Return to Transcripts main page

CNN Newsroom

New VA Secretary Says He's Hamstrung by Federal Government; Ferguson Preparing for Decision From Grand Jury; Kenneth Bae Thanks Those Who Fought for His Release; U.S.- China Relationships Most Consequential in the World; President Obama Touting his Support for Free Internet; Virgin Galatics Continuing its Creation of Space Tourism

Aired November 10, 2014 - 10:00   ET

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

RANDI KAYE, CNN ANCHOR: Good morning, everyone. I'm Randi Kaye in today for Carol Costello. Thanks so much for joining me.

A betrayal of trust and a call to action. Today, we should learn more about a massive overhaul of Veterans Affairs, prompted by a CNN investigation of the agency. CNN's Drew Griffin uncovered massive delays in providing medical care to veterans, as well as top officials conspiring to systematically hide those problems.

Last night, on CBS' "60 Minutes", the new head of the V.A. said he will announce big changes, including widespread firings for the cover- ups.

(BEGIN VIDEO CLIP)

ROBERT MCDONALD, VETERANS AFFAIRS SECRETARY: The report we've passed up to the Senate committee and House committee has about 35 names on it. I've got another report that has over 1,000.

SCOTT PELLEY, CBS NEWS: If 1,000 people need to go, give me a sense of what are some of the things that they did?

MCDONALD: Well, we're simplistically talking about people who violated our values.

PELLEY: And those values are what?

MCDONALD: It's integrity, it's advocacy, it's respect, it's excellence. These are the things we try to do for our veterans.

(END VIDEO CLIP)

KAYE: Drew Griffin is CNN's senior investigative correspondent and first broke the story of the V.A.'s widespread failures. Good morning to you, Drew, what do you make of this?

DREW GRIFFIN, CNN CORRESPONDENT: Good morning, Randi. I think the big question is if he has a list of 35 and another thousand, the questions being asked specifically in Congress are why aren't you firing? Why aren't you doing this? Why aren't you taking this action and moving much more quicker on this? They're going to make the announcement midday today to talk about this. This has been part of the secretary's road to Veterans Day. He's been touring the country. A couple of weeks ago he was here in Atlanta touring Emory University's medical school, trying to recruit med students actually there to come on to the V.A. and be part of the program. But in a news conference after that, I did ask him specifically, you know, members of Congress say we know what happened at the V.A. The reports were out there. It's why General Shinseki, the former V.A. secretary, stepped down. It's why we have all these criminal investigations going on around the country. Why aren't you actually firing these people instead of preparing to fire these people? Here's what he said.

(BEGIN VIDEO CLIP)

ROBERT MCDONALD, VETERANS AFFAIRS SECRETARY: As the new secretary of the VA, why would I want to take a long period of time to get this done? It's not in my interest, it's not in the veterans' interest, and it's not in the interest of the members of Congress.

GRIFFIN: The secretary said he's hamstrung by the rules of the federal government and labor laws that surround it, Randi, but still a lot of criticism coming to this new secretary because he's been on the job a while now and we still have these people in Phoenix who are on administrative leave, basically paid vacation. In Pittsburgh who were involved with the scandal there who are still being paid and not too many being fired. In fact, the really upper ranks who have been responsible for this have quietly been retired with all benefits. So there is criticism here, but the secretary says he's going to get that change turned around and it was all part of his plan, the road to Veterans Day. Well, Veterans Day is tomorrow. Today we'll hear what he has to say.

KAYE: And this guy, I mean McDonald, I mean he doesn't have any government experience, he doesn't have any medical experience, he is a CEO, right? So ...

GRIFFIN: He is ...

KAYE: He knows business.

GRIFFIN: He knows business, and that may be just a little bit part of the problem. He has to take some advice on knowing government and making sure that he is following all the rules of government. You know, running Procter & Gamble, which he did, is not going to be the same thing as running the V.A. He brings a lot of passion, a lot of business strength to the job, but as you well know, Randi, business and government are two different things and there are a lot of rules and a lot of competing issues you have to deal with to turn an agency as big as the V.A. around.

KAYE: Yeah.

GRIFFIN: And that's what I think he's struggling with now.

