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JCPenney's Johnson Ousted; McConnell Campaign: We Were Bugged; "Accidental Racist" Song Creates Controversy; Pitino's Promise: I'll Get A Tattoo

Aired April 9, 2013 - 16:29   ET


JAKE TAPPER, CNN HOST: In our "Money Lead", freshly ousted JCPenney CEO Ron Johnson has learned, you just can't take away people's coupons. The department store announced Johnson, famous for leading retail operations for Apple was stepping down and the guy he replaced back in 2011, Mike Ullman, was taking over again.

It's been a rough year for the company with shares dropping over 50 percent and sales down nearly 30 percent. You can't say Johnson failed because he refused to try something different. He offered free hair cuts for kids, for example. More controversial, he got rid of sales, saying JCPenney would always offer a fair price. That didn't work. People like sales. So he brought them back.

The big question: was this one man stumbling or is there a larger problem with all retail stores?

Joining me now from Los Angeles is Rocco Pendola, columnist for the Rocco, can you point to one thing and say, this was Johnson's downfall at JCPenney?

ROCCO PENDOLA, COLUMNIST, THESTREET.COM: I don't think so, Jake. I think you can certainly say, well, the sale thing and then bringing it back wasn't a good idea. We always like to focus and hone in on one thing.

But I think it's a bigger problem. I think it's the JCPenney was in need and still is in need of a visionary. Somebody who can come in and completely change retail, make the department store unrecognizable to itself and just totally overhaul the business because that's what it needs. Johnson isn't that guy. We think he's that guy because of what happened at Apple with their retail stores when he worked there, but I think it is a major misconception that most people share.

TAPPER: But he had a good reputation in Apple, and Apple obviously is a legendary company. Did people just misunderstand, just applied Apple's success and just assumed he had something to do with it when it is just that Apple is - just fantastic?

PENDOLA: I think so. I think what happened was Steve Jobs very clearly had a vision for retail. He knew what he wanted Apple stores to look like, from everything from the design to product placement to how they were going to market them. And Ron Johnson, to his credit, to be fair, is a business person. He is a great MBA. He's a great manager. He implemented. He executed Steve Jobs' vision. We can't forget about Mickey Drexler, the chairman and CEO of J. Crew. He and Jobs worked together for years and his input was crucial in terms of visioning the Apple concept. Those guys visioned it. Johnson to his credit implemented it. They need a visionary at JCPenney. That is not Ron Johnson.

He thinks he's a visionary. If you hear him talk, he thinks a lot of himself. He read his own press clippings at Apple. But it just obviously didn't work out. And again, I think it's bigger than one thing.

TAPPER: And lastly, Rocco, for other retailers looking at the example of JCPenney, other than don't hire a visionary even if he's selling himself as a visionary, what lessons can they take from the Johnson failed experiment?

PENDOLA: Don't do what you do after firing Johnson. You make the obvious move about six to nine months too late and then you bring the guy in, like Best Buy did by installing people on their board who led the company. During the time when Jeff Bezos and was absolutely turning retail on its ear. I mean, he crushed physical retail.

So, what is your answer? You bring in the same people who watched the death spiral. They were sleeping under their desk while this stuff happened. You have to look to a company like Starbucks. Howard Schultz is one of the best CEOs in the business. He treats that company like a tech company. And they're always evolving. They've been first on digital, first on mobile. And that's why they provided a great customer experience because they continue to move with the times, and they have visionaries in place. That's the direction that all retail needs to go in, particularly the ones like JCPenney and Best Buy who have had it taken to them by some of the more successful retailers.

TAPPER: All right. Rocco Pendola from The Street. Thank you so much.

PENDOLA: Thank you.

TAPPER: You've seen the pictures and videos. Employees of trendy Silicon Valley firms have long enjoyed fringe benefits like free meals and much more. But now Uncle Sam may be ready for his piece of the pie. According to a report in "The Wall Street Journal," the IRS is now considering whether to tax free meal perks at companies like Google and Facebook.

