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At This Hour

Workers For LA Unified School District Hold First Day Of Strikes; Fox News Producer Files Two Explosive Lawsuits Against The Network; New Surveillance Video Shows Encounter Leading Up To VA Man's Death. Aired 11:30a-12p ET

Aired March 21, 2023 - 11:30   ET

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

[11:30:00]

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KATE BOLDUAN, CNN ANCHOR: AT THIS HOUR, workers for the second-largest school district in the country are on strike. Custodians, cafeteria staff, bus drivers, and others are on the picket lines Over a half a million students are being told to stay home.

Nick Watt is there for us. He joins us now. Nick, how did the talks break down? And where is this headed right now?

NICK WATT, CNN NATIONAL CORRESPONDENT: Well, we don't entirely know where it's headed. Right now, there is a three-day strike scheduled here in Los Angeles. It is the bus drivers, the cafeteria workers, teaching assistants, custodians, the union that represents them that is called this strike. But the Teachers Union has also called its members out in sympathy.

The two sides still pretty far away from each other on pay and other things. They've been talking for nearly a year and couldn't figure it out. There were supposed to be some last-ditch talks late yesterday. Those talks didn't even happen over an argument over whether they should have been secret and leaked to the press. It was a whole thing.

We've just heard from the union again this morning that says listen, a lot of our workers, their pay puts them below the poverty line here in Los Angeles. That pay needs to increase. They also want better conditions. And, of course, while the adults argue about this, you've got more than half a million kids here in Los Angeles who are not going to school today.

Now, there is some child supervision offered. There are also box lunches. There are many kids here who rely on school not just for education, but for food. LA Zoo has also said free admission today. I'm not sure how long it'll take that up. We expect to hear throughout the day from both sides if they are managing to get any closer to an agreement to get kids back into school. Back to you.

BOLDUAN: All right. Nick, thank you for being there.

So, we turn to this right now. The Federal Reserve is right now facing what many see as its toughest decision in recent memory. They're meeting today to decide whether to raise interest rates again in the fight against inflation. But now, there's also, of course, they're dealing with a banking system on edge.

Rahel Solomon is here with much more on this. Rahel, what are the expectations today?

RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Well, Kate, as you know, so much has changed over the last two weeks.

BOLDUAN: Of course.

SOLOMON: And expectations have changed over the last two weeks. So, two weeks ago, the expectation heading into this meeting was a rate hike of half a percent. Take a look at how that compares now with traders largely expecting a rate hike of a quarter of a percent, or perhaps even a pause. The Fed essentially finds itself, Kate, walking a tightrope here.

On the one hand, you have this chance of additional banking instability. On the other hand, you have oh yes, inflation, which presents its own host of problems, we can show you how sort of the rate hiking cycle has looked and see how half a percent would essentially look or a quarter of a percent rather. The big challenge here for the Fed is we don't know how this banking situation -- let's call it a situation. Some have called it a crisis. We don't know what the other side of this looks like. Could we see another bank fall?

BOLDUAN: Right.

SOLOMON: Perhaps. But even if we don't, there will be an impact because you have to consider these small and medium-sized banks are still in a position where they are unsure of what deposits will look like, might they see another deposit run. And so, they're holding on to liquidity. They're holding on to cash just trying to protect themselves. But what that means is that that's less cash, less funding for loans, car loans, business loans, etcetera. So, that will have a real impact on the economy.

But Jan Hatzius, the chief economist at Goldman Sachs saying, essentially, it doesn't make sense to raise rates right now in the midst of this ongoing stress in the banking system. That could present substantial downside risks to the economy. So, there will be an impact.

The question is, we don't know how large it will be. And so, maybe the Fed should pause, maybe take a beat, see what things look like. On the other hand, inflation, which of course, we've been dealing with host --

BOLDUAN: Right.

SOLOMON: -- host of its own problems. And there's also this concern that you know, two weeks ago, the last time we heard from Jay Powell, essentially on the Hill, he signaled that more rate hikes were coming, that they had more to do.

[11:25:08]

And so, in about-face here in terms of a pause, could really spook investors, right, essentially, what do they know that we don't know. And so, there's a whole host of things to consider here.

BOLDUAN: There's so much -- there's so much psychology to this.

SOLOMON: And there may not be one right answer.

BOLDUAN: I think that is probably -- the only answer is what you just said right now. It's good to see you, Rahel.

SOLOMON: (INAUDIBLE)

BOLDUAN: Thanks for walking through it.

Let's get some more perspective on this right now. Joining me now is Democratic Senator Tina Smith from Minnesota. She's a member of the Senate Banking Committee. Senator, thanks for being here.

So, the Fed admitted today, Rahel was laying out how complicated the decision is. And the former president of the New York Fed just said on CNN that he thinks there's no right answer when it comes to the rate decision this time. What do you think? I mean, do you -- what do you think the impact of a pause in raising rates would do right now?

SEN. TINA SMITH, (D-MN): Well, as you've just described, this is a very complicated situation. The Fed has a mandate of controlling inflation -- keeping inflation stable, and also they have a mandate about maximizing employment. And now, on top of those two very important goals, we have this situation with banks, most notably the Silicon Valley Bank that had significant risk on their balance sheet because the assets that they held declined in value as interest rates went up. So, the Fed has to balance all of these things as they make their decision.

