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LEGAL VIEW WITH ASHLEIGH BANFIELD

Federal Government Wins Chicago Housing Suit; Outburst in Courtroom; Children's Charity Exposed; Jay-Z Sued Over Song.

Aired August 27, 2013 - 11:30   ET

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


PAUL CALLAN, CNN LEGAL ANALYST: There's a doctrine --

(CROSSTALK)

(LAUGHTER)

CALLAN: It's called concurrent jurisdiction. The federal government may have the final say here, because they're the feds, OK? But they can yield to the state and say, you know, Chicago, you have this ordinance, we're willing to abide by it. The feds frequently do that. I don't know why the federal government would say, in Chicago, where President Obama came from, we'll take care of the properties according to Chicago standards.

ASHLEIGH BANFIELD, CNN ANCHOR: Just quickly, Joey, I want you to get in on this, but first I want to real the statement from both parties. Number one jurisdiction of Chicago and also from the FHFA. Let me start with the FHFA and how it responded to this. It said, "The Federal Housing Finance Agency is pleased with this ruling" -- no kidding -- I added the no kidding -- "Fannie Mae and Freddie Mac policies and procedures for addressing vacant properties have been and continue to remain in force." Chicago's response, you can imagine, is the exact opposite. "Vacant properties are a challenge for neighborhoods and a financial burden for the city. And while we are disappointed in the court's decision, we will continue to hold financial institutions responsible for maintaining properties while protecting our residents and communities from the dangers the properties create."

Joey Jackson, here's the simple question. If Fannie Mae and Freddie Mac are holders of these mortgages, or owners of these mortgages, whether it be either one, isn't it in their best interests to protect their asset and keep that house looking good?

JOEY JACKSON, HLN LEGAL ANALYST: It absolutely is. At usual, you're right on point, Ashleigh. There are two things that are significant. Number one, what you just stated. It is in their interests. You want to preserve the home. You want to preserve the value. You want to be a good neighbor. As a result of that, however, there are procedures in place that provide for them to do that. There's a mechanism that they already have that says keep the properties preserved, keep them nice, be good neighbors.

The second issue, let me be clear, we're dealing with the federal government. BANFIELD: OK --

(CROSSTALK)

JACKSON: The federal government is supreme, therefore, lest there be any question, this renews what we already know, as between a local ordinance and federal law, there's no match between the two.

(CROSSTALK)

JACKSON: It's going to be the king.

BANFIELD: Isn't it, though?

Thank you. Danny Cevallos, Joey Jackson, Paul Callan, stick around. A lot more coming up.

This one. You know, sometimes in a courtroom words spoken can be way too much to handle for those having to listen.

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(SHOUTING)

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BANFIELD: Yes, that's exactly the case for the man in the middle of that melee because he just heard how many times his own brother was stabbed and the horrible way that he died. You'll hear the rest of the story, next.

(COMMERCIAL BREAK)

BANFIELD: A man whose brother was stabbed 69 times lost it in a Massachusetts courtroom, as the gruesome details of the killing of his brother were revealed, it really got out of control.

As Susan Tran reports, from our Boston affiliate, WHDH, that man got so incensed, he lunged at the suspect during his arraignment.

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(SHOUTING)

SUSAN TRAN, CORRESPONDENT, WHDH (voice-over): Intense emotions turn into rage inside court.

(SHOUTING)

TRAN: It took nearly a half dozens officers to remove Tom Russo. His attorney says listening to the details of how his brother was killed was just too much for him.

JAY SATIN, THOMAS RUSSO'S ATTORNEY: Listening to the events, he was just very incensed. TRAN: Peter Deconick (ph), behind this glass partition, was being arraigned for killing Ronald Russo Saturday night in this Revere (ph) mobile home, and as the prosecuting attorney was detailing how Deconick (ph) allegedly killed Russo --

UNIDENTIFIED PROSECUTOR: The autopsy report revealed that Mr. Russo suffered 69 knife wounds to his body, and the defendant made statements later at Mass General Hospital stating that he was at --

(SHOUTING)

TRAN: Tom Russo lunged for his brother's accused killer.

(SHOUTING)

TRAN: It was a packed courtroom. People were looking for cover.

