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Boeing Makes Admission after 2 Deadly Plane Crashes; Trump Praises Economy but Dings Federal Reserve; Trump Wants Herman Cain on Federal Reserve Board; Harvard Investigates Head Fencing Coach for Real Estate Sale involving Family of Student Athletes; UNC Coach & Staff Suspended over Racial Remarks & Pushing Injured Players to Continue Playing; Biden Makes Light of Unwanted Touching in 1st Public Appearance Since Complaints. Aired 11:30a-12p ET

Aired April 5, 2019 - 11:30   ET



[11:30:00] DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice- over): Former Boeing operations analyst, Rick Ludtke, says during development of the 737 MAX, Boeing had a mandate, make sure any changes to the plane would not require additional pilot training in a simulator.

RICK LUDTKE, FORMER BOEING OPERATIONS ANALYST: Unprecedented. Never happened in the past that I'm aware of. We were very uncomfortable with this.

GRIFFIN: Ludtke says Boeing managers told him they even sold the plane to Southwest Airlines with a guarantee, a rebate of $1 million per plane if simulator training was required.

The flight control analyst says the demand to avoid simulator training, known as Level D, took over design of the aircraft.

LUDTKE: Throughout the design iteration, all the status meetings with managers, that was something that was always asked, you know, are we threatened, are we risking Level D. If you are, you have to change it. I think, philosophically, it was the wrong thing for the company to do, to mandate such a limitation. To strongly avoid it makes sense. But to prevent it, I think you can see the line from that to these accidents.

GRIFFIN: Federal investigators are now trying to determine if Boeing's cost-saving moves could somehow lead to criminal charges.

(on camera): Both Boeing and Southwest Airlines refused to comment on their business deal that was referred to in this piece.

But in the meantime, we're learning what is causing the delay in getting Boeing's software fix to the FAA. It was supposed to be sent last week, but CNN has learned there was a glitch in integrating the software with other Boeing programs, which has now caused a delay.

Drew Griffin, CNN, outside Boeing's Renton facility in Renton, Washington. (END VIDEOTAPE)

ERICA HILL, CNN ANCHOR: A lot to process in that report.

Just ahead, President Trump says he wants former presidential candidate, Herman Cain, for a seat on the Federal Reserve. Is Cain the right man for the job? That's next.


[11:36:44] HILL: The new jobs report showing a big bounce in March after a sluggish February. The U.S. economy adding an impressive 196,000 jobs last month. Unemployment remains steady at 3.8 percent. That's all good news for President Trump, who praised the strength of the economy in just the last hour as he was leaving the White House. Almost in the same breath, though, he managed to ding the Federal Reserve. Take a listen.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, I personally think the Fed should drop rates. I think they really slowed us down. There's no inflation.


HILL: Joining us now, CNN global economics analyst, Rana Foroohar.

We'll get to the Fed in just a moment. Let's tackle unemployment for the moment. Was last month just an anomaly? We're doing all right. We're doing great, actually, if you look at that number. Almost at full employment.

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Well, yes, but the devil is in the details, as always. For starters, I always look at three- month averages. You never take one jobs report and say, hey, this is where we are. If you really dig into the details of the job report, there are worrying signs. If you look, about half of the growth is coming from really low-wage industries, home health care, restaurants, hotels, you know, sort of low-wage $15-an-hour jobs. That's not what you want to see. Meanwhile, manufacturing, which the president is always boasting about bringing back manufacturing jobs, manufacturing is falling. That's the weakest it's been since we had a little mini manufacturing recession in 2015. So really digging into this, this still leaves me worried about where we're headed. And I think the likelihood of a recession in the coming year is still pretty high.

HILL: Wow. OK, so as we look at that --


FOROOHAR: Sorry to be a downer.

HILL: No. I appreciate you being a realist. That's a good thing.

The president, meantime, saying this morning he wants the Fed to lower interest rates.

FOROOHAR: Of course, he wants the Fed to lower interest rates because lowering interest rates creates a kind of sugar high in the economy. And a lot of people felt that we should have been tightening rates years ago in order to prepare ourselves for a coming recession. You want to have a lot of firepower when that happens. You want to have the Fed in a position where they can lower rates when we really need that extra juice. Unfortunately, the president has not wanted to take his foot off the gas. You can understand why. He first wanted to get through the midterms with lower rates, hoping we could push the economy more. He now wants to try to get to 2020 with the economy still being on this sugar high. Ultimately, that's going to increase the pain if and when the correction comes.

HILL: In terms of the Federal Reserve, the board, President Trump --


HILL: -- we're now learning, has nominated Herman Cain to the board of the Federal Reserve. For folks who may not remember him from --


FOROOHAR: The pizza king.

HILL: The pizza king, Godfather's Pizza. He also did serve as the director of the Federal Reserve in Kansas City for, what, eight years.


HILL: There's been a lot of pushback, though.

FOROOHAR: There has been a lot of pushback.

