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Legal View with Ashleigh Banfield

Tropical Storm Arthur; Boy Found in Basement; Supreme Court Rules Corporations Have Religious Rights; Disabled Vet Charity Receives Historic Fine

Aired July 01, 2014 - 12:00   ET

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

MICHAELA PEREIRA, CNN ANCHOR: Thanks so much for joining us AT THIS HOUR.

Nischelle, thanks for being here.

JOHN BERMAN, CNN ANCHOR: Happy Canada Day to you and all our friends up north and your queen.

PEREIRA: And Ashleigh.

BERMAN: "Legal View" with Ashleigh Banfield starts right now.

PEREIRA: Also Canadian.

BERMAN: Canadian. Happy Canada Day.

ASHLEIGH BANFIELD, CNN ANCHOR: We are tracking the tropics for you right now, watching this nasty looking storm that threatens to smack right into the East Coast, right in time for July 4th.

Plus, brand-new details on the boy who was found barricaded in his family's basement after he was reported missing 11 days earlier. Right now, the authorities are interviewing him again. And now it's the FBI doing the questioning.

And a game changer in the highest court in the land. Does the Hobby Lobby Supreme Court ruling open up a Pandora's box? Could other companies now use that religious freedom argument to justify health care decisions well beyond birth control? We're going to get the legal view this hour on CNN.

Hi, everybody. I'm Ashleigh Banfield. It's Tuesday, July the 1st. Welcome to the program.

The season's first tropical storm, Arthur, has now officially formed off of the East Coast and will probably become a hurricane just in time for all of those July 4th plans. But ahead of that, there is more severe weather in the forecast today. I want to run through all of it for you. Here's a sample from last night. Some just spectacular video. Major lightning strikes hitting the top of the Willis Tower in Chicago not once but several times. It looks like a scene out of "Batman." It's just remarkable.

The storms in the Midwest, in fact, were just wicked, especially in Cedar Rapids, Iowa. Several workers at this baseball game ended up being hurt when a severe thunderstorm that was packing 80 mile an hour winds blew that tarp right over them as they were trying to pull it on to the infield.

In the meantime, rescue crews are looking for a teenager who was swept down a storm drain. A second teenager got sucked through the same drain trying to save his friend and then miraculously traveled for more than a mile before ending up in a lake, and then was able to walk to the hospital to get help. But, of course, everyone is still worried sick about his friend.

(BEGIN VIDEO CLIP)

GREG BUELOW, CEDAR RAPIDS PUBLIC SCHOOLS: At this point, the victim's family has assembled in the area and we have a chaplain here to provide some type of comfort for them, emotional comfort at this point, as this search is going on.

(END VIDEO CLIP)

BANFIELD: Winds blew grocery carts, knocked down trees, and there was even a report of a tornado.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Wind came right out of the south, right up the hill here, and just boom, boom. We thought the house was going to really disintegrate.

UNIDENTIFIED MALE: I've never felt that feeling of standing in the house and all of a sudden it seemed like the roof was going to lift right out of the house. It had that much of an impact. It just really scares you. You know, you realize how helpless you are to that kind of a storm.

(END VIDEO CLIP)

BANFIELD: That kind of a storm. We want to make sure that you're as prepared as possible for what's ahead, depending on (INAUDIBLE) with meteorologist Chad Myers is at the CNN Weather Center in Atlanta.

I know you have a lot to cover, so start with that big red blob and tell me what's going to happen.

CHAD MYERS, AMS METEOROLOGIST: I know, Ashleigh, it's been a long time since we've talked because we haven't had weather like this almost coast to coast in a long time. Tropical Storm Arthur, the first storm of the season. That's why it's an "a" storm, Arthur starts with an "a."

But this is going to be Hurricane Arthur as it makes an approach to North Carolina. I'm not sure whether it's Wilmington or whether it's outer banks or whether it's off shore, and neither is the Hurricane Center. But right now it's a 40 mile per hour storm gaining strength down here in very warm water. The water off the coast of Florida about 83 degrees.

And here's where I'm most concerned as it makes its approach to the outer banks. Nags Head, maybe all the way down toward Myrtle. There's another line right there, you can see. Remember the cone. Haven't talked about the cone in a couple years. Haven't had a land-falling hurricane in a couple of years. This may be the first one, category one likely, 80 miles per hour. And, guess what, that is Friday, July the 4th, morning.

