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LEGAL VIEW WITH ASHLEIGH BANFIELD

Shinseki Resigns; Ballmer Offer $2 Billion for Clippers; Interview with Jackie Walorski

Aired May 30, 2014 - 12:00   ET

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


ANNOUNCER: This is CNN breaking news.

ASHLIEGH BANFIELD, CNN HOST, Hello everyone, I'm Ashleigh Banfield with our continuing breaking news. It was just apparently a little too much, too much to handle, even for a five-star general to survive. Eric Shinseki has resigned. He has resigned as head of the veterans administration. All of this, amidst a growing scandal first revealed right here on CNN. We got the news straight from the president himself, as he announced it to the country just a short time ago. Have a look.

(BEGIN VIDEO TAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: This morning, I think some of you also heard Rick take a truly remarkable action. In public remarks, he took responsibility for the conduct of those facilities and apologized to his fellow veterans and to the American people. A few minutes ago, secretary Shinseki offered me his own resignation. With considerable regret, I accept it.

Ric Shinseki has served his country with honor for nearly 50 years. He did two tours of combat in Vietnam. He's a veteran who left a part of himself on the battlefield. He rose to command the first cavalry division, served as army chief of staff, and has never been afraid to speak truth to power. As secretary of the V.A., he presided over record investments in our veterans, enrolling 2 million new veterans in health care and delivering disability pay to more Vietnam veterans exposed to agent orange, making it easier for veterans with post traumatic stress, mental health issues and traumatic brain injury to get treatment, improving care for our women veterans.

At the same time, he helped reduced homelessness and helped more than 1 million veterans, service members and their families pursue their education under the post-9/11 GI bill. So Ric's commitment to our veterans is unquestioned. His service to our country is exemplary. I am grateful for his service, as are many veterans across the country.

BANFIELD: The president named deputy veterans affairs secretary Sloan Gibson as acting director. He's going to run the VA on an interim basis. All of this, as the president begins the search for another VA secretary. A huge move for sure. Joining me now to digest all of what this means is the man in the middle of this. He broke the VA scandal. CNN's senior investigative correspondent Drew Griffin, he's also joined by senior White House correspondent Jim Acosta, Pentagon correspondent Barbara Starr, and Jake Tapper also joining us. And first to you Drew Griffin, it's why I come to work every day, because I work with people like you, this started with your work. This is a huge move today. The end of a secretary's rein. Is it enough, is it going to fix the problem, and is there a future, according to all of those people you worked with who wanted to see a solution here?

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: Well, I don't think this solves the problem in any way. It solves the political crisis for the president, and perhaps can remove some of the distraction. But I hope it doesn't remove the spotlight on the VA. Quite frankly, probably should have been 300 people whose heads rolled over at the VA. These people, any of them who have been identified as cooking the books in any of the many hospitals, now, across the country, those are the people that really did in general Eric Shinseki and today they are still at the VA administration, albeit some of them out in Phoenix, are apparently on their way to being fired.

BANFIELD: I want to bring in Barbara Starr, as well, at the Pentagon. Barbara, I am just vexed by the notion that senior leadership has admitted this is not a money problem, this is not a broke area, this is an administration, this is a department that had a surplus of $500 million rolling over to next year. So when it comes to veterans, when it comes to those who need the care the most, who are still flooding off the battlefield, if money wasn't an issue, is it just this complete debacle that should rest only at Shinseki's resignation?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, I think many people will tell you, the disasters in management at the department of veterans affairs has been known for years. Certainly known to Congress. Known to the department itself. Known to veterans. Known to active duty members. This has been no secret. Many of these reports, public. Drew, of course, bringing additional matters to light in his reporting.

Perhaps the issue that has really occurred, as my colleague Jake Tapper said a little while ago, is the national media spotlight turned on this, it became, very quickly, one of those political firestorms in Washington that catches hold that can't be contained. The actual facts are the VA has been a management disaster for years.

Was Eric Shinseki decent, fine human being that he is, very honored veteran, wounded Vietnam veteran, was he ever actually the right person to run the department? I have to tell you, a lot of four stars I have spoken to have raised that question very quietly. He's a hugely decent human being. But he is not someone who has a management style, and he never did, of being terribly outgoing, outreaching. He truly believes that the way to success in that job, we know this, was to sort of keep his head down, deal with the facts, lay out his plans, and be very task oriented.

What's happened in the last couple of weeks is events somewhat overtook him. Congress wanted to see some passion about all of this. They didn't get that. They wanted to see a much quicker response. That didn't really happen. And you begin to see things build. And last night, we had the extraordinary event of the defense secretary, Chuck Hagel, openly softening his support for Shinseki to stay in office, being very noncommittal about whether Shinseki should stay. Once you have one cabinet officer not really supporting another cabinet officer, seems like things are only headed in one direction.

