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Amanda Knox Acquitted; Pro Football Suffers from Image Problem; Senate to Vote on Publishing China for Manipulating Currency; Chris Christie to Decide Whether to Run; Perry's Ranch and its Racist Rock; Is President Obama the Underdog in 2012?; Interview With NFL Commissioner Roger Goodell

Aired October 3, 2011 - 18:00   ET


JOHN KING, CNN ANCHOR: And good evening on a night of dramatic breaking news.

Just moments ago, American student Amanda Knox gathered her belongings and left an Italian prison on her way to freedom. We will take you live to the Italian courthouse in just a few moments.

Also tonight, President Obama says he is the underdog in campaign 2012, candidly conceding he won't be able to tell the American people he has made their lives better.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I don't think they're better off than they were four years ago.


KING: Plus, are you ready for some football? No, we're not shifting to sports here in our new time slot. But the NFL commissioner, Roger Goodell, is here tonight with his take on concussions, drug testing and Tom Brady's decision to give up the Justin Bieber look.


ROGER GOODELL, NFL COMMISSIONER: His hair is getting a lot of attention.


KING: Yes, we're allowed a little fun.

But first, as we will every night, let's begin with the news you need to know right now.

In Perugia, Italy, a dramatic and emotional verdict tonight. An Italian court orders Amanda Knox set free. Here's the scene dramatic inside the courtroom.


UNIDENTIFIED FEMALE (through translator): On behalf of the Italian people (INAUDIBLE) in Perugia after having examined section 605 of the criminal procedure code...


KING: As the verdict was read, Knox broke down, hugged her attorneys, then was rushed from the courthouse. She and her one-time boyfriend have been in jail since 2007 when they were arrested for the brutal murder of Knox's British roommate. They were convicted of murder two years ago. Both appealed. Today both won. Shortly after the verdicts, Knox's sister faced the cameras outside the courthouse.


DEANNA KNOX, SISTER OF AMANDA KNOX: We are thankful Amanda's nightmare is over. She has suffered for four years for a crime that she did not commit.


KING: CNN senior international correspondent Matthew Chance is outside the courthouse in Perugia now.

And, Matthew, you were in that courthouse when the verdict was read. Take us inside. Describe the moment when Knox and her family realized she would be set free.

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: It was a very, very emotional moment, indeed, John. When the verdict was read out, there were whoops and cheers from the Amanda Knox corner where her family had gathered to witness this experience.

Amanda Knox herself was, I think, she was absolutely devastated. She was in tears. She was hysterical. She could hardly stand up she was crying so much as she was sort of escorted by the guards out of the courthouse. She walked right past me out of the door and away. It was a totally emotional experience.

Raffaele Sollecito as well, very emotional. Very highly charged atmosphere inside, very electric, not least because -- not just for the celebrations going on, but there were tears as well because the family of Meredith Kercher, the murdered girl, were also inside the court. The mother, Arline Kercher, the sister, Stephanie Kercher, they were there, too. They didn't want this to happen, they have made it quite clear.

Stephanie Kercher broke down. She was in tears. She was being comforted by the person next to her. The whole thing combined, the joy on the one side, the pain, the agony on the other side, created a very tense atmosphere, indeed, John.

KING: And, Matthew, we could see Amanda Knox's emotions in the court. We could hear her sobbing. We could see the guards rushing her out. Now we know she left the prison within the past hour. What's next for her? I understand she has told someone her first wish is to lie down on a green field?

CHANCE: yes. Well, she's told everybody. What the lawyers of Amanda Knox have told us, what the parents have told us, what the people she's been speaking to at the prison have told us is that she wants to get back home as soon as possible. She told the court that, in fact, earlier today. She begged them. She pleaded with them to stop punishing her for something she hadn't done.

She pleaded with them to set her free so she could resume her life back in Seattle and be back with her family. That's exactly what we understand she's about to do. She's left the prison already as you mentioned to an undisclosed location. We understand she's going to take the next available flight back to Seattle to go home -- John.

KING: Matthew Chance for us live outside the courthouse, Matthew, thank you for the fabulous reporting.

And our senior legal analyst Jeffrey Toobin is with us from New York tonight.

Jeffrey, four years since she was arrested. Nearly two since she was convicted. What changed over time that led to this dramatic reversal today?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: The evidence against her was somewhere between thin and nonexistent. Two things. A confession that was confused and simply unbelievable and not really a confession at all and a DNA test of blood on a knife that turned out not to say what the government said it was. Take those two things away, there's simply no case against her.

KING: Jeff, stand by. We will have much more on this story coming up in just a few moments.

First, though, some other breaking news tonight. CNN is told tonight that the New Jersey governor, Chris Christie, is on the verge of announcing whether he will seek the 2012 presidential nomination. In conversations with several sources today, it was clear the governor wants to make his decision this week. One of the sources told me Christie spent time this weekend in discussions with his wife about the pros and the cons of a late entry into the race.

