it's an honor for us to be here and to answer any questions you all might have. thank you. >> i want to ask for those who did know, what was your involvement in the last presidential cycle, what would you doing speak what i was working for the mccain campaign. and i worked in finance. >> okay. already has some experience. ..

>> we've had the privilege of watching our father, john huntsman, represent our country three times oversea, and as a goof nor here in utah. tomorrow's friday, one day closer to the weekend. >> we strongly believe our dad as the experience and proven track record to revive america's economy and great jobs. even if we didn't believe that, we still have to be here. >> we are shamelessly promoting our dad. no one's seen a trio like this. we need you to get involved to make sure our next president is based on substance, not sound bites. check out our dad at jon2012.com.

♪ >> just one question, how many takes did you have? did you just sort of shoot out of the park on the first try? >> we all grew up acting, and it came first, took one try for all of us. >> i think the whole scene took an hour. >> the editing took the majority of the time, but an hour to film the whole thing, memorize the script. >> yeah, the lines, and took about an hour to get everything perfect. >> we did not know this was -- we knew they were doing something, but it's, you know, we were a little bit nervous because, you know, we had no idea. i said just wait, just wait, and finally they just said, okay. here it goes, and they sent it to us as they sent it out. we sat there and -- >> we actually had no idea it would go this viral. when we made the video, it was also for fun, and, you know, we

actually got up early that morning and had the idea, so we ran out in the pajamas to find mustaches, and what? >> when i was little, i was trying to find the little pipes that blow bubbles. i was trying to find those so it would look -- you we couldn't find those. >> no, no, no, we can't do this? >> yeah, we were sitting there, i received a bunch of e-mails and people were calling me saying have you seen herman cain commercial? i said, of course. i said let's do something with this, age appropriate, blow bubbles, and we had to write the script, but i woke up and i had a vision. i'm more creative. that's how my mind works. i said it would be really fun

for us to do, and my sister, abby, the more mom of the group, she -- i got her up out of bed at 7 a.m. saying i have thissed why. we have to do it. she said, absolutely not, liddy. she shoots down all my ideas, and she was downstairs like, okay, you know, actually, it could be something, and her husband approved of it which is like huge. okay, it must be okay. we got to work on it, and i didn't think it was going to turn out the way that it did, and it was very, very surprising, but a lot of people liked it. >> spur of the moment? >> the ones where we're like people are going to love this tweet and nobody pays attention, but it's the spur of the moment, off the top of your head, those go viral. like the panic. i didn't think that was -- >> i was in the middle of a don't, homely myself, i don't know, on a roll and wrote it,

and the next morning i saw on "good morning, america," they were reading it, and i was like i hope my dad's not upset. >>st there's a tweet about the lack of experience in china and knowledge of china and said panda express doesn't count. that was a great joke, and that's why people respond to you because you have this great, young, nice reaction that people, i think, understand, and that it's not so scripted, and that's the most refreshing part. >> yeah, i think that's what people like about our twitter accounts, very light hearted, but it tells it in a way that's true, but gives some sort of laugh or some -- i don't know entertainment towards it. >> yeah, we say how it is. >> yeah. >> so i wanted to first of all say it was great scowly faces on during this, the serious, it was good. i wanted to ask about your

father and his reaction. >> well, he was -- he was with my mom in the car. we were in the car, and he looked down, and he just broke out laughing, and i knew that it was okay. >> we sent it to him the exact moment we sent it out. >> oh, wow. >> jon has a dry sense of humor, and the more the country gets to know him, the more they will see that. >> what's dinner look like on a saturday night? a lot of laughter? >> we love to joke around, sit around and watch "dumb and dumber." >> what i was woundserring in terms -- wounderring in the social media aspect, but what do you think it is that is so important in terms of the presidential campaign in embracing social media, and why

do you think it is really important for presidential candidates nowadays to make sure they are using that? >> i mean, i think it's such a great tool to reach out to every type of individual, and twitter, you can get it so fast where i think in previous elections it was last election cycle in this blog, and today people are very impatient, so they want things right away, and twitter, people are obsessed with it to get the news and what the candidates are saying and things are viral in 30 seconds. i mean, it's a very exciting part, i think, of the campaign, and this election cycle that i think is making it a different election cycle more than ever, and i really think social media has a big part to do with that, so i think it's the modern world kind of coming to play with campaigns that's changing the election cycle a lot >> yeah, i think it's great you can find things out on the spot, and on twitter, you read the

news feeds of, you know, everything going on. it's different from the last election cycle where it might take a couple days to blog about something, but twitter it's exactly what's happening at the moment. i think twitter will stay around for quite a while. >> i think, also, i had twitter for a couple years, and i have not seen it grow this big. i feel like this election cycle has really, the last couple months really made a grow to like a new aspect of the new facebook or the new way to communicate. >> the candidates themselves are using it so it is a way to get messages out quickly. >> right. >> your twitter account has over 18,000 followers, and i don't know if anyone here is following 2012 girls, but were you asked if you had push back from the campaign? you know, the role of the campaign is to stay on message -- >> right. >> and here you are sort of off the cuff blogging, tweeting.

what's that been like? >> pretty great so far, and they said we're the campaign's secret weapon, but i think they trust us for the most part. >> at the end of the day, i mean, we're promoting our dad, and so we're going to try to make it as positive as possible and try to get him out there. that's most important. >> yeah, that's the goal, to help our dad, and that's why we initially started the twitter account. >> great. i have a question from a tweeter, sarah, and she asked if it's true that younger voters are apathetic or do you think that's just a stereotype? >> i mean, i think -- what i've seen, i mean, we're all involved. i was in college for the last election cycle, four years ago, and i think the media -- i think that the youth was really involved because of hope and

change campaign, and, in fact, it was really attractive todd younger generation, where this election cycle, i think people lost that hope and have not seen that change and they are not wanting to be involved that much, where when we go to speak at schools, it's like more than ever are you audience needs to be engaged in the elections more than ever because it's our future. it's the most crucial election cycle, and i don't think people realize that. people wake up, and the issues that they used to care about are not things to affect us in the future, and so, i mean, our role, too, in this whole twitter is we want the youth involved as much as possible because it really is such a crucial time to get involved in politics. >> yeah, i mean, it affects our generation more than anybody else, and i think that's what a lot of young people don't realize is that, you know, whoever our next leader is, it really has a huge impact on this

generation. >> encourage people to get involved as much as possible. >> now, one of the things i want to remind the audience is we want questions from you, so if there's anybody who wants to ask questions, line up at the microphone there, and we'd love to hear from you. >> don't be shy. >> oh, great, we have someone. introduce yourself, please, before you ask your question. >> hi, thank you for copping. i'm seth, a student in the peace and conflicts program here. there's a lot of different republican cap dates that have been in the media spotlight, front runners at some point in the primary campaign, and i'm wondering why you think that's not happened to your dad? why the media has not put a spotlight op him and why he's not a front runner yet in the campaign? >> i think the media in the beginning were more interested in sound diets than substance. the people who won the debates

were the ones with the best lines. getting closer to the election, now they switch to my dad because they want substance. people are really going to be interested in what my dad has to say. i mean, we all love the position we're in right now. i mean, i think we'd all want to be the last front runner rather than the first, and i think this is the best way of going right now. >> yeah, and i think this is really an interesting time in our country and election cycle where, you know, i feel like both parties have never been so divided, and, you know, so as you look at all the front runners that come and go, i don't think people really have a clear idea of who they want yet, and one thing that my dad brings to the table is that he is a real people person and brings different parties together. i mean, he has all the republicans, the independents, and the democrats, and when you look at somebody to go against the incumbent, president obama,

you need somebody who can bring all of those people together, and that person is my dad. >> i think at the beginning, when jon jumped into the race, immediately the republican party said he crossed party lines, and he worked for a democrat as ambassador to china. well, what happened now is people are going back saying we forgot to give him the first look. we saw he did that, forgot to look at the record. he has an extremely conservative record and always has been consistently conservative record, and, you know, always pro-life, prosecond amendment, progrowth. what he did with the state of utah is phenomenal, you know, in bringing it to, you know, number one, and in job creation and, you know, his economic plan put forth was endorsed by the "wall street journal". i feel the republican party is going back now saying, and they admit we forgot to give you a

first look, automatically dismissed you because you took that job, and now what he did is something that i, as i, as a wife, and the children feel the same way, we are proud of him for stepping out into the arena and serving his country when asked, and when you're asked in a critical need and trying to find somebody that fits the position like ambassador to china, it's really hard in the country to find something whose the business background, the executive service background, and a background in china, which he studied for 30 years and speaks fluent mandrin, you know, it would have been hard to pass someone over like that regardless of what party you are from, and we have two boys serving in the united states navy that we think about every day as we're in the race, and the decisions that my husband made to serve his country would have been something that i think he would have felt that he had

disappointed his boys had he not taken it as he taught them about service and always stepping up and serving your country, and so i think that america will come around to that and understand that. as he explains it, people understand that reason, and he did a phenomenal job as ambassador to china, speaking out on human rights, such an important issue, that i think a lot of us feel strongly about, and he did a lot of wonderful things, and so if you can now look at the whole picture, which i think is happening now, and we've, you know, he's been that slow, steady rise, and a substantive rise that i think you'll find his rise sticks, and it's not one of these that goes up and down. he doesn't want 15 minutes of fame, but to be able to have a slow steady rise. watch new hampshire closely starting at 0, and now here's in third place just passing ron paul, and he's at 13% now. we're very encouraged and excited about where he is. the town hall meetings are

getting bigger and bigger and more excitement. watch new hampshire, and i think you'll see a steady rise. >> he also got two newspaper endorsements. he's made two of the five so far which is great. >> thank you. >> thank you. >> he's in a good place. >> i also wanted to follow-up, mai, because you work in the last campaign, do you feel as though this is more of a roller coaster ride for the gop primary in terms of having a front runner candidate, and do you have thoughts as to why it is like this opposed to the 2008? >> yeah, it's funny. you know, although this has been a very odd election cycle, i look back at 2008, and there are a lot of similarities in the front runners. >> okay. >> because if you look back, mccain was not even up at this point.

you had juliani and thoferson as the front runners and named by the media as the nominee in june or july of that year, and so in a way, there are some similarities to how the cycle has gone, but i think that this has also been a very odd year, and, you know, i think you'll see a lot of changes happen in the next few weeks. >> any sense as to why this year somehow sort of -- >> like i said before, i think our country's never been so divided on both ends of the spectrum, and there's extremes. >> i think people are unhappy with the current situation, and people are impatient. i watched a news program the other morning and said who is going to be up in 2016, and i

sat there wondering why we're talking about 2016 when we should be talking about 2012. it's impatience now with a lot of people. they just want to know who will be the front runner. especially with twitter because you get more information and more behind the scenes with twitter and other outlets. >> being involved as a candidate r you sit there, watch, tun on the news, and we would think there's two people running, and it's two different people throughout. whoever it is in the lead at that time, if you turn on the news, you only think there's two people running, and i think that's what -- in a way, it's a disservice to the american people because, you know, you think, okay, just two people to choose from instead of here's the field there, and let's look at all of them. that's something i noticed this time, and maybe it's because we're involved with it and see it every day, but it seems that, you know, they really focus just on two, whether it's a debate or

whether it's just a news cycle, and i think as american people we have to look at the whole field and recognize what that is. >> right. looking back to 2008, it was very similar where you would turn on the tv, and there's two candidate, the front runner, and mccain got the nominee in the end, which nobody would have thought unless this point or even a little bit later on. so -- >> sort of on that path, this question is from a new hampshire independent, and he or she asked what do you think of mitt romney or newt gingrich? they are asking about the two candidates that happen to be, i guess, most talked about right now. >> we like them, but they are no jon huntsman. [laughter] i mean it takes courage for anybody to get into this arena, so obviously anybody willing to put themselves out there, you know, you have to, you know, say, well that's, you have to

complement them for doing that. obviously, i think that our dad is the best candidate for the job, but, you know, they are nice when we see them at debates. >> there's a lot of respect that people don't realize amongst candidates and spouses, and that's something that maybe on the outside people would not see, but we do try to keep that, you know, on a personal level, there is a lot of respect, and, yes, you're going to see, you know, ads and different things going across the board, but you get in the arena with them, and everybody shakes hands, and, you know, it's just the part of the game where you go out there and it's the competitive part of it, but, you know, there is a good repore between candidates and spouses, and that's something that i think is -- >> there's a republic behind the -- respect behind the stage. >> we understand what one another is going through.

>> well, on the trail, how much does get personal? looking at ads and earlier in the campaign and rick perry supporter expressed some anti-mormon rhetoric at some point, and how much of that, when people go after candidates and their beliefs, and how much of it feels personal? does it ever feel personal? >> i don't think we take anything personally. if you're going to be in this game, you can't, or else you would never get out of bed in the morning, and i think since day one, you know, we're so close as a family, and we know at the end of the day, we are there for the right reason, out there for our dad, and believe so much in him, and people can say what they want. we hear negative comments all the time or see things on tv, and, you know, we have our family at the end of the day and we are behind the right guy. >> i mean, we went through this when my dad ran for governor, and it took a little bit of time to get used to. you know, i think the hardest thing as a daughter is to read

things about your dad, and that took awhile for me to get over, but it only makes you stronger, and, you know, you know what's going on within the family, and with your dad, so, you know, you just -- >> you try not to read the news. >> it can put you in a bad mood. it really can. what we read it affects our emotions, and when you're in a campaign like this, you have to keep yourself focused. i know my husband does not open up and read articles all day. you know, he's busy thinking about, you know, the next event he's going to, and if there's something he needs to know, they'll let him know, but you can get caught up in it all, and that can bring you down, but you have to stay up and focused every day. you know, the best thing in family is having each other build one another up. we could be down about something said, and somebody else in the family picks us up again, so,

you know, we're human, real, we feel it, and, you know, talking to some of the other spouses, as i do, you know, as a wife, i know that we, on a personal level feel emotions that go up and down and feel it for our husbands, and you care and love them so much, and, you know, it's all part of the, you know, this game we knew getting into it that it would not be easy, but there's a bigger picture out there, and that's, you know, getting this country back on track. >> we try not to watch tv. we were in south carolina, and it was right after the debate, and every channel i flipped oven, it was like comments, and the first thing was the debate, and next channel, and every single tv show had something on the debate and then finally "the office" came on, and i was like we're watching this and nothing else. [laughter] >> since the youtube and twitter sensation exploded -- >> we had a lot of show programs, and i've done a lot of

interviews, and the more we do things, the less i read. you know, in the news because you know what's going on, and i think it's -- i think it's worth it. i think it's worth it to put out your life for such a good cause, and i think we've seen that. we're risking a lot of things, but at the een of the day, this is for a greater cause, our country, and for the best leader, and i think that's why we feel confident at the end of the day of what we're doing. >> well, on that line, this is from new hampshire voter, and they asked in terms of your social media work and your exposure, look at votes. do you think it translates into votes, and then they followed up by asking how many. i'm not sure if there's -- >> three or four -- [laughter] >> you're shooting high. [laughter] >> we hope so. we really hope to make an impact on people. >> yeah. >> and i have seen several tweets saying, you know, now

that i'm following you, i'm definitely voting for your dad. >> that was the point of twitter and getting into, you know, ourselves out there to promote our dad, and as people watch the youtube and go to my dad's website, it's worth making fun of ourselves. it's worth it in the end, and i think hopefully this will translate into votes, so we'll see. >> questions from the audience? yes? >> i'm jim, student trustee here. i welcome you and thank you for coming. >> thank you. >> your father seems more moderate than everybody else in the republican field, and at the same time there's the rise of the tea party in the republican party, so my question to you is how does your father reconcile his moderate streak compared to everybody else with the domination of the republican party by its fringes at this point? >> well, if you look at his background and record, he has a

more conservative record than any of the other candidates, which i don't think a lot of people read or realized. >> i think he's in reality, you see him be moderate on civil unions, and he's been stereotyped with that since day one, but the record, and on all the issues, he's the most conservative of everyone on stage. i think at the beginning of the race he was mislabeled as being a moderate, when the reality is he's the only consistent cop servetive on stage. if people go back and look at the record of utah, they will say, wow, he's more conservative than any other candidate. >> we encourage everybody to go to jon2012.com, and you'll see the record there and be surprised at what he's done and how conservative he is. >> he has a moderate add duet about -- at dude about life because he

brings people together, and that comes across as liberal, but it's a gift that he has, and it's something the country needs more than ever now. i watched him as governor bring the state together, and he was able to unite a state where you may not agree with him on every issue, but you'll know he's genuine, authentic. he doesn't pander. he would rather lose than not be authentic, and he's -- >> the modern day politician, and i think our country's aching for someone who is modern. i mean we have social media and twitter, and our country is changing in a more modern way, and we need someone with a more moderate approach to life i guess. >> moderate approach to life, but he was nos changed the conservative principles. married 28 years, exact same, he doesn't flip on issues.

he's exactly the same on those principles and values he's had since the day i married him, and so that's something i think again as i said, i believe the republican party who may have missed labeled him at the very beginning which was unfortunate because if you look back now, and it's maybe taken awhile to go back and see who he really is, people coming around to it and realizing we forgot to look at the record which truly you have to look at the past to see how they lead in the future, and i think his record speaks for itself. >> all right. great. one other question from the audience. >> i'm mike, freshmen here at school, got out of the army in august and started this process. you said you had brothers in the navy. i wanted to know, as far as them being stationed in different places around the world and their service, how does that impact the family both on the campaign trail while they serve. what's the dynamic there? >> thank you for your service. thank you. they are just beginning the process. >> sure. >> they both -- one's the second

year in the naval academy, and the second child is not too far from here in rhode island playing football and he'll be at the academy next year, and so i know that they have a world ahead of them in store for them, and you kind of wonder what that's going to be, and when we were in annapolis a year ago picking up our son -- not picking up, but spent an hour with him to see him in yiewn form for the first time, and all the parents are there, dropping them out of six weeks before, and then you see them for an hour, and the son said to us, i just want to take you and mom up to the cemetery because that's where i run every day because we have so many great heros that served our country, and it was something that meant a lot to our son, jon, and he said i learn a lot here. i feel, you know, their goodness when i'm here.

we went there, and that was a moment i'll never forget. when i think about the next generation and our men and women going out into battle and our son was in front of us and my husband shook his head and said i'm really worried for our country. it was that moment i thought, you know, what is in store for your generation? i realized how concerned he was, and we were actually still living in china at the time, so we went back to china and were not thinking about doing this, and he went back and continued as ambassador, but that did not leave his minute, and he was concerned about what was in store for the men and women and the next generation, and i think that had a big impact on them, so coming back as we thought about where our country was and where it's going, he thought i can sit on the sidelines or i can jump into the arena and at least put forth some ideas that i think can help the country move forward, but that is something we keep in our minds

every day, and where they are going to be, and yesterday somebody said to jon, what do you have to say about the iraq war ending? he said, i'm thinking about 4,000 gold star mothers right now, and for me, as a mom, i was walking to the car, and i found that i got choked up, just that one comment, "gold star mothers," and i realized the sacrifice young men and women do for this great country, so we keep that in our minds every day. >> a follow-up, how do you feel with your brothers serving? >> it's an amazing thing. we're so proud of our brothers. as people ask me all the time, was this something they were forced to do or decided a year before? they actually have been thinking about this since they were really little. it's been a dream of both jon and will to serve in the navy and serve their country, so i'm very, very proud of them, and we

obviously look up to them more than anything. >> right. i'm extremely honored and so proud of both of my brothers, and i feel i'm emotional talking about them because i look at the position we're in now, and that's why i have become so passionate about my dad because i feel like he is the only one, when alook at who is calling the shots in the day for my brothers and their lives, i want someone who i can trust in office, and i think that's why we are here at the same time saying these are brothers, this is our brothers' boss at the end of the day, too, we need someone in the middle of the night we can trust, and they will have our brothers, you know, lives in hands, and we want to be able to trust them, so i think that's why i'm also out here. i'm also out here fighting for my brothers and trying to get the best leader in office. >> sure. >> all right. we're going to do a bit of a lightning round for questions and just go somewhat quickly. the first question is it's sort

of because you guys are actually in massachusetts, just over the border, but we're wondering the thoughts on senator scott brown, a sensation here when he was elected. >> i don't know who -- [laughter] >> you know, i don't know him. >> okay. >> i think highly of, you know -- >> i think we think highly of him, but, yeah. >> we'll move on to will you run for office someday? is that something the daughters are considering? >> i've been involved, obviously, in campaigns, other presidential campaign and this, i mean, it takes a lot of guts to run for something, so i think it's great for anybody who decides to do that 6789 i don't think it's in my future, but -- >> i will not run for office. [laughter] that's an absolute for me. >> definitely not ever.

