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NYT: Students Receive "Target Letters" in College Scandal; "Some Vulnerabilities" Detected in Notre Dame Structure; Buttigieg Addresses Lack of Diversity Among His Supporters. Aired 11:30-12p ET

Aired April 16, 2019 - 11:30   ET

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

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[11:30:22] KATE BOLDUAN, CNN ANCHOR: It was called Operation Varsity Blues, The largest FBI investigation of this kind. And 50 parents, college coaches, the ring leader, and college prep course employees, all implicated in the largest college admissions cheating scheme ever prosecuted in the United States, charged with everything from mail fraud to money laundering, racketeering, obstruction of justice, as they stand accused of cheating, bribing, and lying to get students into college.

Prosecutors say some of the students were in on it, and others were not. Now, the "New York Times" is reporting that some students of parents charged could also now be targets. But with the millions of dollars that changed hands and the serious charges these parents are facing, we're seeing very different legal strategies emerge. Plea deal or no plea deal. That does seem to be the question, and a very real one right now.

CNN's Brynn Gingras has been following this from the beginning and is joining me now.

Brynn, where do things stand with the parents?

BRYNN GINGRAS, CNN CORRESPONDENT: It literally changes every single day because there are communications going on between the government, between different sets of parents. But, yes, basically, let's break it down for you as to where parents stand. We have 16 parents pleading not guilty. Most of those parents, except for two of them, filed a formal letter essentially saying they understand the two conspiracy charges that are against them, one for fraud and one for money laundering and they want to tell the court they're going to plead not guilty. Meaning they don't need to actually come into court to make that formal plea.

We have 13 parents that are pleading guilty. That one, of course we know, as we talked about, has included Felicity Huffman. Some of the parents issuing apologies. And one parent as we are looking at the court paperwork, who is in talks with the government as to exactly, they're going to start making some deal. We do expect to see, again, more changes happening with this case as it continues.

But let's break it down when it comes to the two actresses, of course, the two faces as it's come to with this college admissions scheme. Felicity Huffman, as we said, she pleaded guilty. She's accused of paying $15,000 to the Key Worldwide Foundation, which was a sham foundation started by Rick Singer, the meantime, behind all of this, to get her daughter, her oldest daughter's test scores boosted in order to facilitate her admission to a college. She did issue an apology, taking responsibility. She said her daughter had absolutely nothing to do with her part in the scam and she's facing a reduced sentence.

Going on to Lori Loughlin, she's not pleading guilty. Sources close to the actress say she intends to fight it in the court system as it stands now, but she's not publicly said much. Really, at the court filing where she said she's not going to plead guilty, that's the only thing she's said and she'll face more time in prison if we get to a trial if she's found guilty of the charges. She's been dropped by the Hallmark Channel. Her daughter has been dropped by major brands. A big deal.

BOLDUAN: You see the fallout there.

What about this news that some of the students in this could now be targeted for investigation?

GINGRAS: This is a new development that we're learning today. Essentially, what's happening is we're learning through "New York Times" reporting that some of the students are receiving what are called target letters. They're learning they could be part of the criminal investigation probe. We don't know how many students are facing this at this point. We don't know if they actually will face charges. We know from the criminal complaint there were some students who possibly knew about what their parents were doing so, therefore, it's possible they could be facing charges which we have been hearing all along.

BOLDUAN: A next chapter in this. And it's far from over.

GINGRAS: Right.

BOLDUAN: Great to see you, Brynn. Thank you so much.

GINGRAS: Thanks.

BOLDUAN: I really appreciate it.

All right, so much to discuss on this. Joining me right now is Julie Lythcott-Haims, a former dean at Stanford University, author of "How to Raise an Adult." And also joining me, CNN legal analyst, Paul Callan.

Thank you both for being here.

Paul, jumping off what was laid out, there's so much to this and so many people involved. Take the example of Lori Loughlin and Felicity Huffman as she laid it out. Loughlin and her husband are accused of paying $500,000 to get their two daughters into school. They went the route of saying they were recruited to row crew. They had never done that. Felicity Huffman paid $15,000 for someone to correct her daughter's SAT scores. They're both -- they both have recorded phone calls, according to prosecutors, discussing the terms of their deals. They're charged with the same crimes. Huffman pleads guilty and apologizes. Loughlin and her husband plead not guilty and are fighting it. How do the two paths diverge so much?

