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Peace in the Middle East; Murder Mystery in China; Political Ads

Aired April 26, 2012 - 19:00   ET


ERIN BURNETT, HOST: When I sat down with Israeli Prime Minister Benjamin Netanyahu he said yes to something incredible. Will it mean no more Mideast wars for America?

And Joe Biden goes off. And sex for cash, new accusations of wild behavior my Secret Service agents. Let's go OUTFRONT.

Good evening, everyone. I'm Erin Burnett. And OUTFRONT tonight, peace in the Middle East. What would that mean for America? For decades the United States has been at odds with the Arab world over its support for Israel in its conflict over Palestine.

The Palestinian conflict has dominated 70 percent of Israel's existence as a nation, and it's the reason given for animosity in the Arab world against America. But that conflict could be coming to an end if you believe what Israeli Prime Minister Benjamin Netanyahu told me this week.


BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: I think there's one other thing. I think that I could deliver a peace agreement. I could get the Israeli people to follow me, if I believed that I have a serious partner on the other side willing to make the necessary compromises on the Palestinian side.

BURNETT: Would you accept their belief, though, that they should have a country which is contiguous?


BURNETT: Not islands here, islands there, but one space?


BURNETT: No checkpoints?

NETANYAHU: I don't want to govern the Palestinians. I don't want them as subjects of Israel or citizens of Israel. I want them to have their own independent state, but a demilitarized state.

BURNETT: And to be clear one that isn't separated by Israel as in (INAUDIBLE) here, Israel (INAUDIBLE) all one.

NETANYAHU: No, that is Swiss cheese now. BURNETT: No Swiss cheese.



BURNETT: Those words, contiguous and not Swiss cheese are essential in the age-old debate over land. Arab newspapers seized on those words and turned them into front page headlines. Here's one. "Netanyahu declares for the first time support for a contiguous, demilitarized Palestinian state." That's from the Palestinian paper "Alcuds". And in "Al Hira" (ph), a pan-Arab newspaper, "Netanyahu supports establishing a contiguous Palestinian state." That word is crucial. And in the United States bipartisan. Two very different Republican and Democratic administrations have pressed Israel to relent on a contiguous state for Palestine.


GEORGE W. BUSH, FORMER PRES. OF THE UNITED STATES: Swiss cheese isn't going to work when it comes to the outline of a state.

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: The Palestinian people must have the right to govern themselves and reach their full potential in a sovereign and contiguous state.


BURNETT: Contiguous and no Swiss cheese. Well, after the controversial statement by President Obama that he made right there, contiguous, Prime Minister Netanyahu intentionally refused to use the word contiguous when he addressed a joint meeting of Congress much to the chagrin of the Obama administration. So how significant was that answer Prime Minister Netanyahu gave to my question.

Dennis Ross has worked in every administration since George H.W. Bush, most recently for President Obama. His career has been focused on bringing peace to the Middle East. Jamie Rubin is a former assistant secretary of state and a State Department spokesperson. Thanks very much to both of you for joining us. I appreciate it.

Dennis, let me start with you. The Palestinian Authority responded to what the prime minister said in our interview. They said, quote, "an immediate and complete halt of all settlement activities, dismantling of the settlements, recognition of a two-state resolution based on 1967 borders" are the actions that they need to go with those words. Obviously actions speak louder than words. But clearly the prime minister was saying something when he said yes, contiguous and no Swiss cheese.

AMB. DENNIS ROSS, FORMER SPECIAL ASST. TO PRES. OBAMA: Well, he was saying in fact what's going to be essential if you're actually going to produce a two-state outcome. It has to be a credible, viable state and, therefore, the word contiguous is meaningful. I think what you got in terms of Palestinian response is that they continue to question whether or not he's really prepared to do that. That's why they impose these kinds of conditions like a settlement freeze saying if he can do that, then that proves he's actually serious.

The Israeli side of the argument, Bibi's side of the argument will be you're imposing conditions on me that you imposed on none of my predecessors. I'm making a very clear statement. I'm committed to a two-state outcome. He also used the word an independent Palestinian state with you. He was very clear. The word demilitarized frankly back at Camp David, back in the Clinton parameters, we always operated on the premise that we were talking about a non-militarized Palestinian state so that is something that has been consistent over time when we talk about a two-state outcome.

BURNETT: Yes. Jamie Rubin, let me ask you though because this is so crucial and obviously there aren't talks going on right now but the prime minister has moved the line, right? He's now saying contiguous, no Swiss cheese, but I wanted to throw up a map for people to see. 1967, orange you see, that's the Palestinian area. And now you see how it is. It's Swiss cheese right now. So how do you get that today map to be contiguous? And obviously Gaza is -- we're not even talking about that, whether that would be included in the definition of the term.

