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CNN Connie Chung Tonight

Two Pilots Arrested for Intoxication on the Job; Did the CIA Discriminate Against a Black Agent?; Nanny Accuses Mother of Child Abuse

Aired July 02, 2002 - 20:00   ET

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

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CONNIE CHUNG, CNN ANCHOR: Good evening. I'm Connie Chung.

One hundred and twenty-four people onboard, the plane ready for takeoff, the pilot arrested for DUI.

(BEGIN VIDEOTAPE)

ANNOUNCER (voice-over): Were they drinking on the job? Two pilots pulled over on the runway.

MAJ. M. HAMMERSCHMIDT, MIAMI-DADE FLORIDA: The pilot and copilot were requested off of the plane. Impairment was indicated.

ANNOUNCER: How did these pilots even make it to the cockpit...

UNIDENTIFIED FEMALE: They guy who was sitting next to me heard that the pilots were drunk.

ANNOUNCER: ... without being stopped?

Spy versus spy, a CIA agent's dream to land the perfect assignment.

JEFFREY STERLING, BLACK EX-SPY: The trained me, but I was still not good enough.

ANNOUNCER: Did the CIA stop him because of the color of his skin?

STERLING: It was a good ole boy's club, and that is a club that I can't join.

ANNOUNCER: Do you know everything you need to about your nanny?

Maybe not.

UNIDENTIFIED FEMALE: I've lost custody of my kids. I don't know where to go. I've walked through the doors into hell.

ANNOUNCER: Connie talks to a woman who tells her own frightening story.

(END VIDEOTAPE)

ANNOUNCER: This is CONNIE CHUNG TONIGHT.

Live from the CNN Broadcast Center in New York: Connie Chung.

CHUNG: Would you go to work drunk? What if you had more than 100 people whose lives were in your hands? Two America West pilots are accused of doing just that: attempting to fly a commercial airliner drunk.

And tonight CNN confirms that one of the pilots has been involved in two previous alcohol-related incidents where police were called.

CNN's Susan Candiotti is on the story tonight in Miami.

(BEGIN VIDEOTAPE)

SUSAN CANDIOTTI, CNN CORRESPONDENT (voice-over): After posting $7,000 bond each, the America West captain and copilot hurried out of jail just before midnight, leaving after their arrest for getting behind the controls of an aircraft drunk.

HAMMERSCHMIDT: They were both tested, and both tested above the legal limit in the State of Florida.

CANDIOTTI: That limit is .08. Blowing into a breathalyzer, pilot Thomas Cloyd tested at .091. Copilot Christopher Hughes tested at .84.

The FAA is investigating. It could revoke their licenses permanently.

One hundred and twenty-four passengers were aboard.

UNIDENTIFIED FEMALE: Our lives are in the hands of these people, and they don't care.

CANDIOTTI: A screener at Miami International Airport initially stopped both pilots for trying to carry two cups of coffee through a security checkpoint. It was before 10:30 Monday morning.

A supervisor was called; there was trouble. According to a police report there were, quote, visual signs of intoxication, odor of an alcoholic beverage, flushed face, bloodshot, watery eyes.

Security called police. But by the time they got to the gate, Flight 566 to Phoenix had taxied to the runway, about to takeoff. The tower ordered the plane to stop.

When police questioned the pilots about the smell of alcohol, the copilot told police, quote, "it's merely mouthwash."

UNIDENTIFIED MALE: I am mostly disgusted about how these people totally disregarded the safety of the passengers on that airplane, and the profession that they supposedly represent.

CANDIOTTI: Aviation consultant Jim Tilman (ph) insists flying drunk is an exception, far from routine.

FAA records appear to back him up. In required random alcohol testing in the years 2000 and 2001, pilots and other airport employees failed less than half of 1 percent of the time.

The FAA rule forbids pilots from drinking eight hours before they step into the cockpit. America West policy is 12 hours.

(END VIDEOTAPE)

CANDIOTTI: In fact, when the FAA randomly checks pilots for alcohol use, its own rules limit their use to .04. That means that the pilots here in Florida when they blew into that breathalyzer tested twice as high, more than .08 percent --- Connie.

CHUNG: Susan, didn't the crew notice anything?