UNIDENTIFIED FEMALE: The guy just jumped up and was like, you mother -- we jumped up and were standing because we didn't know if we were going to get hit at that point.

TRAN: One court officer was taken out in a stretcher.

Tom Russo was the one back in court, this time, to face a judge for disorderly conduct and disrupting a court proceeding.

SATIN: Mr. Russo apologized for his behavior. He explained he emotionally lost control at the hearing. (INAUDIBLE).

(END VIDEOTAPE)

BANFIELD: Again, our thanks to Susan Tran from our affiliate, WHDH, for that report.

Coming up next, buckle up. Chasing a charity. A charity collecting millions to grant wishes for dying children. So why does this charity spend less than 3 cents on every dollar that you give to the charity? A whistle-blower exposes their operation, and guess what happens to the whistle-blower? We're going to keep them honest, next.

(COMMERCIAL BREAK)

BANFIELD: Keeping them honest, the latest in a gallery of charities that raise money from donors but only send small change on the people they claim to be helping. In the past, CNN has exposed charities that benefit themselves. This time, with "The Tampa Bay Times" and the Center for Investigative Reporting, we have identified the worst, the rock bottom when it comes to how little out if each dollar raised it spends helping those it claims to be raising money for. In this case, it is children dying of cancer and other deadly illnesses. You heard right. Children who are dying.

Drew Griffin and producer, David Fitzpatrick, are keeping them honest.

(BEGIN VIDEOTAPE) DREW GRIFFIN, CNN NATIONAL CORRESPONDENT (voice-over): Three former employees of the Kids Wish Network say, to work here at the charity we rated as America's worst, it appears you have to know how to lie. We found that out the moment we knocked on the charity's door.

(on camera): Is Ms. Lanzatella in?

UNIDENTIFIED FEMALE: No, she isn't.

GRIFFIN: She's not?

UNIDENTIFIED FEMALE: No.

GRIFFIN: That's her car right there.

UNIDENTIFIED FEMALE: That's correct.

GRIFFIN: All right.

(voice-over): Anna Lanzatella runs Kids Wish Network. That is her car.

After waiting in the parking lot for two hours, it turns out she was at work after all.

(on camera): Hi, Anna Lanzatella?

ANNA LANZATELLA, DIRECTOR, KIDS WISH NETWORK: Hi.

GRIFFIN: Ma'am, Drew Griffin with CNN.

LANZATELLA: Hi, Drew, nice to see you.

GRIFFIN: Nice to see you. Can we just ask you some questions about the ratings that have come out?

LANZATELLA: No, I'm sorry. There have been so many misleading reports that we have asked our attorney to look into everything, and I won't be doing any interviews.

GRIFFIN: Well, we --

LANZATELLA: Thank you.

GRIFFIN (voice-over): It is perhaps with good reasons that Lanzatella and the Kids Wish Network don't answer our questions, because it's all about how this charity has taken in $127 million of your donations over the last 10 years, yet according to the charity's own tax filings, it has used less than 3 percent of the money to fulfill the wishes of sick children. You heard right, less than 3 percent.

(on camera): We've looked at your own tax returns and determined that, you know, less than three cents of every delay raised in cash goes to actual programs or children. Can you at least tell us if your own tax filings are true? And that's the case? LANZATELLA: I'm not going to interview and not discuss it. We've made a statement and it's on our website and we've answered the questions.

GRIFFIN (voice-over): In fact, Anna Lanzatella has never given an interview.

The charity's website statement says, in part, "We are very aware of the high costs involved with fundraising, and are doing everything we can to allocate more and more dollars to program services every year, while exploring the lowest cost fund-raising opportunities."

But less than three cents out of every dollar?

LANZATELLA: That's just not true.

(CROSSTALK)

GRIFFIN (on camera): That's what is on the tax returns.

LANZATELLA: We're very proud of the work that the network has done over the last 15 years. We've helped hundreds of thousands of children, and that's what we're going to continue to do.

GRIFFIN (voice-over): Year after year, Kids Wish Network continues to select millions in donations, $22.8 million in one year according to its most recent tax filing.

How do they raise so much money? Most of it comes from paid telemarketers, most, but not all.

MEANDA DUBAY, FORMER CHARITY EMPLOYEE: My main focus was to grant wishes for children suffering from life-threatening illnesses.