KAYE: All right. Drew Griffin, I appreciate it, great reporting as always. GRIFFIN: The parents of slain Ferguson teenager Michael Brown are

traveling to Geneva, Switzerland, today to speak out on police violence before a U.N. Committee. But back home, everyone from the mayor to the police to school officials are bracing for what's to come when the grand jury returns its decision against the white officer who shot and killed the black unarmed teen. They're hoping that it won't be more scenes like this right here, the weeks of riots and protests that followed Brown's killing. CNN's Sara Sidner has been in Ferguson, remains there for us and joins us now live. Sara, so set the scene there now. Are people just bracing for the worst?

SARA SIDNER, CNN CORRESPONDENT: Yeah, you could say that the residents and business owners are sort of collectively holding their breath. And a lot of things are really at a standstill waiting to see what's going to happen. Yes, there is some rebuilding, but mostly a lot of the businesses, especially on West Florissant that saw so much of the unrest in August, are boarding up.

(BEGIN VIDEOTAPE)

SIDNER: Ferguson is on edge. Some business owners are busy fortifying their shops.

CONSTANCE GARNETT, BUSINESS OWNER: It's hurtful. It is really, really hurtful.

SIDNER: Salon owner Constance Garnett says she can't afford to take a chance that unrest will crash head on into the business she built here for the past 11 years.

GARNETT: If they should come and loot our area, then it's going to cost us.

SIDNER: Protests haven't stopped for three months on her street so we asked one of the police's most confrontational protesters about those concerns.

BASAM MASRI, ST. LOUIS RESIDENT: Now, as far as what's happened within the last 90 days, people will know that if you have been paying attention, there hasn't been any looting, or violence, what not. We've been completely peaceful.

CROWD: (INAUDIBLE)

SIDNER: Nevertheless, plenty of folks worry that may change. If the grand jury announcement goes against what protesters want -- the indictment of Officer Darren Wilson for the killing of unarmed teenager Michael Brown.

At a gun shop near Ferguson, the manager says sales of firearms for personal protection are up about 50 percent.

JOHN STEPHENSON, BUSINESS OWNER: Every time that door opens we're seeing new faces every day. Dozens of new faces coming in.

SIDNER (on camera): Do you think that's because of what happened in Ferguson?

STEPHENSON: I think it is. I think - I think people in general, because it's spread beyond Ferguson now.

SIDNER (voice over): The mayor of Ferguson says he's heard all about it, too.

MAYOR JAMES KNOWLES, FERGUSON, MISSOURI: The plus side of that is that, you know, every one of them I've spoken to have went out and taken a training class, have went out and tried to learn the law.

SIDNER: But not everyone is convinced there's going to be chaos. At the Ferguson Burger Bar and More, which opened just a day before Brown was killed, no boards. Unlike most of his neighbors.

UNIDENTIFIED MALE: I'm here, I'm open, I'm not going anywhere.

(END VIDEO CLIP)

SIDNER: And so, you know, you hear that from some of the business owners. And I can tell you that the protesters themselves are giving some people hope because they have been policing themselves for the most part, the protests every night have been peaceful and they've been telling anyone who plans on doing violence that they're not a part of this movement. And as for the police, as for the people here, the residents we've talked to dozens of people, they are all planning for what they think is the inevitable, waiting for the grand jury's decision to come down as early as this weekend. Randi.

KAYE: Sara Sidner in Ferguson, Missouri for us. Thank you, Sara.

And this morning, we have new details on this weekend's unexpected release of two Americans imprisoned in North Korea. Kenneth Bae and Matthew Todd Miller stepped off the plane and onto American soil after whirlwind efforts to free them. It was a secret mission launched by the White House and dispatching as its envoy America's top spy, national intelligence director James Clapper. CNN's Ana Cabrera is live in Seattle near Kenneth Bay's family home. Ana, good morning to you, I would imagine a whole lot of smiles where you are.

(LAUGHTER)

ANA CABRERA, CNN CORRESPONDENT: Absolutely. It's a beautiful day here in Seattle and for more than one reason, clearly. Kenneth Bae and Matthew Todd Miller presumably waking up in their own beds this morning. This is their second day back on American soil. And it was an emotional reunion with their families. Lots of hugs, lots of smiles, even tears of joy. Now, Matthew Todd Miller, he and his family have asked for their privacy. He did not speak upon his arrival but Kenneth Bae did. Listen.