CANDIOTTI: Well, that's a good question, Connie. We're trying to find the crew, to ask them that very question.

According to aviation experts, it's certainly probable that the crew had some contact with the pilots, because they do go over a checklist with, at the very least, the head flight attendant. But it's unclear whether the pilots went straight into the cockpit and had no contact with the crew.

CHUNG: And what about the investigation -- the legal investigation? Is that continuing?

CANDIOTTI: Yes it is. The FAA will not say exactly when it intends to wrap it up. However, sources do tell us that it probably will be quickly.

CHUNG: All right, CNN's Susan Candiotti in Miami, thank you.

Joining me now, also from Miami, are Police Detective Juan DelCastillo, and from Tempe, Arizona, American West spokesperson Jim Sabourin.

Thank you, gentlemen, for being with us.

Jim, wouldn't it be America West's responsibility to know that one of those pilots had a previous record that involved a drinking problem? Why didn't you know that?

JIM SABOURIN, AMERICA WEST SPOKESMAN: Well, in this case, when an employee comes to America West and applies for a position, that is something that should, and would, be indicated on the application for employment. And if, indeed -- and then would be uncovered in a background check. But I don't -- I can't speak, quite frankly, to all of the details in this.

I think the bottom line is we have two employees that, at this point, clearly violated our policy. And we have a zero-tolerance policy. And we will certainly terminate those employees. CHUNG: But Jim, there were two incidents: one in 1998 and one in 2000. In one incident, the wife of Mr. -- I believe it was Cloyd, Thomas Cloyd -- the wife Thomas Cloyd reported that they have had an abuse problem. That he -- whenever he drinks, he's abusive. And out of the 12 years -- the 16 years they've been married, 12 of them, he's been abusive.

Shouldn't you have known that?

SABOURIN: Well, that's a good question. And all I can tell you at this point is those are the very things we're looking at. We're trying our best at this point to determine what went wrong in this case.

The obvious facts are: We have two employees that were in the state of Florida that measured over the limit on a breathalyzer test. That, we know. The rest of the situation, at this point, is still unclear, and sometimes a bit sketchy.

But I can assure you, at this very moment, we're looking at all of the details. We're trying to figure out exactly what happened, exactly what we can do about this.

And the commitment we have, is that we will do something about it, and we'll do our best to ensure that this does not happen again.

CHUNG: I just really need to question you just a touch further about these previous incidents. I mean, the fact is if this man did, indeed, have a drinking problem, and it's been going on for years, are we to believe that America West never noticed? That no one on any of those crews, or no officials, noticed?

SABOURIN: Well I think, to begin with, I think to categorize this as a drinking problem is a bit potentially premature. I mean, I can't state for a fact that, indeed, this individual has a drinking problem. And I don't think any of us really can.

CHUNG: But he pleaded -- sir, he pleaded guilty to a misdemeanor: disorderly conduct; his neighbor had called in and said that he was extremely intoxicated. And his wife verifies that as well.

SABOURIN: OK, although that alone does not indicate the individual has a drinking problem.

The bottom line is what I don't want to do is argue the semantics of the situation here. We...

CHUNG: Forgive me. Forgive me.

But this is what she told police: The wife said the abuse has been happening for 12 of the 16 years that they've been married. When Tom is drinking, it doesn't take anything to start him fighting. She claims that he came home, he was drunk, and then he was abusive.

Doesn't that say it to you? SABOURIN: Well Connie, again, at this point, we are up-front with the fact that something has gone wrong with this process. We are looking diligently into the individual's background, into this particular incident and trying to determine, what is it that went wrong? Why were these things not uncovered? How is it that the individuals intended to get through security in the condition they were in?

And we will get to the bottom of it, and we will do something about it. At this point, though, this is all -- these are all the very topics of the discussions in the investigations that we're doing.

CHUNG: Tell me, what is the status of these two pilots now?

SABOURIN: Well, the status of the two pilots is that just today they were both sent a letter stating our intent to terminate them. And we said all along that employees that violate our policy will be terminated. And that is what we intend to do.

CHUNG: Were their breathalyzer tests confirmed?

SABOURIN: As I understand it, they were.

We have been in contact with the law enforcement officials in south Florida. We now have the documentation, the police reports, and it appears that everything that was reported is, indeed, accurate.