[11:35:00] PAUL CALLAN, CNN LEGAL ANALYST: They diverge in a very substantial way, because, of course, Lori Loughlin is facing many years in prison if she goes to trial and loses in this case, where Felicity Huffman has sort of a guarantee of a very light sentence by pleading guilty. But don't underestimate Lori Loughlin's strategy. She's represented by a top lawyer. This guy who represents her was the Department of Justice guy in charge of the Enron investigation. So that was a big investigation involving complex financial crimes. He's obviously looked at this case and said, you know something, the money laundering part of it, which pops it up to 20 years, is a weak case against her.

And I will say, money laundering usually is a crime committed by professional criminals. You don't often see it committed by ordinary people. And in this case, the so-called fake charity that Brynn was talking about was certified by the IRS as a legitimate charity. You have to go through certification process before you can list your foundation as a charity. That's going to be her defense. She'll say I contributed to a charity, and I thought it was a legitimate charity. Maybe I understood I shouldn't be doing what I was doing with respect to my kid, but I wasn't money laundering.

BOLDUAN: Fascinating. The tapes are barking in my head, but there are tapes.

Julie, let me ask you, there's the legal impact and also the impact on the kids here. Huffman said this in her statement when she was -- when she pled guilty. She said, "My daughter knew absolutely nothing about my actions. And in my misguided and profoundly wrong way, I have betrayed her."

We have heard nothing from Lori Loughlin and her husband -- we have heard nothing from Lori Loughlin, really, and definitely not heard anything about what her daughter knew or didn't know. What does this do to the kids? To the students?

JULIE LYTHCOTT-HAIMS, FORMER DEAN, STANFORD UNIVERSITY & AUTHOR: Yes, that was, frankly, my first thought, Kate, when I first heard the news break. However, many weeks ago, for the kids who are not complicit in the illegal behaviors, they had just woken up to this awful truth that their parents thought so little of their chances that they had to -- they felt the need to bribe other people to let them into school. This can be really damaging to a kid's sense of self. It's tremendously damaging to the parent/child relationship. I really am pleased to see that Felicity Huffman has really tried to take the high road in this circumstance by coming out with an apology and by, it sounds like, trying to really work on that aspect of, you know, her relationship with her kid and acknowledging that her kid had no idea. And I think implicit in that statement is a parent's real fear and understanding about, oh, my gosh, what have I just done to my child? BOLDUAN: Absolutely.

Paul, talk to me, though. Prosecutors say some of the students were in on it, others were not. Now the fact there's this reporting there are target letters. What does that mean?

CALLAN: A target letter goes out to somebody who may be charged with a crime. I think what prosecutors are saying here, they're using the kids as leverage against the parents to force guilty pleas. When prosecutors come to you and say, if you don't plead guilty, we're coming after your child, and they're going to be indicted for complicity in the scam. That's a fearful thing, and a lot of pressure being put on these parents to plead guilty.

BOLDUAN: And a terrifying thought.

Julie, all along the FBI has said that universities, the universities involved here were innocent and were also victims in this. I do wonder, though, and I want to get your take, why wasn't there more of, I don't know if you would call it a safety net or a backstop, to kind of catch this kind of a scam or fraud and these lies. I mean, from, I don't know, guidance counselors in high school all the way up to admissions officers for so many years.

LYTHCOTT-HAIMS: I think, quite frankly, it's because at institutions of higher education, people for the most part are behaving with tremendous integrity. My colleagues at Stanford and their counterparts around the country trust and the admissions office trust that the Athletics Department coaches are creating a list of people they're trying to recruit for the sport who have in fact played the sport and have the other credentials necessary to get in. So I think there's been tremendous collegial trust that everybody is trying to play the game correctly. And it may sound naive, but I think, you know, I don't think of it as naive. I think of it as people with high integrity who are assuming everyone around them is behaving the same way. I think this has really pulled back the curtain on very specific bad actors but I don't think it reflects poorly on the entire university or the entire admissions system.

BOLDUAN: Right. Right. And it shouldn't as well. Albeit a rude awakening for everybody involved in the process.

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BOLDUAN: Go ahead, Julie.

