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Phoenix VA Accused Of Changing Death Records; White House Lawyer To Testify On IRS E-mails; ISIS Militants Go After Key Oil Refinery; Hearing Over Lost IRS Emails Gets Heated

Aired June 24, 2014 - 06:00   ET

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


MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: So the system is going to take a long time to heal, but for many it remains infuriating.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I'm skeptical of the --

KOSINSKI (voice-over): The VA bureaucrats returned for this hearing with a far less defensive tone, an opening mea culpa.

DR. THOMAS LYNCH, ASSISTANT DEPUTY UNDERSECRETARY FOR VA HEALTH FOR CLINICAL OPERATIONS: This is a breach of trust. It's irresponsible, indefensible and unacceptable.

KOSINSKI: But then this was the answer to the very first question.

UNIDENTIFIED MALE: Mr. Chairman, I don't have the answer to that question.

KOSINSKI: And here we go again.

UNIDENTIFIED MALE: It pains me that we're at this point. How did we get here?

KOSINSKI: Members of Congress getting angrier.

UNIDENTIFIED MALE: The reality is you're not outraged.

LYNCH: I think it's a good system.

UNIDENTIFIED MALE: It's not a good system. Tell me how you can say it's a good system.

LYNCH: I think it's a good system, Congressman.

UNIDENTIFIED MALE: Not if you're a veteran, it's not.

KOSINSKI: And they are hearing from their constituents.

REPRESENTATIVE DAVID JOLLY (R), FLORIDA: I was approached by a mom whose son committed suicide while he was waiting for mental health services.

REPRESENTATIVIE PHIL ROE (R), TENNESSEE: A guy with a detached retina for five months he didn't get treated.

UNIDENTIFIED MALE: He was referred to get a biopsy done to determine whether or not he had cancer. He couldn't be seen for two months.

KOSINSKI: The Office of Special Counsel sent a letter to President Obama detailing a culture of non-responsiveness at the VA, all kinds of problems. Maybe the most stunning was in a long-term mental health facility in Brockton, Massachusetts. One veteran had his first mental health evaluation eight years after he moved in. Another veteran, seven years.

UNIDENTIFIED FEMALE: I have evidence.

KOSINSKI: Now a whistleblower in Phoenix where the scandal broke and where 35 veterans died awaiting care tells CNN's Drew Griffin, she was instructed to keep a secret waiting list while she made life or death decisions about whom to schedule and someone has now gone into the system and changed the status of several deceased veterans to still alive.

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: To hide the fact that people died on that list?

UNIDENTIFIED FEMALE: That's my belief.

GRIFFIN: What would be the -- any other purpose?

UNIDENTIFIED FEMALE: There wouldn't be any other purpose.

KOSINSKI: As this story broke while the hearing was going on, more disbelief.

REPRESENTATIVE JACKIE WALORSKI: Still, while we've been doing this, these hearings for a couple of months, Americans are literally wondering when is this going to stop.

(END VIDEOTAPE)

KOSINSKI: So the VA last night said it felt confident it has the tools and data necessary to move forward. It just becomes clear that they are still in the triage stage dealing with the emergency at hand, and Congress wants to know why it took this long for the problems to even become known. Just think that this all came to light because of those whistleblowers, many of whom faced retaliation -- John.

JOHN BERMAN, CNN ANCHOR: All right, thanks, Michelle. Wait, there's more. A top White House lawyer will take the stand in day two of a House Oversight hearing on lost e-mails at the IRS. Today's testimony follows a game of political cat and mouse surrounding claims that the IRS targeted conservative groups. CNN's Athena Jones is in Washington with this one. Good morning, Athena.

ATHENA JONES, CNN CORRESPONDENT: Good morning, John. We're talking about high drama on Capitol Hill last night. This hearing lasted more than three and a half hours, and for much of that time it was Republicans grilling the IRS commissioner, accusing him of working to cover up the fact that all these e-mails had gone missing.

They said the IRS commissioner testified back in March that the IRS would provide all of Lois Lerner's e-mails and come to find out just earlier this month that owe mails over a two-year period are missing because of this hard drive crash.

I want to play for you a heated exchange, one of several, between the committee Chairman Darrell Issa and the IRS commissioner. Let's play that.