And so as a result of that, we have since sent letters indicating our intent to terminate these employees.

CHUNG: All right. Don't go away, I'll come back to you in a minute.

Detective DelCastillo, tell me: How close did this plane come to taking off?

DET. JUAN DELCASTILLO, MIAMI POLICE SPOKESMAN: Well fortunately, not very close.

My understanding is that the aircraft had just pushed back from the gate and the tug was just disconnected when they were notified to reconnect to the plane and move it back to the terminal.

So they weren't out on the taxiway, or they weren't actually ready for takeoff as of yet.

CHUNG: All right. When the plane came back to the gate and the two men were arrested, did they resist at all?

DELCASTILLO: No, not at all. What we did is, we sent word to the pilot and the copilot that they needed to do come out and speak to the officers.

We tried to do it in as discreet a way as possible, so the passengers would not be alarmed. We spoke to them outside of the aircraft. That's where we did our first initial tests, and we believed them to be impaired, and then we asked them to join us at the police station, where we did the breathalyzer.

CHUNG: Were you able to question them, or were other detectives able to question them? What I'm wondering is, how did they explain their condition?

DELCASTILLO: Well, at first, like some of what was said was that it was mouthwash, et cetera. There was not a lot -- we don't necessarily question an individual in this situation. What we are doing is to test to see if they are impaired. But they were very cooperative. We did do our tests and they came back with the readings that indicated that they were impaired.

CHUNG: So, it was quite sobering. In other words, they weren't making any trouble in terms of the questioning or whatever?

DELCASTILLO: No. The only incident that occurred with them was at the checkpoint at the screening area, where they had the coffee, and it was with the screeners.

Nothing with the officers. There was no problems between the officers and the pilots, and they complied with what we asked them to do.

CHUNG: Thank you. Let me go back, then, to Mr. Sabourin, spokesperson for America West. Does America West have any system that will -- does America West have any system to check on any records, police records that have preceded the hiring of a particular pilot, or a pilot that is on staff already?

SABOURIN: Well, we do. In terms of hiring a new pilot, this -- the individual would undergo a thorough background investigation. In terms of pilots who are currently on staff, America West itself does periodically look at individuals' backgrounds.

The other thing is every year in the medical forms that the pilots must fill out with the FAA, it asks if there are any issues like this, and -- but I think the bigger issue here is what we are dealing with is -- and it sounds like what you're getting at, is the fact that we are dealing with a situation largely driven by self- disclosure.

Unless we have an actual reason -- or reason to be suspicious of one of our employees, we don't make it a habit of going through and conducting active investigations on 13,000 people. So it's unfortunate, and it's something that we certainly are reviewing, I think, on behalf of our airline and the whole industry.

How can we resolve this? How can we better know what kind of record our employees have? That is something we are currently looking at.

CHUNG: With all due respect, isn't it a little more than unfortunate? Because what you're dealing with is the safety of passengers. If this has been going on, if his wife is correct, if his drinking has been going on and his abusive behavior has been going on for 12 years, it seems as if the airline, someone at the airline, should have been able to see or detect it.

SABOURIN: Well, I think one of the things we are overlooking here is that this individual has an outstanding record of flight with America West, and again, if there's no reason to be suspicious of any activity.

The other issue to mention is that we have random -- sampling random testing of our pilots. Ten percent of our pilots, every year, undergo random testing for alcohol. Twenty-five percent of them, every year, undergo random testing for drugs.

So it's not like we're saying that there are no safeguards or nothing at all in place to capture this type of a thing. Now, I can tell you that the first officer was part of a random test just several months ago, and passed. There was not a problem with that whatsoever.

What I don't know at this point is when was the last time that the captain underwent a random test. Those are the things we are looking at as we speak.

CHUNG: Mr. Sabourin, I'm not trying to give you a hard time. It's just that it seems so clear -- I mean, wouldn't you agree with it -- I mean, America West could easily say that this is a terrible mistake.

SABOURIN: We are saying that. That's exactly what we're saying. This is a terrible mistake. Now, defining the actual mistake, though, is something we're trying to do right now.

I think the bottom line here is we have two individuals that -- two employees, two pilots that boarded an aircraft and -- with the intent of flying it. That shouldn't have happened. We admit that, that should not have happened.