JAMIE RUBIN, FMR. ASST. U.S. SEC. OF STATE: Well, that's right and I think the way you get the pieces of the Palestinian territory attached to each other is some of the settlers have to go back to Israel. And I think why -- the reason why the Palestinians focus on the issue of settlements is because they regard that as a indicator of whether the Israeli leader in negotiations is prepared to do the hard things, namely to get all of those hundreds of thousands of Israelis who have been given special privileges to live in the West Bank, whether he's prepared to see them come home. Obviously big chunks of the West Bank that Israel has settled would be part of Israel in exchange for traded parts of Israel. That's always been an understanding between Israelis and Americans and Palestinians.


RUBIN: But we are so far, Erin, from a negotiation where this could be worked out. I would have to say I don't know if Dennis would agree with this, but certainly in the last decade, my observations, we -- it's very hard to envision right now a ceremony on the White House lawn with President Obama, Prime Minister Netanyahu and whoever is the Palestinian leader negotiated and completing a peace agreement. Those kinds of ceremonies happened a lot 10, 15 years ago. But we are so far from that for a whole bunch of reasons, one of which is the debate over settlements.

BURNETT: And I want to -- Dennis, let me ask you a question because let's just -- a fair point that it isn't going to happen now, even if he's moved the goal posts closer. But let me ask you this. Let's just say that there was a peace deal. What would happen, because so many people -- governments in the Arab world cite this conflict over the Palestinian issue as a reason for animosity and frustration against Israel and against the United States. Let's just say it was solved. Would there really be peace in the Middle East or would this be exposed as a fig leaf that it really was? ROSS: Well, I think it's not that simple a choice, because on the one hand you would remove what is an enduring historic conflict, you would remove what is an evocative (ph) symbol of conflict. You would certainly remove a grievance. But I also think we have to have a perspective here. The Palestinian conflict with the Israelis is not the reason that we see a huge conflict taking place within Syria.

It's not the reason you have revolutionary upheaval in Egypt. It's not the reason that we've seen a fundamental transformation taking place in Tunisia. There is revolutionary upheaval throughout the Middle East or at least major parts of it that are disconnected from this conflict. One of the big sources of frustration for Palestinians today is that Arabs are preoccupied with the relationship they are going to have with their rulers, not with the Palestinians. The world is heavily preoccupied both with the Arab upheaval and with Iran and not preoccupied with them.


ROSS: So would it be an important thing to achieve and end this conflict -- absolutely. Would it transform the region as we know it? No, because we're seeing an upheaval right now that is transforming it.

BURNETT: All right, well thanks very much to both of you. We appreciate it.

(INAUDIBLE) accused of spying on other high-ranking Chinese officials but the scandal is now here in the United States and we have that side of the story.

And a major development in the trial of John Edwards, cell phone conversations between him and his mistress just released. We have them for you and Rupert Murdoch making a surprising admission during the phone hacking trial today.


BURNETT: Internet retailer Amazon reported numbers today and they were just way better than anybody expected. North American sales alone up 36 percent from a year ago. Now unless you buy a digital product like an e-book or an MP3 song, most of the Amazon products that you buy get shipped to you. So you'd think that's great for UPS, which reported today that online sales was a big reason it shipped a billion packages in the first quarter. A billion packages (INAUDIBLE).

Well that brings us to our number tonight, $9.45. That's how much revenue UPS made per package it shipped. And it sounds like a heck of a lot of money, but it's actually well below the average for last year. One of the reasons the number isn't higher is because of what people buy online. People are buying clothing, books, small electronics and they're buying all the time instead of you know all at once, which puts UPS in a rather grim position because there's more things being shipped, but they can't charge as much per package because the packages are lighter and people say, oh you know hey, I need those cotton swabs, I'll get them in a week, so pretty interesting. Good for Amazon, not so good for UPS.

And now a story we've been OUTFRONT on, the mysterious murder of a British businessman in China. It has cost the job of a powerful communist leader, Bo Xilai, was once viewed as possibly the next president of China. His wife is now the main suspect in the British man's death, suspected of poisoning him with cyanide. And the whole scandal has rocked the Chinese government to its core with constant rumors of a coup in Beijing.

And today another strange twist, as if the story wasn't bizarre enough there are new details coming out from "The New York Times" that Bo was actually spying on Chinese President Hu Jintao. We'd actually joked about this on our show a month ago and said this is what it was going to be, he was a spy. We thought it was a joke. Through all of this drama their son Bo Guagua (ph), a graduate student at Harvard has been out of the public eye until now.


BURNETT (voice-over): Here at Harvard's iconic campus, more than 7,000 miles from Chung Chang (ph), China, the scandal that has turned the Chinese communist party upside down is playing out Ivy League style. This is where Xilai's son, 24-year-old graduate student Bo Guagua (ph), studies public policy and where he's tried to keep a low profile in this off-campus apartment in the weeks after his family's secrets were spilled out on the front pages of newspapers around the world.