i love politics, and i think it's great, but my world and my hobbies and passion are not the political route, but it would be fun to work on another campaign because i have this experience, and i think we have all seen the inside process of it, but i think it comes easily to us, so definitely, no, i would never -- i'll save you guys that, i'll never run for anything. >> when are you shooting your next video? plans or ideas for another one? >> i think we found that spur of the moment ideas and things are what kind of get the best viewership, so i don't know, maybe tomorrow i'll wake up with another idea, so just keep watching. >> i'm actually curious, how much did you watch any of the romney sons in the last campaign 1234 the mitt mole going on --

mitt mobile going on, i don't know if you saw that. >> i did. >> i wasn't sure if that influenced you or you have seen it and sort of saw children or kids taking part in this, you know -- >> well, i think, i mean, she worked on the campaign -- >> i helped with the blog out at first. >> i think looking at anybody, we looked at the blog, and my sister was involved with it, and so i think during this process, we started twitter just to keep our friends. updated op what we're doing, and that led into a much bigger process, and then we realized social media will be the big theme, and we ran with it. >> i think it's great to see behind the scenes of a family and what the kids are up to because you want to see what the family's like, and i think that's one thing that i really liked about the last election cycle is, you know, you saw the

kids out there like the romney boys and megagan doing -- megan doing her blog, and we're close, we wanted to do something as sisters, and twitter was the new fad, so, you know, that's why we decided to do this. >> what do you think it is about the romney boys that is fun to poke fun of? >> well, they won't respond to us op twitter. i think the romney boys are playing hard to get with us. >> i mean, we don't know them. we have seen tag a few times, but, you know, it's all fun and games, but thaw have not been that involved this go-around. >> that's right. they are definitely less involved leading to another question. who was the best sport in terms of campaigns that you've dealt with in terms of just going back and forth? just playing with you, basically, having, you know, doing what you guys do best. >> who's been the best person? >> sports --

the kids. >> of other campaigns? >> yeah. >> i don't know. >> this election cycle? >> yeah. >> griff probably. >> yeah, griff perry, he's sweet. our families are close, and it's fun to go back and forth on twitter, but no one else responds to us on twitter. >> really there's no worse sport because everybody else has not -- >> i don't think they want us to make a parody of them so they keep it quiet. >> i don't blame them. any take away moments from the campaign so far? the campaign trail? you've been up in new hampshire for two weeks almost? >> both been here for two weeks straight. >> any take away moments, either interactions with other candidates or any especially long days? >> always long days, but i think

every day is just a new add menture. we explored all new hampshire, meant so many great people, and every day is a new day. we have not come across any of the candidates in the last two weeks -- >> one day they said let's go in the car and go to every diner we can think of. >> yeah. it's good. >> we have gone to a few. i would say one of the most meme memorable experiences for me is when we first got to new hampshire, the three of us girls, i was in florida and they were in other places doing finance events, and we came together in new hampshire, and this my dad's first debate in south carolina, i can't remember, but the first presidential debate ever -- >> a debate party. >> yeah, we got to new hampshire, and we saw there was a 5k starting at like 7, six or

seven that night. we had not been working out at all. >> we had diners. >> right. [laughter] >> we thought this would be a great thing for us to do together, so we decided last minute to jump in, and i think it was one the biggest 5k's in number of. they do it year round. >> labor day? >> no, i can't rewhat it was, but we jumped in, and i remember thinking, the only thing that got me through it was it's for our dad, his first debate, and we all got through it -- >> barely. >> rushed to the first debate watch party. obviously, all sweaty, and my dad did a great job, but it was a way of, you know, getting through it because we did it for our dads. there's things like that that happen on the campaign that are very memorable for us. >> just a 5k for fun, that's

motivating. >> another question from the add yeps? >> i'm cory, a sophomore here, and i just had a question regarding both the daughters' recent college graduates, and how being fresh out of college influenced your action in the campaign and actions as an adult. >> it's mainly more passionate. sitting there during graduation, i think, and in 2010, 76% of students op graduation day were unemployed, and when i read that statistic, my heart just dropped, and, you know, the majority of people graduating in my graduation were all unemployeed, and i think it got to a point where you don't have to an adult, and you have to worry about health care and taxes, and you have to wake up and say, okay, i need to get involved and make a difference, and we are in such a hard place

right now with our country, and i think graduating, and i think if i was in college right now, i really wouldn't understand the real world, but now being out there, i think it's made me more passionate about getting involved in trying to get the younger generation involved. >> yeah, i'm actually a musician, so i'm in a totally different field, but having lived in china the last two years, i had several friends. who were graduating from great schools who couldn't get a job here, and so they've been in china for the last few years, and they are planning on staying in china for as long as they can because it's really hard for them to come back and get a job, and that's something that really has surprised me, and so looking at that, it really made me want to come back and be a part of this campaign. >> thank you. >> thank you. >> thank you. >> great, length of time. we have another question here from concord river.

what do you hear back from voters using twitter? >> comments to us? >> yeah. >> i would say the biggest comment that we get is we love your dad, he's the only sane candidate. we see that over and over and over. >> everyone says your dad is the only sane candidate, i'd vote for him, but, you know, he's blah, blah, blah. i don't know. that's the biggest comment. i think every day we get that comment. >> we get that one three to five times a day. >> what's your sense when they say he's the most sane candidate? do you have a sense of what they mean? >> i'm not going to go into it, but you can see the field, how it looks, and when they see my dad on stage, they realize he's the only one to get up there and win and beat obama and lead, and he has a proven record for that, and i think when they say he's the only sane candidate, i mean,

i think that's where they are going at. >> okay. do we want to take another question from the audience? >> hi, alex, sophomore here. my question, social media, a big topic here, do you have any ideas -- asked of a future video, but to get your dad's image out more in states like massachusetts and around here in new england where mitt romney, i know, is a big face because he was governor, big in the area, just any ideas of getting his image out like he is in utah? >> i think that's by -- i think that's why we're so excited to do things like this here and going on different programs, just to kind of get the name out as much as possible, and if we have to do another video to do that, then i guess we'll have to. >> that's the great thing about youtube, you can come up with anything. >> getting people more -- like new hampshire, the diner core, trying to get people more involved and going throughout

the state and hopefully coming here to boston and doing a lot, so trying to get his name out and his image. >> i remember when they thought about doing the video at the beginning. it was more out of we're so tired of people not knowing who our dad is. we want people to know. that gave them the motivation to say we're going to do something about it. they jumped right in and really within -- >> yeah, that was the conversation i had with my mom before i got -- you know, i'm doing something bold, a video, come up with something that gets out there, so -- >> thank you. >> thank you. >> your role has changed in that you have become more and more visible. at what moment did that change? when your father announced his candidacy, were you ready to jump in full force? >> i think we've always been ready. i think it's been a paveed way for us because he was governor of utah, we lived there, played

the same role, and so i think once -- we all had to be ready for this when he announced it. >> i mean, i think, it obviously took awhile to sink in when your dad ainarchessed he's run -- announces he's running for president of the united states. i mean, it's such an exciting thing, but, you know, i don't -- i think we really got involved when we started this twitter account. that's when the three of us were gung ho saying we're doing everything we can to help our dad. you know, it's, yeah, it's definitely been a great experience so far, and, you know, no matter what happens, it's, you know, we'll never forget this time of our lives. >> now, i saw that you had retweeted after the lincoln-douglass style debates saying that was not a debate, but a ticket.

what do you think would be the best candidate to pair up with your dad. this was speculative, but -- >> i think they need to do this with all the candidates. >> uh-huh. >> i think it would be interesting for the country to watch all of these candidates paired up, talking about these very serious issues, which you don't really get at the debates, and the nice thing about this lincoln-style debates, and they only had five issues because it takes a long time, takes more than 30 seconds to answer some of these questions. >> can't talk about china in 30 seconds. you just can't. >> right, right, and i think that the country needs to see, you know, who can handle all of these issues for our country, and so i really hope all of the candidates get an opportunity to do this. >> it was interesting because after the debate, the media didn't really feel -- there was a lot of media with it, but on twitter, everyone's like, oh, there was no side show. i'm not going to write about it

or tweet about it, and like, all right, that was a good debate. that was the best so far because there was people listening and getting involved and learning something. >> john may not be the one center of the drama, and if you're not in the center, you don't get the headlines or, you know, all the media attention, and yet that's why i think people now are going back and realizing that the substance, when you really think about who can lead the country, you go back and say it's not about a side show, some comment in a debate, but it's serious business, and i think that's why we're seeing, especially in new hampshire, those voters who take it very seriously begin to take a good look at someone like him and his background and what he can do. with this country. it's, you know, it's been an interesting road to say the least, but we like where our chances are now. >> is there a candidate? another candidate in the field that would be the best to be on a ticket with your dad? >> i guess we'll find out.

[laughter] >> you don't have opinions on that? no? >> not as of now. >> we have not really talkedded about that yet. >> all right. well, looks like we have another question from the audience. >> hi, i'm marissa, an english major and editor of the student newspaper. do you disagree with your father on any major issues? >> liddy? >> i mean, i went through a phase where i wanted to debate him on every single issue, and that was the dinner discussions, but every time i brought up an issue, i would come back do his side because i realized he was correct about it, so -- i went through ever issue with him, so now i don't disagree with him anymore. [laughter] >> yeah, i actually -- no, i agree with him on every issue so far. >> thank you.

>> do you think this will go all the way to the convention? >> boy, i don't know. it very well could. i think it very well could. it's been an interesting year. i think we're going to see -- we're not doing much in iowa. we're spending time in new hampshire, so, you know, watching that play out in iowa, i think it's anybody's guess at this point what happens there, and -- >> i think it's going to be a very historic election cycle when the florida straw poll in the middle of the summer, the governor got up and said mark my words, the next person who wins the straw poll will be the nominee. herman cain won. that says a lot. it's thrown a lot of experts off because nobody knows what next week's going to predict, and that's why people are being more

involved in it because it's going to be such a historic election cycle. >> yeah, anything can happen at this point. you can have a different winner for each primary, and it could go on for awhile, which i think could be very possible at this point. >> sometimes it's hour to hour, and threef event today, and go outside and see that something else happened in the race, and be on an airplane, four hours, get off, and something totally different than when we left. that's the way it's been. it's really been an interesting process. >> yeah, and do you see that as mary ann does? seeing it could drag on and on? >> there's a good chance it could. there could be three winners in three different states. nobody knows at this point. it's very exciting to watch, and a lot of people are tuning in. >> i don't think it will be over soon. >> no. >> we're just starting.

>> longer than people think. >> i know, i mean, certainly people ask us because your father put so much into new hampshire. if he doesn't win there, do you think he needs to drop out? >> i think even if he comes in second, and we believe he will win, but even if he comes in second, i think he still has a great chance. >> at the end of the day with new hampshire because of its retail politics, people are focusing on new hampshire, and that's why we participate in it, but the story at the end of the day says my dad was at 0%, and now he's at 13%, and whatever he ends with is the story. for some reason, new hampshire loves him, and he, you know, became, you know, first or second in new hampshire, and i think that we'll see that and why new hampshire is going to be key in this whole election cycle. >> get to know the heart and soul of the candidate which is important as you sit in the town hall meetings, and many times you shake people's hands six or seven times before you earn

their vote, but you feel your earned it, and america looks to see what happens in new hampshire, and, in fact k i think the world is watching what happens in the state of new hampshire. >> retail politics in new hampshire is crucial because the rest of the nation is watching versus iowa, other states, it's based off of media, and whoever, you know, has the best party before the election caucus, but, i think new hampshire is definitely important, and my dad is resinating and gaining traction because people are liking that up there, so -- >> okay. >> i guess we're able to take one more question from a student, and then we'll wrap this up. introduce yourself. >> i'm brian, president of the student government here at u mass law. in at least massachusetts, public higher education has not been getting as much funding as we'd like students, so i was wondering where your dad puts public higher education in his list of priorities.

>> education -- >> so we -- >> he'll give a speech on that and lay it out all, but take it this way, he takes it very seriously, very seriously. >> okay. >> i can answer a little. he had a trial run with all seven of his kids where with education he's seen it all. he had some of us in private, public, and even home schooling. i home schooled for piano, and, you know, he has seen the importance of everyone's individual needs for education, and so that is something that he takes very seriously, and he did as governor. if you go on the website, you can see, you know, what he did and what was on his record. >> well, listen, thank you for your question, and we want to thank the huntsman family for being here with us today. we really appreciate. we thank you all 6 you -- of you for watching and for

coming, and thank you again. we appreciate all your work in the campaign. >> thank you. >> thank you. >> thank you so much. [applause] >> we have a little something from the university for your agreeing to come today. >> oh, thank you. >> thank you. >> make sure you get the right one. >> thank you very much. >> that's for your sister. >> oh, very kind. >> thank you so much. >> thank you. yeah, i'll take it for her. >> there's a shirt you might want to open up to show the audience. >> oh, i'll get it out. oh, that's a great one. i love that! i love that. >> thank you so much. >> we need long sleeves up in new hampshire. >> anyone interested come up to new hampshire and help us. we would love to have anybody

volunteer. it would be a great opportunity. >> a couple weeks ahead of us. >> yeah. >> all right. thank you. >> thank you so much. [applause] >> thank you. [applause] [inaudible conversations]

>> washington journal looked at the succession of his sun, kim jong un and what future holds for the u.s., north korea, and south korea. >> host: focusing on north korea with the death of kim jong il. center for strategic and

international studies and wrote a number of pieces the last couple of days for the "financial times" and new york new york on this topic. we appreciate you being with us. >> guest: sure, steve. >> host: also joining us live on the phone from seoul, south korea. thank you for being with us. we lost the phone connection. we apologize for that. we'll reconnect in just a moment. let's begin, first of all, with the news that came sunday on the death of kim jong il. you wrote for the "new york times," "north korea as we know it is over, whether it comes apart in the next few weeks or over several months, the regime will not be able to hold together after the untimely death of its leader. how america responds will determine whether the region moves towards greater stability or falls into conflict." can you elaborate? >> guest: yeah, well i think, steve, as an analyst of korea

for many years and receiverring in government on the policy -- serving in government on the policy side, you know, everything i read says that the regime really stood on kim jong il, the leadership, and if he could live long, they could effect the successful transition process, and the worse thing to possibly happen would be the sudden death of the leader, so i don't reach this conclusion with any degree of happiness or optimism. it's just simply the logical extension of everything that i've read to this date about the viability of the regime. >> host: we heard some stories this morning, the official chinese government supporting the so-called great successor kim jong il's son, but you wrote yesterday for the "new york times," even if beijing sticks close to its communist brother, there's intense debates within its leadership about whether the north is a strategic liability. it was one thing to back kim

jong il and harder to underwrit the leadership. >> guest: since the nuclear test in 2006, there's been an intense debate raging in china to the degree of which china should stick with north korea and provide aid and assistance to it with little home of reform or just shed the liability and work with other countries in the region, and this has always been a problem for it and continues to be a problem for it as its knee jerk reaction is to show support from the regime in a very difficult time. the natural status bias of chinese leadership is to support something they know opposed to trying to address as what they see as fundamental change. >> host: getting into north korea is difficult as best. we reconnected, joining us live on the phone from seoul, south korea, mr. mccloud, can you hear me? >> caller: i can, yes. >> host: give us a sense of

the mood in south korea, and what you hear about not only the funeral sierms in not korea, but the transition in power taking place just north of you. >> caller: i think what's most striking, i mean, is how can two neighbors of the same ethnic stock be so different? there's millions weeping in the streets in the north, with little electricity, little food, two leaders since 1953, and here in seoul, the most varied place on the planet, and people are getting on with the normal bustle of capitalism and democracy. here they are shopping for christmas, thinking about the elections next year for parliament and president, and they are not talking about kim jong il. it's not dominating conversations yet. >> host: how tense is political south korea in terms of the uncertainty that is now presented with north korea, and most notably the missile test

that took place, occurred after kim jong il had died, but before they announced his death? >> well, plenty of high level meetings going on, and i'm sure they are focusing on the intelligence's failure, two days before anybody knew about this, took the north to announce the death. i mean, what the kind of wait and see attitude obviously will predominate here. ..

>> i've made two trips to north korea in the past, speaking to several -- people there are certainly frustration here, people are suffering. but there seems to be little sense that could, that this was the magnetism, state control could really crumble, the stage whereby real change takes place. it's still incredibly militarized and supervise and restricted population. people can't travel throughout parts of the country without permits. given what they have suffered

for so long, there are doubts there will be any rapid change. people have been suffering for so long, and have been unable to change themselves and talking with calum macleod with "usa today." how long have you been in south korea? >> i've been here since monday, since the announcement of his death. came over from beijing. >> host: just to reiterate your sense, more normalcy right now in the south korean capital? >> yes. these are people that are living, the bogeyman over the border. but they put up with provocations and aggressions from the north for a long time. experts and ordinary people i speaspeak to here are not expecg great change from the third generation. >> host: calum macleod, your story is them online at

u.s.a..com. appreciate your perspective from south korea. thanks very much. >> you're welcome. >> host: clinical back to your words about the economic decay throughout north korea and the last sentence of the editorial wrote, the straw that broke the c.a.m.e.l.s. back. >> guest: what he said certain make sense. i think for the average south korean, they're getting ready for christmas, they have lots and lots of things to do. i think activity in size of the government today is not so blasé. whether it's the south korean government or the u.s. government, the sudden death of the north korean leader was sort of the key factor that could lead to some sort of problems in the regime. that's certainly the way it's been believed for a decade now, or more, since kim jong-il took power. in terms of this whole question whether the regime can survive or not into the future, a couple things i think we should remember. the first is that this young son

who is supposed to take over, kim jong-un, who is barely 30 years old, has had made at best 24 months to get ready for this job. his father, kim jong-il, took over for kim l. so, the first leader in north korea in 1994 after having prepared for nearly 20 years to take the position but it was basically running the country day today with his father passed weight in july 1994. 20 years versus less than 24 months after the big difference. >> host: i have to ask you about the scenes we're seeing on the news yesterday of people waiting in the streets of pyongyang and elsewhere in north korea. a bit of trivia, and singapore who the death of kim jong-il's father announcing the death of kim jong-il over the weekend. but what those seems genuine our propaganda? >> guest: i think it's a little of both. if they dear leader dies in a country like north korea, boring is mandatory. grant -- crying is mandatory.

on the other hand, i do think some of it is quite genuine. we have to remember that in north korea there is really no psychic space in the average north koreans might for anything except worship of the two leadership. there is the religion in north korea. extracurricular activity for the schoolboy after school is doing exercise, dances or singing songs, in praise of the dear leader. literature, writing literature is writing about the dear leader. there's nothing else there. to have this taken away from them suddenly, it is certain possible that some people are quite grief stricken. >> host: talk about the latest from the korean peninsula in north korea and relations between u.s. and our allies in the part of the world, china, south korea and japan. our guest is victor cha. will get your phone calls in a moment. you can join the conversation online. or send us an e-mail or join us on facebook. one of the point, this goes into

a time when perspective. he wrote in the financial times just last week the u.s. which is engaging in painstaking diplomacy with north koreans on food aid agreement and recovering the remains of prisoners of war. these bits of diplomacy constituted small bites of the apple. we are not talking about a whole new apple. >> guest: right. the administration i think was in the process of trying to get back to a denuclearization negotiation with north korea when all of this happened. and while i think that they were right to try to do this, and he should continue to try to do this, what we are faced with now is a whole new type of nuclear problem in north korea. up until the death of kim jong-il it was really about denuclearization. but if this regime can't hold it together, if we start seeing signs or news reports that something is amiss in the leadership transition, the

dimensions of the problem change completely and now we're getting with the potential of the newest nuclear weapon in the system no longer having a leader, and lots of concerns about who would have control of those nuclear weapons. >> host: mr. cha has been a foe with stanford and harvard. the korea chairman for the center for strategic and international studies known as csis. he's also former national security council from 2004-2007 in the bush administration. independent line at the talk about the situation in north korea. good morning. >> caller: hello. i would like to ask your guest is on any level the south koreans have a vested interest in making sure there's a strong man always in north korea as was keeping the country split up him or the two countries split up because of the exorbitant costs and the refugee problem that would ensue if there was a unification, and think how germany, over the last 20 years, has had a lot of financial burden because when they

reunified after communism fell. thank you. >> guest: good question. i think every government, every society feels more comfortable with what they know and what they don't know. going down the unification tile would be a very faced scary, i think for many south koreans. as you say it would be costly but the same time i think of many koreans is a part of how they define their identity. the division of the financial and history of korea is considered a historic collaboration. and history will end in many case on korean peninsula when unification happens. so i think i'm the one hand there is sort of this rational calculation that it's difficult to fathom, losing north korea and having to deal with the absorption process. germany as you say was an extremely difficult transition. in the case of korea it would be even more difficult because economic gaps are so wider than they were between the two germany's. at the same time i think is an

emotional ideation level i think for many koreans, they see unity as part of their future. the death of kim jong-il does raise also to questions about whether the north can hold it together. anyways south koreans may not have a choice. the north koreans can't hold it together and unification falls into the lab they will have to do with the. >> host: our guest is a graduate of columbia university and studied at oxford and in the. he's not with a new book titled north korea, the impossible state. kathleen wright has this on your early point about the same so north korea. that was some terrible, fake crying. a lot of people talking about the emotions people have been showing. >> guest: well, i think there is. i mean, as i said earlier i think part of this in a system like north korea worship, grief, joy is all mandatory as directed by the state. but then again, at the same time you can just imagine any country where you have no religion.

