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Rep. Dan Kildee (D-MI) is Interviewed about Obstruction Probe; Boeing Completes Software Fix; Buttigieg on Military; "Trump Family Business" Airs on CNN. Aired 9:30-10a ET

Aired May 17, 2019 - 09:30   ET


[09:30:00] REP. DAN KILDEE (D-MI): Conducting. And one does have to ask the question, why not? What are they trying to hide?

SCIUTTO: A fair question. Finally, if I can ask you, because this just broke in the last several minutes, and that is that the Trump administration, the president, is delaying by six months auto tariffs that were planned targeting Japan and the E.U., to be clear, not China, those tariffs continue here. But, of course, the great state of Michigan has a few auto plants and auto workers there.

I wonder what your reaction is to the president's delay here? Do you welcome that change?

KILDEE: Well, what I would like to see from the president is a far more intentional strategy on all of this. I'm one who believes that there is an appropriate use of tariffs when some of our trading partners are bending the rules to their favor. But, unfortunately, the president has taken sort of a meat axe approach to this.

So, yes, I think there are instances where we need to make sure we protect American workers. But the problem is, the American auto industry, including domestic auto producers, rely upon a global supply chain. And sometimes I think the president likes his unilateral authority so much that he doesn't think about the downstream consequence. And that's what I'm worried about. We need a targeted approach to deal with those bad actors, but not do things that ultimately could slow down the economy and hurt American workers.

SCIUTTO: Congressman Dan Kildee, thanks very much for joining us.

KILDEE: Thank you, Jim.

SCIUTTO: And as we've been speaking to the congressman there, you see the market opened down nearly 200 points at the start. This following broad drops overseas as well, continuing concerns about the trade war between the U.S. and China.

Other news we're following this morning, Boeing says that it has fixed now the software linked to crashes of two of its 737 Max jets. So will the FAA agree to let the planes fly again? Are they safe now?

(COMMERCIAL BREAK) [09:36:06] SCIUTTO: Boeing now says it has completed a software fix for its grounded 737 Max jets, but the update will have to win approval from U.S. and international regulators before the planes can return to fly. The system played a role in the crash of two jets operated, one by Lion Air in October, another by Ethiopian Airlines in March. Three hundred and forty-six people died in those crashes. In both accidents, the anti-stall system pushed the plane's noses down while the pilots struggled to retain -- regain control.

Joining me now is former FAA safety inspector and CNN safety analyst David Soucie.

So, David, looking at this now, these were multiple failures by Boeing throughout this, both before the first crash, after the first crash, before the second crash. I just wonder, how can flyers be confident that the fix Boeing says it has now makes these planes safe to fly?

DAVID SOUCIE, CNN SAFETY ANALYST: Jim, it's unbelievable what they've gone through to try to make this safe. There are still questions, there are still things that need to be certified. The FAA comes in and they say, yes, it's fine.

But the question, Jim, is, why did they say it was fine the first time and not this time? And that has to do with the fact that safety is really an iterative process. It -- as tragic as that sounds, we really have to learn from these things and make sure that those lost lives weren't in vain and that they're responded to appropriately.

And the question again is, why wasn't this caught in the first place.


SOUCIE: I think Boeing still needs to look deeper to regain confidence for all of us.

SCIUTTO: So since the Lion Air crash, pilots complained -- pilots complained that they were not informed of the MCAS system, as it's known, that it was even on their plane. And I just wonder, how is that not gross negligence on the part of Boeing, not to let pilots know? Because throughout this, Boeing is sort of in a -- you know, a side way blamed it on foreign pilots, but these were American pilots complaining about this.

SOUCIE: Absolutely. It's been known. And it goes back, Jim, to a critical error that happened within Boeing when this aircraft was in design, and that was that this system was categorized as something that wasn't a flight safety issue. And by design it really wasn't at the time.

What happened is, it became a safety of flight issue when they stopped relying -- when they started relying on it, allowing it to move the horizontal stabilizer in a way that's non-recoverable. So it was lack of foresight on behalf of Boeing to say -- and the FAA because the FAA was part of the certification as well. So why they didn't recognize this as being a safety of flight item, that's the issue. And that's why they didn't inform pilots because they didn't think it could cause this accident.

