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ANDERSON COOPER 360 DEGREES

Oil Spill Hitting Home; Chemical Warfare; "Don't ask Don't Tell" Compromise; Crew: Maersk Captain Not Hero; Fergie's Royal Scandal

Aired May 24, 2010 - 23:00   ET

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


(COMMERCIAL BREAK)

ANDERSON COOPER, CNN HOST: Tonight, "Keeping Them Honest": BP's CEO changing his tune. No longer using words like "very modest" to describe his spill's impact, promising to clear every drop of oil and fix any damage. His company, though, disobeying the EPA while saying they're cooperating.

So can BP really be trusted? This as the oil comes ashore, on new questions about how much more lies just below the surface.

Also tonight, breaking news: President Obama signs on to a compromise putting the end of the military's "don't ask, don't tell" policy on gays and lesbians in the military one step closer. We have late details tonight.

Plus, Sarah Ferguson, the Duchess of York, caught on tape, selling access to her Royal ex-husband. And the video is stunning. We'll show it to you tonight; asking for more than $700,000 and taking $40,000 in cash in a bag.

First up tonight, "Keeping Them Honest," the Gulf oil spill. The oil is coming ashore; the toll now just beginning to be understood. There you see a pelican covered in oil. The President of Plaquemine's Parish who joins us shortly says he's got islands with thousands of them. They dive into the oil slick to feed, come up coated. Their feathers clogged. They lose their insulating power. The pelican freezes to death.

A dolphin dead on the beach -- that's the picture right there, covered in brown gunk. No final word yet if oil killed this dolphin, but more than a dozen dolphins have washed up dead since the leak. The oil is getting into crabbing grounds, shrimp hatcheries and oyster beds. And this is nesting and spawning season for a lot of birds and sea life. Birds and fish returning to marshes like that covered in oil.

BP says nobody could handle the oil spill better than it can, but still no one has any idea just how big it is, how much oil is still pouring into the Gulf. BP says it doesn't matter. That's what they've said all along. 35 days it's been.

These are live pictures of the oil gushing into the Gulf right now. Anywhere from thousands to tens of thousands of barrels of oil pouring into the Gulf of Mexico every single day; BP says nobody could handle this better. The federal government says, well, it's been saying a lot of different things these days. We are "Keeping Them Honest" tonight as well.

This is what BP CEO Tony Hayward said less than a week ago. Remember?

(BEGIN VIDEO CLIP)

TONY HAYWARD, BP GROUP CHIEF EXECUTIVE: We will mount as part of the aftermath a very detailed environmental assessment as we go forward. We're going to do that with some of the science institutions in the U.S. But everything we can see at the moment suggests that the overall environmental impact of this will be very, very modest.

(END VIDEO CLIP)

COOPER: "Very, very modest." Right before he said that, by the way, he said, it's impossible to say, but then he went ahead and said it anyway. No big deal.

This is him today, a photo op touring an oil-covered beach in Louisiana. And here is how he explained those remarks to ABC News.

(BEGIN VIDEO CLIP)

HAYWARD: I said that in the context of about a week ago when at that time we were being successful in keeping the oil off the shore. Clearly, the defenses of the shore have been breached.

(END VIDEO CLIP)

COOPER: Defenses have been breached. Local officials wanted to dredge and help create build up barrier bands, barrier islands to prevent the oil from coming ashore. But local officials say the Army Corps of Engineers has been dragging its feet on that.

Interior Secretary Salazar was promising again to get a boot on BP's neck. But to a lot of people -- a lot of the people living in the affected area that seems like hollow rhetoric.

Last week the EPA demanded that BP quit using the oil dispersant Corexit, but they haven't. And what has the EPA done about it? So far nothing.

Today the Coast Guard Admiral in charge of the disaster reiterating his confidence in BP. Louisiana's Governor Bobby Jindal certainly seems fed up.

(BEGIN VIDEO CLIP)

GOV. BOBBY JINDAL (R), LOUISIANA: We've been frustrated with the disjointed effort to date that is too often, too little too late for the oil hitting our coast. We need folks in each of the vulnerable basins -- for example the Breton Sound, Timbalier, Terrebonne Bay (ph) -- various area bays that can mobilize resources quickly to contain oil when it arrives.

We don't need to wait 24 hours or 48 hours.

(END VIDEO CLIP)

COOPER: By the way, all during our reporting on this story, we're going to keep up that live picture so you can see the Gulf, the oil that's pouring into the Gulf as we speak. Bobby Jindal demanding more help on the ground and faster decision-making up and down the line.

As for the Obama administration, even staunch Democrat and New Orleans resident James Carville expressing doubts and frustration at the Obama administration.

(BEGIN VIDEO CLIP)

JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: They are risking everything by this to "go along with the BP" strategy they have. And it seems lackadaisical on this.

(END VIDEO CLIP)

COOPER: Let's "Dig Deeper" now with Plaquemines Parish President Billy Nungesser and Rice University presidential historian Doug Brinkley. Billy, you've described the response to the oil spill clean-up so far as criminal. First of all, what's your view of BP and how they've handled this so far?

