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THE SITUATION ROOM
Shinseki on 'Thin Ice' with Obama; Report: Iranian Hackers Spied on U.S.; Attorney: Sterling Considering Suing NBA
Aired May 29, 2014 - 17:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Jake, thanks very much.
Happening now, seconds from disaster. A commercial airliner and a cargo plane come very close to colliding. We have details on the latest shocking close call.
Suing or selling? While Donald Sterling may be ready to strike back at the NBA, his wife has received some serious offers for the L.A. Clippers. I'll speak live with Sterling's lawyer.
And hackers exposed. Cyberspies creating a fake new site using social media to lure U.S. officials. Is Iran behind this elaborate scheme?
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
All that coming up, but we begin with an avalanche of fresh outrage, triggered by an explosive report from inside the Department of Veterans Affairs up on Capitol Hill, Democrats are now joining the calls for the V.A. secretary, Eric Shinseki, to resign. And over at the White House, Shinseki is said to be on, quote, "thin ice" over the failures at his agency.
CNN's Drew Griffin, who first broke this story, he's standing by. I'll also speak live this house with House Veterans Affairs Committee chairman, Congressman Jeff Miller.
But let's bring with our senior White House correspondent, Jim Acosta -- Jim.
JIM ACOSTA, CNN WHITE HOUSE CORRESPONDENT: Wolf, the writing may be on the wall for Eric Shinseki. For the first time since the V.A. scandal broke, the White House declined to say whether Shinseki has the confidence of the president.
ACOSTA (voice-over): As one White House official put it, Veterans Affairs Secretary Eric Shinseki is on thin ice.
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: I'm just not going to speculate about personnel matters.
ACOSTA: Today, the ice started cracking. White House press secretary Jay Carney refused to answer whether President Obama had confidence in Shinseki, who's leading a review of the V.A. scandal.
(on camera): How does the run the department if he doesn't have the full confidence of the president? How does he conduct this investigation if he doesn't have...
CARNEY: We look forward to the preliminary review that he asked the secretary to provide to them.
ACOSTA (voice-over): Instead, Carney pointed to what the president said last week when one White House official says Shinseki was placed on probation.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If he thinks he's let our veterans, then I'm sure he is not going to be interested in continuing to serve.
ACOSTA: The latest blow to Shinseki came from this inspector general's report, pointing to systemic issues in the V.A. system, noting in Phoenix, 1,700 veterans were never put on a waiting list and were likely lost or forgotten.
Shinseki responded in a "USA Today" op-ed, saying, "We are redoubling our efforts with commitment and compassion to restore integrity to our processes to earn veterans' trust."
That's not flying with a growing list of Senate Democrats, many up for reelection, who are calling for Shinseki to go. Even as the nation's top Republican said he's not so sure.
SEN. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The real issue here is that the president is the one who should be held accountable.
ACOSTA: It's no secret the president is loyal to his cabinet. White House officials said there's now a difference in the case of Secretary Kathleen Sebelius during the HealthCare.gov fiasco and Shinseki. The problems at the V.A., the official said, are bigger than a broken website.
(on camera): The president just doesn't like to fire people.
CARNEY: I think you heard that. The president was clear that he believes accountability is important.
ACOSTA: And the White House is waiting on the V.A. to turn over its initial findings from its own internal audit. Those findings, which are expected any day now, could well determine the fate of Eric Shinseki, Wolf. And we can report, in just the last half hour, another Democrat has defected from this White House over the fate of Shinseki. Mary Landrieu from Louisiana, she too wants him to step down -- Wolf.
BLITZER: Jim Acosta at the White House. Thanks very much.
Let's bring in our senior investigative correspondent, Drew Griffin. He was the first to report on this scandal.
Drew, these are widespread problems, certainly not just in Phoenix, a few other places. They seem to be expanding.
DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: Yes, they are expanding. And, you know, Jim mentioned in that report, it is a huge report now: 42 different facilities being investigated.
And you know, it may be a political crisis here in Washington, Wolf, but the real crisis remains. These veterans to this day waiting far too long for care. The interim report released yesterday calls it systemic nationwide, yet no real solutions in sight.
