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PIERS MORGAN TONIGHT

Interview with Rudy Giuliani

Aired January 24, 2011 - 21:00   ET

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


(BEGIN VIDEO CLIP)

PIERS MORGAN, HOST: If there is one person who personifies this great city of New York, then surely it's Rudy Giuliani. He was born here in Brooklyn and on 9/11 he became the global figurehead for that terrible disaster and the reemergence of the city in the aftermath.

RUDY GIULIANI, FORMER MAYOR: What about Yankee Stadium? I just about lived there. It's my home away from home.

MORGAN: Rudy is a tough guy. But tonight I've got tough questions for him. Sarah Palin is too polarizing. Would you be more tempted to run if she wasn't?

GIULIANI: Piers Morgan, who does this guy think he is? David Frost?

MORGAN: I want to know this. Is America's mayor getting ready to run for the White House?

(END VIDEO CLIP)

MORGAN: Rudy, welcome. How are you?

GIULIANI: Nice to be with you.

MORGAN: It seems to be no secret that you're going run again for the presidency. Obviously you're going to give me a normal answer.

GIULIANI: Like nobody told me that yet.

MORGAN: I can't possibly comment, blah blah blah, working on the assumption that you may run again, and I'm assuming you will, how would you do things differently?

GIULIANI: You mean if I ran again, how would I do it differently? I would try to win.

MORGAN: I thought you were going to win when you ran before.

GIULIANI: For my benefit or benefit of anybody else running, I made a basic mistake. The basic mistake was -- I made a lot of them, but I made one big one, which was I built a national campaign. When John McCain was ahead, we were kind of like trying to catch him. We caught him and we went ahead of him. So we were the front-runner for six months, five months, whatever. But I didn't build a good enough campaign in any one state to win a primary. I had a great national campaign, a terrible primary campaign. And it should be reversed. You've got to win primaries in order to get nominated. So if I did it again, or for anybody else who is running, I would concentrate on figuring out how do you win Iowa? How do you win New Hampshire? How do you win South Carolina? How do you win Florida? In that order, at least one or two of those. And we raised $57, $60 million. I think we raised the most money of any candidate.

MORGAN: You were on this complete roller coaster. I remember thinking Rudy is going to win.

GIULIANI: And it looked that way.

MORGAN: This time I would say to you, and it would be trickier, wouldn't it? You're not coming with quite the head of steam behind you.

GIULIANI: Trickier. Or maybe?

MORGAN: Or better?

GIULIANI: It wouldn't be better.

MORGAN: Is it easier coming when you're not a favorite?

GIULIANI: I think being the front-runner is tough. The front- runners have won. But they've also lost. I mean Hillary Clinton was the front-runner. If you had looked at that campaign let's say in April or May of that primary season, you would have said that Hillary and I were going to be the candidates. We were both knocked off.

The next one, you probably would have assumed was Mitt Romney. And he didn't make it. So it's hard to know. I mean timing has a lot to do with it there is no obvious front-runner right now. I guess everybody is happy with that because nobody wants to be the front- runner at this point because it always seems the front-runner gets all the attention, all the negative publicity. And then give the president credit. He has made the right decision. I think he has a couple of problems that will remain, though. What does he do about Obamacare? The American people at least in a critical stage don't like it.

MORGAN: What would you do? From what I was looking, I come from a country where we have the NHS, the National Health Service. Everyone is entitled to free health care in my country.

GIULIANI: Right.

MORGAN: Here Obama brings in a new policy. I'm being simplistic, but I think I need to be. And from what I was looking at, 30 impoverished people are brought into a health care plan that weren't there before, and all he gets is kicked all over the place. I find that rather baffling. GIULIANI: Here is why. First of all, Americans have a great regard for private health care. They feel that the reason they have the best health care system in the world is because it's the most private health care system in the world, less so than England, Canada. Americans say who goes to England for treatment? Who goes to Canada for treatment? People come to the United States when the prince of Saudi Arabia is in trouble.

MORGAN: That doesn't help people who can afford it.

GIULIANI: It helps everybody because we have a law in the United States you have to care for people in emergency rooms. I ran a hospital system, 17 hospitals, the New York Health and Hospitals Corporation. Not a single person in this city isn't cared for when they need help. They get it in the emergency room. But then they get the benefit of a health care system that is more advanced than any other health care system. And we're afraid to lose that.

Secondly, they didn't tell the truth about it. The president is trying to convince us, and so are the Democrats, that this adding of 30 million more people is going to cost less money. Of course that's absurd. You can't add 30 million more people to the health care system and have it cost less money.

MORGAN: Isn't it worth paying more money?

GIULIANI: Maybe. But if you have that debate honestly, you don't lose as many people. If you say to me it's going to cost X amount of money to cover 30 million people, I take a look at it and say can we afford that.

MORGAN: What is your view of Sarah Palin?