This source said look for a decision within the next 48 hours. Will he or won't he? That depends on who you ask. One longtime advocate of a Christie presidential run says tells me he senses a change in the governor, and -- quote -- "I see him running." But another says Christie is methodically going through the challenges he would face and says -- quote -- "I hope he does, but I think wiser minds will prevail."

For more, I'm joined by CNN's chief political analyst Gloria Borger who's been reporting this story all day as well.

Gloria, he's under incredible pressure to make a decision and to make it soon. Why so much pressure to decide quickly?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, first of all, it's really late, John, isn't it? And there are other people in the field. I spoke with one Republican today who said, look, he can't be like Sarah Palin when it comes to this. He's got to make a decision because fund-raisers have to commit. Out of courtesy to the other candidates, they got to know, so soon.

KING: What are the biggest challenges? You mentioned fund-raising. You mentioned other candidates. You have to organize. You have to get out to Iowa and organize. You have to get up to New Hampshire or South Carolina. It's a big national infrastructure you have to put together. What about other concerns?

In fact, one of the people I talked to said, you know, if he decides no, if he decides not to run for president, the longer he stretches this out, the more damage it might do him at home in New Jersey if he decides instead of running for president to seek reelection for governor.

BORGER: Right. He's not a shoo-in in his reelect, I might add.

The first thing in talking to lots of people today, the question the campaign is asking is, how do you get -- if Chris Christie runs, you're going to need to get him up to speed. This is somebody whose area of expertise is not national security. It happens to be Barack Obama's strength. And as someone said to me, look, he's a very smart guy who can learn, but there's not a lot of time here. So that's very important.

Also those early states that you talk about, Iowa, New Hampshire, South Carolina, Nevada, all require a lot of organization, John, very early. And that's another thing Chris Christie does not have. Organization. People believe he can raise the money, but the first two hurdles are very difficult.

KING: Gloria Borger helping us out tonight. Again, I'm told look for a decision definitely this week. One source saying from Governor Christie look for that decision within the next 48 hours.

More politics tonight. President Obama speaking bluntly today about his chances in 2012. This afternoon, ABC's George Stephanopoulos asked the president about a new poll showing only about 37 percent of Americans think the president will win next year, while 55 percent think he will lose.


GEORGE STEPHANOPOULOS, ABC NEWS: Are you the underdog now?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Absolutely. The -- because, you know, given the economy, there's no doubt that, you know, whatever happens on your watch, you've got...

STEPHANOPOULOS: You embraced that pretty quickly.

OBAMA: You know, I don't mind.


KING: One of the things the president doesn't have to worry about that Republicans do, the 2012 presidential primary calendar keeps moving up. As first reported on CNN this morning South Carolina Republicans scheduled their primary for January 21. Initially they wanted to hold it in late February. They blame Florida which moved its primary to the end of January.


CHAD CONNELLY, SOUTH CAROLINA GOP CHAIRMAN: Forty-nine states played very pretty in the sandbox. And only one decided to do it wrong.


KING: That one, they say, is Florida. We will watch that one play out.

In other news tonight, the U.S. auto industry back in a big way. General Motors today reported its sales rose nearly 20 percent in September. Ford sales were up 9 percent. And the Chrysler Group reports September sales jumped 27 percent.

Tomorrow is a big day for Apple and the nation's number three cell phone provider, Sprint. Apple set to unveil its new generation iPhone 5 which reports say will have a better camera, larger screen, longer battery life and a faster processor.

Also, for the first time, it's expected to be available on the Sprint network. "The Wall Street Journal" reports Sprint Nextel making a $20 million investment in the phones gambling they will keep the company competitive.

Wall Street joined markets around the world in closing sharply lower today, investors spooked by the Greek government's warning that its deficit will be higher than expected. That in turn raises questions about whether Greece can get another bailout and avoid a default.

Turns out the Lockerbie bomber no longer is near death or in a coma. In a new interview with Reuters in Libya, he says -- quote -- "New facts about the bombing of Pan Am 103 over Scotland in 1988 will come out" -- quote -- "one day and hopefully in the near future."

There's word today of a new assault on anti-government protesters in Syria. It comes just after Syria's opposition group tried to draw up a united front during a meeting in Turkey.

CNN's Arwa Damon keeping track of developments from Beirut.


KING: Arwa, the opposition says there's a massacre going on in Al-Rastan, a town just outside of Homs. What's the latest you know?

ARWA DAMON, CNN CORRESPONDENT: Well, what activists are telling us, that there's now a campaign of mass detention saying that some 3,000 people have been taken in by Syrian security forces who are trying to hunt down elements of or information about the Free Syria Army.

Now, this Free Syria Army was actually established in August, but has only really begun to gain traction in the last few weeks. It is still just comprised of a few thousand individual defectors mostly from the Syrian military. But they are increasingly they say carrying out operations to try to defend its civilians from the Syrian security forces. That is why activists say we saw this massive crackdown in Rastan and Homs and in other areas.

KING: Arwa Damon in Beirut tonight -- Arwa, thank you.


KING: The Nobel Prize committee says a share of this year's medicine award will go to a Canadian board scientist who worked at New York's Rockefeller university even though he died Friday.