BILLY NUNGESSER, PRESIDENT, PLAQUEMINES PARISH: Well, they haven't handled anything. You know, here we are, 35 days later, he said the first line of defense broke down. I heard your report. There was no first line of defense.

When they put the booms out in the open water, we told them from day one they would not work in one-foot seas. They were over top. They were ripped apart. And the oil came ashore.

That's when we put our berm plan together which would have kept the oil out. We'd have about 20 miles of that berm built if we would have started it the day we asked for the permit. It's absolutely ridiculous that they keep pointing the finger between BP and the Coast Guard.

I don't understand it. Today if you'll asked Admiral Allen, is he doing everything possible? And instead of saying yes or no, he said the word BP. That's -- that's unacceptable.

COOPER: So is the federal government just -- I mean, we keep hearing from Salazar they're going to put their foot at the neck of BP and hold them accountable. Do you think that's just talk?

NUNGESSER: Well, you know, I don't know. We spray in one dispersant and it's the only thing that we're spraying and there's 1,000 products out there that we could be using that would get this oil out of the marsh. And we're not using them. We're doing nothing right. We're not taking care of the fishermen, we're not cleaning up the oil and we're not keeping it out.

COOPER: And is the federal government -- do you think -- I mean, are they -- or have they been criminal as well?

NUNGESSER: Well, absolutely. The U.S. -- the Coast Guard, you know, has given me every reason why we can't do this dredge project. I said, well, give me a better plan. You know, they keep talking about the resources, the Defense Department, and everything they have at their disposal.

We've got a few elected officials, the Governor, some engineers and some passionate fishermen, and we put a better plan together.

Work with us. Let's come up with a better plan. Don't just tell us no or we can't do it in six months. I don't think Admiral Allen has ever done a dredge project. We've done them. The people working with them, the experts, say we can do this in six months.

Well, who is he to say it'll take at least a year or you can't do it? And then they said, 300,000 is too much. That's a third of our budget. But today BP is going to spend $500 million to study the effects? We'll save you $500 million because you won't be able to study anything because it'll be gone.

COOPER: Billy, I know --

NUNGESSER: And what you've seen in those pictures --

COOPER: Go ahead.

NUNGESSER: -- is minimal compared to the damage that is coming ahead. It is just starting to get into the breeding grounds. And you will see much more death and devastation amongst the wildlife in South Louisiana in the weeks to come.

And today we're doing absolutely nothing but redeploying the same boom and doing some minimal skimming. There is no plan. There is no master plan. There's nobody taking charge. The President of the United States has to step up to the plate.

We're begging him. I looked him in the eye for two hours. He cares about us. I could tell because he made the Coast Guard implement our dredge -- our jack-up boats. We have them out there on the front line. He needs to step up to the plate, put somebody in charge that will protect the wetlands and will keep this oil out.

We've given them several plans that will work. Either do our plan or come up with one better. But quit trading back and forth between BP and the Coast Guard. It's like a bunch of kids pointing the finger at each other. Step up to the plate.

We need leadership right now. We don't need a blame game.

COOPER: Doug Brinkley, I want to bring you in here. Obama administration they -- you know, what have they really been doing? I mean, early on they -- they push it back saying, you know, this is not our Katrina. Some conservatives were trying to, you know, put that around their necks. But at this point, we're hearing more and more people just saying, look, they are dropping the ball.

DOUGLAS BRINKLEY, PRESIDENTIAL HISTORIAN, RICE UNIVERSITY: Well, I think the public outrage started really clicking in, Anderson, when we had the video footage from under the Gulf and just seeing it gushing out when BP was saying they had a straw working. And it kind of made -- it brought the whole public into play.

And now we're getting the wildlife and wetlands devastation photographs and I was just sad. It's just beginning. It's going to get worse and worse. And those visuals are infuriating the American people. This isn't just going to be a Louisiana problem, Mississippi, Alabama, Florida, Texas.

The people in the Obama administration are working overtime. Thad Allen, head of the Coast Guard, for example, has the Coast Guard to run. Ken Salazar is having to deal with Interior, MMS being investigated and deal with Fish and Wildlife. I urge President Obama to get a high commissioner to oversee all this. It's no longer a Louisiana issue. It's an entire region of the country.

And I agree we've got to up the game. We've got -- we've got about 48 hours to do this try of plugging that hole. If that does not work, we've got relief wells that could be up to three months of that gushing oil. It's going to totally devastate the marine --

COOPER: Yes.

BRINKLEY: -- environment.

COOPER: Billy, earlier tonight you said that you're going to give the federal government 24 hours to step up to the plate or else your council is going to give you $1 million to start building the berms.

NUNGESSER: Well, we --

COOPER: Are you suggesting you're going to start dredging tomorrow night?

NUNGESSER: No. By Friday we'll start moving some bucket dredges to build small berms. It won't be the six foot in our plan. This will be an interim measure to protect some of the wildlife areas. We'll also take some marsh buggies to -- and build some berms to protect some critical areas.