BEN SAMUELS, PRESIDENT, HARVARD CRIMSON: It's very rare for someone to take on a persona like that at Harvard, so I hadn't heard of it.

BURNETT: Bo Guagua (ph) has been portrayed as a playboy, a princeling, the privileged son of a powerful leader. At home in China and at boarding school in England, he developed a reputation as a spoiled party boy with a weakness for sports cars, champagne parties and girls. In China he even spent time on two occasions with Mary Ann and Abbie Huntsman, daughters of Jon Huntsman, the former presidential candidate and U.S. ambassador to China.

This week we finally heard from Bo Guagua (ph) for the first time since the scandal broke. He told the "Harvard Crimson", "I am deeply concerned about the events surrounding my family." He also felt the need to defend his rumored lavish lifestyle. "My tuition and living expenses are funded exclusively by two sources, scholarships and my mother's savings. My examination records have been solid throughout my schooling years, and I have never driven a Ferrari." He made no mention of his long-time family friend, Neil Heywood, allegedly murdered in his hometown, poisoned by Bo Guagua's mother.

UNIDENTIFIED MALE: After weeks of people talking about what he's doing, he wanted to at least get his voice out there and clear the air.

BURNETT: The statement by Bo Guagua to the Harvard newspaper caused the website to crash, presumably from all of the international intrigue. But here at Harvard, it was nearly impossible to find anyone who would talk on the record about him. And at his luxury apartment, the concierges told us to leave, seems that for now the statement to the university newspaper is all we'll hear from the mysterious Bo Guagua.


BURNETT: And we have new information just in from Cambridge tonight. According to a source familiar with his academic performance, in one class at Harvard in the 2010 school year, Bo Guagua did not turn in a single assignment. Yet the following year he was one of 21 students awarded a coveted research grant in policy analysis from Harvard's Kennedy School of Government. Fellow student expressed dismay that Harvard awarded a prestigious grant to a student who quote "didn't meet minimum academic standards" -- a pretty interesting development here and certainly goes -- flies in the face of what Bo Guagua is saying about himself.

Gordon Chang is a columnist for "Forbes" and the author of "The Coming Collapse of China". I met with him just a couple of minutes before the show and I asked him what the United States should do about the Bo Xilai scandal.


GORDON CHANG, AUTHOR, "THE COMING COLLAPOSE OF China": (INAUDIBLE) who was the police chief in Chung Chang (ph), he defected to the U.S. or at least tried to and we had to make a decision. And we decided to stay out by throwing him back. Now other officials could come to the United States and sort of force us to make that decision all over again like who do we help, who do we not help by taking all of these officials. So it gets to the point where we may have to sort of become much more involved.

BURNETT: And there is a way that the United States could do that, right, which is short of really giving asylum to these people but would cause a real issue for China?

CHANG: The one thing -- the one thing that we could do is if we -- if the Obama administration leaked to the press, for instance, the bank account details of a Chinese leader we didn't like or the U.S.- based assets --

BURNETT: So then everyone would see how loaded, how rich, how corrupt they are?

CHANG: Right and this is important because it sort of -- Bo Xilai's wife was supposedly involved in transferring hundreds of millions of dollars out of China and also Bo's son is at Harvard, like who's paying for this? So this is how the United States could have a role if it wanted to.

BURNETT: And what do you think is going to happen next? When are we going to see (INAUDIBLE)?

CHANG: I think that we're going to see more and more officials decide to leave. I think that we're going to see -- the Chinese people sort of almost you know just express disgust in a more public manner because they are in a very -- you know in a very real sense seeing they're seeing this play out in front of them and they're saying what's going on here?


BURNETT: All right. The Obama administration launches an attack on Mitt Romney today. Joe Biden going on the attack. It's fun to watch.

And sex for cash. A new report accusing Secret Service agents of partying with strippers a year before the latest scandal.


BURNETT: Joe Biden went after Mitt Romney today and he also touted the president's top achievements.


JOSEPH BIDEN, (D-DE) VICE PRESIDENT OF THE UNITED STATES: If you're looking for a bumper sticker to sum up how President Obama has handled what we inherited, it's pretty simple. Osama bin Laden is dead and General Motors is alive.


BURNETT: John Avlon is with us, Reihan Salam and Chris Lehane. Good to see all of you. John Avlon you said this would be a very smart bumper sticker a while ago, so I guess it's nice to hear him taking your idea.

JOHN AVLON, CNN CONTRIBUTOR: Sure I mean -- you know -- I think it is a strong argument for them to make. Fits on a bumper sticker, like all good slogans it's strong, it's optimistic, and it's unapologetic. You're going to own those key accomplishments and draw a contrast with that way on the substance. So I do think it's a smart argument for them to make.

BURNETT: All right, Reihan, foreign policy, you were just saying, how important is it going to be this cycle. I mean you've -- obviously there he's talking about Osama bin Laden, of course you've got the Iran issue where personally Mitt Romney's proposed way of dealing with it looks identical to Barack Obama's, but anyway that's a -- you think -- 16 points right now is the margin where the electorate thinks Obama is stronger as a commander in chief than Mitt Romney.