HILL: Jamie Dimon even saying, I don't think he's -- let me quote him properly here. "He's not necessarily the right guy for the job," not a direct quote -- (CROSSTALK)


HILL: -- he's saying. I mean -- your thoughts?

FOROOHAR: Well, I'm not crazy about it. I'll tell you why. The Fed is at a really difficult moment right now. The Federal Reserve is a collaborative organization. I know it seems like there's none of those left in America, but the Fed is actually a body that has to get together and agree on things. If you have someone like Cain or Stephen Moore that are perceived as being proxies for the president, some folks that will be very political, that's not a good position for the Fed to be in.

[11:40:05] HILL: The pushback on that is you don't want the appointee to be too political.

FOROOHAR: No. No. HILL: That makes sense.


HILL: At the same time, do you want everybody to be in lockstep because then there isn't any collaboration happening?

FOROOHAR: No. No, you don't, but you want folks to be intellectually neutral. That's something that's always been so importantly historically. One of the reasons the Fed was able to save the economy post-financial crisis is they weren't political. They didn't get tied up in the arguments over fiscal stimulus. They could make policy as they saw fit. We need to keep that independence.

HILL: When you look at what Jamie Dimon had to say, that he doesn't think he's the right person to put on the Fed board, is that a real concern for the Fed? Is that concern about potential financial oversight that could come with these two?


FOROOHAR: No, not at all. In fact, I think, in some ways, Jamie, by saying I don't want two people that are very likely to want to cut interest rates on the Fed, he's talking against his own book. He would do better if interest rates were low. Big banks do very well when interest rates are low. But I think Jamie cares a lot about the economy. I think he cares a lot about America. And he's saying, look, I don't think these two people are qualified at this time. There are so many qualified people out there. We need to look for them.

HILL: Good to see you as always. Thanks, Rana.

FOROOHAR: Good to see you.

HILL: When he is not pounding his gavel, this week's "CNN Hero" is pounding the pavement. Three times a week, every week, Superior Court Judge Craig Mitchell wakes at 3:30 a.m. and runs through L.A.'s notorious Skid Row neighborhood to try to change the lives of those struggling with poverty, homelessness and addiction.


CRAIG MITCHELL, CNN HERO: Running is a mechanism for the participants to build relationships.

This is the one time I'm at the front of the pack.

Lawyers, social workers, people from all different walks of life, running with people who are recovering from addiction and homelessness.

Good job.

We affirm, we listen, we support. It shows what open-minded people who really care about each other, how they can treat one another. And it's a lesson in and of itself.


HILL: To experience Judge Mitchell's transformative Skid Row running community and to nominate someone you think should be A "CNN Hero," log on to

We'll be right back.


[11:46:57] HILL: Harvard could be the latest school dealing with fallout from a possible scandal.

I do want to point out, this is completely separate from the ongoing college admissions scam, the criminal case, the one that involves Lori Loughlin and Felicity Huffman.

When we're talking about Harvard, this has to do with the school's head fencing coach who sold his home to a wealthy businessman who had one son on the fencing team and another son who was a competitive high school fencer who was applying to the school. The father bought the coach's house at nearly double its assessed value and then younger son got into Harvard, got onto the team. Can we draw a connection there? That's the big question.

CNN's Brynn Gingras has more on this.

It certainly sounds shady if nothing else.

BRYNN GINGRAS, CNN CORRESPONDENT: Shady, fishy. That's where we're at right now, that side door we heard Singer talk about in court. A separate case, as you said, but very interesting.

Let me break it down more. Peter Brand is Harvard's longtime fencing coach. He's a famed coach. The university really credits him with unprecedented success. In 2016, he sold his house in a Boston suburb for almost double what tax records show the property was worth. Now, the buyer, well, he was a wealthy businessman. His name was Jie Zhao. And he had a son on the Harvard fencing team, as Erica said, another son in high school. After Brand made that sale to Zhao, Brand bought a condo in Cambridge in the town where Harvard is located for $989,000. I have to look down. A lot of numbers there. That's just $500 shy of the amount that Zhao paid him for his home, and $300,000 more than the condo's asking price. Now, of course, a listing real estate agent will say it's not uncommon in a competitive market to sell a house or buy a house for much more.

HILL: A pretty high margin, though.

GINGRAS: Exactly.

The other thing that's fishy is, 17 months later, Zhao sold Brand's home for way under --


HILL: At a loss.

GINGRAS: At a loss, $300,000 at a loss. There's a lot of fishy details here.

And then, of course, as we sort of laid out for you the son was already a fencing team member. Then his son who was in high school went to Harvard on the fencing team, according to the "Boston Globe," who was the first publication to actually report all this. But again, a lot of fishy details. Now Harvard is investigating.

I want to bring up a statement from the Harvard dean. She wrote, "Regardless of what we eventually learn about these allegations, this is not a time for complacency. Where there are opportunities to clarify practices and strengthen procedures, we must act on them and do so with a sense of urgency."

So again, not part of this big college admissions scam, but certainly raising eyebrows. Is this happening in other ways, real estate? Are we seeing other ways parents are trying to get their kids into school?