the only faith that exist is for the leadership. and all of a sudden this is taken away. there's got to be a boy. there's got to be some people who have no idea what to do now that this standard and daily worship of the dear leader is gone. in almost any public space you into in north korea, any road or in any place you go, there are portraits for these two individuals, kim jong-il and kim jong-un. from a very early age, children are taught, worship of the two individuals is more important than even your own family. some of it i think is genuine. >> host: joint is -- john is joining us. >> caller: thank you for c-span. this is one of the strangest phenomenon i've ever seen, social logically. it's like if you don't get out there and cried just as much as your neighbor, the secret police will show up at your door. these people are in fear or the security and their families

safety if they don't show enough grief for the do-gooder. i'm sure a lot of it is genuine. this is the you care in -- unitarian view all their lives. what is your insight to the new leader? we saw a little light shed with the envoy of governor richardson and wolf blitzer, unlikely looking do. do. a large fellow and a sure thing that looks like fell out of his pocket with a beer. we don't really know much about the young guy who is apparently in charge. but would you be willing to go with an on board over there? what is your insight to the new leadership over there? that's going to be the key. >> host: thank you. we will get a response of. >> guest: it's a good question. i have traveled there. i traveled there when i was working at the white house as part of the nation to retrieve pow mia remains of soldiers that have died during the korean war. and so i think we need it goes

there, the north koreans mobilize and they present a particular picture of north korea to the media. that is one in which they try to get everybody the sense that hey, things are not as bad here as everybody thinks they are. we are not people that have things in our mouth. but i think the reality is that it is quite decrepit society in many ways to a society that has been caught in a bit of a time freeze, really in the 1950s and 1960s. with regard to the new leader, kim jong-un, what we know about them? we know less about him that we knew about kim jong-il that we know less about him and we knew about the first leader of north korea, kim il-sung. we don't even know his age. is somewhere between 28 and 30 years old. we do know that he was promoted to the rank of a four-star general in the north korean military last september when he hasn't served a day in the

military. we do know that he is been anointed as the successor to kim jong-il. but we know nothing about his ideology. we know nothing about his worldview. there's been some widely publicized reports that this young man has spent a period of his life outside of north korea, which is interesting. he studied in switzerland, which is interesting. it may somehow affect his worldview, but the simple answer is we don't know. it's quite extraordinary in international relations do not know anything about this fellow. >> host: in terms of the impact in u.s. we should point out there are invested 20,500 troops currently stationed in south korea or along the dmz zone. one of our viewers has a question along those lines. he says mr. cha hypothetically what you think the result would be if america removed its military presence from the area of the world? >> guest: well, i think the u.s. multi--- military presence

in korea has been about the north korean threat, but it's also been about the u.s. presence and influence in asia. removing the troops would make the koreans solely responsible for the own military capabilities and their own deterrence capabilities. the south korean military is quite a modern and very confident military that has served in various multinational peacekeeping missions around the world and has done a fantastic job. but right now they don't have the full spectrum and capability to really have a credible deterrent. the u.s. and the south koreans have entered into an agreement, which is to eventually pass wartime operational control from the united states to south korea. but that is a process that will still take a couple years. >> host: bill is joining us. yankton south dakota. online for independence with victor cha. good morning. >> caller: good morning. victor, my question is to you. may be done or whatever, but why

does everybody kind of browbeat north korea, north korea, but you never hear, or i've never heard of anybody, past or present, is there anybody, any plans in the future to show compassion to north korea and south korea to rejoin him? >> guest: thanks for the question. i'm a professor at georgetown, so there's no such thing as a dumb question. with regard to compassion i think the united states already, secretary clinton, already has made a statement of compassion for the north korean people. in the hope that in the future a leadership will take the north korean people into better direction. so i think, and the united states actually this week was in plans for offering food assistance to north korea before the death of kim jong-il sorted through everything up in the air. so it has been u.s. policy for quite some time now to try to

help the north korean people, and i think successive administrations going back over 20 years have tried to do that. i think the same thing for the south koreans. there's a country that has a greater interest in trying to help the people of north korea and south korea. and both the government and the public's over the past 20 years have done more than any other country to try to provide food, to resettled defectors, to try to reunite families that were divided during the korean war. they have tried to do this quite strongly over the past two decades. >> host: arnold siegel has this, not sure if it is fair or unfair comparison but he points out the last dictator to die, and he sent it over, was a side in syria. lookup that is working for syria. >> guest: i think this is a good point because while there are many who say that she's going to be gotten in north korea, i mean, while you can

make a direct comparison between what happened in the arab spring what happened in north korea, we did learn from the air springs of these sorts of regimes are quite brittle. you think succession is an easy thing to do just because dictators want to stay in power. it's just not that easy. >> host: from the new york times yesterday you said quote, while some observers hope that kim jong-il's death will unleash democratic regime change, china will work strongly against that possibility. you go on to write but given that beijing has the only eyes inside the north, washington and so could do little in response. can you elaborate? >> guest: one of the questions as we go forward is what will be china's role in trying to prop up the north. there's a pitcher right now in the region that has a greater stake in keeping the koreas divided in china. china has made it their core strategic calculation that a unified korea, presumably democratic under the south, is a military ally of the united states is not in china's interest.

and, therefore, they're doing everything in their power to try to keep the regime in place and try to maintain the strategic buffer as it has been historically referred to along its flank. so i think as we go forward, the chinese have already made clear that they support this leadership transition. they haven't made clear they welcome an early visit by the new leader of north korea to china. and presumably any aid and assistance that they had been providing to the north koreans, which they do not report publicly, they do not tell us what to give the north koreans, will be even greater in order to support this very difficult transition process. >> host: on the republican line, patrick is on the phone from oklahoma. good morning. >> caller: good morning. the way i see it is, you know, we are living in a new world, in a new time where everything is causally controlled by finances. i don't see, the way china has barred so much money to deny

states, the trillions, i think we probably underestimate how much they have loaned the united states. if korea, north korea ever did use warheads, i think china would crush north korea because the finance control, china, it controls the nice days, it controls everything in this new world and this new time, and it's not getting reported. let's face it, everything is controlled by finances today. i think north korea needs china's help. they need the united states a. i think that's why the country is still starving. these younger son that is taking over, i think he is a puppet it. i think the military, and there are people behind the scenes that knows it's all being controlled by finances. i would like to get your information and opinion on what i see is always going to be controlled by finances. i don't think china will ever let north korea use a warhead. it's all controlled by finances. that's my opinion. i'd like to hear yours, thank

you. >> guest: thank you. i think on the one hand, i do think that china exercise a great deal of economic leverage over north korea. it certainly does not want to see north korea use a nuclear warhead. i think that's very clear. on the other hand, you know, china does literally 100 times more visits annually with south korea than it does with north korea. 100 times. and yet at the same time it still remains wedded to this broken down regime, throwing money at literally down a black hole because there's really no prospect of reform in north korea. it's just what they could help prop up the regime. they continue to do this for strategic reasons. not for economic reasons. and at the same time alienating the south koreans who are again very important business partners with giant. >> host: in your book, north korea, you entitle it be impossible state.

why? >> guest: i think, i studied international relations at i teach international relations. to me if you look at the history this is just an incredible country. the notion that a country like this, after the end of the cold war, after the fall of the soviet union, after what is happening in the arab spring, still manages to chug along, it's really an impossible story. and so in the book i try to explain to the reader why we've ended up with this country as it is and how it has managed to chug along when basically every one else that has looked anything like north korea has long left history here so we look, i looked through the history of the book, i take it to the nuclear issues, to the leadership issues, kim jong-il included and, of course, i'm going to have to do a little revising given the sudden death of kim jong-il, but the general taken the book was i do believe that the united states, the next president, the 40th president of the united states, is going to have to deal with a major

crisis in north korea before he leaves office. >> host: quick follow-up. you refer to the sudden death of kim jong-il. based on your intelligence you have no ideas in such poor health? >> guest: he had a stroke in august 2008. that was finally reported in the media. initial photos of him showed him looking quite, like a stroke victim. but the most interesting thing about the news today is that the reports that were coming out of china little bit last week were about how he was fully recovered. in great health, gained a lot of weight back. and then to have this news come out again just reinforces the point about how little we know about this regime. >> host: north korea doesn't do anything without china's permission. >> guest: i think that china has a great deal of influence on north korea but at the same the gentleman's time has expired in many ways is held hostage by north korea. because it doesn't want the regime to become destabilized as he doesn't want to collapse.

the north koreans know that. so did the chinese know about the nuclear test in october 2006 during the bush administration? or the nuclear test in may 2009 to the obama administration? i think the answer is no. until after the fact that the north koreans were going to do this. and yet the chinese feel obligated to support this system because they simply don't want to see the strategic collapse of the regime and lose their buffer on the korean peninsula. >> host: and with kim jong-il's son now in control, what with this i need to do to show that he is or can take control of north korea? >> guest: i don't know if it's so much of public displays as to what he should do within the country. he needs to consolidate his relationship with the military. i think he will need to consolidate his relationship with key members of the party, because the party and the military basically are the key foundations of the north korean state. where we would see this most

likely from the outside world is that i -- new ideology. the north korean state rests on ideology and they need a new ideology for a new leader. since the last year had an ideology that didn't really work, and i think most north koreans know that. that's what we be looking for from the outside. it would be very difficult to see from the inside what sort of relationships are being cultivated in the military and in the party host that as a given and former national security advisor i should parse the words of the suggested that she was joined on monday, previously scheduled meeting with japanese foreign minister get it was at that event here in washington at the state department that the secretary state issued its official statement following the death of kim jong-il. >> today the foreign minister and i discuss the evolving situation on the korean peninsula. in light of the report from north korea state-owned media on the death of kim jong-il. we both share a common interest

in a peaceful and stable transition in north korea, as well as ensuring regional peace and stability. we have been in close touch with our partners in the six-party talks today. we reiterate our hope for improved relations with the people of north korea, and remained deeply concerned about their well being. >> host: victor cha, read between the lines. what is she saying? >> guest: first i think it's a very good statement. we had to say something about this, and the question is, you offer condolences about the death of the leader. i think for the united states we are not in a position to do that, given the fact the north korean leadership has created nuclear weapons. but i think this point of going directly to the people and expressing condolences to the people and hoping for better life for the people of north korea is really the right sort of angle to take on this. i think it was perfect.

>> host: we talked with richard bush from bookings institution that one of the questions we posed to him is in light of what we saw in germany in the late 1980s, the earlier point, we could see a unified korean peninsula between north and south. he said it would be decades before something like that could happen but he said it's possible. what are your thoughts? >> guest: it could be decades before it happens but it could happen tomorrow and we wouldn't be surprised. that's how wide a spectrum of possibility is on this. with the death of kim jong-il. after the fall of all those regimes in the arab spring, experts could point to all the indicators for why those countries, why those regimes fell. unemployment, twitter, all these sorts of things. but nobody could have predicted them before they happen. i think we're in the same situation with north korea. if the regime were to fall tomorrow we would say of course this happen. i'm tested leadership, economically broken, starving country. of course, this was going to collapse. the spectrum is just a wide.

>> host: financial times with the headlines the death of kim jong-il pushing reunification back up on the agenda but then there's a comparison of north and south korea. the obvious difference between the two countries, south korea is twice the size in terms of population. but also if you look at various factors whether it is that power that north korea has which is minimal compared to south korea, or even the issue of steel production that pales in comparison, 1.3 million versus more than 53 million in south korea. cement production as welcome an example of construction. minimal in north korea compared to what's going on in south korea. a snapshot of life in the two countries. >> guest: these are two completely, these are two completely completely different countries. you know, when i had to go to north korea to negotiate the return of the pow-mia remains, and i was coming back into south korea from north korea, and you

see the styling of south korea which looks like manhattan, compared to what you saw in north korea, so different and it's all about policy. it's all about politics in the north. >> host: let me show you these two pictures side by side. seen on a form in north korea. you can see a woman using a hand-held home as she tries to kill the land. and in south korea, connected, will connect with an iphone app in the background and a south korean woman walking down the street talking on her cell phone. >> guest: again, these two countries will start out anyways the same base at the end of the korean war. the north was a little ahead because of the japanese occupation. they put more infrastructure in north korea than they put in south korea. the two countries have gone incompletely different directions. north korea is an economically decrepit country. it is the only, one of the only modern societies in world history to have come and our shores society to suffer a famine because of economic

mismanagement. in south korea with the 13th largest economy in the world. the most wired country in the world for them household in terms of computers, computer use, internet use and pda device uses. just an incredibly different story is that our is victor cha, and this in the financial times yesterday in which you wrote this is a watershed moment. kim jong-un is that even 30 years old. he is a little preparation in cultivating his own followers. yet no new ideology to associate with his rise to power. i could not think of a less ideal conditions in the north korean context under which the so-called great successor could be given the reins of power. >> guest: this is a big challenge. i think it is truly a big challenge and will be a test of how well the north korean state can hold themselves together under really dire conditions. in 1994 they went through the same problem because the leader

of north korea died suddenly in 1994. and many people didn't think they could affect the transition day. i would argue the situation today is much worse than it was in 94. maybe not in terms of food, but the north korean society today is a different. it's much more penetrated by the outside world than we think. it was because of kim jong-il that the economy was run into the ground and, therefore, the people to longer, this is a communist system so they had a ration system. the system broke down so that people have to fend for themselves and they started creating markets. a market mentality is an independently minded mentality. so this has been a process that has been going on for 20 years now, and we don't know how it is going to show itself or when it's going to show itself, just like we did know in the arab spring. by this combination of a society is moving in the direction of the more independently minded and in an unstable and uncertain

leadership, this is a very combustible combination. >> host: our guest is as i said what with a. he teaches at george yin diversity, the author of a new book called "north korea." former national security advisor to president george w. bush. robin is joining us in austin, texas. good morning. >> caller: hi. i enjoy what you have said. i was kind of surprised eventually -- especially since. [inaudible] i was just being sarcastic. can we all get along, okay? i'm a realist. i'm the real old texan, and i see things as you do in engineering point of way. and yet, can tear us apart has

bought on the point of getting along, specifically with regard to u.s. and china relations, can you elaborate. >> guest: i think this is coming up, very important issue for the united states and china. there are many things that unite state and china do not agree on. we don't agree on taiwan. we don't agree on how much it should be a value with. we don't agree on lots of things. human rights in china. but this is one thing that i think the u.s. and china agree on. we don't want nuclear weapons in north korea. and we don't want to see the north korean regime continued in his stride for nuclear weapons. so this is something where the united states and china can cooperate. it's very important that they share information about what is going on in north korea. and i think it's an opportunity for u.s.-china relations even though it is also a challenge. >> host: where does north korea get its technology and how much comes to china?

>> guest: a lot of it comes from china. most of it comes from china. whether we are talking about the economics, when we talk about military side, particularly their nuclear program, it was initially provided through an experimental reactor from russia, soviet union. but since then north korea has had a lot of dealings with pakistan, iran, up until recently libya in terms of their missile programs and other aspects of the military. >> host: next is randall on the republican line. talk about north korea. good morning, republican line. >> caller: [inaudible] that's a line from a poem about to tell us that love each other and don't know where they are. when i was in korea i was there when they captured -- [inaudible] i was in we shall move. the people there were really

wanting to get back together as one free. they had a lot of famine in north korea. a lot of family and friends. i never saw such a desire of those people. it was like in the united states will have a war between the states. they wanted to get the country back together so much. this is one thing i think want to work for is unification peninsula. >> host: in a joint statement between president obama and present for the joint vision of the last united states said very clearly that it's hope was for a unified peninsula on korea that was free and at peace. second u.s. official policy is that they support the aspirations of the korean people for unity. but again, this is a very challenging task and it's one in which you have to manage, particularly in the current situation, very strong relations

with south korea. but as well as this we need outreach with china because china is the only country with eyes on the ground in north korea. they will have a good sense of what we will see coming in the future. we're going to this two-week period of mourning in north korea, which will end with the actual funeral for kim jong-il to simmer 28th-29, depending on whether you're in the u.s. or in north korea. it's from that point on that all of us will be looking for, to understand what is going on in terms of this transition. it's that important for the u.s., south korea and china to coordinate information so that we're all operating from the same basis and we don't miscalculate. >> host: bill is joining us, democrats line. seattle, washington, with victor cha. good morning. >> caller: good morning. i have a question here. i hope you will hear me out. i'm a little bit confused. i felt that china has to be just

as nervous as north korea as anybody else, especially since they have become nuclear armed. it's not a thing you can really control. when wikileaks came out one of the things that was revealed that supposedly there were elements of the chinese government that would not be opposed to our military intervention as long as they didn't end up with u.s. troops on the border. my question is, at what point with the chinese figure out that this is just -- it's their mess, go in there and clean it up themselves? >> guest: i can't comment on the wikileaks stuff, but when the president south korea went to north korea in 2000, he came back saying the same thing. he came back saying that in his conversation with kim jong-il, kim jong-il said that u.s. presence on the korean peninsula after unification with the necessary be a bad thing because korea is a small country, it's got a big neighbor in china, big

neighbor in the so begin, they've made in japan. it would be bad to be allied with the outside power, a great power outside of the region as way to maintain korea's balance and korea's sovereignty. >> hostsovereignty. i think from a basic perspective that makes a lot of sense but as the caller mentioned, i do think the chinese at all feel comfortable that the united states is going to say yes. we're going to stay away from the korean peninsula once korea is unified. we are connected to that country from common values. korea is one of her most important partners, not just in asia but on a global agenda whether it is climate change, peacekeeping operations in afghanistan, peacekeeping in lebanon or, the greens have always been there. what we say ideas on paper is very different from the real geopolitics of the region. >> host: you been outlined the political, military and diplomatic relationship between the u.s. and the korean peninsula but let me just go

back to life in north korea for the time you been there and i realize it's been limited. in our remaining and give our audience a sense of what it's like for the average north korean, what it is like, what the routine is like, how they get their information, what to eat and where they live. >> guest: there are to north korea's. there's north korea within the city of pyongyang which is really sort of the elite of north korean society. and they are if you just try to the street you see people walking around going about their daily business. but if you look closely you see that this is not the sort of society that we are used to. long lines of people standing, 20 keep at a payphone waiting to make the phone call of the day. bus systems that really look like they're from the 1950s. storefronts that are empty in terms of food. you go into the hotel room and you turn on tv and there only two channels. there is no c-span. there only two channels. they're both north korean about

the history and propaganda of north korea. outside of pyongyang is complete and total utter devastation. no mechanization whatsoever. mohegan, no clean water act, truly a remarkable place. >> host: >> tonight at 8 p.m. here on c-span2, after hugh grant's recent testimony before the british phone hacking investigation hearings. coming up in about 20 minutes or c-span2 will be live at the pentagon for defense briefing. >> now more coverage with anita perry campaign for her husband, texas governor rick perry on monday in hudson new hampshire.

