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The Lead with Jake Tapper

Senate Committee Calls On General Motors Scandal "Criminal"; Malaysia Prime Minister Meets With Search Tears

Aired April 02, 2014 - 16:30   ET

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

(COMMERCIAL BREAK)

BILL WEIR, CNN GUEST HOST: Welcome back. And in our Buried Lead, a story not getting near enough attention. He played a role in some of the most tense and fearful days in American history. A man identified as one of the people responsible for the Iran hostage crisis. And now, he is heading to New York City after Iran's president tapped him as ambassador to the United Nations. A move former hostages are calling, quote, "a slap in the face." Our foreign affairs reporter, Elise Labott, is here with details.

This is pretty amazing.

ELISE LABOTT, CNN FOREIGN AFFAIRS CORRESPONDENT: It's amazing. The hostage crisis was really the catalyst for more than three decades of hatred between the U.S. and Iran. And now the U.S. -- both countries trying to put the relationship on a more, better footing. And with this appointment of this former student involved in the hostage taking group, the U.S. and the hostages themselves are thinking, what are the Iranians thinking?

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LABOTT: He was an Iranian student involved in taking Americans hostage and holding them for 444 days at the U.S embassy in Iran. Now the White House is under pressure to stop Hamid Aboutalebi from becoming Iran's next ambassador to the United Nations. Barry Rosen, a hostage at the embassy, is outraged. One of his captors could be welcome on U.S. soil.

VOICE OF BARRY ROSEN, FORMER HOSTAGE IN IRAN: Well, it's more than a disgrace. It's an outrage to all of my fellow colleagues who went through that terrible time in our lives. Our families who suffered with us. And to have this man sitting at the U.N. is an outrage beyond belief.

LABOTT: The 1979 takeover, dramatized in the Oscar-winning film "Argo" left the U.S. and Iran sworn enemies. Aboutalebi's exact role in the crisis is unclear. He told Iranian media he was not part of the group that stormed the embassy and only served as a translator. He went on to serve as Iran's ambassador to Belgium, Italy and the European Union.

CNN has learned that the U.S. received Aboutalebi's visa application months ago, but is delaying a decision pending an investigation into his role in the hostage crisis.

MARIE HARF, STATE DEPT. DEPUTY SPOKESPERSON: We think this nomination would be extremely troubling. We're taking a close look at the case now, and we've raised our serious concerns about this possible nomination with the government of Iran -

LABOTT: As host country to the U.N., the U.S. is required to provide visas to U.N. diplomats. Taking the unusual step of denying a visa to an ambassador could thwart President Obama's efforts to engage Iran and negotiate a nuclear deal, finally closing the chapter on the hostage crisis.

John Limbert, a former hostage-turned-State Department diplomat, warned that could never happen with Aboutalebi's appointment.

JOHN LIMBERT, FORMER HOSTAGE IN IRAN: Clearly he would be toxic here if he were ambassador. Because what his past would clearly get in the way of his present.

(END VIDEOTAPE)

LABOTT: And that's why, Bill, this is not going over well on Capitol Hill. Senators trying to block the appointment. Senator Ted Cruz has proposed legislation denying a visa to any supposed former terrorist, and that's why with the Congress so important to this nuclear deal with Iran that the Obama administration is really hoping the Iranians reconsider.

WEIR: Elise, thank you.

Let's go up to the Hill to get some of those voices right now. Let's turn to Congressman Eliot Engle, senior Democrat on the House Foreign Affairs Committee. I guess part of the buried lead here, Congressman, is that you're agreeing with Ted Cruz on this, who calls this move by the Iranians "willfully, deliberately, insulting, contemptuous," and you're opposed as well.

But why? I can understand the outrage of those who were held hostage, but at a certain point, you'd be hard pressed to find anybody in Iran's diplomatic corps that you could talk to in good conscience without seeing them as an enemy in some way.

REP. ELIOT ENGEL (D), NEW YORK: Well, let me just say for Ted Cruz and Eliot Engel to agree on something, it's got to be right. Look, this fellow, by being an interpreter for the group that took American hostages, was certainly complicit in their capture. And I just think it's a terrible insult to the United States at a time when Iran is talking with us, purportedly is doing that in good faith, Iran continues to make mischief and wreak havoc in other places of the world. They are negative in Syria, they are a major funder of Hezbollah, a terrorist organization. They continue to do that with impunity. And now this, which is a real slap in the face.

