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House Speaker Speaks Soon; House Grills Holder Today; Tea Party Groups Targeted By IRS; GOP On Jobs And Economy; Teen Buried Alive For 17 Days; Russia Says U.S. Diplomat Is A Spy; Russia Expels U.S. Diplomat

Aired May 15, 2013 - 10:00   ET

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

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CAROL COSTELLO, CNN ANCHOR: Good morning. Thank you so much for being with me. I'm Carol Costello. Happening now, we are going to go to Capitol Hill where any minute now the Republican House Speaker John Boehner will step before the cameras at the House Republican Leadership Conference. I'm sure he'll have many choice things to say about President Obama.

Our chief congressional correspondent Dana Bash joins me now from Washington. He is going to talk probably Benghazi, the IRS, spying on the AP, and perhaps a host of other things as well -- Dana.

DANA BASH, CNN CHIEF CONGRESSIONAL CORRESPONDENT: That's right. If you take a look at the big sign behind the podium, it says "Solutions for American Jobs," I am told by a Republican source that that is what he is going to start talking about. Because Republicans are certainly licking their chops with regard to all of these issues on the president's plate, but they still at least internally are a little fearful of losing sight of the thing that people out there are so most concerned about.

That is that they're still, many of them, looking for jobs. But you can be sure, I am told, he is going to talk again about Benghazi. He does pretty much every single time he is in front of the cameras. Last week, he called on the president to ask them to publicly release e-mails dealing with those now infamous talking points.

That has not happened yet, at least not in a formally way and, of course, the IRS. You know, it would be political malpractice for him not to talk about the IRS because it is a pretty easy political gift for Republicans. So we do expect him to talk about it.

COSTELLO: They are really turning up the heat too, on the president because already, one Republican lawmaker has come out with impeachment as it applies to the Benghazi situation.

BASH: That's right. One of -- Jason Chaffetz, in fact, I think talked about that. He is a Republican who has been intimately involved in investigating Benghazi. I have not heard that in a more widespread way. But, you know, this is the kind of thing that Republicans will kind of slam the president for because it really speaks to what their base has been crying about for years. Which is they feel the Obama administration has taken government, big government gone awry with regard to Obamacare, now with regard to Benghazi, with regard to the IRS. So it really does all kind of allow them to wrap it up with a nice bow the whole message that Republicans have been getting out there, which is that the president has taken government and used it to his benefit and in a way that's not so nice sometimes.

COSTELLO: OK. We'll get back to you in just a minute when John Boehner begins speaking, but we also want to talk about Eric Holder. Because just in a few hours from now, lawmakers will grill the president's attorney general, Eric Holder and as a backdrop, RNC Chair Reince Priebus is leading the latest charge demanding that holder step down or be fired.

CNN Joe Johns is also in Washington. This hearing is expected to get under way, what, about 1:00 p.m. Eastern Time. I would imagine that lawmakers will have very tough questions for Mr. Holder.

JOE JOHNS, CNN CRIME AND JUSTICE CORRESPONDENT: Carol, Republicans on the committee are expected to ask some tough pointed questions at the attorney general. Democrats we talked to seemed less energized to go after the AG who is a Democrat though, these hearings can certainly be unpredictable.

On the issue of targeting of conservative groups by the IRS, which is now under federal investigation, one question is what a government employee could be charged with. One couple of sources have told us that if any high level government employees intentionally failed to disclose facts related to the IRS targeting, they could have exposure over any alleged false statements, though, it would be up to the FBI to determine those facts.

A government source has also tells CNN one possibility is some type of criminal conspiracy civil rights violation, though, that statute is rarely used. Looking over the attorney general's opening statement, we don't have a clue to whether he's going to talk a lot about this stuff.

But it's plausible at least based on some of his previous conversations of that he could at least explore the issue of civil rights violations. On the issue of secret Justice Department subpoenas, the Associated Press in a leak investigation.

Holder is expected to stick to his story of disclosure of sensitive information in that case a year ago was so unusual the tactics were used. Here is a snippet of what Holder said in a news conference yesterday.

(BEGIN VIDEO CLIP)

ERIC HOLDER, U.S. ATTORNEY GENERAL: I have to say that this is among if not the most serious. It is the top two or three most serious leaks that I have ever seen. It put the American people at risk. That is not hyperbole.

