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No Guarantee on Social Security Checks; New Alternative to a Grand Bargain; Rep. Ron Paul Interview; News by Bribes and Hacking

Aired July 12, 2011 - 19:00   ET


JOHN KING, HOST: Thanks Wolf and good evening everyone.

Tonight fascinating CNN reporting from Libya where army troops now being held by anti-Gadhafi rebels (INAUDIBLE) crisis and say they were told to shoot to kill any comrades who tried to flee the fighting.


UNIDENTIFIED MALE: If you saw any Libyan running away from the forward positions, you would shoot him. I ask again to make sure we understand one another. That was our job, he answers.


KING: Plus live pictures here. A moving farewell to Betty Ford whose public battles with breast cancer and alcohol addiction were cultural turning points. You're seeing there live pictures of people leaving a very moving memorial service today in Palm Desert, California.

But up first tonight, President Obama raises the ante in his showdown with Republicans over giving the government authority to borrow more money. If there is no deal the president is now warning more than 70 million elderly Americans and veterans might not get their benefit checks.


BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: I cannot guarantee that those checks will go out on August 3rd if we haven't resolved this issue because there may simply not be the money in the coffers to do it.


KING: Republicans tonight call that a scare tactic and the president hardly alone in drawing sharp rhetorical lines. From the left, blunt warnings that the president better not count the votes of liberals, better not take them for granted, especially if any deal includes major changes to Medicare and Social Security.

(BEGIN VIDEO CLIP) SEN. BERNARD SANDERS (I), VERMONT: Mr. President, when you want to ask why the American people are frustrated with politicians, are increasingly cynical, it has a lot to do with candidates who say one thing and do another thing. If you told the American people you're not going to cut Social Security, then don't cut Social Security. Keep your word.


KING: Also tonight, a curious new proposal from the Senate's top Republican. Senator Mitch McConnell proposes giving the president the power to raise the debt limit without the blessing of Congress but only if the president outlines spending cuts equal to the amount he wants to borrow. Any new borrowing account, now many conservatives reacted to that with outrage, but Senator McConnell saying prospects for a negotiated deal in his view are bleak. And he cast his plan as one that would prevent default and guarantee spending cuts.


SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: The president has presented us with three choices. Smoke and mirrors, tax hikes or default. Republicans choose none of the above. I had hoped to do good but I refuse to do harm.


KING: Let's get the latest on the negotiations, the stakes, and the fast shifting politics. Our chief White House correspondent Jessica Yellin is over at the White House, our chief political analyst Gloria Borger here with me and in Atlanta, CNN contributor Erick Erickson, the editor who is among the conservatives worried the McConnell plan is too kind to the Obama White House.

Jess, let me start with you. Am I wrong? I get the sense in my conversations and my e-mails today that negotiations that are supposed to get you closer to a deal are going the other way.

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: Yes, they're not getting any closer. There's no late breakthrough and the way it was described to me is that the mood was quote "bleak heading in". The perception is that there's so much of a fight and a bitter rivalry within the House Republican ranks, that that is sort of gumming up the works for the whole negotiating team. Clearly that's a perception among Democrats. Among Republicans there's a real frustration that the Democrats just aren't putting enough on the table.

The big picture, John, is that the clock is ticking and these talks aren't bearing fruit. They don't seem to be locking down agreements and moving on to the next big issue which is what we call progress. They need to be making progress if they're going to have a deal any time soon.

KING: Yes, it does require progress to get a deal. Let's dig a little deeper here because, Gloria, Jess just mentioned there seems to be a little tug of war within the House Republican caucus and if you listen the speaker, John Boehner heading into the weekend was talking about this grand bargain, a $4 trillion over 10 years deficit reduction package, that would have required some new revenues. Now some of us call those new taxes in Washington, D.C., but listen to the speaker today, it seems like he's getting a little tougher.


REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: My message to the White House over the last several months has been real simple. The spending cuts have to be larger than the increase in the debt ceiling. Secondly, there are no tax increases on the table. And thirdly, we have to have real controls in place to make sure this never happens again.


KING: He says his message over the several months. But isn't it fair to say that John Boehner is less pliable, seems less flexible today than he did coming into the weekend?


GLORIA BORGER, CNN CHIEF POLITICAL ANALYST: Yes, I think he was told in no uncertain terms by the man who counts the votes for him, Eric Cantor, who has always been known to be kind of a political rival of his, that there are no votes among House Republicans to raise revenues of any kind. And I think the way you work this kind of a deal is nothing is on the table until it's a done deal and it's all on the table. And it's very clear from our reporting, what we know, is that there were about $3 of spending cuts for every dollar of tax increases. There was a day not too long ago Republicans would have jumped at that deal and rejoiced and said, we won. But now it seems to me it's much more about tax cutting than deficits.

