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Scandal Rumors Fly at the Vatican; Cannibalism in the Courtroom; Interview with Father Albert Cutie; Sequestration Looms; Obama, Biden Speak at National Governor's Meeting

Aired February 25, 2013 - 11:00   ET

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


ASHLEIGH BANFIELD, CNN ANCHOR: Thank you very much, Carol. Hello, everyone. Good to have you with us. I'm Ashleigh Banfield.

The Vatican fighting off rumors of unholy scandals behind the Pope's resignation as a cardinal quits under a cloud.

Cannibalism in the courtroom. An officer, a police officer, accused of plotting to cook and eat women, and he goes on trial today.

And a mega trial over millions of gallons of oil spilled in the gulf. It could mean billions and billions more in fines for BP.

So leave it to $85 billion in spending cuts to remind people just how much the federal government matters.

Moments from now, President Obama and Vice President Biden are due to meet with the nation's governors who do not need reminding that they're able to meet their payrolls, employ their citizens and provide their services largely because of Washington's help.

For the rest of us, the White House is pointing out just exactly how the spending cuts in almost every federal program and department are going to affect each state.

Let's go to a couple of them. For instance, North Dakota, it stands to lose funding for 10 of its public schools, and 200 kids will be cut from Head Start. Two thousand civilian defense employees will face furlough.

In Ohio, that state stands to lose 350 teachers and cut 2,500 preschoolers from Head Start. Twenty-six thousand defense furloughs are expected there, as well.

To California now, 320 schools are going to lose funding, 64,000 defense furloughs, almost 16,000 fewer children will be vaccinated in that state.

Pretty tough to see those numbers. In fact, I want to bring in my CNN colleague, Wolf Blitzer, in Washington and Ali Velshi here in New York, as well.

Ali, let me start with you. The numbers seem to be staggering when you look at them state by state. Overall, when you hear $85 million to hit on Friday, people across the country might say, that's a good start.

But it's not -- it doesn't stop there. There's a lot more to it than that.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, first of all, that's correct. It doesn't stop there. Over the course of the next seven months, you'll see a lot of cutbacks.

You know, there are two schools of thought on this, Ashleigh. There are some people who think it's really legitimate that there are finally cuts coming and that Washington does nothing without its back to a corner, so why don't we go with these cuts because you'll never get them agreed to through negotiation?

The problem -- the problem -- we have to remind of this. There are a lot of people saying, Democrats are fear-mongering. The problem here is the ham-fisted, unfocused nature of these cuts. These are sledgehammers where you really need stilettos.

The government is not as fat as people think it is, and you're going to learn this if the sequester goes through. If these forced budget cuts go through, you're going to learn over the course of the next month or so how you actually use the government.

So, the issue here is that it will furlough federal employees. It will have cuts that you just described.

A number of the governors, as you said, are meeting with the president, trying to make their case that this is really going to hurt us. The transfer payments to the states are going to be hurt, and it's not done in a way that people can say, here, this is what we should really cut. This we don't want cut.

So, it's going to be 13 percent to defense, nine percent coming out of most other what you call discretionary items.

And it's not going to have that much of a cut to non-discretionary things. There will be some cuts to Medicare, not to Social Security. And that's where the cuts really need to be made.

And that's what nobody wants to do, Ashleigh, because nobody wants to politically be behind the idea that we're cutting Medicare or Social Security benefits.

BANFIELD: And, Ali, as much as people love to bash the government, the closing down of government is a real possibility ...

VELSHI: Right.

BANFIELD: ... in the next month. We've got this whole continuing resolution deadline that's looming.

VELSHI: Yeah.

BANFIELD: Give us the background. It's very complex because there are a lot of financial issues for people to wrap their heads around. Give us the meat and potatoes on that.

VELSHI: So, you're supposed to have a budget every year. The president's supposed to put forward a budget proposal in February. By April 15th, the government, the Congress is supposed to vote on it, goes into effect October. That's with when the government's year starts.

We haven't done that for year, since 2009. So, we have what's called a continuing resolution. Congress agrees to fund everything at exactly the same level as before. That's what we've done for years.

