?

MENSCH: Well, I'm -- well, I said what I said in the committee, Wolf, and I'm afraid right now I'm going to say that I can't comment about it outside of the committee room because, as Mr. Morgan will know, inside Parliament, when I speak at a select committee of Parliament, I am protected by absolute Parliamentary privilege.

To repeat something outside of Parliament doesn't give me that cloak of privilege, and Mr. Morgan is a very rich man.

So I am sure that the ferocious investigative journalists at CNN and across the news media in the United States will take careful note of what was said in the committee and look into it.

That's the best, I'm afraid, I'm going to be able to do on legal grounds.

BLITZER: Well, I understand the legal grounds.

PIERS MORGAN, HOST, CNN'S "PIERS MORGAN TONIGHT": Well, I'm amused by her cowardice in refusing to repeat that allegation now she's not in Parliament and covered by privilege.

As she may be already aware, she came out with an absolute blatant lie during those proceedings. At no stage in my book or indeed outside of my book have I ever boasted of using phone hacking for any stories.

For the record, in my time at "The Mirror" and the "News of the World," I have never hacked a phone, told anybody to hack a phone or published any story based on the hacking of a phone.

And what she did today was a deliberate, in my view, and outrageous attempt to smear my name, CNN's name, "The Daily Mirror's" name. And I think her now to have the breathtaking gall to just sit here calmly and say, I can't possibly repeat that cause I haven't got privilege, is an outrage.

And I call on you Mrs. Mensch now to repeat it, show some balls, repeat what you said about me and then maybe go and buy a copy of my book, "The Insider," and see where in that book these claims that you made today in a televised committee watched all over the world, where that claim is in that book, because it isn't there.

BLITZER: All right, Mrs. Mensch, do you want to respond to that?

MENSCH: They -- as I've just said, I made the claims in the select committee and people will look at them.

(END VIDEOTAPE)

BLITZER: All right, let's continue our conversation with Piers Morgan, he's joining us live right now. She clearly, Piers, did not want to say in public what she said behind closed -- behind open doors, indeed the whole world was watching, in Parliament, but she has parliamentary immunity so she's not going to get into a fight with you on that.

Is there anything else you want to say before I move on to some of the substance of what was done today?

MORGAN: Well, only that -- I mean, she made some very specific claims and, in fact, later on she repeated them even down to me apparently to me giving tutorials in phone hacking, how I hacked people myself, how my staff have broken stories of hacking , and she has absolutely no evidence for any of this, and she based it on what she claimed I had published in my own volume of diaries.

Well, you've seen the entries now, Wolf, and I read the entries to her earlier. There is no such thing. The only entry in my book referring to phone hacking was when somebody warned me that my phone might be being hacked and advised me to change my pin number.

So I was pretty outraged actually. I think when somebody makes such a claim against your own integrity and does it based on a complete falsehood and then hides behind parliamentary privilege -- which I think your viewers find a rather mysterious entity where a politician in Britain can say anything you like and you can't sue them, not that I would anyway, but you can't sue them -- I think is pretty rich when she now must know having seen the book, presumably, that none of the things she said I wrote actually exist in the book.

BLITZER: Let's talk about the bigger picture right now.

What did you think of this hearing, this testimony today. You know the Murdochs, you worked for them at one point in your life. What did you come away with?

MORGAN: Well, the most extraordinary spectacle, I watched all of it. I've known Rupert and James Murdoch for a very long time. Rupert Murdoch made me one of the youngest editors in Fleet Street history in Britain when I was 28 years old. I owe him a lot. You know, I wouldn't probably be here without his help.

I also know Rebekah Brooks very well, one of my oldest friends. And, you know, I'm proud to be their friends.

I felt it was a very tough day for them. I thought the outrageous attack on Rupert Murdoch by that protester should never have been allowed to happen. I think it's a scandal that it did. But he dusted himself down, as you would expect. He got some pretty tough questions. I thought some of the MPs landed a few blows.

My summation of the thing was that nobody proved to, I don't think, any mutual neutral observer that Rupert Murdoch had any personal knowledge of what was going on with this phone hacking, or James Murdoch for that matter, or Rebekah Brooks.