KING: That day was before the 2010 midterm elections --

BORGER: Yes it was.

KING: -- and the rise of the Tea Party, which is a good point to bring Erick Erickson into the conversation.


KING: Erick, you know Senator McConnell came up with what he views as an alternative today. And I want you to first listen to why he says so. Senator McConnell says he's going to -- he's looking around. He was trying to negotiate with the president, trying to strike a deal everybody could sign on to, but Senator McConnell thinks, not happening.


MCCONNELL: But after years of discussions and months of negotiations, I have little question that as long as this president is in the oval office a real solution is probably unattainable. (END VIDEO CLIP)

KING: So what he proposes, Erick, is part -- in part to keep Republicans for being blamed for any default is this plan where the president can do it, the president can write new checks but only if he gives Congress a list of spending cuts. You say it's a horrible idea. Why?

ERICK ERICKSON, CNN CONTRIBUTOR: Well because if you actually get into the nuggets of the plan, and Rich Lowry over at "National Review" pointed this out, is that the Congress can disapprove of the president's spending cuts, the president can veto what Congress has disapproved and then the president can raise the debt ceiling without the cuts actually happening. So in effect you're giving the president through this plan the ability to raise the debt limit $2 trillion with no actual cuts if he and Congress can't agree on them, which Mitch McConnell has been one of the Republicans out there saying that this is all about policy and we've got to make these spending cuts and we've got this huge national crisis and they cite the chairman of the Joint Chiefs of Staff saying it's a national security issue and now all of a sudden you're going to say, hey this is great politics. We'll let the president take the blame for it. If this is a crisis then we need a real policy, not to play politics.

KING: Part of the point for the McConnell team is they don't want to be blamed for it and that if the president did that, if the president didn't actually deliver with the cuts, he'd be walking into a re-election brick wall and that the Republicans then would have a very strong message against him. You were skeptic on that.

Let's go back to the idea that they're still negotiating and we'll see. Senator Durbin tonight on the Democratic side saying the McConnell plan is a live option that they're looking at that as an option. But let's assume they try to go back to making a deal. Here's another problem for the president. He has this huge problem on his right, right now. But listen to Nancy Pelosi today, the former speaker who would like to be the speaker again after the 2012 elections. She's telling the president, sure, negotiate a deal, but listen to this.


REP. NANCY PELOSI (D-CA), MINORITY LEADER: Today the Democratic women of Congress have come together to send a very clear message we must protect Medicare and Social Security. We will not support cuts.


KING: Jess, we can debate the meaning of cuts, but if they're talking about getting billions of dollars of savings out of Medicare, more savings out of Social Security, the president told Scott Pelley today at CBS oh I think I can get the Democrats to compromise. It seems as the differences with the Republicans get firmer the Democrats are emboldened to say no, Mr. President, too.

YELLIN: But there -- but there's a sense that that Medicare alterations, let's not call them cuts, are essentially part of this package. That there are cuts and then there are cuts and that there could be some kind of tweaking that can still allow Democrats to go into the next election and still use the Ryan plan against Republican opponents and not be -- and that's still a viable political message.

And one of the pieces to this, John, could be something that I've been hearing discussed today. I should say not from the White House but from sort of wise folks around town who you know we all check in with and say, how do you see this playing out. And the next likely option that people see happening now possibly is that maybe the Senate goes first.

Maybe the politics in the House are just too toxic right now. And Harry Reid and Mitch McConnell sit down and hammer out a deal around the Biden terms and they vote on it first, and then the House sort of has to accept what's done.

KING: Do the wise people call cuts, cuts or do they call them alterations or modifications or this or that --


KING: One of the questions here is who do you believe and who do you trust? Because if you listen to the White House and if you listen to the treasury secretary and if you listen to people out in the economy, some are Democrats, some are Republicans, there are those who say Armageddon. If you don't do this it would be Armageddon, a potential financial collapse. Let's look at some, just some of the things that people say could happen. And some of them certainly would. The question is would all of them happen if it came to this.

But what could happen if the government defaults? We'll get this to come down if it wants to cooperate with me -- here we go. No increases in the debt limit the government defaults. That would happen. Could retirement savings shrink? The GDP, the economy could drop. Home prices could fall. The value of the dollar could fall.

Foreign creditors could dump, China among them, U.S. securities. Interest rates for all of us, not just the government could go up. The credit rating of the government would be downgraded. What would that cause in financial markets? A financial asset fire sale, for this reason, one of the people who signs on to the not quite doomsday, but serious harm proposal is the New York City Mayor Michael Bloomberg. Listen to his assessment today if the politicians can't figure this out.


MAYOR MICHAEL BLOOMBERG (I), NEW YORK: If America for the first time in its history defaults on its obligations it would have a catastrophic effect on our financial system and on our credibility around the world. It would also take a serious toll on our economy and that at a time when this nation is still trying to recover from a deep recession.

