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FBI Charges Wealthy and Celebrities in College Entrance Scheme; Book Says Ivanka Trump Isolated from Dad During Childhood; House Democrat Says Can't Give the Impression Were Fixated on Impeachment; United States Regulators Resist Call to Ground Boeing MAX 8. Aired 2-3:30p ET
Aired March 12, 2019 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[14:00:00] BROOKE BALDWIN, CNN HOST: You are watching CNN, I'm Brooke Baldwin. Remember back in the day when you studied really hard and you made that list of your dream colleges and you took those standardized tests and spent all the extra time on scholarship applications, and then waited with bated breath for the letter or e- mail to come in the mail? Yes. Turns out if you are rich and famous, you could have paid for it. Check this out. This -- this huge hunk of paper, thank you, that's the criminal complaint the Justice Department announcing today it has charged 50 people, 5-0, in a widespread and long-running bribery scheme to get their kids into some of the country's most elite colleges and universities -- colleges and universities. It is the largest college admissions scam ever prosecuted by the Justice Department. Those facing charges, CEOs, athletic coaches at some of these elite schools, insiders at the S.A.T. or A.C.T. testing centers, and obviously affluent parents, including academy award nominee Felicity Huffman and "Full House" actress Lori Loughlin. Prosecutors unveiled what they've dubbed "Operation Varsity Blues" this morning in Boston, saying an admissions consultant by the name of William Rick Singer was at the center of this vast scheme.
(BEGIN VIDEO CLIP)
ANDREW E. LELLING, U.S. ATTORNEY FOR MASSACHUSETTS: A central defendant in the scheme, William Singer, will plead guilty today to charges of racketeering, conspiracy, money laundering conspiracy, conspiracy to defraud the United States and obstruction of justice. Between roughly 2011 and 2018, wealthy parents paid singer about $25 million in total to guarantee their children's admission to elite schools including Yale, Georgetown, Stanford, the University of Southern California, the University of Texas, UCLA, and Wake Forest.
(END VIDEO CLIP)
BALDWIN: Let's start with our reporter in Boston, she attended the news conference. And Brynn, how did this happen?
BRYNN GINGRAS, CNN NATIONAL CORRESPONDENT: Well, we're on the same wavelength because I'm holding that you will paperwork in my hand -- holding all that paperwork in my hand. It's dense, descriptive about the people named in the case. It was a year-long investigation. Varsity blues is what the federal authorities called it. It's complex, as you can imagine. Let me try to break this down. What authorities are basically saying is that singer started a nonprofit. Parents would come to singer trying to get their kids into these universities, elite universities. And singer would help them in two ways. One way was the parents would pay the money into the nonprofit, and he would use money to pay people to either take those S.A.T.s for the students or change the scores for the students. Always telling the parents to have their kids go to a therapy session to ask for more time on those tests. That was one way. Another way was through athletics. According to all these court documents, authorities say singer would bribe college athletic coaches and have these students admitted to these elite schools as recruited students for a sport. Even if that student never even played a sport. Now you've mentioned Felicity Huffman, Lori Loughlin. According to authorities, these two actresses took -- separate routes. In the case of Felicity Huffman, the court documents detail that she and her husband paid $15,000 to singer to get him to take the -- change scores for her daughter's S.A.T. tests which, in turn, made her test score higher in order to get admitted. In the case of Lori Loughlin, the court documents show that she and her husband paid singer to create a fake crew profile so that she could get into USC as a crew recruit each though she never rowed the sport. Incredible detail in these documents. A lot of people who are named are pleading guilty. They're coming to court today. And some are waiting to be arrested at this point. But I should mention the colleges say, we're getting a lot of reaction, a lot saying disappointment. They didn't know anything about it, and no colleges have been charged in this case.
BALDWIN: Yes. I think the word "disappointment" just starts to scratch at the surface of how people are feeling. Thank you so much in Boston.
[14:05:00] Let's have a big conversation. Elie Hoenig, former federal and state prosecutor, Denise Clark Pope is a senior lecturer at Stanford Graduate School of Education, and the author of "Doing School, How We Are Creating A Generation of Stressed Out, Materialistic, And Miseducated Students." welcome to board of health of you. And first of all, I can't help but think of all the kids -- think of the kids who got bounced out of their dream school for the kids whose parents paid up to half a million dollars. So, Elie, my first question to you is what are the legal consequences for these parents?