I hope that they are cautious that they think about the potential negative impact of additional rate increases in the midst of all of this uncertainty. And, you know, we know that inflation is bad, especially for working families who have very little discretionary income. And raising interest rates actually doesn't get at in this moment the key components of those price increases, which have to do with housing costs going up, and also other services costs going up. So, I think it's a time in my view for them to exercise caution.

BOLDUAN: The top Republican in your committee sent a letter to Jerome Powell, and also the head of the FDIC asking for a timeline of the Feds' interactions with SVB and Signature Bank over the last two years. Also asking for names and titles of all the people from the Fed that had been involved. Do you think -- do you want to see the focus to be there as you guys are investigating what went wrong, and how to make sure it doesn't happen again? I mean, do you want these Fed officials to come before your committee?

SMITH: Well, we absolutely need to understand what went wrong and how this happened. And I look first to the importance of holding the management of this bank accountable, that by all appearances made irresponsible decisions that put their depositors at risk, and then paid out massive bonuses to themselves just days or hours before the bank collapse. So, there's accountability there that we have to get to the bottom of.

The question of the supervisory role that the Fed played and what happened there is also a really important question. Reports recently has suggested that the Fed expressed to Silicon Valley Bank their real concerns about the status of their financial condition. I want to know why the bank didn't act on that, or if they did act on those -- on those Federal Reserve you know letters, you know, what happened as a result of that?

So absolutely, there's a question that we need to answer about how that supervision happened or didn't happen. And then last of all, we have to really look at whether or not the regulations that we have in place were these regional banks that are quite large, though not deemed systemically important, are those regulations tough enough? Do they have high enough capital requirements? Should they be stress tested to make sure that these kinds of interest rate risks like we've seen don't do great damage to depositors? So, there's a lot that we need to look at here.

BOLDUAN: And threading the needle and getting the balance right is going to be a real challenge and really critical for you guys, as policymakers, as lawmakers. Thank you so much, Senator. I appreciate your time.

SMITH: Thank you.

BOLDUAN: Thank you.

So, a new lawsuit against Fox News, a producer accusing Fox lawyers of trying to coerce her. That's next. But first, here's Dr. Sanjay Gupta with a tip for how to keep your heart healthy in today's "CHASING LIFE."

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DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Hey, there. I'm Dr. Sanjay Gupta, host of CNN's "CHASING LIFE" podcast. OK, you're going to love this one. A relaxing session in the sauna may also offer you cardiovascular benefits. Let me be clear on something. This is not a replacement for exercise.

But what studies did find was that regular sauna use was associated with lower rates of cardiovascular deaths. Turns out, they say, the high heat inside the sauna makes your heart work a little bit harder. And taking a sauna after exercise might be even better. The heat may intensify your workout's cardiovascular benefits.

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Now, saunas have also been shown to lower stress levels, and that's obviously always good for your health. But if you're pregnant or you have a heart condition like angina or congestive heart failure, you do need to check with your doctor before going into the sauna. And you can hear more about how to optimize your health in Chase Life wherever you get your podcast.

(END VIDEOTAPE)

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BOLDUAN: Explosive new allegations from a Fox News producer as the company fights a $1.6 billion defamation case. This producer is claiming lawyers for Fox coerced her into giving misleading testimony when she was deposed in Dominion's massive suit against the network.

Jessica Schneider is live outside the courthouse where lawyers for Fox and Dominion are duking it out right now actually. Jessica, what's the impact of this new lawsuit on this existing legal fight?

JESSICA SCHNEIDER, CNN JUSTICE CORRESPONDENT: Well, Kate, these are two new lawsuits from this Fox News producer. And they're being filed at the exact same time that a judge inside this Delaware courthouse right now is deciding whether this $1.6 billion defamation case against Fox News can actually move forward to trial or if this judge should just decide the case outright.

So, this particular lawsuit filed by Fox News producer Abby Grossberg. She says that she was coerced into giving misleading testimony during the depositions in this Dominion case. She says her misleading testimony really shifted culpability away from Fox executives as well as Fox corporation. So, here's what Abby Grossberg is saying in this lawsuit.

Saying Fox News attorneys acted as agents and at the behest of Fox News to misleadingly coach, manipulate, and coerce Ms. Grossberg to deliver shaded and or incomplete answers during her sworn deposition testimony, which answers were clearly to her reputational detriment but greatly benefited Fox News. Now, Fox News for its part is responding to this lawsuit really citing attorney-client privilege as a reason what -- why they can't comment on this. As for this fox news producer, Abby Grossberg, she's actually out on administrative leave while her case goes forward. And all at the same time, there's this looming $1.6 billion defamation lawsuit.

I've been inside the courtroom here as these arguments are playing out. We've heard a lot from Dominion voting systems' attorneys. They're saying that all of the texts and e-mails that they've uncovered throughout this deposition process really show that Fox News hosts, they knew exactly that the claims that they and others were making were false as it pertained to Dominion voting systems allegedly and falsely rigging the 2020 election. Up next will be the Fox News attorneys. They're saying that they are fully protected and all this by the First Amendment.