And you know, the comments that were just made about working overtime, you want to see working overtime, I'll show you some fishermen. Other than that, if they're working overtime, they're wasting their time because there is absolutely nothing on the ground here. You know, we're still spraying one dispersant. There are thousands of products out there. Tomorrow we'll give BP a -- BP 24 hours to put something in the marsh to clean it up. Friday, if they don't answer the call, we will start testing some of these products and we will start purchasing them and we will go out there and clean up our marsh. It's time to make a move, have some leadership step up to the plate and take charge. And obviously we don't have that in the Coast Guard or in BP.

So I think it's time for somebody to grab the bull by the horns and take action. Working overtime, we've got a thousand people on the ground. All the cheap talk doesn't mean anything. We're not cleaning up the oil in the marsh. We have no means of keeping it offshore. And the dispersants, you've seen the pictures from Jacques Cousteau's son of 50 feet of oil below the surface.

What we're doing is we're sinking it and we're hiding it. And it's going to come ashore during hurricane season. And God bless them and God help them for not protecting our coast.

President, it's your turn to step up to the plate. Change the people in charge and make something happen now. We can't wait.

COOPER: Billy, we're going to be down there tomorrow night. I would love to have you back on the show. I appreciate your voice on this. Thank you very much, Billy.

Doug, I want to --

NUNGESSER: Thank you.

COOPER: -- ask you one last question.

And we got a text 360 question from Victoria in Alameda in Sunnyvale, California. She wants to know, could something else go wrong when BP tries to seal off the leak? Could the leak become even worse? I think the answer is yes on this.

BRINKLEY: A big-time yes. It can grow a great deal and we can have a worse problem if this fails within 48 hours. There's also a lot of people concerned about what the natural gas is doing on the surface. There are people worried about the ships that -- basically we have 600 vessels floating around in an oil field right now. And there's a fear of further industrial accidents.

COOPER: Yes.

BRINKLEY: If BP is putting 100 percent, Anderson, and they're also trying to build a relief well, why not have Exxon/Mobil or Chevron start working on the relief well while BP focuses on trying to close the pipe? A lot more energy has to be put into this. I think we have to be planning for the worst case scenario.

COOPER: Doug Brinkley thanks as well as for you joining us tonight, as well as Billy Nungesser, who we'll see tomorrow.

We quoted BP Chief Operating Officer, Doug Suttles at the top of the program saying, he didn't think anyone could do better handling the spill than his company. But what happens if the government says enough of BP already?

Tom Foreman has been looking into the technical side of this question. Tom, what about it, would we be better off if the government took over?

TOM FOREMAN, CNN CORRESPONDENT: Well Anderson, this is the sad truth here. Some industry analysts are telling me to the contrary, a complete government takeover of this operation really could make things worse. We're dealing with a very specific area of science and technology, which is relatively young.

In 1992, for example, only six deep-water wells in the Gulf of Mexico, now there are around 150. And they operate in an alien world full of wild water currents, with brutal heat and cold and pressures so great that if you had just a square inch of it on your thumb, it would feel like a small car sitting there.

So sure, the government has nuclear subs and great geologists and brilliant minds at NASA, but no one who day in and day out is working in this environment the way the oil folks are. And as one industry analysts at Oppenheimer told me today, look, the best brains at BP, Exxon, Shell, Chevron and the rest are already working on this. And if they don't have an answer, no one does.

And he says, while there's plenty of blame for letting that situation exist, for both the industry and the government, the blame won't cap the well. And for now, Anderson, the experts in the oil industry seem to be the only ones we can turn to.

COOPER: Well, let me just push you on this a little bit. And you just heard from that local official essentially saying they're going to start taking matters into their own hands because all these folks are pointing fingers at each other. I mean, couldn't the government or some agency take the lead role and simply use BP and all of its experts as tools?

FOREMAN: Well first, Billy Nungesser has a good point there. In terms of the clean-up on the coast, yes, a lot of other people could be doing a lot of that and could be doing it a lot better than what's being done. But legally, when you talk about the below-the-water stuff here, the difficult, difficult stuff, I'm told the government could do that. And certainly some believe that's a proper course.

But bear in mind, even though BP has agreed to pay for all of this, if the government takes over and it can't close the well either, at some point BP might be able to say, you know, our financial obligation is no longer 100 percent, because we would have closed it sooner if you would just let us alone -- Anderson.

COOPER: Tom, thanks.

Let us know what you think. The live chat is up and running at AC360.com.

Up next, spraying the chemical Corexit into the Gulf, we've been talking about this a lot. Billy was just talking about it as well. The government says it's a bad idea. The EPA says that there are better less toxic chemicals available. So why are they continuing to use just this one? And what, if anything, is the government going to do about it?

We're "Keeping Them Honest" ahead.

(COMMERCIAL BREAK)

COOPER: Well as you know, BP has already tried to cover the Gulf oil leak with a big containment box and a smaller one. Now it's got a siphon going but it's not enough.

On Wednesday, I want to show you over here on the wall, on Wednesday what they're going to try to do. They're going to try to use something called the "Top Kill."

Essentially they're going to try and choke it to death by making it swallow mud. Here is the animation of how -- how it actually is going to work. They're going to run a tube down from the surface of the top of the well's blowout preventer. Then robot subs actually do the plumbing job. Then crews start pumping thick fluid down into the well. The fluid is about twice the density of water. And the pump is powerful enough, BP hopes, to win out over the incredible pressure pushing up. Eventually they hope to cap off the well with cement.