That continuing resolution, the budget for the government, ends to March 27th. On March 28th, if there isn't another continuing resolution, because there certainly won't be a new budget. We don't have enough time for that. The government could shut down.

There are little shutdowns that last a day or so. There are some, which, you know, like 1995/1996, which go on for a long time. That's very damaging.

So, even the Republicans who say that they are interested in the forced budget cuts going into place, many of them are not interested in a government shutdown. People hate those.

BANFIELD: Well, and they're very expensive. You're right. Ali Velshi, thanks for that.

Wolf Blitzer's going to weigh in in just a moment, as well, on the political implications of all of this.

And meanwhile, Ali, the government continues. As I just mentioned, as well, the president and the vice president are going to be speaking this hour to the nation's governors on the upcoming federal spending cuts. We're going to take their speeches live when they happen.

But right now the first lady who had a late night last night, presenting the Best Picture at the Oscars, she's now speaking. And she has been speaking about military families. Let's listen for a bit.

(BEGIN LIVE FEED)

MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: ... we'll be improving our health care system. We're going to be boosting economic growth in this country through these efforts.

And, most importantly, we're going to be strengthening our country not just for now, but for the years ahead, and in the end, that's really what joining forces is all about.

It's not just about supporting our heroes while they're on the battlefield. It's about standing with them in these times, standing with them and their families when they come home.

When they come home, it's a forever commitment because we know that they don't stop serving this country when their military service ends. That is the beauty of our service members. They keep on going.

We know that they are the next generation of leaders. All over the place in our businesses, in our hospitals, in our schools, they are the key resources that will put this country on the track and keep it on the track of greatness.

So, we don't just owe it to them to get issues like this right. We owe it to our communities, and we owe it to our country.

That's how we will continue to grow our economy.

(END LIVE FEED)

BANFIELD: So, as we continue to listen in, by the way, the first lady was not only dressed up nicely to give out the Best Picture for the Oscars, but this event she's speaking to right now, the Governors' Association, they had a black tie dinner last night with the first lady and the president, as well.

They've been meeting since Friday, and this meeting ends today. but not before the president has a chance to address all of the governors and, of course, this looming sequester is the big issue today.

And, more than likely, the president is going to use his chance with the governors to push them, to try to pressure them to get their legislators to back a new debt deal.

There is a lot more to come, and we're going to dip back into that as soon as the president begins to speak.

But here's our other big story, sex, blackmail and abuse of power, not usually what you like to think of when it comes to the church.

But coming up, how the Vatican is dealing with a brand-new basket of allegations and resignations, as well, all while preparing to pick a brand-new leader. Coming up, next.

(COMMERCIAL BREAK)

BANFIELD: If Benedict the XVI was hoping for a quiet end to a sometimes turbulent papacy, it is obviously not to be.

Just four days before the pope's own resignation takes effect, we learned the only Catholic cardinal in Britain, Keith O'Brien -- seen here -- Keith O'Brien of Scotland -- has also resigned and won't be taking part in the conclave to choose Pope Benedict's successor.

A British newspaper is saying that three priests and one former priest have accused O'Brien of, quote, "inappropriate relationships" dating back to the 1980s.

He denies that, and he was due to step down anyway because of his age, but he was also expected to gather in Rome this week, or next, with his fellow cardinals.

And if anybody thought the church's scandals would end when a new pope was chosen, well, that is not to be either.

The pope today decided that a top-secret Vatican report on the document leak -- remember that document leak that was blamed on the pope's butler? Well, it's a report that he and only he is supposed to have seen, but it is supposed to be left to his successor now and not shared with the rest of us.

Those leaks were sensational enough, but the Holy See's investigation reportedly turned up even bigger and juicier revelations which led to bigger questions about the first papal resignation in 600 years.

CNN's Christiane Amanpour joins me live from Rome and, from Miami, we're joined by Father Albert Cutie, who is a Catholic turned Episcopal priest, TV host and author.

Christiane, I want to begin with you. First of all, the secret dossier, what do we actually know about this secret dossier, and how do we even know what's in it?

CHRISTIANE AMANPOUR: Well, Ashleigh, to be frank, we don't know. The only person who really does know is Pope Benedict who was briefed today by those three cardinals.

