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Sources: White House Helped Form Ethics Agreement with Art Gallery Selling Hunter Biden's Paintings; Former Ethics Czar: We Need a Government Ethics Renaissance; Billionaire Branson Ready for Sunday Space Trip; 1st Black American Wins National Spelling Bee. Aired 2:30- 3p ET

Aired July 09, 2021 - 14:30   ET

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

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[14:34:00]

ALISYN CAMEROTA, CNN HOST: So, Hunter Biden's debut in the art world is raising some ethical eyebrows. His first pieces will reportedly go on sale for between $75,000 to $500,000.

Now, sources tell CNN the White House got involved in striking an agreement with the owner of a New York art gallery to display and sell some of the artwork that you're seeing on your screen right now.

And the administration's decision was reportedly an effort to head off any ethical concerns.

White House press secretary, Jen Psaki, was pressed on this just a short time ago.

(BEGIN VIDEO CLIP)

JEN PSAKI, WHITE HOUSE PRESS SECRETARY: I can tell you that after careful consideration, a system has been established that allows for Hunter Biden to work in his profession within reasonable safeguards.

Of course, he has the right to pursue an artistic career just like any child of the president has the right to pursue a career.

But all interactions regarding the selling of art and the setting of prices will be handled by a professional gallerist, adhering to the highest industry standards.

[14:35:01]

And any offer out of the normal, of course, will be rejected out of hand.

And the gallerists will not share information about buyers or prospective buyers including with Hunter Biden or the administration, which provides quite a level of protection and transparency.

(END VIDEO CLIP)

VICTOR BLACKWELL, CNN HOST: Walter Shaub is the former head of the Office of Government Ethics under President Obama.

Walter, thanks for being with us.

So, some of those safeguards put in place are neither Hunter Biden nor the public will know who bid on or purchased the work.

And if there's unusual behavior, like the offer being too high, the collector didn't appear to be interested, the gallery will turn down the offer.

You don't think that's enough. Why?

WALTER SHAUB, FORMER DIRECTOR, OFFICE OF GOVERNMENT ETHICS: No. They have outsourced government ethics to an art dealer.

She mentioned industry standards. It's an industry that's notorious for money laundering. There's no standards in that industry.

And the idea that they're going to flag any overly priced offers, well, this is art that hasn't even been juried into a community art sale.

How are they going to decide what's unreasonable when they've already priced it in the range of $75,000 to $500,000 for a first outing?

This is just preposterous and very disappointing.

CAMEROTA: Walter, just explain why would the White House be the intermediary for the art sale?

I mean, I think that what Jen Psaki was saying was they thought this would be a way to head off any ethical concerns but you're shaking your head.

SHAUB: Yes, they've absolutely made it worse for two reasons.

One, what they've done is ensured that neither you, nor I, nor anyone watching this show will know who buys the art unless they share it publicly.

But there's nothing that we can do to monitor to make sure that Hunter Biden or anyone in the White House doesn't find out that the dealer keeps his or her promise.

That the buyers don't call the White House, ask for a meeting and say, hey, I just bought the president's son's art for $500,000.

Now, maybe we trust Joe Biden not to give preferential treatment because he's a better human being than Donald Trump.

But you don't run an ethics program on the idea that you hope everybody behaves. If everybody in the world would behave, we don't even need laws prohibiting murder then.

BLACKWELL: So, Walter, let's look at it from this perspective, and art is subjective, right? The appreciation of these pieces. But they're not bad. Right?

If you look at them, these are things that some collectors might like. Is there a way that Hunter Biden could now become this great emerging artist and sell them for a price that matches the market that would not run afoul of ethics concerns?

SHAUB: Well, the thing is, it's just got the absolute appearance that he's profiting off of his father's fame. He's not selling under a pseudonym.

He's not waiting until his father is out of office. And he's not selling at any price comparable to what other first-time artists are selling.

So, the White House should have first made its move to have the president try to talk him out of doing this.

And if that failed, they should have gone the opposite direction and asked that the name of buyers be released.

And pledge to the American people that what they would do is let us know any time one of those buyers got a meeting with an administration official so that the public could judge whether or not they were getting preferential treatment.

The problem is, now they've set a precedent for the next president, and even if you happen to trust Joe Biden, what if the next president has the character of a Donald Trump? This would be perfect for funneling bribes to that president.

CAMEROTA: Walter, that's really interesting, because those words that this is going to be a private and confidential opening and sale did get my attention, too.