The prize committee didn't know about Ralph Steinman's death when it announced this morning that he and two others are sharing this year's medicine prize for research on the immune system.

Still to come here, it's a busy night of breaking political news. President Obama plays 2012 oddsmaker. And New Jersey's governor nears his decision on joining the Republican race.

Plus, the Italian legal system handed American Amanda Knox a 26-year prison sentence and then tonight set her free. How differently would this case have been handled here in the United States? That's tonight's truth next.


KING: American student Amanda Knox is free tonight. A friend tells CNN Knox will leave Italy for Seattle on Tuesday. Knox left a prison outside Perugia, Italy, about an hour ago after an Italian court cleared her and her former boyfriend of murder.

Today's dramatic decision came hours after Amanda Knox made an emotional statement proclaiming her innocence.


AMANDA KNOX, DEFENDANT (through translator): I haven't one the things that they are suggesting that I have done. I haven't murdered, I haven't raped, I haven't stolen. I wasn't there. I wasn't present in that crime.


KING: That was a translator there. Knox spoke in Italian.

Knox was convicted in December 2009 of charges, including the murder her roommate Meredith Kercher. Back then, her home state senator complained that perhaps anti-American sentiment played a role in the verdict. Harvard Law School's Alan Dershowitz told an Italian publication the evidence used to convict Knox would not have passed muster in an American court.

So is the Italian that system that different? Well, here's tonight's truth. Let's take a look at compare them as we go through.

The first trial, of course, was a jury trial. Amanda Knox was convicted in the first trial. How does the Italian system stack up next to the American system? Number one, the biggest difference, the judge is non-neutral. In our system, the judge is neutral, plays off between the prosecution and the defense, enforces the rules. Here a judge determines if the charges have merit.

A jury of eight decides the verdict, but the jury includes the presiding judge, as well as another judge and six civilians. That's a huge difference. You have a judge and civilians on the jury in the trial system. In the American system of course the judge is neutral. Prosecution and defense both given equal time. And the jury decides the verdict. The judge has no role in that process at all. That's the trial process.

It was here that Amanda Knox was found guilty. Now, of course, today was about the appeals process. There are, again, significant differences here. In the Italian system a defendant can ask to have a case retried with all of the evidence re-heard. And this is very important. New evidence can be introduced in the Italian appeals process. A jury of eight decides the verdict. That jury includes two judges and six civilians. Again, judges involved, judges involved in the process there.

In the American system a defendant can dispute the lower court process in the legal arguments. Again, you can revisit the case. But you can't bring new evidence in an American appeal system and a judge decides the verdict in the American system here. That's one of the things.

What was fascinating in the Italian case is not only do they have the normal decision like you would in an American appeal, do you uphold or reverse the conviction. Well, in Italy, the appeals process, you can actually add time to a defendant's sentence. That's something prosecutors were seeking in the Knox case. They wanted her to get a longer sentence.

Let's take a closer look now at the Italian system that first convicted Amanda Knox and then tonight ordered her set free.

Joining us now from Perugia, Italy, Barbie Latza Nadeau. She's a reporter for "Newsweek," Daily Beast, and author of "Angel Face: The True Story of Student Killer Amanda Knox." In New York, senior CNN legal analyst Jeffrey Toobin.

Barbie, I want to start with you as you're in this courthouse. Explain to Americans. There's been a lot of talk, a lot of commentary that the Italian system was unfair, that Amanda Knox was treated differently or unfairly because she was American. Is that a valid criticism or is the system just different?

BARBIE LATZA NADEAU, "NEWSWEEK": I think the system is simply just different, Because Raffaele Sollecito, who's Italian, was also convicted in this murder in the first trial.

So I think shouting anti-Americanism doesn't make sense on a lot of different levels. I think Amanda Knox was very much out of context, though, here in Italy. And I think that when the investigators first talked to her, when she was first noticed mingling around the crime scene, I think that they had their eye on her then. I don't think it was because she was American.

I think it was just because she was different and acting in a way that they felt inappropriate after something as disastrous as her roommate being murdered.

KING: And then, Jeff Toobin, for an American who might follow court cases in this country and then spent a lot of time on this one, let's go through a couple of issues. Let's start with the idea that in an appeal in the Italian system you can bring new evidence into play. You can't do that in a traditional American appeal, can you?

TOOBIN: No. You have what's called the record, which is the evidence that was brought to the trial. And except in extremely unusual circumstances, that's it. That's what you're arguing about in appeal. There's no new fact finding, no new jury. You just have to deal with the hand that you dealt and you were dealt in the trial court.

KING: And also judges. Jeff, let me stay with you for a minute. The judges are involved. In an American system the judge presides over the trial. The jury goes off. That's all laypeople. And the appeals system, again, in an appeals system here, judges make the decisions period.

How unusual, how different does it make it that you have six citizens plus two judges deciding the case?

TOOBIN: Well, this is really the heart of the difference between the two systems. In Italy, in Spain, in France, you have the judge as really an active participant in the case.