The Iranians should withdraw their nomination and should send somebody else, because this -- all of us that were alive at the time remember that hostage crisis, and that is not something I think we can just turn a blind eye toward.

WEIR: Do you think a move like this comes from President Rouhani, who many want to believe is a moderate, or is this something from the supreme leader, the ayatollah?

ENGEL: Well, we have no way of knowing. It's obvious the supreme leader is the final decision maker on things like this. I've always said that Rouhani, it's not clear to me that he make any of these decisions without the blessings of the supreme leader.

It's just very, very troubling. It's a slap in the face to Americans. And it ought to be withdrawn. And, you know, it's very difficult for us to block a diplomat from coming in. But if it's proven that he was part and parcel of it, I would urge our authorities to deny him entry into the country.

WEIR: I was looking at the rules, we have a 60-plus-year agreement with the United Nations that we have to pretty much let anybody in, but they are limited to a 25-mile radius of Manhattan. Which means they can't go to Disneyland, but they can get into your district, Congressman Engel.

But let me ask you about whether this sort of thing throws a wrench into our nuclear disarmament talks. Do you think this is a deal breaker? As you said so, much going on with Russia, with Syria, but for the nukes, is this a problem?

ENGEL: It's a problem. It's a problem for me in that, again, if Iran is negotiating with us in good faith, and let me say, I hope these talks with Iran are successful. I want them to be successful, but I have my grave doubts. Because you know, first of all while these talks are going on, Iran continues to enrich; that's troubling. And secondly, as I've just stated, there are events going on in Syria in that terrible civil war where Iran is part and parcel of the starvation and the civilian population. And they continue to support Hezbollah, which is a terrorist organization.

So it's as if the Iranians are thumbing their nose at us and saying, well, we're going to negotiate with you but we're not going to change any of our bad behavior while we're negotiating. It seems to me if you're really serious in having negotiations that are fruitful, you'd stop some of the outrageous behavior. And sending this diplomat to New York as their representative to the U.N. is just another indication that the Iranians think they can get away with anything. And that, I think, is an ominous sign to their seriousness in these nuclear talks.

WEIR: You didn't even mention the fake American aircraft carrier they're building, perhaps for propaganda purposes. But we'll have to save that for another show. Congressman Engel, thanks for your time.

ENGEL: Thank you. Thank you.

Wolf Blitzer just wandered over from THE SITUATION ROOM. Good to be --

WOLF BLITZER, CNN HOST, "THE SITUATION ROOM": Not a far walk. WEIR: Yes. Good to be in your domicile here in Washington, D.C.

BLITZER: Welcome to Washington, D.C.

WEIR: Thank you.

BLITZER: How do you like it here?

WEIR: I'm figuring it out.

BLITZER: Nice setup we got here.

WEIR: Yes. Good people.

BLITZER: Good to have you. As I like to say, part of our team.

WEIR: I'm proud to be on your team. We can tell stories. What you've got coming up, the Australians. They've taken the lead.

BLITZER: We have the Australian ambassador to the United States going to tell us the latest of what's going on with this search. It's so frustrating. First, they start off outside Malaysia in the South China Sea, then they say never mind. Then they go to the southern part of the Indian Ocean, then they say never mind. Then they go 700 miles north, then they say never mind. Now they're 200 miles east. What's going on with this search? Do they know what they're doing? The Australians are obviously deeply involved. We'll get the latest from him.

WEIR: All right, Wolf. We look forward to it, coming up at the top of the hour.

And coming up right here on THE LEAD next, a pledge to do the right thing that comes nearly 10 years too late. GM's CEO plays defense on Capitol Hill for the second day in a row as members of the Senate paint the company's recall scandal not only as deceptive but criminal.

And it won't do much to help in the search for Flight 370, but could the latest move by Malaysia's government help repair the country's image following weeks of scrutiny? Stay with us.