The White House is still taking this wait-and-see approach in a very contentious hearing last night on Capitol Hill. The V.A.'s assistant undersecretary for health tried. He couldn't answer a lot of the questions and couldn't really answer my question after that hearing, Wolf, which is, after ten years, nearly two dozen government reports outlining all of these problems, why hasn't the V.A. done anything to solve them?
(BEGIN VIDEO CLIP)
GRIFFIN: The overall issue, though, is, No. 1, the V.A. has not listened to the inspector general for ten years and has not listened to the Government Accountability Office for ten years, because if you did, you would have known about these scheduling problems, wait times and inability...
DR. THOMAS LYNCH, V.A. ASSISTANT UNDER SECRETARY FOR HEALTH: Drew, let me say that I have acknowledged during the course of this hearing that I think the V.A. made assumptions that our data were accurate. I think that we assumed that OIG and GAO information, patient concerns were exceptions rather than rules. I think knowledge that we have perhaps elevated performance majors to goals, that we need to improve that system.
(END VIDEO CLIP)
GRIFFIN: Wolf, Dr. Lynch went on to say that he, the current administration and General Shinseki can lead this V.A. out of this mess; give him a chance.
BLITZER: Drew, I want you to stand by for a moment, because I want to bring in Representative Jeff Miller. He's the chairman of the House Committee on Veterans Affairs.
Congressman, thanks very much for joining us. Let me get right to a potential criminal issue. Do you believe bureaucrats over at the Department of Veterans Affairs and facilities around the country were deliberately -- deliberately fudging some of the numbers so that they might qualify for bonuses?
REP. JEFF MILLER (R), CHAIRMAN, HOUSE COMMITTEE ON VETERANS AFFAIRS: I do. In fact, that's why I wrote the attorney general this morning and asked him to launch an investigation into the activities that have taken place now all across the country. And as you've already talked about, it's well over 40 facilities that are under investigation.
BLITZER: That sounds to me like a crime, potentially. Do you want the FBI, Department of Justice to get involved and start a criminal investigation?
MILLER: I do. And interestingly enough, last night during our late-night hearing on the floor of the House of Representatives, we're doing the Commerce, State and Justice Appropriation bill, and we had an amendment, in fact, that pluses up the FBI budget by a million dollars in order for them to start this investigation.
BLITZER: Have you notified, have you called Eric Holder, the attorney general, written to him and said, please investigate?
MILLER: Yes. I wrote a letter this morning. I made the comment yesterday when I called for Secretary Shinseki's resignation. I said I was also going to talk to Eric Holder. I did so by letter today. It would be interesting to see. So far he's been pretty much hands off, but I think the facts are too many now for them to be able to look the other way.
BLITZER: Congressman, Drew is still with us. He's got a question for you.
GRIFFIN: Mr. Chairman, so much of this issue seems to be rooted in the fact that the V.A. for a long time has not listened to just about anybody about its management. Didn't listen to the inspector general for years, didn't listen to the Government of Accountability Office and, quite frankly, has not listened to or responded to your committee for the last year, maybe year and a half now.
Since this most recent crisis began in Phoenix, has there been any more open communication between you, your staff, the minority side of your committee, and either the White House or the V.A. administration on all these problems?
MILLER: Well, first of all, the minority staff and the majority staff work very well together. So there is no daylight between the two of us as we go forward in trying to fix the problem.
But I will tell you, since our hearing on the 9th of April in regards to these wait times and the deaths that occurred while waiting, they have gone -- V.A., themselves -- have gone into a bunker mode. And we're not getting calls or contacts from anybody. And what little bit of information they're providing to us is from very low- level individuals.
In fact, I'm sure you recognize last night as we talk about the lack of progress of getting the subpoena fully fulfilled, we've got no information from Undersecretary Joan Mooney, whose job it is to be the congressional liaison between the administration and Congress.
BLITZER: Mr. Chairman, you want the secretary, Eric Shinseki, to resign, right? MILLER: I do.