So we are being as diligent as possible in determining exactly what went wrong, exactly how they violated our policy, when they did it, what they consumed, what time, who was with them. Those are the very things we are looking at, because we can't let this happen again.

So we are being very up-front about that, that a mistake occurred. Defining it, though, is something we are working on as fast as we can, because we are very committed. We are proud of our safety record, we are proud of our commitment, unwavering commitment to safety.

CHUNG: Thank you. Thank you so much, Mr. Sabourin, and Detective DelCastillo.

When we come back, is enough being done to protect your safety, as we stay on this story. But first, tonight's story isn't a new one, as you'll see in tonight's "Off the Radar."

(COMMERCIAL BREAK)

ANNOUNCER: Who cleared the record of convicted drunken pilot Norman Prouse (ph)? Prouse (ph) had already gotten back in the cockpit after treatment for alcoholism, and retired in 1998.

But he wanted his record cleared, partly so he could legally buy guns. So he lobbied hard for a pardon, and got it from President Clinton as one of his final acts in office.

CHUNG: Tonight, the big question: How were two pilots able to get as far as taxiing onto the runway with apparently illegal blood alcohol levels, especially in an era of tighter airline security?

Joining me now from Denver is former FAA inspector general Mary Schiavo; and in Phoenix, Arv Schultz, retired pilot and vice president of the U.S. Pilots Association. Thank you for being with us, both of you.

Mary Schiavo, I'll start with you. First, what is your reaction to everything that you've heard?

MARY SCHIAVO, FORMER FAA INSPECTOR GENERAL: Well, it's shocking and very saddening. Of course, it was a risk to safety. But, unfortunately, this kind of problem has been one that has been falling through the cracks for many, many years. And in some ways, the scenario is almost a classic. Drunk in an event outside of flying, a spouse reporting abuse. Those were many -- I had received many similar kind of calls when I was inspector general. But, unfortunately, the situation and the policing of alcohol is very difficult because consuming alcohol when you're not on duty is legal if you abide by the eight hours or 12 hours bottle to throttle and the no tolerance rule.

CHUNG: So what should America West have done? What should America West have done? You know, did it have any alternatives there? Would there have been a way to find out about his previous, if indeed they're true, incidents?

SCHIAVO: The problem is is that the airlines rely on the government regulations. And the government regulations rely on self- reporting and random drug tests, and random alcohol tests. And testing 10 percent of the work force means if you did additive statistics, which are not always accurate, of course, but you had a chance of getting tested once every 10 years. And less than one-half of one percent positive rate on 30,000 flights a day means that perhaps as many as 150 are in jeopardy. What the carrier has to do is have much higher standards and require reporting other than just drug or alcohol convictions. For example, violence.

CHUNG: Let me switch over to Mr. Schultz, because we don't have a lot of time. Sir, it must have been awful for you to hear that, in fact, if indeed, it's all true, that this other gentleman, this pilot, had some kind of incidence with a drinking problem. Now, shouldn't the U.S. Pilots Association have a way to check their own people?

ARV SCHULTZ, VICE PRESIDENT, U.S. PILOTS ASSOCIATION: Well, the U.S. Pilots Association is basically a general aviation group. The testing that is done by the FAA on a random basis is something that has kept a lot of these types of things from occurring. CHUNG: Well, but, I'm a little bit surprised, honestly. I mean, we are talking about the safety of passengers. Wouldn't it be smart if the Pilots Association, this is all I'm asking, had a way of checking all of the pilots?

SCHULTZ: Well...

CHUNG: The membership?

SCHULTZ: First of all, the pilots, most of the pilots are members of the Airline Pilots Association. And there are programs in effect that the pilots undergo treatment if there is a problem, and these problems have been uncovered in the past and there has been a great deal done in that regard.

CHUNG: Mary Schiavo, I see you shaking your head.

SCHIAVO: Well, the problem is is, for example, people often don't look at this as a big risk. For example, in the last decade, there have been 270 fatalities because of alcoholism and accidents caused by drunk pilots and alcohol and aviation. And most of those have been in general aviation, where we don't even have the random drug testing. And there has been discussion in many studies about having a device where you'd actually have to blow in it to be able to start the general aviation plane. It looks like we might have to have devices like that for commercial jets. But, in fact, there are additional ways to catch problems if you look at other difficulties such as has been reported here.