And that goes through the appeals process. That's what an inquisitorial system is. We have an adversary system, prosecution, defense with a neutral judge. Again, I don't think one is necessarily better than the other in general. But both of them make mistakes some of the time. And it certainly seems like initially the Italian court really blew this case.

KING: And, Barbie, as you tracked this case over the years, at what point did the Knox team think, we actually have a chance here in this appeal, we may get this reversal?

NADEAU: I think, you know, the big difference between the first trial and the second trial, it really comes down to the fact that in the appellate level they allowed for an independent review of two very contentious pieces of forensic evidence. The defense had asked for that in the first trial. And it was denied. The fact that it was granted in the second trial and those two pieces of forensic evidence were really the only two things linking Amanda Knox and Raffaele Sollecito to the murder were thrown out. And I think that that was the real game changer between the first trial and the second trial.

KING: And, Jeff Toobin, are we done? Or as these proceedings go on, Amanda Knox and her family say she is coming home, could there be subsequent proceedings in which an Italian court says come back, we need to talk to you?

TOOBIN: There could be. There is one more route for the prosecution.

But it's important to remember about this case Rudy Guede, whose evidence, whose fingerprints, whose DNA is all over the crime scene, he's in prison. This crime is solved. The mystery was why they wanted to prosecute two other people. But the killer in this case is in prison and has been for years.

KING: And so, Barbie, on that point, is there navel-gazing, reflections, a debate in Italy? They know this case attracted attention not only in the United States but around the world. Has there been criticism of the system there or do they think this is proof their system actually works just fine?

NADEAU: Well, I think we have to have one clarification, because Rudy Guede was actually convicted as one of three people who killed Meredith Kercher. And this is what the Italian press is talking about tonight, is, you know, Rudy Guede passed through the high court level, confirmed his conviction with two other people.

Right now, you know, there are two people who are also responsible for Meredith Kercher's murder. And the Italians are asking, well, who are those people if Amanda Knox and Raffaele Sollecito aren't them?

I think this is a -- in Italy 50 percent of all cases that go to the appellate level are changed or modified in some way. This is proof of that theory. This is proof of that statistic. The prosecutor in this case has said that he's going to appeal an acquittal and I'm sure he will.

And I suspect also that the lawyers for Rudy Guede are preparing their petition to reopen his case as well. Because the high court as we just said has him as one of three for the murder of Meredith Kercher.

KING: And, Barbie, we're going through the legal rules and requirements in the process. You're there and you have been covering this case for some time.

Just take us back to that moment, the emotions of the moment, when Amanda Knox -- and we saw her on television sobbing -- found out she's free.

NADEAU: Well, she really collapsed with emotion. I think her family especially was very confused, because, of course, they don't speak Italian. And they saw her emotional reaction. And I think they were not entirely sure if, in fact, she had been acquitted or confirmed at that point.

She was really -- just collapsed with emotion. And she was helped out of the courtroom and whisked away to the prison where she in record time was processed out and we understand leaving tomorrow to go back to Seattle.

KING: Barbie Nadeau in Italy, Jeffrey Toobin in New York, thank you for your help on this fascinating case. We will track it as Amanda Knox makes her way home. Appreciate your help tonight.

When we come back, a shift to the news of sports. The NFL commissioner, Roger Goodell, is here. Remember, football was going to have -- they had a lockout and thought they'd have a strike and no season. Now television ratings are up, but what about the promise for drug testing? Mr. Roger Goodell next.


KING: The NFL season four weeks old and the TV ratings so far at least suggests fans have a forgive-and-forget approach to the labor problems that not too long ago were considered a threat to the 2011- 2012 season.

But with ticket prices so high, how is attendance holding up in such tough economic times? And will the league take leadership roles in the big national debates about concussions and drug testing?

All good questions for the NFL commissioner, Roger Goodell, who is kind enough to join us.

And, Commissioner, I want to get to those questions. But as a football fan, let's go first to the conversation every fan is having on this Monday. Is this a fumble, or is this declared down?


KING: About three minutes left, Giants vs. Arizona Cardinals, Eli Manning throws here to Victor Cruz. And as we watch, the pass is completed. He does something. They don't care it that way. He leaves the ball on the carpet. The officials say he declared himself down.

That's a fumble, no?

GOODELL: Well, I haven't had a chance to get back to the office -- I have been down here all morning -- and talk with our officiating crew.

But the rule is pretty clear about giving yourself up. And it does appear that that's what he's done. But I would like to spend some time with our officiating crew. And it's an unusual play, of course.

KING: Unusual play.

In hindsight, maybe he should have waited for a whistle or hand the ball to an official.

GOODELL: Well, he's trying to get down so he can stop the clock and get on to the next play. And that's something they do in a hurry-up offense.

KING: How much of your Mondays are spent on plays like that?

GOODELL: Well, today, I'm traveling, so it won't be a lot today, but I will get to it as soon as I get back to the office this afternoon.

KING: One of the big issues in your labor agreement was testing for human growth hormone.