GIULIANI: My view of Sarah Palin is she is the most dynamic figure maybe in politics, even more in some ways than President Obama, who is a little more scripted than she is. He is great with the teleprompter.

MORGAN: When you watch this bit of footage I want to show you here, which is Sarah Palin talking about the --

(BEGIN VIDEO CLIP)

SARAH PALIN, FORMER VICE PRESIDENTIAL CANDIDATE: You're free to debate that vision. If you don't like their ideas, you're free to propose better ideas. But especially within hours of tragedy unfolding, journalists and pundits should not manufacture a blood libel that serves only to incite the very hatred and violence that purport to condemn. That is reprehensible.

(END VIDEO CLIP)

MORGAN: Is she right?

GIULIANI: Except for the use of the word, absolutely right on.

MORGAN: Which word?

GIULIANI: Blood libel. A bad word to use. A bad connotation going back to the whole history of anti-Semitism. This wasn't at that level. However to say that there was horribly ridiculous politically inspired attempt to blame her and the right wing for the shootings in Arizona is just factually correct.

MORGAN: I would say to a point. I remember the sequence of events that day. What was interesting to me was she took that off her website as soon as this happened. Why do you do that unless it's inherently, you think it's wrong?

GIULIANI: Because you know what the media is going to do. If you have lived the life she has lived for the last two years, and they pick on your children and they accuse your daughter of being accosted by A-Rod and all this crazy stuff.

MORGAN: Would you have ever done -- I don't know if you ever did -- but what you have ever done a website of your own which had crosshairs aimed at political targets?

GIULIANI: Not if I had thought about it. But before that, the idea of having targets, you use targets, you're not necessarily suggesting shooting. They use targets in football. They use targets in all kinds of things. So I don't think that's what she intended by it.

MORGAN: Given the furor, though, do you think it would now be prudent for politicians to not do that?

GIULIANI: Of course it would. But you learn these things in advance.

MORGAN: Is Sarah Palin too polarizing to win against Barack Obama?

GIULIANI: You know, it depends. She's certainly not too polarizing to win a Republican primary. She could win a Republican primary.

MORGAN: But against President Obama?

GIULIANI: It depends on the job he does.

MORGAN: All the polls I see say in the key states she hasn't got a chance.

GIULIANI: Right.

MORGAN: I agree with you. She is incredibly dynamic. She is very impressive at marketing her brand. And she gets to the heartland of her vote very, very well in a way that I've rarely seen before in a politician.

GIULIANI: If we were look at the 1980 presidential election, looking back on it, at this stage of that election, Ronald Reagan would have looked too polarizing to beat Jimmy Carter. It would have looked like George Bush might be the candidate. Three or four other candidates, maybe Gerald Ford would run again. Well, he turned out not to be too polarizing. And part of it was because of Jimmy Carter. Jimmy Carter between now and --

MORGAN: Would you be more tempted to run if she wasn't?

GIULIANI: Maybe the opposite.

MORGAN: Really?

GIULIANI: Maybe the opposite because my one chance, if I have a chance, is that I'm considered a moderate Republican.

MORGAN: Yeah. With the Tea Party grabbing so much attention and energizing so much of your base, is this going to be a disadvantage to you? Are they going to hammer --

GIULIANI: It's a strange thing, Piers. I'm probably the most fiscally conservative of the people that might run for president or who were running for president and played that out as mayor of New York City. I'm probably one of the most conservative on foreign policy. But I am a social moderate. And it really depends on how important those issues are going to be this time. It's not a benefit in the Republican Party. It is a benefit in the general election. It is not a benefit. It's a liability in the Republican Party.

And the question is are they going to be looking for someone that is a fiscal conservative and has proven to be a fiscal conservative. If the social issues become a big issue, then I wouldn't have a very good chance. But I'm against abortion personally, but I think people should have the right to make that choice because I think it's a personal decision. People disagree about that.

MORGAN: Do you agree on some of the outpourings of the Tea Party bordering on bigotry?

GIULIANI: I find some of the outpourings of all of these movements bordering on extremist. It always happens. You get a core --

MORGAN: Doesn't that inherently bring with it a danger? Isn't that bad for American society?

GIULIANI: Sure. But the core of the movement is a good movement. It's about, you know, it's about fiscal discipline. It's about -- you know what it's really about and why the emotion is there, it's about a feeling that the government is taking too many rights from me.

MORGAN: The Tea Party could easily split your vote against President Obama in the general election. When that happens, it's all over for you guys.

GIULIANI: Well, sure, sure.

MORGAN: He gets reelected. So isn't there a real inherent danger?

GIULIANI: No, I don't think so.

MORGAN: In you guys encouraging the Tea Party to grow? Why are you creating two parties?

