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Calls For Firings In VA Scandal; Kidnapping Victim Found After 10 Years; GM Recalls More Cars Than Sold In Five Years; Protesters Fight Fast Food Wage Inequality
Aired May 22, 2014 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
COSTELLO: That's right. Just too painful right now. The next hour of CNN NEWSROOM starts now.
Happening now in the NEWSROOM, a decade in captivity, now free.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: He tells her that her mother doesn't care, that she can't go to the police because they're going to deport her.
(END VIDEO CLIP)
COSTELLO: Kidnapped, held hostage, now reunited with her family thanks to Facebook.
Also, the VA crisis deepens.
(BEGIN VIDEO CIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: It is dishonorable. It is disgraceful, and I will not tolerate it, period.
(END VIDEO CLIP)
COSTELLO: And calls for heads to roll grow louder.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: There was no urgency. Mr. President, we need urgency. We need you to roll up our sleeves and get into these hospitals!
(END VIDEO CLIP)
COSTELLO: But so far nothing.
(BEGIN VIDEO CLIP)
PRESIDENT OBAMA: I want to see what the results of these reports are, and there is going to be accountability.
(END VIDEO CLIP)
COSTELLO: Plus -- what the hail? Parts of Denver buried.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: They were struggling to push the ice and the hail off the field.
(END VIDEO CLIP)
COSTELLO: Apocalyptic-looking storms grind the city to a halt.
And runaway groom. Days after the invitations go out, Rory McIlroy and Caroline Wozniacki say I don't.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Quite a difficult time for Caroline and myself.
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COSTELLO: What happened? Let's talk live in the CNN NEWSROOM.
Good morning. I'm Carol Costello. Thank you so much for joining me. This morning, new allegations and more outrage in the scandal over the Veteran Administration hospitals. Three senior VA Officials gave late notice they will not attend this meeting that just wrapped up of the house veterans affairs committee. Lawmakers had planned to grill them on allegations that several VA centers hid massive delays in providing veterans much needed medical care.
And as they cooked the books, possibly dozens of vets died, awaiting the medical attention they so desperately need. This morning on CNN'S "NEW DAY," the committee chairman warned that an investigation will turn up a lot more abuses in our nation's military veterans hospitals.
(BEGIN VIDEO CLIP)
REPRESENTATIVE JEFF MILLER (R), CHAIRMAN, VETERANS AFFAIRS COMMITTEE: This is just the tip of the iceberg. I know there's more to come. We have received some information and some tips that will make what has already come out look like kindergarten stuff.
(END VIDEO CLIP)
COSTELLO: Pretty ominous words, Drew Griffin. I know you led this CNN investigation. You broke this story. And this morning, you're going to add another wrinkle to all of this. Tell us about it.
DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT: I'm here at the Phoenix VA where the director of the post-deployment clinic, Dr. Katherine Mitchell is now coming forward to us. She's the person who transitions current enlisted people into the vets system, the VA system, as they are coming out of deployment. Yes, these are our most current warriors who are coming into the VA, supposed to be first in line, Carol, and they are being told to wait.
(BEGIN VIDEOTAPE)
GRIFFIN: Dr. Mitchell, I just want to make sure I understand what you're telling me. You are telling me that our troops coming back from war, now separated from active service --
DR. KATHERINE MITCHELL, PHOENIX VETERANS AFFAIRS HOSPITAL: Who should have priority for scheduling do not.
GRIFFIN: -- who are coming to the Phoenix VA for follow-up care for war injuries.
MITCHELL: Correct.
GRIFFIN: Are being put on a waiting list and made to wait six to ten months?
MITCHELL: Yes, or longer.
GRIFFIN: You're kidding.
MITCHELL: No. But it's the same for everyone. Everyone is made to wait.
GRIFFIN: That's now? That's happening now?
MITCHELL: Yes, unless they've changed something since the OIG --
GRIFFIN: You're there now.
MITCHELL: I don't -- since all this happened, people --
GRIFFIN: But we're talking about two or three weeks.
MITCHELL: Right.
GRIFFIN: Can you tell me two or three weeks ago what type of person we're talking about?