BLITZER: What about the deputy? If he resigns, the deputy secretary becomes the acting secretary. That person is Sloan Gibson. I assume you know Sloan Gibson. Do you have confidence he can do a better job?
MILLER: I've known Sloan Gibson for a number of years, ever since he started running the USO, which is an outstanding organization. I think that he has organizational skills that, in fact, could help the Department of Veterans Affairs get out of the problem that they're in.
But it's much larger than whoever is in the position of secretary. It is the bureaucracy itself that thinks that they are more important than the veterans that they serve.
And I can tell you, the people that go to work every day, mostly at the line level, are doing the right thing. But the bureaucrats, at the middle, that I've been warning the secretary for years now are not telling you the truth. They will not give you the bad news. They'll only give you the good news and, unfortunately, things have come to pass that we, in fact, anticipated were the secretary.
BLITZER: If he does resign and Sloan Gibson became the acting secretary, would you support his becoming the secretary if the president were to nominate Sloan Gibson to become secretary of veterans affairs?
MILLER: I will support whoever the president puts in that position. I have told Secretary Shinseki time and time again, we don't want to be an adversary. We want to be a partner in trying to solve the problems that exist at the V.A.
But there seems to be an animosity between the administration and Congress. They have relegated us to basically a debating society and, finally, people are paying attention. And we're able to shine a light on, really, the arrogance of this administration and certainly the V.A. and the fact that Congress has been trying to provide the oversight, and they will not respond.
BLITZER: There are some suggesting, Mr. Chairman, that the V.A., as we know it, may be beyond repair. It's time to start thinking about privatizing at least elements of the Veterans Administration. Would you support that?
MILLER: I think it is time to look at giving veterans a choice, of being able to go outside of the system.
What I want to reassure the veterans service organizations out there is that we're not talking about trying to dismantle the entire V.A. system, because certainly, V.A. provides care and expertise in areas that nobody else does. Traumatic brain injury, posttraumatic stress, spinal cord injury. There are people that experience in combat and serving in the military that nobody else can treat. The V.A. does that well. But what we're seeing is increased number of people coming into the system, overwhelming the system, and it's not a matter of V.A. not having the dollars, because they're going to carry over a billion dollars or half a billion dollars this year anyway. They have the dollars there to have already sent these people out to non-V.A. health care, and I think that is the answer, especially to the immediate problem that exists today, and that is not just in Phoenix, but it is many, many other installations around this country.
BLITZER: We have one final question from Drew who wrote this whole story. Go ahead, Drew.
GRIFFIN: Congressman, have you been able to determine conclusively that the cover-up of the data, the manipulation of the data, is directly tied in many cases to bonuses, whether or not these administrators received the bonuses? Was there a financial gain to gaming the system?
MILLER: That's what most people suspect; it's certainly what I suspect. And why else would somebody work so hard to manipulate the numbers to create not one, two, but maybe three lists at different facilities, to make it appear that they are keeping their numbers to the 14-day level that V.A. tries to ascribe to.
The problem that exists out there, and I think Dr. Lynch admitted so in the meeting last night, where he said, "We have lost our compass."
We do not think that the goal that we set was used properly and people, again, went in, found a way to gain the system. And the criminality part comes in where they were able to recoup or inure their own self-worth by getting bonuses and also by getting new jobs or getting promoted.
BLITZER: Jeff Miller is the chairman of the House Veterans Affairs Committee. Congressman, thanks very much for joining us.
MILLER: Thank you, Wolf.
BLITZER: I want to thank Drew, as well, for the excellent reporting that he's been doing.
Just ahead, we have exclusive new details as Donald Sterling gets ready for a possible legal battle with the NBA. I'll speak live this hour with Donald Sterling's attorney in Los Angeles.
Hackers, meanwhile, creating a fake news site using social media to lure officials in the United States and around the world. Is Iran behind this complicated scheme? That's coming up next.