GIULIANI: No, I don't think so. Let's go back three or four years ago when I was running. There was a big anti-war movement in the country against the Iraq war. People hanging President Bush in effigy, saying President Bush should be killed. The core of the movement wasn't that. The core of that movement legitimately opposed the war in Iraq. I didn't agree with them. But they had every right to do it. They were very emotional. They were very angry. They were respectable people who opposed it with some extremists who made them look bad. Tea Party same thing. Respectable people, they have a legitimate political point, couple of people who are a little crazy who take it to an extreme. Basically, they help the Republican Party. And if they keep us on a strict focus on economic issues, they'll help us a lot. If they take us off on other issues, then you just don't know. They could hurt us.

MORGAN: We're going to take a break. When we come back, tomorrow is the planned day for the State of the Union. And I want to get your views on what you think the State of the Union really is.

(COMMERCIAL BREAK)

MORGAN: Rudy, President Obama's due to give the State of the Union tomorrow. What do you think the State of the Union is? If you were him, what would you be saying?

GIULIANI: If I were him, I would be saying the State of the Union is strong, which I do think it is.

MORGAN: What should he be saying?

GIULIANI: First of all he should be saying it's strong. He should be talking about what he is going to do about the economic dislocation, the tremendous spending that goes on. He's got to sound like a fiscal conservative without going too far. President Clinton at his stage of the presidency I think this is when he delivered the State of the Union speech where he said the era of big government is over. That just flipped the whole thing. All of the sudden Republicans, he had adopted the entire Republican agenda.

MORGAN: I can't see that.

GIULIANI: He's not going to do that. I think he'll be more subtle. I think there will be areas of agreement. I think he'll talk about how he wants to reduce the deficit, but he is never going to embrace everything the Republicans want to do. I think he'll defend Obamacare because that is his signature moment. And how Obamacare plays out in the next years may very well determines if he gets reelected.

MORGAN: Would it, or will it really as always come down to the economy? Trillions of dollars in debt, won't it really depend on is it 10 percent job losses in two years' time, is it 14? Is it eight?

GIULIANI: Yes.

MORGAN: I mean it seems to me when there are significant job losses in the country and unemployment is at that kind of level, that makes a hell of a difference.

GIULIANI: The reason I think Obamacare may continue to be a big issue, if you look at the key states, in those states, Obamacare is very, very unpopular. Over the next year and a half, it's going to turn out to be more expensive than the president predicted, because one of the biggest mistakes he made in passing Obamacare is telling us we were going to save money. This is absurd. So what he is going to see are things playing out where it's going to cost more and more money.

MORGAN: How would you get the deficit down? Would you raise taxes?

GIULIANI: Absolutely not. What I would do --

MORGAN: Can you honestly say that?

GIULIANI: Yes. I actually did it. When I became mayor of New York City, I had a $2.4 billion deficit. And everybody wanted me to raise taxes. I said if I raise taxes, I'll drive people out of New York City, and then I'll be raising taxes again. So what I did was I cut expenses by 15 percent. I cut everything but the police department, because I had too much crime. I cut schools, very unpopular. I cut every single thing, things that I thought were good, things that I thought were bad. And he has got to cut federal spending to the level of realistic federal revenues. And there is plenty of cutting to do. He could cut 10, 15 percent. And he's got to go into nondiscretionary spending, because it's out of control.

MORGAN: What is your view, I mean you took on Wall Street when you were the mayor. You took on Wall Street when you were an attorney. At the moment it seems to many people in America that the bankers having been bailed out with taxpayers' money, the first chance they've got, they've just got back in the trough and filled their snouts with millions of dollars of bonuses.

GIULIANI: Well, I have to tell you, I have a different view of bonuses, as Mayor Bloomberg probably does. Bonuses balance my budget in New York City. The bigger the bonuses on Wall Street, the more money I had to spend on poor people. The New York City budget is determined greatly by the bonuses given on Wall Street.

MORGAN: But is it as simple as that, really?

GIULIANI: We collect taxes. Absolutely. We collect taxes on it. It puts a lot of people to work. The bigger a bonus that someone gets on Wall Street, the bigger present they buy, the more people that work in restaurants and hotels.

MORGAN: I get that argument. But the problem with it is, it was the very bankers who brought this country to its knees. The bonuses seem like a reward for failure.

GIULIANI: They're not. People who brought them to their knees lost money, some of them have gone to jail. The fact is when you have a society that creates great wealth, you have a society that has a tremendous amount of social mobility.

America was the most capitalist country in the world for the last 100 years. Is there any country in the world that has more social mobility than the United States? Is there any country that has brought more people out of poverty than the United States? No. And part of the reason for that is we retain our wealthy people.

MORGAN: Did you know Bernie Madoff?

GIULIANI: I did not. I didn't know Bernie Madoff. My law firm was involved in representing one of the people in that case. So I know it very, very well.

MORGAN: When you were mayor, you had no inkling of what he was up to?

GIULIANI: No. It was very strange to me when it all came out was it two years ago now because I thought I knew everyone in New York. And I thought I knew all the big players in New York, the good ones and the bad ones. I never really heard of him. I know some of his friends very well. I know some of the people that lost millions and hundreds of millions of dollars with him. I never knew Bernie Madoff. I may have met him, but I never knew him.