But in the meantime, the storm, as it develops, is going to make huge rip currents all the way up and down the East Coast. Even up here into New York City, the beaches along New Jersey and even up along the shore, this will be Saturday, as it gets that way. So although, yes, there will be rain, yes, there will be a hurricane in the water, there will be rip currents that will put hundreds, if not thousands of people in danger if you try to swim in the ocean this weekend. Those red flags will be up for a reason. They mean stay out of the water. Already seeing red flag warnings here from Daytona all the way down to Ft. Pierce. And we do have the potential for some more severe weather all the way from New York back to Arkansas. The same type of severe weather we saw through Chicago last night.

Ashleigh.

BANFIELD: Chad, one of our producers, Steven Samiago (ph), is a huge surfer. He's been talking about how epic it's going to be this weekend.

MYERS: Yes.

BANFIELD: But with that rip current threat, that is really serious. So, great advice and thank you for that, Chad Myers. Keep your eye on it. Update us throughout the hour, would you?

MYERS: We'll do.

BANFIELD: All right, Chad, thank you.

In other news today, the FBI is planning to question a 12-year-old boy who went missing for 11 days before the police eventually found him in his own basement. A forensic interview, that's what they're calling it, of Charlie Bothuell is scheduled for today. And based on what he tells the police, they may end up submitting a report to the prosecutor's office as early as tomorrow. CNN national correspondent Deborah Feyerick joins me now live with this.

And I know you've got your sources in the FBI. The minute I hear the FBI enters into the picture, Deb, I instantly think, OK, there's something bigger afoot or it's just the kidnapping aspect of it. But I think you found something else.

DEBORAH FEYERICK, CNN NATIONAL CORRESPONDENT: Well, that could be the case. They're part of a joint terrorism - I'm sorry --

BANFIELD: A joint task force.

FEYERICK: Sorry, a joint task. I'm showing my cards (ph). They're part of a joint task force that investigates these kinds of things. So all law enforcement tends to work together. But when you bring in a child forensic interviewer, that is a specialty that is directly related to the FBI, the Office of Victim Assistance. And what they do is they've got four people who are trained on how to deal with children, how to question them, the kinds of things to ask, the kind of things not to ask. It is very specific.

You know, you don't want to traumatize a child who's already been traumatized. And so, for example, the child may be a victim or the only witness to a crime and that's why it involves a specific sensitivity in terms of how you do this. The key of these interviewers is to gather information, gather statements that can then be used in court to make a case against anybody who may be involved. And that's why the FBI's involved. They're the ones who are conducting this interview because it is so specific, they want to make sure they get it right and protect the child.

BANFIELD: And the other thing is, it's just so fascinating to see the scientific studies and how children respond to interviews and how suggestible they are. You can get them to believe the magic taxi to Jupiter came by an hour ago, it's remarkable, if you suggested it enough in the kinds of questioning. So it's remarkable that they have jumped on that so quickly with the FBI.

FEYERICK: Absolutely.

BANFIELD: But what about the dad in this case? This was the amazing Nancy Grace moment -

FEYERICK: Right.

BANFIELD: Where he was surprised - well, it seemed as though he was surprised on television by her revealing that the child was in the basement. But he still doesn't have that child. I mean he's got supervised visits but the children are (INAUDIBLE) too.

FEYERICK: No, exactly. The child has been removed. Charlie's been removed. This -- his younger brother and sister also have been removed. But what we know is this. Look, the lawyer for the father has basically said, this was a loving dad. He puts the burden not on the dad but actually on the child, saying Charlie -- 12-year-old Charlie was a troubled kid. He was homeschooled. He was overweight. That's why the dad was making him work out. And there was also eczema that the boy had and would scratch so vigorously that it would bleed on to his clothing. So we don't know whether this is a case where the child is unhappy and he ran away or whether, in fact, the parents were doing something.

What we do know is that the FBI and the police came in, they searched the house four times and it was only on the last time did they find the child almost hiding - you know, police have used the word barricaded behind a furnace.

BANFIELD: Yes.

FEYERICK: But this wasn't a secret room. It sounds as if he was hiding close to the furnace and there were boxes and there were barrels in front of him. So I think there's a lot that has to come out in terms of the child, because when he was discovered, you know, he was smiling, he greeted the police officers. It didn't look, in their words, as if he had been a captive. So a lot that's unknown right now.

BANFIELD: It's still mysterious. Well, Wednesday, if that's - if that's the reality, as early as Wednesday, there may be some kind of petition to the court, at least with some information from the - from the investigators, from the prosecutors. So please let us know as soon as -

FEYERICK: You bet. Of course.