Now, in the meantime, though -- I'm going to turn this off -- in the meantime, the oil keeps on gushing. BP keeps spraying chemicals to try to break it up. And they keep using one particular chemical, one particular dispersant, even though the EPA is telling them to stop.

Ed Lavandera tonight is "Keeping Them Honest."

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN CORRESPONDENT (voice-over): Despite being told to use a less toxic dispersant, BP continues spraying tens of thousands of gallons of the chemical called Corexit into the Gulf of Mexico.

BP's chief executive is unapologetic.

HAYWARD: We have used dispersants from the beginning that are on the EPA-approved list. Everything that we do with the dispersants is with the explicit approval of the EPA.

LAVANDERA: Not quite. EPA administrator Lisa Jackson gave BP a three-day deadline to change dispersants or explain why it couldn't. The deadline has passed and BP is still using Corexit.

LISA JACKSON, EPA ADMINISTRATOR: The answer we got back from BP to me seemed more like a defense of their current choice. Reminding me a little bit of that old commercial, I'd rather fight than switch.

LAVANDERA: BP says there are five viable dispersant options at this point besides Corexit. The EPA says Corexit is the most toxic of those. But in fact, on May 4th, BP ordered 100,000 gallons of one of those called Sea Brat, but it's still sitting in an industrial park outside of Houston, Texas.

After our story aired last week questioning why this potential help was sitting hundreds of miles away, BP now says Sea Brat needs more testing because it may harm the environment more than Corexit. The maker of that Sea Brat though, says BP is nitpicking.

JOHN SHEFFIELD, PRESIDENT, ALABASTER CORPORATION: I'm anxious to get started. I think the window of opportunity to start effectively dealing with the oil spill is closing.

LAVANDERA (on camera): So that makes it more urgent to get this?

SHEFFIELD: I think absolutely.

LAVANDERA (voice-over): While BP keeps fighting to stick with a product it's always used Louisiana environmentalists like Wilma Subra say the EPA should force BP to stop using Corexit.

WILMA SUBRA, LOUISIANA ENVIRONMENTAL ACTION NETWORK: Nobody's standing up to BP. They make the decision. They disperse it into the water column and then we have to live with the environmental damage.

LAVANDERA: The EPA says it is standing up to BP, calling on the oil giant to dramatically cut back on the amount of dispersant it's shooting into the Gulf of Mexico.

(END VIDEOTAPE)

COOPER: So, Ed, I mean, if I'm hearing this right on the one hand you have Ken Salazar, head of the Interior Department saying, look, we're putting a boot on the neck of BP.

And then on the other hand you have the EPA, which has already told BP to stop using Corexit and look for other dispersants of which on their own list there are many. I mean, can the EPA actually do anything about this? Can they actually get BP to follow their orders?

LAVANDERA: Well, what we asked of the EPA administrator late this afternoon was if -- if she thought that BP was essentially defying what she had -- what she had told them to do. She didn't agree with that.

But she did say that what they were telling BP to do now is severely cut back on the use of dispersants. And they say the EPA says that they can cut that use back by 50 percent. We anticipate that that would go into effect starting immediately.

COOPER: But, again, I mean, they wrote a letter days ago, I think they gave them 72 hours, if I'm not incorrect, if memory serves. I mean, either they're using it or they're not. It seems like they're still using it. So I don't know, I guess we'll wait and see what happens tomorrow.

But it doesn't seem like BP is agreeing with the EPA, even though the EPA maybe doesn't want to -- kind of draw a line in the sand.

Ed, we'll continue following it.

LAVANDERA: Well, you know Anderson -- Anderson --

COOPER: Go ahead.

LAVANDERA: -- well, I was going to say, what the EPA also does also say is that they're going to continue to do more testing. Essentially what she seemed to have here is a battle between EPA scientists and the BP scientists.

So the EPA scientists are going to go back -- go back and study what BP had told them in that letter. And this might change here in the coming days and they might get a little more strict. But right now, as you mentioned, there is no talk of fines or anything like that.

COOPER: Well, you can see why the President of Plaquemine's Parish, Billy, who we're just talking to, is frustrated and just wants to start experimenting with other -- other dispersants on his own.

A programming note, as I said I'm heading down to Louisiana tomorrow to report for at least the next couple of days. I want to obviously talk to the people on the ground and the folks who are forced to deal with it. It's clearly now a slow-rolling disaster. We hope you'll join us tomorrow on 360 from Louisiana.

Up next, breaking news, a compromise is reached on "don't ask, don't tell" that may move it a step closer to repeal. We'll have the late-breaking details.

And the Royal sting -- have you seen the video? The Duchess of York caught on tape by an undercover reporter offering to sell access to her ex-husband, Prince Andrew, for about $700,000. She wanted cash -- $40,000 in cash -- and she got it in a bag handed to her.

Details and the fallout ahead.

(COMMERCIAL BREAK)

COOPER: There's breaking news tonight, over the military's "don't ask, don't tell" policy. Sources tell CNN that President Obama and Congressional Democrats have reached an agreement that would remove the key obstacle to repealing the policy banning gays and lesbians from serving openly in the Armed Forces.