MORGAN: When we come back, I want to talk to you about the war on terror, which aspects of it you think you're winning as a country, which aspects you maybe regret in terms of policies perceived by your party.

GIULIANI: Absolutely.

(COMMERCIAL BREAK)

MORGAN: Rudy, the war in Afghanistan isn't working, is it?

GIULIANI: It hasn't come to the result we want yet. I think we've made a lot of progress in the last year or so. I think that we can win the war in Afghanistan if we stick with it. We were at this point with Iraq also where a lot of people in this country were ready to pull out of Iraq before we had victory.

MORGAN: If I invite you back in 2015, do you honestly think that there will be any kind of tangible victory in Afghanistan?

GIULIANI: I think there could be, yes. I think that we could have a more stable government in Afghanistan. I think we could have a tremendous destruction of the Taliban and al Qaeda. That's really our objective in Afghanistan is somewhat different than Iraq. In Iraq our objective was put a government together that can act as a stabilizing influence in that part of the world, and we're three-quarters of the way there. In Afghanistan our objective always has been since President Bush went in and President Obama upped the stakes. Let's see if we can destroy the Taliban or particularly al Qaeda.

MORGAN: Can you ever really get victory in these countries?

GIULIANI: Sure, what constitutes a victory? Look at Iraq. Iraq is now a lot more peaceful. Iraq has a government. Iraq is bringing some of the dissidents in and some of the extremists into the government now. Iraq is trying --

MORGAN: When you say more peaceful, it's not more peaceful than it was before the war.

GIULIANI: It's a lot more peaceful than it was before Saddam. When Saddam was there, it was a heck of a lot more violent.

MORGAN: I think that's a very arguable point. There is still a lot of bloodshed in the streets of Baghdad.

GIULIANI: Sure.

MORGAN: That's not what you would call a stable free democracy there.

GIULIANI: It takes a while to have a stable free democracy. There is a democracy there. In various parts of the country, it is much, much better. You don't have the political prisoners that you had under Saddam Hussein. You don't have the threat of a nuclear power being established there. If Saddam were still there, with Iran becoming a nuclear power, Saddam would be matching that just like Pakistan and India played off each other in becoming nuclear powers. So we eliminate that problem immediately by him not being there.

MORGAN: Let's rewind to September 10th, 2001. If you were honest, would you have identified then as the major threat in terms of weapons of mass destruction? North Korea? Iran? Or Iraq?

GIULIANI: Probably all three.

MORGAN: But who would you in order? I mean from all I've been told, it was bleedingly obvious to people that Iran and North Korea clearly had better capability.

GIULIANI: No, no, that's in retrospect. Every single intelligence report, including the ones that went to the UK, United States, Germany said that Saddam had weapons of mass destruction.

MORGAN: But it was wrong, that intelligence.

GIULIANI: It was all wrong, but every bit of it said it. If you had asked me on September 10th, does Saddam Hussein have nuclear weapons, and I called up President Clinton who was then out of office and asked him, he would have told me yes.

If I called up President Bush he would have told me yes. If I called up Tony Blair, he would have told me yes. If I talked to the FBI or the CIA, they would have told me yes. So I would have believed that he had weapons of mass destruction, just like everybody else. MORGAN: But it would be a mistake, wouldn't it, to invade Iran now?

GIULIANI: Would it be a mistake to invade Iran right now?

MORGAN: Using the same yardstick of argument that you used with Saddam Hussein?

GIULIANI: I think it would be a mistake right now to invade Iran. But I don't think it would be a mistake --

MORGAN: And I'm assuming North Korea presumably?

GIULIANI: North Korea is a different situation which we can talk about different things involving North Korea. Iran should, however, feel that if they do become a nuclear power, we might very well take military action if they become a nuclear power. It's the only way in which we're going to gain leverage over them in order to get them to be more reasonable about inspections. I think the fact that they think that we will not take military action makes them a lot bolder.

MORGAN: You recently went to Paris with several other Republicans.

GIULIANI: Right.

MORGAN: And you talked with an Iranian opposition group called Mujahedeen e-Khalq. And you got some flak for that.

GIULIANI: I did.

MORGAN: I don't think I would give you flak for that, because I saw the benefit of the Blair government talking directly to the IRA. And it led to peace and prosperity. I saw it happen. Not perfect, but certainly better than what was going on before. Do you believe fundamentally that America should be doing more of these trips?

GIULIANI: Absolutely, absolutely. And the group that sent us there is a group that supports lifting the sanction against them that was placed on by the Clinton administration describing them as a terrorist group. That sanction has been lifted by the UK. That sanction has been lifted by the European Union. Basically, they're considered a terrorist group because they oppose Ahmadinejad and they oppose the mullahs. And the only two countries that now list them that way are Iran and the United States.