REIHAN SALAM, COLUMNIST, THE DAILY: Yes that's a very, very big gap and it's something that he is going to have to close. But the question is, is it going to be a salient issue? Is it going to be the issue that's --


SALAM: -- actually going to get voters to decide on that question. And I think that fundamentally Republicans traditionally have an advantage on the idea of foreign policy and military strength. And so the question is can Romney capitalize on that in the future.

BURNETT: All right, Chris, I want to show Karl Rove's Super PAC rolled out an ad today trying to hit President Obama for well something I think that he thinks is pretty good about himself, being cool. Take a look.



"America elected the biggest celebrity in the world."

"And America got one cool president."





UNIDENTIFIED FEMALE, POLITICAL AD: I'm so in love with you --



OBAMA, POLITICAL AD: He's a jackass. He's a jackass.


"But after 4 years" --

"1 in 2 recent college grads are jobless or underemployed. 85 percent moving back in with their parents. Student loan debt exceeds one trillion dollars."


BURNETT: All right, which reminded me of a celebrity ad from 2008 which actually was somewhat effective so let's play that and then get your reaction.


UNIDENTIFIED FEMALE, POLITICAL AD: He's the biggest celebrity in the world, but is he ready to lead?

"Obama, is he ready to lead?"


BURNETT: Do you think this one will be effective or just make people chuckle?

CHRIS LEHANE, DEMOCRATIC STRATEGIST: I think people will certainly chuckle and you have to give people credit for being creative and entertaining. But at the end of the day the bumper sticker we were just talking about speaks for itself. You have Detroit and you have bin Laden and what both of those issues go to is he has demonstrated that he is capable of doing the job. He has what it takes.

And ultimately these elections are going to come down to one issue and that is the trust issue, right? Who do you trust on foreign policy? Who do you trust on the economy? And on that very simple issue of trust, he has a significant advantage right now and so while I think the celebrity thing is fun and we can chuckle about it, I do think there's a big difference between four years ago and today because of the successes that he has demonstrated and that gets specifically at that trust issue.

AVLON: But it's a classic Karl Rove move. He's going at his opponent's strength, trying to turn that strength into a liability. Saying look, you may like President Obama personally, you may think he's cool, but how has it helped you in your bottom line, especially you young voters.


AVLON: So it's a classic move. The difference as Chris just said though is in 2008 McCain could make that argument because here's a guy that had been in the Senate less than four years. Now he is president of the United States --


AVLON: -- and to just dismiss him as a celebrity doesn't cut it.

BURNETT: Reihan, I guess bottom line is also maybe he just gets young people to -- don't vote at all. (INAUDIBLE) for Romney, but --

SALAM: Yes, I think that certainly a lack of enthusiasm on young voters will be a very big issue for the president, but I think that you know another way of looking at this is that -- you know, is that when you look at this kind of larger landscape and the cool issue, it's something that is -- exactly -- it's kind of trying to turn a strength into a weakness. And I think that's -- I think that's certainly an effective test.

BURNETT: All right, thanks very much to all three, appreciate it as always.




BURNETT: Media mogul fail. UNIDENTIFIED MALE: I failed and I'm very sorry about it.

BURNETT: Agent provocateur.

UNIDENTIFIED MALE: They were working really hard to try to get the strippers back to their hotel rooms.

UNIDENTIFIED MALE: I'm confident we'll get to the bottom of it.

BURNETT: All this OUTFRONT in our second half.



BURNETT: We start the second half of our show with stories we care about, where we focus on our own reporting, do the work and find the "OutFront 5".

First, new details in the search for a missing soldier from Ft. Bragg. North Carolina police just released this photo of Private Kelli Bordeaux taken on the night she disappeared. A police department spokesman would not tell OUTFRONT who gave them the photo, only saying officers obtained it as part of their investigation. The 23-year-old was last seen at a bar in Fayetteville (ph) about two weeks ago. We're told 600 volunteers helped search for Bordeaux today in the area around the bar and her apartment.

Number two, the Obama administration has approved a broader use of drones to target suspected terrorists in Yemen. This is according to the "Wall Street Journal" and the "Washington Post." The new authority allows the military and CIA to fire at militants even when their names aren't known but they are declared high-value targets. A similar policy is in place in Pakistan.

Sources tell us there has been an increase in counterterrorism strikes over the past few weeks in Yemen by U.S. drones and manned fighter jets.

Number three, Charles Taylor, the former president of Liberia, has been found guilty of war crimes. An international court convicted Taylor of planning, aiding and abetting war crimes committed in Sierra Leone during its civil war. Judges found Taylor used so-called blood diamonds to fuel atrocities carried out by rebel forces, including murder, rape, slavery and using children as soldiers. Sources tell me that Taylor may select a new defense attorney and will be sentenced next month.