And you committed to doing it. The union committed to doing it. Now a month into the season, some key members of Congress are saying, where is it? They haven't seen it. And so they want to call you up and the players union up to Capitol Hill and say, why? What's the delay?

What is it?

GOODELL: Well, we're ready to go on the NFL side. The players wanted to continue to look at the science behind the testing. It's not a new conversation for us. We have been talking about this for over a year in implementing HGH testing.

KING: Do you get to a credibility question at one point where you say, we're going to do it, it's part of our deal, and now...


GOODELL: Well, it certainly is for me, because we committed to it in our collective bargaining agreement that we'd start on the regular season. So I'm disappointed we haven't done it. I want to get to the point where we have the best testing program in all of sports.

HGH testing is happening in Olympics. The science is there. There's a valid test. We should be doing it.

KING: Union just stubborn?

GOODELL: The union, it seems they want to continue to focus on some of the science. But I think the science is there.

Now, obviously, technology will continue to improve. And it will be our job to stay up with technology and try to have the best technology in all of our testing.

KING: A conversation you have had to deal with and that happens at every level of football is what to do about concussions and the violence and how much of it is rules, how much of it is equipment.

Well, let me start with the equipment question. What is the league doing and how much is the league itself willing to spend on research, maybe, do we need a new helmet, do we need other equipment? GOODELL: Well, interestingly enough, in our new collective bargaining agreement, the players and owners agreed that they would fund medical research to the tune of $100 million over the next 10 years.

In addition to that, we continue to work with equipment manufacturers to make sure we have the best possible equipment for our players and make sure they're wearing it, which is a key issue, and wearing it properly. So we are continuing to do everything we can to make our game safer, which will flow down to every other level of football.

KING: And yet it's a physical sport. And when you try to clean up the game, it causes some controversy.

James Harrison of the Steelers said this to "Men's Health" magazine in July:

"Up until last year there was no word of me being dirty until Roger Goodell, who's a crook and a puppet, said I was the dirtiest player in the league. If that man was on fire and I had to" -- I'll use the word "urinate"; he didn't -- on him to put him out, I wouldn't do it. I hate him and will never respect him."

How do you answer him?

GOODELL: I don't. I'm going to keep doing what's right for the game of football and make the game safer for all players.

KING: When a player says something like that do you try to meet with him or do you just say ignore it?

GOODELL: We met James last year. He came into our offices to go over the rules and to meet with our staff to make sure that he understands the techniques that we're trying to eliminate from the game. He met with our entire football staff. I did attend the meeting. I sat there for 20 minutes. And hopefully...

KING: Did he say anything like that to you in that private meeting?

GOODELL: No, sir.

KING: The league was the pioneer, I think, out ahead of a lot of political class in society with Play 60, trying to deal with childhood obesity and trying to say, "Look at our players. We're going to be examples in the community."

In the last couple years you've teamed up with the Obama White House. The first lady has put an emphasis on this. Do you ever worry about getting drawn into the politics of that? There are some, Rush Limbaugh, for example, said, "You know, I don't want the government telling me I need to exercise. I don't want the government telling me what to eat or not to eat or telling what -- the school what they can serve my kids.

GOODELL: Well, we're not the government. And we will partner with anybody, including the government that wants to try to help make our kids healthier and live more active lifestyles. We think that's good for them. That's good for the individuals. It's good for our country. And we'll continue to do what we can to support that effort.

KING: You say you won't give David Stern advice because he's the dean of commissioners. But are there lessons from your experience that you would tell him look at this, your ratings, for example? Would the NBA, if they don't figure this out in the next week or so, if their season, the regular season, not the preseason, is kicked back or will they pay a price?

GOODELL: Well, I think all of us know when we're in the business of appealing to fans that fans want to see their sport. So if you get between the sport and the fan, you're in dangerous territory.

David knows that better than anybody. He went through the lockout in the '90s and is experiencing it again now. I know nobody wants to get an agreement that works with the sport more than David Stern.

But part of his job is to make sure that the agreement works for the clubs and the players. And that's the trick that a commissioner has to continually focus on.

KING: I started with a controversy from Sunday's game. So I'm going to end on one as a Patriots fan. I need the commissioner's opinion. What's up with this? I want to show these pictures, the before and after Tom Brady. "The Boston Globe" wrote an obituary for the long- haired Tom Brady. Who's that guy on the right?

GOODELL: Anybody who writes an obituary for Tom Brady is making a big mistake. He's...

KING: No. For the hair. Not for him. Just for the hair.

GOODELL: He's -- not only his hair, as a young man he's one of the greatest guys in the world. And his hair is getting a lot of attention.

KING: Any idea why?

GOODELL: I don't. I haven't talked to Tom about that part of the business.

KING: You've got more important things to worry about. We appreciate your time today.

GOODELL: Great to be with you, thank you.

KING: On a footnote, ESPN has decided to pull Hank William Jr.'s opening song from tonight's "Monday Night Football" telecast after comments Williams made on FOX News this morning comparing President Obama to Adolf Hitler.