(BEGIN VIDEO CLIP)

JOHN KOSKINEN, IRS COMMISSIONER: All the e-mails we have will be provided. I did not say I would provide you e-mails that would be disappeared. If have you a magical way for me to do that, I would be happy to know about that. We're providing all the e-mails. The fact that three years ago, some of them, not all of them, were not available. I never said I would provide you e-mails we didn't, have and, in fact, we are going to provide you 24,000 e-mails from the time period.

UNIDENTIFIED MALE: My time section period and I've lost my patience with you.

(END VIDEO CLIP)

JONES: So there you heard some strong words there, heated words, and we expect to see more of that today -- John.

BERMAN: Athena, I understand there is another investigation into this at this point.

JONES: That's right, yet another one. We heard from the IRS commissioner last night that the treasury inspector general for tax administration has already opened an independent review, an investigation into these missing Lerner e-mails, and so we expect to see that report at some point, but, of course, this hard drive crash happened three years ago, so unclear at this point how long it will take for that independent review to be completed --John.

BERMAN: Athena Jones in Washington, thanks so much.

KATE BOLDUAN, CNN ANCHOR: Let's turn now to the crisis in Iraq where the country over the country's main oil refinery is intensifying. There's conflicting reports over whether the military or ISIS militants have taken control of it this morning, and we've just learned that Iraqi air strikes have killed 19 militants near that oil complex. This comes after Secretary of State John Kerry. He met with Iraqi Prime Minister Nouri Al Maliki, who has agreed to begin the process to form a new government.

Let's get to Nima Elgabir who live in Baghdad with the very latest. Nima, what is the latest? NIMA ELBAGIR, CNN CORRESPONDENT: Well, Kate, as you've said we've spent the week see-sawing between these conflicting ownership of the Baiji refinery. We're hearing that the Iraqi Air Force has called in strikes, which just gives you a sense of how much that battle has intensified. We're already seeing the impact of that here on the ground.

Up in the north of Iraq, eyewitnesses are reporting queues stretching for hours at gas stations. Interestingly, even the Iraqi army admits that the militants are going very carefully in their attempt to take over the refinery, hoping that they will be able to use it for their own needs, fuel needs in the coming days and weeks, but it's not just about controlling the oil supply to Iraq's north.

It's also about getting that crucial step closer to Baghdad. Baiji is on the highway to the Iraqi capital. Secretary of State Kerry is up in the Kurdish region. He's just met with the president, and he's bringing the same message he brought down here to Baghdad, you to unite. Any military help that the U.S. brings must go hand in hand with a political resolution here on the ground in Iraq.

But these gains that we're seeing the militants taking in day after day, that really gives you a sense of how quickly both these processes need to move and they need to move in tandem. All of those we're speaking to here on the ground are telling us, Kate, that U.S. military help cannot come soon enough -- Kate.

BOLDUAN: How they unite and how quickly they can pull it off. That's where all the skepticism remains on the ground in Baghdad and, of course, here still in the U.S. Nima, thank you so much.

Important to note, next hour, chief national security correspondent, Jim Sciutto will be sitting down with Secretary of State John Kerry for an exclusive interview. We are going to bring you that in the 7 a.m. Eastern hour.

MICHAELA PEREIRA, CNN ANCHRO: All right, let's take a look at your headlines parachute accident in Southern California last night resulting in the sailor's death. We do know they were doing routine parachute training and the Navy says an investigating what exactly went wrong.

A federal appeals report has released a secret Justice Department memo on a drone strike that killed a U.S. citizen. In this memo, it maps out the legal argument for targeting Anwar Al-Awlaki authorized the use of military form against him as the leader of an enemy force. Al- Awlaki was killed by a CIA drone in Yemen in 2011.

International weapons inspectors say, the last of Syria's chemical weapons have now been handed over. They will transferred to American ship and destroyed over the next couple of months while the remaining material will be disposed at a toxic waste side. The handover is part of a deal reached last fall under threat of U.S. air strikes, but there's still questions about whether or not Syria is hiding undeclared poison gases that are not classified as chemical weapons. First lady Michelle Obama says she will not run for office after she leaves the White House. During a summit focused on family friendly work policy she made it clear that her future work will not involve politics.

(BEGIN VIDEO CLIP)

MICHELLE OBAMA, FIRST LADY: No, I will not be political. Yes, no. It definitely will not be. It will be mission-based. It will be service-focused. It will, you know --

(END VIDEO CLIP)

PEREIRA: She made it pretty clear. Mrs. Obama believes the United States is ready for a female president.