Number four, filings for jobless claims fell by a thousand to 388,000, the 12th straight week. There was an upward revision to the prior week's numbers, which is not a good sign. Economists we spoke say next week's key number will let them know whether the recent downturn is seasonal or actually the start of a new trend of broader weakening in the economy.

Speaking of which, it's been 266 days since the U.S. lost its top credit rating. What are we doing to get it back? Well, today, Spain felt the downgrade pain as they cut the country's credit rating from A to BBB plus. It's the same with Italy and Ireland. It means it will cost them more to borrow. Spain already has a youth unemployment rate, some say nearing 50 percent.

The John Edwards trial has already revealed a wealth of embarrassing details about the former presidential candidate's personal life. Now, more details are coming to light today. A federal judge rejected an appeal by Edwards' mistress, Rielle Hunter, to keep certain evidence sealed, evidence like phone records between Hunter and Edwards.

Also today, his former campaign aide, Andy Young, took the stand for a fourth day. He once claimed to be the father of Edwards' child to try to keep the affair from coming out.

Joe Johns is OUTFRONT for us today.

And, Joe, let's start with the evidence presented in the court. I know you just got your hands on some of it. What did you find?

JOE JOHNS, CNN SENIOR CORRESPONDENT: Well, a lot of stuff. This is voice mail transcripts, for example, that just came out. Hopefully, the court is going to send us more of this stuff, still going through it. But, Erin, I can tell you, we just wanted to give you sort of an example, taking you back, if you will, to the middle of December, 2007. This was a time when the media was really closing in on the mistress of John Edwards, Rielle Hunter. And during that time, there was an e-mail exchange, actually a phone mail exchange that went down from Edwards to Andrew Young. I just wanted to read you part of it because the prosecution says this sort of shows the signs of deceit.

Here you go. "I'm calling saying -- if I'm calling saying what happened, how did this happen, what's going on, then that's because Elizabeth is standing there with me, because I have to -- I think I've got to tell her about this because it's moving."

So the prosecution will look at that and say it's a sign of a pattern of deceit. But in a nutshell, the defense will look at it and say, maybe so. Maybe he's being deceptive, but at the same time, he's not talking about campaign financing here. What he's talking about is staying out of the dog house with his wife. He's trying to keep this information away from his wife, which, Erin, is sort of the crux of the case.

BURNETT: It's just -- yes, let's bring in Paul Callan here. And, Paul, you're saying there's a big issue here for the defense?

PAUL CALLAN, CNN LEGAL CONTRIBUTOR: Yes, it's a strange case, Erin, because he's charged with violating federal election laws. His defense is, you know, federal election laws don't ban personal funds, personal use of funds, if the donor knows that it's just being given to the candidate not for politics but for personal use.

BURNETT: Right. CALLAN: So he raises $900,000 from two people and that $900,000 is used to hide his mistress from the public.


CALLAN: Now at the time of trial he comes in and he says, well, those were my personal funds, not election funds. But he says I didn't know he was spending them to hide my mistress. Well, if they were your personal $900,000, wouldn't you know about it?

So I think he's in somewhat of a contradictory position to say it's personal but I didn't know Andrew Young was using them to hide my mistress. So I think the jury is going to have trouble with that.

BURNETT: And it also seems from what Joe was just reporting, voice mails, phone transcripts, a lot of them seem to be embarrassing, talking about covering the affair up from his wife. Very embarrassing for him, but perhaps not necessarily something that's going to send him to jail. I mean, this is sort of a different issue, isn't it?

CALLAN: Well, at the end of the case that will be up to the judge. He faces -- he could do 15, 20, 30 years in prison depending on how many counts he's convicted of. He's got a very talented lawyer doing great cross examination.

But, you know, getting back to the contradiction thing, he hires this aide, Andrew Young, and tells him to lie. He admits that. He said lie, pretend that you're the father of my baby. And Andrew Young does that, the biggest lie you could imagine. And now, he's being cross examined because he's a liar.


CALLAN: Well, John Edwards hired a liar and so I don't know that the jury is going to think that's such a big deal, even though it kind of looks like good cross examination.

BURNETT: Joe, it's interesting, some of the revelations that have come out with Andrew Young admitting that he was, quote-unquote, "in love with his boss," right?

JOHNS: Yes, yes. Well, the main thing today, I've got to tell you, it was all about the money. It was about the checks that Bunny Mellon, the rich woman in Virginia, wrote to Andrew Young, deposited into his account.

And the question was how much of that money did you actually benefit from? And it's hard to deny that he would make a telephone call to Bunny Mellon. A day or two later, a check would roll in. And just how much of that money did he end up with as opposed to how much of it went to Rielle Hunter, because that's where the money was supposed to go. It was, I think, pretty damaging testimony and it was all about the credibility of Andrew Young.