Senior Congressional correspondent, Dana Bash and her team has been working source all day. Dana, what's the compromise?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, the compromise is that Congress would vote to repeal "don't ask, don't tell", but, and this is a big but, Anderson. It would not happen right away. The repeal would only take effect after the military completes its year-long review of the policy and, more importantly, after the Defense Secretary and the Chairman of the Joint Chiefs of Staff and the President all certify that repealing "don't ask, don't tell", would not affect military readiness and effectiveness.

Now, the White House publicly formalized its support for this approach tonight but our sources told us earlier today it was really hatched during two meetings. One at the White House with gay rights groups like the Human Rights Campaign and another on Capitol Hill where key Democratic lawmakers said that they will push the first series of votes as soon as this week -- Anderson.

COOPER: So what about Gates, has he responded tonight, the Defense Secretary?

BASH: He hasn't. We're not hearing anything yet, which Anderson is really telling. I was told earlier tonight by a source close to Gates that he was drafting a statement. But just before coming on with you I was told, never mind. There won't be anything from him tonight which sure seems to suggest that the Defense Secretary, who was never comfortable with Congress moving forward on a repeal of "don't ask, don't tell", before the military finishes its review, still isn't comfortable with this, even though the compromise gives the Pentagon a lot of leeway.

And it's significant because on Capitol Hill sources say that getting a blessing from the Pentagon is critical to luring wavering Democrats to get this passed.

COOPER: So essentially you're saying they would vote in the near term. Do we have a time frame? And that -- but that -- and nothing would actually take effect until a year later when this policy review happened and it was sign-off by the Head of Joint Chiefs, the head of Defense and the President?

BASH: Exactly. It's very interesting. Well, there's a senate committee that wants to vote this Thursday. And then there may be a full House vote on Thursday as well. It just depends on whether they think they can have the votes. But why are they doing this now when this would not be implemented perhaps for months, even years? Well, the answer Anderson, is simple math.

Democrats know if they're struggling for the votes now, it's going to be a whole lot harder with a smaller Democratic majority, which everybody expects will happen after November's election. And there's also a lot of pressure on the President and Democrats in Congress from the gay community which is really frustrated by the Democrats' inaction on this.

COOPER: Interesting, Dana, I appreciate it. Thanks very much.

Next on the program, what really happened aboard the "Maersk Alabama"? Remember that story, the ship seized by pirates on the high seas, its captain hailed a hero? But tonight, some of his crew is telling a very different story about the hijacking, about their skipper. It's our special investigation ahead.

(COMMERCIAL BREAK)

COOPER: Tonight, a U.S. Navy destroyer has located a hijacked ship off the coast of Somalia. The Pentagon says the crew of the Panamanian-flagged vessel radioed that they have been taken hostage by more than 50 heavily-armed pirates.

This comes a little more than a year after Somali pirates seized the Maersk Alabama, a high-seas drama that we all watched unfold. You remember it ended with three of the attackers dead and with the captain of the Maersk being hailed as a hero.

Tonight, however, several former crew members speak out and tell a very different story of what happened and why.

Special investigations unit correspondent Drew Griffin reports.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN CORRESPONDENT (voice-over): Held for four days in a steaming life boat with Somali pirates aiming AK-47s at his head. Captain Richard Phillips' story of pirates and a heroic Navy SEAL rescue at sea is the stuff of legend. After the incident, Phillips' publisher promoted him as a sea captain who risked his life, offering himself as hostage in exchange for the safety of his crew.

In the 13 months since the incident, Phillips was invited to the White House, threw out the first pitch at a Boston Red Sox game, and was lauded for his bravery as he toured the country, pushing his book, "A Captain's Duty."

UNIDENTIFIED MALE: I want to thank this man for doing such a great job for us.

GRIFFIN: Throughout all of this hero's tour, his crew, the 19 men he commanded on the Maersk Alabama, has been far less public about the events until now.

Now, as Phillips prepares to go become to sea for the first time since his ship was attacked, most of his former crew is speaking, and they tell a different version of the story of what happened on the high seas.

(on camera): Do you think this guy's a good captain?

MIKE PERRY, CHIEF ENGINEER, MAERSK ALABAMA: I think that it certainly warrants an investigation. I just want an investigation, for this to be looked at properly, before that man winds up going back to sea on another ship and endangering somebody else.

GRIFFIN (voice-over): These days, Mike Perry rides his motorcycle to the local Merchant Marine Union Hall looking for work. A year ago in the Indian Ocean, he was the chief engineer, the third ranking officer on board the Maersk Alabama when pirates attacked.

PERRY: We vowed we were going to take it to our grave. We weren't going to say anything. Then we hear this PR stuff coming out about him giving himself up. And we said, he's still -- he's still hostage. And the whole crew's like, "What?" Just everybody's in shock. GRIFFIN: Perry isn't the only crew member who says Phillips was no hero.

