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@THISHOUR WITH BERMAN AND MICHAELA

New V.A. Allegations Surface; China Threatens to Retaliate Against Indictments; New Film on Flight 370; Germs Thrive on Planes

Aired May 20, 2014 - 11:30   ET

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


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JIM ACOSTA, CNN SENIOR WHITE HOUSE CORRESPONDENT: When was the president first made aware of these problems, these fraudulent lists being kept to hide the wait times? When was he first made aware of those problems? And when did other White House officials, top White House officials become aware of these problems?

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: When you say these problems, the fact that there have been --

(CROSSTALK)

CARNEY: If you mean the specific allegations reported first by your network out of Phoenix, I believe we learned about them through the reports.

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MICHAELA PEREIRA, CNN ANCHOR: You heard our Jim Acosta with the question. Jay Carney stating that President Obama did not know about the dangerously long wait times at V.A. hospitals until CNN reported it. Our investigative unit broke the story six months ago. We keep hearing new allegations about these fraudulent and secretive wait lists.

JOHN BERMAN, CNN ANCHOR: Our latest allegations come from Gainesville, Florida.

Chris Frates in on our investigative team. He joins us from Washington. Along with retired gunnery sergeant, Jessie Jane Duff. She is involved with Concerned Veterans for America.

Chris I want to start with you. Tell us about the new accusations from Florida.

CHRIS FRATES, CNN INVESTIGATIVE TEAM CORRESPONDENT: This is the latest in a string of accusations, this time in Gainesville, Florida, where auditors went into the V.A. there and found that officials were using paper documents, paper wait lists, instead of electronic ones. This is important because, in Phoenix, they found that there were two separate lists, an unofficial list that had veterans waiting for months for care, and then an official electronic list showing they were waiting no longer than 14 days. Now we have another case in Florida where there was a paper list in Florida. Three officials are on administrative leave as auditors look at what that list was being used for.

PEREIRA: Concerns about Florida. We know that 40 veterans died waiting for appointments at the Phoenix V.A. health care system, as Chris was saying. Jessie, you got to wonder and you can tell us best from talking to other veterans, how much confidence do they have that the administration is going to get to the bottom of this and investigate it properly and then make sure it's not going to happen again?

JESSIE JANE DUFF, CONCERNED VETERANS FOR AMERICA & RETIED GUNNERY SERGEANT: Most veterans out there believe that the V.A. is just waiting for them to die. There are 19 states now that have been exposed with either delaying care, hiding appointments or deleting records. In Albuquerque, New Mexico, alone, they were putting appointments for four months for brain tumors, gangrene and heart elements. Often times it was too late. They had to test positive three times in screenings before they would get a colonoscopy going from stage-1 to stage-4 cancer, which is inoperable. This has been going on and it's systemic throughout the V.A.

Chris, what Jay Carney said is the first the president knew of the Phoenix incident with people on the wait list and maybe doctoring the books was when CNN first reported it. There's a larger question about how much the White House has been involved in V.A. issues in general and whether this administration is providing oversight that Barack Obama promised when he first ran for office. What do we know about the quality of the oversight and when the president may have been informed about problems in general?

FRATES: Problems in general, John, go back to the transition. We know that the president was briefed on problems at the V.A. going back to 2008 when he took over. So this has been a systemic problem in Washington. I talked -- before I came on, I got off the phone with a White House official, and they like to point out that Secretary Shinseki has tried to decrease wait times to make sure that more disabled veterans were getting seen and that that bigger pool of people were getting seen faster. And they point to these things but they are quick to say, but clearly there are still problems. If there are these wait times and there's allegations that veterans were dying while waiting for care, they are taking them very seriously and looking into them.

But what's more important, John, than what did the White House know is what did V.A. officials know and when did they know them? When did the secretary know about this? The House Committee on Veterans Affairs is looking into this. They subpoenaed some documents from the V.A. just yesterday. So we're trying to get a sense of what they may find there. We're not quite sure what's in them but we're going to take a look.

What we do know, John, is that this point the inspector general, the independent agency that's looking into this, is looking into at least 10 states where there are these wait list problems. PEREIRA: Shinseki vowed to stay on to fix the problem. And there's many people wondering if he should stay.