MORGAN: Would you meet with Hezbollah, with al Qaeda?

GIULIANI: It would depend on what could be accomplished. What I believe in is the old-fashioned diplomacy that used to exist, which is when a president or a mayor or a governor goes into a negotiating session, you've got to have a group of objectives that you think you can obtain from it. And you have to have leverage.

MORGAN: But as a principle --

GIULIANI: I wouldn't just meet for the purpose of meeting.

MORGAN: But as a principle, you believe it is probably time that America talked more to its enemies?

GIULIANI: If America has the objective of obtaining advantages from it. Like to talk to Iran is useless unless you have leverage. That leverage could be created by Iran truly believing that we would take military action if we had to do that. I grew up in the Reagan administration. Reagan spoke to the Soviet Union. He spoke to our enemies. But he also pointed missiles at their major cities when he did it. And he insisted on nuclear defense. And he raised the leverage against them. If you know how to do it, then it is appropriate to talk to our enemies. But if you're begging them to talk to you, as happened in some cases in the early part of this administration, you're never going to get anywhere.

MORGAN: Would you meet this group again?

GIULIANI: Absolutely. This group -- this group is a hope for Iran. This is a group that 100 members of Congress have petitioned the State Department to have it delisted so that it can raise money in the United States. The only two countries in the world that refuse to deal with this group are Iran and the United States. What are we doing on the same side of Iran? We should be on the side of the UK and the European Union.

MORGAN: It's a good time for America and Russia to be doing deals to reduce their nuclear capability, given that both countries are relatively stable compared to a lot of other countries. Given that Pakistan and countries like that are clearly unstable and in possession of a number of weapons, is this really the right time for America to be downgrading?

GIULIANI: I didn't think so. I mean I didn't think that the START treaty made sense right now. Particularly I didn't see it as a good time to do it as a reward for Putin's actions in which Putin has gone way, way back and retrogressed in Russia. It almost feels somewhat like a Soviet Union now. So I didn't think this was the right time to do that. I don't think the treaty means all that much in terms of our ability to defend ourselves or their ability to harm us. But I thought symbolically this wasn't the right time. I thought it wasn't also a good idea to give up the nuclear defense of Poland and the Czech Republic as part of it. I don't think we got enough back in return.

MORGAN: We're going to come back in a minute and talk about the events of 9/11. We're approaching the 10th anniversary. You were a key figurehead on that terrible day, and I want to talk to you about your recollection.

(COMMERCIAL BREAK)

MORGAN: Rudy, this year will be the tenth anniversary of 9/11. You were obviously a pivotal figure that day. Is America as susceptible now to another attack like that as it was then, do you think? GIULIANI: Probably less, for the simple fact that they're looking for it more. We have intercepted several of them, more than several. There are about four or five that are public. There are probably another 20 or 30 that we don't even know about. I'm guessing at that.

So we have better intelligence capability. We have better cooperation among intelligence services here, Europe, all over the world. We have picked up plots, picked up plots in the UK, in Germany. But I think we have a much better system than we had back then.

MORGAN: Are you surprised, in a good way, that there hasn't been another huge attack on American mainland in the last decade?

GIULIANI: Very surprised. If you had asked me on September 11th, 12th, 13th, 14th, the days after that, I would have told you there is no chance we're not going to be attacked numerous times, all different kinds of attacks. I wasn't just guessing that. That's what I was being told by responsibility intelligence services.

I think it's a combination of having taken very, very strong action, and continuing to take strong action. I also think it is they want to exceed the impact that they had with September 11th. And therefore they haven't done a lot of the small attacks, which I think we're very fortunate that they decided to do that. And we've had some time now to prepare ourselves for all the things that they can do.

MORGAN: On that day, you were having breakfast at the Peninsula Hotel here in Manhattan. How did you hear what had happened?

GIULIANI: One of the police officers that was with me came up to my counsel, Denny Young, who was having breakfast with me, and Bill Simon was the third person. Whispered in his ear. Denny came over to me -- got up from the breakfast table and said there is a terrible fire at the Twin Towers. A twin engine plane they think has hit the North Tower. We better get down there right away.

So when we first heard it, we didn't realize it was a terrorist attack or how bad it was. When I walked out into the street on 55th street, and I looked up into the sky, it was the most beautiful day, clear sky, not a cloud in the sky. The first reaction I had was it could not be an accident. This has to be a deliberate situation. A plane would not have gotten off course and just smashed in.

MORGAN: You thought that from the very first.

GIULIANI: I did. But I didn't think terrorism necessarily. I thought maybe it was a crazy person like the person that we're dealing with in Arizona, a person who has their own mental issues that had nothing to do with politics. So we rushed down there. And then the second attack took place. I was about a mile away when the second attack took place.