John Cronan was the third engineer. Abu Thair Mohd Zahid Reza, who goes by the name ATM, was an able-bodied seaman. They are among 16 of the 19 crewmen who have formed a Facebook page, "Alabama Shipmates", to present their side of the story. Each says the captain's book version of the pirate attack is, in a word, wrong. Not only that, they claim their captain knew he was leading all of them into harm's way.

Phillips says his preparations went beyond the industry standard.

(on camera): When you started doing your own digging, you found the warnings. The Maersk Alabama had been warned?

PERRY: Well, all ships had been warned. When I went back to ship, the crew that was on there at that time had collected them all. And I reviewed them all. And then I went up and had the mates plot them on the chart.

GRIFFIN (voice-over): Perry is talking about these seven e-mails sent to all ships in the area, and one specifically to Captain Phillips and the Maersk Alabama by a private maritime security agency. Each e-mail, based on information from British and U.S. naval authorities urges the Alabama to steer clear, very clear of the shipping lane where Phillips was heading.

But despite the e-mails, and even after an unsuccessful pirate attack, the crew says Phillips did not change course.

JOHN CRONAN, THIRD ENGINEER, MAERSK ALABAMA: He was advised to change course by competent deck officers, and he overruled them. Stay on course, make our ETA. Stay on the same course.

GRIFFIN: The Alabama was on a course from Oman to Mombasa, Kenya, and about 300 miles off the Somali coast. These warnings advised Captain Phillips to move much further offshore.

PERRY: All those messages recommended that the vessels in the area stay outside 600 miles.

GRIFFIN (on camera): Did you?

PERRY: To my knowledge, we would have been, but, no, we weren't.

GRIFFIN (voice-over): Captain Richard Phillips, fresh from his book tour and very near the day he returns to sea, sat down with CNN to answer the men who are now his critics, his own crew. They claim he lied in this book and is potentially dangerous to any future crew members who may sail with him.

(on camera): To a man, those we talked to feel very slighted by you, sir.

CAPTAIN RICHARD PHILLIPS, KIDNAPPED BY PIRATES: Well, there's not much I can say. I agree with them. The media made everything out to be me, but that's the media. When I came home, I really didn't go and put myself in front of the media. A lot of my crew did. I didn't.

(END VIDEOTAPE)

COOPER: Well, is it all the media's fault? Next on the program, e-mails that the crew of the Maersk say show how the captain put their lives in danger.

And later, another story of unbelievable video: cash demand from the Duchess of York caught on tape. Sarah Ferguson saying she'll arrange a meeting with her former husband, Prince Andrew for about $700,000.

(COMMERCIAL BREAK)

COOPER: Well, Captain Richard Phillips risked his life to save his crew, offering himself as a hostage to pirates who had hijacked the Maersk Alabama last year. That's the story that many in the country know.

But to 16 former Maersk crew members, Captain Phillips is something else. They say the well-known story is not true and, in fact, they -- they say he endangered their lives and, despite the obvious dangers, led them into harm's way. They say he lied in his book. He says he told the truth.

The question is who do you believe?

Once again, here's special investigations unit correspondent Drew Griffin.

(BEGIN VIDEOTAPE)

GRIFFIN (voice-over): Captain Richard Phillips is used to criticism, but even though a lawsuit has been filed by some members of his crew against the shipping company for creating a near disaster at sea, he says that this interview is the first he's heard of their specific complaints, questioning his judgment and even his reasoning.

(on camera): The complaint is that there were specific e-mails sent to your ship, stressing the need to go further out to sea.

PHILLIPS: Yes. On something like that, we will deal with that in the arena that they wish. And that's the core. That's what this is based on.

GRIFFIN (voice-over): We showed him excerpts of CNN interviews with his ex-crew, including the third engineering officer on board the Maersk Alabama, John Cronan.

(on camera): Let me play you just -- I don't think you've seen these crew members since they -- they've left your ship.

(BEGIN VIDEO CLIP) CRONAN: Unbeknownst to us at the time, Captain Phillips had been warned at least nine times via e-mail from competent authorities to get that ship further offshore; hundreds of miles further offshore.

(END VIDEO CLIP)

GRIFFIN: Why would he say that?

PHILLIPS: I have no idea.

GRIFFIN: Is it true?

PHILLIPS: There are warnings put out -- I don't know what authorities he's talking about. He doesn't say.

GRIFFIN: Well, I have the e-mails.

PHILLIPS: Yes?

GRIFFIN: You've seen the e-mails.

PHILLIPS: I haven't seen the e-mails --

GRIFFIN: You got them, right?

PHILLIPS: -- since I'd been on the ship.

GRIFFIN: But you were warned to go further out to sea.

PHILLIPS: Warned to stay clear of an area. Yes.

GRIFFIN: And you didn't.

PHILLIPS: We were within -- we had come from Djibouti, which is from the north side of Somalia, which is right next to Somalia. We're going to Mombasa, which is on the south side.

So, it -- we're in the area. We were almost 300 miles out during our incident.

GRIFFIN (voice-over): We checked U.S. Navy records of the incident. They indicate Phillips about 380 miles off the Somali coast. And remember, the e-mail warned about pirates and urged captains to stay 600 miles off the coast.

The Maersk Alabama received a radio warning from the pirates themselves, saying they're coming for his ship. That was followed by an approach by pirates in a swift boat. The Alabama avoided that approach.