(BEGIN VIDEO CLIP)

KENNETH BAE, AMERICAN RELEASED BY NORTH KOREA: Thank you all for supporting me and standing by me during this time. And it's been just amazing blessing to see so many people being involved, getting me released for the last two years. Not to mention -- not only mentioning for the thousands of people that have been praying for me as well. So I just want to say thank you all for supporting me, lifting me up and not forgetting me. At the same time that also not forgetting the people of North Korea. And thank you for supporting my family as well. That during this has been a tremendously difficult time for my family and there's so many people who have been supporting them to stand strong during this time.

And I just also want to thank President Obama and all the people in the State Department working tirelessly hard to get me released as well. And also I'd like to thank the North Korean government as well for allowing me to go home and -- come home and be united with our family and with our loved people. It's been amazing two years, I learned a lot, I grew a lot, lost a lot of weight -- in a good way. But I'm standing strong because of you and thank you for being there at such a time as this. So I just want to say tonight that thank you for all your support and prayer and your love that has really been encouraging for me and for others that - who are in the same shoes in (INAUDIBLE) and elsewhere. Thank you. God bless you.

(END VIDEO CLIP)

KAYE: It was so great to hear him even in good spirits enough to joke as he talked about losing a little bit of weight and that that was a good thing. You know, his health there in North Korea was one of the big concerns of his family members over the past two years that he was in prison there because he has diabetes, he has high blood pressure. And in an interview a couple of months ago with our Will Ripley he had talked about feeling numbness and tingling in his hands and being really unable to sleep, and so the good news is he seems to be in fairly good condition.

His sister telling us yesterday that that may have been because he was hospitalized not long before his release. As for what he's been doing since he arrived back in the U.S., we know he had pizza for his first meal and that the family stayed up late joking and sharing stories. And so it sounds like he's on a road to recovery. But let's not, you know, let's not kid ourselves, his sister says. It's probably going to be a longer road as he'll have to work through some of the emotions and still continue to recover physically as well. Randi?

KAYE: Pizza, huh? I'm sure he was wondering what he was going to eat when he was released thinking positively the whole time he was there. Ana Cabrera, thank you so much.

KAYE: Indeed.

KAYE: All right, so, it may be time to grab your winter coats already. 200 million Americans are in the path of a deep freeze that is striking too early for comfort this year. Check out Minneapolis, Minnesota, right there. It is below freezing there right now and the brutal forecast is calling for more than a foot of snow. CNN meteorologist Indra Petersons is joining me now with the latest. Looking pretty chilly there, I'm not ready to turn the heat on just yet. INDRA PETERSONS, CNN METEOROLOGIST: I don't think we are already just yet. Typically, even in Minneapolis it only gets about nine inches for the entire month of November. What are they expecting today? They're looking for over a foot of snow of places in Minnesota. This is not something they're welcoming. They're looking even possibly over a foot and a half in places like Wisconsin today so, yes, the snow is already on the way. Just keep in mind, temperatures there are going to be chilly. Right now over in Minnesota they're already - temperatures feeling like they're in the teens right now and they're not even expected to be above freezing for a week. So here's the story we have all been talking about. Take a look at the cold air. It's now going to be diving down to the south already. Down to the south. And then to the east.

So, if that cold air is not by you yet. Don't worry. It's coming. Here comes the changes. Just keep in mind, already about a 50-degree temperature drop in places like the Dakotas today. That temperature drop is only going to be spreading farther to the East. The story today has actually been more of the snow. You can actually watch the low bringing some of that heavy snow. But once it lifts out of here, you're going to have that tail end or that cold front. That's what's going to bring in that cold, dry air.

So you may be saying "That's not that bad today." Maybe not because it's not by you just yet. I mean notice the East Coast, temperatures are actually still climbing up. In fact, tomorrow if you're out towards D.C. it's going to be beautiful. It's going to be 68 degrees. But look what's right behind it? Here comes that cold plunge, temperatures day by day only dropping further. St. Louis going down to the 30s. Not until about Wednesday or Thursday do we start to see those temperatures drop. It's almost like that that sneak attack. Look at those 40s quickly jump in if you're out towards New York City by Thursday. Morning lows, yeah, it's been like 20s and 30s. Randi, I hope you're ready whether you like it or not.

KAYE: I'm ready. You know, I lived in Minneapolis seven years so I can handle anything.

(CROSSTALK)

PETERSONS: You'll always be more ready than me.

(LAUGHTER)

KAYE: That was a good training ground for any type of cold. All right, Indra, thank you, good to see you.