MORGAN: You're the mayor of New York. What are you now thinking? GIULIANI: I'm thinking how do I get air support for the city. We better get planes up in the air. I don't have an Air Force. We have to get the Defense Department, the president on the phone. So I reached Vice President Cheney eventually. Actually, I didn't reach Vice President Cheney, the phone got cut off because the first building came down, amazing.

I called the police commissioner. I called the fire commissioner. I made sure we had our people in place. We immediately started to think about how do we do the rescue effectively. At the same time, how do we protect the rest of the city. Because, as I said, from the first moment I knew it was a terrorist attack, I assumed --

MORGAN: How do you control emotion in that moment? You're a New Yorker. You were born in Brooklyn. You're watching the Twin Towers come down. You're watching thousands of people -- you don't know how many dying. And yet you've got to show calm and you've got to show leadership. And inside you must be turmoil.

GIULIANI: I think I remember how I did it. The first time I got emotional -- the first time I realized how terrible it was, how bad it was, I was right below the North Tower. Police were telling me to look up because things were falling down and they were afraid it was going to hit us. And I realized that it wasn't things falling down, it was a man throwing himself out of the 101st floor.

My emotions, I can't tell you what they were. I just froze. I said to myself, this is the worst thing I have ever seen. This is the worst situation I'm ever going to face. And then I said to myself, I can't think about that right now. All I can think about is what is the most effective way to handle it. What is the safest thing to do to help these people? Let me just focus on my job, the next step ahead.

MORGAN: At one of the initial press conferences you were asked about the death toll. And I want to play you a bit of footage of what you said.

(BEGIN VIDEO CLIP)

GIULIANI: The number of casualties will be more than any -- any of us can bear ultimately. And I don't think we want to speculate on the number of casualties. The effort now has to be to save as many people as possible.

(END VIDEO CLIP)

MORGAN: Why did you say that?

GIULIANI: I thought if I said a number like 12,000, it would -- it would just create even more fear, more shock, possibly even panic. And I wasn't sure it was correct. Intuitively, it seemed like the number was high. But who the heck knew? I didn't know. So I thought that was the best thing to do. MORGAN: If you had been President Bush, would you have ignored all the advice not to come back and just come back to New York, do you think? If you had been the president?

GIULIANI: Being the president is very different, because there is a whole obligation. You got a whole country to run, and you got to be careful.

MORGAN: And you are the commander in chief. You can supersede.

GIULIANI: I honestly don't know what I would have done as the president of the United States, whether I would have tried to overrule them, or at that particular moment, not knowing the gravity of the attack, and not knowing if there would be five other attacks, listen to what they said.

My instinct, which is good and bad, is to run to the scene of the -- I remember when there was first Anthrax was found in New York a month later. It was at NBC. And the first thing I did I rushed up there.

MORGAN: You rushed towards the Anthrax? Why would you do that, Rudy?

GIULIANI: My staff used to then tease me and say oh, gee, we have a little more Anthrax. Why don't we rush there? Why don't we rush here? Why don't we rush there.

MORGAN: But isn't it very, very important in the modern media age, when everyone is looking for figureheads and leaders to emerge.

GIULIANI: I think so.

MORGAN: I can remember -- I was in a newsroom of the "Daily Mirror" newspaper in London, which I was the editor of. And I remember in the chaos seeing you appearing at the -- and it was comforting that somebody was taking charge of this. And the message going out was America will not be beaten by this.

GIULIANI: I believe that. That's my view. There are other ways to look at it. There are people who criticized me for rushing down there. I could have been killed. People could have -- key significant people in the city could have been killed. It wasn't the best place from which to manage it. For me it was.

I wrote about this in my book. It's also something I need to do. In order for me to manage something, I have to see it to manage it better. I've got to assess do we have enough people. I've got to look in the eyes of the commander and say, like Chief Ganci, who was in charge, unfortunately lost his life -- I said to him, do you have enough? Can you handle it? He looked at me and he said yes.

I said, can we get people to the top? Can we get helicopters to the top to get people off the roof. And he looked at me straight in my eyes and he said, I can't save anybody above the fire. And I knew what he was saying to me because we had been through so many emergencies before. He was saying mayor, don't force me to put firefighters above the fire, or don't force me to put helicopters because they'll blow up. But I'll get everybody out below the fire.

In the 9/11 Commission Report, one of the things they point out is that firefighters saved just about everybody below the fire. I don't think they realize how proud the fire department is of that. Because, conceivably, that's all they could have done. They could not have gotten above that fire.

It allowed me to take the measure of the man and understand he's got this under control. And sometimes people will tell you I've got it under control and they don't. And you've got to be able to see them and you've got to know. You got to bring in more reinforcements.

MORGAN: We're going to take a break. I want to talk to you more about 9/11. This is fascinating.

(COMMERCIAL BREAK)

MORGAN: Rudy, you appeared on "Saturday Night Live" a few weeks after 9/11. I want to remind you of what you said on that show at a the time.