BANFIELD: Because it just -- it defies logic, all of this story.

FEYERICK: Absolutely.

BANFIELD: Deb Feyerick for us on the case. Thank you so much, Deb.

FEYERICK: Of course.

BANFIELD: We've got an update as well on that - on a horrific story of a New Jersey woman who was attacked by a McDonald's employee right in front of her own two-year-old son. The entire beat-down caught on videotape. A telephone, of course. Police have been looking for 25- year-old Latia Harris for about a week. Well now Ms. Harris has decided to turn herself in. Happened last night without incident. Local police, state police, U.S. Marshals had all been looking for her. And now the woman on your screen is facing charges of aggravated assault and two counts of terroristic threats.

Another big story that we're following, the potential impact of the Supreme Court ruling in that Hobby Lobby case. Could that ruling, giving companies the permission to deny certain contraceptive coverage, could it open up future legal complications for things well beyond what was covered yesterday? Could it open the door for discrimination in the workplace based on religious beliefs? Got that story next.

(COMMERCIAL BREAK)

BANFIELD: Has the Supreme Court opened up a Pandora's Box? The court ruled yesterday in favor of companies who want to deny coverage of certain kinds of contraceptives because of that company's religious beliefs. But there are some questions about what that ruling, as narrow as some call it, what that ruling actually means for American businesses and their workers and, of course, for women.

Justice Ruth Bader Ginsburg wrote the dissenting opinion. The case is Burwell versus Hobby Lobby. And she did not pull any punches in doing so, saying that she fears the court, and I'll quote her, "has ventured into a minefield." The concern is whether the ruling will allow companies to just discriminate in other ways, like, for instance, not hiring gay people because it might be against their religious principles. It's kind of the classic slippery slope argument, if you ask some people.

In the meantime, supporters are calling this a victory for religious freedom. And joining me to hash out what this opinion means for the future of equal protection in America is CNN political commentator Sally Kohn and CNN legal analyst Sunny Hostin, along with Kevin Russell, who's an attorney and a contributor for SCOTUSBLOG.com.

And, Kevin, I'll just start with you.

Why is it that I am hearing from two different camps that this is completely narrow and that it only pertains to that very one issue, those drugs that are deemed to be abortive, and yet others are saying, the union is going to float away? Why am I hearing such divergent opinions?

KEVIN RUSSELL, CONTRIBUTOR, SCOTUSBLOG.COM: Well, because the Supreme Court, obviously, was deciding one question, but the rules and the reasons it gives for reaching that decision are going to apply more broadly. And so a lot of people are looking at that reasoning and the Supreme Court's decision and saying, look, this is going to apply to things like employers who want exemptions from anti-discrimination laws or paying taxes. And the Supreme Court just hasn't decided those questions yet.

BANFIELD: And the yet I think would be the operative word in what you just said, Kevin. Thank you, ladies. I want to open this up to you. And I think I'm just going to have to leave it with you and you all can take this. But I started to think yesterday as I was trying to sort of digest everything I was hearing at rapid pace, what if this were a Muslim family, owned a company, and they were very strict in their religion, they did not believe that women should be coming to work unless they had permission slips from their husbands. Is this the kind of thing that they now could mount a case and take this all the way to the Supreme Court and then, heavens to Betsy, there's actually precedent for a religious issue trumping civil rights laws, Sally?

SALLY KOHN, CNN POLITICAL COMMENTATOR: Well, this is exactly the danger in this case. I should be clear, there's really two problems. One is, when you say that corporations can claim religious freedom and that that religious freedom, quote/unquote, can trump certain laws, you do open up an incredibly dangerous minefield. And you don't have to trust me on this. Ruth Bader Ginsburg, 48 pages, warning of the very scary implications for this. For instance, an employer, it could be a Muslim employer --

BANFIELD: But the other (INAUDIBLE) say she's wrong.

KOHN: Well, but, of course they do, and that's what this court has a history of doing, right? They create these very narrow rulings. They did this on voting rights, these very narrow rulings, and then they go in a few years later and use that narrow ruling to open up a wider wedge and change precedent dramatically.

So in this case, right, you could have, for instance, it could be Muslim, it could be Jewish, it could be a Hindu employer who claims that religious quote/unquote freedom and says they don't approve of certain anesthetics, certain medications that have gelatin pills that are made from pig fat, right, to deny health care coverage to the American people.