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WEIR: Welcome back. I'm Bill Weir in for Jake Tapper today. We turn to the "Money Lead" now. Criminal, deceitful, and just down right cheap. That's pretty much how members of a Senate subcommittee summed up General Motors' failure to recall millions of faulty parts during a hearing on Capitol Hill today.

GM's CEO Mary Barra was called back for a second round of questioning and was drilled on what the company knew about the flawed ignition switches and why it failed to act for nearly a decade. Thirteen deaths and 32 crashes have been linked to the defect since red flags were first raised back in 2001.

CNN correspondent, Poppy Harlow, joins us from Capitol Hill with details. Poppy, we saw some tough questions on day one. How did Mary Barra do today?

POPPY HARLOW, CNN CORRESPONENT: You know, she faced even tougher questions from the Senate committee in two-plus hours of testimony. The CEO of General Motors opening her testimony saying she is deeply sorry for the lives lost. We know that at least 13 lives were lost as a result of this ignition switch failure. But Democratic Senator Claire McCaskill, who chairs this committee, in the hearing said let's call this, quote, "a culture of cover-up," quote, "egregious violations of public trust," to give you a sense of the tone in the hearing room.

Senators just like members of the House wanting to know why General Motors did not come forward for a decade about a problem that they knew about back in 2004 if not earlier. What we do know is GM created a new part, a new ignition switch part, but didn't give that part another number. That is very abnormal for this company or any auto company to do.

That was the real focus of the questioning, is was this a cover-up or was this just extremely sloppy work and a lack of communication? I want you to listen to what Republican Senator Kelly Ayotte had to say.

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SENATOR KELLY AYOTTE (R), NEW HAMPSHIRE: The fact that there would be two identical parts, in other words, one's defective and one isn't, and you didn't change the part number strikes me as deception. And I think it goes beyond unacceptable. I believe this is criminal.

MARY BARRA, CEO, GENERAL MOTORS: It is not an appropriate practice to do. It is not acceptable. It is crucial. It's engineering principle 101 to change the part number when you make a change.

(END VIDEO CLIP)

HARLOW: Now here's what's critical. If this is found to be criminal, that is a huge problem for General Motors. We know that the Department of Justice launched a criminal probe, but that is all we know. We don't know the findings. This is really the beginning, Bill. I can tell you that Mary Barra did say today again in testimony that, look, the company pre-bankruptcy in 2009 had more of a cost culture focus than focusing on the consumer.

She's promised time and time again that is changed in a, quote/unquote, "new GM," but you know, Senator Barbara Boxer said I'm held responsible for things I did yesterday and this company needs to be held responsible as well.

This is a CEO that has been working at General Motors for more than 30 years. She was one of the head people in product development and engineering, so I think lawmakers are having a hard time stomaching this, how did she, and all the other executives have no idea?

WEIR: Poppy Harlow reporting from the capitol, thanks. It is reasonable to wonder what kind of impact this recall scandal will have on GM's image, not to mention the company's bottom line. So let's bring in Paul Ingrassia, the author of the book "Engines of Change," the managing editor with Reuters, but a guy who won a Pulitzer covering Detroit, covering GM scandals of years past. Paul, good to see you again.

PAUL INGRASSIA, AUTHOR, "ENGINES OF CHANGE": Same here, Bill.

WEIR: We so wanted to believe GM was back. This was such a great from the ashes, a Phoenix rises story. But this looks really horrible for this company. Try to quantify it. How bad is it?

INGRASSIA: It will be a problem financially, but it will not be crippling financially. I mean, the company has the financial resources to handle this, but in terms of their image and reputation, which is a huge part of selling cars, I mean, consumer confidence has a direct relation to people's willingness to buy a certain brand of automobile, and this is going to be a problem, I think, for a long time for them.

It sort of smacks of back to the future, if you will, the old GM. And the other big issue, Bill, is that this is going to be a huge drain on the time and attention of senior management. So instead of focusing on, you know, how do we develop new cars for the marketplace and how do we get the better of Toyota and Ford, and all that sort of thing, they're going to be be tied up in legal proceedings, investigation, congressional hearings, all kinds of things. So I think there is going to be some significant short-term damage, but most of it will not be financial.

