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'The Last Word with Lawrence O'Donnell' for Tuesday, July 19, 2011

Guests: Sen. Kent Conrad, Bruce Bartlett, Martin Bashir, Michael Isikoff

LAWRENCE O‘DONNELL, HOST: The leader of the “gang of six” is here with the latest plan to break the deadlock on the debt. While House Republicans are still using the Rupert Murdoch leadership method: don‘t blame me.
UNIDENTIFIED MALE: Mr. Murdoch, do you accept that, ultimately, you are responsible for this whole fiasco?
REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The issue is not congressional in action.
O‘DONNELL (voice-over): Rupert Murdoch, John Boehner, Eric Cantor in charge when it‘s convenient.
CHUCK TODD, NBC NEWS: Back here in the States, cue the blame game.
EZRA KLEIN, MSNBC CONTRIBUTOR: Virtually, no Americans hold Congress in high esteem.
CANTOR: We, as Republicans, as the new majority in this House—
KLEIN: Failing on the big things is something they choose to do.
CANTOR: We implore the other side to get serious. Let‘s do big things.
UNIDENTIFIED MALE: When is the House going to stop this charade?
CANTOR: We are serious.
O‘DONNELL: The “gang of six” is still trying to lead.
KLEIN: It‘s a far cry from the absurdities of Paul Ryan‘s budget.
CHRIS CILLIZZA, WASHINGTON POST: We thought this was—the “gang of six” was dead and buried.
ANDREA MITCHELL, NBC NEWS: Now, the “gang of six” is a gang of seven.
CILLIZZA: The plan itself is two parts, there‘s always a second act.
LUKE RUSSERT, NBC NEWS: Gotten rave reviews from a lot of folks.
KLEIN: Their colleagues really liked it.
CILLIZZA: The president gave it very much a thumbs-up.
TODD: When does somebody have to say uncle?
O‘DONNELL: Murdoch is also not taking the blame.
UNIDENTIFIED MALE: Insisting that he is not to blame.
TODD: London calling.
UNIDENTIFIED MALE: Tried to pass the buck today.
KLEIN: It just doesn‘t really stack up.
UNIDENTIFIED MALE: The 80-year-old also appeared confused.
UNIDENTIFIED FEMALE: He said, yes, I‘m in charge of this company.
THOMAS ROBERTS, MSNBC ANCHOR: Somebody jumped over trying to get, I believe, to Rupert Murdoch.
TAMRON HALL, MSNBC ANCHOR: A man armed with a shaving cream pie, Wendi Deng Murdoch leaped past her husband, and attempted to smash Rupert Murdoch in the face with his pie.
RICHARD WOLFFE, MSNBC POLITICAL ANALYST: She‘s very feisty. I‘ve met her.
ROBERTS: If I remember correctly, that looks like a spike.
KLEIN: You can always say with glitter.
O‘DONNELL: As the deadline for raising the debt ceiling grows closer by the day, House Republicans chose to spend this day in debate and on a floor vote on a bill that the president has promised to veto if it somehow miraculously passed the Senate, which it won‘t.
Republicans are calling it the “cut, cap, and balance” bill because it drastically cuts spending, then caps future spending and would guarantee future balanced budgets through a balanced budget amendment to the Constitution. That amendment would also require a 2/3 majority to raise taxes.
It was a symbolic debate over a symbolic bill that will never become law, but you couldn‘t tell that from watching the action on the floor.
CANTOR: The gentleman from Maryland loves to talk about those corporate loopholes. He loves to talk about corporate jet owners and the kind of preferences that exist in the code. The gentleman from Maryland knows all too well, he and I were in discussions for almost seven weeks, when I said again and again that we would be happy to engage in a discussion of tax reform to get rid of those loopholes.
I know it makes for good politics to go throw the shiny ball out there, Madam Speaker.
REP. CHRIS VAN HOLLEN (D), MARYLAND: Would the gentlemen yield?
CANTOR: I will not yield.
VAN HOLLEN: All right.
CANTOR: To throw the shiny ball out there that somehow Republicans are wed to that kind of policy to sustain these preferences.