The allegations, the suspicions, are that it could possibly have been about the possibility of blackmail against certain gay priests here in the Vatican or around the world.

But as we say, we simply don't know. If we had expected some of that to be released today, as you mentioned, the pope made a decision that this would go to the next pope and then it would be up to him on how to deal with it.

But that is just one of the big stories here. And just when we think things can't get any worse, this last week of the pope being in office, things keep getting worse, Ashleigh.

BANFIELD: But, Christiane, does this make any difference for those who are expected to gather for the conclave? Will it meet sooner than expected? Will it meet later? Will people not show up? Will there be people named at very high levels? Or is this all going to be speculation until the next pope is chosen?

AMANPOUR: Well, what we do know is that the pope, Pope Benedict, today, made a decision to change the very deliberate rules of the choosing of the next pope and of when the conclave can start.

But, again, he didn't say when. That apparently we're going to know right after he leaves, after February 28th, maybe as early as March 1st. That's this Friday coming.

Then we'll know, perhaps, when they will decide to have the next conclave. But he has said that it can happen earlier than the prescribed 15 days.

On the other hand, there's also these scandals swirling around various cardinals and archbishops who are meant to be coming here to take part in the election.

You've mentioned also the cardinal of Scotland, Keith O'Brien, who today had his resignation accepted by the pope earlier than many people would have believed, but perhaps because of these allegations that have been lodged against him by, as you say, four clergymen, allegations of sexual misconduct back in the '80s.

Now, he has said that he is not coming. He said he does not want the spotlight to be on him in Rome, but rather on the pope and his last days. So that's one issue.

And then, of course, you've got the questions around the Los Angeles -- the now disgraced Los Angeles cardinal, Mahoney. Many, many people don't want him to come here.

He, of course, has been accused and criticized because of years of cover-up of social misconduct in this swirling priest pedophile criminal case that swept the United States since 2002.

He says he's coming. More and more people, particularly high-level people, are saying that he should not come, including President Obama's outgoing Vatican ambassador has said that, too -- he should not come.

BANFIELD: I want to bring in Father Cutie on this.

Father, what are your thoughts in terms of the timing of what's happened with this British cardinal and, of course, what Christiane just mentioned with Los Angeles's disgraced cardinal?

Is there anything to the timing of this stepping down in Scotland?

FATHER ALBERT CUTIE, FORMER CATHOLIC PRIEST: Well, I think the first thing is that, as religious leaders of any church, we want to see more positive headlines, obviously, about the Vatican.

And it's horrible to see over and over again how the culture of secrecy doesn't allow the church to come clean on so many of these issues.

I think it's wrong to say the cardinal archbishop of Los Angeles or the cardinal archbishop of Boston are the ones who covered up things.

I think it's part of the institution to cover up things, and unfortunately, if you were going to tell me no one can go to the conclave who has participated in any type of cover-up, you would probably exclude every cardinal in the church because, unfortunately, that's the way the church has operated.

BANFIELD: And for those who hear these reports over and over again, these allegations, these cases, these settlements, does it matter at this point that we're getting these allegations at the highest levels, at the cardinal level, or does this become white noise after a while?

Or does it have the opposite effect? Will people start to really take note? Will this have a lasting effect, a detrimental effect, on the Catholic Church?

FATHER ALBERT CUTIE: Well, it's negative to hear that spiritual leaders are involved, especially protecting criminal behavior, because what we see is almost everything has to do with sexuality. And maybe a lot of these issues would be dealt with differently by the public and even by the media if the church had a different attitude toward human sexuality to start with.

You can't condemn homosexuality and homosexual persons and at the same time cover up activities of homosexual clergy. That's the problem that we have here.

BANFIELD: And certainly you can't condemn homosexuality; you can condemn hypocrisy, without question.

Christiane, that leads me to this question, and I'm not sure if it can be answered: How hard is it to report on the church? How hard is it to get information out of the Vatican? How much do you think we just don't know and never will know?

CHRISTIANE AMANPOUR, CNN INTERNATIONAL ANCHOR: Well, as your guest just said, it is true, there is a culture of secrecy and a total lack of transparency. That is simply a fact and has been for now decades. I mean, decades.