THE LEAD's Erin McPike is here with more. Erin, I can understand both sides in this argument. I can understand why the perks shouldn't be taxed, and at the same time, clearly, it is a reason people go there. It's almost like part of their salary.

ERIN MCPIKE, CNN CORRESPONDENT: Yes, well this is a really big gray area, Jake because plenty of these fringe benefits or so-called fringe benefits are considered totally acceptable like gyms, gym classes, rec rooms, that kind of thing. But the big concern is that when it comes to meals, the IRS isn't particularly clear.


MCPIKE: The cushy life out in the expansive offices of Silicon Valley. It comes with lots of bonuses, but not all of them are cash.

UNIDENTIFIED MALE: We have yoga. We have Pilates.

UNIDENTIFIED MALE: Sushi, by the way, is great.

MCPIKE: But free lunch, you know there is no such thing.

UNIDENTIFIED FEMALE: There is any type of amazing cuisine even better than some restaurants in New York.

MCPIKE: Big tech companies out West are in fierce competition to attract top talent. So, they're not the least bit shy about publicizing their perks. As the April 15th tax deadline nears, "The Wall Street Journal" reports there is a debate looming about whether all the freebies ought to be taxable. The IRS has stringent guidelines on what employers can feed their employees, and the test of whether those meals count as income convenience.

If you work on an offshore oil rig, you can't exactly run out for a burger. So the tax man says your company can feed you tax free. But what about those tech companies? They're often in places with plenty of restaurant options.

They say it's all about culture, like at Facebook, voted best place to work on the Web site GlassDoor.

UNIDENTIFIED FEMALE: I really feel like Facebook sometimes is a utopia in the best of ways. The cool thing about Facebook's approach to benefits is they're really focused on removing stress from our daily lives so it's things that make me just -- make it easier for me to focus on my work. MCPIKE: Being together, working together, and yes, eating together.

TOM CRYAN, TAX ATTORNEY: Recent press is going to get the IRS more interested in this issue generally.

MCPIKE: Tom Cryan is a tax attorney who represents companies in cases like this. He says the IRS has been investigating perks for years, like the way high-level executives fly on corporate jets for their personal use. But meals for the common techie?

CRYAN: It hasn't been seen as this big abuse area. Law's a law, so they're going to look into this when they audit you. And as I said, the dollars can be huge depending on the size of the company.


MCPIKE: Now, lest anyone worry about coffee and donuts in the morning in the office, that's all okay. It's just these big company- wide meals that they're worried about. Now, the IRS is not looking to do anything new, per se. It's just a matter of maybe we'll see some audits in northern California this year.

TAPPER: Interesting. All right. Erin McPike.

Politics is a cutthroat business, but bugging the opposition? Yep. The secret campaign meeting caught on tape and why the Senate minority leader wants the FBI involved. That's our Politics Lead, and it's next.


TAPPER: Our Politics Lead. Senate minority leader Mitch McConnell, Republican of Kentucky, says his office was bugged. Here to talk about it, Republican strategist and former senior adviser to the Mitt Romney campaign Kevin Madden. Maggie Haberman from Politico, and Democratic strategist Jamal Simmons.

So, explain to our viewers what exactly is going on with this McConnell news.

MAGGIE HABERMAN, POLITICO: So Mother Jones had a tape recorded session --

TAPPER: That is not a person. That's a publication.


HABERMAN: Right. Not someone's Mother Jones.

TAPPER: Right.

HABERMAN: Mother Jones of the 47 percent -


HABERMAN: I'm sorry. I'm just bringing everybody into the conversation here. They got hold of a recorded briefing session of the McConnell campaign where they were talking about how they were going to attack Ashley Judd, how they were going to attack another potential Democratic opponent.

TAPPER: In fact, we have a little bit of that. Let's play it right now.


SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: I assume most of you have played the game Whac-A-Mole? This is the Whac-A-Mole period of the campaign...when anybody sticks their head up, do them out.


TAPPER: Obviously the most controversial part of the tape is others talk about how they potentially could use --

HABERMAN: They could potentially use the fact that she is, quote, "unstable" in their words. She's had some issues with depression. This is all very public, so they were sort of going after her vulnerabilities.

To me, and we talked about this in the green room, this would be malpractice for a campaign not to go over a potential rival's weaknesses, so for me that's not what's so surprising here. What's surprising is that this tape got leaked. And the big question is, whodunit, right? I mean, he is saying he believes he was bugged. There is not clear evidence that he was bugged, that there wasn't somebody sitting at a meeting taping it and then leaking it. But this is pretty standard operating procedure, as you know in campaigns. It's ugly to hear it, but it's reality.

TAPPER: It's juicy to hear it.

HABERMAN: It's juicy.

TAPPER: And the McConnell people are very, very upset. They're accusing a liberal group of bugging the offices. They referred this complaint to the FBI, which is taking a preliminary step to look into the matter. Walk us through what it must feel like for a campaign to have something like this come out.

KEVIN MADDEN, FORMER ROMNEY CAMPAIGN ADVISER: Well, you know, I think this is different from other campaigns, you know, surreptiously taped campaigns that -- at least the ones I've worked on.

This was met with a yawn by a lot of folks that are looking at the actual substance of what was in the tape. As Maggie said, very correctly, this is standard operating procedure. These type of conversations are routine parts of both Democrat and Republican campaigns. So, you know, I think there is -- this is going to be about 48 hours of, hey, FBI, Nixonian back-and-forth charges. And then we'll move on. We'll find out if we have another candidate from the Democratic side.

TAPPER: Because Ashley Judd is not running.

MADDEN: Correct.

TAPPER: This would be a bigger deal, Jamal, if she were running, right? I mean, the idea -- I mean, I understand you hardened political operatives and tough political reporters.


TAPPER: This is nothing. Oh, this is how we do it. We destroy people's lives. But if Ashley Judd were in the race, this would probably be a much bigger story.

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: Sure. Sometimes the much more fun conversation is when people come back with information about your own candidate. You have to have that conversation --

TAPPER: Right. Because people do oppo research on themselves.

SIMMONS: On themselves. That is a much tougher conversation than the one about the opponent. What usually gets people in trouble when these surreptitious tapes come out is when something is confirmed about the candidate that people sort of suspect deep down inside. So, remember the Mecaca moment with Senator George Allen in Virginia. Everyone sort of thought George Allen had kind of a weird background when it came to racial sensitivity issues. And so, when that came out, it became a big way of confirming something people thought underneath. This doesn't really tell you anything about Mitch McConnell that I think you maybe didn't know.

TAPPER: He is a tough political operative.

MADDEN: I think it tells you that, yes. Right.

Look, the big channel for the campaign is this is McConnell's words about his opponent. And I think if I'm inside that campaign, my goal right now is to make sure that there are only the campaign staff talking about this, and then you get it off the front page and you go back to running your campaign and no longer have the voice of explaining this or what happened in Senator McConnell's own voice.

HABERMAN: The other piece of news on this tape is they were talking about Allison Grimes, his potential Democratic opponent or a potential Democratic opponent. They have basically nothing on her. This is supposed to be an oppo research walkthrough for their campaign. Mostly what they were talking about was that she supported the Democratic platform in 2008. If that's the most they have against a rival, that's a problem.

MADDEN: They don't have anything yet.


MADDEN: And I wouldn't base that on one conversation that you heard on one tape. I'm sure knowing that operation as I do, they are a very good one. There is going to be a very strong contrast drawn between Senator McConnell and his opponent.