And the ratings are in, at least 25 million people watched Sunday's U.S.-Portugal World Cup match. More than 18 million of you saw it on ESPN and another 6.5 million caught the Spanish Language Broadcast on Univision. The ratings were the highest ever for any soccer match televised in the United States.

This could also mean another ratings bonanza when the team takes on Germany this Thursday, but today you have Costa Rica-England and Italy versus Uruguay, Greece and Ivory Coast versus Japan.

BERMAN: The U.S.-Germany game is at 12:00 so you may have to skip work.

PEREIRA: We don't condone that.

BOLDUAN: Who cares?

BERMAN: It comes right here on CNN. We'll extensive pre-game coverage of the U.S. game and I know you'll be watching. You can come on the pre-game show.

PEREIRA: Pass it down.

Let's move to weather right now. I know Indra is keeping her eye on flooding going on in the Midwest. What can you tell us about the situation there?

INDRA PETERSONS, AMS METEOROLOGIST: Definitely not what you want to be seeing, Michaela. All the rain that hit over the weekend in the upper Midwest. This is Cedar Rapids in towards Iowa. Several days later we're talking about that water trickling down. So much rain there. Highways covered, and here's the concern.

Let's talk about where we should be seeing those rivers and what those river gauges are showing. We should be seeing below 14 feet. Already we're talking about 19 feet out there and even if it doesn't rain anymore, it's still expected to trickle down continuing to heighten to about 20 feet by Thursday. Now, keep in mind, this is the forecast without any rain, but unfortunately, more rain is in still in the forecast, and that's the concern as those rivers keep rising up, up and up.

A lot of showers. They're still gonna be out there today. As far as the severe weather threat, yes, it is out there, but very concentrated, again, from Denver kind of down back through Texas. So about 3 million of you again today do have that threat, even for tornadoes out there.

But the bulk of you are really just talking about those scattered showers, that hot, humid summer factor that everyone is complaining about. But keep in mind, there are a couple of cold fronts out there. What does that mean? Just a couple of chances for more showers into the northeast. You kinda want to see it day by day.

As far as some of the bigger cities, Pittsburgh, Cleveland, back in through Cincinnati, you'll get those heavier rain showers and still dry notice right along the actual East coast. But keep in mind, once we go in through tomorrow, we're gonna see that rain shift farther to the east. So New York City, Philly, D.C., and up towards Boston, you will start to be talking about some of that rain as well.

Now temperature wise, kind of a mixed bag. 88 degrees humid showers out there, that's what we're looking at towards D.C., just like New York City, about 81; 90s down to the South. But tomorrow at least behind the cold front it will be a little bit milder.

It's still scary though, when you talk about all that rain, though, right? And the rivers are still crusting.

PEREIRA: Did you actually hear that? That's something to note, a meteorologist used the term mixed bag.

(CROSSTALK)

BOLDUAN: Reaching 90 in Washington. And that can feel a whole lot worse in Washington with the humidity.

PETERSONS: It's not a dry heat.

(CROSSTALK)

(LAUGHTER)

BOLDUAN: Thanks, Indra.

Coming up next on NEW DAY, primary day in seven states. Could this be the end of the line for two long-time members of Congress? We'll talk about it.

BERMAN: Plus, a kidnapped baby found alone near the side of the road. Look at that picture. We'll have the details of this traumatic image that has gone viral just ahead.

(COMMERCIAL BREAK)

BOLDUAN: Welcome back. Startling new allegations against the Veterans Affairs Department. A

whistleblower tells CNN that veterans' records were changed at the Phoenix V.A. hospital in order to hide how many of them died waiting for care. The allegations were made public just as lawmakers grilled V.A. officials on Capitol Hill about the growing scandal last night.

Let's discuss the political fallout with Paul Begala, CNN political commentator, Democratic strategist and senior adviser to Priorities USA Action. And Kevin Madden, CNN political commentator and Republican strategist.

Good morning to both of you.

I mean, this just keeps getting worse and worse. What is unique about this -- I think you can both agree -- is that it's not partisan. This problem, unfortunately, has spanned administrations.

But, Paul, it does make me wonder as this gets worse and worse, where does the buck stop? When does it begin hurting the president?

PAUL BEGALA, CNN POLITICAL COMMENTATOR: Well, it may have already. I mean, as you will recall, when he campaigned in 2008, he campaigned in part on trying to fix the V.A. Most people think General Shinseki who just resigned, terrific man, he was Army chief of staff, but clearly the place is a mess.