HILL: Which is fascinating, which is why we saw the Democratic lawmakers in California say we need to look at legacy status for how kids are admitted, donations, whether that comes into play. There's a lot here. And it's only beginning.


HILL: Brynn, thanks.

And turning now to another university coach who is under investigation. The "Washington Post" is reporting Sylvia Hatchell, the University of North Carolina's Hall of Fame women's basketball coach, is accused of making racially offensive remarks and pressuring players with serious injuries to continue playing. UNC suspended Hatchell and her entire coaching staff.

[11:50:14] CNN's Kaylee Hartung joining us now with more on this.

Kaylee, the allegations are troubling. What are some of the details about what is being alleged here?

KAYLEE HARTUNG, CNN CORRESPONDENT: Hey, Erica. These are stunning allegations that have been made against this Hall of Fame coach, who has led North Carolina's women's basketball team for more than 30 years. The "Washington Post" is citing sources. They say they've spoken to six parents of current players on the team who say Sylvia Hatchell made these series of racially offensive remarks to her team. The parents allege that Hatchell said players would get, quote, "hanged from trees with nooses" in an upcoming game if their performance didn't improve. And "The Post" is also reporting that their sources say Hatchell tried to force some players to compete through very serious injuries. Earlier this week, we learned UNC had opened an investigation into the

coach, placing Hatchell and three of her assistant coaches on paid administrative leave. But it was unclear why this review began. A statement from the university simply said it was due to issues raised.

At that time, Hatchell released a statement saying, quote, "My goal has always been to help them become the very best people they can be on the basketball court and in life. I love each and every one of the players I've coached and would do anything to encourage and support them. They are like family to me."

No follow-up statement has been made in light of the "The Post's" reporting that came out last night. But Hatchell's attorneys spoke to "The Post" and the "News Observer," and he says there's not a racist bone in Hatchell's body. He says that her comments were misconstrued. The way he explains, he's saying that the team was preparing for conference play and the coach was trying to warn her players that their opponents would be tougher competition than the teams they had played out of conference. He said her comments were something along the lines of, they're going to take a rope and string us up and hang us out to dry. He also said that Hatchell would never try to convince someone to play who medical staff didn't already clear.

Erica, there's no timetable to the university's investigation, which, I should note, is being conducted by an outside law firm, but UCN says the review will be thorough and prompt.

HILL: Kaylee Hartung with the latest there. Kaylee, thank you.

We just heard moments ago from former Vice President Joe Biden addressing these accusations about his conduct. So what did he have to say? Stay with us.


[11:57:13] HILL: Joe Biden speaking to union workers and has already somewhat made reference to what everybody else seems to have been talking about for the last several days. Take a listen.


JOE BIDEN, FORMER VICE PRESIDENT OF THE UNITED STATES: And I just want you to know I had permission to hug Lani. I mean --


BIDEN: We had permission.

But -- by the way, he gave me permission to touch him.



HILL: So there were two references there. The first was, I understand, it was reference to a union leader who had introduced the former vice president. Then also saying again he had permission to hug the child you saw with him there on stage.

I want to bring back in Nia Malika Henderson.

There was a question about whether or not this would be addressed and, if so, how it would be addressed. Making light of it? I don't know, sort of leaves me scratching my head.

NIA MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: Yes. It kind of undoes the video, right, and the sort of work that he did in putting this issue in a different light, right? In the video, he basically says this is a serious issue and people have a right to their personal space, basically parroting what Nancy Pelosi said. Here, in many ways, he undoes that by making light of it. Making it out to be one big joke. This is Joe Biden. He keeps stepping in it. If you think about what's happened over this last week, because that's when the Lucy Flores story broke, this is the fifth time they've addressed it, right? There were two statements from his spokesperson, then two statements from Vice President Joe Biden, and the final one, which is as close to an apology as we're going to get from Joe Biden, and this one, which makes light of it, and probably puts him a step backward --


HENDERSON: based on where he was, I guess, on Wednesday. So, yes --


HILL: To your point, too, as you said earlier, just in the hour --


HILL: -- it was the non-apology, the sorriest non-sorry with the video.


HILL: He got flak for it. And to come out and have this tone-deaf joke, it makes you wonder who he's listening to.

HENDERSON: Yes. And does he listen to anybody? Is there anybody around him with any sort of sophistication with this issue in terms of how to handle it? We knew it was going to be a question in the case of Joe Biden in terms of him running. They clearly were caught flatfooted with Lucy Flores' allegations. Which, again, weren't about hugging. It was about him smelling her hair and kissing her on the head. There he is, again, making light of it. I guess the person he hugged was a man. The child was also a young boy. And so, yes, this is Joe Biden stepping in it again after there was clean up before.

HILL: Yes.

HENDERSON: This is what you can expect by Joe Biden.

HILL: All right, more to come. We'll see what else he has to say as this speech continues.

Nia Malika, appreciate it, as always.

And thanks to all of you for joining us.