Three days later, on the morning of April 8, able-bodied seaman Abu Thair Mohd Zahid Reza, who goes by the name ATM, says he saw the first signs of trouble.

(on camera): And you saw the boat?

ATM REZA, CREW MEMBER, MAERSK ALABAMA: Yes, I saw the boat. Three miles from the starboard quarter.

GRIFFIN (voice-over): The boat was small, white and fast with men sitting up straight, holding what appeared to be guns.

(on camera): Did you think, "Oh, no, they're coming, and this time they're coming fast?"

REZA: I was pretty sure. I was -- I was pretty sure this was pirates boat. I talked to the captain. I showed him, "Captain, I'm damn sure this is pirate boat." He laughed at me. He told me it could be fishing boat. And he walked away from me.

GRIFFIN: He ignored you?

REZA: He ignored me. Completely he ignored me.

PHILLIPS: I question that. I'm not someone who laughs a lot. I think if you ask my crew, do I laugh a lot and tell jokes? I think the majority will say no. So to be put in that situation and to say I laughed --

GRIFFIN: Did you blow off the first potential warning?

PHILLIPS: No. I didn't blow off any warnings.

GRIFFIN (voice-over): Mike Perry, the ship's chief engineer, says it wasn't just warnings ignored. He believes Captain Richard Phillips is dangerous.

(on camera): He doesn't heed the e-mail warnings telling him to go further out to sea. After the second attempt on the boat, he doesn't stay the course, which is to go further out to sea.

PERRY: Right.

GRIFFIN: He doesn't lock the bridge when the pirates are attacking. And then --

PERRY: When they're known to have been on board. They were on board and even at that point he didn't lock them.

GRIFFIN: And what you're telling me is -- I mean, your hunch is that he wanted to be captured, that he wanted the boat to be taken by pirates?

PERRY: That's what many of us officers were saying to ourselves.

GRIFFIN: Did you want to stay with the pirates for some reason?

PHILLIPS: No. I think you're forgetting they had weapons.

GRIFFIN (voice-over): Phillips says much of the criticism is driven by human nature, some by a lawsuit some members of the crew have filed against the shipping company, and fueled by a press that he says wanted a hero captain who saved his crew -- a good story. PHILLIPS: The media got everything wrong. I don't know how I could control this, when I'm in a life boat and the media is saying I gave myself up for it. In the book, if you've read it -- have you read the book?

GRIFFIN (on camera): I did. I read it.

PHILLIPS: So you know I didn't give myself up. I was already a -- a hostage by then.

GRIFFIN (voice-over): He says the real heroes are the ones he dedicated his book to, the Navy, the Navy SEALs. And, yes, the merchant mariners he sailed with.

And, despite their criticism of him, Captain Phillips says the crew of the Maersk Alabama stayed calm, followed orders and instincts and prevented a tragedy.

(on camera): Do you give the crew much credit for your survival?

PHILLIPS: Do I give the crew much credit for the incident?

GRIFFIN: For your survival?

PHILLIPS: For my survival in the -- on the Maersk Alabama? Yes, they did a wonderful job. It's in the book. Everywhere I speak, I say what a great job they did.

GRIFFIN (voice-over): Captain Richard Phillips returns to sea next month. Most likely, he says, to the same waters he was taken hostage.

Drew Griffin, CNN, Burlington, Vermont.

(END VIDEOTAPE)

COOPER: It's an interesting story. Who do you believe? Let us know at the live chat at AC360.com.

Coming up next on the program: Sarah Ferguson and the 40k; the Duchess of York sitting in front of thousands of dollars, a drop in the bucket in a deal to meet Prince Andrew. What she said caught on tape and what she has said afterward, that's ahead.

(COMMERCIAL BREAK)

COOPER: Up close tonight, a royal deal. This is unbelievable. Sarah Ferguson -- she's not, as you know, not married to Prince Andrew anymore -- but the Duchess of York tried to arrange a meeting with her ex for a price.

In an undercover video by a British tabloid, we see Ferguson dangling a cigarette, talking money, a lot of money for the regal introduction. It's a sophisticated sting and one that leaves Fergie shamed and sorry.

Here's Randi Kaye.

(BEGIN VIDEOTAPE)

RANDI KAYE, CNN CORRESPONDENT (voice-over): On the couch, smoking and drinking from a bottle of wine on the table, that is the Duchess of York. As you will hear, she thinks she is making a very sweet deal for herself.

She's asking a businessman for a total of $720,000. And in return, she promises him she can open doors, provide him special access to her ex-husband, Prince Andrew, the Duke of York, who serves as the U.K. special representative for international trade and investment.

SARAH FERGUSON, DUCHESS OF YORK: 500,000 when you can to me, open doors.

UNIDENTIFIED MALE: It would be Prince Andrew?

FERGUSON: Yes.

UNIDENTIFIED MALE: Is that a deal?

FERGUSON: Yes.

KAYE (voice-over): But Sarah Ferguson didn't know the meeting was secretly videotaped and that the man she's talking to is no international business tycoon but a reporter with the London tabloid "News of the World."