Forget about gender discrimination. Forget about sexual orientation discrimination. You don't want to bake a cake for a gay wedding, the supreme court just gave you an out. This is going to be litigated to the hilt.

SUNNY HOSTIN, CNN LEGAL ANALYST: I think you're absolutely right.

BANFIELD: But what about this -- and I'm just going to -- you know, look, Justice Samuel Alito wrote the majority opinion here, and he was very specific saying that this law can't be used as a shield to cloak discrimination in hiring as a religious practice to escape legal sanction, effectively saying it only pertains to what we're talking about and it doesn't pertain to a wide-open free-for-all on, you know, for getting your hate on.

HOSTIN: You know, he definitely used the correct buzzwords by trying to narrowly limit it and using that kind of language but you only need to look at justice Ginsburg's dissent.

She says it is startling in its breadth, this decision. I have to agree. I don't think it's any coincidence all the women dissented together, the three female justices, because this is very much a women's rights issue. And, again, I think the community that needs to be very concerned about this is the LBGT community because it's not a protected class.

BANFIELD: We talked about this yesterday, you know, it's hard to say, oh, my god, it's just the women. They're also the liberals.

HOSTIN: But it's no coincidence that they saw what the narrative was, that this was an attack on and a clash between religious freedom and women's rights, and that is stark in and of itself.

And, again, the community that I think that needs to be very concerned is the LBGT community, because while you look at Alito's opinion, and he says this is not going to -- this is not a cloak for discrimination, he only mentions race. And that's smart because race is a protected class, right? Gender but not necessarily sexual orientation.

KOHN: And this is where people need to parse out in Supreme Court decisions the difference between rhetoric and the difference between the legal holding of the opinion. So he says these things rhetorically, but the legal holding of the opinion creates a new class that allows corporations to claim religious freedom in order to trump laws they don't like.

HOSTIN: That's it. That's incredible.

BANFIELD: This is a lot to digest. Look, constitutional law is not easy so don't feel bad. But this all goes back to the Religious Freedom Restoration Act. Effectively, what the justices said was, yeah, you got to stick to it, and in one line -- and Kevin, maybe you can weigh in here -- that act prevents the government from, quote, "substantially burdening a person's exercise of religion." That sounds so simple, and it doesn't sound like it's assailable, but is it?

KEVIN RUSSELL, CONTRIBUTOR, SCOTUSBLOG.COM: There's another piece to the test as well. You can't burden somebody's right unless the government has a compelling interest to do so.

And so Justice Alito did say, as it was mentioned, that the government has a compelling interest in preventing race discrimination. The question will be, does it also have a compelling interest in preventing other kinds of discrimination?

HOSTIN: There you go.

RUSSELL: And the court just didn't say.

It's important to note, though, that Justice Kennedy who provided the fifth vote, did write separately to say, look, the dissent here, which is saying that this is a really terrible broad decision, is misreading the opinion. It's not as broad as Justice Ginsburg says.

BANFIELD: So I have a feeling that for a few years, just like the weapons issue, we're going to have to be sorting all this out to figure out how it's going to play out and how difficult it's going to be to figure out as well. But --

KOHN: It's going to be very scary.

BANFIELD: I have the smartest voices here to start me off.

Thank you, Sally. Nice to see you. Thank you, Sunny. Good to see you. And, Kevin, thank you for your time as well. Do appreciate it. Good to see you.

RUSSELL: My pleasure.

BANFIELD: So on to another big story that we're following on CNN, a veterans charity group -- remember that word, folks, "charity" -- raising millions of dollars and hardly any of those dollars going to the vets themselves.

(BEGIN VIDEO CLIP)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT: It's $64 million over three years and none of the money has gone to any veterans.

Ma'am? Ma'am?

(END VIDEO CLIP)

BANFIELD: Yeah. Ma'am? Drew Griffin has been on this story for years. He would not let it go. He's had a lot of doors slammed in his face, folks, but guess what? It worked. He got to the bottom of it. The charity gets a record-breaking fine levied against it, and that ain't all. We're going to let you know what else Drew was able to do in just a moment.

(COMMERCIAL BREAK)

BANFIELD: We are "Keeping Them Honest," and a huge historic fine has been levied in the veteran charity fraud case. This is a story that was busted wide open by CNN and our investigative unit headed by Drew Griffin.

The Disabled Veterans National Foundation -- sounds great -- it claimed to help disabled veterans, and in the end, the way they decided to help was donating thousands of Coconut M&Ms -- nothing says help like that -- instead of things that were genuinely in need.