CHUNG: Back to Mr. Schultz. I just wonder if this is a terrible, if not embarrassment, it's probably just -- it's an unspeakable, unacceptable situation for any pilot.

SCHULTZ: Well, no question about it. I mean, it is unacceptable. It's something that we pilots don't appreciate when other people, other pilots, commit these types of acts. Why, it's something that affects all pilots. And 99 percent or more or greater, pilots don't abuse alcohol or any drugs or anything like that. So, therefore, I don't think it's something that is really an isolated case and is something...

CHUNG: You believe it is an isolated case?

SCHULTZ: Yes.

CHUNG: Just quickly, Mary Schiavo, I think you've been saying tonight that there are not just isolated cases?

SCHIAVO: Well, ordinarily, it is a private problem when someone is picked up on the random test, or if they self report and turns themselves in, usually the carrier handles it quietly sometimes by dismissing the pilot, sometimes by allowing them to rehabilitate. And, in other cases, the pilots make the decision to go sober, et cetera.

But it's a very difficult problem when some alcohol consumption is legal. Unlike drug use, any drug use is illegal. In this case, I suspect the Miami-Dade police, which are very tough on aviation crimes, will probably throw the book at them. And these pilots' problems may be over forever. They may be finished.

CHUNG: All right. Mary Schiavo, thank you so much. Arv Schultz, thank you for being with us tonight.

SCHULTZ: Thank you.

CHUNG: Still ahead, a nanny nightmare. Stay with us.

ANNOUNCER: Up next, a secret assignment to recruit Iranian spies for the CIA, but the CIA would not let him do the job.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They are stuck in the dark ages. They have not evolved with the world.

(END VIDEO CLIP)

ANNOUNCER: CONNIE CHUNG TONIGHT is coming right back.

(COMMERCIAL BREAK)

CHUNG: Jeffrey Sterling thought it was going to be his dream job, until the CIA told him he was the wrong man for the job. Why? He says it's because he's black. It's a very different story from when they hired him. In just a moment, we will hear from Sterling in his first television interview. But first, his story.

(BEGIN VIDEOTAPE)

STERLING: I was thrilled. I was absolutely proud. I mean, such a tough process to join the organization.

CHUNG (voice-over): Jeffrey Sterling was used to fighting the odds. He grew up in the racially divided town of Cape Girardeau, Missouri. Determined to make something of himself, he earned a political science degree in 1989.

After law school, he applied to the CIA.

STERLING: I was bouncing off the walls when I found out that I had received the job, and very proud to serve my country in such a unique way.

CHUNG: After training, Sterling joined the Iran task force and was eager to prepare for his secret assignment, recruiting Iranian spies.

He learned Farsi, and he says he read everything he could about Iran. In 1997, an overseas position opened up, and Sterling took the job, but when no new prospects to recruit were given to him, he was stunned at what his supervisor told him. STERLING: You know, as a big black guy, you kind of stick out. In other words, what they're saying was, was that I didn't have the ability to be operationally inconspicuous. As a big black guy, I would garner too much attention.

CHUNG: Frustrated, Sterling became the first African-American case officer to sue the CIA for racial discrimination.

He claimed a pattern of prejudice derailed his career. The CIA disagreed, saying the agency has zero tolerance for any form of discrimination. And it filed a petition to have the case dismissed on the grounds of national security. Mark Zaid, Sterling's lawyer, thinks that is an excuse.

MARK ZAID, JEFFREY STERLING'S LAWYER: Just because it's the CIA and their nature of secrecy, it shouldn't relieve their lawful obligation to respond to this lawsuit and ascertain whether or not, in fact, there were discriminatory practices, and if there were, to remedy the situation.

(END VIDEOTAPE)

CHUNG: Today, Jeffrey Sterling is a spy left out in the cold, unemployed, suing his old bosses for racial discrimination.

He's agreed to share his story with us tonight. Thank you so much, Jeffrey.

STERLING: Thank you for having me on.

CHUNG: I have to have you just tell me what that supervisor said one more time, because it is really quite extraordinary.

STERLING: That is the way I took it as well.