Still to come, President Obama kicks off a week-long trip to Asia and Australia but his most critical meeting could take place with Chinese president. Inside the complex relationship between the two nations when we come back.

(COMMERCIAL BREAK)

KAYE: "The most consequential relationship in the world today." That's how John Kerry sums up ties between the U.S. and China. And that relationship is on full display now this week as President Obama attends the Asia-Pacific Economic Summit in Beijing. He is expected to hold direct talks with his Chinese counterpart on key issues like trade, currency, and cyber security. CNN's Christine Romans is here to talk a little bit more about this. This is a pretty big deal.

CHRISTINE ROMANS, CNN CORRESPONDENT: It is. It is a powerful relationship that's only getting tighter, quite frankly. I mean you look at this powerful relationship between a rising established - a rising power and an established power with very different ideals and very different systems of government, but very big business ties. I mean look at this. The U.S. trade deficit with China, the largest trade imbalance basically in history, those red bars are how much more we buy from China than we sell every year. It's hundreds of billions of dollars. When you look at, say, the most recent month, September imports, we import more from China than any other country in the world. You know, China is our factory floor, China buys our debt, China lends us money. We have these ties between - with this country that are really strong and growing ever stronger.

Now, the president in a nod to trying to strengthen the relationship announcing some new visa rules so Chinese business people and students will have longer visas. Ten year long visa for business people, five years for students. You know, business leaders say that they - that China buying power, the China tourist is reshaping how American businesses do business and they would like to have those visas easier to get and longer and that's exactly the president ...

KAYE: A year really isn't enough time.

ROMANS: If you're a Chinese business person doing business here you're back and forth over and over, you're watching your investment, so, yeah, ten years is what the president is giving them. And that's a nod to strengthening that relationship.

KAYE: But we can't ignore the fact that the relationship between the U.S. and China has been pretty tough over the years. Certainly over the last year.

ROMANS: Over the last year, I would say, this is a relationship that got a little bit rocky. You had the attorney general. He announced some charges to get some Chinese nationals for stealing. He said stealing some really important industrial secrets, there have been complaints about cyber espionage, the Chinese always deny it and say we are making it up. The Americans are making it up. But there have been claims about espionage and China is getting closer and closer to Russia at the same time the United States and Europe are trying to isolate Vladimir Putin. I mean this morning we were watching the president speak to the APEC conference. Putin is there, the Chinese are there, Obama is there and they are three very different relationships with Russia right in the middle.

KAYE: All right. Christine Romans, thank you.

ROMANS: You're welcome.

KAYE: Still to come, pioneers at the crossroads less than two weeks after the fatal disaster of Spaceship Two, the future of space tourism is in doubt. But not according to the man who heads up the private enterprise. That interview coming your way next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Ever since the Internet was created it's been organized around basic principles of openness, fairness, and freedom. There are no gatekeepers deciding which sites you get to access, there are no toll roads on the information superhighway.

(END VIDEO CLIP)

KAYE: President Obama touting his support for a free and open Internet. It's called net neutrality and Obama says it is essential to the American economy and to the American way of life. CNN's Samuel Burke is here to talk a little bit more about this. Hey there, Samuel.

SAMUEL BURKE, CNN CORRESPONDENT: Hey, Randi. So anybody who cares about how much their Internet bill is at the end of the month will be happy with this news. Basically, let me explain net neutrality. Companies like Netflix right now, they're being charge by the Internet service providers like Comcast and Time Warner cable more money because they're using so much space, getting you all those movies and series that you're watching on Netflix.

Eventually though, that cost is probably going to be passed on to people like you and me, Randi. We're going to have to pay that extra money those companies are charging, like Comcast charging Netflix. But basically what's just happened, the president came out and said that he is recommending that the FCC reclassify the Internet as a utility. And this would probably have the effect of making net neutrality real. Once again, that these companies couldn't charge Netflix and then the cost won't get passed on to you. Now, he's just recommending it at this point, but I'm speaking to some of the top lawyers in the United States dealing with this issue and they tell me the FCC is very likely to go along with what Obama is saying because three of the five people on the FCC commission are Democrats.

We're seeing the stocks of Time Warner cable and Comcast falling six and five percent, and you're seeing that tweet right there, Obama says "I'm urging the FCC to keep the Internet open and free. Here's my plan to protect net neutrality for everyone." Even signing it "BO." And anybody who follows Barack Obama knows that if he actually signs it BO, it means it really came from him and not just one of his assistants. So I said, Randi, it could have the effect of keeping cable bills lower for all of us, consumers.