VAN HOLLEN: I wish the gentlemen had yielded, because I think it would be very clear that the Republican position is they won‘t close a tax loophole that generates one penny for deficit reduction, not one penny. So, you can‘t close a corporate jet loop hole if it‘s going to deficit reduction.
O‘DONNELL: The House vote is scheduled to take place within the hour. We‘re watching the House floor and we‘ll bring you that vote live when it happens.
President Obama returns to the press briefing room today to publicly support the sudden emergence of yet another possible solution to the standoff.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The good news is that today, a group of senators, the “gang of six,” Democrats and Republicans, I guess now the “gang of seven” because one additional Republican senator added on, put forward a proposal that is broadly consistent with the approach that I‘ve urged. What it says is we‘ve got to be serious about reducing discretionary spending, both in domestic spending and defense. We‘ve got to be serious about tackling health care spending and entitlements in a serious way, and we‘ve got to have some additional revenue.
O‘DONNELL: The gang of six senators led by Budget Committee Chairman Kent Conrad had been working on a solution for months and had been largely ignored by the White House for months until today, when it became impossible for the president to continue to pretend that he could reach a so-called grand bargain in White House negotiations with House Republican leaders.
Despite the president‘s praise for the “gang of six” plan, he admits he hasn‘t actually read it.
OBAMA: I want to congratulate the “gang of six” for coming up with a plan that, I think, is—is balanced. We just received it, so we haven‘t reviewed all the details of it.
O‘DONNELL: And the president says it will take days to actually negotiate the details of any solution.
OBAMA: It would not match perfectly with some of the approaches that we value taken, but I think we‘re in the same playing field. And my hope is that we can start gathering everybody over the next couple of days to choose a clear direction and to get this issue resolved. There‘s still going to be a lot of difficult negotiations that have to take place in order for us to actually get something done. And as I said, we have to have the failsafe that Senator McConnell and Senator Reid are working on.
O‘DONNELL: The White House announced today that President Obama will hold a town hall meeting this Friday at the University of Maryland College Park. Now, that is not the sort of thing that gets added to the president‘s schedule in the middle of a serious summit negotiation on a bipartisan budget deal, but the president continues to use his outside game to strengthen his inside game, by going outside of the White House and the political process to speak directly to the American people about the Republican intransigence, the Republican refusal to even discuss reasonable tax revenue raising mechanisms, has brought the public now to the president‘s side in these negotiations.
Our new NBC News/”Wall Street Journal” Poll shows that a plurality now say Congress must raise the debt ceiling, a remarkable turnaround from April when 46 percent said Congress should not raise the debt ceiling. In that same poll, 55 percent say not raising the debt ceiling would be a real and serious problem. Only 18 percent now believe otherwise.
And a CBS News poll found that just 21 percent of people approve and 71 percent disapprove of how the congressional Republicans are handling the debt ceiling negotiations.
Republicans are watching those polls, too, and those polls have strengthened the president‘s hand in his inside game in negotiations with Republicans.
But presidents who are confident that they will make a deal on legislation don‘t say things like this.
OBAMA: In the event that we don‘t get an agreement, at minimum, we‘ve got to raise the debt ceiling. So, that‘s the bare minimum that has to be achieved, but we continue to believe that we can achieve more.
O‘DONNELL: Presidents on legislative crusades do not keep reminding you what they will accept at minimum. They don‘t keep underlining the bare minimum that has to be achieved.
As of tonight, unless Kent Conrad can turn the “gang of six” into the gang of 60 in the Senate, the bare minimum is as likely an outcome as anything else.
Joining me now is North Dakota Senator Kent Conrad, the chairman of the Senate Budget Committee and a member, leader of the “gang of six.”
Senator, thank you very much for joining me tonight.
What is in the latest version of your so-called “gang of six” plan?
SEN. KENT CONRAD (D), NORTH DAKOTA: Larry, it‘s a comprehensive plan, fundamental tax reform, reform the entitlements, cut spending both non-defense and defense in significant ways—have about $4 trillion of deficit and debt reduction over 10 years. We‘ve got revenue through actually broadening the tax base and reducing tax rates to make America more competitive. We‘ve got very significant spending reductions in both non-defense and defense, and mandatory programs as well—a reform of the entitlements, including addressing the looming insolvency of Social Security, not by using savings from Social Security for deficit reduction, but by using all of the savings from Social Security to secure its long-term viability and strength.