>> i am the daughter of a veteran, world war ii. my dad was t. for d. a pilot off of guam. and so he loved that. he didn't talk much about his military service. he opened up about probably 20 years ago -- [inaudible] >> okay. day ago. i think if those airplane off the end of the runway and it's at the bottom of the ocean right now or something. but anyway, want to thank you all for your service and what you do for us. we wouldn't be here i've been today if it weren't for you. i want to say that also the wife of a veteran. rick volunteered after he got out of a indian. he graduated in 1972. is a pilot in the air force and flew c-130s. [inaudible] >> yes, sir he was. and now he's running for the

presidency of the united states. who would've ever thought i would be here today at the vfw? no, no. i know that i would be here but i'm delighted. i want to thank you all for your service to our country and to our veterans and those that are continuing to serve for us. we have the finest people in the world in the greatest country in the world, and they are all, you are all heroes. does that say that we don't have heroes anymore in a country are wrong. those that say that our country is an exceptional are wrong. because they clearly haven't visited you here at the hudson vfw. so if i can want to talk a little bit about rick. some of you may have heard a little bit before you ever want to get review at the end of this that says so much more than i could probably say to you from words from a piece of paper. but he grew up the son of tenant farmers in dry land, cotton farmers out there in texas where we didn't get a lot of rain.

was a lot to do out there. rick went to church on wednesdays and sundays. he went to boy scouts on saturday morning. he is an eagle scout, and because of him our sun also is an eagle scout. but richard grew up and where i grew up in that part of texas, we took care of our neighbors. if they were sick we took them a casual that we had in the freezer. we picked up their children up from school. we kept the dogs when they were on vacation. we never would've bought if we have enough because we didn't know if we didn't have enough or not. we always had plenty. we always had more than we probably needed. but we were taught that to whom much is given, much is to be required. we learned that from our father, his father was a tailgunner. flew missions out of england during world war ii. 35 nations over not see europe. but as i mentioned in rick's father, my father, neither one of them spoke often about the war but because they prefer to think about peace.

but they did profess their love for america and their desire to serve every citizen. so people say why are you doing this? because we feel like we have been called to serve. and because both of us are proud to walk in our father's footsteps. if you flash back nearly 40 years you will recall it was a tumultuous time, those that served in vietnam were not always welcomed him as he rose. that was the time that rick was in the air force but he volunteered. though he was never sent into combat he was prepared to do what his nation required him to do, and he was proud to wear the uniform of our country. so people say what separates your husband from everyone else in this presidential field? if i could say one thing, or actually two things come he's the only one that really volunteered for the service. he's an optimist. and even though these times were living in right now in the standard times, these economic

times, he truly believes america's best days are yet to come. four years ago we had a man that became our president that promised us hope. but it's hard to say we have hope with 13 million people out of work, 45 million people are on food stamps. hope is hard to come by. we think it's time we had a president who understands that hope comes from freedom, not from government. in fact you look at the government, the seat of her capital, the government, it's not the most affluent metropolitan area in the country. the status quo is good business for those that work in washington, d.c. that's why things will never change if we replace one washington insider with another. rick doesn't feel like we can make the change in the country if we just tinker around the edges, kind of sauce to a rather geeky things we need a bold change. he thinks we need members of congress that should spend more

time in their districts with the people that they represent, and living under the laws that they pass. he thinks they need to cut their pay in half, cut their time in washington in half. he wants to choke the economy back by cutting taxes for working families, closing corporate loopholes and passing a flat tax. and get rid of the irs as we know it today. he thinks we should ban bailouts on bankers, dan earmarks on pet projects, and then the politicians from raiding the social security trust fund. his plan not only eliminates the tax and social security benefits for working seniors, but it will and the great moral injustice that we all know as the death tax. because we know when the good lord takes you home, he shouldn't come after you in government take your house. and when it comes to foreign

policy, my husband will never ever apologize for a country that has done more to promote peace than any other country in the world, deliberate -- [applause] and advance the cause of human freedom around the world. rick perry will never apologize for america. and as president he will protect our values. he will make sure our troops have the tools they need to wage war, successfully. he will never risk american treasure or american lives unless they are in the most vital interests that are at stake. and he will not only fully fund our current defense needs, he will fully fund the programs that take care of the veterans that once served. [applause]

you know, we live in the greatest country in the world. we live in a free nation. and a free nation cannot turn a blind eye to the wounded warriors that provide our freedom. i just came from a prosthetic company, and the wonderful work that they do their in feeding our veterans with the most innovative best, latest technology that they can. the federal government will try to take that away and had a panel of judges decide what is best other than the expert. and if they decide that veteran doesn't need that prosthetic, they can decide not to give it to him. that is not right. they are our flesh and blood and we have an obligation to take care of our veterans with the best that we can, like they are our family. they should have the best health care. they should have helped transition back to civilian life. they should have good jobs that

allow them to make the most of the freedom that they have defended. now, this election, and yours is coming up quickly, your primary, you have a choice. you don't have to resign to politics as usual. you don't have to settle for modest reform that amounts to reshuffling of the status quo. you can reach beyond the boundaries and that combines of the beltway, and you can choose the old conservative leader, a true leader, a true washington outsider. and you can choose a president who wore the uniform of our country, just like you. because we are one of you. and rick knows nothing is more important than in showing we have a strong military and providing our veterans the benefits that they have earned. a lot of veterans have already signed up to support his campaign. i'm going to ask you if you haven't already to please

consider doing that in supporting us in this quest. as we tried to save our country and have america again that you and i knew as we grew up. we have somebody with us today who has done that, and i want to recognize him. and i know there are many other veterans, but al, thank you. thank you for your service. [applause] >> thank you. here's a video that says so much more than i could say, like i said, and the words on the paper. is it a longer video? you've got some medal of honor recipients, navy cross recipients, decorated marine who was with us last week in iowa. i'd like for you to listen to that video, and to help you to encourage you to join us. i think you're going to like what you will see.

these are men of honor and valor and our veterans. so you don't have to take my word for this. listen to the veterans and their video. >> my name is jim washington. either retired major general. >> i'm a captain with unites states marine corps retired. >> i join the military in march of 98. >> navy seal team. >> in 2006 i was on my second deployment. i was in charge at a mobil assaulting. october 21 of 2006, i was on a mission. i was in the lead vehicle. we were hit by an ied.

five marines in the vehicles. i lost three marines. myself into other marines survived. i was able to see through it, truly what america -- [inaudible] you can't tell me that's. -- that. i was operate in afghanistan 2009 until december 2009. over there operated in afghanistan national army advisor. >> because of your honor, 36 men are alive today. because of your courage, more american heroes came home. >> the president of the united states in the name of the congress takes pleasure in presenting the medal of honor.

>> after knowing everything that happened can he get a call, the governor of texas took the time to call, to call me. i live in kentucky, so he knew that there was anything else invested, he really cared the neck hundred and . [inaudible] we got overrun by the taliban. i lost three of my teammates. we had a rescue helicopter come in and we shot down 16 what my teammates. god granted me life on the day and got me out of there. i can't tell you why. i was lucky enough to get out of there. my support for governor rick perry for president goes back a long way. he's one of the most honorable men i've ever met. it's those characteristics in amman, especially in him, that i

think embodies what the president of the united states should be. >> almost 34 years in the marine corps, three terms in vietnam. i became the recipient for the medal of honor. i support rick perry because he's a veteran and i'm very proud of him. looking at america, this great country where we're at now, looking at all the candidates, he's the one man that has the total package of leadership capabilities to lead this country in a new direction which we so desperately need now. rick perry is the man for the job. >> we need to look for integrity, courage, passion. but also leadership here we expect nothing else from the man who serve this great nation of ours. why should we accept anything less from the president of the united states? i was in the navy s.e.a.l. team from about 1967, 68 timeframe to

1992 when i retired. for tours of vietnam. i was also in the first desert storm. we started a firefight which lasted almost four hours. i had been wounded and six times. [inaudible] >> i went back to see, in washington, d.c., then i went back in october the 15th, 1973, to receive the medal from president nixon. during that time i took tommy with me, and we stood in the eastern as i receive the medal of honor.

>> what i see our nation leads today is a leader, not a follower. we need a person is not about politics. how we would lead this nation. freedom is not free. the greatest governor of texas, rick perry. [inaudible] >> when i think about governor perry, i think about that dumb he's the best person to serve as commander-in-chief. and service president. he's always for me fateful. >> american soldiers should be led by american commanders. >> these are our precious sons and daughters. >> commendation to all of you for your sacrifices.

>> your courage, your leadersh leadership. i wish you the best of luck as you go home, and you continue to improve the communities that you come from. and i pray that god continue to bless you, and through you, he continues to bless this great country that we love. >> i think i will come over here, and see if anybody has a question, attempt to answer. [inaudible] >> i would like to try

something. 30 years air force, i felt so bad for those guys up here, and the whole company in iraq. i visited them twice in 2008. i give them everything they needed. the first time i went there, my captain got hold of me and jeremy. he said it comes out of vicksburg tonight, i don't know what region. i walked out to the hall that opened up -- [inaudible] i told him i'm an air force guy, i surrender. didn't have a chance. what i did as an individual, many more companies should do. >> thank you for that. thank you so much. [applause] and i guess you saw your local, al, on the video. thank you so much for doing that. [inaudible] when i see all the medal of

honor veterans support rick perry, i mean, i didn't come close to those guys. but it was an honor being there though. >> your all he was. and we are blessed to have their support and your support. so thank you all. if nobody has a question, you do? >> i would like to take it one step farther. [inaudible] retired marine. i studied each candidate. i looked at what you have in texas, okay, and i'm going to start with the veterans homes. we have one. [inaudible] cut their budget where we can only take on maybe 195. ..

>> in fact, they are happy. they looked well fed, well cared for, and that means so much as a daughter of a veteran, and my father, and it's a great place. he's still in the home. we're able to take care of him at home, and it's a great place, and thank you for all that you are doing. thank you, thank you for having me. >> thank you for coming. >> looks like you have cookies. >> absolutely.

[applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> thank you, sir, thank you, thank you for everything. so nice to meet you. thank you. [inaudible conversations] [inaudible conversations] thank you. good to see you. thank you. thank you so much. thank you. [inaudible conversations]

[inaudible conversations] >> leaving the last few minutes of this recorded program to take you live to the pentagon for a defense briefing with spokesman little and captain john kirby. >> we extend the best to all of you this holiday season and a happy new year. this has been a historic year. if you look back, you see libya, iraq, afghanistan, the arab spring, operations, and many other national security events. the men and women of the u.s. military and their families have done incredible work, have had many successes, and, of course, have made sacrifices, and to them, especially we say thank you. i'd be remiss if i didn't know this year has also seen the demise of osama bin laden, the

decline of al-qaeda, and the increased pressure on aqap to include the loss of anwar alawaki to that terrorist group. we are now at a turning point. 2012 is likely to bring opportunities to the united states military and for all americans. we're seeing successful transition efforts in afghanistan, building a new relationship with iraq, and 2012 is likely to see focus on the asia-pacific region. again, our men and women in uniform have performed in an outstanding manner. in closing, i'd like to say to my colleague that, and you have not noticed this, but i'm wearing a tie with anchors on this. >> there you go. >> happy holidays.

>> go navy. well chosen. >> thank you. anything else? >> i don't know how i can top that. let's go right to the questions. >> all right. very good. >> do you know if all of the 10,000 u.s. troops have come out of afghanistan for this year yet, and secondly, just a yes or no. >> i don't know specifically what the final number is here, but i can tell you general allen's confident he'll meet the draw down deadline by the end of the year. >> you don't know if it's been met yet in >> i don't know the specific number of today, but we can see if we can get that for you. >> okay. secondly, i know it's a criminal investigation, but is will anything you can say about this case, particularly about whether or not there may be some concerns that some of the hazing may have either been known about or, and or whether commanders did or did not take

appropriation action as this was going on over a subsequent period of time? >> i think you can understand why question would not comment on a case that's ongoing. as you know, the charges were just announced today. we have to let the military justice system work. >> a follow-up to that, just to the question. i mean, coming after the marine who was hazed early in the year who also killed himself, there's been a lot of calls from some in the community that say the military really needed to more to screen out racists or people with racist tendencies before they get to the remote bases overseas. do you think the military has to do a better job? >> well, look, any single case of hazing or inappropriate conduct to a fellow soldier, airman, marine, sailor, coast

guard is inappropriate and not acceptable. zero is the right number. we treat each other with dignity and respect, and that's what the uniform requires. when we don't, there's a justice system in place to deal with it, and that's what we're seeing here in the case of private chen, and i don't want to get into specifics on this, but hazing's not tolerated in the military. if it's found and proven, it's dealt with. >> how are you going to prevent what incidents like hazing like this one? >> well, i mean, we -- this is -- this is something in our culture from the moment you join the service, when you raise your right hand, through all of your basic training and your first tours of duty, i mean, these notions are bred into you in the military. we treat each other with respect

and dig any for or we go -- digdignity, and we go home. that's it. the tolerance is absolutely zero, and the system itself because it works and it works well, is, in fact, the deterrent to future behavior. we certainly hope it is, but it doesn't mean there's still not going to be miscreants out there who want to test it and try it, and like i said, when it's found and it's proven, it's dealt with. >> it's dealt with, but it's dealt with after suicides, so i guess the questions would be should something be done before it's getting to that level. >> thoughts and prayers go out to the family here. this is a tragic, tragic incident, and as i said, there are -- there are training

mechanisms in place throughout the military, and in all the sfs whether you're an -- services whether you're an officer enlisted. this is bred into you. i've done this for 25 year, and i can't tell you the number of times i had to undergo that training in awareness problems. it's not like we don't pay attention to this. it's not like this was the first time. we also, you know, you're unfortunately, you're never going to be 100%% with this, and there's going to be those few who want to flaunt what the uniform stands for and what the regulations require, and what the culture demands of us, and like i said, when that happens, they will be dealt with. >> [inaudible] the committee came to visit the pentagon last week, so was that because of all the pressure -- >> i don't know what prompted -- i mean, that -- this all inside

the justice system and inside the command system out there, and i'd refer to them for specifics on how the charges were preferred. i don't have that kind of detail. yeah? >> happy new yeah and happy holidays to you and my colleagues. >> thank you. >> the question is as we enter the new year, how do you feel about pakistan and afghanistan, and now out of iraq, one, how the afghanis are taking this, that u.s. is now out of iraq, and now that europe will be out by 2014, and u.s. relations in the next year and now the routes are open or not because pakistan and nobody knows what's going on and what's the future. >> well, when it comes to iraq,

as i said in the opener, we're committed to developing a long term relationship with the iraqis. we made that clear, and we continue to build that. i would note that this was the most successful, logistical draw down in u.s. military history, and general austin and the men and women in uniform who carried that out deserve tremendous praise. in afghanistan, we're working hard to define, not just the near term actions in terms of fighting the insurgency, but also what the long term relationships look like and committed to a long term enduring relationship with the afghans. ambassador crocker and general allen doing amazing work to interface with their afghan counterparts, and our men and women in afghanistan, and we just were there with the secretary. we saw that they are incredibly dedicated to their mission which includes the transfer of

security responsibility to the afghans. they are working very hard to do that, and we think they are having very good success. we're looking at about half of the afghan population now that's now living under afghan security lead, and that's an important development. just a final point on afghanistan, and then i'll move to pakistan. 2011 saw a much different fighting season than in many previous years. the taliban and other insurgents have been brought under increased pressure, and that is a mark of progress in what we and the afghans and nato partners are dong, and we think that's an important introduck ri to note. with respect to pakistan, we know that this year brought challenges with our pakistani counterparts. we know the recent border

incident created a challenge too. the goal, of course, is to work through these issues with the pakistanis. this is a complicated, but a central relationship, and we're committed to the long term relationship with the pakistanis. look, we face a lot of the staple threats. terrorists threaten americans and pakistanis. we're confident we can get to a baseline in the relationship that allows us to move forward, not only going to be easy, but with a little bit of hard work, we think we can do it. phil? >> quickly, first, on the pakistan issue, the report is due out, i think on thursday or friday. dupe -- by thursday or friday. do you know if it's already been completed? >> it -- what i can tell you is, yeah, it was -- i think the due date was the 23rd to be

completed. our understanding is it's on track, and it is being staffed. i don't have anything more than that for you today. >> made public right away? >> we this year, the findings with all of you, we're not doing that this afternoon, but in relatively near future, we expect that to happen. >> are you getting any attitude -- >> [inaudible] >> on the blockade on supplies coming through pakistan to afghanistan, that's now begun for some time, and you said it's not affected operations. could you go into a little bit more explanation into what has been the practical effect and how long can you go before you have to take certain steps to mitt kate it? i know that the northern distribution network, we're all familiar, but if you can discuss a little bit more because this

has been going on quite some time and can you offer any indication when you think that might be -- if you got signal when this might end or is this seen as indefinite? >> i think we're hopeful that the ground supply routes, will open in the near future, and i think the secretary expressed confidence that that would happen. the war effort does continue and our troops are well supplied in afghanistan. it would be helpful to have the ground supplier routes reopened, but working with our team and partner, they have done incredible work to ensure we have what we need to carry out our mission in afghanistan. i can't give specific time frames in terms of how long our supplies will last, but we have what we need, and we have what we need for the near term.

>> the only thing i'd add to that is general allen as all good commanders ensures there's sufficient stockpiles on hand, and he had been prepared with stockpiles on hand. there's been no appreciateble impact to operations throughout afghanistan as a result of this, and there are other avenues for support. you mentioned the northern distribution network yourself. there are -- you can shift to other arteries if you need to, but i think for the most part, general allen has been able to assist and sustain the war effort based on stockpiles he had on hand. >> one follow-up. how does that affect the cost of the operations then? obviously more expensive to go -- >> if you have to go through the northern distribution network

for any great length of time -- well, actually, not even -- just when you shift over to the northern distribution network, it's going to be a little bit more costly, and it's also going to take a little longer, but as i said, he's been largely able to subsist with what he's had on hand. >> this would have been an accepted truth if the pakistani governments can't close the lines for too long because of all the powerful families and lines of business that profit so greatly. i know it's a pakistani political question, but you all track this closely. have you noticed building pressure from the business community on the pakistani government to open up those ground lines? >> i don't believe we have, tom. i don't believe we have, and as i understand it, there is traffic moving through those gates, civilian traffic, not traffic designed for nato, for the mission.

bart? >> egypt, what is the secretary's reaction to seeing the violence perpetrated by the egyptian military on the streets of cay row? has he spoken to the counterparts or the chairman? is it permissible in his mind for this to continue? are you looking at cutting off any arm sales to egypt to ensure they don't use u.s. equipment or gear? what can you tell us? >> as you know, i visited egypt in october and had good discussions with field marshall, and since then there have been further developments in egypt, and, of course, the secretary wishes that the level of violence would go to zero in egypt, and so when he sees violence break out, that's a concern. of course, at the same time, he believes that the egyptian military is committed to process

of transition whereby the wishes of the egyptian people for a full democratic system are realized, and that involves, of course, the elections that have been taking place, constitutional reforms, and eventually the election of a new president, so he has confidence that the egyptian military is working towards that, and that being said, when we see violence on the streets of cairo or elsewhere in egypt, that raises concerns. >> well, to be clear, the violence of the last several days has very clierly -- clearly, by some large extent was conducted by the egyptian military. the question remains one, not in october, but more recently in the latest state has neither

panetta or general dempsey spoken to the counterparts of are you doing anything to cut any supply of u.s. equipment or gear that could be used. are you concerned about the violence perpetrated by the egyptian military against civilians and what they might be using to do that? >> to your question, we'd have to check on general dempsey, i don't know. i don't believe the secretary has made a call in recent days, but as george said, he's deeply concerned by the violence. no matter who it's perpetrated by. it's simply unacceptable. you've seen the egyptian military leaders come out and apologize for it. that's an encouraging thing, and we certainly hope that they will, you know, investigate this

and deal with it appropriately. that's the secretary's expectation, but as george said, the military is working very hard towards a transition to a civilian government. at the same time, they are trying to secure their country. i'm not making excuses for it, not at all, it's unacceptable behavior. >> can i follow-up on just one other thing? a different subject on iran, what the secretary meant when he told cbs news that iran could have a nuclear weapon within a year. what is he precisely talking about? >> the secretary was very clear in his comments to cbs. he said that in iran with a nuclear weapon is unacceptable. that's a red line, and he was apt about some specific time lines, and he said that if -- if the iranians made a decision to

move towards the development of a nuclear weapon, they could, in theory, have one in the relatively near future, but he was also very clear that requires certain steps. would require them first to make a decision to move forward with the nuclear weapon, and then, of course, they would have to not only enrich uranium so you get highly enriched uranium for a nuclear weapon. you'd have to go through the weaponnization process, so he was not saying definitively that the iranians would have a nuclear weapon in 2012. if they did move out on that time line though, it's possible. >> well, what he said though -- right, 2012, within the next year. he said it could be within the next year if these conditions were met? is that his assessment? >> if they made a decision to move forward with enrichment and

with weaponnization, then that is possible. we don't know that decision was made inside the iranian regime. you certainly hope they don't make that decision, so the big -- our best information, barbara, is that we don't know whether or not the iranians have made the decision to move ahead. >> we also think that if they make the decisions that george talked about, that we would be able to detect that, and we have time to deal with it. >> secretary articulated that as well. >> he did. >> in the discussion. >> he did. >> we had the iaea there, and we would in all likelihood have some signals that they are moving ahead. >> what signals would you have? >> as the secretary said, one of the signals would be they would probably move to kick the inspectors out. inspectors on the ground, they

have access right now, and so, again, we think that we would be able to know, should they cross that threshold, and we would have time to deal with it. >> when you say "red line," is the red line then when they kick inspectors out because that's the signal -- >> the president said, and the secretary also reiterated is the red line is a nuclear armed iran. that's the red lean. >> i'm sorry to keep on this, but red line is a nuclear armed iran, and that means if i'm understanding you correctly, they would be committed to get the nuclear rarms? a nuclear armed iran, not stopping it before it's armed -- >> the line with nuclear weapons in the united states. that's what the president said and the secretary of defense made clear as well. you know, i want to -- it's also important to understand what -- we're on a dual track here of