(END VIDEO CLIP) KING: So Gloria does that argument, does that argument hold sway or particularly in the House or the new guys, are they willing to say, you know what? We're willing to take that risk?

BORGER: A lot of the new guys are saying we'll take the risk. It's not going to be Armageddon. And I'll tell you who else is doing it. The president -- Republican presidential candidates, you've got Michele Bachmann, you've got Tim Pawlenty out there, Tim Pawlenty saying that "he hopes and prays", that's a quote, that the debt limit doesn't get raised.

So you have this argument, Republican leaders like Mitch McConnell are saying we understand we have to raise it, but the new House Republicans and the presidential candidates who are playing to the base of the party, which the new House Republicans represent are saying, not so fast. I mean that's where the McConnell proposal is sort of interesting because if they care, you know this -- this has no fingerprints, you know and I think it gives Obama all the power.


KING: Is the problem, Erick, because here's a tweet from Newt Gingrich, @NewtGingrich. McConnell's plan is irresponsible, surrendered to big government, big deficits and continued over spending. I oppose it. How does this break down? Is it by ideology? Is it by philosophy? Is it by generation? There's obviously a huge debate within the Republican Party over how firm, how hard to plant the flag, especially on the revenue question.


KING: How does it break down?

ERICKSON: You know I think it does break down both among those who have been in Washington for a very long time and those who have not. It is not necessarily an ideological divide, although it's shaping out to be that way. Privately what a lot of conservatives will tell you is that at the end of the day, they're trying to rev up the base as hard as possible now because they foresee a TARP scenario where on August 1st someone from the White House comes in and says it's doomsday, we've got to do this and all the Republicans say OK, let's do it. And ultimately the Biden deal gets done whether they like it or not. They're trying to stave that off. It's going to be interesting to see how the presidential candidates actually start become more vocal on this. Mitt Romney today has now come out against the McConnell plan as well, saying he supports more cuts and capping --


ERICKSON: Newt Gingrich as well.

KING: Well we'll watch as this play out. I'm in the camp with Erick to think this is going to go --

BORGER: Do we have to watch -- KING: This is going to -- yes we do. We have to watch. That's what they pay us for. And this is going to go down to the end because if they cut a deal now John Boehner goes to his conference and they say, no, we want more. The Democrats go to their conference; they say no we want zero cuts. This is going to go to the very end. Jess, Gloria, Erick, thanks for coming in tonight.

And still to come here the latest on Britain's exploding tabloid scandal. Tonight Parliament demands an explanation from the media mogul Rupert Murdoch and next why is America's best known libertarian leaving Congress? Ron Paul joins us to explain his big decision next.


KING: The country's best known libertarian is calling it a career in Congress and in elective politics unless you decide to make him your next president. Texas Republican Ron Paul announced today he will not seek re-election to his seat representing the 14th Congressional District of Texas. Congressman Paul says he will instead concentrate on his bid for the Republican presidential nomination. The congressman joins us now from Capitol Hill to discuss his decision and the big debt and deficit showdown between House Republicans and the White House.

And let's start there, Congressman. In the big debate of the day, the president tried to up the ante today. He says unless you guys cut a deal and Congress extends or raises the debt ceiling, that he can't guarantee that on August 3rd Social Security checks will go out, veterans' checks will go out. What do you make of that?

REP. RON PAUL (R), TEXAS: I think he's using scare tactics. That just isn't true. Because the funds there for Social Security and these emergencies, the cash flow is good enough for that. And if they really needed to, why don't they just quit sending the interest rate payments over to the Federal Reserve?

So no, I think he's using scare tactics. That's that old thing. It's Social Security. It's -- and if you don't do exactly what we say, raise the debt limit, keep the spending going, don't change anything, so -- and I just don't believe that is true that social security checks are going to stop if the debt limit is not raised by August 2nd.

KING: So you're critical of the president there. I want you to listen here to your leader, the Speaker John Boehner who essentially today after starting to negotiate with the president says you know what, why this back and forth, let's hear from you, Mr. President.


BOEHNER: This debt limit increase is his problem and I think it's time for him to lead by putting his plan on the table, something that the Congress can pass.

(END VIDEO CLIP) KING: I know you're not a fan of President Obama but is it fair to say this is his problem? Isn't this everybody's problem? This goes back years and years and years, some of the money that has accumulated the debt. You didn't vote for them, but the wars in Iraq and Afghanistan have required all this money. It is fair to say this is his problem?

PAUL: No, it isn't his problem. As a matter of fact, even though I don't think the administration has helped get us out of the recession, it's gotten much worse. I never say it's Obama's recession. I talk about long-term problems. You know I talk about monetary changes back in the '70s, the -- and creating the anticipation I've had that we would reach this point. So no, it's been many administrations. It's been both parties.