I mean, it was me directly asking why I was not receiving assignments, and with a straight look on his face, he said, Well, you kind of stick out, as a big black guy speaking Farsi.

CHUNG: What did you say back to him?

STERLING: I had to pause, of course, being stunned at hearing such a statement.

My first response was, well, when did you realize that I was black? This is the organization that color should not have mattered. That is the way I joined the organization.

CHUNG: You had been working, what, eight-and-a-half years?

STERLING: At that time, it was around three.

CHUNG: Oh, I see.

STERLING: But that started the whole pattern and practice -- part of the entire pattern and practice that I suffered through. CHUNG: In fact, the entire time you were there, it was eight years, is that correct?

STERLING: About eight-and-a-half years, yes.

CHUNG: Aren't there assignments in which race and sex could be a problem?

STERLING: That -- it could be a problem, but in such situations, it's your training that gets you by. It shouldn't matter what you look like. There is never -- the entire time I was in the organization, there was never any talk of places where white officers could not go. There were white officers in every spot we have.

CHUNG: It defies logic that the CIA would train you, have you learn a language, and then cast you out.

STERLING: Well, it doesn't make any sense. It's absolutely ludicrous. But the CIA is such -- has such a clubby nature about it. It's a club that, of course, that I could not join. It's the Good Ole Boys Network, which is very well entrenched, and they are really loath to change. They don't -- if there is no pressure for them to change, they won't change, so the Good Ole Boy Network stays quite well entrenched within the organization.

CHUNG: Tell me, have you ever been a malcontent, troublemaker, not a team player, one of those guys that -- I'm sure you know what I'm talking about -- who always will not play with the team?

STERLING: Absolutely not.

I joined this organization with the hopes and dreams and aspirations of serving in such a unique way. I was very proud, and I am an American, and this was a great way to serve my country.

I am a team player. Even through all of the other instances of being passed over for promotions or having my assignments given to less qualified white officers, I still believed in the assignment and the duty of the CIA, so I tried to trudge through all of that, because I believe in that more than these managers who make these decisions.

CHUNG: The CIA put out a statement saying that you had a difficult time taking direction and working on aspects of your performance that needed improvement. Also said that you refused to take several assignments that were offered to you, and during your last 18 months in the agency, you did not contribute to the intelligence mission.

STERLING: Well, it's unfortunate that they would, I guess, stoop to such statements about my time and my performance in the organization.

This is absolutely -- actually, the first time that they've made such statements about my career in the organization. In fact, that absolutely contradicts their own statements about my performance on the previous show on CNN. But that is a natural reaction. They have to make me look like I'm not a team player and that I was not a contributor.

I stand by my record and what I was able to achieve at the CIA, and with maybe a bit more pride, because I was able to have success despite of the fact that I was being treated differently. I was not afforded the same tools as the white officers were, yet I was still successful in what I did.

CHUNG: Do you stand alone, do you think, among people who work there?

In terms of being discriminated against, are there other minorities there? Other African-Americans?

STERLING: Oh, absolutely. The feeling is widespread through the organization that there is racial discrimination. But there is also the fear of coming forward, because there is absolutely -- they will retaliate against you. I mean, these people -- a lot of people have mortgages, families, children in college, so they have a lot to worry about.

CHUNG: All right, Jeffrey Sterling, thank you so much for being with us.

Still ahead: Did picking the wrong nanny cost her her children?

ANNOUNCER: Coming up: They're hired to take care of our kids. The former employer of this nanny claims she's ruining their life.

CONNIE CHUNG TONIGHT returns in a moment.

(COMMERCIAL BREAK)

CHUNG: We have a story now about a parent's worst fears coming to life. Danica Cordell-Reeh hired a nanny to help care for her 5- year-old twins.

Not just any nanny, but Michelle Padilla, author of "The Official Guide to Finding a Great Nanny and Keeping Her."

But two-and-a-half weeks later, Danica fired her. And the very next day, her world turned upside down.

The nanny went to authorities claiming Danica sexually abused and starved the children. The next day a court took her kids away from her, turning them over to Danica's estranged husband.

Danica flatly denies all the nanny's allegations, but she's fighting to get her kids back, suing the nanny and the agency for $20 million.