O‘DONNELL: Senator, I just want to cover three points in this—what will be the most contentious points in the plan. One is what you do with Medicare, what you do with Social Security? And the other, what you do on taxation.
So, just quickly, let‘s go through the things Democrats would worry about, what do you do in terms of the adjustments you make to Medicare?
CONRAD: Medicare and the other health care accounts in total, we save $500 billion over the next 10 years. Remember, as you so well know, we‘ll be spending more than $10 trillion over the next 10 years, so these are relatively modest savings out of Medicare and the other health care accounts.
O‘DONNELL: Do you take those savings out of providers or do they come from beneficiaries also?
CONRAD: I think we would say that they should come from providers, but ultimately, the finance committee will come back with a proposal. It‘s their responsibility to do that. We‘ve given them a number to hit, a savings number that they are responsible to secure.
O‘DONNELL: And on the Social Security piece, what are the savings that you achieve there?
CONRAD: What we have called for is 75-year solvency. Again, ask the finance committee to comeback with a plan that would do that. Again, none of the savings from Social Security go for deficit reduction. It all goes to extend the life of Social Security itself.
O‘DONNELL: And on the tax piece, which is the part that it‘s hard to see how House Republicans can accept any version of it—is there something in what you‘re doing with tax revenues in your plan that you think would somehow suddenly be acceptable to Eric Cantor?
CONRAD: Yes, three things I would say. First of all, it is fundamental, sweeping tax reform to make America more competitive, to try to provide a lift to the economy by broadening the base, by reducing rates, including the corporate rate that is paid for by eliminating other corporate loopholes and dodges that exist in the current system.
Second, CBO would actually score this as a $1.5 trillion tax cut compared to current law.
Third, we eliminate the alternative minimum tax at a cost of $1.7 trillion, which is paid for. I don‘t consider that a tax increase at all. It is reducing taxes that would otherwise fall increasingly on the middle class—in fact, tens of millions of people would be caught up in the alternative minimum tax if this provision is not passed.
O‘DONNELL: I want to read Eric Cantor‘s reaction to what he knows so far about the “gang of six” plan. He said, “I am concerned with the ‘gang of six‘ revenue target. The plan fails to significantly address the largest drivers of America‘s debt and it‘s unclear how the goals of tax and entitlement reforms would be enforced. I continue to caution that a tax increase is the wrong policy to pursue with so many Americans out of work.”
He does take any form of tax revenue increase to be what he calls a tax increase.
So what is it, Senator, that you think you can—if you can talk to Eric Cantor directly about this, what is it you‘d tell him about this that makes it different from what he‘s heard in the White House about tax revenue increases?
CONRAD: Again, I don‘t—first of all, we‘re not increasing tax rates, we‘re actually reducing tax rates both on the individual side and the corporate side. We‘re paying for those reductions. That‘s not unreasonable. As I say, we eliminate the alternate minimum tax and the Congressional Budget Office would score this as a $1.5 trillion tax cut compared to current law.
So, you know, at some point we kind of got to get past all of these lines in the sand by all sides, because on the left, they say don‘t touch entitlements. On the right, they say, don‘t touch revenue.
Well, guess what? We are borrowing 41 cents of every dollar that we spend. We are headed for a financial disaster. And there isn‘t a single objective expert on both sides that doesn‘t acknowledge we‘re heading for a fiscal cliff.
So, the question is what is your plan, Mr. Cantor and others who object to our plan—which is the only bipartisan plan that‘s out there. Three Democrats, three Republicans after six months of negotiation.
We met with 50 senators this morning—many of them stood up on the spot and said I will support the plan, Republicans and Democrats.
It‘s been a long time since we‘ve saw that in Washington.
O‘DONNELL: Harry Reid raised a couple of procedural realities about the plan that could make it difficult. One is, speaking of CBO scoring, he says it would probably take a couple of weeks to score a package like this that has both complicated revenue pieces and Medicare, Social Security pieces, especially the complicated Medicare/Social Security pieces, hard to score.