BANFIELD: It's interesting you say that. Even Robert Gates, you know, formerly in the sec def role, has said that bureaucracy, as Gloria Borger very clearly laid out in a piece today, may have just been the foil of this administration.

So, Jake Tapper, when I heard the president and his words, and I'm going to try my best with my quick handwriting to quote him, he called secretary Shinseki a very good man, accomplished outstanding soldier. Under his leadership, more progress was made than just about every other VA secretary in homelessness, in agent orange issues, in victims issues with PTSD and brain injury. First thing that came to mind to me is, Jack Tapper, is this too big a job for one person, or was this just too big a job for Shinseki?

JACK TAPPER, CNN CHIEF WASHINGTON CORRESPONDENT: Well, he did, you know, indubitably accomplish quite a bit. There's no question when it comes to homelessness, when it comes to opening up benefits to those who suffer from the side effects of agent orange, opening up benefits to those who suffer from post traumatic stress, as former secretary Shinseki did do a lot.

But the problem in the veterans affairs system, and I know this on a personal level as well, because my mom used to work for the Philadelphia VA. The problems in the VA system are very deep and very systemic. It is difficult to fire somebody. There is -- it is a system like any other bloated bureaucracy that depends upon performance reviews and the reviews are not necessarily encouraged to represent the actual truth of the delivery of health care to veterans.

But, rather, they are a goal unto themselves, to have perfect performance reviews. Ashleigh, as you know, the Pittsburgh VA, a few years ago had an outbreak of legionnaires disease. Anywhere from 5 to 6 veterans died. Still the director of that hospital got a perfect performance review that did not even mention the outbreak of legionnaires disease, and then her manager got something like a $65,000 bonus that year.

This is a system that needs serious reform. And it needs somebody who's willing to come in, make enemies, fire people, change the way the system is run. And it's outstanding that Drew Griffin's reporting brought attention to this problem, because of his exemplary reporting about the problems at the Phoenix VA. How that systemic failure resulted in 1, 400 individuals, as we now know from the audit, on wait lists, and then 1, 700 not put on wait lists. Perhaps others died while waiting for care.

BANFIELD: Drew you got the ball rolling, and now it's all the way to the White House. In that announcement where Jim Acosta was standing by. So Jim I'd like you to just comment on one of the questions the president had to face that felt very, very pointed.

I wasn't sure I was reading the president's face properly, but he was asked, when you had a crisis with the health care website and the secretary, Sebelius, there was a lot of pressure on her to step down, your comments were, we need experience, we need the leadership, we need people in the know to continue. And the question to the president, well, what changed, because that's exactly what you said about Shinseki just days ago. Maybe you could elucidate about that. A little bit

JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: I can tell you, from talking to White House officials here in the run-up to this, it almost felt like this was going to happen. And even though they weren't announcing it, even though they weren't telling us, yes, Shinseki will not survive this week, you really felt this, you know, day after day after day.

Especially yesterday, when the White House press secretary would not say, even after being pressed repeatedly by reporters in the briefing room, whether or not the president had confidence in Shinseki. I don't think the president could have come out after that and said, well, now I have confidence in Shinseki. You can't put the toothpaste back in the tube.

With respect to Kathleen Sebelius, I've talked to White House officials who said, yes, during that time, you know, remember the president almost pulled the plug on healthcare.gov, that's how outraged he was about the failure of that website.

But he felt, and White House officials felt, that that website could be fixed, that Kathleen Sebelius could credibly stay at the top of HHS during that process. And I think what Drew has uncovered in his reporting what CNN has uncovered in its reporting on this crisis, is that the problems are so deep and so embedded in the VA system, as Jake laid out from his own personal tale about his mother, that really there is a change needed at the top.

Not only a change needed at the top, but as the president said, during his comments in the briefing room, that there needs to be a change in culture at the VA. When you heard the VA secretary earlier this morning saying that he's had officials not being honest with him for many years, I mean, that just goes to show you this culture in the VA has been, for years, covering up and concealing these long wait times to these veterans.

Unfortunately, veterans have died as a result. That is the sad tragedy of all this. The president has a very difficult task on his hands. He now has somebody in charge of the VA, Sloan Gibson, a deputy secretary, with only a few months of experience. When, really, the president probably needs somebody like a Colin Powell, somebody who is widely respected, who comes from a military background who can go in there and clean house. It seems you have top officials throughout the VA who have been covering this up for years.

BANFIELD: Excellent reporting on all fronts. Jim and Barbara, Jake, thank you. To you, Drew, once again, I'll say it early and often, you're the reason we all come to work every day, the kind of work you've been doing for over a year now to uncover this and to start this ball rolling makes us very proud. Thank you to you, all of you, but Drew Griffin in particular. I want to bring in the Jackie Walorski Republican representative from Indiana. She was the first member of Congress to call for the resignation of secretary Shinseki. Congresswoman, is this enough, are you satisfied, or is this the tip of the iceberg?