(BEGIN VIDEO CLIP)

GIULIANI: Having our city's institutions up and running sends a message that New York City is open for business. "Saturday Night Live" is one of our great New York City institutions. And that's why it's important for you to do your show tonight.

LORNE MICHAELS, "SATURDAY NIGHT LIVE": Can we be funny?

GIULIANI: Why start now?

(END VIDEO CLIP)

MORGAN: That ironically was one of the funniest lines I've ever heard on that show. It was great line. Everything about that was great. The world was waiting for something like that. Everyone needed to know it was time to not move on, but to get a grip and say right, America is not beat.

GIULIANI: It's true. In a situation like that, what you're trying to do is get people to get their eyes up, because all they're doing is looking at the vast devastation in front of them. It seems like the world is going to be like this forever. You want to get them to start thinking about well things can return, things can return to normal.

That was a wonderful thing that Lorne Michael did, by putting that show on, proceeded by all the firefighters in the background.

MORGAN: You became known as America's Mayor after that. How did you take that?

GIULIANI: That's not an official position. MORGAN: Everyone called you that.

GIULIANI: It's easier being America's mayor than New York's mayor. Nobody calls you up in the middle of the night. And you don't have to pick up the snow.

MORGAN: Is there ever a day when you don't think about 9/11?

GIULIANI: No, not a day. You know, after a couple of years, it was really bothering me. I thought, shouldn't I get over this? And shouldn't I -- but then I just came to peace with it. It was the most significant day of my life, for good and bad in many ways. Right? The most significant day for my city, my country. I have endless memories of it, good ones and bad ones.

MORGAN: How did you feel when the 9/11 Health Care Bill was being debated and there were Republicans who did not want that to go through?

GIULIANI: I was annoyed with using it as a political device. I agree -- I was in the interesting position of agreeing with the general philosophy and theory that you should hold up everything until you got the tax situation resolved and the financial situation.

MORGAN: -- that transcend politics?

GIULIANI: thought that one transcends politics. You weren't gaining anything by doing that. I thought on the merits it should pass. And I thought politically it was a big mistake, because Republicans have largely been enormously supportive of dealing with all these issues that have come out of September 11th. To put us on the wrong side of it I think was a big mistake.

MORGAN: What do you think America learned about itself after 9/11?

GIULIANI: That we're very resilient, that we can take the worst attack in our history and we can come back from it. The terrorists lost their main objective, which was to destroy our spirit. They tried to kill us to kill us, because of their own insane thoughts. But they also thought by doing that, by hitting the financial capital of America and the world, to a large extent, and the political capital, they were going to destroy our spirit. And they haven't. New York is a stronger city now than it was before.

MORGAN: What was it like being knighted by the queen of England?

GIULIANI: It was fascinating.

MORGAN: I bet it was.

GIULIANI: It was really, really fascinating. What I did was I got all the copies of the New York newspapers. I picked them up and I kept them and had none of them sent to Brooklyn, because I think my old friends in Brooklyn would get very annoyed with me if I asked them to call me a sir. If I said in Brooklyn, you better call me sir, I would never have any chance to run for political office again.

But it was a great honor for me. One of my great heroes is Winston Churchill. I became a good friend of Tony Blair, because I admired him so much. I admired Tony Blair because of how he stood with us. People think he stood with us -- these were actually things he believed.

He was the person during the Clinton administration who tried to explain to President Clinton how we had to be stronger and tougher about dealing with terrorism and dealing with some of the problems in the world. And you have to use your military might to some extent in order to get leverage.

I think President Clinton appreciated that. So a lot of people think that President Bush was leading Tony Blair around to positions he didn't have internally. And it's just the opposite.

MORGAN: The interesting thing about Tony Blair --

GIULIANI: Not the opposite. I think they both agreed. But Tony Blair had a very strong view. And he once explained it to me, having to do with his parents being children of the Second World War, and not wanting to see that happen again. >

MORGAN: When we come back, I want to talk to you about the private side of Rudy Giuliani.

GIULIANI: Sure.

(COMMERCIAL BREAK)

MORGAN: Rudy, you're a man that commands respect around the world. You've been a leading politician. You're someone that I admired personally after the events of 9/11. Everything you've done has been gritty and tough, from taking on the Mafia, to taking on terrorism, to taking on Wall Street. But there is one defining image that I'd like to show you, which to me sums up the private side of Rudy Giuliani. There it is. It's --

GIULIANI: How did I know -- I didn't expect that one. I expected the Marilyn Monroe one. That was from my fine performance in the musical "The Godfather."

MORGAN: Did you regularly dress up in women's clothes?

GIULIANI: I did it two or three times as part of --

MORGAN: Once I understand. More than that becomes a habit.

GIULIANI: You have to understand this is my frustration. I wanted to be a performer. This one, we did "The Godfather," the musical. I always thought there should be a musical version. We wrote our own, except we wrote in New York City political figures as part of the spoof.

MORGAN: If you could have been an actor, a successful one, would you have swapped that for politics? Would you have rather been a great movie star, do you think?