And then there is the constitutional fact that any bill that includes revenue, any bill that includes taxation, must originate in the House of Representatives. And that is a constitutional requirement.
There‘s no way around that, is there, Senator?
CONRAD: Larry, you‘re smart. You know, there‘s always a way around almost anything around here. As you know, if we had a House vehicle, which we happen to have right now sitting over here that began there, that does have revenue, we could take that vehicle, we could put this on it and send it back.
Number two, in terms of the scoring—actually, the scoring on this would be much, much different than the scoring of the policy changes that were contained in the health care plan, because these are numbers changes. In other words, they are instructions to committees to raise revenue or to cut spending. That‘s really quite easy to score for CBO.
O‘DONNELL: So, Senator, basically it would come in the form of a budget resolution?
CONRAD: Yes, it‘s much like a budget resolution.
CONRAD: Instructions to committees, you hit these numbers, and if you don‘t, we‘ve created a special mechanism where 10 senators, five Democrats, five Republicans, could lay down a measure if they fail to report.
O‘DONNELL: The budget resolution process does simplify it.
Senator Kent Conrad, chairman of the Budget Committee, thank you very much for joining me tonight.
CONRAD: Yes, sir.
O‘DONNELL: Coming up, why one of the most prominent, conservative voices in America is utterly embarrassed by Republicans in Congress.
And it wasn‘t just the pie-throwing incident—the questioning of Rupert Murdoch, his son, James Murdoch, and former “News of the World” editor, Rebekah Brooks, was riveting for the British and American media. But what did it reveal about how Rupert Murdoch does business?
In tonight‘s “Rewrite,” why a Maine newspaper told a Republican candidate for Senate to get out of the race and why that Republican candidate thinks Barack Obama is not a Christian.
O‘DONNELL: Rupert Murdoch would like you to believe that he runs his mega-media empire without actually knowing how it works. He‘d also like you to believe that he‘s sorry for hacking into your phone.
And next, how Republicans may have squandered their chances to get most of the things they‘ve always wanted. Reagan adviser Bruce Bartlett is here.
O‘DONNELL: Today, Republican columnist David Brooks writing in “The New York Times” considered the unprecedented opportunity to achieve conservative greatness that Republicans have been handed by President Barack Obama.
“There was a Democratic president eager to move to the center. He floated certain ideas that would be normally unheard of from a Democrat. According to widespread reports, White House officials talked about raising the Medicare eligibility age, cutting Social Security by changing the inflation index, freezing domestic discretionary spending, and offering to preempt the end of the Bush tax cuts in exchange for a broad tax reform process.”
And why will Republicans miss this opportunity? Because of who Brooks calls the “gods of the new dawn.” They are the beltway bandits, “interest groups adept as arousing elderly donors and attracting rich lobbying contracts.” For example, Grover Norquist of Americans for Tax Reform. Brooks calls him the Zelig of Republican catastrophe.
There are also the blowhards, presumably a reference to Rush Limbaugh. Quote, “To keep audience share, they need to portray politics as a cataclysmic, Manichaean struggle, a series of compromises that steadily advance conservative aims, would muddy their storylines and be deaf to their ratings.”
Then Brooks describes the show horses. He says, political celebrities, “Sarah Palin and Michele Bachmann produce tweets, not laws. They have created a climate in which purity is prized over practicality.”
Finally, there are the permanent campaigners. According to Brooks, “For many legislators, the purpose of being in Congress is not to pass laws. It‘s to create clear contrasts you can take into the next election campaign. It‘s not to take responsibility for the state of the country and make it better, it‘s to pass responsibility on to the other party and force them to take as many difficult votes as possible.”
Joining me now is Bruce Bartlett, senior policy analyst in the Reagan White House and a columnist now for “The Fiscal Times.”
Thanks for joining me tonight, Bruce.
O‘DONNELL: Bruce, it is a difficult time to be a thoughtful Republican. You and I have chatted about this a bit. David Brooks is not alone in his feelings about this, is he?
BARTLETT: No, he‘s not. But the number of people who are willing to speak out publicly as David and I and David Frum and a few others have is still painfully small, I‘m afraid.