MITCHELL: We're talking about people that were injured by being blown up by IEDs. We're talking about people who had a mental breakdown and have severe PTSD and are having trouble functioning. We're talking about veterans that were severely injured by some means in the while in the military, even if it wasn't in actual combat, because we have people involved in vehicle accidents. We have people that are injured stateside.
GRIFFIN: Who have you told this to in terms of this United States government?
MITCHELL: The OIG knows when they spoke to me -- the OIG inspectors can ask anyone that does scheduling.
GRIFFIN: They asked you.
MITCHELL: They didn't ask me. I told them.
(END VIDEOTAPE)
GRIFFIN: Carol, the more we hear about what has gone on here in the Phoenix VA and getting reports around the country, the worse this scandal becomes, we did ask the Phoenix VA about the allegations made by their own doctor. They told us they couldn't talk about it based on the investigation currently under way. But, I mean, as you can see, just more and more detail. And now we're understanding that these are young soldiers who are coming out of service, coming here for help, and guess what? You've just got to stand in line.
COSTELLO: It's -- it's shocking. Drew, I want you to stay with us because I want to bring in Joe Kaplan to discuss more on this. He's a labor attorney. So good morning, Joe.
JOE KAPLAN, LABOR ATTORNEY: Good morning, Carol.
COSTELLO: Thanks for joining me. The outrage over this story is leading many to ask why hasn't anyone been fired yet? You say, Joe, there's a reason for that. Tell us what it is.
KAPLAN: Well, the reason is that first of all, it's just too soon. We don't really know what the facts are. There are a lot of allegations out there. They are very serious allegations, but they really need to be investigated. Before an employer like the VA or any government agency would take an action against an employee to fire them, for example, which could ruin their reputation, make it very unlikely that they could earn a livelihood, get another job, think of the impact on their family.
Before you take an action like that, you want to know what the facts are, so you get them right. You don't want a rush to judgment. These are very, very serious matters. They have grave implications on the employee who faces these allegations.
COSTELLO: But Drew, we know a lot of facts. We know -- we know, for example, that people died because they were placed on these wait lists.
GRIFFIN: Absolutely. The government has known that for at least a year, if not longer. We know the wait list issue has been around for years and years and years. We know that recommendations made by the Government Accountability Office by the VA's own Office of Inspector General have not been followed, have not solved these problems.
I understand what this labor attorney is saying, but at some point, Carol, there has to be accountability. The fact of the matter is yes, now we are waiting for these investigations, but the people behind them should have been fired -- well, it's in my opinion -- they should have been fired a long, long time ago before anybody even did die.
KAPLAN: Carol --
COSTELLO: Joe, there's something in the law -- there's something like with federal employees, they can't be fired the way, you know, private employees can be fired, perhaps. The House has passed a bill making it easier to fire federal employees. It has to go to the Senate. Is that necessary, Joe?
KAPLAN: No, that's really, you know, pabulum to kind of quench some of the political outrage here. You know, most federal employees do have due process rights that before they can be terminated, they're entitled to notice of the charges against them, an opportunity to reply to those charges because the charges may be false. The person you're accusing may not be the person who was involved, may not be the person who made the decision.
And then after the employee has the right to reply to that proposed removal, then the agency can make a decision. You know, what we don't want to have happen here is, you know, the wheels of this process to turn so quickly that people's rights get trampled in their haste. Now, as to Drew's point about, you know, how long the VA has known about these issues, I think there are really two separate issues here.
One is a political question, and that is what has the secretary or his officials known, and why have they taken action or not taken action? But I think that's a separate question from what are the specific allegations against any specific employee and whether they engaged in wrongdoing.
COSTELLO: All right, I'm going to have to end it there. Thanks to both of you, Drew Griffin, Joe Kaplan, many thanks.
KAPLAN: You're welcome.
COSTELLO: A decade after disappearing, a young woman finally back with her family and telling a story of being beaten, forced into marriage and having a child with her kidnapper. CNN's Sara Sidner has more for you.