BLACKWELL: Yes.

CAMEROTA: So, they think that -- what I think the White House thought was that by setting it up as a blind sale, then there couldn't be influence exerted on the Bidens.

But you're saying that it makes it secretive in a way that the public can't know.

And I think that your idea about -- that he could have done it under a pseudonym is interesting also, because Hunter Biden says that he now devotes his life to the creative arts. He credits it as his coping mechanism.

We know that he's had substance abuse issues and it literally keeps him sane. So he needs to be able to make a living. This wouldn't have been a problem.

SHAUB: Yes, I mean, people often ask, well, what job can he do? The truth is, he can do any job in the world he wants and he can sell art all he wants.

But he ought to be abiding by a standard that he shouldn't be doing things to capitalize on his father's name.

And you just are never going to convince me that selling art as a first-time artist at this price, he's not selling it based on his father's name.

People are going to buy this art to be able to say, I've got the president's son's art hanging in my den or whatever room rich people who can afford this art have.

[14:40:03]

And he's just not doing what he needs to do to avoid that.

I know he's not a government official and isn't covered by the government ethics laws, but he's an American citizen, and he has a patriotic duty not to capitalize on his father's public service. And that's clearly what he's doing here.

BLACKWELL: Hey, Walter, let's expand this conversation. You had a lengthy thread on your Twitter account talking about that we can't just go back to the ethics norms and laws pre-Trump, thinking that those will work now.

You're calling for what you describe as an ethical renaissance in government. What's that look like?

SHAUB: You know, we've just had a four-year period where our illusions that we had a strong government ethics program have been shattered.

We used to have people from around the world come and visit us, particularly from developing nations, to see how to run an ethics program.

My advice to them right now would be, run as far away from the ethics program that we currently have as you can. Because what we've learned is that it doesn't work.

And the problem is this idea of going back to the way Trump was suggests that Trump was just an aberration and the systems were strong enough to stand up against someone like him.

The problem is, they didn't stand up to someone like him. And the conditions that everybody wants to go back to when they say, let's go back to the way it was, were the conditions that got him in the first place.

We need to learn those lessons and push for massive, sweeping changes. We need transformational leadership in this time.

After the Watergate scandal, there was sweeping reforms that passed through Congress, and we had 40 years of relative calm on the ethics front.

You know, there were scandals, there always will be, but things were relatively calm. Now, we know that that wasn't working anymore. And we needed a post-Watergate era type renaissance, really. And if we had seen President Biden put the level of effort into the

for the People Act, H.R.-1, also called S-1 in the Senate, that would have been a good down payment.

It would have ensured voting rights in the states. It would have reined in some campaign finance. It would have established new ethics rules, including rules for the president himself.

But we saw some lackluster effort and a whole lot of excuses that, well, we don't have enough control in the Senate to get it through.

The problem is, they're out there pitching this infrastructure bill every day, and I don't see that kind of effort on the reform front.

His entire ethics platform read about -- if you read that, it was all about legislation he was going to push for.

We haven't had a single bill suggested by this White House.

I don't think it's too late for them to turn this car around. But I think they're running out of time. And they need to get committed to reform. And they need to clean up their house a little bit.

BLACKWELL: All right, Walter Shaub, always good to have you. We'll see you at the Hunter Biden auction in September. I'm kidding. No, we're not.

(LAUGHTER)

CAMEROTA: I mean, you are an art collector. People should know.

BLACKWELL: I have a very modest collection.

CAMEROTA: You have a great eye for it.

BLACKWELL: Thank you.

But the idea that an artist enters the market at $75,000.

CAMEROTA: Doesn't happen?

BLACKWELL: To a half million dollars? It just doesn't happen unless you're going for the name and what does that name mean in this context?

CAMEROTA: All right, we will continue to follow that.

BLACKWELL: All right, right now, Richard Branson is less than 48 hours from blasting off into space. What you need to know about his historic mission.

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[14:48:14]

BLACKWELL: Sunday is the big day for Richard Branson, the founder of Virgin Galactic. He'll go right to the edge of space when he travels aboard a rocket-powered plane that he helped fund.

CAMEROTA: If all go as planned, Branson and his team will beat former Amazon CEO Jeff Bezos by nine days. Apparently, that's very important.

Rachel Crane is live in New Mexico where the launch will take place.

Rachel, how's this going to work?