O‘DONNELL: We can report that the “cut, cap, and balance” bill has passed the Republican-controlled House now, 234 to 190 against, with five Democrats actually voting for it. Nine—nine Republicans, Bruce, voting against it.
So, there‘s hope for nine Republicans now working in the House of Representatives.
They always have, ever since you left office in your party, Bruce, pointed to Ronald Reagan as the great man, the man who was right about absolutely everything. I want you to listen to what he had to say about the debt ceiling.
RONALD REAGAN, 40TH PRESIDENT OF THE UNITED STATES: Congress consistently brings the government to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets and the federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility—two things that set us apart from much of the world.
O‘DONNELL: Bruce, somewhat to my surprise, that lesson that President Reagan was trying to teach about the debt ceiling, what it means, what would happen if you didn‘t raise it. And he said that in a context of having to sign a debt ceiling increase that included pieces that he did not like, that he was absolutely opposed to, but he said, I got to sign it, because if I don‘t, look what happens, and they‘ve jammed me on the time as they always do.
But the public seems to be learning, Bruce. They are turning around on the issue of, no we don‘t—taken the position in the past of no, we don‘t have to raise it, who cares? They don‘t like the sound of it.
It seems like the education campaign is working.
BARTLETT: It certainly looks that way from the polls. This is not terribly surprising. It‘s very similar to what you see in elections. The average person doesn‘t have the time to devote to thinking seriously about these issues until it gets very close to Election Day. And the closer we get to zero hour on August 2nd, it stands to reason that people are going to pay more attention and then, hopefully, this will have some impact.
O‘DONNELL: Bruce, I don‘t know any harder working senator than Kent Conrad, and, you know, I want to give him a forum here to tell us what he‘s been working on. But I actually didn‘t hear anything he said about the tax revenue pieces in his plan that are any different conceptually from what the White House has been saying to Eric Cantor in their negotiations.
Did you hear him say anything that could somehow appeal to Eric Cantor about the tax piece of what he‘s talking about?
BARTLETT: Well, I think Eric Cantor takes his orders from Grover Norquist, and I think Grover would oppose any measure that raises $1 or one cent of debt additional revenue.
And I thought the most revealing thing about what Senator Conrad said was that the revenue baseline is current law. Now, keep in mind, current law means all existing tax cuts expire on schedule. So, we have under current law, a net—big net tax increase programmed into the baseline. So, I think they are playing some games with that to try to finesse the whole issue of whether this is a net tax increase or a net tax cut in order to try to make this thing work.
O‘DONNELL: Bruce Bartlett, columnist for “The Fiscal Times”—thank you very much for joining me this evening.
BARTLETT: Thank you.
O‘DONNELL: Coming up, Rupert Murdoch tells the parliamentary committee that he‘s sorry. He also claims to be humble but not responsible.
O‘DONNELL: Time for tonight‘s Rewrite. Republican Senator Olympia Snowe has a problem. And his name is more conservative challenger. Polls in Maine show that Snowe can be beaten in a Republican primary next year by Mr. More conservative challenger.
Indeed, she would be trounced by more conservative challenger, 58 to 33. Olympia Snowe is an obvious target. In the era of Tea Party Republicanism, she one of the least, if not the least conservative Republican in the Senate. Senator Snowe was the only Republican to vote for the Democrat‘s health care reform bill in the Senate Finance Committee.
In the committee‘s mark-up, she was the only Republican to support the Democrat‘s position that the use of federal funds for abortion was already effectively banned by the Hyde Amendment and did not need any further restrictions in the health care reform bill.
The final bill that the president signed into law had more restrictive abortion language than the provisions supported by Senator Snowe because anti-choice Democrats in the House forced that language into the legislation.
Senator Snowe did not vote for the health care reform bill on the Senate floor after changes were made that she opposed. But she knew she was putting her career at risk by voting for it in the Senate Finance Committee. She knew she would be challenged in a Republican primary.
Enter Scott Damboise, the leading Republican challenger against Senator Snowe. Although more conservative challenger is beating Olympia Snowe in the polls, crazy conservative challenger Scott Damboise is not. Snowe leads Damboise 43 to 18, indicating that Maine Republicans may be more conservative than Senator Snowe, but they are not crazy.