REP. JACKIE WALORSKI (R ), INDIANA: This is the tip of the iceberg. I am grateful. I've said it before, general Shinseki is an honorable man. But it's time. One of the reasons I was one of the first people to call for his resignation, it's time to get to the bottom of what's happening with the VA. So this is step one of a long process. I think it's a great stuff forward.

I agree with the president. This is systemic. I think when the nation, and I think the American people and the rest of Congress and the Senate found out this was systemic, you know, there's a lot of things that need to happen now, but this is a great opportunity. And I'm grateful that the secretary has stepped aside. I'm grateful that the president said today that this needs to be an urgent action type of thing. It does need to have urgent action. I think that's one of the things that's been missing. Is the slow response, just the beleaguered continued refusal from the VA to have any cooperation with Congress at all in the oversight area.

BANFIELD: Let me ask you something.

WALORSKI: Yes.

BANFIELD: Congressmen, I'm watching my computer and I am getting a flood of e-mails one after the other from your colleagues all sending out their blasts with lovely graphics. You know, celebrating what's happened today. This is exactly what they called for.

WALORSKI: This isn't celebration. No.

BANFIELD: Well it looks like it, by the way that it was only minutes until the e-mails went out. I want to know, how much of this is going to be politicized, how much is going to be hard work going forward, bi-partisan work, to fix the mess where people are dying who serve this country?

WALORSKI: That is my commitment. I can tell you this, I'm glad you brought it up. The message that needs to be sent from this capital is that this has never been political, this has never been partisan. It will not be in my oversight. And the research and activity I have in this issue, I have made a commitment to make sure we don't stop the oversight, we don't stop the working together, we don't take this as a day of victory. This is a day of tragedy for America. This has impacted the lives of so many families.

And our best and our finest men and women who serve and their families. Nobody should have to go through what these people went through. Our commitment in this capital, in Washington, D.C., needs to be stayed and focused on cleaning this up, rooting out the corruption, having investigations where people probably go to jail. There were deliberative actions taken inside the VA that literally have caused this problem. Today is just the acknowledgment that this is a step forward, there's a lot of work to do. I'm going to remain committed to see this through to the end. We have to stay together as Democrats and Republicans on this issue.

BANFIELD: You will have an open invitation to reappear on this program often as we watch for progress. When I say we, we are going to be that estate that continues to hold you and your colleagues -- your feet to the fire on this one, because it takes a village. Sorry to say that Democratic comment from Hillary Clinton, it takes a village to fix a problem like this, it doesn't take a lot of e-mail blasts again, with the beautiful graphics, from each of the Congressmen's offices. So thank you for your time today.

WALORSKI: Absolutely, thank you very much.

BANFIELD: And thank you for the service of your father, very well, Congressman Jackie Walorski joining us live from Capitol Hill.

We're following this breaking news, moment by moment, on what's happened with the resigning of the secretary of the Veterans Affairs administration.

There was an audit, of V.A. hospitals, that was released today. If you think you've heard everything that's made your blood boil about what's going on with those who are injured serving our country only to come back to find they didn't even exist on waiting lists.

They thought they did, but years have gone by, and they're still not on them.

We're going to tell you exactly what the audit found, next.

(COMMERCIAL BREAK)

BANFIELD: We are continuing to follow this breaking news out of Washington, D.C. Many predicted it. It's happened.

Heads are rolling today at the Veterans Administration, and perhaps the biggest of them all, the boss, Eric Shinseki, the retired four- star general, a vet himself, is out, President Obama making that announcement in the Press Briefing Room just a short time ago, that the general offered his resignation and that the president accented it.

Chris Frates is in Washington, D.C., right now. Now, Chris, you're going to have to bear with me, because as Drew Griffin has continued this reporting, the floodgates of information about disastrous happenings throughout the V.A. -- and it has been called systemic. I think we're in agreement about that.

It started with 40 people dying while waiting on lists at the Phoenix V.A. Then I think it went to 1,700 who were stuck on waiting lists across the country. Then again today, I think I saw the headline, 700 more found on waiting lists in Pittsburgh. And now I'm hearing a new audit, something called Phase One, one of 216, different site audits, is revealing even more, as if there could be more.

How much more?

CHRIS FRATES, CNN CORRESPONDENT: Well, that's the big million-dollar question here, Ashleigh.

The audit says that there were many of those, 260 sites that, quote, "had questionable scheduling practices" that really had a lack of integrity inside the system. So the V.A. is looking at that things that CNN has reported and basically saying that they are true.