What you have seen are clearly management failings in how they controlled this story from when it first came up, and I think they would accept that. Clearly, this was a much bigger problem than they realize. And I think if Rupert Murdoch had his time again, he would have gotten stuck into this personally early on and made sure appropriate action was taken.

It's been very damaging for the Murdoch family, for the corporation. But at the end of the day, money talks. I think that the stock price of News Corp rose 6 percent today. So, clearly, the markets believe that no death charge blow was landed except possibly by Wendy Deng.

BLITZER: How much pressure were you under when you edited these newspapers in London to get the scoop, to get the big story and to do whatever it took to get that story?

MORGAN: Huge pressure, and I detail that in my book as well. You know, when you're an editor of a British tabloid newspaper, you're in a commercial war and you're encouraged to be aggressive, to be forceful, to pursue stories with the full might of your reporting army. But most news organizations are the same. Rupert Murdoch's happened to be more successful than most over the years.

The key thing for me was listening to Murdoch today, a lot of what he said resonated. And people may be bemused by what he said and not believe him, but when he says that he didn't have much day-to-day contact with these papers, that's true.

I spoke to an editor of the "News of the World" maybe once a week, maybe once every two weeks. He never asked me about methodology of stories, he didn't have time. He would just say what's going on, and you would tell him what stories you had and he would be, I'm sure, in a position where he thought, I have editors, I have managers, I have lawyers, I have accountants, they do all the box ticking here. My job is just to get an overview of what's going on.

And I think when you run a company of 50,000 people, it is a bit ridiculous to expect Rupert Murdoch to be all over the micro-detail of how each individual part of the company gets run. As he said, you know, he may have been let down by other people that he charged to look after this detail and big mistakes were made. And when it came to the phone hacking of the young missing girl and so on, utter outrages, and everybody shares that view.

BLITZER: Piers, I know you're going to have more on this later tonight on "PIERS MORGAN TONIGHT." We'll be watching 9:00 p.m. Eastern. Thanks very much for coming in.

MORGAN: Thank you, Wolf. Take care.

BLITZER: Anyone who gets migraine headaches knows they can be debilitating. Republican presidential candidate Michele Bachmann apparently gets them as well. Could that be a problem for her presidential campaign?

And refugees from Somalia threatened by drought and starvation. CNN is using its global resources to expose this crisis to the world. (COMMERCIAL BREAK)

BLITZER: Here's the latest on America's debt crisis.

President Obama says it's time to start talking turkey before the deadline to raise the debt limit two weeks from today, and he says it may not be too late to get a grand, huge compromise. His approach would raise the debt limit and save about $4 trillion over 10 years by closing tax loopholes and reforming Medicare and Social Security spending.

The president said today that he sees promise in a bipartisan Senate compromise that might increase support for raising the debt limit.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And so, I want to congratulate the gang of six for coming out with a plan that I think is balanced. We just received it, so we haven't reviewed all the details of it. It would not match perfectly with some of the approaches that we've taken, but I think that we're in the same playing field. And, my hope is that we can start gathering everybody over the next couple of days to choose a clear direction and to get this issue solved.

(END VIDEO CLIP)

BLITZER: The gang of six plan would cut America's debt by about $3.7 trillion through some deep cuts and what's called discretionary spending and some of the entitlement programs as well. The top Senate leaders have also complicated last (ph) plan to avoid financial crisis. It will allow increases in the debt ceiling while letting the lawmakers cast votes to show their disapproval. And the house is scheduled to vote tonight on a Republican plan known as cut, cap and balance.

They would cut spending by $111 billion next year alone and increase the debt ceiling only, only if a balanced budget amendment is approved by Congress, sent to the states. That legislation is expected to pass the House, but eventually, die in the senate, but even if it passed, the president says he would veto it.

In Texas tonight, a high-powered meeting that could help kick off Governor Rick Perry's run for the White House in a rather crowded republican field. A GOP source confirming that potential donors and fundraisers to a possible Rick Perry campaign are getting together in Austin, Texas.

CNN's Jim Acosta is in the Texas capital.

Governor Perry is very serious about making a decision. I'm hearing from a lot of his associates. He's likely to do it. What are you hearing in Texas right now, Jim?

JIM ACOSTA, CNN CORRESPONDENT: Wolf, Governor Perry staff says he will make a decision about running for president by the end of the summer. And if he does jump in this race, his faith just might take center stage.