Nicole Glass, writing on the conservative but not crazy website, “Frum Forum,” tells us that Damboise has been endorsed by organizations that still suggest President Obama‘s birth certificate is still fake and accused the president of making peace with terrorists, and, quote, “returning to his Muslim roots.”
Damboise told Ms. Glass in an interview, quote, “the president, he says he‘s Christian, but yet he exercises a lot of Muslim faith too. Me personally, I‘m a Christian conservative. I don‘t hold any malice to anybody whether they are Muslim or Jewish or Catholic or anything else. I just believe that he needs to come forward with his views a little bit clearer.”
When Ms. Glass asked Damboise if he thinks President Obama is secretly a Muslim, he said “I don‘t know if he is or isn‘t. But I don‘t believe he‘s a Christian.”
Well, I don‘t believe Scott Damboise is a Republican. I mean, Damboise is way too French a name for a Republican, even though he tries to use the American pronunciation, Damboise.
Republicans are still furious with the French for not joining our coalition to invade Iraq, looking for those weapons of mass destruction that weren‘t there. Remember Freedom Fries? Surely, if there were any Damboises in the Republican party, they must have gotten rid of them when they changed the name of French Fries to Freedom Fries.
You know, the trouble with who is really a Republican and who isn‘t is that all we have to go on is what people say about themselves. I mean, Olympia Snowe says she‘s a Republican. But a lot of Republicans think she‘s just a Republican in name only. They think she‘s some kind of like crazy lefty, like a socialist.
And there‘s nothing a Republican can do about that, because she keeps saying she‘s a Republican. Just like Barack Obama keeps saying he‘s a Christian. And the funny thing about being a Christian is you can‘t tell who really is a Christian.
All we have to go on is what people say about themselves. The only thing unfair about Damboise believing that President Obama is not a Christian is that he believes any other politician is a Christian. If Damboise wants to lead a movement that says we shouldn‘t believe what any politician says about religion, because they all have a huge incentive to lie about just how religious they are, and because we have separation of church and state in this country, then I would give him as much time as he needs to make that case on this program.
But that‘s not Scott Damboise. He‘s the kind of politicians who says I‘m a Conservative, and then says about another politician, I don‘t believe he is a Christian.
A “Portland Press Herald” editorial told Damboise to get out of the race, saying, quote, “he is insulting the voters and wasting their time.” If he keeps doing that, then Olympia Snowe has nothing to worry about.
O‘DONNELL: It was a day of humble pie for Rupert Murdoch. First, there was this.
RUPERT MURDOCH, NEWS CORPORATION CEO: I would just like to say one sentence: this is the most humble day of my life.
O‘DONNELL: Then there was this. A man identified as activist and comedian Jonnie Marbles charged Rupert Murdoch with a shaving cream pie. But one of the many reasons Murdoch is married to a woman 37 years younger is that she is the best body guard in his entourage.
Wendi Murdoch, seen here in the pink jacket, is a former employee of her husband and a former volleyball player, who demonstrated the quickest reflexes in the room when she sprung towards the assailant and spiked the pie back in his direction.
Just before the attack, the comedian Tweeted “it is a far better thing that I do now than I have ever done before #splat.”
The gist of the Murdoch testimony was I run a very big company and I didn‘t know any of these bad things were happening.
UNIDENTIFIED MALE: Did you or anyone else at your organization investigate this at the time?
UNIDENTIFIED MALE: Can you explain why?
R. MURDOCH: I didn‘t know that. This is not an excuse. Maybe it‘s an explanation. “News of the World” is less than one percent of our company. I employee 53,000 people around the world. We—who are proud and great and ethical, and distinguished people, professionals in their life.
And perhaps—and I‘m spread watching and appointing people in my trust who run those divisions.
I‘d just add, my son had only been with the company for a matter of a very few weeks. He had a lot on his plate.
UNIDENTIFIED MALE: Do you accept that ultimately you are responsible for the whole fiasco?
UNIDENTIFIED MALE: You are not responsible? Who is responsible?