But you even go back to the people. There's a high demand by the people to have entitlements. And then there are a lot of special interests who think that we should be the policemen of the world. So there's a lot of blame to go around. And as long as it's a blame game and a power struggle, you know it's power and blaming and a power struggle and that's why we don't get anywhere and my goal has always been to get the American people to ask what should the role of government be?

Should the role of our government be to be the policemen? Should it be there to tell us how to run our lives? Is it be there to be Centro economic planners and have a Federal Reserve system pretending that you know what the interest rates should be. That is the question that has to be asked because I don't think this is a budgetary crisis. The budget is the symptom of us not having a precise definition of what the role of government ought to be and the founders gave us the precise definition and that's in our Constitution and unfortunately, we don't follow it.

KING: And it is a question you have asked for many years back in 1988 as a libertarian candidate for president, last time as a Republican candidate, this time as a Republican candidate. And yet you say now you will not run for re-election to the Congress. If you're not successful in winning the Republican nomination for presidency and then the presidency, sir, and the polls at the moment suggest that's unlikely to happen, is this it? Is this the end of Ron Paul's political career?

PAUL: Well I guess all the way you describe it, you know I've been in politics, but I don't think I have a political career as much as trying to change the course of history and trying to change the attitude of the American people. So I've done that in and out of office. You know I took a break from Congress of 12 years, and yet I continued with educational efforts. So I think the philosophy of the people and the philosophy of our economic policy that is more important than the politician himself or herself, so no, I will continue to do that. I wouldn't know what to do if I didn't continue this process, you know of trying to change people's minds, so that will continue and of course, this will free me up. I won't have two campaigns to run, so there's a long way to go in this campaign, so I'm going to continue to work on that effort as well. KING: You say a long way to go in this campaign, but why the decision not to wage two campaigns? And let me ask it in this context. On the first day of the session, I was up there standing in one of those balconies and I was with Ron Paul and I was with the newly elected Senator Rand Paul. Does your son's election, him coming to Congress did that impact your decision at all, sort of a generational passing of the torch or a changing of the guard?

PAUL: No, I don't think of it that way and I don't think he does either. Because I think he's dedicated the same way I am to changing the nature of government and to produce good ideas and good economic policies. So -- but I don't of it -- I don't think he thinks of it in that manner nor do I. I think we just do our best as individuals.

KING: We talked recently at the CNN Republican Presidential Debate up in New Hampshire and you were making the point that, you know, after years of talking about U.S. intervention overseas and those questions about the role of government, that you think in recent years things have started to trend your way. There would be many of your supporters out there who say Dr. Paul you know if this presidential thing doesn't work out, why are you going to disappear now?

PAUL: I don't think I'll disappear. I think my approach will be somewhat different and there will be some. And I think I've already read a few on the Internet that, you know, that worry that way, but the change in the country that can't depend on one person. It depends on a lot more than that, and it doesn't even depend on one party. When you think about what has happened over the past, you know, I keep referring frequently to Richard Nixon when he said we're all Keynesians now, so Keynesianism, a whole philosophy infiltrated both parties. But we need the philosophy of individual liberty and free market economy and sound money to infiltrate, you know, both parties. Because it's an intellectual revolution that I'm looking forward to and I'm involved in and the political process have just allowed me a voice and allowed me to express myself as a member of Congress and now as a serious candidate for the presidency.

KING: The Texas congressman and presidential candidate Ron Paul, appreciate your time today. We'll keep in touch as the campaign plays out.

PAUL: Thank you.

KING: When we come back, a dramatic turn today in the phone hacking scandal in Rupert Murdoch's media empire, Parliament wants answers including from Murdoch himself.


KING: Another blockbuster headline today in Great Britain's tabloid hacking scandal, the media baron Rupert Murdoch and his top deputies summoned before Parliament next week. Today a top police official told British lawmakers it's quote "highly probable that some corrupt officers sold secrets to Murdoch's newspapers". Here's CNN's Dan Rivers. (BEGIN VIDEOTAPE)

DAN RIVERS, CNN INTERNATIONAL CORRESPONDENT (voice-over): The multifaceted phone hacking scandal is suddenly focused on current and former police officers at London's Scotland Yard, called before politicians to answer accusations of systemic corruption, incompetence and collusion with "News International", their answers were telling.

UNIDENTIFIED MALE: Let's be clear that there's corrupt people in the metropolitan police. We know that as a matter of fact, there always will be.

RIVERS: So who did take bribes? Among those questioned, former senior Police Officer Andy Hayman (ph) who now writes for "News International", ironic given that he led a criticized investigation against the company for phone hacking in 2006.

UNIDENTIFIED FEMALE: Mr. Hayman (ph), while a police officer, did you ever receive payment from any news --

UNIDENTIFIED MALE: Good God, absolutely not. I can't believe you suggested that.