BLITZER: We're getting some dramatic new details in Donald Sterling's battle against the NBA. His attorney, Maxwell Blecher, there you see him. He's standing by to join us live. We'll speak with him in just a few minutes. But first, government officials and lawmakers were the apparent target of an elaborate cyber spying scheme involving social media and a fake website. Our foreign affairs reporter, Elise Labatt, has been digging into the story. Elise, what are you learning?
ELISE LABATT, CNN FOREIGN AFFAIRS CORRESPONDENT: Well, Wolf, it was a very clever campaign of modern-day espionage where the victims found that their new Facebook friends were actually their enemies.
LABATT (voice-over): The hackers used social networks in a brazen and creative scheme to spy on high-ranking U.S. and Israeli officials. A new report by a private cybersecurity firm claims those hackers are based in Iran.
TIFFANY JONES, ISIGHT PARTNERS: While it's low sophistication technically, it's actually one of the most elaborate social media, or socially engineered espionage campaigns we've ever seen to date.
LABATT: Here's how it works. The hackers create identities as journalists with a bogus online news site, News on Air. Sometimes they use real reporters' names, photos and bios. They strike up relationships with friends, relatives and colleagues of their targets on social media sites like Facebook and LinkedIn to connect with the target.
Once contact is made, the hackers send e-mails with links to real news stories in order to establish credibility. Over time, they lure the target to a fake website where they steal their passwords and other credentials.
In all, the report found more than 2,000 connections made by the hackers over the past three years, including a four-star U.S. admiral, British and Saudi officials, journalists and lawmakers. None of them are named. They appear to be after national security intelligence. But what information the hackers took is unclear.
There's no smoking gun pointing to official Iranian involvement, but the report cites circumstantial evidence.
(on camera): Do you think that the Iranian government was involved here?
JONES: We can't say for sure if the Iranian government was involved in this. What we can say is, based on who was targeted, the type of information they were going after, the infrastructure that was used and where it's registered in Tehran and a number of other indicators that we believe there are links to Iranian actors here.
LABATT: And Wolf, Facebook says that it was made aware of this fake campaign when some of its subscribers talked about suspicious activity from some so-called friends and have removed all of those profiles from this fake news website. The FBI and state Department say that they are aware of the report, not commenting on it directly. But the State Department are aware that hackers from Iran have used social media networking sites in the past to gain information about targets in the U.S., including U.S. officials, Wolf.
BLITZER: Elise Labatt, thank you for that report.
When we come back, we're learning new information about what Donald Sterling plans to do next in his battle against the NBA. Donald Sterling's lawyer -- there you see him -- Maxwell Blecher is here in THE SITUATION ROOM getting ready to discuss.
Plus, another deadly midair crash averted. The latest in a series of very disturbing near collisions just in the last few weeks. Why does this keep happening? That's coming up later.
BLITZER: Breaking news. We're learning exclusive news about Donald Sterling's plans just days before the NBA votes on his fate following the infamous public remarks. His lawyer, Maxwell Blecher, there you see him. He's standing by to join us live. We'll speak with him in just a moment.
But first, our Brian Todd is working his sources. He's joining us with the breaking details. Brian, what are you learning?
BRIAN TODD, CNN CORRESPONDENT: Wolf, things are moving very fast tonight. Sources tell us all the bids are in for the L.A. Clippers, and they come from some very powerful, well-known, high-stakes investors.
But while that plays out in the camp of Donald Sterling's estranged wife Shelly, the embattled owner himself seems to be gearing up for a fight.
TODD (voice-over): Tonight, CNN has learned Donald Sterling isn't backing down and that he's now seriously considering suing the NBA over its efforts to throw him out.
UNIDENTIFIED MALE: Do you think it's fair, Donald?
TODD: While no decision has been made, those close to Sterling say he has told his lawyer, "Go out there and fight them."
(on camera): How ugly could it get?
UNIDENTIFIED MALE: It could get ugly. Anything you've got a suit, you've got pretrial discovery. And you've got pretrial discovery, you've got all sorts of skeletons coming out of the closets on both sides.
TODD (voice-over): Yet, even as Donald Sterling appears to be hunkering down, CNN has learned behind the scenes a fast-paced and increasingly competitive bidding war is under way for his team, the L.A. Clippers, all led by his estranged wife, Shelly.