diplomatic pressure from the international imhiewnt and economic pressure applied through sanctions and there's public comments by their oil minister the other day admitting the sanctions have had an effect on their oil revenues. they are taking a bite, and the secretary has been clear over and over and over again that he fully supports the dual track path, and while military options have to be ready for the president, that's the job, provide options for the president, it has to be the last option, and the president fully supports the approach that's been taken now. >> tony? >> this year, has the united states approved its capability to attack iran's underground -- >> i'm not going to speak about our operational capabilities in that regard. >> the stray stegic -- strategic review coming out in early january? >> i think as i said earlier in similar forms, we do expect to

articulate more about what the budget strategy is early next year in january. >> speeches or how is -- >> i don't have the exact contours lined up yet, but we expect to go public with our thoughts on defense strategy and in january. >> the last week and a half, there's been the themes of sacrifice and success. the elephant in the room is whether the invasion was justified or not. panetta is getting hit in the blogs that it was worth the price. do you believe the invasion was justified, and, john, you're been here for 5 long time. are lots of military people saying thank god we're out because this was a fiasco and not in our interest? >> want to go first? >> be happy to. >> [inaudible] >> i think the secretary's been clear, tony. he has said that the start of

the war was controversial inside the united states. he understands that. he understands the don'tings that went on in the 2002 and 2003 time frame. roll the tape forward. nearly nine years after that point. nine years of blood spilled, sacrifice, and hard work, and the secretary believes that the men and women of the u.s. military had done an outstanding job and have made sacrifices in nearly 4500 cases, the ultimate sacrifice, and they have, at the end of the day, given iraq the opportunity for a better future to define for themselves what the way ahead is, and to define what a sovereign, free and democratic iraq should look like, and that's what -- that's where his mind is right now, and i think you heard some of that

last week in his remarks at the end of the mission ceremony. that was a very historic occasion, and that's where he is right now. he believes that at the end of the day, that opportunity is there for the people of iraq. >> was it worth the price though? the price was huge, and -- >> that was not the reason we went in to give them opportunity. i'll ask again. he was opposed going in -- >> many americans questioned the rationale for going into the iraq war. he believes at the end of the day that the 4500 service members who died and the many thousands more injured there, their sacrifices were not, i repeat, were not in vain. >> okay -- >> here's the thing about wars, and you don't have to be much of a historian to figure this out. they change. they often change over time -- >> [inaudible] >> the character, the objectives, the missions, the

goals, the strategies, it's not unusual or a-typical for them to change in their very nature, and the iraq war did chaifng over time. -- change over time. it was a large scale invasion, and then it became a full out cover insurgency. you guys know that. you know it more than i do. over time, this war did become about giving iraq an opportunity, an opportunity that they didn't have before, and as george said, it's their ring to grasp. back to the other question to me. you were accurate. i've been in the building a long time. i did not serve in iraq, so i will not pretend to speak for the hundreds of thousands of men and women or families affected by that war. what i will tell you is this -- when you strap on this uniform, you do what you are told. you follow the orders you're given. you do your duty, and regardless

of how any of our troops, and i'm not -- some of them may be glad it's over, and i won't speak for that, but each and every one. -- but each and every one of them should be proud they did their duet, and they can move forward in their lives in the cautiousness that they did their duties very, very well. >> the point tony's making is a really interesting one. the sacrifice of the men and women who served and served magnificently, there's a sense to contribute sides the -- criticize the war now that it's over is to undermind their sacrifice. not at all. the nation owes them republic. we get there. we're not safe if we're broke. part of the budget problem we're having today is the cost of the war, so we can, you know, all agree the sacrifice of the service members is something we all should respect, but is our

financial insecurity now, should that be put on the scale of what we did to liberate the iraqi people? >> well, there's a lot that -- you know, our financial situation in the country, yes, it's been affected by ten years of war. no question about that, tom, but it's not the obviously impact or the -- it's not the only impact or the only reason why the economy's struggling. it's a fair point you make. speaking for those of us in uniform, and i can tell you it's -- the decision to go to war and all that that entails, the risks, the costs, the dangers, the sacrifices that you know are going to be made, those decisions are made by the civilian leadership. we execute those decisions, and it would be wrong. it'd be inappropriate for us to be, again, the military to be over concerned with the financial costs or the impact of

the economy to the united states as we execute those orders. we don't determine when or where we fight, but we do determine how we fight and to give the advice to the civilians leaders in that regard. >> time for a qowp -- couple questions. >> with regard to the f-35, deployed by 2016, but that's two years ahead of schedule. expect the u.s. air force in 2018, but what message does this send to people inside the u.s. and japan could have it before the u.s. if all is on schedule. >> i don't know the exact schedule, but welcome japan into the joint strike fighter program. japan is an unwaiverring ally of the united states, and we have an unwaiverring commitment to japan, and the latest announcement by the jab these

government -- japanese government is further indication of the strength of our relationship with the japanese self-defense forces, and it expresses confidence in the american industrial base, so we welcome the decision wholeheartedly. uh-huh? john? >> has anyone from dod been in touch with the chinese counterparts regarding the situation in north korea, and also in the last couple days, have you seen new or unusual activity by the north korean military in >> the anxious to your -- the answer to your second question is no, no unusual movements by north korean military. this appears to be a relatively smooth transition on the peninsula, and we hope it stays that way. there has been no increase in force protection levels for u.s. forces in korea, and general thurman, another american official in the republic of

korea, are in constant contact with their south korean counterparts. they are doing an amazing job. secretary has full confidence in what they're doing. in terms of the first part of the question -- >> i'm not aware of any discussions with our contacts in china thus far, no. >> would you like to have contacts with the chinese military regarding the situation in north korea? >> we'd like to have contacts with the chinese military for a wide range of issues. this is a country we want a much stronger relationship with from the military perspective. at this point, i'm not sure there's a need specifically as george said, the things are calm there across the dmz right now, and that's the way we'd like to see it 6789 i'm not certain there's necessarily an imperative there to reach out to the chinese with respect to

what's going on in north korea. >> can i ask a question -- you said the transition is relatively smooth. one, how does the united states actually know that since the information is almost non-existent dealing with north korean channels, and does that mean you do believe that kim jong kim jong un is solely in power or are there other members taking power? what leads you to say the transition is smooth? >> we have no information of the contrary, and there's been no unusual north korean troop movements since the death of kim jong il. that's one indicator of a less than smooth transition, and i'm talking now about the security situation. in terms of succession, and kim jong un was identified as

someone who would take over. the north korean media indicated he will take over for kim jong il. as to who else might be in power alongside kim jong un, i'm not going to speculate. >> there's an opportunity here for whoever heads it to join the family of nations and stop the isolation they have suffered their people through, and i hope they take that. >> a couple questions about the u.s. president in kuwait. has an agreement been reached with kuwait to maintain that additional comment brigade as has been reported earlier this year? seems -- [inaudible] 3,000 troops maintaining themselves, and how long will they be there for, and if there's no agreement with kuwait

kuwait -- [inaudible] third part of the question, the 40,000 troops in the gulf region to be maintained there, the u.s. maintaining a presence, and i think there was mention at the white house, two weeks ago, that the u.s. was going back to a pre-gulf war presence which would be significantly lower than the numbers he detailed. which of the two are we supposed to believe? >> i'll take the first part of that. we are still working through what a post iraq that a legal presence would be. what's it look like, where's it going to be, how many, and what will they be doing? no final discussions made about where any residual forces may stay or for how long they will stay. we're grateful for the support that we have received from kuwait for a long time, and not

even in the last 10 years, but certainly for the years of war, kuwait is a steadfast partner, and we appreciate that, but no predecision discussions that we've been having with any partners there. >> in terms of the numbers, the secretary's been clear that we are going to maintain a presence in the middle east. you know, the numbers in terms of deployments flux wait depending on requirements at any given point in time. i'm not sure i'm in a position today to disparse the number, but the secretary is insist tent we have a -- insistent we have a presence in the middle east and assist our allies in the region. >> [inaudible] >> i'm not going to get into any particular discussions on troop levels in the middle east or elsewhere. the key point, louis, is we are going to maintain a strong presence in the middle east. i don't have a particular figure

to give to you today, but that is beginning to remain a focus of the united states military. >> that's, i think we have to go. >> thank you, everyone. happy holidays. happy new year. [inaudible conversations]

>> now remarks from merck ceo ken frazier interviewed by "wall street journal" manager in new york, and prior to becoming merck ceo in 2010, he was the defense litigation concerning the drug viox, and in november, he was put in charge of the investigation of child sex abuse at the university. ken frazier is a trustee as well as a penn state alum. this interview is an hour. >> thank you, ken frazier, for being here. it's great to have you. you've been in the job for about one year? >> one year, a one long year though. >> i was going to say, how's it going? >> relatively well.

it's been a challenging time for the entire industry. there are a number of important challenges that we face including a fundamental challenge around research, productivity, but on the whole, i think things are going well for merck. we've had a strong year, a very strong top line performance of about 5% growth on our top line. we've introduced new products into the market. we have 19 products in late stage development, eight to be filed in the next couple years, and we think things are going relatively well. >> i want to talk research and innovation, a big part of what we'll talk about this morning, but there's an interesting book written by a business school professor called "what got you here won't get you there." >> i've read it. >> okay, you have. you're an interesting case of that because what you got here, at least from the reading the press, was your defense of the company from, to a large degree,

your defense of the company from the vioxx claims, but what gets you there is overseeing innovation, a new generation of innovation in drugs. seems like very different skill sets. >> i think you're completely right on that, but i guess i would say a couple things about that. first of all, the defense of vioxx was the deft of innovation at the end of the day. many saw it as a war in courtrooms and lawyers,=v17 ann you're in a company like merck interested in integrity, defending how we handle vioxx is critical who who we say we are as a company, and vioxx was one of the most studied drugs in the history of the pharmaceutical history, and in the charge that we were trying to cover up what the true safety profiles of the drug was in the data, and i think we were fortunate when the

cases were tried to juries and they heard both sides, they sided with us, but back to your question, i've been very fortunate in my career, working for three ceos, including the ceo back in the 1990s, and he hired me out of the law and insisted i not be in the legal department. for my first six years in the company, i was responsible for public policy and communications, and one of the board members is here, and she's from my standpoint, one of the great communicators of our time, and i learned a lot about the need to communicate, and what we communicating was the value of pharmaceuticals and the importance of innovation. i had a stint in the legal department we talked about in the terms of vioxx, and the current, the past ceo who just retired last month, dick clark, allowed me to run the business of merck for three to three and a half years.

i had experience outside the legal department, and i think that was very heful to me. >> is legal train itself in being a ceo. >> that's a hard question for me to answer. i think that some aspects of it can be helpful, the ability to sort of cut through the clutter of discussions and try to find that's important, and i think that's helpful, but i don't think by and large business and law are very close to one anotherment i think the way that business people think is very different the the way lawyers think about protecting business is a different things. in some ways it's not perfect preparation, but i was fortunate at america that my time was spent outside the legal department. >> you made a strong statement after starting research and development was the core of the company and intended to focus on that. a new ceo at around the same

time, made different statements at the time talking about slashing costs and the research and development budget, and in the 12 months since, it's increased 20% in terms of the stock price, and merck stayed about the same. >> uh-huh. >> what's the marketplace telling you? >> first of all, i'm pleased we stayed about the same because for a long period of time we were very much down in terms of our stock prices. >> because of vioxx? >> no, i mean, this year. >> oh, this year. >> i think initially, i think the issue really had to do more with an issue that came up in the late stage pipeline with another drug, one of our most important drugs in development. i would just say this, i think that at merck, science and translating cutting edge science into medically important productings is the core of what

merck defined as its purpose in the world, and, you know, without commenting on anybody else's strategy, i think the position i took was consistent with merck's core values and what its strengths are and when one runs a company like merck with long lead times in terms of development, it's important to keep in mind you're not necessarily running the company for the immediate reaction of the stock market. obviously, i can tell you it's better to have the stock go up than down, but what we are really trying to do is run the company to create sustainable long term value for our shareholders, and from my perspective, and i think my management team agrees, the most sustainable strategy is really around innovation because over time, the marketplace will try very hard to comity goods and services, and the only way to

sustain that for your shareholders, customers issue and patients is to do the innovation. >> for people out there, investors included, who think the big research and development model is broken and a company like merck can't productively invest, what is it? >> $8 billion. >> $8 billion in a way that will get a decent return. i mean, is that part of the message you hear from the market? >> i think i hear that from some investors, but i back up for a minute and say if we were sitting here four years ago in 2007, merck would have been at the tail end of introdewsing eight -- introducing eight new important products like the cervical cancer vaccine, and at that time, no one was saying you shouldn't invest in research and development. the problem with research and

development is it's not always consistent. it's not like engineering where you can incrementally have another version of the iphone, and we were tried too big something in our industry where we have to reinvent ourselves every ten years, and we have to come up with a completely new molecule, a different compound who works for a different patient population and provides benefit in terms of unmet medical needs. that doesn't happen regularly. it happens up and down, and if you look in the past, there's been other periods for research and development, but over the long term, science always made progress, basic science has always made progress, and there's a lag time from the basic science to companies like merck or others to apply what we learn from that new science and come out with new drugs. what i'm saying is having looked

at the past, having seen these stages and changes in the past, i'm confident that if we focus on cutting edge science, the right targets, and if we put into place the kind of environment inside merck where world class scientists want to come and make it a career at merck, i believe over the long time, the return on investment comes back. >> what can you do and have you done to maximize that over the long term? >> well, first of all, my colleague, dr. peter kim, who runs the research lab is focused on this question as much as anybody is, and what we've done, for example, is look at the disease areas that we were in. we've made decision to narrow the therapeutic area to focus our basic research dialers going forward, and we continue to hire the best talent. we continue to work intrnlly --

internally and organizationally to make better decisions to kill compounds earlier. you are managing it and 98% of the products will fail. the question is can you make it 98 and not 99? it's important if you fail, fail early before you expend a lot of money. those are the kinds of things we focus on internally to ensure we improve our return on investment. >> one of the things that has probably soured some people on medical research and development is the fact that ten years ago we had this decoding of the human genome and there was so much excitement about that discovery and a feeling that would revolutionize medicine, and ten years out, it really hasn't. nothing seems to have changed that much. what do you say to those people who tell you that? >> well, i say a couple of things. first of all, you have to be patient. you look back, and in the late 1970s, the predominant way to

discover drugs was in-vitro testing taking soil elements, plant extracts, put them in a pea tree dish, and extract from them and synthesize them, and the approach was not overnight. it took awhile for people to begin to take the new approaches and figure out how to apply them in the context of industrialization of pharmaceutical development. i think the same it happening right now with the human genome. i'm not a scientist as we've already established, but i talk to my scientific colleagues all the time, and they look in the areas of oncology and immunology and what used to be a black box, they are now beginning to understand the disease processes, and multiple targets are involved in cancer or, you know, as ma or other -- asthma or other conditions, and it will take some time before

people can mayser that and really -- master that and really pick the right target and find the right interventions whether they are small molecules or bilogic, but i'm convinced it will happen. >> in the next decade? >> absolutely in the next decade. >> what does that mean? you mentioned cancer, and it's been 40 years since the war on cancer was declared, and it feels like the war in afghanistan, or, you know, progress is hard to measure. are we going to see that change in the next decade as well? >> well, we've seen a couple drugs this year making a real impact on certain tumor types, and i think that gives us reason to believe that if we continue to apply the science in that context, we will be able to conquer specific types of cancer. the cancer is an interesting word that describes a lot of diseases that actually involve tumors, so i think one of the issues that we're dealing with is it's not something like a

hypertension or high blood pressure where a medication is treat a very broad population of people. what we're learning is how to find drugs that effect specific tumor types, and i see progress. again, a couple drugs this year with phenomenal impact on specific kinds of cancer. >> can you quantity my that at all? ten years from now, how many types of cancer will have effective treatments? how much of a reduction -- >> i can't quantity my it as i sit here today. i'd be making a wild guess. >> we're fine with wild guesses. [laughter] >> let me just say this, a whole bunch. [laughter] i'm convinced, again, when you look at the progress we've made in the last ten years that you see an acceleration of our understanding in oncology, and i think as we begin to understand the molecule targets, we'll be able to target compounds that

actually affect those in specific patient types and tumor types as we move forward. >> we've made it this far in the conversation without you making reference to public policy, but you wrote a tough piece in the "wall street journal" this summer, i guess it was, attacking some of the aspects of the health care bill saying they would prevent innovation in biosciences. >> well, i would say that one of the big challenges that the industry faces, i just spent the last few minutes telling you how excited we are about the science and where the science can go, but one of the challenges we have is what kind of marketplace will there be with the new drugs? that's why public policy comes in. globally, before we get to the united states, governments tend to be our customers outside the united states, and so when you're dealing with public policy challenges, when you deal with the economies around the world, it's really important

that there be a public policy environment that is conducive to the kind of innovation we're talking about. our business requires significant investment over a long period of time, facing significant amounts of scientific and regulatory uncertainty, and it's hard on top of that to have a marketplace where public policy doesn't really support new drugs that actually have a profound impact on -- >> are you saying that by and large the governments who procured drugs in most other countries don't give you the incentives for innovation? >> i think overtime the incentives have been lessened. for example, in europe right now where those countries are now facing major problems which we all know about in terms of the deficits that they have in the lack of economic growth that goes along with those deficits, many countries are struggling in their social welfare systems to afford health care at the level

at which they promised their population, and one of the impacts is they tend to focus on one part of the health care bill which is what i call the ingredient costs, the drug costs -- >> but it's partly because it's a big cost. >> well, it's actually generally 10% of health care costs that are actually the drug costs so the other 90% has to do with other ways of providing health care, hospitals, physicians, diagnose procedures, and frankly, a lot of inefficiency of how those services are provided, and so we are 10% of the health care bill, and i think frankly when you look at the proper use of drugs, it tends to be class perspective, but it's an easy target if it's one segregated part of the health budget and it's growing because the new drug and people say it's with innovation. for example, there's a hep titus

b drug, and the importance of that drug is that with previous therapies, only about a third of patients were able to clear the virus, in other words, effectively have a cure, and now the cure rate is up to 70% or 80%. i was with a german health minister, looks like he was 35 years old, but the fact of the matter is we were talking about the facts in germany, the health technology assessment agency determined this change from a third to 80% does not represent a real innovation that has to be paid for. well, if that's the case, it's hard to have an industry like ours. what's happening is people are putting the finger on the scale because they know there's an economic prop, and it's important for us, and the reason i wrote that piece in the "wall street journal" because it's important for ceos and others to be very loud about the importance of paying for innovation, real innovation when it occurs. >> you know, one of the things

that frustrates americans who look at this question is we seem to be paying for innovation for the world. >> uh-huh. >> we're delighted to have the most innovative pharmaceutical companies in the country, but the cost of innovation is baked into the cost we pay for drugs and everybody else is getting it at a discount. >> yeah. let me start by saying before we get to the cost of the drugs recognize that u.s. does have the benefit of 5 very strong farm pharmaceutical industry and foreign companies locate in the united states because it's conducive to that and 800,000 excellent jobs, one of the few net exporting industries we have left in the united states, so let's not forget the benefit that it provides the country in terms of a very strong industry along with, for example, the computer industry of silicone valley. we don't have that many really strong industries to sweep them aside, but getting to the cost side of thing, that is the challenge. there's a great deal of transparency worldwide now on

the cost of drugs, and countries like the united states or germany, for example, germany wants to pay the same price that croatia and bulgaria pays, and the doctor world in which you live, two things happen. first of all, you take away the inseptembersive for innovation -- incentives for innovation as we talked about, and second, you remove the incentive for differential pricing because people who cannot afford to pay more are forced to pay the same amount, and you discourage the use of drugs in those poor countries, and to me, that's not actually a moral position to take, to i understand the frustration of looking at other price controlling environment, and say we wish we had those prices. one more thing people have to recognize is go back to the story and the problems the price control regimes is the newest drugs take longer to get to patients in a lot of those countries so you also want a situation in which you have a free market where physicians can

make individualized medical judgments about whether this new drug is actually going to provide a salient benefit for a particular patient, so i say you can't have everything. . . for those patients for whom does