TAPPER: We also actually know obviously this recording was from when Ashley Judd was still talking about possibly running, and a lot of the energy and attention was on her. So -- and she was considered -- I don't know if she could beat McConnell, but she was considered the heavyweight, the Democrat that people really wanted to run because she could do (ph) the race. So, maybe they hadn't done as much research on her.

SIMMONS: The other question for the McConnell campaign which is probably really driving them nuts, which is not did the Democrats surreptitiously take this, but did somebody who they trust who is sitting on a phone call or sitting on a -- sitting in the room -- did they tape it and then give it away?

My understanding of the law is it's legal that one person consent in the conversation that they get to then have it. The question though is, did somebody that the McConnell campaign know and trust listen to this phone call and then give it out? TAPPER: We may never get that answer.

HABERMAN: Now it is appropriate to call for an FBI investigation. What becomes a bigger question and I don't know the taping laws in that state, the idea that we know for sure bugged us. I think it is problematic for McConnell.

TAPPER: There is a liberal group called "Progress Kentucky" and there is no evidence that anybody did anything at this point.

HABERMAN: Correct.

TAPPER: All right, thank you so much, Kevin, Maggie and Jamal. I appreciate it.

Finally, a rapper and a country star are teaming up to tackle the issue of accidental racism. You know, when you do something racist accidently, right. The newly released single that some are calling the worst song ever, that's our "Pop Lead" and it's next.


TAPPER: The "Pop Culture Lead." Here we go. Brad Paisley and L.L. Cool J teamed up to tackle the serious issue of racism. By now you probably heard the snickering about their newly released collaboration. It's called "Accidental Racist."

The song, which is on Paisley's new album is an attempt to use music to confront issues of racism and stereo typing head on. But what we end up with is a duet that in my view makes "Ebony and Ivory" sound like "The I Have A Dream" speech. Take a listen.

That was Brad Paisley's part. Here comes where L.L. Cool J's comes in.

TAPPER: Mama said knock him out for those lyrics. We're joined now by Christopher John Farley. He is "The Wall Street Journal" senior editorial director and he oversees "The Speak Easy Culture" blog.

Christopher, before we get your take on this song, let me show you a few reactions from Twitter. Patton Oswalt tweeted, "I can't wait for Brad Paisley and L.L. Cool J's next single "Whoopsy Daisy Holocaust My Bad."

(Inaudible) tweeting, this is the worst song ever. But the reaction was not all bad. Coach Mike Dee tweeted, "Love the song. Our beautiful country needs more of those positive vibes."

My view however well intentioned, Paisley and Cool J created a song that to me sounds like it is one bong hit away from being a South Park parody, but that's just my view. I am interested --

CHRISTOPHER JOHN FARLEY, "WALL STREET JOURNAL'S SPEAKEASY" BLOG: Maybe a half bong hit. This song obviously is problematic. It set Twitter ablaze. People were talking about it saying what is going on here? I think part of the problem is, one, it's bad musically. This music is bad.

The lyrics are also quite bad. The themes are bad. So it's a total strikeout on almost every single aspect of a song you would judge it by it seems to have failed. Brad Paisley is a very talented country artist and one of the best ones out there I think, only 40 years old, but he's one of the guys who is really driving new country.

L.L. Cool J obviously a terrific star. You have to respect the work he's done on television and some of his past rap work. This is obviously an epic fail and people have attacked it because it doesn't take the subject seriously. It wants to take it too seriously and somehow not seriously enough.

If you are going to address the issue of American slavery you have to have new ideas. Saying something and this is a paraphrase of what L.L. Cool J. Says in the song, saying things like if you don't judge me for my gold chains, I'll forget about the iron chains. That's ridiculous.

I don't want anyone forgetting about the iron chains and about the middle passage and American slavery. These are things we can't put aside and that no rap, hip hop, country collaboration can tell us to put aside. So it's a quite ridiculous song and really surprising that L.L. Cool J would be involved in putting it out.

TAPPER: I will say though and you'll agree with me on this if you're looking for a rhyme for the word chains you can't do any better than the word chains.