R. MURDOCH: The people that I trusted to run it and then maybe people they trusted.
O‘DONNELL: Joining me now from London, host of “The Martin Bashir Show,” Martin Bashir. Martin, thank you very much for joining me tonight.
I‘ve been looking at all the coverage of it and all the highlights. I seem to be missing the spot where parliament had the Murdochs tarred and feathered in that room today. How bad did it get for them?
MARTIN BASHIR, “THE MARTIN BASHIR SHOW”: It was fairly intense, but I have to tell you, Lawrence, this was the one occasion when being 80 years of age probably proved to be a positive and distinct advantage. He couldn‘t remember dates and times. He couldn‘t remember payments. He couldn‘t remember individual staff members.
And so what we had was this all-powerful media mogul reduced to a frail, elderly man, who couldn‘t remember a single thing. But he could assert two things. One was that he knew absolutely nothing about illegal phone hacking. He knew nothing about illegal payments to police. He knew nothing about paying private detectives to steal private medical records of politicians and members of the public.
He knew nothing about that. He was adamant. And also, second, he was absolutely clear that he‘s not for resigning. He believes that he should stay at the helm of this company, rebuild it, and in his own words, reestablish its moral underpinnings.
But I have to say that one of the things that came across today was something of a shock for British society. Here we have institutions, the police, politicians, the press, all corralled and controlled by this gargantuan media mogul. So it was disturbing and it was dramatic, even without the humble pie that you saw and described so expertly just now.
O‘DONNELL: Martin, despite his testimony of hearing no evil and seeing no evil, creating that kind of web of control would require an overview of all of the interlocking parts of it. And that overview was impossible to have sitting at any one individual Murdoch property.
You‘d have to have a view of all of the Murdoch properties that were interacting this way.
BASHIR: You would. And one of the interesting things, Lawrence—and I think you of all people, astute as ever, have picked this up. Murdoch‘s power and control was particular and specific.
He talks, for example, about the fact that last year when David Cameron built a coalition government in May of 2010, he was one of the first visitors to Number 10 Downing Street. And guess what, he entered through the back door. Now I remember reading Allaster Campbell‘s diaries. Allaster Campbell the press spokesman for Tony Blair.
Guess what it says in his diaries. “We ushered in Rupert Murdoch through the back door of Number 10.”
This was a man who had full and free access to the most senior individuals elected in the United Kingdom. And he had close relationships with the editors of his newspapers.
For example, Piers Morgan, who was the editor of the “News of the
World” for 18 months, in his own recollection, writes that Rupert Murdoch
spoke to him at least once a week for 18 months.‘
So here we have this vast contrast between a man who‘s sitting before a House of Commons committee incapable of remembering anything. And yet individuals who interacted with him remember absolutely everything. Is it really possible that Rupert Murdoch knew nothing, absolutely zero?
And remember, he had newspapers under his control that were delivering the most spectacular stories, stories about members of the royal family asking 500,000 Pounds to allow people access to Prince Andrew. He—that‘s the sort of story that his newspaper was delivering.
Members of parliament, for example, caught in bed with various women. Again, stories that his newspapers were delivering. That is the kind of detail that Rupert Murdoch provided. And yet we‘re supposed to believe after today, he knows nothing and can‘t remember anything of the criminality.
O‘DONNELL: Martin, your command of this story and perspective on it is invaluable to us. You can see Martin Bashir weekdays at 3:00 pm Eastern on MSNBC. Martin, thank you very much for joining me tonight.
BASHIR: It‘s a great pleasure, Lawrence. And thank you for having me.
O‘DONNELL: Coming up, what‘s next in the investigation of Rupert Murdoch‘s empire? And what could come back to haunt him?
O‘DONNELL: Though he‘s in the thick of the British media scandal, Rupert Murdoch is an American citizen and his company, News Corp, is an American company. The FBI is now investigating accusations that first appeared in the British newspaper “the Daily Mirror,” a Murdoch competitor, that “News of the World” journalists offered a former New York police officer a bribe in exchange for the private phone records of 9/11 victims, with the intent of hacking into those victim‘s voicemails.
Appearing before the British parliamentary committee today, the Murdochs left open the possibility that those claims might be true.