RACHEL CRANE, CNN BUSINESS INNOVATION & SPACE CORRESPONDENT: Well, Alisyn, I got to tell you, I'm pretty pumped right now because I am behind the gates here at Space Port America. This is a location that the space flight will take off on Sunday morning, scheduled for 9:00 a.m. Eastern, 7:00 a.m. local.

And from our mass cam, you guys can see the runway that this rocket- powered space plane will be taking off from. That is a 12,000-foot runway that you are looking at.

And that is also where the rocket-powered space plane will land as well as its mothership, named eve. She will also be landing on this runway.

And here at the facility, I mean, it is a bevy of activity. Tents are being erected.

Hundreds of people are on location. Engineers checking all the systems, making sure that the space flight itself. But also, the event surrounding the space flight goes off without a hitch.

You know, thousands of people are flocking to Las Cruzes for this event. The city saying it should generate nearly $400,000 in revenue just this week, and tons of VIP will be attending this launch.

So while today is actually a rest day for Richard Branson, the past few days, he's been at this location doing his astronaut training. But so today, he's with his family.

But it is certainly not a rest day here at Space Port America. And Richard Branson, his objective on this flight is to test the astronaut experience.

[14:50:07]

And nobody is more excited about that than Branson himself. Take a listen to what he had to say.

(BEGIN VIDEO CLIP)

RICHARD BRANSON, CEO, VIRGIN GALACTIC: I'm going up in a -- as someone there to test the customer experience. And I'm going to enjoy every single minute of it.

I think it's something that millions and millions of people out there would want to take my seat.

And I'm going to enjoy every second from the beginning to the end. (END VIDEO CLIP)

CRANE: Victor and Alisyn, currently, around 600 people have already put down deposits of around $200,000 to hitch a ride on this rocket- powered space plane.

Virgin Galactic saying commercial operations should begin in the beginning of 2022 -- Alisyn, Victor?

CAMEROTA: Do you have any interest in doing that, Victor?

BLACKWELL: I'd do it, yes. If I didn't have to pay for it. Yes, I'd do it.

Rachel said she was pumped at the start. I know you would do it.

BLACKWELL: Rachel could stowaway.

(LAUGHTER)

CAMEROTA: Richard Branson is having a rest day. You could stowaway right now.

Rachel, thanks so much. Really interesting report.

BLACKWELL: The new National Spelling Bee champion is making history. And beyond spelling, she has a few other amazing talents. I mean amazing. You should know about them.

Stay with us.

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[14:55:53]

BLACKWELL: There's a new top speller in the U.S.

(BEGIN VIDEO CLIP)

ZAILA AVANT-GARDE, NATIONAL SPELLING BEE WINNER: Murraya, M-U-R-R-A-Y- A.

UNIDENTIFIED HOST: That is correct!

(APPLAUSE)

(CHEERING)

(END VIDEO CLIP)

CAMEROTA: That's 14-year-old Zaila Avant-garde from New Orleans. She beat out more than 200 contestants from five countries. She's the first black American to ever win the competition.

How did she know how to spell Murraya? How did she know that?

BLACKWELL: We just had to ask someone, what is that?

CAMEROTA: What is it.

(CROSSTALK)

CAMEROTA: It's a type of tree, we're told.

(CROSSTALK)

CAMEROTA: But I would have put an "H" in there. How did she know that it's M-U-R-R-A-Y-A?

BLACKWELL: A lot of studying.

CAMEROTA: know what she wants to be when she grows up.

BLACKWELL: Tell me.

CAMEROTA: Listen to this.

AVANTE-GARDE: I'm thinking about maybe an NBA basketball coach, working for NASA or maybe going into treating diseases and stuff to help with neuroscience.

(END VIDEO CLIP)

CAMEROTA: Neuroscientist or NBA basketball coach. She also wants to win a Nobel Prize for gene editing.

BLACKWELL: OK. All within reach.

Listen, she also already has -- and she's only 13 -- she has --

CAMEROTA: Fourteen.

BLACKWELL: Fourteen. She has a Guinness record for the most bounce juggles in Maine. She's a great basketball player.

Here is the bounce juggling. Three basketballs here.

CAMEROTA: That looks like they are on strings. It looks like she's not doing that as though they are on strings. Is that not incredible?

BLACKWELL: It really reminds us that we're not doing enough with our lives.

CAMEROTA: No, no, totally. I mean, absolutely. We're complete under achievers.

BLACKWELL: Well, congratulations, Zaila.

Next hour starts in a moment.

CAMEROTA: We'll be right back.

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