According to a source familiar with the situation, several bids ranging from 1 to $2 billion have been submitted, about 120 times what Sterling paid for the team in 1981.
DOMENIC ROMANO, SPORTS AND ENTERTAINMENT ATTORNEY: A lot of people have come out and expressed interest. There have been a lot of press reports. It's probably -- value of the Clippers is probably at its zenith right now.
TODD: Sources say at least three groups or individuals have made what the NBA would consider serious offers. Among them, former Microsoft CEO Steve Ballmer, who one source says has a strong bid. A group led by former NBA star Grant Hill also wants to buy the team. His bid, sources say, about $1.2 billion.
But the third bid may make the biggest splash publicly. It's from a high-profile group of moguls and other elites, reportedly including record executive David Geffen, Oracle founder Larry Ellison, Oprah Winfrey, and others. The goal, according to one source, is for some sort of sale agreement for the Clippers to be done before Tuesday. So a scheduled NBA owners' vote to kick Donald Sterling out wouldn't be necessary.
And if the sale didn't go through...
N. JEREMI DURU, AMERICAN UNIVERSITY LAW SCHOOL: Then it's not the Sterlings who are controlling the sale. And I think anybody selling any property would argue that they have the best potential outcomes if they're the ones controlling the sale.
TODD: And this sale will inevitably shatter all NBA records, regardless of when and how it happens. The last NBA team to be sold, the Milwaukee Bucks. They were sold last month. Five hundred and fifty million dollars, the sale of the L.A. Clippers now shaping up to be maybe three or four times that amount -- Wolf.
BLITZER: Is the NBA, Brian, saying anything about a potential Donald Sterling lawsuit against the NBA or is the NBA saying anything about this bidding war that's going on?
TODD: First, on the first point, Wolf, we have asked and we've gotten no response from the NBA so far to the possible lawsuit. The NBA is also not commenting officially on the bidding. But a source tells us behind the scenes the league is consulting closely with Shelly Sterling on this bidding process, on the sales process. Adam Silver said to be pretty heavily involved.
BLITZER: I'm sure he is. All right. Thanks very much.
Brian Todd reporting for us. Donald Sterling's attorney, Maxwell Blecher, is joining us now live. Mr. Blecher, thanks very much for coming in. Where does it stand right now, from your client's perspective? Does it look like there's going to be a sale, that meeting next Tuesday will not be necessary? Or are you going to a legal war right now with the NBA?
MAXWELL BLECHER, DONALD STERLING'S ATTORNEY: Wolf, it's my pleasure to join you, and we thank you for the opportunity to express our point of view.
The answer is, the league on Tuesday has a guillotine under the illegally. And if they don't want a lawsuit challenging that conduct, they need to let us know before Tuesday.
BLITZER: But what if this team is sold -- what if the team is sold before Tuesday? Because it looks like they're getting closer. At least Shelly Sterling is moving very expeditiously to avert any kind of legal battle, to sell the team, and then everyone can simply move on.
BLECHER: We don't think the team can be sold without Mr. Sterling's consent. Mr. Sterling is not going to consent unless the NBA does something about the squealers (ph) and the legal charges they filed against him and so far we've heard nothing to indicate that will occur.
BLITZER: What do you want the NBA to do? What do you -- what do you want the NBA to do to avert that kind of legal challenge?
BLECHER: We have a laundry list. I don't want to publish it on TV without giving the league an opportunity to review it first, if they are interested. But among other things, they have seriously invaded his right of privacy for which he's entitled to damages. They have caused him to spend lots of money for lawyers and lawyers' fees and they damaged his reputation.
All falsely because they know that this man is not a racist regardless of what he said to his girlfriend in the privacy of a living room and which is a privileged conversation, a confidential conversation that he did not consent to be recorded, and which under the law of the state of California, she didn't say she consent -- he ever consented to this recording, which he has said is that in the past they have made recordings.
But she's not said that she disclosed or that he consented to the recording of this particular conversation in which she goaded and taunted him saying she's going to bring four gorgeous black people to the games to sit in his box with her.