And the more than $100 million that they got in donations have instead been going into the pockets of private fund-raisers, instead of into the pockets of the vets that needed help.

And now New York state attorney general says enough is enough, and it is all because of the reporting by CNN and senior investigative correspondent Drew Griffin.

Have a look for yourself.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: It is one of the largest settlements ever recorded by the New York Attorney General's Office for deceptive charitable fundraising.

The Disabled Veterans National Foundation's chief private fund-raiser Quadriga Art has agreed to pay huge fines, change the way it does business and possibly set a new and much more transparent course for charities across the nation.

Attorney General Eric Schneiderman calls the private fundraising firm Quadriga, quote, "despicable," in how it has deceived the mostly old and gullible out of hundreds of millions of dollars.

ERIC SCHNEIDERMAN, NEW YORK ATTORNEY GENERAL: Some of these pleas that were put up by Quadriga were heart-wrenching, that they're helping some poor particular veteran get a car and get a better life.

And we've now learned through our investigation, that in some cases those stories were totally fabricated, that the foundation at issue had never helped the veterans that they used in their ads.

GRIFFIN: Quadriga will pay a $9.7 million fine, and it will forgive nearly $13 million in debt still owed it by the Disabled Veterans National Foundation. All right, so now you're getting back to me, is there going to be an interview? CNN has been chasing Quadriga and the Disabled Veterans National

Foundation for years, ever since we found out these two groups -- one a company, one a charity -- have been taking your generous donations to our nation's disabled veterans and pocketing almost all of the money.

We're doing a story on Quadriga Arts. We're with CNN.

Quadriga, the investigation discovered, had almost total control over the charity. In effect, the charity was a front for Quadriga's profit- driven scheme.

SCHNEIDERMAN: They've got the folks who set up the charity going, they used their council to advise the charity, and they entered into a contract which enabled Quadriga to control the flow of funds. They -- Quadriga put up the money for the direct mail campaigning but then it had total control and discretion over the funds going in.

GRIFFIN: Out of a total of $116 million raised by the veterans charity over the years, $104 million of it went to the direct mail fund-raiser according to New York state. And most of the donations that it made called gifts in kind like those coconut M&Ms were useless to veterans.

SCHNEIDERMAN: The abuses here really span the whole gamut of abuses that you could see in a charitable organization, that's why this is such an interesting case because they were falsifying the value of the gifts in kind. They were sending things that no disabled veteran needed like M&Ms, chefs' hats.

GRIFFIN: As a result of the settlement, the DVNF founding board members including its founder Priscilla Wilkewitz are being removed from the charity. Its executive director has already left and the charity is banned from doing any business with Quadriga Art for three years.

In addition to its huge fine and the forgiven debt, Quadriga Art itself and its president Mark Schulhof must now fully disclose its fundraising costs upfront so would-be charities understand just how much of the donated money, your donated money, Quadriga will keep for itself.

SCHNEIDERMAN: The donors' intent in this case was to help disabled veterans, and to take money that people are trying to spend to help disabled veterans just to feed your own overhead and to pay your executives off as Quadriga did here is pretty despicable.

GRIFFIN: Quadriga Art, which is a family company, announced that an uncle who helped run the company, Tommy Schulhof, has resigned.

His nephew is running the company, Mark Schulhof, and he released this statement, saying, "We have taken responsibility for the mistakes that were made. We deeply apologize for our actions and have taken steps to ensure that this situation will never occur again."

As for the Disabled Veterans National Foundation, their four founding members have been separated from that organization, and now they have released a statement as well, saying, "This is very significant and a positive step for the Disabled Veterans National Foundation."

"That," they say, "will enable us to improve the services we deliver and increase transparency with our local donors."

Drew Griffin, CNN, Atlanta.

(END VIDEOTAPE)

BANFIELD: And just, again, just a huge hats off to Drew and that investigative team for spending years, and it took years really to open that door and find out what was going on inside and then ultimately make a difference and keep those people honest.

Our thanks to Drew and his team, once again.

Do you remember the case we covered on this program not too long ago about this guy, a New York city police officer in a very twisted crime involving a kidnap plot where he would cook and eat several women? He was convicted, and he was facing almost a lifetime behind bars. And now a judge has come back and said no, all of it amounted to just a twisted fantasy. And guess what? He may get out.

We'll explain why this happened in a moment.

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