(BEGIN VIDEOTAPE)

ACOSTA (voice-over): For republicans dissatisfied with the field for 2012, it could be divine intervention. At a press conference, Texas governor, Rick Perry, confirmed what he recently told an Iowa newspaper, that he is feeling called by his faith and his friends to run.

GOV. RICK PERRY (R), TEXAS: There's a lot of different ways to be called. My mother may call me for dinner.

ACOSTA: So, there was no religious overtone?

PERRY: Oh, no, no, no. I don't ever get confused about it. I'm a man of faith. Texas is where the games being play.

ACOSTA: GOP insiders see a pro business governor who scores both tea party activists and Christian conservatives. When Perry announced new jobs coming to the state's high-tech community this week, he got a cameo playing quarterback in a college football video game.

UNIDENTIFIED MALE: This is Governor Rick Perry.

ACOSTA: But it's what Perry will do on another playing field that's come under scrutiny. At a stadium in Houston next month, the governor plans to lead a day of prayer, an event dubbed the response for what organizers call a nation in crisis.

PERRY: We need God's help. That's why I'm calling on Americans to pray and fast, like Jesus did.

ACOSTA: But critics say the response blurs the separation between church and state and pointed the controversial statements made by some of the event's official endorsers, including one pastor who called the Statue of Liberty a false idol.

PASTOR JOHN BENEFEL, PEOPLE FOR THE AMERICAN WAY: That is an idol, a demonic idol right there in the middle of New York harbor. People say, well, no, it's patriotic. What makes it patriotic? Why is it? It's the statue of a false goddess.

ACOSTA: Perry says it's unfair to link him to the events endorsers.

PERRY: Just because you endorse me doesn't mean I endorse everything that you say or do.

JIM HIGHTOWER (D), FORMER TEXAS AGRICULTURAL COMMISSIONER: He's hitching himself up to it. You know, there are some dogs that are too ugly to hug, but he seems willing to do it.

ACOSTA: Democrat, Jim Hightower, was beaten by Perry for Texas Agricultural Commissioner more than 20 years ago. He says Perry's talk of being called to run is an obvious appeal to Christian conservatives, tried by another Texas governor, George W. Bush.

HIGHTOWER: I don't know what he exactly believes. I know how he's positioned himself and that is far to the right of George W.

ACOSTA: Pastor Bob Long who has prayed with the governor and plans to attend the response sees something else.

PASTOR BOB LONG, RALLY CALL MINISTRIES: I believe it's absolutely a possibility that God could be speaking to him.

ACOSTA: To have him run for president?

LONG: Yes, possibility, absolutely.

(END VIDEOTAPE)

ACOSTA: From a teleconference with South Carolina pastors to a dinner this evening with a group of potential presidential donors, Rick Perry's schedule suggests he is seriously considering a run for the White House. There's a saying down here that everything is bigger in Texas and so is the speculation swirling around Rick Perry -- Wolf.

BLITZER: We should know soon enough. All right. Jim, good report. Thanks very much. Jim Acosta in Austin,

A global crisis impacting literally millions of people including innocent children. Up next, the heartbreaking images of a problem you need to know about right now.

(COMMERCIAL BREAK)

BLITZER: Somalis have faced many enemies over the years, but the latest is one that can't be defeated by soldiers or by armies it's draught. One that's parched the land and left so many people scrambling for food and water.

CNN's David McKenzie reports from a refugee camp in Kenya.

(BEGIN VIDEOTAPE)

DAVID MCKENZIE, CNN CORRESPONDENT (voice-over): These Somalis started waiting outside this refugee camp before dawn. Some had walked many days and miles to get here. Those too weak left at the roadside. Children managing the march.

(on-camera): It's almost noon, and still, people are waiting to get into the reception area of this camp. These camps are overflowing, but still, almost 5,000 people come here from Somalia each week.

(voice-over): Mohammed fled with his large family, gaunt and tired, he explains the choices he faced.

MOHAMMED MAHMOUD, SOMALI REFUGEE (through translator): We could have died if we stayed. If we died or lived, it's in God's hands. But the drought destroyed everything I have, So I've come here to live.

MCKENZIE: People once split from the conflict grieve from hunger. The first bigger rations must last them two weeks. Aid agencies tried to cope with the influx that are defunded and nearly overwhelmed.