drugs work. but if you go after it and no way where i put a cap on what innovations you provide, as we started off at the beginning, investors are the rest in about the challenges we have. >> you think that's part of its holding in your stock prices? >> i note that it is. i don't have to speculate that because i type where large investors invested by large investors notwithstanding the challenges they had when we announced we were not going to disproportionally cut research. the good news is most appropriate investors that we think that's the right thing to do. but they said two things. one is you have to work on the roi and internally, and secondly, since you're going to engage the public policy environment, ensure that if he took it across the finish line it can get reasonable reimbursement. >> are you doing on engaging the public policy? habitat to the president about it? at what level do you engage? >> i actually had the honor of

being in the oval office earlier this year but the president and i did have an opportunity to express my views on some specific issues in terms of the health care and terms that the fda. so he was incredibly gracious to me to buy me about half an hour of time. so i did do that. >> did you get a good response? >> i did get a good response. i don't know that it's been translated into action so far, but assert a good conversation and i think the president understands the need to maintain a strong viable industry. but the other issue is how much time can you stand with the congress? because that is sort of where the action is. we spent a lot of time on the hill trying to persuade people that, for example, put additional rebate under part d benefit, a benefit which by the way has two virtues. one of which is very well perceived by theaters around the country. i think seniors with

inhabitation possibly being viewed as one. it also, it is some of the fields of government programs that have come in under budget because it has used the private market. and so i think it's a mistake to tamper with the benefits that provide such satisfaction to people and comes in under budget. if we start putting price control in the united states like the one adjourning other countries, i think they are taking away a huge cannot desensitization. >> we had blaster on a staged stanzas i know. he had a whole list of ideas for how the government could save money. i said give us an example. the top example he gave was if the government could negotiate for its drugs directly from the start of good local companies, rather than intermediaries, we could get a much better price

and save billions of dollars. what do you think about that? >> i think it's a terrible idea. first of all, the concept having had the experience of negotiating with european governments is not what the word means. it's not a negotiation. they set the price. and secondly, i go back to what i just said. it's one of the few benefits that come in way under the weight was scored by cbo. the reality of the road is there's lots of people out here who are employers who go to health plans that provide the right balance between cost cost-effectiveness and the benefit to their employees. so for most -- in fact, the congress has the private benefit for the federal employees health benefit plan. so the fact of the matter is i think the private market has worked pretty well when it comes to drug prices. we provide very significant competitive rebates in order to

get them on formularies. so i actually don't see that there's a problem that needs to be fixed. >> well, the problem is price. >> you can see the problem is price, but which are really saying is you don't want to sharks. because i can't be in a business where you take this much risk. i spent $8 billion. i'm going at the new target in this huge uncertainty around them. i then get a regulator, cost a billion to according to the most recent studies to bring a new drug to market and say the problem is value. the reality of the world is every drug on the market in the year 1995, pretty high standard of care is already generic. so either the american people want to live is today's standard of care or they actually want a drug for alzheimer's. we had four programs going. one of the most important programs -- pivotal programs that test one of the fundamental hypotheses of all time -- i

won't get into the details could did not yet had my extent of the knowledge of their science is a program that we are spending a significant amount of time and effort on. if that program is successful, we will have a truck in 10 years. i think about the societal costs of alzheimer's. we can't possibly charge enough in terms of the price do not make that drug a net benefit to our society. but if you say the drugs cost too much and you've got to be intellectually honest about this and i think the drugs we have today are good enough and i don't need the one still come up with tomorrow. >> you are talking about the importance of training to engage in public policy. we had a bit of a flat share of merck engagement in public policy in texas. >> i heard about that. >> where the governor mandated garden fill in this state and then there was the elaborate about his former chief of staff who became a lobbyist for your

company. it was sort of a case study in how involvement in public policy can get you into a hornets nest of trouble. >> i agree. first of all, the stories many are sold. >> it wasn't on to your watch. >> the point i'm making if they got recycled in the context of a political campaign among other things were told this drug that prevents most cases of cervical cancer and actually causes mental retardation and girls. the level of political discourse around it is silly though. the fact of the matter is governor perry could sign an executive order and texas legislature is interesting innovation embedded meets only every other year. there might be some texans here. but in the interim, he decided that given what he has learned, not just by the way for the lobbyists, but from his own public health people about the

importance in terms of cervical cancer, that he would sign an executive order. it created a huge firestorm in texas because the difficulty of this drug against cervical cancer is actually caused by a virus that is transmitted. and so again, a discourse in the country becomes about whether you are promoting promiscuity versus protecting girls from cancer. so that's sort of blew up in the governor space and he immediately retracted that. the discussion this year i think frankly was what happens and people are running for president. people revisit those issues and i think at the end of the day the concept of the governor of texas would sign an executive order preventing for the vaccination of every girl in the state simply because somebody was later going to become a lobbyist. i think it's a little bit interact. >> so it doesn't trouble you too much? >> it doesn't trouble me. although the appearances -- i'd

have to say i do get by with respect to the american people, people are concerned that various elements of society have too much access to the political system by political contributions and lobbying efforts. but what merck has always tried to do and i think we are known for this, is to lobby for what we believe to be sound public policy principles because i use this is what is good for the patient is always good for us. >> but you also make significant contributions. >> absolutely. there's no two ways about it. i think the reality of the world is the political system is different in this country. if you run for office and congress were there in the house of representatives or governor or anyone else come your challenges stay elected in the cost keeps going up. and we think it's highly appropriate for our political action committee, for our

employees to contribute so we can support those people who support innovation. >> we have had the spectacle of seemingly endless from the republican debates. at last count, but moreover he does then. in the standard line about health care is to repeal the obama health care plan. is that the right approach? >> i don't think so. there's a lot of things about the obama health care plan that i think a really positive. the focus on prevention, for example is something i would point out. there is no reason why we should give people first dollar coverage for vaccinations. i think it's highly appropriate to get to a position where we could take the uninsured and provide some basic level of coverage. they are aspects of the obamacare -- and i don't want to call it that, but the affordable care at because it is one of those political slogans that we actually have some concerns

about. something called by pap which is a body of people that's not accountable if congress doesn't reach out. he said his son and say which drugs really are reimbursed. which drugs for medical interventions that could be reimbursed? i'm worried about that. exactly. i think one of the geniuses at the american political system as we believed by and large the decisions made by broader groups of people are better than decisions made by concentrated groups of people. i think physicians are able to look at data and decide whether new drugs or invention makes sense for a particular patient. >> but i mean, we know there's lots and lots of evidence -- i mean, a lot of physicians out there i'm all not allowed to the state-of-the-art. they don't all have the best information on what drugs and treatments are most affect it. i mean, you really believe

distributing those decisions over other positions? >> i absolutely do. >> yet we do a better job of informing them perhaps? >> we should provide medical education. no question about that. >> a lot of their information seemed to come -- the drug companies spent a lot of time on that. >> what is happening in the outside world with social media and everything is there is more access to information today than it's ever been in the history of mankind. and if you go and look at data around what people see when they go to the internet, health is one of the primary things that people seek information for. so actually the critique that they are sort of dependent on our sales representatives for information is actually 50 years too late to make that critique because everyone has access. >> what would you do to raise the level of knowledge and education about new treatments

that physicians have if you're going to leave those decisions? >> well, i think the enemy continuing physical education is really important. we just talked about the pace of science changing faster and faster. it's important for people to have access to unbiased medical education at the company we support unbiased independent continuing medical education. i think that is the way in which people need to keep up with their art and with the science. >> turn the focus for a minute to china and then i want to open it up to questions in just a minute here. you have just announced -- recently announced a major investment in china for research and development. why take that research and development to china? >> first of all, i think we have to recognize we live in a global society and merck is a global company. the emerging markets are a big

part of our business from the standpoint of sales. we anticipate 25% of our sales to be in those markets in china is the leading market by 2013. at the same time, i think you look at the low cost to example of human genome sequence that's revolutionized. so i think if we are going to be an important player in global health, we have to seek the best medical and scientific talent wherever it is. so just to give you a data point. and merck now and the united states, in terms of our bio status, something like 60%, 60% of our biostatisticians at merck are needed for a chinese that we brought in the united states to work in our biostatisticians, statistical department. so there is tremendous talent there and i think we have to access the talent where it is.

>> last november we brought together our ceo council, about 100 ceos from different parts of the world. and in the survey prior to that event, talk to them about their concerns about china. the number one concern was intellectual contention and chinese public policy. does it bother you to be doing research in china when there are concerns about the protection of intellectual property, which is critical to survival of your company? >> is a very valid question. i would say that we've chosen specifically which parts of research value change we want to do in china appear with me purposeful decisions about what we're not going to be there and i think we've done that with ip protection foremost in mind. >> in certain industries, china has been explicit about a pro-quote. if you want to operate in this country, you must do certain high-end research and

development. was there anything like them in your case? >> well, there is something in that respect her, but it didn't relate to this installation. so the issue in china as it relates to market access really has to do it if we want to sell vaccines to chinese children is a huge market. and by the way, merck is one of the first western customers to provide back to the chinese market going back to when they had a huge hepatitis b. program. he designated with the result that we saved tens of millions of lives. so we have a long history as we deal with the chinese government in terms of access to have their children, there are some demands that is made on us around manufacturing those guys in china and negotiating them and their chinese vaccine companies to see if we can come to an

agreement about technology transfer that makes sense. >> the final question to ask before you open it up as if reviving merck were too big and as challenge, you've also taken on the challenge of investigating the jerry sandusky and what it says about penn state and why it wasn't spotted earlier and that was earlier. why in the world would you do that? >> the question that my wife asks all the time. she has a list of things she prefers that i do. i think the bottom-line here is that authority of the board of trustees. is this my alma mater? this is a school i grow up that completely changed my life. so when this thing happened sitting in the boardroom, people look around and said is there anyone in this room who has had

the experience with this kind of widespread public situation before. and i didn't raise my hand. and then i think the second question was, is there anyone here that's handled by apps is? [laughter] and at that point i guess it was pretty clear that i had been outed as they say. and so, it's really hard to step away from an institution that you've pledged her support for any valid need. we were able to get the former sui -- fbi to take over the investigation. now that i've gotten someone that the public would agree is an able investigator to takeover would take less time. >> some people have been critical for precisely that region. they say what you did was protect the company from access liability and what should happen if penn state is not a focus on my ability, but a focus on what

went wrong. >> i said earlier on when he said we defended the company, you know, people on the outside tend to look at the fat that for once there was a liability could be 40, $50 billion and is less than that. >> it was 4.85, not to be too specific. but as shelley and i will tell you, inside the company it was the defense of the institution. i'm a big believer institutions. institutions are what allows us to have continuity in our civilization. and merck is an important institution because of what it can do 20, 30, 40 years from now in terms of alzheimer's, cancer and things of that nature. so too with penn state is an important institution. and so, i took on that responsibility because i believe in the institution and i believe

it is important to maintain institution. this is a horrible situation that occurred, but it doesn't define the university. i don't know what the facts will ultimately be. but i think it is important in times like this that people step up and remind people of the value of an institution to the country. and that's how i do my responsibility. >> questions? yes, please. >> nancy mccoy. you mention the independent payment advisory board as part of the obama health law that troubles you. the courts may strike down the individual mandate or the medicaid expansion. it's not a nation we elect to congress and push for repeal. tell us what parts, the faster the first dollar coverage for vaccines you would like to keep me up on the and also what other parts trouble you? for example, the controls onto

yours to treat privately patients, will that interfere with clinical decisions and access to medications section 1311. could you tell us more about what you're thinking? >> she spent some time on this. >> i think the things that the absent of the additional rebate is another big thing that concerns us in law. i think the benefits of the law i hit the big ones. i think providing medical access for a broader percentage of our population is very important for people. >> is the mandate essential in your view? >> i don't think it is. >> so you can achieve that goal? >> i believe you could. >> would you be in favor of that? >> i would be. at another court will do with this case. it could keep the rest of the lot and say the law sufficiently

strike down the whole lot. we could give repeal legislation in the house and senate have made repeal of the health care love a major priority. i do think that the law had some goals that are laudable. my biggest disappointment in the lot coming back to the earlier discussion is i don't think it didn't have to remove some of the disincentives that we have in the world. you see studies that say, for example, pay to have settled a particular city. if one has a lot of specialists on bass and another when does that come you get very different amounts of back surgery and is to hospitals. those are the kinds of things come utilization -- over utilization and efficiency. it didn't really aim that were the costs are going out of control. again i come back -- >> is not what that i have only focuses on new technology.

that's the point. i will come back to that point. if you think drugs are too expensive, you should see how expensive diseases. its 10% of the budget. if you focus on 10% and not focus on the efficiency of the downstream, then you're missing a big opportunity. from my standpoint, to answer a question, the most important thing i miss is focusing on some of the incentives that create inefficiencies in the system. >> yes, sir. right here. >> so, i'd like to talk or ask about your r&d and particularly a bunch of things are happening. one with both genomics and cardio mix.

when you do clinical trials come you can now look at, not just race or age or sex, but also genotypes and so forth. in many cases you're likely to discover that certain drugs is very affect you for a subset coming useless for another subset and toxic for a third. it's great for you to discover that. it means in theory you could target the drugs to smaller population, may be charged more. but the ipab and the fta need to recognize that. i'm curious where you think they are. sakic has detected that the.tears and social media and how much by the doctors know. the doctors will need to understand that any to know more about that on patients diagnostics and genotyping are even more important. so the whole amount of knowledge that's going to be required is in fact going to be much

greater. and the third thing -- >> how many are there? >> so i believe it was mirk that long before you were involved the 225 million for a drug test in russia that proved to be useless. >> i don't think u.s. we didn't get that win. the way hotter her on atrocity. so the question as in a polite way high reliable as you think that kind of research is going to be in china? >> let me start with personalized medicine. i think that's one of the exciting things that's happening. as we get more information that the human genome and personal life sort of gene expressions, it gives us the opportunity that you talked about to really focus not only a broad populations were appropriate, but also near populations who might respond better to medicines were badly

to those medicines. i think the fta is very much focused on those kinds of issues. one of the things we can do as an industry and society is spend more money on the fda survey of the resource is. what regulatory science to keep up with basic science for these kind of changes can be made. but that's an exciting thing about our industry frankly. because as the cost of drugs increases in the economic pressure gets greater, it will help us to be able to demonstrate the utility of that drug, the benefit in a population. so i see that as an exciting thing. a way to provide value going forward. i think that will only help innovation, not hurt innovation. on the china thing, i would not take one example of a clinical trial that was done in russia and not having it replicated to say that there's a problem necessarily in china versus the united states. the fact of the matter our industry is one where most drug

candidates fail and often dollar trust we can't replicate them in larger trials we learn about a side effect it didn't appear in the smaller trial. so i would say that what we do when it comes to life as we try hard in our due diligence to ask on the right questions to make sure we are not wasting shareholders money to get access to the underlying data and give ourselves the right opportunity to make those judgments. coming back to the main thing, but now we have diagnostics and biomarkers and genetic insight opens up a whole new avenue of valuable drug intervention and drug innovation. >> is a question back here. >> lieu crosscut with reuters news. i've got actually a couple questions on penn state. i just wondered if you could let us know how the investigation is going. you brought up the role of louis

freeh and that may speed up the process. you have any sense to an investigation may be over? >> i don't have a timetable because we said you've got complete free reign to do the right kind of investigation and he's very much alien estate as the early investigation. i would hope would be done by the end of this academic year so we can come back in the academic year and have all of that behind us. but i can't put a timetable on it. i think judge frees the right person to do the investigation. i think he's got the skill, the background and i've heard so far as he's getting pretty good cooperation of people. i'm not in a position i don't want to ask for interim reports. he has to carry out his investigation just as a law-enforcement agency. so the fact they're required to get into mario reports that can compromise the investigation and that's not what we need here. >> question right here.

>> to speed the market of new drugs and unnecessary delays as a constant theme of the editorial pledge. i wonder what you comment and balance it given the fact that it takes them is to bring a regular drug to market and protect what safety. >> for companies like merck, our goal should be to work constructively with the fda. the fda works under very difficult circumstances. i just alluded to the funding that they have bet their challenges from congress and others overruling the fta with respect to determination on plan b and something i think they thought had pretty good evidence this could be used safely. so why not a person who's at the fda. for talented people. the first-rate people who work for government and people on

public service know they can leave and made a lot more money in the air. i think the challenge we have is to find ways of meeting their needs in a more expeditious way. from their standpoint, a little more transparency about what the standards are going to be is what i think would help us because we have to design clinical trials here in advance. if the evidentiary standard shifts in the middle of it, it's pretty hard to adjust. the big thing for me is really the openness back and forth in terms of dialogue and transparency, in terms of a quantum of proof or benefit risk is going to be necessary to get a drug proof. >> banks. a telco for pfizer. i appreciated your comments on the continued innovation in our industry. i love your thoughts when you look at the changes taking place in the health care marketplace, coming together consolidation,

50% are part of corporations. this corporate goals, countable care organizations. do you feel this landscape is more conducive to innovative medicines, or is this another way to squeeze costs, take new drugs out? >> well, i think every -- every industry has to figure out how to compete in the marketplace that it actually has. you don't get to choose your customers. your customers choose you. it is very clear that health care generally has been viewed as a pretty inefficient marketplace and with a lot of discontinuity. so the challenge we have inside merck is to adapt to the environment. i think there's still unmet medical need and people still value innovation. the challenge for us is to recognize that the customers out there -- let's be clear are mostly bankrupt.

and so, we're going to have to think about innovation, not just technical innovation, the low-cost innovation will be a big part of the business model going forward. i know read and his colleagues are doing a great thing. these companies will have to think about running themselves in a way sustainable to provide not just benefit from a therapeutic standpoint, but benefit from a health economic standpoint. to be the biggest change that's occurred is the rise of health economics. before it was just position sitting in there making an individualized medical judgment. now physicians are not necessarily decision-makers anymore because there are people looking at drugs with the managed care provider or nice in the u.k. these are the technology assessment agencies. they are people who are now trying to ensure that there are

evidence-based ways of deciding which drug should be used for people, including not just benefit risk, but also cause. we could lament that. everybody else gets mastered and the world and challenge to provide a better service. if you get a new cell phone, it each subsequent one has to be better and cheaper. in many ways our industry has had the luxury of not having to compete on the basis of cost. going back to the questions allen asked, i'm not saying we shouldn't compete on the basis of cost. the problem is if your only customer is the government and the government gets to decide the value without regard to inputs from others, that's what worries me. >> other questions? >> their summary here. >> thank you. you mentioned plan b and i realize this is how this issue

per se, but you think would have a chilling effect on the industry as a whole? >> i think that's a special circumstance. the links between that and a discussion we started off with respect to the texas governor's border, every time you talk about children and sexuality, you're in a space where the political dynamics are going to dominate the science. that is that both of those cases have in common. i think that scientists tend to look at it from the tip of, we need to provide young women with options when they have an unintended pregnancy that is a medical problem or we need to protect young women from risk of service problems. when you move from a public health arena into the political arena, then we know we have different kinds legislation and

the president himself thinks that pro-common sense needs to be applied. i guess that implies that science is the common sense is compatible at some level. it is highly politicized and i think it won't having a chilling effect because most of our drugs are not used in that context. >> there's another question from the table. >> yes, i never questioned with regard to cost in innovation. it is a significant amount of drug development financed by the capital markets and by individuals who are under discovery. i'm curious as to whether that is important in the terms of merck and development of new drugs. >> it's very important. one of the problems we have in ensuring the right kind of return on investment is to get the balance right between work that we do internally and basic

work done externally. a lot of fantastic work being done by startup companies. many people would argue that drug companies like to spend less internally, more in terms of the work being done on the outside. i would say it's not diminish. one of the things we say to investors and others is merck wants to be a good partner. the biotech industry is struggling a little bit now. i think their struggle is a near image of our struggle. we have the resources to take some of these medicines into broad populations. so that is the benefit we could provide, if you will, resources and ability to do clinical trials come easy a biotech company furniture to market and now they simply can't afford to do the large clinical trials. so to me, that kind of partnership is one that will create value for the biotech

industry, will create value for our industry, but most importantly for patients. >> with one of these conversations who started the netscape browser in california this year and he said we are talking about why a science satellite hasn't had the same kind of explosion. he made the argument when he gets to the point that you can put the human genome and some of this data and open databases and 12 and 13 euros can play around and innovate the way they do with computer software, that that is what it would explode. do you buy that argument? sort of a more open innovation approach? >> is the world were going into. i think that it has been shown before that the more access you have, the people solving a problem city state, the better you are in terms of getting a good outcome of that problem. so i think that will be beneficial. there is a role for our industry because it takes concentrated amounts of capital to take

something from the very beginning stage of discovery all the way through large-scale clinical trials, fda approved lab rat commercialization. so i think frankly i'm excited by what you just said because the more discoveries we can validate the better off the industry will be in terms of the poulter on the other end. >> i think we have time for one or two more questions. read here. >> hi, diane brady "businessweek". i just wanted to go back if you don't mind to penn state for once i can't. i know. i hear about mark. >> this was so predictable. >> i have two elements. one is i know there's infestation to the actual case, but how do you feel the trustees handled the prices since he got a lot of experience with crisis? i'd love to get your thoughts on this new center for exploited

children or whatever is being set up by penn state because i think there's some question of whether that's the best use of money. so just her sense if you could go back on anything you might do differently. >> well, i think the trusty impacted rather quickly after information became public. i just ramberg was like, how shocked we were to your that information when it became public. it became public on a saturday evening and we took with respect to the head football coach on wednesday evening. and so i think given the fact that we are a large board geographically dispersed, we reacted in a fairly quick period of time. i think that we did the best he could put the information we had in the circumstances under which reacted. so i'll leave it to others to decide whether or not we did a good job on that point. on the center for exploited children, that's a positive thing.

one of things that is being missed in this tendency, which is an unfortunate aspect of public life and media and the american people is that among the strongest forms of rhetoric in our society, what i like to call the rhetoric of blame. when these things happen, we spend more time trying to parcel out lamed than we do looking at the broadest of vital issues. so the issue here is that too often, children are being exploited in our society. this case arose at penn state. subsequently we had issues at syracuse in the aau. we have had the issues in a catholic church. these are not unique to any particular strata of society. just read a "new york times" the issue that has occurred in new york and the orthodox jewish community. my point is only that it's happening everywhere and it's hard to match. the real disappointment is this

could've been a teaching moment for our society. as grownups, we could focus on our rule and not looking carefully and not being willing to talk about these things with our children and to expose these things when they happen. my biggest disappointment is that no one is focusing on that. they act as though this is a penn state issue because it erodes on the penn state campus. there's no person who doesn't understand that this is a broad societal issue and we really ought to be protecting children. my wife and i give thanks every day for children may think we really have to think what can we as a society do to protect our children? >> i think we should end with that and give the final word to one of our sponsors. peter tallman with bcg. >> thank you very much, ken. ry.

this is an hour and 40 minutes. >> fir of alake the >> i will invite you first of all to takoe the oath. >> can mr. morgan see us? can use es? >> i can see mr. j but not you. >> that's all right. fine. >> if you need to, you will.