BURNETT: And what do you think, Paul Callan, is going to happen here, when all is said and done? I mean, in terms of whether he'll be guilty and how much time he could serve in jail. You talked 20 to 30 years possible.

CALLAN: Well, I don't think he'll get that much time. But election law experts, lawyers who do these cases all the time --


CALLAN: -- have never seen a criminal prosecution and they all said it's going to get thrown out, there's no case here, it can't be made. But you know something, this is such a reprehensible cast of characters that it's caused so much humiliation to the entire state of North Carolina, that it's quite possible that this jury is going to say we're going to convict him and he'll go down for something.

And they had that last count that they always get him on, lying to federal officials. You know, even if you're innocent of everything else, you've got that one thing, that's a five-year count.

So I'm betting that John Edwards, as skillful as he was as a candidate and as a trial lawyer, he's going to have some problems with this jury.

BURNETT: And, Joe Johns, let me just ask you how he appears. I know we've been talking about a lot about that because he said he was sick. That's why we had a lot of delays here. How does John Edwards appear? How does he come off, confident, swagger, healthy, or none of the above?

JOHNS: You know, he looks exactly like he did when he was on Capitol Hill. I mean I saw him for years. The thing, though, as I talk to people around town, they say that a few weeks ago, he was looking pretty bad. He was looking gaunt. He looked like he'd lost a lot of weight.

But something happened between then and now. He looks super healthy. Not a gray hair on his head. And he seems very active and engaged, talking to his daughter, Cate, behind him, talking to his attorneys, working on the defense. So a real turn-around, if you will, if he ever looked very bad at all.

CALLAN: Well, he's back where he started in, a courtroom, OK? Wrong seat maybe, but he started out at a trial lawyer. So maybe he's just comfortable back in the old workplace.

BURNETT: Maybe that's it. And I have to say, Joe is talking about his hair looking perfect. We all know he doesn't spare any expense when it comes to his hair.

OK. A new Secret Service sex scandal has emerged. Agents partying with strippers and this was a year ago. And Rupert Murdoch making a surprising admission about the phone hacking scandal today.


BURNETT: All right. We're back with our "Outer Circle," where we reach out to our sources around the world.

And we start in Nigeria where at least eight were killed, dozens wounded by three bomb blasts today.

Vladimir Duthiers is in Lagos.

And, Vlad, how do we know who did it?


VLADIMIR DUTHIERS, CNN CORRESPONDENT: Erin, so far, no one has claimed responsibility for these attacks. It seemed to target civilians, and more specifically members of the press. However, I spoke to the managing director of one of the newspapers targeted in the bombing, the newspaper "This Day". He tells me why he can't be 100 percent sure, he believes these attacks bear the hallmark of an Islamist fundamentalist group Boko Haram.

Now, this groups has been responsible for killing some 400 people in Nigeria just this year alone and most dramatically, killing 25 people and wounding hundreds in the United Nations compound in Abusia (ph) last year. The President Goodluck Jonathan today condemned the killings, saying, quote, "they are misguided, horrendous and wicked" -- Erin.


BURNETT: All right. Thanks very much to Vlad.

And now to London where News Corp CEO Rupert Murdoch admitted there was a cover-up in the "News of the World" phone hacking scandal. He testified in front of a judicial inquiry.

Dan Rivers was there.

And, Dan, how significant is Rupert Murdoch' admission that there was a cover-up.


DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: Erin, this is highly significant. It's the first time, Rupert Murdoch has admitted a cover-up, used that phrase. It is an accusation that's being bounded about for months by his enemies. The remaining question now is how high up the management structure did it go?

Rupert Murdoch is trying to give us the impression that it was limited to the legal affairs manager Tom Crone and perhaps the editor Colin Myler of the disgraced "News of the World" tabloid. But his enemies have repeatedly insisted, as have Tom Crone and Colin Myler themselves, that James Murdoch, his son was also told about the extent of phone hacking, suggesting this perhaps goes higher up than Rupert Murdoch would like to admit -- Erin


BURNETT: Now to Pakistan where officials have deported 14 members of Osama bin Laden's family. Reza Sayah is there -- Reza.


REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Erin, in a brief statement, Pakistan's interior minister said the bin Laden family was sent to Saudi Arabia because that's where they asked to be sent to. Of course, two of the wives from Saudi Arabia, the third from Yemen.

This brings to an end a year where this family was kept in limbo while they were being held in custody by Pakistani authorities and while they were questioned by Pakistani authorities.

Of course, the anniversary of the raid on the bin Laden compound happens to be next week. It was during questioning by Pakistani authorities that it was revealed that bin Laden and his family lived in a number of homes in a number of major Pakistani cities for over a decade, fueling that question, how did they do it without being detected -- Erin.


BURNETT: All right. Thanks very much to Reza.

Now let's check in with Anderson for a look at what's coming up on "A.C. 360".