Here with her account of this nightmare-turned into reality is Danica Cordell-Reeh joined by her attorney Bernard Clair.

(BEGIN VIDEOTAPE)

CHUNG: All right, let's go back to the beginning then. It's eight months ago, you're an ordinary mother, you have a husband, your marriage is just fine. And you have two children, twins, 5 years old.

Tell me, you were looking for a babysitter, you called a service. Had you used this service ever before?

DANICA CORDELL-REEH, ACCUSES NANNY OF FABRICATING CLAIMS: Many times.

CHUNG: And had you -- did you immediately, at that point, get the name of Michelle Padilla and think she was probably going to be OK?

CORDELL-REEH: I worked with several names, and she seemed to be the best at the time.

CHUNG: Did the agency vouch for her?

CORDELL-REEH: The agency stood behind her, said she was a fantastic nanny; nanny of the year of 2000, and that she -- impeccable, you know, references, credentials.

CHUNG: So you and your husband interviewed her and thought she was good?

CORDELL-REEH: We thought she was good.

CHUNG: Both of you?

CORDELL-REEH: We both interviewed her and approved her. We worked together because we wanted the best for our kids.

We may not have been together, but we still wanted the best for our kids.

CHUNG: All right. Did you call any references?

CORDELL-REEH: I called almost all of them.

CHUNG: You did? And she checked out completely?

CORDELL-REEH: Checked out. I couldn't get in touch with one or two. The numbers were either stale, or I was told there was a family that had a tragedy related to 9/11.

CHUNG: All right. So, she's in your home, she's taking care of your children. But just a short while later, you're uncomfortable with her, and you want to fire her.

What was wrong?

CORDELL-REEH: She just didn't -- the agency had billed her as being able to do stuff, and was this great person, and would fit in, live-in. She couldn't do the household things that needed to be done. She just didn't seem to fit in right with, you know, with the kids and me.

CHUNG: After you fire her, she goes to your estranged husband, she goes to your therapist, the family therapist, and she goes to the children's school and she accuses you of?

CORDELL-REEH: These heinous crimes: sexually abusing them, starving them. It was incredible. I just didn't know where to go.

It was -- I had walked through the doors into hell. And they just kept opening. First, I had the State of New York down on me with protective services showing up. And then you take the kids to school the next day, you figure you're picking them up, and I am served these papers.

And she has filed an affidavit in court, she's talked to my therapist, my estranged husband, who six weeks ago had asked me to get back together with him after 9/11, has run into court.

I've lost custody of my kids. I don't -- I don't know where to go at that point.

CHUNG: Now, apparently your estranged husband believed these allegations over the nanny. In other words, didn't believe you, but believed the nanny.

CORDELL-REEH: Isn't this incredulous? I mean, a guy I've known that long had the reverse happen. I had been knocking on his door going, what is going on? This person has been there two weeks?

I knew this person.

CHUNG: Did you willingly turn the children over?

CORDELL-REEH: The children were picked up from their school.

CHUNG: Without your knowledge?

CORDELL-REEH: No, I had just gotten the papers. I was leaving to go pick them up from preschool.

CHUNG: So you never were able to see them and say goodbye at that moment?

CORDELL-REEH: Nothing. It was like they were expecting me, and I was walking out the door when the papers got there.

I had to find a lawyer. I had to be in court on Monday morning. This was Friday afternoon.

CHUNG: All right, when we come back, what Danica Cordell-Reeh and her lawyer say they've uncovered about Michelle Padilla.

Plus: what two of the nanny's family members have to say, right after this.

(COMMERCIAL BREAK)

CHUNG: We are back with Danica Cordell-Reeh and attorney Bernard Clair. Danica is suing her former nanny after the nanny's accusations cost Danica custody of her five-year-old twins. Now, Danica, your estranged husband, his name is Henry Owsley, gave a statement, and I wanted to read part of it for you.

"I have acted in accordance with the recommendations of neutral, third-party, mental health experts made after an extensive investigation with interviews of more than a dozen witnesses, including the child's therapist, my wife's therapist, three nannies and others involved with both my wife and the children."

He seems to be implying that the allegations are supported by numerous other people.