GRIFFIN: Meanda Dubay spent six months as a wish coordinator with Kids Wish Network.

GRIFFIN (on camera): How did you do that? You just dipped into the funds that everything had donated to Kids Wish Network and made it happen, right?

DUBAY: No, I would call and get people to grant me parts of the wish.

GRIFFIN (voice-over): She said she would call hotels, airlines, amusement parks, freebies, even rental cars and meals, all donated, while at the same time, at another desk in this same building, someone else was also making calls to get money to pay for the wish.

DUBAY: We would have one person call to get the actual services donated while another person is calling to get the money donated for things side of already getting for free.

GRIFFIN (on camera): So if you have this entire wish, let's say, a trip to Disneyland or Disneyworld donated, where was this money going?

DUBAY: That, I don't know. I have no idea where that money would go. GRIFFIN (voice-over): It turns out now we do. Records reviewed by CNN and "The Tampa Bay Times" show of the $127 million raised in the past 10 years, $109 million was paid right back to those professional fundraisers.

And you'll want to hear about one of those fundraisers in particular. He is Mark Breiner, the person who actually started Kids Wish Network. In the past five weeks, the charity he started has paid almost $5 million to fundraising companies owned or controlled by him. That includes more than $3 million after Mr. Breiner left Kids Wish Network.

DUBAY: My research found that they were in business with their founder Mark Breiner, and that they had lied on several occasions on their 990s, their tax returns. I want to make sure people knew, so I brought the information to the board of directors.

GRIFFIN (on camera): That they have in fact forgot to mention the fact that they had paid the former operator of the charity more than a million dollars?

DUBAY: Yes, I took that information to the board, and I was let go. I was fired. About 45 minutes after sending my concerns to the board.

GRIFFIN (voice-over): Not just fired. It turns out the Kids Wish Network reported Dubay to the FBI, claiming she had stolen privileged electronic information from company files and illegally accessed employee credit card data. Two months after she was fired, Dubay's home was raided.

DUBAY: There was close to 16 or 17 FBI agents that stormed my home with guns drawn on my husband, called all of us out of our home, guns pointing at us, myself and children -- crying -- and two dogs. I had no idea why they were at my house.

GRIFFIN (on camera): The FBI came to your house with guns?

DUBAY: Yes, in front of my children.

GRIFFIN: Because?

DUBAY: Because I had a complaint against a charity that was lying on their tax returns, because they didn't want people to find out exactly what they were doing.

GRIFFIN (voice-over): The FBI's case was closed and Dubay's confiscated computers returned. Kids Wish Network says it was planning on firing Dubay anyway, accusing her of stealing doubts, even filing a defamation case against her.

An attorney for the charity told CNN there was nothing illegal, unethical or immoral about the charity's fund-raising.

In the meantime, though, the charity admits it did pay the founder of Kids Wish Network millions, and say getting the list of most of its payments was an error. Just one more thing the current CEO didn't want to talk about.

(CROSSTALK)

GRIFFIN (on camera): Why did the Kids Wish Network give $5 million to your founder, Mr. Breiner, and his associated companies?

LANZATELLA: I'm sorry. I've already made a statement and it's on our website. Thank you.

GRIFFIN: But what about the $109 million?

(END VIDEOTAPE)

#; Mark Breiner, the founder of that charity, told Drew Griffin that he was willing to be interviewed by him, but only if the interview was live with Anderson Cooper. Of course, Anderson Cooper said yes. But then Mr. Breiner backed out, saying he didn't feel well, and sent a statement saying, in part, that failure to list those payments to his companies was an omission. He said that just because his companies got paid doesn't mean that he got any money. In fact, Breiner says he personally hand received $1 from the charity since he left three years ago and his businesses aren't doing business with Kids Wish Network right now. Stay tuned.

OK. He's a self-made media and music mogul, but Jay-Z still can't party like it's 1999.

(SINGING)

BANFIELD: Yeah, that's when he recorded this song, and years later, despite how fabulous it is, there's a lawsuit that's lingers on the copyright infringement allegations and that won't go away. It has to do with a song from Egypt back in the '50s. I'm not kidding. That's coming up next.