Interestingly, here, Kate, also on the eve of these arguments, there was a filing from Dominion saying that they want Fox Corporation Chairman Rupert Murdoch and his CEO son Lachlan to testify if and when this case goes to trial. If it does go to trial that, will be decided by this judge, and it would be about mid-April. So, there's a lot at stake here. And high stakes of course with this $1.6 billion defamation suit, Kate.

BOLDUAN: Yes, and a lot that could be happening very soon. It's good to see you, Jessica. Thanks for putting it all together for us.

Coming up. A video just released. It shows the deadly encounter when a Virginia man was taken into custody and a group of officers can be seen piling on top of him. Several of them are now charged in his death. We're going to walk you through it next.

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BOLDUAN: We are hearing now for the first time from the teacher shot by a six-year-old student in her classroom. Abby Zwerner speaking to NBC News says that she grew increasingly concerned when she heard rumors that the child might have a gun at school. And then Zwerner as we know was shot in her hand and in her chest in early January. Listen.

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ABBY ZWERNER, TEACHER WHO WAS SHOT BY STUDENT: I was terrified. In that moment, my initial reaction was your kids need to get out of here, you know. This is not a safe classroom anymore. And then you need to go find help for yourself.

It was pretty shocking. You know once the fire alarm went off, and then I felt something that shock itself that I had been shot. But I just wanted to get my babies out of there.

(END VIDEO CLIP)

BOLDUAN: Zwerner says that she's still healing from the physical wounds from all of this. The bullet is still lodged in her chest, she says. And she also says that she's still working through the mental trauma of all of it. She says some days she can't even get out of bed. Zwerner has filed a lawsuit, accusing school administrators of repeatedly ignoring warnings.

We also have a new surveillance video that we want to show you and speak to about. 911 calls all shedding new light on the deadly encounter between a Virginia man and several security officers at a mental health facility earlier this month. Prosecutors just released the video, an alleged that the 28-year-old man was smothered to death. And now, ten people including seven sheriff's deputies had been charged with second-degree murder in his death.

Brian Todd is following this. He's joining us now with more details. Now, we're sick, taking a look at this -- at this surveillance video, Brian. And we should warn viewers this video is disturbing. Walk us through what it shows. BRIAN TODD, CNN CORRESPONDENT: Right, Kate, we can take you through this video. We've just obtained it from the prosecutor's office here in Dinwiddie County. Some videos in sequence. You see them bringing Irvo Otieno into the Central State Hospital intake ward there. You see the deputies bringing him in. This is on the afternoon of Monday, March 6.

They are supporting him as they bring him in. Not quite dragging him but he is in shackles and leg irons when they bring him in and they sit him on the floor by a chair. There's a chair there but they don't put them in the chair. They sit them on the floor and restrain him. Another portion of this video that we've gotten is the operative part where it shows several deputies on top of him at various points and then joined in by -- allegedly joined in by three security guards from Central State Hospital.

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At certain points, there are ten people on top of Irvo Otieno. And you can see in this video of the restraining period there where at least one of the deputies has his knee on Irvo Otieno's neck. This restraining period went on for roughly 12 minutes.

You will then see a certain part of the video where there's some struggling going on. Now, Irvo Otieno does not appear to be giving a lot of resistance, but there are points in the video where he kind of jerks his body slightly where the deputies shift and try to adjust their weight. Also, we've obtained 911 calls from when the hospital staff called 911 to try to get EMTs to that position at about 4:40 that afternoon. Take a listen.

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UNIDENTIFIED FEMALE: We need any emergency -- what do you call this again? An EMS here in Central State Hospital in St. Petersburg, Virginia.

UNIDENTIFIED FEMALE: OK, what happened?

UNIDENTIFIED FEMALE: So, the patient is a new admission, so we're still in the admission unit. And then he's very aggressive, so --

UNIDENTIFIED FEMALE: What building?

UNIDENTIFIED FEMALE: Building 39. It's a maximum security unit. So, they're doing CPR right now. And there's no pulse anymore.

UNIDENTIFIED FEMALE: I'm sorry. Is the patient aggressive or is he not -- he's not breathing?

UNIDENTIFIED FEMALE: No, he used to be aggressive, right? So, they're trying to put him in restraints, then eventually he then -- he's no longer breathing.

UNIDENTIFIED FEMALE: Are they doing CPR?

UNIDENTIFIED FEMALE: Yes, they do -- they're doing right now.

(END AUDIO CLIP)

TODD: There were several points in that video where staff are shown trying to give him CPR. Another big development that we can tell you that just happened quickly here, one of the attorneys for one of the deputies has said that the employees at Central State Hospital had the responsibility of taking him in and restraining him, that they did not meet their responsibilities that they failed in those responsibilities. We have reached out to Central State Hospital for comment on that, for response. We've not heard back from them, Kate.

BOLDUAN: Brian, thank you very much. Thank you all for watching. "INSIDE POLITICS WITH JOHN KING" starts after this break.

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