BLITZER: But listen to -- but listen to what your client -- listen to what your client told Anderson Cooper himself in taking responsibility for his racist comments that were recorded and played, as all of us know. Listen to this.
(BEGIN VIDEO CLIP)
DONALD STERLING, L.A. CLIPPERS OWNER: I'm responsible. I wanted to apologize to my partners. I have 29 partners in the league that is a wonderful league. I respect them and I love every owner. Every owner knows me. I love the commissioner and I think that whatever they decide that has to be done, I think I should work with them and do it.
(END VIDEO CLIP)
BLITZER: All right. That's what he told Anderson Cooper. You heard it yourself. It sounds like whatever they decide to do, next Tuesday, the 29 other owners, he wants to go along with it.
BLECHER: He doesn't want to go along with it. He's been very gracious in reaching out to the league to see if there's some accommodation that is possible. Apparently we're not headed in that direction. What needs to be observed is that this conversation was a private conversation in September of 2013 between Mr. Sterling and his girlfriend. She did not tell him it was being recorded. Under California law, that recording cannot be used for any purpose in any proceeding except for impeachment.
Now the league has said in writing to me that that tape recording is the sole basis of the claims against Mr. Sterling. So the sole basis of their claims is an illegally obtained recording which, under California law, cannot be offered in evidence. So they have no case. They have no case secondarily because Mr. Sterling did not breach any rule. He's entitled to say what he wants in the --
BLITZER: Mr. Blecher, I just want to be precise, you heard him say to Anderson Cooper that he accepts responsibility, he apologizes to his owners, he loves the league. He is accepting responsibility for the blunders that were recorded in that racist rant.
BLECHER: He's accepting responsibility that he made a mistake. He's not consenting to the league confiscating his property which you can now see is worth more than $1 billion. He's not consenting to paying a $2.5 million fine or to be banished from the stadium for the rest of his life. These are draconian remedies that exceed anything anybody has ever done in any professional sport. And what is the basis of it? An illegal recording. An illegal recording that cannot be used.
BLITZER: Let's go through that. Let's go through some of those specific points. When you say an illegal recording, she says, V. Stiviano, that he had authorized her to record all sorts of stuff for archival purposes and we're also now being told that she wasn't alone during that recorded conversation. Her sister was there as well. So it wasn't simply a private conversation between Donald Sterling and V. Stiviano. That's the argument on the other side.
BLECHER: As far as other recordings, yes, they did make recordings for business purposes. This was a truly -- this was a purely personal conversation. I describe it and I think correctly as a lover's quarrel between V. Stiviano --
BLITZER: Was her sister there -- was her sister there during some of those recordings?
BLECHER: Her sister was on the premises but not in the room when the conversation took place. As far as we know. There is no evidence that the sister overheard or participated in the conversation and Miss Stiviano has not said that, nor has the sister come forward.
BLITZER: Let me play --
BLECHER: So as far as we're concerned, it was a lover's quarrel.
BLITZER: Let me play a clip of what he was recorded saying because it is awful. Everybody who heard it was grimacing when they heard it. I'll play this clip. Listen to this.
(BEGIN VIDEO CLIP)
V. STIVIANO, DONALD STERLING'S ALLEGED GIRLFRIEND: There is no negativity coming from --
STERLING: There's no negativity. I love everybody. I'm just saying, in your lousy (EXPLETIVE DELETED) Instagram you don't have to have yourself walking with black people. You could do anything. But don't put them on Instagram for the world to see so they have to call me. And don't bring them to my games. OK?
(END VIDEO CLIP)
BLITZER: How does he explain that kind of talk? It's so ugly.
BLECHER: Yes, Wolf, the problem with playing clips is they are clips. If you played the entirety of the conversation you would see and anybody listening to it would see that she taunted him. She induced him to get angry. Four times in the conversation he said -- he said basically, V., I've had enough of this. Let's stop this conversation. He didn't want it to continue and she taunted him.