SARA SIDNER, CNN CORRESPONDENT: Carol, there are a lot of people asking why it is the victim stayed with her alleged kidnapper for so long. The police say it appeared she was brainwashed, told that no one was missing her from her own family and that she would be deported if she went to police because she had arrived in the United States illegally from Mexico.
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SIDNER (voice-over): These photos from KNBC show that 25-year-old woman found a decade after she says she was kidnapped. These photos taken during her alleged captivity show her, her alleged kidnapper and their child seemingly living a normal life. Breaking overnight, she tells our affiliate, KABC, that she's so happy and God blessed to be with her family.
She says all the time she cried for them. Police say the girl entered a police station in Bell Gardens, California, with a disturbing story. She told police her mother's then live-in boyfriend, this man, Cezar Garcia, drugged, kidnapped and tricked her into keeping quiet after a fight at the family home back in 2004.
LT. SCOTT FAIRFIELD, BELL GARDENS POLICE DEPARTMENT: She walked in on her own. And she stated that she was kidnapped about ten years ago and held against her will.
CPL. ANTHONY BERTAGNA, SANTA ANA POLICE DEPARTMENT: You're talking about a 15-year-old girl that came to this country, doesn't speak English. Her mother's boyfriend decides that he wants to physically and sexually abuse her. He tells her that her mother doesn't care, that she can't go to the police because they're going to deport her.
SIDNER: The girl reportedly telling police she ended up marrying and having a baby with her alleged kidnapper. All the while harboring the painful secret.
(on camera): This apartment complex is where the couple lived. Police say it's about 25 miles from where the victim's mother lived. But people who live here in this very tight-knit community say they knew the couple well, and they simply can't believe what they're hearing. It appeared they loved each other.
MARIBEL GARCIA, VICTIM'S NEIGHBOR: She would go to the market like every other couple. They'd be happy, kissing, holding hands, and then she comes up with this now why did she take so long to do it.
SIDNER: Was there any indication that she was in trouble, that something was wrong in this family?
GARCIA: That I think of myself, from what I've seen, no.
SIDNER (voice-over): But police say there was something terribly wrong.
BERTAGNA: We do know on one or two occasions she fled. She was caught and she was beaten for her efforts.
(END VIDEOTAPE)
SIDNER: The suspect has been booked on suspicion of lewd acts with a minor, kidnapping, rape and false imprisonment. He is expected in court today here in Southern California. And as for those who are questioning what happened with this victim, she has been reunited with her family -- Carol.
COSTELLO: Sara Sidner reporting this morning.
Still to come in the NEWSROOM, GM facing a major crisis, recalling more cars this year alone than it sold in the last five years combined. Poppy Harlow following the fallout for us. Good morning.
POPPY HARLOW, CNN CORRESPONDENT: Good morning to you, Carol. Yes, when you look at the numbers, they're pretty staggering. General Motors recalling 13.8 million vehicles here in the United States alone. It's leaving a lot of people asking, what the heck is going on with GM? We'll discuss straight ahead.
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COSTELLO: General Motors is facing a growing crisis, a federal investigation over a deadly ignition flaw and now the automaker has recalled 13.8 million vehicles in the United States alone. That is more cars than it sold in the last five years combined. Poppy Harlow has more for you.
(BEGIN VIDEOTAPE)
HARLOW (voice-over): Eleven recall announcements in the past week as General Motors racks up 13.8 million U.S. recalls this year alone.
PETER VALDES-DAPENA, SENIOR AUTO WRITER, CNNMONEY: So this has been a banner year for GM in a bad way. They've had 29 separate recalls so far this year, which is a record. This is big.
HARLOW: GM has recalled more cars this year than it has sold since exiting bankruptcy in 2009, leaving just about everyone wondering, what's going on with GM?
MARY BARRA, CEO, GENERAL MOTORS: We've moved from a cost culture after the bankruptcy to a customer culture.
HARLOW: The automaker says the surge in recalls is because it's holding itself to higher safety standards, tackling problems more quickly. They also follow newly minted CEO Mary Barra's congressional testimony about why it took GM a decade to report a defect that has been tied to at least 13 deaths.
UNIDENTIFIED MALE: Employees of General Motors from engineers, investigators, all the way up through executives were briefed on information associated with this recall.