SCIUTTO: Well, this gets to a bigger picture issue, right, is that how much of these safety judgments the FAA farms out to the manufacturer, which, of course, has its own incentive, you might say, certainly a big financial incentive perhaps to downplay some safety issues. And will these crashes fundamentally change that process so that the FAA has more oversight and is not letting planes self-certify these safety issues?

SOUCIE: I think self-certify is a little bit of a -- too much going too far because they still do certify it through the FAA. The question -- and I don't think anybody intentionally says, hey, I'm going to do this for profit. What they do is it sways their opinion making.

SCIUTTO: Of course not intentionally, but there are questions about mixed incentives, right, or the proper incentives.

SOUCIE: Yes. Exactly.

SCIUTTO: And you and I have spoken about this before that the manufacturers have too big a role in that certification process.

SOUCIE: Exactly. That's -- that's probably a better phrase, Jim.

And the fact is that right now they're not focused on that. The FAA and Boeing are focused on fixing the problem and that's short term. There really has to be something deeper than that and perhaps with the new FAA administrator coming in, perhaps with the Senate and Congress investigating this, that will change. But it's been there a long time. This is something they've always relied on. It would cost billions of dollars to not have that in the system. So it's not going to go away quickly, but the question is, what are they going to do about it to improve it the way that it's supposed to be improved.

[09:40:26] SCIUTTO: Well, big questions for flyers certainly as well.

David Soucie, always good to have you on.

SOUCIE: Yes. Thanks.

SCIUTTO: Pete Buttigieg is one of three Democratic presidential candidates who served in Afghanistan or Iraq. Why he thinks his time serving overseas sets him apart from the current president. That's coming up.


MAYOR PETE BUTTIGIEG (D), PRESIDENTIAL CANDIDATE: It's not like I killed bin Laden, right? I don't want to overstate what my role was. But it certainly was something that was dangerous.



[09:45:20] (BEGIN VIDEO CLIP) UNIDENTIFIED MALE: Don't you think it's just great to see the fact that you've got a guy there on the stage with his husband and it's normal, it's not even seen as a big deal.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think it's absolutely fine. I do. I think it's absolutely fine.

UNIDENTIFIED MALE: But isn't -- isn't it a sign of great progress in the country that that's just --

TRUMP: Yes, I think it's great. I think that's something that perhaps some people will have a problem with. I have no problem with it whatsoever. I think it's good.


SCIUTTO: That's President Trump there recognizing the significance, even the positive progress of a gay man running for president is something that has set South Bend, Indiana, Mayor Pete Buttigieg apart in a very crowded Democratic field. But it's Buttigieg's time in the military that he says helped him come out.

CNN's Jeff Zeleny sat down with the mayor to talk about his military service.


JEFF ZELENY, CNN CORRESPONDENT (voice over): There's one chapter of his life that Pete Buttigieg often turns to.

MAYOR PETE BUTTIGIEG (D), PRESIDENTIAL CANDIDATE: So somebody who served in Afghanistan.

When I went overseas.

When I was packing my bags for Afghanistan.

ZELENY: The 37-year-old mayor of South Bend, Indiana, deploys his military service as both a sword and a shield, whether taking questions about his experience or quieting anti-gay protesters, Afghanistan is often his answer.

BUTTIGIEG: That's one more reason why it might not be a bad idea to have somebody in the White House who actually served.

ZELENY: His time as an intelligence officer in the naval reserves and a six month deployment to Afghanistan makes his already gold plated resume shine even brighter, yet Buttigieg rarely talks about why he joined the service after graduating from Harvard and studying as a Rhodes Scholar.

It turns out it was 2008 and he was volunteering for the Barack Obama campaign in Iowa, where he said he saw many young people signing up for the Army or National Guard.

BUTTIGIEG: I might have dragged my feet on it forever if I hadn't had that experience in Iowa and just realizing that some communities were almost emptying out their youth into the military and some were barely serving at all.