ELIE HONIG, CNN LEGAL ANALYST: These parents are in trouble. The coaches are in trouble, and the middlemen who ran this nonprofit are in trouble. I looked through this quickly. This is an ironclad case. Nobody is walking away without getting convicted. The thing is, they flipped the main guy, this game, William Singer, who looks like he's the hub. We call it a hub and spokes conspiracy meaning there's a guy in the middle, and he's dealing with people who don't necessarily know each other which are the spokes. This guy cooperated for about a year. They had his testimony. He made recorded phone calls that are devastating. This is the phone call where you hit play for the jury, and you have a conviction. He has emails -- these people are not savvy criminals. They're not a mafioso or drug dealer who knows how to use code and speak around it. They're saying straight up they're --
BALDWIN: Yo, how can you get my kid in --
Honig: Thank you for helping, I'll pay the bribe. Everyone's in a lot of trouble.
BALDWIN: Denise, at such a vaunted place as Stanford, what do you say to your students tomorrow? Let me play the first clip, what prosecutors said about rich parents buying their kids' way into college.
(BEGIN VIDEO CLIP)
LELLING: This is not a case where parents were acting in the best interests of their children. This is a case where they flaunted their wealth, sparing no expense, to cheat the system so they could set their children up for success with the best education money could buy literally. Some spent from $200,000 to $6.5 million for guaranteed admission. Their actions were without a doubt insidious, selfish, and shameful.
(END VIDEO CLIP)
BALDWIN: Denise, you earned your PhD at Stanford. You even wrote a paper about the overwhelming culture of cheating in this country. I mean, there are students still enrolled in college who didn't earn their spots. What do you make of this, and what do you tell your students tomorrow?
DENISE CLARK POPE, SENIOR LECTURER AT STANFORD GRADUATE SCHOOL OF EDUCATION: So, I think one of the problems is unfortunately cheating is a reality. And it's a cheat or be cheated mentality that a lot of high school kids we see have and obviously a lot of parents. And the problem is that's really a symptom of a much larger cause around stress and overwhelm, and under a real misunderstanding of how important it is to go to a selective college. The sad thing about this case s that these parents believe that selectivity of college was so important, it was worth compromising their values. And --
BALDWIN: But hang on. Hang on, if I may interrupt you. I'm like -- I can see the thought bubble above parents' heads as they're listening and thinking, hang on. If you're the kid of one of these affluent Americans, aren't you already at an advantage? And to feel this need to go above and beyond, and in some cases, you heard the prosecutors say pay millions of dollars to get your kid into a school, are you not --
POPE: Yes.
BALDWIN: -- furious?
POPE: I mean, I think all of us are furious. I think -- I'm not surprised. We knew it wasn't a meritocracy from the start. You're already privileged when you come in the system with money. And excellent k12 that will set you up for getting into college in the first place. Yes, I think the people are rightly outraged, and unfortunately, I'm not surprised because of the culture of cheating. Not just in schools but in our country right now in general.
BALDWIN: What do you make of the fact that this is alleged to have happened at Stanford? By the way, we reached out to Stanford. We haven't heard back.
POPE: I'm not allowed to comment at all on the university. What I can say is that my organization, "Challenge Success," which is connected to the Graduate School of Education at Stanford, we work every day with schools to try to dial down the kind of stress and pressure on kids to take these kinds of cheating -- obviously this is much more extreme. But we work to educate parents around the right way to do school.
BALDWIN: OK. Here's the other piece of this, Elie. When I was listening to the news conference earlier, this defendant, William Singer, so he received these bribes. He had them funneled through this fake charity. And so, he could conceal the nature of the bribes. Then he told parents, hey, by the way, you can deduct your charitable donation on your taxes.
[14:10:07] HONIG: That's a serious piece of this, as well. It's not just the bribery and the fraud that we see. There's a money laundering problem because they're funneling money through this bogus corporation. And there's tax implications. Think about it -- if someone writes off a $100,000 charitable donation, that's $30,000, $40,000, you're cheating the IRS for. That's a serious piece, as well. Problem because they're funneling money through this bogus corporation. This -- this hits all the notes. You have privilege, you have wealth, you have athletics, you have celebrities. It's really a pretty unbelievable case.
BALDWIN: Thank you so much for that conversation, as we get more and more details, obviously we'll pass them along.
In the meantime, let me move to what's happening in Washington, D.C. House Speaker Nancy Pelosi breaking with members of her own party saying impeaching Trump isn't worth it. How do those freshmen Democrats feel about that? We asked them.