HARLOW: That violation alone cost GM the maximum $35 million civil fine and will likely cost the company significantly more in victim compensation and potential other fines. This is all on top of a criminal probe by the Department of Justice surrounding the ignition switch defect.
BARRA: My sincere apologies to everyone who has been affected by this recall especially the families and friends who lost their lives or were injured.
HARLOW: But Barra is not new to General Motors. She's been with the company for 33 years, formerly vice president of Global Product Development, leaving lingering questions about what she knew when about product flaws in GM vehicles.
BARRA: I was not aware that there was this issue until the recall was introduced on January 31st.
ANTHONY FOXX, SECRETARY OF TRANSPORTATION: Had GM acted differently, perhaps some of this tragedy might not -- might have been averted.
HARLOW: GM says that's exactly what it's doing now, hence the mountain of recalls, the last thing they want is to be accused of delaying another one.
DAPENA: They're cleaning out their closets, going through, minding every issue that they've had in the past that maybe should have been a recall and making it a recall.
HARLOW (on camera): So far fixing all those recalled cars will cost GM $1.7 billion this year, and the stock is down 18 percent year to date. But what might be surprising is that all the recalls haven't made a dent in GM's sales, which were 7 percent higher in April than a year ago.
CLARENCE DITLOW, EXECUTIVE DIRECTOR, CENTER FOR AUTO SAFETY: What GM is doing is talking, saying that we're going to be a good corporate citizen, but they've said the same thing in the past. The proof is really in the pudding.
(END VIDEOTAPE)
COSTELLO: OK. So let's talk about this some more with Poppy Harlow and automotive expert Lauren Fix. Welcome to both of you. Poppy, I think the most surprising aspect of this story is that people are going into dealerships and buying GM products. It really hasn't affected their sales.
HARLOW: They're buying a lot of them. As you just heard in the piece, 7 percent higher, sales were, in April, the latest numbers we have, than a year ago. I think this is playing out -- this is what we typically see. Recalls don't tend to hurt automakers, interestingly. But what we're also seeing here is that GM is recalling literally everything but the kitchen sink if they see any potential problem.
That is the exact opposite of what they did with the ignition switch defect, and you saw what's happened to them since. The congressional testimony, the Department of Justice investigation, the civil $35 million fine. They do not want anyone to be able to point to anything that could indicate that they waited too long to recall a car.
So they're even -- experts are telling us are recalling issues that maybe automakers wouldn't recall, or if they see an issue in just a few vehicles, they're going to recall thousands of them. And Carol, I think that can help sales because it shows people that they are trying to be completely different and out in front here.
COSTELLO: It's fascinating. And by the way, we're rolling the cars that have been recalled, just so you know, if you have a GM car. Lauren, just to add on to what Poppy was saying, I talked to Christine Romans last hour. She said people are bringing in their recalled cars to dealerships to be fixed, and they're seeing a new product that they like, and they're buying a new product. So is Mary Barra some kind of genius?
LAUREN FIX, AUTOMOTIVE EXPERT: Well, I think she's got a long road to hoe yet, but I think she actually is smart because they're offering discounts on recalled cars. I just hope that they get repaired. Remember, not all these cars will get repaired until October, so they'll have a constant stream of people coming in.
And hopefully if you do know someone with these cars, please tell them because not everybody watches TV or gets on the internet. Some people don't have any clue. I'm always concerned when there's 30 recalls in one year, yes, they're being proactive, but bottom line, I think consumers will pay more for cars.
That's what Sergio Marcioni said of Chrysler. He said if we're going to do this much oversight, every little, teeny thing is going to create a recall, it's going to cost somebody money down the road, and it's going to be the consumer.
COSTELLO: Interesting. So Poppy, still, despite what was just said, that people are still buying General Motors cars and still driving them, you have to wonder if it's -- if these cars are safe to drive. And I know you're fixing little, tiny things, but it's still concerning when there are so many recalls.
HARLOW: Yes, I think that's such an important question. I mean, you have to go on everyone that really owns a GM vehicle should go on gm.com/recall or the main web site to the owner page, put your VIN number in there. See if your car is recalled because there have been 13.8 million of them recalled this year.