We'll say a big thank you for the retired gunnery sergeant, Jessie Jane Duff, our Chris Frates, as well.

What Jessie said stuck with me, that a lot of veterans believe the V.A. is just waiting for them to die.

BERMAN: Blunt assessment there.

36 minutes after the hour. Beijing threatening to retaliate after the U.S. indicts Chinese military officials for hacking into U.S. companies. China says Washington spies, too, and not just on them but on Americans as well. So is the U.S. being hypocritical? That's next.

PEREIRA: Then, what happened to flight 370 is still a mystery but that hasn't stopped one director from making a movie about the tragedy. We're going to talk to him and ask if he thinks that this is really a good idea.

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ANNOUNCER: This is CNN breaking news.

BERMAN: Breaking news for you @ THIS HOUR. Another major recall from General Motors. The company announcing almost 2.5 million vehicles will be affected. We're talking sedans, SUVs, pickup trucks, all part of it because of various safety issues. One case, it's seat belts. Another case, it's shift cables. Some affected models are 10 years old. Others are brand new, 2015 models.

PEREIRA: Mounting to problems that GM has already. We'll let you know more about it.

Also @ THIS HOUR, tensions between the U.S. and China are building after the U.S. indicted five Chinese military officials accused of hacking into major U.S. companies and stealing business secrets so Chinese companies could benefit. China wants to talk to U.S. Ambassador Max Baucus about it and is threatening to retaliate.

BERMAN: Beijing also says U.S. is being hypocritical, saying not only do you spy on us all the time, you spy on your own people too.

But a former deputy CIA director says there's a big, big difference.

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MICHAEL MORELL, FORMER DEPUTY CIA DIRECTOR: The United States does not, and in my experience, never has stolen economic secrets from another country and given them to our companies for economic advantage. We do not do that. A number of other countries do, but we do not and never have.

(END VIDEO CLIP) Our justice reporter, Evan Perez, has been following the story. We're also joined by Mark Rasch, a privacy expert who used to be a prosecutor at the Justice Department.

First, Evan, outline for us what China's response has been so far.

EVAN PEREZ, CNN JUSTICE CORRESPONDENT: John, they're suspending a cybersecurity cooperation group they set up with the U.S. And they warn it will lead to rocky relations. The U.S. has tried to do a lot of work to improve cooperation on cybersecurity issues with China, so this will stop for now probably.

PEREIRA: What do we know, Evan, in terms of a result to these U.S. companies? Did they see any losses from any of this? What do we know about that?

PEREZ: You know, Michaela, I think some of the retaliation could be in trade and frankly in money that U.S. companies will see. I would expect Chinese would reduce business with U.S. technology companies and perhaps Chinese could turn to European competitors. Bottom line is that the Chinese think that U.S. companies are too close to U.S. spy agencies any way. They're not going to cut off all contact but you might see some reduced business from this.

BERMAN: China also says the U.S. is trying to have it both ways here, Mark. What about that? The U.S. suggests spying is OK when it comes to military issues, intelligence issues, but we draw the line when it comes to big business. China doesn't seem to draw that line.

MARK RASCH, CYBER & PRIVACY EXPERT & FORMER JUSTICE DEPARTMENT PROSECUTOR: A lot of it is because China has a lot of state owned industries. When they look at national interests, they don't just look at protecting their national defense, they look at encouraging the growth and development of state owned businesses. The easiest way to do that rather than coming up with innovative solutions is just to go steal them from someone else.

PEREIRA: In terms of what -- this is right in your wheelhouse, Mark. I imagine U.S. firms are taking a hard look at what they need to do to protect their secrets and their intelligence and the work they're doing. Is that what's happening? This obviously seems like a wake-up call that's been a long time coming.

RASCH: You know, the thing about wake-up calls is if you keep hitting the snooze button, it's not much of a wake-up call. We've been having wake-up calls for years. This demonstrates that companies, even those in manufacturing and pharmaceuticals, heavy industry, pretty much any company in America has to worry not only about these 16-year-old kids but about state-sponsored attacks at their critical infrastructure and their critical secrets. They really have to tighten it up.