[laughter] you're full name and please, mr. morgan. >> piers morgan. >> thank you. you've provided to witness statements. the first is 15 pages signed another segment of truth. is that your first witness statement, mr. morgan? >> yes. >> the second one is nine pages dated the 21st of november again with a statement of truth. do you stand by that statement mr. morgan? >> yes. >> now, if i can cover your professional background, your editor of the noon news of the world, is that right, between january, 1994 and august, 1995; is that correct? >> yes. estimate your the youngest set her ever at the age of 28; is that correct?

>> i believe so, yes. >> and that news has not yet been surpassed? you then move to the daily mirror did in september, 1995 and the 14th of may, 2004; is that correct? >> yes. >> and you are now fighting to an employee of cnn and you do a daily show piers morgan tonight which is very big in the usis understand. >> yes it is. >> me ask you to general questions. we know from your first statement that you are, as you described, that a facto editor of passan showbiz column which is i think still called bizarre under calvin mackenzie. we've noted it's not uncommon for the editors of leading tabloids to come to the show biz columns of the tabloid

newspapers. why do you think that is so? >> a column white the bizarre came to be working template if you like. that's why so many became editors. >> it is often indexed the occupation in celebrity and the news value is have very much focused on that sort of matter. >> i think it's very patronizing when people say that because i think in the end the have to compromise that and do news and show biz stuff and the art of being a good tabloid journalist is to do both. i always felt if you look at some of the people who came from the bizarre who went on to edit the new york daily news, these are proper news journalists. i'm not sure they can follow because you do recall on in your

early years about the celebrities it is unfit to cover news i think it is rather pompous. >> can i ask the second question that the turnover between the tabloids and ask you about the experience in many of 2004 a very rapid turnover for the tabloid newspapers are not? >> between the newspapers they may not want to admit this but quite a few people have gone through the ranks have originated from the tabloids. >> thank you. i would ask you now another general question about the to volumes of your diary. the first is called the insider. the second, don't you know who i am. the general question is how reliable are these historical documents? well, that is a moot point.

they are my records of ten years of editing newspapers, which were compiled not as a contemporaneous diary but say in the introduction from the collection of notes, memos, e-mails, stuff like that and stuff like this on a weekly basis and i've constructed the four men as best my memory served it but it is in the record of 100% historical import i would say no. estimate is it your best recollection? >> yes. >> in your first statement please if i can take you to 16, which is page 24194 in answer to a general question you

say ethical determinations are central for the will to an editor to the major national newspapers and to a professional journalism. during my time is editor of the news of the world and the daily mirror ethical considerations are interwoven into my work and were imprisoned in aspect of the daily professional life. so that is and was your quota, have i got the right? >> yes. >> than a 17th of the code of practice use the l.a.p.d. to say is displayed prominently throughout and informed every editorial decision made during my tenure as editor of news of the world and the daily mirror and then i paraphrase in the context of balancing privacy of individuals against the public interest. and is that right? >> yes. >> and eight your recollection is in compliance with the practice was the

requirement of the contracts with employment of journalists working with the daily news released around 2000. you don't think, and again i paraphrase, it was the expressed requirement of the employment as editor but then you say in the second statement it was so obvious it went without saying you comply with the practice, is that correct? >> yes. >> paragraph 25 of the statement you deal with libel and you make it clear in your view that the libel law we in the united kingdom has enormously onerous requirements is that so? >> that was my belief when i was editing newspaper. i have written this nearly eight years after left it is a newspapers said it relates to my time as editor.

>> paragraph you give examples of how the ethical consideration informed decision making and in paragraph 29 you were providing the copy of the budget in 1996 and the upshot it was and para a phrase you didn't think it was to publish so instead you had to get back. have i summarized what happened? >> yes. taking the view that the budget were before it was publicly announced is that you're thinking? >> we have the management which is very unusual but because of the indication of the allin king of the budget we felt this was correct and there were a number of considerations one of which we were not able because the ticking clock element of the

story to completely verify its veracity so we were not sure that we were dealing with 100% accurate documents. second, we felt the material contained could potentially cause market chaos and was that irresponsible thing for a newspaper to be giving, did we need to do that? it's not a big enough story to actually just have the budget and create the big sites that went back through that. looking for there were a number of things we could have done to the story. i am satisfied that we took the responsible course of action, although i would note within the space of the 24 hours i was captain skidded by the government overnight the priest me for what i had done and then by the next day they had come around to thinking this was a terrible allegations of my journalistic duties. so clearly there were different views about what i have done to a 64. in paragraph 31, do you have any more detail in your first diary you deal with the story in

december 1997 involving the 17-year-olds secretary being involved in you explain how that was confirmed but then on and decided in the circumstances that rose to publish the story but without identifying the concern is that correct? >> yes. >> thank you. 33v nado b campbell story, that of course is the story which ended up in the house of lords a couple of years later i think. is the right? they were divided as we all know. >> yes. >> paragraph 34 of your statement dealing with the complaints and the wide proceeding treatment the complete was upheld by the dcc

and then mr rupert murdoch gave a public statement which you set out in 34 where he said it is clear the young man, that's you, went over and had no hesitation to make the public demonstration. now i've reminded mr. morgan forcefully this is the responsibility to which she is an editor subscribes to in the employment. the company will not tolerate the company's best practices of the popular journalism. i'm going to return to that in a moment. they ask you a little bit in this first witness statement to deal with the issue of the investigators would now be 50 on page 24202 you have no recollection of any personal involvement in the use of the private investigators during your time in the news of the

world but we were looking at the period that i think was less than two years. so paragraph 51 from time to time they would engage in a private investigative journalism during my time as editor the professionals were useful tools in securing the water it in evidence for or fact checking the articles and stories the journalists had uncovered about which they received. do you know what sort of evidence private investigators would seek out for the newspaper mr. morgan? >> i don't because i've never been directly involved. this was dealt with through the news desk so in editor in that position i think probably like most editors you wouldn't get directly involved. that was enshrined in the contract of employment so i never had any concerns that they were breaking a law using the private investigators.

>> i will come back to that issue if i may. the question please of the unethical news gathering. presumably you have heard of the term ecology. is that correct? >> i have become acquainted 28. speck on how many occasions did you take advantage of the services? >> i was trying to remember. i know that i to tell that least one in my book in relation to the story about elton john. i cannot honestly say how many times but certainly we deploy him or the services several times. >> in the first book 1998, the 13th of january the gentry said a is there any way you got the same peter bac edition?

>> yeah. i have the hardback. >> it is 185. you tell us it is a very strange guy who told me a few stories in the past and ran this morning with an extraordinary offer. i've got all of the bank statements he squealed in a high-pitched voice. he would have gotten them. his nickname is benge and he goes around making rubbish in celebrities' houses and lay the papers by the stock despite the serious unethical way that he acquires it, and then i paraphrase he turned out the documents including the bank statements. did you have any problems with that, mr. morgan? >> it clearly is a strange thing to be doing.

he used to live in the house that have hundreds if not thousands of. it's a very unusual way to lead your life. did i think that he was a legal? no. dividing that he was on the cusp of being unethical? yes. but it is interesting to me to see the testimony in the chief investigations editor of the guardian who decided to make somebody else pay for this information who brings up the beatles and self which is something the guardian is very good at and since they've appointed themselves as the sufficient i would like to examine that practice because in a way it isn't disseminated. they take the discord of remains from the tabloids, fill their papers with them but don't have to pay anything. the daily mirror would have been a lot more profitable. >> we are not asking questions

in this moment we are asking questions of you. you're what makes it clear that you use this exact language despite the unethical way that he acquired it not just on the cusp of this unethical behavior on the strong side of the line, would you agree? >> i don't know actually because if you discard it away you are discarding it so you'd have no more use for it and you just go off to rubbish where everyone knows you walk down and help themselves. >> i'm not sure they can but you can get some advice about that. >> you can't get their rubbish tips? >> you can mr. morgan. the property of the discarded rubbish probably belongs to the local authority see. are you seriously suggesting for the probe said who's thrown away rubbish in this case mr. alton

john has in the expectation he might end up in the hands of a journalist? >> it wasn't him actually. it was his manager. >> his manager, pardon me. >> the same principle applies, doesn't it? >> i think it's thrown rubbish into the street i just throw it out there i wonder how unethical it is that's going to be in the newspaper. that's rubbish. >> okay speed the investigators have you heard of someone called steve whitmore? >> i have since this all blew up. i wasn't aware of him before. >> when were you first aware that 45 of the daily mirror's journalists were identified by the information commission positively to have been involved

in the commission in his view of unlawful transactions? >> it was published in 2006? >> it was, yes. were you aware of it before then? >> i was working in america. i left the newspaper before, so that is when -- i think he will remember noting that when it was published in the paper and the time. >> the information commissioner identified 681 transactions is the term he used which he considered amounted to the breaches of data protection law and 45 known journalists in the daily mirror. are you saying that you were not aware of any of that happening at a time after you were editor? >> i'm not aware of any of the specifics but i'm also not aware that any journalists were arrested or charged or prosecuted or convicted of

anything. so he may have a view about the nature of those investigations and they may have had a different view. >> what you did you have of the journalists were doing at the time regardless of the information commission might have had? >> the journalists were obliged under the contract of employment to work within the law and the only selection is if you were to employ a public >> any possible excuse to have for going against the law? >> where you were in general terms of what the source of information, the journalists were seeking from -- from mr. whitmore, vehicle recommendation strags marks, numbers, that sort of thing. were you aware of that? >> no. >> wasn't it your responsibility as editor to be aware of what your journalists were doing, at least in general terms? >> i would say the average editor is probably aware of

about 5% of what his journalists are up to at any given time on every newspaper. >> were you aware of the sort of money that was being spent on mr. whitmore even if one can find it to the 681 positively identified transactions according to the information commissioner's evidence, the figure would be anything between 52,000 and 80,000 pounds. were you aware of that at the time? >> no. >> who would be responsible for authorizing that level of expenditure? the managing editor? >> i think -- i think so, yeah. i think it's all tightly run through the managing editor's office from the desk editors, themselves, the feature editors, and so on, all done at that level. it didn't come across my desk as far as any recollection of. that's why i don't have any

memory of the specifics on these. i do want to reiterate here, you know, none of it had ever been proven. i mean, these are just things that they said, wow, we believe this -- >> mr. morgan, i'd be grateful if you answered mr. jay's questions rather than entering into a debate with him. i'm sure we'll get on much more quickly. >> okay. not a problem. >> i may come back to the issue, but the issue of phone hacking, which i am obliged to ask you about. page 279 of your -- the first volume of your die rays, and -- die di diaryies, and entry in january of 2001 -- >> yeah. >> bear with me one second while

i find it. >> the 26th of january, someone suggested today that people might be listening to my mobile phone messages. apparently, if you don't change the standard security code every phone comes with, anyone can call your number, and if you don't answer, type in the four digit code to hear all your messages. i'll change mine just in case, but it makes me wonder how many public figures and celebrities are aware of this little trick. when were you first made aware of this little trick? >> well, according to this, friday, january 26th, 2001. >> were you aware of it before? >> not as far as i'm aware, no. >> who made you aware of this little trick? >> i have no idea, i'm sorry. it was ten years ago.

i can't remember. >> can you assist at all with the context? you look at the staff of the entry dealing with something else all together, just refresh your memory. >> uh-huh. >> i'll ask you, too, think hard. you don't necessarily have to identify the someone who suggested it to you, whether it was a journalist or a friend. can you help us at all? >> if i can't remember who it was, obviously i can't narrow it down to a genera. i can't remember. >> okay. do you recall any interview in 2007 with the "press gazette" in which you said, "as for clyde goodman, i deem a lot of

sympathy who is the fall guy for an investigative practice that everyone knows was gone on in almost every people in fleet street for years." >> yes. >> now why did you say that? >> i mean it was exploding then, and three years, and everyone you talked to said he was made a scapegoat, a widely pref leapt thing. i was not aware it was widely prevalent in any specific form. i heard the rumors like everybody else, and the reality is that is certainly seems to be much more widespread at one newspaper, and we now know that the guardian also phone hacked, so you had two newspapers, but certainly it was wider apparently than just clyde goodman, but not getting into rumors, because that's not the point of the hearing i don't think.

>> where were you when you had the interview in 2007 or were you speaking from your own experience? >> no, i was just passing on rumors i had heard. >> was this a practice which you may add a certain newspaper to the mix was taking place within the daily mirror before 2004. >> i do not believe so, no. >> you don't believe so or you're sure? >> i don't believe so, to the best of my recollection, do not believe so. >> and then there was june 2009 which young said, and what about this nice middle class boy to be dealing with essentially people who went through people's bins for a living, and then you say, well, i -- and then you are cut off and continues people who tap people's phones, people who take

secret photographs, and you say, i know, but, and you're interrupted again, who do all of all nasty down in the gutter stuff. how do you feel about that? you say this, let's be honest and put it into perspective as well. not a lot of that went on. a lot of that was done -- she says, really, and you said a lot was done by third parties rather than by the staff themselves. that's not to defend it base obviously you were running the results of their work. i'm quite happy to be parked in the corner of tabloid beat and have to sit here and defend all the things i used to get up to and make no pretense about the stuff we usedded to do. there's the massive people doing and certain it was very wide and certainly encompassed to high and the low end of the supposed newspaper market. you were saying there, with respect you, that your newspaper was doing it?

>> doing what? >> phone hacking, amongst other things. >> no. if you listen to the tape. it's interesting because i played it back the other day to remind migs. you can see i answer the question immediately, and she cuts me off because i know where she's going, and she's talking about the kind of, what, i guess would be described as the newspaper investigations, whether a big man, and i was responding in general terms, and i think if you hear the tape back in realtime, you can see that. i hear her say phone tapping, and i was not eluding to phone tapping. i was talking about it in a general way about the practices of undercover investigations, the nature of which by definition sounds quite unedifying. >> the third parties you're referring to rather than the staff themselves, who were the third parties in general terms 1234 >> people like the private

investigators, anybody that was photographers. >> what were the private investigators doing? >> i don't know specifics. i'm talking about the generalization of this investigative work, so, you know, people don't understand how stories get into newspapers or how, indeed, television news reports get on television. the way that stories are gathered, the way they are processed can often sound unedifying. it doesn't make it illegal. >> just one -- just want to know what you intend to encop pass by third parties and private investigators, mr. morgan. what activities were they up to on your behalf this >> i don't know specifics as i said to you. i think i've given the range of things from, you know, the

rubbish we talked about to photography to staking people out of their homes, and, you know, it's not the kind of work that sound that edifying, but every news organization will do it, and it's the process of gathering news, and it doesn't matter if you're a television company or tabloid. >> are you saying you didn't hear kurt de jong say they tapped people's phones? >> no, i think 23 you listen to the tape -- >> it says people who tap people's phones, take secret photographs, and you say, i know, but, and then she interrupts you again. >> i tried to answer on her first point before she mentioned phone tapping. i didn't hear her say it. she rattles off a list of stuff, and if you thereon it in real teem, i think you would see that. >> okay.

there's another interview which is in "gq" magazine and should be under your tab 17, i hope, mr. morgan. >> yes. >> this is quite recent, the 4th of february, 2011. >> no, no. it's not. >> it's a reprint of an article published in april of 2007. that's right. >> right. >> the version we're looking at was later. the same sort of phenomena as we saw with steve cue gar, and that's -- >> yeah. >> it was reprinted. >> unfortunately the way it's printed off because it's quite difficult to get these things off the internet. it's about 17 pages in. >> i've got the page.

>> when nammy pulls out the large note pad. >> yeah. ? and she starts interviewing you, and the question she puts to you at the bottom of the page, what do you think of the news of the world report who was recently found guilty of tapping the world's phones? did you ever allow that when you were there? when i was there in 94-95, before mobiles were used very much, and that particular trick was not known about, i can't get too excited about it i must say. it's well known because if you didn't change your pin code as a celebrity, you bought a new phone, and they could ring your phone and tap into your messages. that's not to me as serious as planting a bug in swop's house, which is -- someone's house which is what some people seem to think was going on. when you say "it was pretty well

known" are you referring to what was pretty well known -- what period of time would you say it was pretty well known if i can ask the question 234 that way? >> well, i know from my own books i was aware of it in early 2001, and i have vague memories after that of this gathering awareness, and from what i hear it was not a great trade secret, but my memory is gray about it. it was a long time ago. >> okay. and then after you expressed your view about its seriousness, i mean, does that indicate to us that you didn't -- [inaudible] >> no, i think there's misconception built up this involved journalists breaking into people's houses and planting bugs into their phones, and i was really talking about the difference in my view in seriousness between that and what is actually a very simple

thing to do on a mobile phone, and something that i'm told, although i have no evidence myself, was widely known to the public, and, in fact, they used to do it to each other. that's well read. >> it is an invasion of privacy, though, and you say, it is, yes, but loads of newspaper journalists were doing it. clyde goodman, news of the world reporter is made a scrape goat through very widely used tactics. you are aware of this in april 2007; correct? >> yeah, it seems to be born out by -- >> you were thinking they got far, mr. morgan, a very widespread practice, loads of journalists were doing it. i mean, you -- making segments there to suggest at least you were basing yourself on personal

knowledge even if what other people may have told you. would you agree? >> no, i wouldn't agree. >> why did you say he was made the scapegoat for a very wide spret practice? >> i would have thought that subsequent events shows he was made the scapegoat. >> in april of 2007, we were looking at one individual, mr. goodman, and one private investigator, that not many people were saying it was a very widespread practice and that individuals happen to know that it was a very widespread practice. did you see -- >> i see your point, but the point i'm making is that the rumor mill, which is always extremely noisy and often not entirely accurate was starting ever since this blew up with endless rumors, and subsequent

events show that to be the case so i think he was made a scapegoat, and having known him when i was at news of the world, i felt sorry for him. >> a couple questions further on, would you like it if someone listened to your messages? oh, they used to do it to me. who was they? >> well, again, that was the rumor mill. that was my concern when the person who i can't remember say they may be hacking your if phones. what is that, and they told me, and i was told people were doing it to me through my dti investigation, which you may refer to later. i have no proof or evidence of that. >> you say, no, i didn't like it, which suggests to the reader that you knew far more about who was doing it to you than you are telling us now, mr. morgan. >> well, i didn't like the thought of it if it was true. i have actually no hard evidence

that it was true, but i didn't like the idea of it, and it certainly made sense to me because so much stuff was leaking at the time. >> did the rumor mill you're referring to embrace your newspaper as being mons the perpetrators? >> not that i remember, no. >> oh, come on, mr. morgan, your newspaper was near the top of the list, wasn't it? >> top of the list of what? >> of the perpetrators, those carrying out this sort of practice, and you well know that. >> you also well know that not a single person has made any further legal complaint about the daily mirror for phone hacking, not one so why would you say that? >> well, i'll continue with what you told ms. campbell to complete the line of questioning, but with new technology comes new issues and this brought the practice out into the open, and it will not happen anymore. celebrities get more privacy now

than they used to, so you believed that this practice was coming to an end? is that so? in april 2007? >> i certainly thought it was the practice was going to be dead in the water, yeah. >> have you listened to recordings of what you knew to be illegally obtained voice mail messages? >> i do not believe so, no. >> you either did or did not. it's not a question of belief. >> no, i didn't. >> have you listened to recordings of what you knew to be illegally obtained voice mail messages? >> i do not believe so. >> you know about the mail online piece, which i think are now your 22 for the 19th of october of 2006. i'd like you to look at that,

please. >> yeah. >> seems to be under -- under our tab one in the second volume . working from slightly different volumes. it's about ten pages. >> thank you. >> it's dated the 19th of october 2006. it's quite a prank headline, but doesn't matter. i'm sorry, madam, for introducing you to this monster, so we got our bearings there, and what you say at the start of this piece is that it was you who introduced support mccartny to heather mills, that's what you say, isn't it? >> yes. >> i don't mind -- unless you want to read, and you explain that you introduced heather

mills after the show, and then we know what happened next as it were, and cutting straight to the quick, and stories soon emerged that the marriage was in trouble. do you have that sentence? >> yes, i do, yeah. >> at one stage i was played a tape of a message paul had left for heather on her mobile phone. can you remember this circumstance, mr. morgan? >> well, i can't discuss where i was played that tape or who played it because to do so would be to compromise a source, and i can't do that. >> well, i'm not sure about that, mr. morgan. you can discuss in general terms where it was, can't you? >> actually, no, i can't. >> it was a tape of a voice mail message, wasn't it? >> i'm not going to discuss who

played it to me for reasons i discussed. it's not right. and the inquiry stated to me don't expect me to identify sources. >> no, but i think we do expect you to identify what is obvious to anyone reading it is that you listened to a tape of the voice mail message; is that correct? >> i listened to a tape of a message, yeah. >> but it was a voice mail message, wasn't it? >> i believe it was, yes. >> then you deal in more detail here with what you heard? it was heart breaking. the couple was at a tiff. heather was going to india, and paul was pleading to her to come back and saying something into the answer phone as you say. you listened to all of that. did you know that was unethical? >> not unethical, no. >> why not? >> it's not necessarily listening to somebody else speaking who is unethical.