Yes, overall, most of them are safe to drive, General Motors is saying, but they have but some on recall that they do not want you to drive, that they will have come picked up at your home, brought into dealerships and fixed. There was one recent recall where they said don't put someone in the passenger seat because there was an air bag issue.
So bottom line, you have to figure out which cars it is and what the issue is, but they will clearly state whether or not it is safe to drive or not. I think the key for this company, Carol, is transparency. We're waiting for their internal report to come out about why on earth we didn't know about the ignition switch defects for a decade and why there wasn't a recall.
That has to come out by June 30th. Now, are they just going to release it to the government agency in Congress, or are they going to make that public to the American people? I think everyone is going to want to see that and frankly should see that.
COSTELLO: Absolutely. And Lauren, the last question to you, you know, the American auto business had finally started to come back and get a great reputation again, and now this has happened. What will the lasting impact be, do you think?
FIX: I think that people that are true GM enthusiasts will always be GM. My father always bought GM, and that's what he would buy forever. Nothing would stray him. But people that look around me, you know, it may be difficult to get some of those clients that bought cars that maybe felt uncomfortable about the recalls, maybe they'll buy elsewhere.
Some people still call it government motors, even though they're out of the General Motors business, and they'll never come back. It is helping the whole automotive industry. Believe it or not, we're going to be over 16 million cars this year. So the automotive industry is growing, and GM hopes to get some of that back. Their biggest market is China, and it continues to grow.
COSTELLO: Lauren Fix, Poppy Harlow, thanks so much. I appreciate it.
Still to come in the NEWSROOM, it's a showdown at the golden arches. McDonald's workers bringing the fight for better pay right to the company's top executives. We'll talk about that next.
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COSTELLO: Happening now, hundreds of protesters are facing down McDonald's on its home territory, taking their demands for a $15 minimum wage directly to the company's front door. As it holds its annual shareholder meeting in Oakbrook, Illinois. Christine Romans is tracking the story for us this morning. Good morning, Christine.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Good morning, Carol. You know, 110 people were arrested yesterday. They had basically state police with riot gear at the headquarters, and they shut it down and told employees to stay home on the advice of police simply because the tensions were running so high ahead of this shareholder meeting.
And now executives are briefing shareholders about the health of the company. But what the people who are protesting there care about, the fact this company has a profit of something like $1.2 billion last year, and they feel like they can't make ends meet. And that is the bottom line here.
The average fast food worker, Carol, makes something like $9.09 an hour and they say that's just not enough. Not enough to support yourself on and certainly not enough to support a family on. And they look at $15 an hour as what they would like to see, what they think is fair for an hour of their work.
But what you hear from franchise owners, because McDonald's is a franchise, right? What you hear from franchise owners is no way. We would have to really raise prices at a time when sales and revenue are falling for McDonald's. Customers are starting to enjoy other kinds of foodservice venues. And McDonald's is having a tough slog of it here sales wise, not a good time the franchises say to raise wage -- Carol.
COSTELLO: Although it is interesting that companies like Chipotle, for example, where it costs a lot more to eat, they're doing fine.
ROMANS: And they'll have to raise prices. A lot of these places are going to be raising prices. I think for consumers you should expect to see fast food prices rise because beef prices are rising. Cheese prices, milk prices and the like. What's happening here with McDonald's -- and there's a lot of union interests here, union-backed protesting here because they just feel as though it's not fair to make $9 an hour.
It's not fair to be working $9 an hour at a job that many say feels like a dead-end job, except it is their job, it is their career, if you will, and have executives of those companies, by the way, making, like, 1,000 times what the average employee makes, making fast food actually among the biggest disparity between average worker and a CEO, at a time when really they feel as though even the president's $10.10 minimum wage proposal doesn't go far enough. They want $15.
Carol, look at that statistic on your screen. The average age of a fast food worker is 29. So this idea that it's a high school student who's just saving money for college is not true, 31 percent have some form of college education. So you have people there, this is not a steppingstone. This is where they are right now and they do have a broader education.