GIULIANI: No, I think I -- I had a much better career than I ever expected.

MORGAN: You have a good look for a "Godfather" part.

GIULIANI: I played the Marlon Brando role.

MORGAN: Oh you did. I'm downgrading you. I'm sorry.

GIULIANI: I put the gauze in my mouth.

MORGAN: Go on, give me the voice.

GIULIANI: How did we ever let things get this far? How can you ask me these questions? How can you ask me these questions?

MORGAN: How is marriage the third time around?

GIULIANI: It's fabulous. Judith is a wonderful lady. She's a nurse, which helps her a lot dealing with my prostate cancer, and helps me a lot in dealing with everything. She's got a great knowledge of medicine. And she's got a great knowledge of the world. She speaks fluent French, pretty good Spanish, so she does a lot of translating for me. She's a fabulous lady.

MORGAN: The extraordinary thing about you, Rudy, is for at least two or three years now, there's been no scandalous headlines about your private life.

GIULIANI: Thank you. Make it about eight years, maybe 10.

MORGAN: If you were to run for --

GIULIANI: Maybe ten years. There should be a statute of limitations. Ten years would be a good statute of limitation.

MORGAN: If you were to run again for presidency -- and there's got to be a good chance -- all that stuff would get raked up again. How do you feel about that?

GIULIANI: You don't feel good about it, because it affects your family. I'm kind of immune to it, personally, because I've been in public life for 30 years, and been called every name possible. And I know people hate me, people love me, and people have a balanced view of me, which is what you should have.

You worry about it for your family, because it does affect them. When they live through it, it's a little bit harder, because they're not as used to it as I am, even if they've been with me for a long time.

MORGAN: Did you have any big regrets about the impact of your political life on your family life?

GIULIANI: Sure, I guess you'd wished if you had gone back, you had done it better, done it differently. The problem is in life, you can't go back. You can't -- you get to try to fix it from where you are, rather than go back and try to fix it, which I'm trying to do.

MORGAN: We discussed the worst day of your life, 9/11. You've made no secret of that. What would you say has been the best day of your life?

GIULIANI: Probably the same day. Because I don't think I ever saw more heroism, more tremendous outpouring of love, people to people. When I say day, I mean period of time. You showed a picture of Hillary Clinton and me there. You know, people couldn't imagine Hillary Clinton and I could work together. And we worked together very closely. Or Chuck Schumer, or -- there were no Republicans, no Democrats, just trying to help people.

I brought Putin and Schroeder and all the world leaders there. They were all truly horrified by it, and willing to help. It was a very special --

MORGAN: Out of an attempt to really demoralize and destabilize America, oddly unity and strength came out of that?

GIULIANI: Yes. And so in a way, it was the worst and the best day, largely because of the way people reacted. One of the great vivid scenes for me were all the construction workers that came and volunteered about 3:00, 4:00 in the afternoon. Nobody asked for them. Nobody organized them. There are all these big guys with these big muscles. They're going come and just lift -- they're just going to lift us out of it.

Somehow, I was really down. I had found out about the loss of some friends, and I saw their big muscles. I said, boy I have big shoulders to lean on. It just kind of lifted me up.

MORGAN: Would you come back nearer the time of the anniversary?

GIULIANI: Yeah, I will.

MORGAN: I found it really fascinating.

GIULIANI: I'm wondering how I'm going to react to the ten-year situation.

MORGAN: It will be an extraordinary time for you.

GIULIANI: I would appreciate that. Thank you very much.

MORGAN: Rudy, thank you.

GIULIANI: Thank you, Piers. Good luck.

MORGAN: I appreciate that. Thank you.

Tomorrow night, I'll be part of CNN's State of the Union coverage. And on Wednesday, I'll be back with Joel and Victoria Osteen to discuss the faith of the union. (BEGIN VIDEO CLIP)

JOEL OSTEEN, PREACHER: I think, in one sense, that we do need to change, like has been talked about a lot now, to let go a little bit of the anger. To me, it's OK to have differences, but we don't have to be mad about it. I think that's where sometimes we get so passionate that we -- you know, it turns into anger, and I don't like you because you don't agree exactly with me.

That's not what makes our country great. I'd like to say, you know what, we can be civil. We can still be friends and be Democrats and Republicans and have different views.

MORGAN: What is your view? It seems to change, depending on the interview I've read or seen. Is homosexuality a sin in your eyes?

OSTEEN: Yes, I've always believed, Piers, the scripture shows that it's a sin. But, you know, I'm not one of those that are out there to bash homosexuals and tell them they're terrible people and all that. There are other sins in the Bible too.

I think sometimes the church -- I don't mean this critically, but we focus on one issue or two issues and there's plenty of other ones. So I don't believe homosexuality is God's best for a person's life.

(END VIDEO CLIP)

MORGAN: Now, here's my colleague, Anderson Cooper, with "AC 360."