ZELENY: Now, he's one of three presidential candidates who served in America's longest wars in Iraq and Afghanistan. Joining Congressman Tulsi Gabbard and Congressman Seth Moulten. After five years of reserve duty, he deployed to Afghanistan in 2014, just as President Obama was announcing a troop withdrawal. Military records, reviewed by CNN, show Buttigieg was part of a unit assigned to identify and disrupt terrorist finance networks. It was largely a desk job at the Bagram Air Base, but he also worked as a driver and armed escort.

BUTTIGIEG: Look, it's not like I killed bin Laden, right? I don't want to overstate what my role was. But it certainly was something that was dangerous. You know, people that I knew, unfortunately, were attacked.

ZELENY (on camera): Do you think you would be able to make this run as credibly without this military service?

BUTTIGIEG: Well, I think at a moment when obviously people are looking for contrasts, it helps me demonstrate the difference between how I'm oriented and how the current president is.

ZELENY: Jason McRae still remembers the day he met Buttigieg at their training in South Carolina. He didn't know the man assigned to be his battle buddy was also an Indiana mayor.

JASON MCRAE, SERVED WITH PETE BUTTIGIEG: One of my early memories is he had an ear bud in and he was learning a language, I think it was Dari (ph). Certainly I don't remember other folks that were picking up the language at that point in time.

ZELENY: He was interested in Afghanistan was studying and consuming everything about it?

MCRAE: Yes, for sure.

ZELENY (voice over): A dozen people who served alongside Buttigieg in the reserves and in Afghanistan who spoke to CNN described him as mature and, yes, ambitious. But several said he was hardly alone on that front.

J. MCRAE: To go through a deployment in Afghanistan is -- there's probably less dangerous ways to check the box.

ZELENY: McRae and his wife, Sue, are watching their friend's campaign from afar with interest.

SUE MCRAE, WIFE OF JASON MCRAE: When I first met Pete, it was just a wife going to say good-bye to my husband and we just happened to meet a battle buddy.

ZELENY: So Buttigieg mentions Afghanistan at virtually every stop on the campaign trail. He does say it's time for a new U.S. policy there, noting that soldiers enlisting now were not even born at the time of the September 11th terrorist attacks. As for his own enlistment here in Chicago in 2009, he said he was not

doing that with politics in mind. He said you never know if military service will be politically popular or not.

Jeff Zeleny, CNN, Chicago.


[09:49:33] SCIUTTO: Hundreds of millions of dollars flow from Trump Organization businesses to the president's pockets each year. Now CNN takes a new look at how the president and his family do business.


SCIUTTO: The financial disclosure forms are out, and the president raked it in. He made at least $434 million just last year, $40 million of that came from his hotel in Washington, just steps from the White House. A hotel that a lot of foreign leader come to stay at. A new CNN special report, "The Trump Family Business," take a deep dive into the Trump Organization and how others have been caught up in his big financial ventures.


SANDRA SAPOL, BUYER, TRUMP OCEAN RESORT BAJA, MEXICO: Sandra Sapol of suburban San Diego was immediately interested in the Trump Ocean Resort in Baja, Mexico. A big reason, it didn't have a southern California price tag.

[09:55:09] We don't make that kind of money where we're driving around in a Ferrari or a Lamborghini. We're pretty regular, normal people.

We met this lady who showed us brochures of what it's going to look like, and they're going to have a spa, and it's going to have a pool and it's going to have a tennis court. It looked so beautiful.

ERIN BURNETT, CNN ANCHOR, "ERIN BURNETT OUTFRONT": Beautiful. And Sapol thought a great investment, because she thought she was buying from a man with the Midas touch.

SAPOL: Whatever Donald Trump touches turns fantastically gold.

BURNETT: Sapol and her husband signed their purchase agreement in December of 2006.

SAPOL: 12/8/06. Here's the purchase price of our condo, $418,900.

BURNETT: What they could afford.

SAPOL: The letter confirms that we're in receipt of the total deposit of $125,000.

BURNETT: They'd lose every penny.

SAPOL: It's hard when you feel like you've been ripped off by a big name. It's just -- you just start to be like, how could this have happened?

BURNETT: The Trump Ocean Resort Baja, Mexico, was never built. Construction never got beyond this, a giant hole in the ground.