(END VIDEO CLIP)

JOHNS: So Holder has gotten a lot of tough questions on Capitol Hill over the past months and even years. We expect this to be another tough hearing for him -- Carol.

COSTELLO: Very tough hearing and again, that hearing at 1:00 p.m. Eastern. We'll hear more from Eric Holder. He is due to testify on the specifics before the House Judiciary Committee. Holder is a busy man these days. He has now launched a criminal investigation into the IRS. You heard Joe say that.

As you know, IRS employees have for the past 18 months targeted conservative groups with the words "Tea Party" or "Patriot" in their names. As a result, applications for their tax exempt status were delayed. A new Treasury Department report puts it this way. The IRS inspector general found that the IRS agents used inappropriate criteria to identify Tea Party and other groups.

And the report also cited ineffective management that allowed the criteria to be in place for 18 months, which resulted in substantial delays of applications and unnecessary questions. Now, these targeted Tea Party groups were applying for 501C-4 status. In other words, they wanted to be a tax exempt organization, which means they would not have to disclose donors or pay taxes.

But that status is usually meant for social welfare groups not political organizations. Social welfare groups include volunteer fire companies and homeowner associations. However, some lobbying organizations can also qualify for this tax exemption.

Jonathan Turley is a professor of law at George Washington University. Welcome.

PROFESSOR JONATHAN TURLEY, GEORGE WASHINGTON UNIVERSITY: Thank you.

COSTELLO: I'm glad you're here to sort this all out for us. First of all, explain this 501C-4. Why would a political organization qualify for this?

TURLEY: Well, it's unusual to have this type of organization fit into this particular category, but what is really at issue here is whether there was an effort to target a specific or political side of these organizations to go after conservative groups. That's what raises violations of regulations.

There can be ample reason to question the legitimacy of having 501 C4 status, but what you can't do is to use the IRS system to target political groups. Now that's happened in the past, tamper with Republican administrations as well as Democratic.

But we've rarely seen this type of express statement coming from supervisors to target these types of groups. Now, whether that amounts to a crime or a simple wrong doing is the question we're going to have to look at.

But I can tell you, Carol, it's very rare for these types of issues to become criminal matters unless someone lied to a federal investigator and then it's not really part of the IRS code. It's part of what's called 18 U.S. 1001, which is lying to federal officers in an investigation.

COSTELLO: OK, before you move on with that thought, the House Republican Speaker John Boehner is now speaking. He is talking about Benghazi so let's listen.

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REPRESENTATIVE JOHN BOEHNER (R), SPEAKER OF THE HOUSE: I don't want to prolong this anymore than anyone else. What I want is the truth. In addition to that, the IRS has admitted to targeting conservatives even if the White House continues to be stuck on the word "if." Now, my question isn't about who's going to resign. My question is who's going to jail over this scandal?

REPRESENTATIVE ERIC CANTOR (R), HOUSE MAJORITY LEADER: Good morning. Obviously, there have been a lot of questions raised over the lost several days that the news has I think awakened the public. Beginning to raise questions in their minds to the direction of this government as really to whom is this government accountable and we're going to proceed, obviously, in our work here in the House bearing in mind we've got to restore the trust in government and we've got to restore the faith in our economy.

And there are questions that are being answered and we are accountable to the families of the victims in Benghazi. We certainly are accountable to the taxpayers and the people of this country to the actions of the IRS and we certainly have plenty of questions accountable to the press in terms of its first amendment rights and its ability to enjoy those and realize those.

You know, we've got plenty of action, though, on the floor today, I mean, this week, Obamacare repeal is there again because we do not believe that an individual mandate is the direction Washington-based healthcare is the direction we ought to go. And we also are going to be working on an SEC Accountably Act. This is a bill coming out of the Financial Services Committee.

It is a bill that is president's former jobs council said is necessary in terms of creating the conditions to create jobs. So I'm hopeful that we can get a bipartisan vote coming together of the one thing people are continuing to wonder. That is, is Washington concerned about the future of this economy?

REPRESENTATIVE KEVIN MCCARTHY (R), MAJORITY WHIP: The American public is wondering instead of Washington spending their time researching based upon your political beliefs or your economics or your job, maybe they should be focusing on how job creation. One thing that the president can do when he wants to look for something bipartisan in creation is the Keystone Pipeline. Twenty thousand jobs can be created with that single approval. Now, tomorrow is an anniversary, 1,700 days since it's applied, 1,700 days, 15,000 pages have been --

(END LIVE FEED) COSTELLO: All right, we are going to jump out of this. That's the Majority Whip Kevin McCarthy. He's calling for the Keystone pipeline to go through. You heard Erin Cantor, the House majority leader. He said there would be a move to repeal Obamacare in the House of Representatives.