WEIR: Yes, the stock is down a little bit this year, but up a quarter, 25 percent from this time last year. Let me ask you about that management question because Mary Barra, she's the first female, you know, GM there, but -- or CEO of GM, but she didn't come from outside the industry. She's been there her whole career. It would be easy to blame a lot of this on Rick Wagner, the guys who drove this company into bankruptcy. But we thought that that crisis had maybe suck the hubris out of their boardroom. What does it say about systemic issues within this company?

INGRASSIA: That is the fundamental question here. I mean, Mary Barra got up in front of Congress yesterday. She is in front of the Senate today, and she said, that was the old GM. We have a new culture now. The question is what's the proof of the new culture? It's one thing for a CEO to get up and say we do have a new culture, but it's another thing for the company to fundamentally change its ways of behavior.

Now look, all of this happened really in the past. But nonetheless, you know, it's been five years since the bailout in bankruptcy of 2009 and none of this was really addressed during that time. So that is a fundamental question. Has the company's culture really changed? Is there a culture of accountability, responsibility?

I mean, she did appoint a new VP for product safety, but I believe he reports two or three levels down from her, does not report directly to her. These are all things that only behavior answer, not testimony in front of Congress.

WEIR: Would you buy stock in GM these days?

INGRASSIA: Well, you know, the market doesn't like uncertainty, and I think this is going to create an aura of uncertainty. So I think investors are prudent to be careful. There's a couple of issues on the legal front here, one of the issues that has clearly already surfaced is what kind of legal liability they will have to victims of families, even though this is the -- those liabilities could have been wiped out in a legal sense by bankruptcy.

You know, the company may have to pay -- are morally obligated to pay some restitution. But the other issue is this, you know, General Motors just got the government out of its ownership structure a few months ago, went public. You've got to almost wonder whether it might be shareholder lawsuits that say, I invested in this company.

I bought shares in the IPO of the new and reborn General Motors, but this was not disclosed in any of the disclosure documents that led up to the IPO, potential liability. I don't know if that will happen or how valid such a claim will be, but this is clearly a field day for lawyers shaping up.

WEIR: Paul Ingrassia, always appreciate your insight. Thanks.

INGRASSIA: Thanks, Bill.

WEIR: Coming up, Malaysia's prime minister gets a firsthand look at home base for the Flight 370 search operation, but could his latest trip be more about optics than actual investigating? That's next in the "World Lead."

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WEIR: We are now on our "World Lead." And Malaysia's government has been raked over the rhetorical calls over how it's handled the investigation of the Flight 370, of course, but in what may be an attempt to change the country's perception is out of touch. The prime minister is getting up close and personal with some of the key players involved in the search.

CNN correspondent, Kyung Lah, is in Perth where the prime minister will be later today. What are they saying about this trip?

KYUNG LAH, CNN CORRESPONDENT: Well, he's expected to arrive here in the next few hours or so, Bill, and when you talk about the optics, he is going to be doing this all in front of news cameras. He is going to be touring the base. He is going to be shaking hands with the search teams that are taking to the air every single day.

He will be arriving just as the search begins. He will also be getting briefs on the actual search itself, and he will be meeting with Australia's prime minister. The timing on that, we're not exactly sure. But again, he arrived here last night. It's a very short trip, about 24 hours, and all of this happening, Bill, as you point out, as his country is getting raked over the calls for its handling of the investigation. WEIR: Kyung, we've been talking about four days of battery life left in those black boxes hopefully, but it doesn't matter if no one's out there listening for the pings. Is the ship carrying that Navy device in the search zone yet?

LAH: It is almost there from what we understand. It is scheduled to arrive sometime this evening. It is Thursday morning here in Australia, late tonight or early Friday Australia time but it's not much use unless debris is found. The clock still ticking, hoping they find some debris -- Bill.

WEIR: All right, Kyung Lah, down in Perth, thank you for your reporting. That's it. I'm Bill Weir. Jake Tapper may be back tomorrow or maybe I'll be here as well. But we do know that Wolf Blitzer has the very latest in "THE SITUATION ROOM," which starts now.

WOLF BLITZER, CNN ANCHOR: Bill, thanks very much.