FARLEY: Then go back to chain.

TAPPER: I mean, no word rhymes better with chains than chains. I think we can agree on that. You're a black man. I am a white man. We can come together.

FARLEY: Does he not have any friends in the hip hop community who can tell him what is going on? You can't put this out. This will be embarrassing to you and your brand. This guy is a well respected pitch manned today and this undercuts his credibility in the hip hop community even more than it's ever been being linked to this really terrible collaboration.

TAPPER: Let me throw this out as an idea. What if the whole point was for the likes of you and me to mock it so people would run and buy his album in defiance of us?

FARLEY: Well, if he was doing that it is also a fail because I checked on iTunes and this song was hovering around 88, below basically every other thing you're hearing on the radio. The album is going to do well because it actually has some good songs on it. The whole Brad Paisley album called "Wheel House" so that has good stuff on it. But the song so far certainly hasn't caught on among iTunes buyers.

TAPPER: All right.

FARLEY: So that approach doesn't really work for him.

TAPPER: All right, thank you so much, Christopher John Farley. Thank you so much. We'll have you on again soon.

If Veronica Morris can do it why can't the Godfather of "Shock Rock? Alice cooper is turning to "Kick-Starter" to raise money for a TV series. The series would be reminiscent of shows like "Tales From The Crypt" and the "Twilight Zone" with Cooper playing the fitting role of gatekeeper to hell.

"Kick-Starter" is a web site that helps you publicly raise money for any type of project. It broke records when fans chipped in more than $2 million to fund a Veronica Morris movie.

Next you win a couple golf matches, get a nice new girlfriend, you grow a beard. You hardly recognize the new Tiger Woods and that may be exactly the point. Our "Sports Lead" is next.


TAPPER: Lastly our "Sports Lead." They played for their pride and they played for injured teammate Kevin Ware, but most of all the national champion Louisville Cardinals played so Coach Rick Pitino would have to get a tattoo.

Apparently, the coach made that promise in the middle of the season to motivate his team and the players are not letting him forget it.


UNIDENTIFIED MALE: What is he going to get?

KEVIN WARE, LOUISVILLE GUARD: I'm not even sure. He'll probably one of the weirdest things possible.

UNIDENTIFIED MALE: What do you want him to get?

WARE: A lower back tattoo.


TAPPER: You saw him wearing the nets around his neck after watching his Louisville teammates beat Michigan to win the national championship. Kevin Ware got to cut them down. Since he is on crutches and can't climb up a ladder the entire basket was brought down to him.

At first we thought he was growing it because he was going all in, becoming evil Tiger, Tiger's evil twin. But now for the first time Tiger Woods is talking about that weak goatee he is sporting.

Actually technically it's a Van Dyke as my friend Chuck Todd would be the first to tell you. Tiger will be going for his fifth masters and first major win in several years at Augusta, but this will be the first one with the squirrel on his face.


TIGER WOODS, PROFESSIONAL GOLFER: Never want to major without a goatee on because it takes a long time for this thing to grow. OK? It really does. It takes a long time.


TAPPER: That's some weak stuff. Tiger just regained his number one world ranking and many are saying this is his biggest major ever. He was born well after Tiger Woods won his first masters at 14 years old.

China's Gaung Lang will make history as the youngest player ever to compete in the masters. He is not even in high school yet. He is still in junior high. Here he is getting tips from Tiger.

He also played a morning practice round with two-time champ 61- year-old Ben Crenshaw. The kid earned a spot in the masters by winning last year's Asia Pacific Amateur championship.

He may truly be the most interesting man in the world. Anthony Bourdain will pop in tomorrow on THE LEAD before he goes to "Parts Unknown." That's his new show that starts this Sunday night at 9:00 Eastern on CNN.

That does it for THE LEAD today. I'm Jake Tapper. I now leave you in the able hands of Wolf Blitzer.