ESPN's statement reads in part, "We were extremely disappointed with his comments and as a result have decided to pull the open from tonight's telecast."

There's a new move in Congress to get tough with China. Its backers say there are 2 million reasons why. Tonight's number when we return. Plus, we're a bit earlier tonight for a good reason. "ERIN BURNETT OUTFRONT" premieres at the top of the hour. Erin will be here with a special preview.


KING: Welcome back. Here's the latest news you need to know right now.

This hour's breaking news, American Amanda Knox left an Italian prison tonight. And a friend tells CNN she'll head for Seattle, Washington, tomorrow. Several hours ago an Italian court overturned Knox's conviction in the 2007 murder of her roommate.

A huge fire at a chemical plant south of Dallas forced officials to evacuate nearby homes as well as a college and elementary school. Officials say no one was injured.

U.S. Senate tonight is debating a bill to punish China for manipulating its currency. It will be a symbolic vote. House leaders say they won't even bring up the measure, because they say it could start a trade war. But that isn't slowing down the bill's supporters on the Senate side.


SEN. CHARLES SCHUMER (D), NEW YORK: And by the way, China has a lot more to lose with retaliation than we do.

SEN. BOB CORKER (R), TENNESSEE: So why would we, as a country tamper, tamper at this time of a global slowdown, tamper with creating a trade war?


KING: And that brings us to tonight's number. Let me walk over here. We'll give you a peek.

Two million. Two million. That's the number of American jobs supporters of that legislation say have been lost to China over the past decade because of its unfair currency valuation and other unfair trade practices. Two million jobs, they say, over the last decade. Why? Because of the U.S. trade deficit with China.

If you look at this over the past -- over the past ten years, green is the United States. That's what we sell China in the value of goods. Yellow is what China sells us. Look at that. Look at that increase over the year. You see the huge trade gap right there. Because of this, more products being made in China, obviously, which the sponsors of that legislation means more jobs.

So what would that mean? What would that mean? Thirteen point nine million people are unemployed in the United States right now, and we have a 9.1 percent unemployment rate. What would happen if we had those 2 million jobs back? Well, employment would be in the ballpark of 7 percent. That is why -- that is why the advocates on Capitol Hill say it's time to punish China. But as we noted, House leaders won't touch this one, because the last thing they want is a trade war. But 2 million is a big number. It would make a big difference.

"ERIN BURNETT OUTFRONT" is coming up at the top of the hour. Erin is here for a special preview.

It's your first show. And you're already learning what I think is a very important lesson: get out of the office. Where did you go?

ERIN BURNETT, CNN ANCHOR: I did. I actually went down to Wall Street today. I wanted to see those Wall Street protests for myself. Back in my old stomping grounds. And it was pretty interesting. We're going to be sharing that tonight.

Plus you're talking about China. Important economic, shall we say, rival slash friend of the United States. But militarily also important. And we have our exclusive interview with Leon Panetta. A quick snip of that for you, John.

When I asked him if Yemen is -- he had said it was the biggest threat to America. Whether it's still the biggest threat now that he has taken out al-Awlaki. Here it is.


BURNETT: You recently said Yemen was the biggest terror threat to America. Has anything changed? Is Yemen now less of a threat to the United States than it was?

LEON PANETTA, DEFENSE SECRETARY: We certainly have gone after their leadership. I think we've dealt them a major blow by virtue of having taken down bin Laden and now al-Awlaki and other leadership types.

There are still al Qaeda out there that continue to try to plan potential attacks on this country. This is not a time to take the pressure off. This is a time to put the pressure on.


BURNETT: On that note we talked about the budget restrictions, as you've been talking a lot about, that could be really hitting the Department of Defense.

And he also talked about what his biggest fear is of an attack on America, what keeps him up at night. So we have that, our trip to Wall Street, all coming up on our first show.

KING: Looking forward to it. Have fun. That's the most important mission. Have fun.

BURNETT: Thanks, John.

KING: We'll see you in just a few minutes.

When we come back, Governor Chris Christie, I am told tonight, is getting very close to his big decision. Will he or won't he join the Republican race for president? I'm told we'll get an answer perhaps within 48 hours.


KING: New Jersey Governor Chris Christie is about to end the mystery. I'm told tonight he wants to announce his decision on whether to join the Republican presidential field by the end of this week. One source says look for that decision within the next 48 hours. One reason to stay on the sidelines? Once the Republican primary voters hear Christie's views on immigration and some other issues, well, the going could get tough.


HERMAN CAIN (R), PRESIDENTIAL CANDIDATE: I believe that a lot of conservatives, once they know his position on those things that you delineated, they will not be able to support him. So I think that that is absolutely a liability to him if he gets in the race.


KING: But here's the strong reason, maybe a very strong reason in favor of running. 2012 looks, at least at the moment, like a good year to be the GOP nominee. A new "Washington Post"/ABC poll out tonight found that 55 percent of Americans believe a Republican will win the White House next year. Just 37 percent believe President Obama will be reelected.