Hey, Anderson.

ANDERSON COOPER, HOST, "A.C. 360": Hey, Erin, we've got breaking news tonight in the program. In an exclusive interview tonight with Mark O'Mara, the lawyer for George Zimmerman, he tells me the Web site set up by his client asking for donations with PayPal pulled in far more money than he ever knew.


COOPER: Mark, we spoke earlier this week and you told me that you had conflicting information on how much money had been raised through George Zimmerman's Web site, the account that he set up. You said you've been told anywhere from $700 or $80 to a couple of thousand dollars. You now say it's much more than that.

How much money specifically to your knowledge has been raised by George Zimmerman and his supporters?

MARK O'MARA, GEORGE ZIMMERMAN'S ATTORNEY: Well, my understanding was there were two accounts, one with about $700 and one with $2,000 by some friends of his. In talking to George after I was trying to shut down his full Internet presence, because of some impersonators and other problems with Twitter and Facebook, he asked me what to do with his PayPal accounts. I asked him what he was talking about. And he said those were the accounts that had the money from the Web site he had and that there was about $200,000, $204,000 that had come in to date.


O'DONNELL: Two hundred to two hundred and four thousand dollars, that's a big disclosure because you'll remember O'Mara told the court at a bond hearing that his client was hard pressed to pay any of his legal bills, that he was indigent. We'll talk to our legal panel about what that could mean to the case. Also, my interview with a father whose son was bullied in school by his teacher. The abuse caught on tape, and the father put a recording device on his son.

Those stories and tonight's "Ridiculist," Erin, at the top of the hour.

BURNETT: All right. Thanks so much, Anderson. Looking forward to that.

And there are reports of another sex scandal in the Secret Service tonight. There's new details about a separate trip to El Salvador in 2011, just days before President Obama arrived. And on that trip, he brought his wife and children. Now, according to Seattle TV station KIRO, a government contractor who worked with the president's advance team claimed Secret Service agents partied hard at a local strip club.

The reporter spoke to Wolf earlier today describing what the contractor saw.


CHRIS HALSNE, REPORTER, KIRO: He witnessed some of the Secret Service agents going into the VIP area to get sexual favors for cash. And ultimately, he said, they were working really hard to try to get the strippers back to their hotel rooms. And that in at least two circumstances, he witnessed that despite him telling them that it was a terrible idea, that that occurred.


BURNETT: All right. There are now calls for a larger investigation into the Secret Service.

Right now, we have some breaking news. Sheila Jackson Lee just met with the agency's director, Mark Sullivan, and she's OUTFRONT tonight.

Good to see you, ma'am.


BURNETT: Let me just ask you this question. I know you had a chance to meet with Mark Sullivan and talk with him about these latest allegations, about what happened a year ago in El Salvador, and he said something to you that may contradict what we just heard?

JACKSON LEE: If these allegations are true, the behavior is absolutely unacceptable. But Director Sullivan indicated that he is still looking for the facts. Right now, they have begun to question supervisors that were on the ground, personnel attached to the embassy that was there. They have not completed an investigation, but they really need more facts and they really are seeking for anyone who would come forward, for the source to come forward, maybe voluntarily.

But we obviously made the point that no stone should be left unturned with respect to any allegations that may be coming forward.

Now, I added something, and I really believe it is important for some statement to come forward. I believe from the agency in whatever appropriate way, to insist that this is not and should not be the culture of the agency, that no further opportunities like this will be allowed by anybody who was employed by the agency, to restore the faith and confidence of the American people and to say again as I have said that the greater majority of Secret Service agents over the decades have been hard working and protected the commander in chief to the utmost.

BURNETT: And, Congresswoman Lee, what I'm curious about and find very hard to understand is there seems to be some legal question here that, okay, if prostitution is legal in the city that you're in, that maybe it's OK, that it may be inappropriate, but it's OK. I don't understand how it could be OK.

JACKSON LEE: Erin, I'm so glad you asked that question. Let me just share in addition that I think you'll be pleased at some of the immediate administrative changes that are going to be coming into the agency.

First, let me just make it very clear: we need more women. But right now, Director Sullivan will be implementing as we speak a working group that's going to deal with this issue of culture, a separate group that is going to be talking about outreach and recruitment and talking about women and other diverse groups that need to be part of the Secret Service agency.

But more importantly, we're going to be saying that no foreign nationals -- the agency will be saying no foreign nationals will be allowed in your room. It will be absolutely illegal in terms of your job for you to in essence attend or be associated with any place of bad acts.

And then finally, a professional development officer or personal officer is going to go on every trip that the agents take out of the country.

But let me just say this.


JACKSON LEE: I am writing legislation that will speak to your very point. This is a misnomer. First of all, prostitution or sex -- sexual promotion -- promotion of sexual activities in Colombia was not legal. The only act that's legal in Colombia is the fact of the woman's participation. And the reason is that country is impoverished to a certain extent. They are obviously making a great change. They were a great host.