Maybe it was a setup. I don't know if it was a setup or not but it's certainly you pick out the very climax of the time she got him angry and say that represents his views. It doesn't. It doesn't represent his views. He's not a racist. He's had five black head coaches. He had a 22-year association with Elgin Baylor as his director of operations, 22 years with that man. He's given huge sums of money to black charities, including the United Negro Fund. He has given tickets away to the inner city people so that the kids can see his games.
There isn't any record in the entire 30 years he's owned this team of racism entering into the conduct and operation of the team. It's just a phony charge.
BLITZER: All right.
BLECHER: They know it's a phony charge. BLITZER: So, Mr. Bleacher, I hear what you're saying. But then on Anderson Cooper's show, he then goes on to rant and say awful things about someone who is beloved, not only in the NBA but across America. We're talking about Magic Johnson. This is what he said not when he was being taunted, if you will, by Anderson Cooper but simply in a response to a question from Anderson. Listen to this.
(BEGIN VIDEO CLIP)
STERLING: Here is a man who's -- I don't know if I say this. He acts so holy. I mean, he made love to every girl in every city in America and he had AIDS. What kind of a guy goes to every city and has sex with every girl and he catches HIV? Is that someone we want to respect and tell our kids about? I think he should be ashamed of himself. I think he should go into the background. But what does he do for the black people? He doesn't do anything.
(END VIDEO CLIP)
BLITZER: Now should an NBA owner be saying these things on worldwide television, not just domestic television, worldwide television about some like Magic Johnson?
BLECHER: He's entitled -- Mr. Sterling is entitled to his views about Magic Johnson and they don't have to conform with your views or my views. The fact that he doesn't like Magic Johnson or doesn't have respect for him does not entitled the National Basketball Association to confiscate his team, fine him and banish him for life. Those are draconian remedies.
No one has ever -- no sport has ever imposed remedies like that for a man expressing his personal opinion, however reprehensible the rest of us may think those opinions are, this is still the United States of America. And what we should be concerned about is Kareem Abdul Jabbar said. What we should be concerned about is these people sneaking into her living room and using this conversation to try to throw him out of the basketball league. That's more shameful than what he said.
BLITZER: All right. I want you to stand by, Mr. Blecher, because we have more to discuss. I want to take a quick break. I also want to get into whether or not the NBA's constitution and Donald Sterling has abided by the NBA constitution for 33 years, whether the NBA constitution actually allows Donald Sterling to be kicked out of the NBA.
BLITZER: We're back with Donald Sterling's attorney, Maxwell Blecher, is joining us from Los Angeles.
Mr. Blecher, thanks very much for continuing this conversation. Let's talk about something you said. You said that the NBA wants to -- I believe the word you used was confiscate the L.A. Clippers. To take it away from Donald Sterling. But the NBA says if Donald Sterling wants to sell the team, he could walk away right now with a billion or $2 billion. That's not exactly confiscation and they are going to let him walk away with a ton of money. What's wrong with that?
BLECHER: What's wrong with that is it's his decision if and as in when to sell. The only reason he's talking about selling the team, which he had no interest in selling, and subjecting themselves to capital gains tax of $3 to $500 million is because the league is threatening to confiscate the team. In the ordinary course of events, I'm sure Mr. Sterling would let the team pass by the laws of succession and there would be no capital gains tax, too. So the league has got him over a barrel. Sell, pay $500 million to the government, or we'll take the team away from you.
BLITZER: Yes, but he still walks away with $1.5 billion even after paying 20 percent capital gains. What's wrong with that?
BLECHER: Is everything about money? Is there no -- is there no dignity left? Is the man to be subjected to false charges of him being a racist and the basis of evidence which they snuck out of somebody's living room in violation of law? I mean, why are we looking -- why are we examining him and not examining what they did? What they did is reprehensible.
In my language, it stinks. It stinks for them to go into someone's living room and steal a private conversation between two levels? What is right about that?
BLITZER: But the NBA --
BLECHER: What's moral about that?
BLITZER: The NBA didn't do that, Mr. Blecher. That came out on a different Web site. They published that. They released that. The NBA didn't make those -- that audiotape public.