And pressure building on American regulators to ban Boeing's bestselling plane as more countries and more airlines are either grounding the fleet or banning the plane in their airspace altogether. What is the U.S. waiting for is our question?
And this explosive new book on Jared Kushner and Ivanka Trump. Painting this new picture of the White House power couple, including reports that Ivanka and her father aren't as close as you might think.
I'm Brooke Baldwin, and this is CNN.
(COMMERCIAL BREAK)
BALDWIN: He's not worth it. Four little words making a splash on Capitol Hill where a divide among Congressional Democrats over impeachment is coming into full view. House Speaker Nancy Pelosi seemingly advising her caucus against it, saying it could rip the country apart. Speaker Pelosi's words, however, are having little impact on Michigan's Rashida Tlaib who made an expletive-filled vow to go after President Trump shortly after she was elected.
(BEGIN VIDEO CLIP)
REP. RASHIDA TLAIB (D), MICHIGAN: Speaker Pelosi and all members of leadership have encouraged us to represent our district. And this is something that was important to my residents, still continue to be, my constituents.
MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: You are going to continue to push for impeachment, right?
TLAIB: I am beginning the investigation. The things that you've been hearing about. Instead of being rumors. Let's actually have a committee process and investigate these offenses.
(END VIDEO CLIP)
BALDWIN: But a member of the House Intelligence Committee is warning his fellow Democrats about being too focused on this one issue.
(BEGIN VIDEO CLIP)
REP. MIKE QUIGLEY (D), ILLINOIS: In the final analysis, the Speaker's going to move forward on impeachment if it is merited. I think the mistake that some Democrats might be making is making it the only issue we're trying to address.
UNIDENTIFIED FEMALE: Right.
QUIGLEY: There is a whole world of things that we have to work on, and we can't give the public the impression that this is our fixation.
(END VIDEO CLIP)
BALDWIN: CNN chief political correspondent Dana Bash is in Washington. And so, all right, so Speaker Pelosi says Trump isn't worth it. But she also said she wouldn't recommend it -- her words, unless there's something so compelling and overwhelming. So, translation, does it sound like she's closing the door?
DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: Not totally close. As she and the Congresswoman said, they haven't begun their full investigation. Even though it feels like there's been an investigation for years of President Trump, when it comes to the House, Republicans were in charge until January. And Democrats felt like they didn't get near where they need to get in terms of doing oversight. She left the door open. But she's also -- this is one of the benefits of having a Speaker who doesn't give a you know what about her future because she has so much -- so much of a well of very deep and wide well of credibility --
BALDWIN: Experience --
BASH: With her people, her caucus and experience. She understands the political reality. Looking at it from 30,000 feet of going forwards with an impeachment of a President who is going to be up for re-election and will face the voters in -- in less than two years. And so that is a really important point to make. It's not as if this is a President who's in his second term and won't be punished. It is up to the Democrats, she clearly believes, to make the argument on the campaign trail that it is the voters through the regular electoral process who should punish him. But not closing the door fully in case something remarkable comes up.
BALDWIN: And to that point about the voters, Congresswoman Talib said the issue was important to her constituents. That's why she says she's beginning the process. The recent Quinnipiac Poll shows not everyone is on board not yet. To remind everyone, if asked if Congress should begin impeachment against President Trump, which could lead to his removal from office, 59 percent of Americans say no. So that's compared to 35 percent who say yes. Let's set aside the resistance from Senate Republicans for a minute. Don't Democrats need more of the American public on their side?
BASH: Yes --
BALDWIN: Yes, to pursue this?
BASH: Yes. Absolutely. We're not just talking about the base. You know, the base is riled up. We're talking strictly about practical politics here. This is what I'm about to say. The base is riled up. They're going to get out there. They're not going to be depressed because there's no impeachment process. They're going to be energized because they want to get rid of Donald Trump politically. The question is the middle. The question is the independence or the people who maybe stayed home because they were mad about Hillary Clinton.
[14:20:00] And they weren't really that excited. Those people need a reason to not go, particularly those who didn't stay home, went to vote for Donald Trump, to not be turned off by Democrats. And there -- there is a potential, a potential for independents to get turned off by Democratic overreach with impeachment instead of Democrats getting their message out on the issues that they say that they want to deal with, which -- that's already gotten kind of overwhelmed by even the discussion of potential impeachment. So, Pelosi's clearly trying to turn away for that and talk -- away for that and talk about what they want to do with the Democratic majority in the House.