[11:39:54] LYTHCOTT-HAIMS: Yes, I want to point out, for me, the second-biggest issue is the tremendous disparity that this has revealed in terms of who's got access to the back door or the side door of the university and who has to scrimp and save and work their tails off just to get their kids a decent education somewhere. I'm reminded of the case of a woman in Ohio, a black woman named Kelly Williams Bowler. She lived near housing projects, a working-class mom, had two kids, and she wanted them to get to a better public school. Not college, but just K-12. Her own father lived in a better district, so she fudged the zip code that her kids lived in. She sort of pretended they lived in her father's district so they could go to a better school. Well, the state of Ohio came after Kelly Williams Bowler. The judge gave her five years in prison for having done that, fined her $30,000. Now, the judge also convicted her of a felony. The judge suspended the sentence so she only served 10 days in jail, but the felony conviction means this mother, who was in the process of becoming a teacher herself, now is barred from teaching in the state of Ohio because they won't take someone convicted of a felony. There's a tremendous inequity. A woman who is working class just trying to get her kids a better public-school education slammed by the judiciary system. We can only hope these wealthy parents are treated fairly in the system. If this black woman in Ohio was treated fairly with the sentence she got, let's hope the wealthy white folks who have all the many in the world to pay the right lawyers are going to see justice done to them and for them as well.

BOLDUAN: An excellent point.

Julie, thank you so much for being here.

Paul, thank you so much.

Really appreciate it guys.

CALLAN: Thank you.

BOLDUAN: Still ahead for us, the challenge to rebuild Notre Dame after that massive inferno. The flames still stun me to silence when I look at them. We'll talk to one guest who warned years ago that the cathedral was falling apart and reported on it.

We'll be right back.

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[11:45:30] BOLDUAN: This morning, the fire at Notre Dame is out, but the work to recover and restore what was lost is just getting started. The historic church a symbol of Paris, known around the world, ravaged by flames for hours. The extensive of damage apparent from just the sheer size of the flames that we watched consume the roof yesterday. Firefighters, though, say the cathedral's stone structure and main works of art were, fortunately, all saved. Now comes the painstaking task of rebuilding a monument that was already falling apart. A task that could take decades.

With me is Vivienne Walt, a "Time" magazine correspondent, who reported on the renovations needed on Notre Dame before the fire yesterday. She also saw the flames tearing through the historic church just yesterday.

Vivienne, thank you so much for joining me.

You witnessed the fire from your balcony. I mean, this all happened so quickly. What were you seeing and thinking at the time? What struck you most?

VIVIENNE WALT, CORRESPONDENT, TIME MAGAZINE: I think what struck me was how rapidly it spread, and this is really kind of opened a whole lot of questions about what happened and what might have happened had it been better planned for some kind of disaster. I think what we saw, and I'm sure your viewers saw it too on footage, that this was a medieval building that simply went up like a box of matches. There was nothing kind of slow and steady about it. Once it caught fire, it was very, very difficult to get under control. And there was a sense of this being somewhat like out of control. Interestingly, at about 10:00 last night, all the hotel's alarms about a half mile away started ringing. It showed solidarity and captured the mood of the city.

BOLDUAN: You have a unique perspective on this as well because you wrote a great piece some two years ago about how the cathedral was crumbling and undergoing renovation. Is there anything that you saw back then? I mean, you were able to get up on the roof to take a look at the structure then. Anything you saw then that would have shown you that it could be vulnerable to this kind of disaster in particular?

WALT: Well, actually, Kate, I was pretty shocked when they took me up on the roof, and I heard the stories of what was happening and actually, when they led me up on the roof, they kind of stepped out onto the roof and said oh, this one is a new one that just dropped. We haven't seen this before. And with gargoyles, famous gargoyles that the Notre Dame is so renowned for, they were just crumbling. And the real deeper question and the deeper thing now to be answered is that they have no money to fix anything properly. There were chunks of stonework that dropped off the roof that they replaced with wooden because they had no money. Of course, this morning, $600 million being put out, we have hundreds of millions of dollars pouring in from French billionaires, but this is money that was never coming in before. And for Notre Dame officials have been pleading for years.

BOLDUAN: A great point.

One quote struck me reading your piece yesterday from your reporting two years ago, when a French official said to you, "It will not fall down," meaning the cathedral. And that was one of the things that French official had told you. There's no way for them to know at the time just how right they were that it would not fall down, but also now seeing how it is not invincible to this destructive damage.

Vivienne, thank you for coming on. I really appreciate it.