This -- Republicans so far, you're right, Republicans so far on this one have not seemed to partisan, the way they have been on the IRS and these other things, they have not. If I give them free advice, they need to stay with the facts. The facts are outrageous. They're indefensible.

Everybody wants to get to the bottom of it. There ought to be investigations by the Congress, there ought to be prosecutions, if they're warranted. But so far, the Republicans have played this politically very wisely by not being too partisan on it. But you watch -- their inclination. They're not going to be able to contain themselves. They're going to go too far and politicize this.

BOLDUAN: Real quick on this, Paul, you say it may have hurt the president already. But, we have -- I mean, yes, he's got -- there's a lot on his plate especially on the international front, but what more can the president do? Should the president be doing more?

I know he's put one of his senior guys down there to investigate, Rob Nabors, who a lot of people trust within the administration, but we don't hear kind of lighting his hair on fire about this.

BEGALA: No. But again, he has put a very top person there, removed the secretary to begin with. He sent his deputy chief of staff Nabors down there to the V.A. to try to fix it. That's about all you can do.

But what you have to do is turn up the heat on both the investigators and the people being investigated. People are not cooperating. They need to know that that's unacceptable. But frankly, this is not really the president's investigation to run because it's going to have to be done I hope ultimately by prosecutors, but also the Congress has an oversight responsibility.

I have to say the media here, your network and mine, CNN, has covered this really well and has done a terrific job trying to get to the bottom of it.

JOHN BERMAN, CNN ANCHOR: Kevin Madden, you know, but wait, there's more. There was an IRS hearing on Capitol Hill last night. The second one we've seen over the last week that got very, very contentious. Republicans on the committee really going right after the IRS commissioner, John Koskinen.

Do you think this level of confrontation plays well with the American people because these exchanges are downright hostile?

KEVIN MADDEN, CNN POLITICAL COMMENTATOR: It does because it's -- it's because it's the IRS, and I think right now, people feel like the IRS and the federal government is not giving them very simple answers to very simple questions about concerns that they have, and this is a legitimate area of congressional authority. They have oversight over the IRS.

And in many ways, so many of these lawmakers are giving voice to so many of the frustrations that so many Americans have about the IRS, that it's unresponsive, that it's overbearing. So, I think that this is actually -- this is actually one of those areas where the Congress and so many of these lawmakers are really aligned with voter frustration out there.

BERMAN: And, Kevin, you heard Paul say that the V.A. scandal so far not partisan.

MADDEN: Right.

BERMAN: Do you think Republicans will lay off the V.A. as we head into the midterm elections? It seems to me they will be talking about the V.A. and IRS and say this is another example of how government is broken.

MADDEN: Well, I agree with Paul that this is not something that's partisan, and I think that -- that many Republicans aren't going to lay off in the sense that they're going to not -- they're are not going to stop asking the hard questions. This is their job. They were elected to go and provide oversight to administration agencies like this when they screw up. So, they want answers to basic questions that voters also want answers to.

BOLDUAN: On the V.A., on the V.A. front, to both of you, but for Kevin -- I mean, you say that they were elected for oversight, that's exactly right. But why did it take Drew Griffin of CNN to uncover all of the problems with the V.A. before they all started getting oh, so outraged and holding all these hearings and holding people accountable as they are watching it happen.

This is their job to have oversight over this department. Why hasn't that happened? Should members of Congress also be held accountable? They are elected by these districts. They are responsible to these voters.

MADDEN: You're absolutely right, Kate, and I think many voters haven't looked at this through a partisan lens. Some of polling that we've seen, you might have thought President Obama and the democrats, because they are seen as the party in control would have taken a bigger hit but they didn't. I think, collectively, the institution of Washington has taken a hit as it relates to this V.A. scandal.

So, I think what's most important for a lot of these members up on Capitol Hill that are asking these tough questions is that they fix the problem now. Let's forget about who to blame and let's get the hard questions answered that we need to in order to fix it, and I think that's where a lot of energy is with the public at large as well.

BERMAN: Hey, Paul, I want to ask you quickly about the IRS for a second because John Koskinen has had two chances to testify up on Capitol Hill, and both times he has sent it right back at these members asking him the hard questions.

Do you think that's a good strategy? He seems angry.

BEGALA: Yes, I think it's a great strategy. I think it's also the truth. Koskinen is a professional. He's got the highest integrity.