And it's really American journalists, "Boston Globe" who broke this story back in I think early 2000s, 2002, about this raging criminal act that have been going on in the Roman Catholic Church. These are not just sins; these are actual crimes. And this is what Roman Catholics, so many of them, are so upset about, that they have not been able to have a full transparency. Yes, Pope Benedict XVI made some inroads, mad some efforts to do so, but there are still many criticisms that this has not been sorted out as it should be, and that for generations, this thing has been covered up.

And what you have now is, you know, 2005, I was here when Pope John Paul II died, and we had the conclave for Pope Benedict XVI's election. Now, at that time, there was a lot of criticism that Cardinal Bernard Law was coming here to take part in that conclave. At that time, the Vatican said that it's up to -- it's his duty, and he should come.

Now, they're changing their tone somewhat about these others who are embroiled in these scandals and saying, well, it's up to him. They don't want now, here in the Vatican, to take responsibility for these cardinals coming here. They're saying no, it's up to him. And obviously many of them were hoping that they wouldn't come.

BANFIELD: Christiane Amanpour working for us at the Vatican and Father Albert Cutie, I thank you both for your input.

As we move along, here are two things you never want to hear in the same sentence: horse meat and IKEA meatballs. It's happened and we'll explain after this break.

(COMMERCIAL BREAK) BANFIELD: Want to take you live to the White House. This is the State Dining Room, where the vice president is now up at the podium and addressing the National Governors Association meeting. The topic likely on his agenda today, probably the same as the president's, and that's the looming sequester, the spending cuts.

Let's listen.

(BEGIN LIVE FEED)

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: I think the American people are ready to get up as -- as a civil rights leader when I was coming up as a kid said, they're just -- "the American people are tired of being tired." I think they're ready to get up and move.

You guys know that because it's happening in your state. You probably feeling it in your fingertips more than most of us do here in Washington.

And, as I said, I think they -- they know we're better positioned than any other nation of the world to lead the world. And that's why I think they're so frustrated by what they see and don't see happening here in Washington.

And I think their frustration is turning into a little bit of anger. I found an interesting dynamic, without ruining any of your reputations, or picking on any one of you, but whether it was a Democrat or Republican governor, I was -- been talking to, last night and over this past weekend, I heard from several of you, both parties, how do you deal with what's going on up here? How do you deal with the Congress?

No distinction, Democrat or Republican, depending on who I was talking to, no distinction about who you're dealing with. But how do you deal with this?

Because you guys deal -- and women -- deal with legislatures that are split. Some of you represent a minority party as governor, yet you get on very well with -- you accomplish things in your home state.

And as I said, I've been here long enough, that's the way it used to work. And I think we can make it work that way again.

But there's a number of things we have to do immediately. And we may disagree on how to address them, but I don't think anybody disagrees on the need it needs to be addressed, from implementing the Affordable Care Act -- it's a law, you all are grappling with that. Each of you are making different decisions, but you're grappling with it. You're moving, and you're making your own judgments.

We also have to -- I don't think there's much disagreement there's a need for immigration reform. There's -- I've -- I've not met a governor from the time of implementing the Recovery Act to now who doesn't think that we have to do something about our crumbling infrastructure in order to impact on our productivity here in this country, continue to attract, keep, and bring back American business from abroad.

And -- and there's very little disagreement on the need to - to build an education system that has such immense possibilities for our people.

But on most of these issues, we're united by more than what divides us. All these issues intersect at a place, the ones I just mentioned, and others, intersect at a place where both the state and federal governments engage. So we're going to have to work together. They overlap in many cases.

We'll -- you know, we'll have our differences, but we all should agree that the United States has to once again have the highest percentage of college graduates of any nation in the world. I don't think there's any disagreement. Everybody agrees.

And some of you -- of you governors have led the way on early education and the consequences for the prospects of success for our children, not only graduating but avoiding the criminal justice.

You've all lead in knowing that we have to have a reform of our high school system so that we are not a finding a pathway for people who are going to go to a four-year college and community college, but into the trades, I mean.

So there's so much agreement that I think we ought to be able to get a fair amount done.