WALT: You're welcome.

BOLDUAN: Thank you.

[11:49:25] Still ahead for us, presidential candidate, Pete Buttigieg, admits his campaign has a diversity problem. Why he says we need to do better. And what he says he'll do about it.

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BOLDUAN: In his own words this morning, South Bend, Indiana, Mayor Pete Buttigieg has gone from adorable six weeks ago to plausible. Officially joining the presidential race two days ago, he's is already polling ahead of candidates who have had much more time on the stable. And he's facing his first big obstacle, a lack of diversity now amongst his supporters and those turning out at his events. And Mayor Buttigieg tells CNN he's aware of the problem.

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PETE BUTTIGIEG, (D), MAYOR OF SOUTH BEND & PRESIDENTIAL CANDIDATE: Well, I think we need to do better. As I've been on the trail we've, to some extent, we depend on geography. We had a very diverse crowd in South Bend but less so in South Carolina. One of the most important things you can achieve in South Carolina is engage with African-American voters, in particular, which represent such an important part of our party's coalition.

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BOLDUAN: Joining me right now is CNN political commentator, former senior advisers to President Obama, Dan Pfeiffer.

Great to see you, Dan.

DAN PFEIFFER, CNN POLITICAL COMMENTATOR: Good to see you, Kate.

BOLDUAN: You actually had Buttigieg on, let's say -- maybe, I don't know if it was in his adorable phase or plausible phase on the podcast talking to him on the first big interview. Let's called this as something difficult to overcome, diversity. David Axelrod pointed to it in a tweet, "Watching the Buttigieg announcement from South Bend, crowd seems very large and very enthusiastic but also very white, an optical he'll have to overcome, and by optical, I mean deficiency."

What do you make about how Pete Buttigieg is handling questions on this?

PFEIFFER: I thought his answer was good this morning, that he acknowledges the challenge. He's not defensive about it and recognizes he's in the early stage of this campaign. Look, he's gone from entirely unknown to someone who is a legitimate threat to win the Democratic nomination in a very short period of time. The question for him and his campaign going forward is, can they take advantage of this boost of momentum to expand his appeal to a larger group of the Democratic voters and build an organization that can sustain him through this long battle for the Democratic nomination.

BOLDUAN: That's for sure. One of the things that he said is we need to invite -- you know, as a way of correcting the problem -- is we need to invite more people into the process. How do you invite more people into the process? How does that work when you're on the campaign trail?

PFEIFFER: Well, I think he needs to -- I think he's doing this, but it's to expand his group of advisers, the people he's talking to, find out what it is that he can do to raise issues of concern to a wide array of Democrats of all backgrounds, to the diverse population who make up our party and get out there and meet people. Spend time in South Carolina and spend time in Nevada. Meet the people. Won't be people who show up at your rallies or the early events. It will be a being lather group of people who may not be engaged in this moment.

BOLDUAN: That's for sure. First-quarter fundraising numbers come in. President Trump, not surprisingly, as the incumbent, is leading the pack, you know, of $30 million raised in the first quarter. David Chalian, of course, our political director, says, "Money begets money." And that's so always true, right. The more money you bring in, the more money you'll be able to get. But can you make a case -- some have suggested to me. Can you make a case that it's not about this money this cycle and why?

[11:55:17] PFEIFFER: No, I can't.

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I think we know from happened in 2016 that the person who spends the most money is not guaranteed to win.

BOLDUAN: Right.

PFEIFFER: But you do need to have enough money as a Democratic primary candidate to run four serious well-organized campaign in the four primary states if you have any chance to be serous presidential candidate. There's going to be a sorting process is the fundraising goes on about which candidates can do that and which candidate cannot. Money does matter, but whoever has the most money does not necessarily win.

BOLDUAN: Not the end all, be all, do all, but nice to have it when you're running for president.

PFEIFFER: Yes, better to have it than not, yes.

BOLDUAN: Great to see you, man. I really appreciate it. Thanks so much for being here.

PFEIFFER: Thank you.

BOLDUAN: Thank you.

Coming up next, new details about the inferno at Notre Dame and how officials plan to save religious the relics and priceless works of art inside.

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JOHN KING, CNN HOST: Welcome to INSIDE POLITICS. I'm John King. Thank you for sharing your day with us.

[12:00:07] House Democrats issue new subpoenas asking several banks for records about the president's finances.