UNIDENTIFIED MALE: Lots of people --


UNIDENTIFIED MALE: Come on. I'm not letting you get away with that. Absolutely no way. I can say to you --

UNIDENTIFIED MALE: Mr. Hayman (ph) --

UNIDENTIFIED MALE: No, come on, (INAUDIBLE) Chairman, that's not fair.

RIVERS: The police woman leading the current investigation into "News International" phone hacking says the reputation of the entire metropolitan police force is now on the line.

UNIDENTIFIED FEMALE: I think it's everybody's analysis that confidence has been damaged, and I don't -- and I don't doubt if we don't get this right, it will continue to be damaged.


KING: Let's try to get a sense of where this is going. With us now Clive Crook, he's the chief Washington columnist and associate editor of "Financial Times" and Nick Summers, the media reporter for "Newsweek" and "The Daily Beast".

Clive, let's start here. You see the current and the former police being questioned including the indignant man who now works for Rupert Murdoch (INAUDIBLE) of course not. Where is the -- what is the sense from a criminal investigation standpoint of where this is heading? CLIVE CROOK, CHIEF WASHINGTON COLUMNIST, FINANCIAL TIMES: It's very hard to say. I mean, every time you open the paper, it's a new disclosure, a new dramatic turn of events. This last thing on the -- you know the involvement of the police, possibly two policemen were blackmailed and were bribed, it's astonishing. I mean obviously at the end of this people are going to go to jail. But who knows where it stops?

KING: And Nick, when you hear these allegations, you think what? People -- people pay for interviews sometimes, people pay for information sometimes, we don't do it here, but (INAUDIBLE). When you hear this police possibly being bribed for the royal's schedule, the royal's travel schedule, the prime minister's financial records, it is just numbing.

NICK SUMMERS, MEDIA REPORTER, NEWSWEEK/DAILY BEAST: It really is. I mean it is just here in America unthinkable that say the Secret Service you know would pocket a payment in order to give away the details of a first family member's schedule or health records, so it's really -- it's sort of just shocking sort of the way that the standards and practices have gotten to over there.

KING: And so let's listen here. Among those who says he was -- says he was targeted by this is the former Prime Minister Gordon Brown who is quite tough in this interview with the BBC here. Not only is he saying it's an outrage that this was done, but listen to how he makes the connection -- the kind of business he says Rupert Murdoch is running.


GORDON Brown, FORMER BRITISH PRIME MINISTER: I think what happened pretty early on in government is that the "Sunday Times" appear to have got access to my building society account. They got access to my legal files. There's some question mark about what happened to other files, documentation, tax and everything else, but I'm shocked, I'm genuinely shocked to find that this happened because of their links with criminals.


KING: Links with criminals he says, and let me read -- it's important -- there's a statement from the "Sunday Times". They say "We had reasonable grounds to investigate this matter. We believe no law was broken in the process of this investigation and contrary to Mr. Brown's assertion, no criminal was used and the story was published giving all sides a fair hearing." So that is the "Sunday Times" position there. But Clive, now Rupert Murdoch and his top deputies are going to get called before this committee in the parliament. They're going to get some very, very tough questions.

Is there a perception that, OK, he has a tough hearing and he moves on, or is there a serious consideration that possible criminal charges up through the empire and possible severe damage to the business? CROOK: Well, I certainly think possible severe damage to the business. I mean, the business has already been severely damaged. And it's hard to say where that will stop.

That will depend on how zealously, you know, Murdoch defends his senior lieutenants. He's well known for being loyal to people who are loyal to him. And he may calculate, you know, he may take it too far, cross another line, and provoke a backlash against, you know, the very top of his own organization.

I think -- actually, I think that's how things are now shaping up. He needs to -- I think he hoped that it was enough to close down the "News of the World," that that was a dramatic gesture, but it isn't enough. These new disclosures mean that's not like enough.

KING: And, Nick, do we have any sense of the reach of the damage? We'll have to see what he says in his testimony. We'll have to see where the criminal investigations go.

But we talk about the newspapers, the tabloids in the U.K. Obviously his biggest, his richest holdings, if you will, are more in the TV business. And on this side of the Atlantic, you know, FOX News, one of our competitors, obviously, has other sports holdings here.

Is there a sense -- "The Wall Street Journal" even -- is there a sense that the damage overseas will extend to here in the States?

SUMMERS: Well, I think the folks in "The Wall Street Journal" are concerned. Not so long ago, Murdoch was a person that they covered. Now, he's their owner.

But it is important to remember that even though the company has been damaged, they've lost billions in market cap because of this, the newspaper division is one that is relatively small compared to the company as a whole. And if Murdoch has to u know, do the nuclear option and sell some of these British papers or even some of his American ones, it will actually probably help the company in the long term. He's an older guy and his love of newspapers has gotten him to this point, really. A lot of his advisers are telling him that newspapers are old business and they should focus on the film and the TV and the cable outlets.