First the deposit, $40,000 cash. Her left hand says, "Give me."

(on camera): Sarah Ferguson reportedly first met the reporter, the man she thinks she's doing business with, earlier this month. On May 13th, "News of the World" reports the two met for dinner here at the Mark Hotel in New York City. The Duchess, the paper says, had a vodka tonic and ate lobster before inviting the so-called businessman to the Duke's country home, not far from Windsor castle.

(voice-over): A follow-up meeting was set for Tuesday last week in London. That's when this video was recorded.

FERGUSON: If we want to do a big deal with Andrew, then that's the big one.

UNIDENTIFIED MALE: I do, of course. OK, no, of course. So you need 500,000 in pounds --

FERGUSON: But that's in wire transfer, whatever you want. And then that's what -- and then you meet Andrew, and that's fine. And that's -- that's -- that's when you really open up whatever you want.

RICHARD QUEST, CNN INTERNATIONAL ANCHOR: You see a woman who is clearly in deep financial distress, by her own admission. And it's a very sad and sorry state of affairs. KAYE: CNN's Richard Quest, a Royal watcher, says after her divorce from the Duke of York, Sarah Ferguson ran up more than 1 million pounds in debt. She gets 15,000 pounds a year as part of her divorce settlement with the Duke. But she's no longer a royal and desperate for cash.

She wrote children's books, was the spokesperson for Weight Watchers, and produced TV shows until her company went broke.

Back to the videotape and the undercover sting; just as she's about to leave, the Duchess drops one more shocker, falsely telling the man on the tape the Duke of York is on board with this deal.

FERGUSON: And as Andrew said, listen, if he's going to be kind enough to want to play, then Andrew will play.

KAYE: Coat on, she heads for the door, only after grabbing the computer bag stuffed with $40,000 cash.

After the videotape was made public, Sarah Ferguson released a statement, confirming the Duke of York was not aware of the deal that occurred. Adding, "I very deeply regret the situation and the embarrassment caused. It is true that my financial situation is under stress. However, that is no excuse for a serious lapse in judgment."

Randi Kaye, CNN, New York.

(END VIDEOTAPE)

COOPER: Boy, what a mess.

Still ahead, another mess: Lindsay Lohan gets an alcohol monitor after she shows up late to court yet again.

And on a far lighter note, why am I dressed like one of Harry Potter's classmates at Hogwarts? It's our "Shot of the Day," coming up.

(COMMERCIAL BREAK)

COOPER: Following a number of other stories, Randi Kaye joins us with a "360 News & Business Bulletin" -- Randi.

KAYE: Anderson, five months after actress Brittany Murphy died, her husband is also found dead in their Hollywood Hills home. An autopsy scheduled Tuesday for screenwriter Simon Monjack.

A Los Angeles judge has ordered Lindsay Lohan to quit drinking, wear a booze-monitoring bracelet and undergo weekly drug testing. The bail conditions come after she allegedly missed a weekly alcohol class ordered after her 2007 drunk-driving conviction and then skipped a court appearance last week.

On Wall Street, stocks slide. The Dow lost 126 points, falling to its lowest level in three months. Analysts say the European debt crisis fueled the sell-off. And Paula Abdul is returning to the judge's chair.

COOPER: What?

KAYE: Yes, it's true. But not -- not on "American Idol." She will be a judge on "Got to Dance" which will air on CBS.

COOPER: Another dancing show?

KAYE: Another one.

COOPER: Oh. Thank goodness she's back.

KAYE: Well, Anderson, listen, we have you to thank for tonight's "Shot." You recently gave the keynote speech at Tulane University's commencement ceremony. We took an informal vote in the newsroom today and decided that our favorite part is when you actually told the class of 2010 to seize the day, though not quite in those words.

Let's watch.

(BEGIN VIDEO CLIP)

COOPER: If you gave me free catfish po boys at Donnelly's East (ph) for the rest of my life, I could not tell you what happened on my commencement. And it's not just that I don't remember what the speaker said; I don't even remember having a speaker.

So I'm actually not nervous anymore, because you're not going to remember a damn thing I say. It's true. You're going to wake up tomorrow in your bed, or someone else's, you know, if you're lucky -- hey, listen, you're not going to see most of these people again, so go for it.

Your parents got to go to bed at some time.

(END VIDEO CLIP)

KAYE: I think you might be invited back next year.

COOPER: You know, I -- there was -- there was more to it than that. There was a message somewhere in there.

KAYE: That's true. I did watch the whole thing. I got your back on that. But it was quite humorous.

COOPER: Yes, it was actually really fun. Tulane puts on an amazing commencement with amazing music, and Jeffrey Canada won -- won an honorary degree.

KAYE: I liked the robe, too.

COOPER: Yes.

KAYE: Green is your color. COOPER: That was the joke at the beginning. I was like I feel like I'm at a renaissance fair or like a Harry Potter convention. Why they make people wear those ridiculous robes, I don't understand.

KAYE: It brought out your blue eyes.

COOPER: Really?

Anyway, we're going to put the full commencement address online at AC360.com.

Hey, that's it for 360. Thanks for watching.

"LARRY KING" starts right now.