For instance, this 14-day waiting period that we've heard so much about, that when a veteran asked for an appointment that they need to see a doctor within 14 days, this audit says that that was simply not attainable and goes on to say that it represents an organizational failure of leadership, so pretty tough words there in this audit.

Another finding of this audit was that there was pressure for people to use inappropriate practices to make sure that the wait times looked like they were being met. That's some of our reporting around these secret waiting lists.

So this idea that when you came in as a veteran, you asked for an appointment, they took down your information, they put it on a secret waiting list, and then when you were close within your 14-day window of actually getting it, even though you may have waited months, they put you back in the official list, which is completely inappropriate.

So what we're finding today, Ashleigh, is some of the practices CNN's been reporting on for weeks and months are, in fact, happening. They're happening all over the country, and it's not just the Phoenix facility where we first found those problems.

BANFIELD: I'll take your euphemism of "completely inappropriate," and I'll up it to b.s. That is absolute b.s. that that kind of thing is happening with people who are injured, having served our country.

One quick question to you, Chris, and I don't know how much you and Drew have been able to confer as these new developments have just been literally within the last hour.

Drew said this morning -- Drew Griffin, who broke this whole story -- he has been asking and asking and asking for months upon months for an interview with the secretary about this problem.

And yet the president says today, and the secretary has repeated often enough, they just didn't know it was happening, unless they were watching CNN.

I'm getting this feeling that that is an easy out. It's been reported. It's been begged upon by CNN to please answer our questions, and yet they've gone unanswered. Are you buying this business that they just didn't know enough about it? FRATES: Remember, Ashleigh, and it's not just we've been reporting it for weeks, there have been inspector general reports about problems with wait times going back decades.

And this morning I watched Secretary Shinseki give his last speech as V.A. secretary, and he says that he was lied to by people working for him.

And you have to wonder if he was being lied to, if the I.G., the independent inspector, had been telling everyone at V.A. that there were these problems for years, what was the lie? And that's been a big question I think going forward and part of the reason why the president probably felt like he had to get rid of the secretary today.

BANFIELD: Yeah. Chris Frates, thank you for your reporting, and we'll continue to follow this breaking story, Chris Frates, live for us from Washington, D.C. And if you live in New York City, you could not miss walking by this newspaper today with this big line, "The $2 Billion Bigot."

The reason is because the rumor seems to be true. The Los Angeles Clippers may now soon have a new owner to the tune of $2 billion. He's not only a baller, he's a Ballmer, Steve Ballmer, former head of Microsoft agreeing to pay that huge sum for the team.

But, wait, as always, there's a wrinkle and a wrench, and the wrench comes in the way of one Donald Sterling. We'll tell you how he plans, possibly, to stop this, next.

(COMMERCIAL BREAK)

BANFIELD: Welcome back. Talk about a win-win. The NBA sees a festering scandal magically disappear, and the rich old man would admits he, quote, "created all these problems" gets a whole lot richer.

The $2 billion question that's hanging today about the contracted sales of the L.A. Clippers is this, will that man, Donald Sterling, play ball? Sorry for that, but, really, that's what it's all about, because this man hopes he will.

This is Microsoft mogul Steve Ballmer, if you didn't already know, and he's the guy picked by Sterling's wife, who also happens to be that Clippers co-owner, Shelly Sterling. She was picked -- she picked him to buy the team for a price that never before was ever dreamed of in professional basketball.

And we get much, much more on the deal, as well as all the drama, from CNN's Rosa Flores.

(BEGIN VIDEOTAPE)

ROSA FLORES, CNN CORRESPONDENT: It is one of the biggest deals in sports history, and the winning bidder, this man, Steve Ballmer, former CEO of Microsoft.

The price tag, $2 billion, handedly beating out competing bidders like Oprah Winfrey and David Geffen by at least $400 million.

But the deal is no slam dunk. Ballmer has signed an agreement with Shelly Sterling. but the next play belongs to Donald Sterling.

MAX BLECHER, DONALD STERLING'S LAWYER: There is no sale, and he is not yet agree to sign off, period.

FLORES: His lawyer, telling Wolf Blitzer before news of the agreement that while Donald gave her permission to negotiate selling the team, he did not give her permission to actually sell the team.

BLECHER: Not without reaching an accommodation with the NBA, which gives him some form of vindication. The money is not critical to him.

FLORES: The NBA is pushing for a quick sale, trying to ward off a contentious meeting scheduled for this Tuesday, where owners will officially vote to force Sterling out.

The reaction overnight was quick, with Magic Johnson tweeting, quote, "Clipper fans, you'll love Steve Ballmer as your owner."

But either way, Donald Sterling will not leave empty handed. He originally bought the team for $12 million. If the sale goes through, he stands to make over $1.9 billion in profit.

(END VIDEOTAPE)

BANFIELD: And look who's here. It's the Rosa Flores of that report.