(COMMERCIAL BREAK)

BANFIELD: While we may not know all of Jay-Z's '99 problems, we know that "Big Pimpin" is one of them. That's the song from 1999. Turns out, there's another artist that says Jay-Z ripped off his song. Are you sitting down? His song is a 1957 hit from Egypt, a ditty. Now Jay-Z is facing legal trouble in 2013. Be the judge. Ladies and gentlemen, feast your ears on Jay-Z's "Big Pimpin."

(BEGIN VIDEO CLIP)

(SINGING)

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BANFIELD: All right. It's pretty good. Let roll 1957.

(BEGIN VIDEO CLIP)

(SINGING)

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BANFIELD: Again back to "Big Pimpin."

(BEGIN VIDEO CLIP)

(SINGING)

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BANFIELD: It's amazing. It almost sounds as though we kept playing the song with wee bits of pausing.

CNN's Nischelle Turner is here with me and CNN's legal analyst -- you know what, Danny Cevallos, I want to get to the legal implications first. But I've got to ask you, Nischelle, why is it such a big deal. I know the song "Big Pimpin," I should know it even more given how big it is.

NISCHELLE TURNER, CNN ENTERTAINMENT CORRESPONDENT: "Rolling Stone" named this one of the top-500 songs ever made.

BANFIELD: Really?

TURNER: Ever.

(CROSSTALK)

TURNER: Ever all time. It spent 20 weeks on the hot 100 charts. It's one of his best.

What's been established is he did sample the song, but the catch is Jay-Z thought he already paid for the rights to this song and that's where the legal issues come in. Who owns the rights? Does EMI own it or the heirs to the original?

BANFIELD: 1999 is a long time ago. There are things called statutes of limitations and I know that applies here, but then again, it doesn't. I don't get that.

DANNY CEVALLOS, CRIMINAL DEFENSE ATTORNEY: There's a couple of things going on. Jay-Z defended this case based on latches. If you sit on your hands about a lawsuit and enough time passes and it prejudices the defendant, they are entitled to get out of the case. It is a statutes issue. It's also what we call latches. If a plaintiff doesn't pursue their claim, they lose.

But what's interesting about this case is it involves sampling. That's literally taking the exact sound from a prior recording. And when it comes to copyright infringement that makes it easy to prove. This isn't a thing of the same tone or the same feel, they took it.

(CROSSTALK)

BANFIELD: They said they paid for it. There's this whole deal that went down and now there's questions about the deal, which, I still can't believe a decade and a half later. You'll have to follow. (CROSSTALK)

TURNER: It's going forward. It's going to be in the discovery phase.

BANFIELD: Fantastic. You'll have to come back. You just invited yourself back.

(LAUGHTER)

Thank you and, Danny, thank you both.

Coming up, keeping an eye on the police. One major city is deciding to arm their forces with these thing, cameras. We'll tell you where and why. Why they think they need to keep track of their undercover officers. That's next.

(COMMERCIAL BREAK)

BANFIELD: The second teenage suspect in the killing of a World War II vet is due in court today. The 16-year-old was arrested yesterday in connection with the deadly beating of that 88-year-old, Delbert Belton. The other 16-year-old is being held on $2 million and he's set to be tried as an adult.

Plain clothes police supervisors in San Francisco will soon start wearing cameras on their uniforms, like these, on their chests. The camera initiative is in response to problems with drug raids two years ago. There are other area police departments that are wearing these cameras to record the interactions with the public, but not without controversies, privacy to name just one.

Thank you for being with us. It's been great to have you.

AROUND THE WORLD starts now with Richard Quest and Suzanne Malveaux.

SUZANNE MALVEAUX, CNN ANCHOR: The U.S. is quote, "ready to go if President Obama orders attacks on Syria." That's according to Defense Secretary Chuck Hagel. We'll look at the military options straight ahead.

RICHARD QUEST, CNN ANCHOR: Plus, political scandal in Brazil forces the foreign minister to resign. We'll tell you why it's Latin America's version of Edward Snowden.

MALVEAUX: Would you pay extra to make sure that no kids were sitting next to you on a plane? Well, another airline giving you that option.

Welcome to AROUND THE WORLD. I'm Suzanne Malveaux.

QUEST: I'm Richard Quest, in for Michael Holmes.