BLECHER: The NBA -- the NBA is using it, as their lawyer said to me, the sole basis of the prosecution against him. They could have said, because they are lawyers, and they know this, they could have said this evidence is illegal, we're not going to touch it and we don't approve or condone and we condemn what Mr. Sterling said but there is no legal basis for us to use this illegal evidence against him.
BLITZER: All right. Speaking of the law, Jeffrey Toobin, our senior legal analyst has told me --
BLITZER: Mr. Blecher, hold on a second. He's got a legal question, lawyer to lawyer, you're a good lawyer, he's a good lawyer. Listen to this question and then you can respond.
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Mr. Blecher, in the days after this tape became public, advertisers, sponsors fled from the Clippers. The NBA Players Association said the players will not play for Donald Sterling. Isn't that precisely the kind of economic loss that Article 13 of the Constitution of the NBA says is the basis for taking away a team?
BLECHER: It probably is. But let me tell you, Mr. Sterling has been thrown out of his office. He has had no contact with the sponsors. He doesn't know the accuracy of those allegations. He doesn't know what sponsors. We read in the paper that most of the sponsors have returned. And if you think most of the players are going to give up $2, $5, $10 million because of Mr. Sterling's remarks made in 2013 and stop playing, I think you've got another guess coming. I don't -- I think it's some idle threat.
TOOBIN: So what you're saying is --
BLECHER: So we'll see.
TOOBIN: Those sponsors only came back when the NBA said they were going to take away the franchise. If Donald Sterling is there, the NBA loses money. And isn't that a good basis to take away a team?
BLECHER: But they only left because the NBA made these scurrilous and untrue charges based on illegal evidence. If the NBA would have done what I think they should have done and to say we're rejecting the use of this illegally obtained evidence and not filed any charges, no response would have left in the first place. So why are we patting on the back because they created this crisis. And they created it for a reason and some day, when we get into discovery, maybe we'll know what that reason is.
TOOBIN: But you think --
BLECHER: But this is not -- this is not a normal thing for the NBA to do to somebody who's been a loyal member for 33 years and who has been an exemplary member in terms of relationship with the African-American community.
TOOBIN: So you're seriously saying that this is all the NBA's fault, not Donald Sterling's fault?
BLECHER: No. I didn't say that. I said Donald Sterling should not have said these things and they should have never been disclosed and once disclosed the NBA should have said this is an illegally obtained evidence and we're not going to rely on them. Instead, the NBA said we're relying solely on that recording. Solely. That's their word. Not mine. Solely on that recording.
BLITZER: All right. Mr. Blecher, I want you to --
BLECHER: That's wrong. That's wrong.
BLITZER: Bear with us, Mr. Blecher, because we have a few more questions we want to ask you. I want to take a quick break, continue our conversation right after this.
BLITZER: We're back with Donald Sterling's attorney in Los Angeles, Maxwell Blecher.
Mr. Blecher, I just want to clarify one thing. What would it take, assuming Shelly Sterling, Donald Sterling's wife, reaches a deal to sell the team? There's a purchase agreement. Specifically as far as you can tell us, what would it take the NBA to do to resolve this with Donald Sterling and let the sale go through?
BLECHER: I'm not going to give you a laundry list, but I told you some of the things that are troubling him. Very troubled by the invasion of privacy. He's very troubled by the racist charges that have been made against him after 33 years of history, evidencing very close relationship and close support of the black African-American community.
And he wants to be -- he wants to be vindicated. He doesn't want his tombstone to say here lies Donald Sterling racist. And the NBA has the power to make that right. And that's what he wants to do. Wants to sit down in a room with their representatives and try to negotiate some resolution that will make it right. Selling the team and the money is not the answer for him. He doesn't need the money.
BLITZER: When we come back, Mr. Blecher, I'm going to ask you if Donald Sterling will go to the meeting in New York with the Board of Governors meeting next Tuesday. He's been going to those Board of Governors meetings for 33 years. Will he show up in New York next week?
We'll take a quick break? We'll continue the conversation with Maxwell Blecher right after this.