KING: That's a pretty good assessment of the business climate, Nick. But even if you go to your own Web site, you hear from Carl Bernstein, this is his Watergate.

Do people really think that's a catchy comparison, it's a great headline, but do people think that Rupert Murdoch equals Richard Nixon?

SUMMERS: Well, there are some wonderful similarities, you know, the sort of the beginning with a small incident whether, you know, breaking into a hotel versus sort of the small incident that kicked this off and the idea that there's just this one rogue guy behind it, and then the drip, drip, drip of news coming out makes it clear that there's something much more damaging going on here in this sort of specter of a Nixonian president at the top in Rupert Murdoch.

He's nearing the end of his career. He's gotten out of many a jam before. So, it's unlikely this will topple him. But it will be incredibly damaging and the quicker he can sort of seal it off, obviously, the better for the company.

KING: He's a controversial guy, Clive, and there are some people who are taking pleasure in this, including some of his competitors, let's be honest. So, in terms of the discussion in the industry, in the U.K., are people confident this is his way of doing business or his deputies' way of doing business, and the taint won't spread, or is there a bit of nervousness?

CROOK: Well, you know, of course he's denying that this is his way of doing business. I mean, that's a very important point. You know, they're distancing themselves or attempting to from these unethical or outright criminal methods.

The question is whether they'll be able to do that. I think, you know, if they can, then he will survive and may draw strength. He's an amazingly tenacious businessman.

But the question is, you know, how high up the organization were these practices understood, do people know that they were going on, and endorsed by bosses at News Corp. That's the issue.

KING: And perhaps the question that will be asked in parliament, what did you know and when did you know it?

CROOK: Exactly.

KING: Perhaps that will come.

Clive Crook and Nick Summers, thanks for coming in. We'll stay of this ass it goes.

When we come back, still ahead, some fascinating CNN reporting from inside Libya tonight. Also, today's big headlines.

We'll be right back.


KING: Welcome back.

Here's the latest news you need to know right now:

"The Chicago Sun-Times" reports Casey Anthony may enter something similar to a witness protection program once she's released from jail this Sunday. The paper says Anthony, who was found not guilty of killing and abusing her daughter, is aware of her national reputation and is considering options to keep her identity under wraps, including possibly considering cosmetic surgery.

TV writer and producer Sherwood Schwartz died today. Now, you may not know that name, but trust me, you know the work he's created. Gilligan's Island and the "Brady Bunch" among Sherwood Schwartz' programs. Sherwood Schwartz was 94.

Up next, President Obama's clearest message yet about Syria's leader and yesterday's mob attacks on the U.S. embassy in Damascus.


KING: Today, Syria lashed out at Secretary of State Hillary Clinton for saying Syrian President Bashar al-Assad has lot legitimacy.

The Syrians also accused the United States and France of distorting and exaggerating what you're seeing here in your screen -- Monday's attacks on both countries' embassies in Damascus.

Here's Syria's ambassador to the United Nations.


BASHAR JA'AFARI, SYRIAN AMBASSADOR TO THE U.N.: Describing what happened in Damascus as mobs attacks is very indicative of the real intentions of these two countries against my government.


KING: Syria's government says it's pursuing a national dialogue with its opponents despite what it calls, quote, "flagrant interference" from the United States and others.

CNN's Arwa Damon is in Damascus.

And, Arwa, let's start with this diplomatic dustup, if you will. Is Syria saying essentially we don't care about the debate at the United Nations, or is there a sense that increased international isolation could be a problem?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Syria isn't quite used to being at the receiving end of brunt criticism from the United States and also from Western nations. This is not the first time that it has been seeing itself in a spot of isolation when it comes at least to the West. But Syria also realizes that it does not necessarily need to rely on the West or on the United States to be able to survive. It still has strong alliances with countries like Russia and China, and also has a very strong reliance in another regional superpower in Iran.

So, while it might be isolated by the West, it certainly does have powerful allies that it can turn to.

KING: And, Arwa, what's your sense? More importantly, what are the opposition leaders thinking after this national dialogue? Do they think that it is perhaps a small step forward or do you they view it as a sham, the regime essentially trying to say it's having a conversation when it has no intention of opening up?

DAMON: Look, John, even for those opposition members who did choose to partake in the national dialogue conference, there is still an extreme amount of skepticism and doubt when it comes to the regime's intentions.

And, by and large, when you speak to the opposition, members to the activists, those who have been out on the streets, there's only one way that the Syrian government can prove that it's truly intent on reforming itself. And that is to stop the violence, to release political prisoners, to withdraw the Syrian security forces and military from the streets, to allow an international free and independent media to operate inside the country. And they also want the government to stop calling the demonstrators armed gangs.