BALDWIN: Speaking of Speakers, remember Paul Ryan?
BASH: Sure do.
BALDWIN: Paul Ryan sending up this red flag on the 2020 campaign saying that a Democrat could defeat Trump in some of his first public comments leaving Congress saying, "The person who defines the race is going to win the race. If this is about Donald Trump and his personality, he isn't going to win it." So, you know, Ryan's dustups with Trump, that's like, you know, total common knowledge. He is the former Speaker of the House. So how do you think these comments play in the non-Trump wing of the party? Do you think that that might embolden Republicans who are considering that primary challenge to the President?
BASH: No. I don't think it's going to embolden any Republican on that level. I really don't. The President is incredibly popular. Doesn't mean that people like former governor weld of Massachusetts won't do it, but it's going to be an incredible uphill climb. I don't know that this will make that much of a difference. What I do know and I've talked to somebody this morning about this who's getting close with Paul Ryan, is that he -- you're right, there's no love lost between the two. There never was. But what he was trying to say and maybe it didn't come across that way in this speech, is that he's a policy wonk. And he wants to be -- he wants elections to be more about policy and less about personality. 2016 was somewhat about policy, but it was a lot about personality. And that's what he was trying to get across. And I wouldn't be surprised if Paul Ryan goes back into his, you know, hermit kingdom right now, and doesn't come back out because he's already somebody who is a foil for President Trump, I mean, he went after him in the -- in the rose garden a couple of weeks ago. And this makes it even easier for him because it's not unusual and not -- and not unlike the President to run against his fellow Republicans in the House because he's a lot more popular with the base and with others than Republicans in Congress.
BALDWIN: Got it. Dana Bash, thank you so much.
If you had a ticket to fly on the Boeing jet involved in those two recent deadly crashes, would you fly? The pressure is mounting as more countries are grounding this particular plane, but not here in the U.S.
Plus, a brand-new book about the President's family sheds new light on the relationship between Ivanka Trump, her husband, and her father. We'll talk about how she reportedly explained away her father's comments about racism in Charlottesville.
[14:25:00] (COMMERCIAL BREAK)
BALDWIN: Boeing and U.S. regulators are resisting calls to ground the Boeing 737 MAX 8 jet following the second deadly crash in five months after major questions surround its safety. Boeing says it has full confidence in the safety of this aircraft despite the growing number of countries who have grounded or banned the MAX 8 plane from their airspace. Moments ago, the European Union joining the list of those suspending all flight operations of this particular aircraft. And the President of the association of flight attendants called for the grounding of the Boeing 737 MAX 8 fleet until, quote/unquote, FAA identification fixes to -- identify fixes that can be installed and confirmed. Pressure mounting there. Three major U.S. airlines, though, continue to fly the plane. American and Southwest include the MAX 8 in their fleet. And United operates the larger MAX 9. That is a growing source of concern for U.S. flight crews and you the passenger and lawmakers. Senators Mitt Romney and Elizabeth Warren are among lawmakers calling for the FAA to ground these jets. We learned that the pilots of the doomed Ethiopian Airlines flight told air traffic controllers that they were having flight control problems moments before the plane crashed killing all 157 people on board.
(BEGIN VIDEO CLIP)
TEWOLDE GEBREMARIAM, CEO, ETHIOPIAN AIRLINES: I called in -- the air traffic controllers recorded voice exchange. The pilot reported flight control problems. He was having difficulties with the flight control of the airplane. He asked to return back to base, and clearance was given to him.
(END VIDEO CLIP)
BALDWIN: Let's go on this CNN's Richard Quest there in London for us. And Richard, you're the one who did the interview with the CEO of the airline. And the fact that he told you the pilots told air traffic control they were having flight control problems before the crash, what did that tell you?
[14:30:02] RICHARD QUEST, CNN MONEY EDITOR AT LARGE: It tells me that there are too many similarities between what happened with the Ethiopian Plane and what's happened with lion air back in October. That plane, too, had flight control problems that eventually led the plane to crash very violently. Remember, the similarities -- both brand-new planes of the MAX 8 variety. Both in the early phases of flight. Both extremely violent ways in which the planes crashed. And both where there were flight control issues and great altitude changes. Brooke, if this wasn't so serious, it would be reaching to the absurd where we have all these other reputable regulators, the EU, Australia, Singapore, we have airlines themselves like Nigeria.