You heard the House Speaker John Boehner say that he's wondering who is going to go to jail over this IRS scandal. So let's go back to Jonathan Turley because we were just talking about that as we went to John Boehner. He is wondering who is going to go to jail over this IRS scandal. There is a criminal investigation now ongoing. So tell us again what the FBI would have to find to send someone to jail for this.

TURLEY: Well, the odds are that the answer is no one. The IRS has been alleged to have commopolitical targeting at various points in its history under Republicans and Democrats. People have fought gone to juvenile as a general matter. While they have been disciplined, civil servants can be fired. It's difficult. But they can be fired for misconduct.

But in order to graduate up to a crime, you are really looking at 18 USC 1001. This is the statute that is the favorite of federal prosecutors, particularly in Washington. It's the actual provision that most of the big scandals end up being fought on. That is simply lying to investigators.

As you know, it is often the problem not what you did but how you responded to it in Washington and what happens is that people will lie when they're first confronted by federal investigators. Each of those lies can be charged as a crime. So that would be the most likely course, but it's not clear this is the type of case that would generate those types of charges.

COSTELLO: Something I found striking, the inspector criminal released this report. He has been looking into it. He said this happened within the IRS because of time saving measures and that IRS employees didn't realize how would look to the outside world that it would look like they were targeting these conservative groups. Does that make any sense to you?

TURLEY: Well, it doesn't make sense in that for the IRS the third rail for all tax issue is partisanship. That is, really, when you look at the training of IRS agents, that's really the touch-stone of what defines or should define their agency. They're supposed to be strictly apolitical.

So it's hardly to imagine a supervisor who is so tone deaf as to not see how serious this investigation would be. Now having said that, you know, this administration in the first term told CIA employees they would not be going to prosecute for water torture. It is doubtful they will follow that for IRS in this regard.

COSTELLO: Interesting. Jonathan Turley, thanks so much. Jonathan Turley, law professor George Washington University. We'll be right back. TURLEY: Thanks, Carol.

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COSTELLO: That was CNN exclusive out of Bangladesh. Recovery efforts ended after a collapse last month of a garment factory building. More than 1,100 people were killed. Thousands of others were rescued including a teenager who survived 17 days before workers plucked her from the rubble.

CNN's Leone Lakhani spoke one on one with Reshma in this exclusive interview.

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LEONE LAKHANI, CNN INTERNATIONAL CORRESPONDENT (voice-over): Pulled out of the rubble after 17 harrowing days, Reshma's rescue was hailed a miracle. We meet her at a military hospital where she is recovering.

(on camera): Hello, Reshma.

LAKHANI: No broken bones or serious injuries, she is still weak. We are asked not to rattle or move her. From her hospital bed, she describes her unimaginable ordeal.

RESHMA, SURVIVOR OF BANGLADESH DISASTER (through translator): I keep sleeping off and on. I couldn't see anything. It was so dark.

LAKHANI: Cracks in the building had been detected, but I asked her if she had been warned not to go to work?

RESHMAN (through translator): No, no one told me, everyone was looking to see which parts were cracked. So I went in I see that there is a wall where a little bit is cracked. The manager says this is just water damage and you guys can work.

LAKHANI: Day after day as the rescue efforts carried on above her. She laid in pitch dark scavenging for food and water.

RESHMAN (through translator): There was a hole, I didn't know if it was dirty water or what type of water. I was thirsty, so I drank.

LAKHANI: She had no idea how long she had been inside. I asked her if she saw her heard the people outside during the rescue efforts. She said she heard nothing and saw nothing until the 17th day when it all changed.

RESHMA (through translator): Suddenly I heard the call to prayer. Then I heard sounds the sounds of voice, I wondered where is the sound coming from? I was really, really happy. I said, God, save me God.

LAKHANI: Images of Reshma's rescue were seen the world over. Rescuers had thrown in a flashlight allowing her to find a fresh set of clothes to change into. RESHMA (through translator): The day I got out, all my clothes were torn off me. I didn't have many clothes. I was thinking, how was going to come out in front of all those people?