Until those demands are actually met, the vast majority of the opposition says this national dialogue is just talk. The only way for it to be put into action is for those demands by the opposition to be met.

And the government does acknowledge to a certain degree that there is a severe trust deficit that exists. But it does differ on who it's blaming for the violence and what tactics it appears so far to remain intent on resorting to. And that's something the country's going to have to somehow resolve if it is going to pull itself out of this crisis -- John.

KING: Arwa Damon for us in Damascus -- Arwa, thanks.


KING: And this just in to CNN -- continuing the Syria coverage. Very tough words from the president of the United States about that mob attack on the U.S. embassy in Damascus yesterday, and even tougher words -- the toughest yet -- from President Obama when it comes to the legitimacy of the Assad government in Syria.

Excuse me while I read this to you. This is from an interview the president gave to "CBS Evening News."

Here, he's talking about the embassy attack. "We sent a clear message that nobody can be messing with our embassy and that we will take whatever actions necessary in order to protect our embassy and I think they've gotten that message." Then the president goes on to say more broadly, "I think that increasingly, you're seeing President Assad lose legitimacy in the eyes of his people and that's what we've been working at an international level to make sure we keep the pressure up to see if we can bring some real change in Syria."

Again, very tough words from the president of the United States about that man there, Bashar al-Assad, the president of Syria.

Syria's Assad is hardly the only Arab leader to resort to violence against his own people in an effort to crush political opposition. Libya's Moammar Gadhafi moved quickly against his opponents after the governments in neighboring Egypt and Tunisia collapsed, and has been defiantly holding on despite four months now of NATO military strikes designed to weaken the Gadhafi regime.

Now, while many talked about a frustrating stalemate, there are indications of morale and other problems in the army Gadhafi is counting on to help him hold power.

CNN's Ben Wedeman found proof of this while interviewing Libyan army troops now being held as prisoners by anti-Gadhafi rebels.


BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): The prisoners speak of shortages of food, fuel and ammunition, of a Libyan army beginning to fall apart. Mohammed, a naturalized Libya from Mali, was captured by rebel fighters in Gaolesh (ph) last week.

"The morale of the army for a while now is gone," he says. "In all units, there have been many desertions."

"More than half of the men in my unit deserted," says 30-year-old Jamal, a captain.

All of the men we interviewed said they had no desire to fight and several referred to special units, many composed of naturalized Libyans from sub-Saharan Africa whose job it is to kill anyone fleeing the front.

"Whoever retreats is shot," says Khalid, an 18-year army veteran.


KING: Ben Wedeman joins us now from western Libya.

Ben, let's pick up right there. Anyone who flees is shot. Those are the standard orders. If anybody in Gadhafi's army doesn't have the stomach to fight, tries to leave the front lines, the orders are to shoot to kill?

WEDEMAN: That seems to be the case. In fact, we spoke to one young man, a soldier who had been in the Libyan army from just a year. He's originally from Niger. And he told us those are the orders that he'd been given. His unit, their job was to shoot anybody running away from the front.

And my impression in speaking with these other soldiers was that given the choice between being shot by their own army and surrendering to the rebels and hoping to be treated well, they took the second option more or less, and certainly it does appear that at least in the part of the country, the rebels do seem to have the initiative. For one thing, they're on higher ground. And they're firing down on to the Gadhafi forces in the planes.

The question is: do they have the ammunition, the weaponry and the numbers to actually take the fight further, closer to Tripoli.

You hear a lot of talk of an impending offensive, but we've been hearing that talk now for several months -- John.

KING: And we have been hearing that talk. And it's an important point you make, because we've had several conversations over the past few months of are we at a tipping point. Obviously, you can see there a morale crisis in the Libyan army, people dispirited and, as you put it, perhaps more happy to be prisoners of war than they are to continue the fight.

But, do you get the sense, is it stalemate, slight advantage opposition, or is it moving toward a tipping point?

WEDEMAN: I really would not venture to make any kind of prediction about that. Certainly, what we see is that the rebels may have gotten about as far as they can before they really start to run into strongholds loyal to Moammar Gadhafi. There is a minority of Libyans who are still loyal to him and realize that the rebels aren't going to do them any favors when they come in to Tripoli or the suburbs of Tripoli.

What they're hoping for in various cities around the country still under Gadhafi's control is that there's going to be some sort of local revolt. In fact, it's worth point out, that in the course of this revolution, revolt, or whatever you want to call it, there's never really been a case where a rebel military force took over a town. It's always been a case of local residents revolting against Gadhafi's rule and then making common cause with rebels in adjacent town or cities. Not one case of the rebels actually going into a city actually taking it over -- John.

KING: Great reporting and very important context there from CNN's Ben Wedeman in west Libya -- Ben, thank you.