And I have to say some of these congressmen, the V.A., not being too political on and on the IRS they are being so nakedly political they are disgracing themselves. The IRS -- the thing that came out originally, right, the first story of this was, oh, the IRS is targeting conservative groups, if that's true, that's outrageous. That's completely wrong.

Well, now, that it's been investigated, we've found they were targeting liberal groups as well. There's no scandal here. And for these congressmen to stand there preening like that, I mean, it just -- I think it doesn't help the Republicans, by the way, and I think that Koskinen, his testimony put out 20,000 pages already of documents but some of them have crashed years ago before Koskinen was in charge of the IRS and I thought he was great saying what he did. What, I have a magic wand?

I think that's grandstanding by the congressional elections at its worst.

BOLDUAN: It is primary day, gentlemen. I have to -- again, I got to get your take on this. Kevin, two of the longest serving members of Congress, legends in the halls of Capitol Hill, if you've covered Capitol Hill or even walked through those halls, what is going on with the races that Charlie Rangel and Thad Cochran are facing? What's going to happen here?

MADDEN: Look, right now, with this electorate, it's a bad place to be is a legend.

BOLDUAN: Good point. MADDEN: Yes, taken together both of these -- both of these contests

are about incumbents who many voters feel have fallen out of touch with their district. It used to be the seniority that you could promise and your ability to deliver for your constituents is what helped return you to the hall of Congress every single year. But right now, every -- a lot of voters are feeling there's an anti- incumbency strain going through the electorate. They're feeling that the status quo is not good enough and what we need right now in Congress is new blood.

So, taken together that's I think what's driving a lot of dynamics in both of these contests.

BERMAN: You know, Paul, I know you probably never would vote for Thad Cochran but I've heard you'd be almost wistful about the Mississippi senator in his long career that may soon be coming to an end depending on what happens today.

BEGALA: Yes. You know, I was up on the Hill. Saw a bunch of senators, Democrats, of course, in my party, they were feeling that way. They feel like Cochran is a guy that can actually get things done. They can get things done. They have differences with him, of course, as a Republican, but he can get things done.

And I think these are two very different races. I think Charlie Rangel's case, you have a sense of evolutionary change where the district has become more Latino, Charlie Rangel is African-American, his challenger is Dominican. That's the sort of thing that happens from time to time.

Mississippi is revolutionary, not evolutionary. You're seeing the first Republican-elected statewide in Mississippi since reconstruction. Under fire, probably going to lose, I think, from a Tea Party extremist who is so extreme that he has spoken at neo- Confederate events and said it would be a hard vote for hurricane Katrina relief after Katrina destroyed his own state. I mean, this is a real, really radical Tea Party takeover has continued.

The Republican Party is now the Tea Party. If Chris McDaniel beats Thad Cochran in Mississippi tonight, which I think it will, I think it's gong to be one of the most radical elections we've seen in a long time.

BOLDUAN: Well, to get things done, as you were talking about Thad Cochran, you've got to first win elections. So, let's see what happens today.

Kevin, Paul, thank you very much. Great to see you both.

MADDEN: Good to be with you.

BEGALA: Thanks.

BOLDUAN: Thanks, guys.

BERMAN: Next up for us on NEW DAY. The investigation into missing Flight 370 being spun on its head. Did it not soar and dive? Dramatic elevations as previously thought. The new information and what it means for the investigation.

BOLDUAN: Plus, a baby abandoned by a car-jacker. This photo, it went viral, obviously, and the miraculous way that she was found. We're going to hear from the jogger who was visiting the U.S. and was in perfectly the right place at the right time to help.

(COMMERCIAL BREAK)

MICHAELA PEREIRA, CNN ANCHOR: Welcome back to NEW DAY. Almost bottom of the hour here. Let's take a look at your headlines.

A whistleblower alleges more wrongdoing at the Phoenix V.A. hospital. Pauline Dewenter, a hospital scheduling clerk, tells CNN that records were changed to hide how many veterans actually died while waiting for care. She says they were covered up to improve hospital statistics. She describes the way patients were handled as, quote, "beyond horrible."

The crisis in Iraq intensifying as is militants and Iraqi forces battle over control for the country's main oil refinery. This morning, we have learned that 19 militants have been killed in Iraqi airstrikes near that oil refinery north of Baghdad. Meantime, Secretary of State John Kerry met with Iraq's Prime Minister Nouri al Maliki who has agreed to begin the process to form a new government.

Breaking overnight, two people killed in a deadly shooting in Miami. Several other people were wounded.