Let's dig deeper on the Christie side with our CNN contributors Erick Erickson and Donna Brazile and with "The New York Times" national political correspondent Jeff Zeleny.

Jeff, to you first, it's a tough one to track. Because they're all being tight. They said the governor spoke to his wife over the weekend. I was told it will happen this week unless something crazy happens, and it could happen as early as Wednesday. Consistent with your reporting?

JEFF ZELENY, CORRESPONDENT, "NEW YORK TIMES": We're hearing the same thing. I think that time is actually running out for him. I mean, South Carolina moved up the date of its primary because Florida moved up the date of its primary. We're talking some 85 days away perhaps until the Iowa caucuses. So it's very hard to put this together.

And it's not any 85 days we're talking. Debates between now and then. And I think Herman Cain was right. There are some issues that, if conservatives looked at him with a little of a sharper magnifying glass I think that they wouldn't be necessarily as pleased in this.

And surely he has been taking the lesson from Rick Perry, as well. Tough to do this at this point. Some Republicans say, oh, it's the same as Barack Obama. He got in. But he was out there trying out as a candidate long before anyone but a few reporters were paying attention. And frankly, he was a bad candidate until November of '07. It took him a long time to get going. So I think it's tough for Chris Christie. KING: And Erick Erickson, in the sense that's going around, he has a group of fundraisers up in the New York/New Jersey are ready to help him. But in terms of more fundraisers, the necessary nuts and bolts of organization, are you hearing from anybody you know in the grassroots conservative movement that, in the last 24, 48 hours they got a call that says stay tight, here comes our decision or here's what it might be?

ERICK ERICKSON, CNN POLITICAL CONTRIBUTOR: No. In fact I've got a lot of conservatives who I would think would be hearing such a thing and they're not. Which leads me to believe that this may still be some hype to it.

There's too much buzz to suggest they're not thinking about it up in Trenton. But at the same time, I mean, we've had, what, 12 or 13 or 14 no's in the past six or seven months. And to all of the sudden get to yes, there's not a ground game in Iowa right now or New Hampshire or Florida or South Carolina. They'd have to put all that together in the next 85 days.

And, you know, there is that new SEC rule out now that came out in the last year or so that prevents financial services companies from giving monies to governors that get state contracts. So that will hurt his fundraising base to a degree.

And he's going to have to think about all these things and can he do it in 85 days.

KING: Donna, we're talking about a potential Republican candidate here. But you're a veteran organizer. You know how to put together the nuts and bolts of the campaign. Let me first let you listen to Senator John McCain and you can tell me on the other side of this. Is he right?


SEN. JOHN MCCAIN (R), ARIZONA: If Governor Christie decides to run, I wish him luck. I think that there is a bit of a caution that always the swimming pool looks a lot better until you jump right in. The water may not be quite as warm as you think.


DONNA BRAZILE, CNN POLITICAL ANALYST: Oh, I think the water is full of sharks. And it might be difficult for him to get into the cesspool at this hour.

But look, on the other hand, John, the Republicans are looking for a real, strong, conservative stand-up there. And Mr. Cain is absolutely right: on immigration, on guns, on same-sex civil unions, et cetera, you know, I have more in agreement with Governor Christie than, say, Erick Erickson and some of the conservatives. So I think that's for moderate than the Republican Party.

KING: Does that lead you to think he would be a tough general election candidate, if he could get the nomination? BRAZILE: Possibly. He comes from a blue state. He's a blue state governor.

But right now I'm not down on President Obama. I think President Obama has a good chance of winning re-election against the current field. But at the same time, you know, the question is, is there room for a moderate in the Republican Party? I don't think so at this hour.

KING: You said you think the president. Let me focus on the president. He had an interview with George Stephanopoulos today with ABC News, a broadcast also streamed on Yahoo, where he was asked essentially, you're the incumbent president of the United States, but are you the underdog?


GEORGE STEPHANOPOULOS, ABC NEWS: Are you the underdog now?

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Absolutely. Because given the economy, there's no doubt that, you know, whatever happens on your watch, you've got...

STEPHANOPOULOS: You embraced that pretty quickly.

OBAMA: You know, I don't mind.


KING: Expectations game there? Is that a factual statement?

ZELENY: I think it might be both. One thing he's trying to do is -- and the White House is trying to for a couple weeks is send the message to their supporters that they need the troops here. This is serious business here. That he needs people who liked him generally and perhaps may not love him entirely to come out and support him.

But, you know, if you look at "The Washington Post"/ABC poll it's accurate, at least, by this snapshot of things today. But one thing he's leaving out. Incumbent presidents have a lot of advantages. He's going to have a big blue and white airplane, fly all over the country. A lot of attention. So I think it might be slightly early to say that. I think we're going to see that in some TV ads. We'll see how that plays out.

The tag line, love me generally, support me entirely. I like that. You guys stand by. We'll be right back. We'll keep our group with us.

A Texas ranch leased by Rick Perry had a racial slur in its name. What did the Texas governor know, and what did he do about it? That's next.