But more importantly, these women use this to support their family. But pimping is illegal. Promoting prostitution, which the play club did for profit, is illegal. Fraternizing with foreign nationals, or with people underage, which none of the agents really tested their age, maybe under age, or under 14 --


JACKSON LEE: -- is illegal. That was a bogus argument, should not be addressed.

And I'm glad to say that 12 of those agents that were involved, those 12 that were announced, they are gone. Investigations are still proceeding, but 12 of those agents have been gone except for the fact that the director said they're going to complete their investigation. They have a few more people to interview on the Colombian incident.

But that is absolutely a ridiculous argument. That's why I was so outraged. You cannot do what is legal in one country but is illegal in the United States and keep your job.


And did Director Sullivan -- did you ask him or did it come up as to how the departures of these agents has been handled? I mean it has surprised some that some of them weren't outright fired, that they were allowed to resign or retire in one case with benefits.

JACKSON LEE: I think the important point is that we have structures here in the federal government, in any place of work. Work is protected by due process. Some are protected by rights to appeal. We have a federal merit protection board. And that's OK.

I think the acts of the agency made it very clear that these individuals were no longer welcomed at the Secret Service agency. They did not reflect the work and quality of the men and women who have served there.

So, these individuals are gone. They have their rights to appeal. They have their right to resign, because of the procedures. And if you want someone to go quickly, resignation is a perfect way to handle it.

I wanted the cancer to be carved out. I think Director Sullivan has made it very clear that he wanted the cancer to be carved out --


JACKSON LEE: -- so that they could focus on addressing the question of if this is a culture, then they want to immediately put it to rest.

That's why they have established this working group. That's why they have announced right now, no foreign nationals in your room, no fraternizing in places that you should not be.

I want to do more, which is if you perform something that is illegal in the United States while you're, as they say, on duty, performing your duties, you need to be fired immediately. But we are not giving up on the investigation.

BURNETT: All right. Well, Congresswoman Lee, thank you very much.

We appreciate your taking the time and you heard it there. Mark Sullivan saying perhaps nothing did happen in El Salvador. That still ongoing.

All right. Well, I found this in Jerusalem. And it's scented and I'm going to tell you all about why it smells bad.



STEPHEN COLBERT, COMEDIAN: The U.S. dollar remains the global currency standard. You can use it all over the world from buying sushi in Tokyo to prostitutes in Cartagena. There are no challengers to America's currency domination, until now.

BURNETT: Since Iceland's financial collapse in 2008, there have been a lot of discussions about whether the country should stick with the Icelandic krona, or adopt another country's currency.

I for one is considering adopting the Canadian loony as its official currency.

COLBERT: Nation, I have never trusted our poutine-sucking health-care addicted nemesis to the north. They always have to make our stuff their stuff. Canadian bacon, Canadian beer, Canadian baseball.


BURNETT: Sorry. Calling Canada a poutine-sucking nemesis is a little bit harsh, all right? Well, I'm just glad other members of the media are finally taking the Canadian threat seriously.

All right. I heard something crazy today. After years of getting busted for using steroids, Major League Baseball players may have found an all natural alternative, jasmine. The Smell Treatment and Research Foundation, yes, teamed up with members of the Chicago White Sox for a study to see if the smell of jasmine could improve baseball performance.

Now, why the heck they thought of jasmine, I have no idea, people, but it worked. The players wearing jasmine-scented wristbands had better reaction times. Strange, right?

Sure, but not as strange as what I found in Jerusalem. This. This is holy water from the Jordan River. And, yep, it -- it's scented holy water.

Now, because selling holy things at exorbitant prices has become something of an industry in the Holy Land, I was curious about this. A number of companies now offer extensive lines of scented holy water and anointing oils that they came from the Jordan River and other religious sites.

Now, when I saw this bottle at the duty-free shop at the airport for $5, by the way, a week ago it was only $4. Yes. I visited, it reminded me of the time I visited Stations of the Cross. I happened to be in Jerusalem on a Good Friday. I went to the Stations of the Cross and a priest was there and he wouldn't let me in because I didn't have any money and they charge you to go to Stations of the Cross.

Look, I realize people need to make a living. But the idea of charging tourists of visiting holy sites at high holy times, and asking them to pay for holy water because it's scented, well, first of all, I just want to smell it. And it really doesn't smell good. It actually smells like something that I don't think is appropriate to talk about.

So let's just leave it like that. But we think the whole process of charging for things that are very serious and holy for a lot of people just stinks.

Well, tomorrow at 7:00, debt collector deception. Debt collectors are posing as hospital employees, badgering patients in emergency rooms and refusing them treatment until they pay up. A special report, we investigate OUTFRONT tomorrow at 7:00.

Thanks so much for watching, always.

"ANDERSON COOPER 360" starts right now.