(on camera): What is most needed here right now?

ROGER NAYLOR, FIELD OFFICER, UNHCR: Water, food, shelter, and medical care in equal amounts. And land. We need land for people to settle to receive those services.

MCKENZIE (voice-over): These camps were designed for tens of thousands. Now that number is close to half a million. It's the largest refugee camp in the world. It's the children who are suffering the most. Like Noria who is two who weighs as much as a newborn. Or Aden is too sick to even eat so is fed through a tube.

DR. EDWARD CHEGE, DOCTORS WITHOUT BORDERS: They may have had supplies for them, but as soon as they run out of food and basic necessities, that's when they come to the hospital and when they come, they get a small ration and seems like (INAUDIBLE).

MCKENZIE: Otherwise, they end up here, on the wind blast with up skirts of the camp. They must walk miles to get water and wait days to get food, but they say even this suffering is better than the horror they left behind.

David McKenzie, CNN, Kenya (ph).

(END VIDEOTAPE)

BLITZER: And go to CNN impact your world if you want to help and I think you do. We'll continue our coverage of this horrible story ongoing right now in Africa.

Rupert Murdoch says he's not responsible for the phone hacking scandal, but should he resign from the helm of his news empire? We're taking a closer look at the legal and the ethical fallout.

And Jack Cafferty will be back with "The Cafferty File."

(COMMERCIAL BREAK)

BLITZER: Here's a look at some of this hour's hot shot.

In Athens, taxi cab drivers protests in front of the Greek parliament in response to the government's decision to deregulate the cab industry.

In France, a troops flag-draped caskets of seven soldiers who were killed in Afghanistan.

In Australia, an aboriginal dance group performs at the Sydney Opera House. And in outer space, check it out. The space shuttle Atlantis departs from International Space Station for a preliminary scan of its thermal protection system. Very important one.

Hot shots, pictures coming in from around the world, indeed, from around the universe today. Let's go to jack. He's got the "Cafferty File."

I love those hot shots, Jack.

CAFFERTY: Do we know how that scan came out?

BLITZER: Apparently good.

CAFFERTY: A scan of the thermal protection system. I guess, you need that, right, when you reenter the atmosphere.

BLITZER: They're coming back on Thursday.

CAFFERTY: Absolutely. And for the last time, I guess, for the shuttle program, right?

The question this hour: Casino CEO Steve Wynn calls the Obama administration, quote, "the greatest wet blanket to business and job creation in his lifetime." Is he right?

Dennis writes from Los Angeles, "Yes. The proof is that business is sitting on trillions of dollars in cash, refusing to invest capital, and not hiring anyone not because of political reasons, but because we're scared of the regulations, taxes, debt, pro-union, and anti-business rhetoric, and uncertainty. This administration is thrown at the private sector."

Joe in Texas writes, "Steve Wynn is only right in that Obama is the current example of an administration which has been accumulating piles of wet blanket policies for decades. About the only way Obama can be considered less than the greatest wet blank would be if he repeals some of the executive orders and presidential letters of past administrations wet blanket policies."

Mike in Minnesota, "According to Forbes, last year, Steve Wynn was worth 2.3 billion, up from 1.5 billion the previous year. What on earth does he want from Obama? A taxpayer funded bailout? Besides, his business is gambling. Not exactly and are indeed (ph) driven enterprise. He sounds like a bit of a false authority to me."

Janne in North Carolina, "Contrary to what the Democrats think, businesses are in business to make money, not provide social justice or whatever the heck the left wingers think. If you regulate them to the point that they're not making money, then what exactly is the motivation to be in business? You can't regulate business to the point of strangulation and then expect the economy to grow."

Chandler in Rockaway, New Jersey writes, "Why should we believe anything from a man who made billions praying on the gullible through legalized gambling." He's talking about Steve Wynn. "Like the other robber barons, he wants absolute freedom from government oversight of any kind. And, of course, he wants to be able to push all the tax burden on the working classes. The silly whining that uncertainty is the cause of high unemployment is merely a smoke screen masking the agenda of the ultra wealthy."

If you want to read more on this, go to my blog. CNN.com/caffertyfile -- Wolf.

BLITZER: We'll do and see in a few moments. Jack, thank you.