>> it's the tape of a voice mail message. you didn't think that was unethical? >> depends on the circumstances in which you're listening to it. >> can you tell us about the circumstances to lead us to think it was not unethical? >> i'm afraid i can't, no, because i'm not doing anything to identify the source. >> but the source would only be someone who was participating in the same unethical activity as you were, isn't that true? >> you're presuming it's unethical. >> let's do it this way, mr. morgan. without identifying your source, the only person lawfully able to listen to the message is the lady in question or something authorized on her behalf to listen to it; isn't that right? >> possibly.

well? sorry, what do you expect me to say? >> another possibility, there is one, i think. >> well, i can't go into the details of it without compromising the source, and i'm not going to do that. >> well, i am perfectly happy to call lady mccartny to give you evidence where she authorized you to listen to the e-mails. either she didn't, she may say she did, in which case you're not compromising anybody, but if she didn't, then we can proceed on the premise that it's somebody else, can't we? >> from what we know about lady heather mills is in the divorce case, paul mcmccartney said

she work r recorded their conversations and gave them to the media. >> well, maybe i'll do that then. can you help us please as to approximately when the event described here took place, mainly you listening to the message? >> i believe the early part of 2000 and 2001, but i can't remember exactly when. >> we're clearly in the era when you were the editor of the daily mirror, aren't we? >> i believe so, yes. >> was your source an employee of the daily mirror? >> i'm not going into any details about the source. >> i don't think you'd be identifying the source if you tell us whether the individual was an employee of the daily mir rich. >> i'm not starting a trail that

leads to any identification of the source. >> did you listen to johnson's voice mail messages in relation to erikson? >> no, i did not. >> do you recall a lunch hosted by victor blank in november of 2002 when you adviced her to change her pin number, and you started mimicking her swedish accent. do you remember that occasion? >> no, i don't remember the specifics. i think i remember he coming to lunch. >> breaking it down into two parts. might you have advised her to change her pin number? >> i don't recall anything like that. >> was a mr. ben veraragon at the lunch sitting next to or close to you? >> he did come to one of the

lunches. you mean the british telekoms guy? >> yes. >> he came to one of the lunches, but i don't know which one. >> did you tell him that he needed to tell his customers to be more careful about changing their pin numbers? >> i don't recall that. >> might you have told him that? >> i think i warned him if possible, yeah. >> can i tell you -- put you rather as a generally as i can the circumstances in which i suggest that you did listen to johnson's voice mail, that a competitor of yours had hacked into her voice mail, not going into the details of that, and they were then boasting about it in a pub, and then someone sold someone close to you who let it

be known to you this is what happened, and you, and others let them hack into the voice mail as well, and that's what happened? >> absolute nonsense. >> none of that is true; is that right? >> i detail in my book that i was simply told we had a tick that she was having affair, and the agent, who i knew well, and she came back and confirmed it. >> page 330 of the insider, i think, -- mr. morgan -- uh-huh. the entry of the 18 #th of april -- 18th of april, 2002 when you say i think you have to sit down for this one. are you with me? >> yeah. >> it's the new new supreme note

looking more pleased with himself more than usual, and i could tell from the grin on his face, and this was a big one. well, some of the next bit, but never said there what the source was, do you? >> not here, no. >> maybe the reason for your disdense, mr. morgan, is you didn't want to set out precisely who the source was because you knew it would be a bit tricky, would you agree with that? >> i wouldn't agree with that, no. >> it is right that you phoned the agent, and then there were various exchanges, but can i ask you to deal with the 21st of

april? the last line, i attribute this all to comments from close friends. what was that a reference to? >> oh, well, i had a conversation, and he didn't want me to say on the record close friends, which she was. >> but isn't that a reference to whoever was the source in the first place rather than the agent who you spoke to to confirm whether or not the story was correct? i think it's self-evident. if you read from this, wouldn't take the calls, "said she was a liar, and i attribute this to

close friends." i thought it was fairly obvious, isn't it? >> okay. >> you've seen, i think, the statement in this which is in our bundle, just give you the tab in a moment. tab 9, mr. morgan. >> yeah. >> if you look at the bottom right hand side, page 24227 -- >> it's actually not numbered this, i don't think. >> it's not numbered at all. if you look at the bottom right hand side of each page, do you see mod and then a long number? >> i don't actually, no. the statement -- >> yes, it's going to be the

third page. >> okay. >> the paragraph beginning in the middle of the page, and another example of the lack of corporate governance was the unfettered activities of the show business team. are you with me in >> yeah. >> i sat next to the show business chair on the second floor of the tower, and is that where the show business was based? >> i think so, yeah. >> i was able to see close hand how they operated and saw journalists carrying out privacy imden the openness and frequency of the hacking activities gave me the impression that hacking was considered a standard tool of journalists to gather information. i would hear two or more members of the show business team

discussing what they heard on voice maims across their deafs, and i was shown the technique of how to hack into voice mails. it seemed to be common in other newspaper z as well, -- newspapers as well, and the sun was also listening to voice mail messages because on occasion i heard members of the mirror team joking about having deleted the message from a celebrity's voice mail to ensure no other journalist would hack in and hear the message themselves. is that something you knew about, mr. morgan? >> no. >> you were quite hands on, weren't you? came on through show business journalism and close to the show business journalists on the 22nd floor, weren't you? >> they worked for me, i liked them, and they were good at their jobs. >> didn't you take a keen

interest in what they were doing? >> i took a keen interest in everything they were doing. >> so this sort of thing was going on, a bog standard journalistic tool, it was something you would likely know about it if it was, indeed, going on, wouldn't you agree? >> probably, yeah. >> so i think it follows your evidence must be that it was not going on or maybe your evidence is it was going on. can you assist us, please? >> my evidence is i have no reason or knowledge to believe that it was going on. >> but what did you, yourself, know from your own perception of what was going on? did you see this sort of thing going on, mr. morgan? >> no. >> you sure about that? >> 100%. i also found out that james is a convicted criminal.

>> you told us that several times in your second witness statement, but, again, you come close to arguing a position rather than giving us evidence. i just ask you a number of other points of what was said. he says as well page 248, the fourth page, six lines, so five lines from the bottom. occasionally when big stories emerged, he, that's you, would ask us and concerning the credibility of the source and whether or not the paper could take the liable action of publication if the story turned out to be wrong; is that correct? >> sorry, can you repeat that?

>> you're asking him about the source of their information -- occasionally -- is that clear? >> i had little to deal with him, no recollection of any conversation with him ever about the sources of any story. >> as a generality, just talking about your practice rather than a specific case, would you ask your journalist about the source of their information? >> not usually, no. >> on occasion would you? >> very occasionally. >> from my experience of working in newspaper, news editors and editors ask reporters for the source of their stories as a matter of course. the liable action of having to print an apology is the number one concern. is that right or not?

>> no. >> are you seeking to distance yourself from the sources because the sources we are talking about are the fruits of phone hacking? >> no. >> and two pages further on, our page 24231, four lines from the top of the page when it's said there is, however, an undeniable pressure to deliver scoops; is that right or not? >> as a tabloid newspaper or if you work for one, there's a convention that you try to come up with some stories, yes. >> he continues exclusive newspapers, especially sunday newspapers, and every journalist is under pressure to bring them in. would you agree with that statement or not?

>> under pressure, definitely. that's their job description. >> and he continues, for example, mr. morgan would send out old staff e-mails berating his journalists for not bringing in enough exclusive, and the e-mails are menacing in tone; is that correct? >> i'll argue menacing in tone, but would say something if they were not performing enough. >> have you seen the remarks in connection with the criminal proceedings against mr. hickwell? >> typed here? >> yes, it is. i'll find it. >> yeah. >> just one moment.

just bear with me because i know your bundle has been tied in a slightly different way. i'm not sure that you got this, mr. morgan. >> i might have have it. i think i have got it. it's number two and three and four here in my -- >> behind your -- someone is listening to me, hopefully, this is behind your witness statement. >> just one part of this i want to talk about the comment. i won't ask about the particular circumstances of the case. he says -- sorry, this is

mr. justin says on page 5 about ten lines from the bottom of page 5 of the sentencing remarks. i also take into account the fact that at that time there was no formal code of conduct of journalists at the daily mirror; is that correct or not? >> no, i believe there was. i mean, in relation to the press commission which was on display in the newsroom, about an individual who worked for the daily mirror that journalists were expected to adhere to the code. >> no guidance from your superiors or in-house lawyers. would you agree with that? >> i wouldn't, no. that was regular guidance to th?

>> i would not. there was regular guidance from the lawyers of particular. >> then he continues, there is evidence of the culture of information within the office. would you agree with that? >> [inaudible] >> you don't think there residue that's at the time? >> search been journalists did buy shares but don't think that was a culture at all. >> i think you were one of them? you bought 67,000 pounds in the company the day before it was tipped by the daily mir mori on the 18th of january 2000; is that right? >> yes. >> and it culminated in the pcc, upholding a complaint to the

code, but no more than that, and after investigation, not taking the matter any further; is that right? >> yes. >> well, originally, i think your position, mr. morgan, is that you only purchased 20,000 pounds worth of shares; is that right. >> no, that was not my position. i told my company immediately how many shares i bought. >> for the pcc adjudication, the first adjudication referring to 20,000 pounds wort of share -- worth of shares? >> i believe so, yes. >> and wasn't that based on the information you provided the pcc? >> not that i provided, but the company did. >> which company? >> i think it was trinity mirror then, wasn't it? >> it muff been information which you provided trinity mirror for them to provide to the pcc.

can we agree with that? they would not know unless you told them? >> the trinity mirror would run away within ten hours of the story first emerges exactly how many shares i bought. >> based on information you provided; is that correct, mr. morgan? >> yes. >> one way or another, they were under the impression, correct as it seems, that it was 20,000 pounds worth of shares, not 67,000 pounds; is that right? >> who was under that impression? >> trinity mirror after the pcc. are we agreed about that? >> no, they were not. sorry. just to clarify. i told trinity mirror exactly how many shares i bought. >> did you know how it is that the wrong information then was provided to the pcc? >> i believe that the company took a view that there were certain pieces of information not already made public which had led to other people involved

in the scandal around a series of events in total sums of money they were reading about and certain shares they were reading about, and the company felt for better or for worse if this was information they didn't put in the public domain, it would expose other people involved for telling a false story, which is pretty much what happened. >> could be the difference between the 20,000 pounds and the 67,000 pounds worth of shares was based on the fact that some of the shares were put into the personal equity plan of yours, i think, and the balance of the shares were put in your wife's name. have i got that right? >> i think so, yeah. >> i don't see at the moment why that wasn't information that shouldn't have been provided in the first instance to the pcc?

>> well, provide any information, and they were the ones who did that. i read the adjudication here to remind myself, and i read why they did that. i tried to outline their reasoning, but i think the further details on this, you have to ask them. >> okay. >> ask you please about one other entry in your diary, the transcript entry in the insider, page 269. 28th of july 2000. >> yes. >> where you say we were offered a dodgy transscript? a phone conversation between james hewitt and anna today.

if you don't win the case, will you kill piers morgan. here he replays, i don't know. in another call, expands on the thoughts saying he knows a hitman to take me up for 20,000 pounds. they said at least everybody knows who did it is a bloke from south america comes down in soho. why did you say dodgy transcript? >> well, it would have thought somebody planning to have my assassinated by a hitman is necessarily dodgy. >> said that the dodge jiness relates to the circumstances in which the transcript was obtained. is that not a possibility here? >> no because i believe that the dodgy aspect i referred to was the fat i was hoping --

fact i was hoping this was not an accurate record of what had taken place. >> okay. can i ask you please about paying police officers? is that something which happened at the daily mirror while you were editor? >> i have no reason to believe so, no. >> are you saying by that it was not brought to your attention? >> yeah, i've never been made aware of any evidence of that at all. >> can i ask you, please, to clarify one entry in the diary, not sure actually that we prenotified you of this, but forgive me if we didn't. it relates to evidence that was given to the culture and media select committee in 2003. do you recall that? >> i recall appearing, yeah.

>> and your observation on that occasion, have i got this right, is that standards in the tabloid press improved in the previous few years; is that correct? >> yes, yes. >> and then there's a further paragraph on which i'll leave out, and then you said later, rebecca virtually admitted she was paying policemen for information. i told her to thank her for dropping the tabloid the last minute. she apologized and that's why she'd never be seen or heard in public. i won't ask about that particular sentence, but i want to ask you your reason for dropping the tabloid at the last minute was the acceptance of illegally paying policemen is a

practice that went on in the tabloid press generically? would you agree with that? >> no. >> why did you call to thank her that dropping the tabloid back on the last minute? >> because it was getting huge attention in the press, and it was clearly a mistake on her part. >> not sense a mistake at least from your perspective? >> i think she accepted it was a mistake. i thought that was said at the time, but i think it was something she didn't mean to say. >> okay. from your stand point, was it a mistake because she shouldn't have said it or a mistake because it was untrue? do you see the distinction? >> i have no idea if it was true or not. >> okay. there's another incident that

caught my attention, and this is when a journalist was put undercover for a number of weeks. do you recall that? might be hearing from him at some stage, and the journalist was a mr. ron perry. was thatting? -- was that something you organized? >> yes, it was. >> why? >> because on the face of it, it appeared to be a massive security breach involving the royal family, which is exactly what it turned out to be. >> well that's when you instigated? >> well, rather after the terrorists. >> okay. did you publish any stories as a result of this? presuming you did? >> we did, yeah. it led the news for about a week. >> did you feel that was in the public interest? >> absolutely. >> okay. why, mr. morgan?

>> oh, because we exposed a huge series of loopholes in the security system surrounding the senior members of the royal family which was so easy to expose that we could have easily been a terrorist, and if we had been terrorists and not journalists, then the royal family senior members may not be here today. it's hard to imagine anything more in the public interest than that. >> okay. can i ask you -- sorry to go back in time, and we're now going a considerably way back in time, to the 7th of july, 1994, page 40 of the insider. this is the entry for 7th of july, 1994. >> yeah. >> this is what you describe as an intriguing tale about the

female switchboard operator who had a call, became upset with him, and testing him big time, and this is 5 story which on further investigation you didn't publish; is that correct? >> that's right, yeah. >> and you explain why that there was evidence that the female switchboard operator was psychologically disturbed or ill, and you said a lot of people break down when we confront them and often threaten to kill themselves. was that an accurate statement in your diary? >> yeah. i don't know what i mean by "lots," but a general sense when people are confronted, they did tend to play that card. >> then you say there's a

difference of filings and lowly disturbed women like this. i could not live with myself if we exposed her, on page 17, and then she had killed herself. what is the difference? >> between a pedophile and somebody running a switchboard? >> yes. >> i would have thought it self-evident. >> yeah, but explain it to us, please, in this context. >> one is abusing and rapingdown children, and the other is manning a switchboard. >> the pedophiles at the relevant time presumably not doing those things, but you're exposing them, aren't you? just because they have been pedophiles in the past? >> well -- >> is that your position? >> i certainly think it's in the public interest to expose pedophile, yeah. >> okay. you say i'm developing a curious moral code as i go, and sometimes the job does feel a bit like playing god with people's lives.

i guess -- i get to ultimately decide every week who dies of the news of the world sword. is that an accurate description of what a job of the editor of a newspaper entails? >> metaphorically speaking, yeah, i think it is. >> and that sword can be a ruthless highly destructive instrument. is that rue -- true as well? >> yes. >> i have not had any sleepless nights yet, but i can feel them coming. of course, it was not that much longer. only on the news of the world another 13 months before you moved on, but you had immense power, didn't you, in this position of news of the world and then the daily mirror? assuming you'd agree with that? >> yeah, i think the holder of office of editor, yes, it was not me personally, but the

editors. >> yeah, did you feel that you had sufficient judgment at the age of 28 to weigh up the difficult issues of the private interests of individuals against public interest, mr. morgan? >> i did my best. >> no doubt you did, but did you have the necessary judgment to carry out that exercise? looking back on it? >> i would say that i was unusually young for a job like that, and i came to rely on much older, more experienced people on the staff who were invaluable, but certainly when i first went in, i think it's fair to say that i was, you know, i was pretty young. i was 28. >> when you were editor of the news of the world, i think you paid 250 pounds a week to have a moral put into the sunday mirror; is that correct? >> the paper did, yes, i believe. >> is that something you knew about? >> i was made aware of it, yes.

>> i think you said it's a disgrace, of course, and totally unethical. would you agree with that? >> probably, yes. >> and there's one example which i think you accepted, altering or adopting paragraphs, the daily princess photograph making them look as if they were kissing; is that right? 8th of august, 1997. >> yeah, that was a stay tuned thing to do. -- stupid thing to do. we didn't con the public because the picture was the same one that was appearing the next day in the arrival paper in our own building, but it was a very silly thing to have done, and it came as a result of the introduction of digital photography, and a few papers came across by misusing images like that, and i think we all woke up and thought this was not a good idea.

>> can i deal with what your attitude is and perhaps or was and still is to privacy? go back to the piece which is tab 17? four pages from the end of this interview. top right-hand corner says page two of six. right in the middle of the page, how do you feel about snitches? you sell private information to the papers. do you pay them? the answer, yes, papers pay snitches, disgusting little

vermin, and there, again, i agree, but just because papers buy the story, it doesn't mean the editors don't think the people selling them aren't horrible. now you're a celebrity, has your view of the privacy laws changed? no, because celebrities are the last people to be protected by privacy law. they are the ones who use the media the most and sell their privacy for money. were you referring to all celebrity there is? >> in what context? >> the answer to this question which was put to you? >> i actually struggled to find this here because these are not in order. i'm listening to you rather than reading it. can you identify the paragraph you're talking about? >> yes, it's four pages from the end of the -- chief of pages, and at the top right hand side you'll see page two of six.

it might say two of seven on yours, two of six on mine. >> oh, yes. >> it's printed off and it's quite a difficult website to present stuff off. >> yeah, i got the two paragraphs, yeah. my view is celebrities and privacy if that's what you're asking, and it depends, i think, and i'm sure this comes as a point to the inquiry which is how much privacy are you entitled to if you're a famous public figure if you, yourself, use your privacy for commercial game. you know, i have have little sympathy for celebrities to sell their weddings for a million pounds, and then expect to have privacy it they get caught having affairs, for example, and it seems a non-su