CORDELL-REEH: The -- I had to go through not only losing my kids, but walking into a forensic psychologist's office, who is looking at me as somebody who had abused her kids. I don't even remember what was said and, at the same time, and I didn't even realize this, she was trying to view me on my fitness of being a parent to these kids, kids that because of these charges, I couldn't even feel comfortable holding. I had somebody three feet behind me every time I was with them at that point.

CHUNG: Supervised visitation?

CORDELL-REEH: Complete supervised visitation, and I'm still supervised.

CLAIR: Let me clarify something if I can too. You know, under our law, there was already an agreement of custody and parenting time. So in order to change that, Henry Owsley had to come in with something of an exceptional nature, because we respect prior agreements. So he came in with the allegations of Padilla. If, at that time, we knew what we know now, the investigation would never have occurred. Danica would never have been put under the microscope and the spotlight that she...

CHUNG: And what do you now know?

CLAIR: We know that Michelle Padilla not only acted in bad faith, but manipulated the system because she is, as far as we are concerned, unstable and has a history of making these same allegations in prior circumstances, in prior situations where she has been terminated.

CHUNG: We heard from two of her family members. And one of her family members left a message saying he was unaware of these recent allegations and cannot believe this is happening to another family. And also, another relative said to us that she has had some mental problems.

CLAIR: Yes.

CHUNG: Do you have any evidence to suggest that that is true?

CLAIR: Yes. Once we discovered that Michelle Padilla had made similar allegations against other innocent families in the past, we investigated whether she had ever brought a lawsuit, because that is somewhat typical as far as a modus operandi. And, in fact, in 1994, she sued a mental health clinic where she was seeking and attaining treatment. And during those sessions, she made certain startling revelations about herself. One, that she had been sexually abused herself as a child by family members. And the second was that she had engaged in prostitution, along with other assertions.

And, in fact, because she sued the clinic, these session notes that we have became a matter of public record because they had to defend themselves for the allegations that she was making against them, namely, that they had let her records be disseminated to third parties. By the way, that suit was dismissed.

CHUNG: OK. In addition, I need to tell you that a friend of Michelle Padilla called us and says she has no comment.

Now, there is one other aspect of this story and that is you have sued also the agency. And the agency gave us a statement and I'll read it in part. "The company is duty bound not to respond to specific details of the associated family members legal claims." And this one would apply to you, in many ways. "While the agency endeavors to interview personally potential employees and obtain references, it is the employer's responsibility to satisfy themselves as to the suitability of the employee for the engagement."

So, they are essentially -- it's saying it's your job to find out if they are really, you know, dependable and do not have some kind of previous record that you would object to. Bottom line, are you allowed to see your children now?

CORDELL-REEH: Yes. I see my children, but completely supervised. At night, during the day.

CHUNG: And how do they react? How do you deal with the fact that they are not living with you and how do you explain that to them?

CORDELL-REEH: I can't explain it to them. I cannot. They don't even understand why there are supervisors in the house. They say we don't need these people here. Make them go away. They have to...

CHUNG: So, do they want to be with you?

CORDELL-REEH: They just want to be with me. In the beginning, my daughter used to have to be just pried off of me. She was hung on so tight and she'd be screaming and crying. And my son would just lay crying in the car and his fingers would be going down. Even now, if I'm with them, they don't want to leave me. They don't understand.

CLAIR: Now, I should say that the order is only temporary and we are in court in the next week or so, where we will be given the opportunity to show that once this case took that terrible awesome spin, that evil spin, if you will, she never had a chance with the process. And Mr. Owsley saying that there is a bunch of support is dead wrong only because the kinds of support that he's looking for is, for example, my client was woodened when she was with the children. Well, who being accused of sexual abuse would be any different? CHUNG: All right. Thank you so much, Danica Cordell-Reeh and Bernard Clair, for being with us.

We will be back with more in a moment.

(COMMERCIAL BREAK)

CHUNG: That is our program for tonight. Tomorrow, it will be four weeks to the day since the kidnapping of Elizabeth Smart. What do we know? We will take you back for a look at all the strange and bizarre twists and turns in this story and look ahead. Is this case ever going to be solved?

Coming up right now on "LARRY KING LIVE," Ed McMahon pays tribute to the man who's still America's favorite late night host, Johnny Carson. Thank you for joining us. And for all of us at CNN, good night.

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