Up next, her husband became president only because of a scandal, but Betty Ford was a pioneering first lady in part because of her courage confronting addiction.

Larry King helps us pay tribute next.


J. KING: What a remarkable sight this afternoon in California -- First Lady Michelle Obama and former First Lady Rosalynn Carter. Secretary of State Hillary Clinton talking with the former President George W. Bush who is escorting the former First Lady Nancy Reagan. And at the heart of it all, an outpouring of admiration and gratitude for the life and the pioneering work of Betty Ford, the first lady of the United States from 1974 to 1977.

Mrs. Ford was eulogized by, among others, the one who succeeded her in the White House, Rosalynn Carter.


ROSALYNN CARTER, FORMER U.S. FIRST LADY: I thought she was wonderful. And her honesty gave -- to others every single day. By her example, also helped me recover from Jimmy's loss in 1980.


J. KING: CNN's Larry King interviewed Betty Ford seven times over the years. Larry joins us now this day. Larry, I want to play some of the same segments of those interviews in just a moment. But, first, just your reflection, seven times you sit across the table from somebody, you get a sense of who they are.

LARRY KING: She was some kind of lady, John. She was special from the word go. She didn't have much of a cutoff between brain and mouth so she answered your question directly, whether it was about Roe v. Wade, alcoholism, her own problems, how the Betty Ford Center developed, and how she supported her husband and how she even at times disagreed with her husband. She was a little to left of Gerald Ford politically.

But what a stand-up woman she was. I had an honor of him seeing a dinner in which all the first ladies came to honor Betty Ford. It was one of the really great nights in my life, just to be in the center of that circle and to be in her midst. She was -- she was extraordinary, John.

J. KING: And, Larry, it's important, because some people watching, especially younger people watching, might not understand because they see "Celebrity Rehab," they see celebrities talking about everything, from drug addiction and alcohol problems and the like and they think it's part of everyday life but back then it was a huge stigma.

Let's listen to Betty Ford. This is October 1997 when you were talking about how back in the '70s it was groundbreaking for her to publicly confront her alcohol problem.


L. KING: Did you ever say to yourself, I'm an alcoholic?

BETTY FORD, FORMER U.S. FIRST LADY: I finally did, yes.

L. KING: What led to doing that?

FORD: The intervention with my family. When my father intervened and said, mom, you've got -- we've got to tell you that you're just, you know, it's a dangerous thing you're dealing with. And it was an intervention where they confronted me and told me that I had disappointed them. I was, you know, at a point, where I was not really as aware of what was going on as I normally was.

L. KING: Did that shock you?

FORD: Terribly. I was told I wasn't the mother I had been and I was hurt. I felt I had given my family every bit of the love and attention I could possibly give them all these years. And it was -- it was very hurtful.

L. KING: The president was one of these people telling you?

FORD: He was very much in the lead of the intervention.


J. KING: Her poise there, Larry, her courage. There are many, especially from those days, who had addiction issue, alcoholism issues, who say it was her courage that helped them deal with it themselves.

L. KING: Of course. Albert Brooks had a very funny line once. Poignant but also hit it on the mark. He said, where did Betty Ford go?

J. KING: And the Betty Ford Clinic, of course, it was one of the most -- one of the -- still public sites about this.

Let's talk a little more. Breast cancer was another battle she went through publicly. And, again, if you talk to women and some of the women there today, the political women, Hillary Clinton, Michelle Obama, Rosalynn Carter, would say she did so much for dealing with breast cancer in the public format.

A conversation you had with her in July 1998.


GERALD FORD, FORMER U.S. PRESIDENT: Betty has always been extremely open and frank when she had her mastectomy.

L. KING: Was that our business? Was her mastectomy, Nancy Reagan, was that our business?

FORD: Well, Betty thought it was important for her to be open about it and thank goodness she did because as a consequence many, many, many women around the country went to have the examination that either pointed out the fact that that person had cancer or didn't. And that saved many, many lives.

Now, in the case of alcohol and chemical dependency, that was a much more difficult one --

L. KING: But she did.

FORD: She did and I'm darn proud of her.


J. KING: The late former president there, Larry. They were partners to the end.

L. KING: Do you ever think, John, how many lives Betty Ford in the long run may have saved? Countless, countless amount of lives in so many areas. She touched -- I bet she touched every family in America in one way or another.

J. KING: It is a legacy that lives on today. And, again, younger people might not understand it. But when you see the Betty Ford clinic and people dealing with this in public, now, it is important because of the bravery she showed in a more difficult time, back in the 1970s.

Larry, I appreciate your taking time to come in and share these memories and reflections with us tonight. Seven times over the years, our friend interviewed Betty Ford. We pay tribute to her tonight, to Mrs. Ford. Thank you, Larry.

That's all for us tonight. We'll see you right back here tomorrow night.

"IN THE ARENA" starts right now.