KAYE: So, you said he's just recommending it. When will we know for sure?

BURKE: That's hard to know. But as I said three of the five people on the commission are Democrats so it's likely that it will go his way including the street. You know, Wall Street investors think that this could happen very soon, and that's why you're seeing the stocks fall so quickly. This has really just come into play recently that companies like Netflix were having to pay more money to Comcast and the likes, so it's unlikely that you seeing the effect of it on your cable bill yet, but probably this could happen quickly enough that we won't ever see the effects on the bill at the end of the month, Randi.

KAYE: All right, Samuel Burke, thank you very much for the update there.

BURKE: The first commercial flights of space tourism seem just within reach. The first paying customers were within months of blasting out of Earth's atmosphere, but the Spaceship 2 disaster and the death of its pilot now raises new questions about the futuristic enterprise. CNN's Rachel Crane sat down with the CEO of Virgin Galactic to discuss the challenges ahead.

(BEGIN VIDEOTAPE)

RACHEL CRANE, CNN CORRESPONDENT: Virgin Galactic's CEO George Whitesides was watching from the flight line as a scaled composites test flight flying Virgin Galactic Spaceship 2 broke apart above the Mohave Desert tragically ending with a loss of life.

GEORGE WHITESIDES, CEO, VIRGIN GALACTIC: When we saw the clean release, when we saw the start of the rocket motor, and then after a bit the radio calls made clear that there had been a problem, people were pretty shaken up.

CRANE: Stakes have never been higher for Virgin Galactic and despite the tragedy, Virgin is not pressing pause. They are intent on moving forward with the creation of their next passenger spaceship, Spaceship 2 serial two, which has been in the works for about 2.5 years, and is 90 percent structurally complete.

(on camera): How is Virgin Galactic going to convince people that these missions, that these flights will be safe?

WHITESIDES: We're going test fly this vehicle. We're going to test fly Spaceship 2. We're going to do it a lot and we are going to make sure that we understand what happened.

CRANE (voice over): For Virgin, those results mean massive structural changes to the design of their craft won't be necessary.

WHITESIDES: We're heartened by the findings around the condition of the motor and I think that if it does become focused on human procedures then there will be straightforward ways that we can deal with that, make sure that it doesn't happen again.

CRANE: While the investigation is ongoing, Virgin is allowed to continue work on their craft and they expect to enter the testing stage in the next six months.

(on camera): This spacecraft behind us is the future of Virgin Galactic. That's a lot of pressure. WHITESIDES: Well, you know, in the space flight world, we're used to a lot of pressure, we have a lot of pressure on a lot of things that we do. We're not going to rush it. We're going to take our time, make sure that we build this vehicle carefully, strongly and safely.

CRANE: A human life was lost here. Is there any question now within the Virgin Galactic community that the risk is worth the reward?

WHITESIDES: We fly everyday on airplanes that have had accidents and you do that because you know that fixes have been made, that those vehicles are improved over time. We're pioneering a new place now, a new environment, a new set of vehicles to do it with. And there are risks. But I very much believe that the future of space is worth those risks. It's up to us to carry forward.

(END VIDEOTAPE)

CRANE: Now, while the NTSB investigation could take up to a year, ground tests on the latest model for Virgin Galactic will begin in the next five to six months.

KAYE: And Rachel, I mean Virgin Galactic has sold more than 700 tickets already for people who want to go into space. 20 customers apparently asking for refunds. How's the company dealing with that?

CRANE: So, I asked George Whiteside, the CEO, about this. And he said the real story here is that 680 passengers are still with us, are still behind us. Now, the passengers who have asked for a refund, of course, will be given it. But several of them have actually been swayed back once they've spoken to the company and are now, you know, sticking with their mission to go to space. And, in fact, actually, a couple of people have signed up to go to space after this accident.

KAYE: Well, I guess that's some good news for the company and for exploration in general. Rachel Crane, appreciate it.

CRANE: Thank you.

KAYE: Nice to see you.

Still to come, Obama says his decision to double the number of U.S. troops in Iraq is not a sign the war on ISIS is failing, it's just a new phase, he says, in a war that's going to take some time.

(COMMERCIAL BREAK)