LOUISE MENSCH, MEMBER OF BRITISH PARLIAMENT: You‘re absolutely confident that no employee or contractor of News Corp or any of its properties hacked the phones of 9/11 victims or their families?
R. MURDOCH: We have no evidence of that at all.
MENSCH: Have you any credible allegations? I see you hesitating, Mr.
James Murdoch.
JAMES MURDOCH, SON OF RUPERT MURDOCH: No, I was just going to say—sorry, I was just going to say that those are incredibly serious allegations. And they‘ve come to light fairly recently. We do not know the veracity of those allegations and are trying to understand precisely what they are.
I‘m well aware of the allegations and will eagerly cooperate with any investigation or try to find out what went on at that time.
O‘DONNELL: Joining me now, NBC News national investigative correspondent, Michael Isikoff. Thanks for joining me tonight, Michael.
O‘DONNELL: Michael, in the British spread of the scandal, where it involves newspaper reporters colluding with police officials where they end up hacking phones, is there a model that the FBI is using here, where they may then begin looking at newspaper operatives here in the United States for Murdoch, with American police officials, possibly in New York City, as these allegations suggest?
And if they are, the most corrupt New York City police officer we know of at the time was actually the police commissioner, Bernie Kerik. As in London, we may end up seeing a story that goes all the way to the top to a police department here, as it did in Britain.
ISIKOFF: Right, it‘s an interesting theory, Lawrence. But we have to say, look, at this point, there‘s no evidence to support that. There is this allegation from the “Daily Mirror,” which it‘s worth pointing out is a rival paper to Murdoch. There were no names in it. It‘s very hard to assess the credibility of it.
This is clearly the most serious allegation facing News Corp. The FBI is investigating. Were any of this proven to be true, it would have a devastating blow on News Corp. And it could ultimately lead to the challenge to those broadcast licenses, which would be the worst blow possible to the company.
But at this point, I think we have to be cautious and say look, we haven‘t seen a lot to support that particular allegation.
O‘DONNELL: And Michael, the broadcast licenses are important because really the newspaper business, Murdoch says accurately, it‘s a tiny piece of his action. It‘s just a few percent of what that company is up to, which makes you wonder why did he ever want to stay in that business, for any reason other than being a political influence and having that kind of moment that we just heard about of walking in the back door of 10 Downing Street.
ISIKOFF: Look, he is a newspaper guy. He‘s an old-fashioned newspaper baron, right out of William Randolph Hurst days. He began that way in Australia. He moved to Britain, and then bought up papers in the United States. I think it‘s in his blood to be a newspaper tycoon.
And he likes to use the influence. He also likes the game of newspapering. And one of the curious things about his testimony today is when he suggested at one point he only called or spoke to the editor of the “News of the World” maybe once a month.
Look, there are multiple accounts of how he was very in the weeds on the running of the British newspapers. Media people that have interviewed him say they remember him calling editors constantly, what do you got, what‘s going on.
So it‘s kind of hard to square what he said today with the multiple accounts of how he‘s operated this business over the years.
O‘DONNELL: And going back to that—that scale of his company, when you‘re running a big movie studio, which he has, and big television networks, which he has both in cable and in broadcast, holding on to that little newspaper business of his, in relative terms, could only mean he was very, very interested in what was going on in those newspaper businesses that he now claims to have be9+en ignoring basically.
ISIKOFF: Right. And you‘re right that he absolutely enjoyed the political and relished the political influence it gave him. The points Martin made about the back door entree he had to 10 Downing, both under Tony Blair and David Cameron, but also in the United States.
I mean, there are political figures, mostly in the Republican party, but not exclusively, that have bowed to Rupert Murdoch, that have cultivated him. In fact, Hillary Clinton, when she was running for the Senate, did. And so this is a guy who‘s clearly enjoyed the political influence. And that‘s clearly taken a huge blow as a result of this scandal.
O‘DONNELL: Michael Isikoff, NBC News national investigative correspondent, thank you very much for joining me tonight.
ISIKOFF: Thank you, Lawrence.
O‘DONNELL: You can have THE LAST WORD online on our blog, You can follow my Tweets @Lawrence. “THE RACHEL MADDOW SHOW” is up next. Good evening. Rachel.
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