And we should all agree that -- that to grow our economy we have to invest in manufacturing, clean energy, infrastructure, education. The question is, who -- who invests and how much and how we're going to debate that. But there's not much disagreement about the need to invest.

And I think we're all -- I've never met a Democrat or Republican who's been a governor who doesn't think that the American people should have the sense that hard work is going to be rewarded. That there's a -- that there's a chance that if you work hard, you've got an opportunity.

You know, I don't know of any group of men or women who are a better living example of that than all of you sitting in front of me, and your own experiences.

So, you know, the question is we all use the phrase "move forward in a balanced way". What one's man's balance is another man's imbalance. And, but that's what we got to talk about, that's what's at stake.

But the one thing that I don't think any of you lack is a vision about how great this country can be, now that we are coming back that we ought to be able to reassert ourselves in the way that we own the 21st century.

And I know the guy I'm about to introduce believes that as strongly as all of you do.

Ladies and gentlemen, let me introduce you to the president who's back with the pastry chef, and I'm wondering what he's doing back there.

(LAUGHTER)

The president of the United States, my friend, Barack Obama.

(APPLAUSE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you, everybody. Thank you.

Please, please, have a seat.

Thank you, guys. Please have a seat.

Well, welcome. everybody. Thanks for being here.

We all have a lot on our plate, and everything from, well, our immigration system to our education system, as -- as Joe talked about, our goal is to make sure that we can be an effective partner with you.

I want to thank the members of my Cabinet who are here, and members of the administration.

I want to thank Jack and Mary for their leadership of the NGA.

And everybody else, I just want to say thank you for being on your best behavior last night. I'm told nothing was broken, no silverware is missing. I didn't get any calls from the neighbors about the noise.

Although I can't speak for Joe's after party at the Observatory. I hear that was wild.

(LAUGHTER)

Now, I always enjoy this weekend when I have a chance to see the governors. As leaders, we share responsibility to do whatever we can to help grow our economy and create good middle-class jobs and open up new doors of opportunity for all of our people.

That's our true north, our highest priority, and it's got to guide every decision that we make at every level.

As I've said, we should be asking ourselves three questions every single day. How do we make America a magnet for good jobs? How do we equip our people with the skills and the training to get those jobs? And how do we make sure if they get those jobs, that their hard work actually pays off?

As governors, you're the ones who are on the ground, seeing firsthand every single day what works, what doesn't work. And that's what makes you so indispensable.

Whatever your party, you ran for office to do everything that you could to make our folks' lives better. And one thing I know unites all of us and all of you, Democrats and Republicans, and that is the last thing you want to see is Washington get in the way of progress.

Unfortunately, in just four days Congress is poised to allow a series of arbitrary, automatic budget cuts to kick in that will slow our economy, eliminate good jobs, and leave a lot of folks who are already pretty thinly stretched scrambling to figure out what to do.

This morning, you received a report outlining exactly how these cuts will harm middle-class families in your states. Thousands of teachers and educators will be laid off. Tens of thousands of parents will have to deal with finding child care for their children. Hundreds of thousands of Americans will lose access to primary care and preventive care, like flu vaccinations and cancer screenings.

Tomorrow, for example, I'll be in the Tidewater region of Virginia, where workers will sit idle when they should be repairing ships and a carrier sits idle when it should be deploying to the Persian Gulf.

Now, these impacts will not all be felt on day one. But rest assured, the uncertainty is already having an effect. Companies are preparing layoff notices. Families are preparing to cut back on expenses. And the longer these cuts are in place, the bigger the impact will become.

So, while you are in town, I hope that you speak with your congressional delegation and reminded them in no uncertain terms exactly what is at stake and exactly who is at risk.

Because here's the thing. These cuts do not have to happen. Congress can turn them off anytime with just a little bit of compromise.

To do so, Democrats, like me, need to acknowledge that we're going to have to make modest reforms in Medicare if we want the program there for future generations and if we hope to maintain our ability to invest in critical things like education, research and infrastructure.

I've made that commitment. It's reflected in proposals I made last year and the year before that, and it will be reflected in my budget. And I stand by those commitments to make the reforms for smart spending cuts.

But we also need Republicans to adopt the same approach to tax reform that Speaker Boehner championed just two months ago.