LAKHANI: She tells me she is unsure about her future, but she knows she is not going back to the garment business.

RESHMA (through translator): Everybody please pray for me.

LAKHANI: With the world's eyes upon her, many already are. Leone Lakhani, Bangladesh.

(END VIDEOTAPE)

COSTELLO: Still ahead in the NEWSROOM, Russia detains a U.S. diplomat claiming he tried to recruit a spy. How this incident could be related to the fallout over the Boston bombings.

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COSTELLO: People who know the spy game are raising serious questions after what happened in Moscow. A U.S. diplomat tried to turn one of their intelligence officers. Here's the evidence, wigs, a Moscow atlas, phone and a knife, not knives concealing little pins or anything like that.

Former CIA Officer Bob Baer believes the Russian security service planted these items to embarrass the United States, but why, you ask, would the Russians want to do that?

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BOB BAER, FORMER CIA, CNN ANALYST: Well, I think they're mad about the Boston investigation. It's come out the implication is if they'd helped us more, we could have stopped this thing. Russians are saying, wait a machine. We told you about this guy in Boston. It's your fault.

So that hasn't gone all that well. There is also the question of Syria. Secretary of State Kerry was in Moscow last week. The Russians are very angry about Syria. They were attempting to overthrow Bashar Al-Assad. They're coming back at us.

(END VIDEO CLIP)

COSTELLO: CNN's Brian Todd has more on the man in the middle of this spy case.

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BRIAN TODD, CNN CORRESPONDENT (voice-over): Picked up on the streets of Moscow, videotaped wearing an almost comical wig. A man rushes counterintelligence agency says is CIA Spy Ryan Fogel. The Russians say he was trying to recruit a double agent from one of Russia's special services. The FSB says it detained Fogel briefly and handed him over to the U.S. Embassy in Moscow where it says he held the position of third secretary. That embassy, its ambassador not commenting, the CIA is not commenting. The State Department confirmed someone at its embassy was briefly held, but otherwise.

UNIDENTIFIED MALE: We have no comment at this time.

TODD: Russia's Foreign Ministry said, quote, "Such provocative action in the cold war does not contribute to building mutual trust. The Russians also displayed some items they say Fogel was carrying, wigs, a knife, dark glasses, envelopes full of cash, and what appears to be a Moscow map book.

When we showed counterintelligence expert Eric O'Neill those pictures in the video, he said the man I'Ded as Fogel could be a CIA officer. He said this isn't spy craft, it's stage craft.

ERIC O'NEILL, FORMER FBI COUNTERINTELLIGENCE OFFICER: I very much doubt a highly trained CIA operative is going to be walking the streets in Moscow wearing a really bad blonde wig. It's portrayed craft and it looks like a setup to me.

TODD: O'Neill believes the Russians likely planted that material on Fogel for dramatic effect, maybe to stir up anti-American sentiment, achieve a political objective or distract attention from some other matter. O'Neill is a former FBI counterintelligence officer who took down FBI Agent Robert Hansen who was spying for the Russians. O'Neill says the tactic of planting material on a spy is a trademark of Russian President Vladimir Putin, himself a former KGB officer.

(on camera): O'Neill says the U.S. intelligence agencies have much better disguise training than what was displayed in Moscow. He says they teach to you depart only slightly from your normal look, wear sunglass, maybe a ball cap on backwards. When I told an official here at the Russian embassy in Washington of O'Neill's belief that the Moscow pickup was a setup, I got a stiff "no comment."

(voice-over): O'Neill says if the Russians really believed Fogel was recruiting a Russian double agent then rounding up Fogel was a mistake.

O'NEILL: They want to pick up the person he's recruiting. He is irrelevant. Actually, it's better for them to keep many in place because they know that he is potentially a spy and they can watch him in order to catch the Russians.

TODD: O'Neill says all the Russians have done by detaining this man they call Fogel is ruin his career. The Russians have deemed him persona non grata, meaning he will have to return to the U.S. and if he does work for the CIA, O'Neill says it's unlikely he'll ever be able to work undercover again even in another country. O'Neill says the different security agencies will now all know his face. Brian Todd, CNN, Washington.

(END VIDEOTAPE) COSTELLO: Troubling times for the White House, it seems the Obama administration has been trying to stamp out a lot of criticism involving scandals. Some say it's not doing a great job. We'll be right back.

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