SAPOL: So there's my hole. That's what I bought, my hole.


SCIUTTO: Goodness. CNN's Erin Burnett is here with me now.

So, I mean, you know, real losses by real people. So it's moving to watch this.

You say that she thought she was buying from Donald Trump. Was she? I mean the name was all over the materials.

BURNETT: The name was all over the materials. I mean she has a brochure, and it says, developed by one of the most respected names in real estate, Donald J. Trump. You would sure think he was the developer.

Well, he wasn't.


BURNETT: In fact, here's a letter from the developer, and -- and Donald Trump's name is at the bottom. It's interesting, you see the letter, we'll be installing a web cam that will allow you to watch construction progress. As you can see, it never got beyond a hole in the ground.

She lost all -- she and her husband lost their entire deposit. There was a class action lawsuit. A lot of people joined it. They settled. Sandra Sapol and her husband, Jeff, they couldn't afford to join it at the time, so they're still out every dollar of their money.

SCIUTTO: I mean this looks deliberately misleading because the president's signature, now recognizable because he's the president of the United States --


SCIUTTO: But, you know, as businessman, is right on the bottom of the letter.

BURNETT: It certainly seems that way. And then you see it in places like Ft. Lauderdale, same thing.

Now, in the fine print of a prospectus, maybe there is where you find the word -- the words, oh, he's not -- he's not the developer. He actually did a deposition, of course, under oath, do you swear to tell the truth and nothing but the truth, I do. He says he was not the developer. Well, when you say you're developing, well, that doesn't mean I'm actually the developer.

SCIUTTO: OK. BURNETT: He literally says that.

SCIUTTO: That's --

BURNETT: But, you know, it's time and time again, in property after property. And what you see in so many of these cases, he licensed the name, Jim, and they weren't ever built, or they failed, or they went bankrupt. But all the people who put their money in, and so many of them believing in him --

SCIUTTO: Yes. Yes.

BURNETT: That the star of "The Apprentice," the Midas touch, are still recovering.

SCIUTTO: And this is not isolated because you have the Trump University scandal, which had -- which operated in a similar way, right?

BURNETT: Absolutely. And, you know, I talked to a woman who was trying to rebuild her life and her career during the financial crisis, joined Trump University. She says she put all in about $160,000 into classes, into real estate that her mentor said this would be a good idea.

Well, she got about some 30,000 odd dollars back in the settlement.


BURNETT: But she's still recovering and building her life. And yet, again, it became a familiar refrain. She believed in the man she saw on television and -- and it was --

SCIUTTO: And that's indelibly connected to his political message, is it not? It's that I am this -- I am this tremendous business success, and, therefore, I will be a successful president.

BURNETT: Right. You know, he got to a point, as you know, where banks wouldn't really lend him money. So he had to try to find other ways. So he went to countries where a lot of other big real estate stars would not want to do business.

SCIUTTO: Name one of those countries.

BURNETT: You could talk about, you know, Azerbaijan as a country.


BURNETT: And he also, just -- we, just, again, we saw it time and time again. He would license his name. And that's what he really did.


BURNETT: So he would put no money in. Others would lose everything that they put in. He'd still walk away. You know, in one case we found $30 million to $50 million in one property alone. Property failed, Donald Trump still made money. SCIUTTO: Right. And that's a thing you hear in New York often, you

know, from genuine property developers is that we build stuff. Can't remember the last time Trump actually built stuff. That this was more his business model, putting his name on that -- on those kinds of developments.

BURNETT: That's right. That's exactly -- that's exactly what it was.

SCIUTTO: Well, it's a fascinating thing. Really important because you're connecting the dots on a lot of things that might be hard for people to follow here. It's really worth watching this. So glad you did it.

BURNETT: Yes, we're very excited about it, yes.

SCIUTTO: Don't miss it. It's going to be a CNN special report, "The Trump Family Business," tonight, 9:00 Eastern Time, right here on CNN.

A very good Friday morning to you. I'm Jim Sciutto. Poppy has the day off today.

[10:00:03] As the world waits to hear from Robert Mueller, Attorney General William Barr gets his message out on the Russia investigation.