(COMMERCIAL BREAK) KING: This much is not in dispute. Texas Governor Rick Perry leased a hunting property in Texas that had an offensive racial slur in its name. The name was on a rock at the entrance to the property. The "Washington Post" described it as, quote, "a large flat rock standing upright." You can see the word there on the screen. I prefer not to say it.

Governor Perry says his father some time ago had paint applied to obscure the offensive word. But this is in dispute. The Perry campaign says at no time when the word was visible did Perry bring groups to visit the land. But first "The Washington Post" and then the "New York Times" reported the name was visible for some of the outings organized by Perry.

On Sunday GOP rival Herman Cain called it insensitive that Perry left the word visible. But today Mr. Cain seemed to dial it back some.


CAIN: The mere fact that that word was there was insensitive. That's not playing the race card. I am not attacking Governor Perry. Some people in the media want to attack him. I'm done with that issue.


KING: Eric Erickson, Donna Brazile and the "New York Time's" Jeff Zeleny still with us.

Erick, I want to go to you first on this one. There have been a number of controversies, dustups, questioning of the governor's record. This is conduct as a politician and predates his time as governor to some degree. How significant?

KING: I don't think it's very significant. I think the Media Research Center today pointed out that "The Washington Post" in just the last couple of days has written more words on this story than they ever wrote on the Jeremiah Wright story for its entire existence with his connection to Barack Obama. This isn't going to be a big story long-term. I mean, we know the undisputed facts are Rick Perry's father painted over this rock and it was a lease that Rick Perry's father had until '97 when the son took it up. And at some point the rock was turned over. And some people may have seen it very recently but were not sure, and they don't want to speak on the record. And it sounds more like a cheap shot than a legitimate political thing.

And by the way, Texas Democrats since 1992 have not used this as an attack on Perry. And there's a plain juxtaposition here. Perry is the guy who the Republicans are attacking for wanting to let illegal aliens come across the state lines and subsidize them, and somehow he's a racist.

KING: Points taken on much of that. You can criticize the coverage of Jeremiah Wright and all that, and we can go back through that history if we want. But to the questions here, to the questions here, Donna Brazile, do you see this as a legitimate issue about Governor Perry? Or do you at least have a question or two you think he needs to answer? Or is this something that happened long ago? Their story is they painted over the name because they didn't like it. Done, we're done?

BRAZILE: Well, as I mentioned time and time again, I've known Rick Perry when he was a Democrat. So I believe I can say this with credibility that he's not a racist. So I don't think that's the issue.

The issue is the insensitivity of having that word written on a rock, and not doing something about it, and according to him they did something about it.

Now let's go beyond that and stop dealing with what I call race in a very superficial way. It's more of a distraction. It's more annoying when you discuss it, especially when you discuss it in political company. So I think we need to move on.

Governor Perry will have to say that for himself. I can tell you that he is, at least from my knowledge of him back in the 1980s, he's a decent person.

KING: That's an important point and I appreciate you making it. It's a partisan environment sometimes. It's an important point.

What are your questions? You were doing some reporting on this over the weekend, in terms of when did he know it? What was his own involvement in doing anything about it? What are the unanswered questions?

ZELENY: I think some of the unanswered questions are just specifically when was the rock painted over? And was he taking people over, you know, and showing it to them?

But I think what it does sort of longer-term is opens up more questions about his upbringing, you know, his time as a child in west Texas. If there's anything else out there that sort of like feeds into this it will be a problem.

I was a little bit surprised not to see him address this, not to speak about it. He had, his campaign was responding very aggressively. But, he does not have anything scheduled for the next couple of days. At some point he's going to have to address it. I'm not exactly sure why you don't do it right away. We've seen this before. You know...

BRAZILE: He should be on offense. He should not be on defense, especially on these issues.

KING: And Erick, I know you think this is being overblown. But in the sense that, you know, this happens to all governors, not just Governor Perry. Every governor who runs for president think that was asked and answered. That was litigated. I won reelection twice after that came up.

When you run for president things get different and you have to answer the questions again. Do you think maybe they're a little blind to that? ERICKSON: You know, they may very well be. But at the same time I really don't think this is as big a story as the media in New York and Washington may want to make it out to be. I really don't think that this is as big a story.

I agree with Donna. He's at some point going to have to bring this up and address it head-on. But is this a big story? Maybe in "The Washington Post." But, then you know, in 2009, with the Cray Deeds (ph)-Bob McDonnell election they never covered it on the front page except to cover seven stories in one day that Bob McDonnell had confederacy problems and this seems to be something "The Washington Post" likes to do to Republicans.

BRAZILE: Erick it's a problem Republicans have got to deal with. You've got to talk about race in the 21st century.

KING: I need to call a time-out here. If we have to we'll continue this conversation. Erick, Donna, Jeff, thanks for coming in.

Take a quick peek at the White House here. It's pink tonight. Why? Breast Cancer Awareness Month.

We'll see you back here tomorrow night. A special night for us tonight on CNN. "ERIN BURNETT OUTFRONT" starts right now.