BERMAN: Mark, I want to go back to this issue of hypocrisy here in these accusations. The Chinese suggest and so do others -- David Sanger had a great piece in "The New York Times" today -- that it's not black and white. Didn't we learn from Edward Snowden documents that the U.S. was eavesdropping on negotiations? And if you are trying to gather intelligence around trade negotiations, aren't you trying to help U.S. businesses?

RASCH: It's a little bit of each. A black and white line is a little bit gray. I would say it's a dark gray. We do make a distinction not only in who we target but in what we do with information we target. We will as a country hack into foreign companies' websites and hack into their computers to steal information. But we use that information for intelligence and national security purposes. We would not break into a foreign company like a foreign car manufacturer and turn that over to a U.S. car manufacturer and say go ahead and use this to compete. That's a distinction that we have made for many years.

PEREIRA: So apparently there is this invisible code among spies. Sounds like something out of a Hollywood movie.

A big thanks to Mark Rasch. Great to have you on the program.

RASCH: Thank you.

PEREIRA: Evan Perez, thanks so much.

BERMAN: Coming up for us next, it's been more than two months since flight 370 disappeared but one director is out with a trailer for a film based on the missing plane. That's right. A film based on flight 370. The big question, obviously, is this too soon? We'll ask him when we talk with him next.

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UNIDENTIFIED ACTOR: Prepare for takeoff.

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PEREIRA: That is a trailer for what is being billed as the untold story of the missing Malaysian plane. It's called "The Vanishing Act."

BERMAN: The movie's director, Rupesh Paul, is at the Cannes Film Festival in France. He's pitching this project and he's also with us @ THIS HOUR by phone.

Mr. Paul, thanks so much for joining us right now.

Obviously, the flight 370 story is a tragedy and it's a tragedy that's by no means resolved. The families of the people on board that flight still have no sense of what happened to that plane. Have you considered at all what this film -- how it might affect them?

RUPESH PAUL, DIRECTOR (voice-over): OK. Basically, we are considering this very seriously because it came to me as an investigative report which was supposed to be published as a book, not as a movie. People may think we don't take it seriously but it came to me as a book to publish and another friend who was a publisher forwarded this report to me saying it's more than the book. Basically the content is basically off the book which was very serious. So many don't think -- I have come to know there's a lot on social media about the movie but we are taking this very seriously and this move has no intentions to hurt one single person who was involved in the flight.

PEREIRA: But, sir, you can -- while I understand you say you take this very seriously and you're basing this on what you say is hard data, et cetera, why not wait then? If you don't have the intention to hurt somebody, you don't think that the timing or the emotions of the families are still very raw, they have no closure, they don't know what happened to their loved ones, why not just wait?

PAUL: What I'm saying is, is please treat this movie as an investigation report. Nobody -- so this movie is also based on facts. It's not fiction. There will be fictional parts to make it a movie. Otherwise, this movie is based on facts that somebody has found.

BERMAN: You say it's based on facts.

(CROSSTALK)

So many of the facts are still unknown, and I just was looking at that trailer. We saw people making out on the plane. We saw the terrified faces of the passengers. And that's what concerns me a little bit. You're depicting these people and the outcome is still very much unknown about them. I shudder to think what the families who see that might think, sir.

PAUL: The trailer was made -- so it has nothing to do with -- because that's the only thing we have. The trailer it so I personally tell you that the trailer has nothing to do with that truthfully. The trailer was made, like all the trailers, all the presale trailers, are made like this only. So basically it was to pitch the market for finding core producers for it.

BERMAN: Last question, what happens to the plane in the movie?

PAUL: If I tell that, there is no point in making the movie, that's what I'm saying.

(CROSSTALK)

PAUL: What I will tell is it will be a very hopeful ending.

BERMAN: All right, Rupesh Paul, thank you for joining us so much. Appreciate your time, sir.

PEREIRA: That's the part I think is going to leave a bad taste in some people's mouth. He says it's a serious film and he wants to know what happened to the plane but he's also saying there's no point in at thing the ending.

BERMAN: Teasing, trying to get people --

PEREIRA: Yeah, exactly.

Coming up, from tray tables to seatback pockets, a new study may make you question the next time you fly. It's going to show you potentially deadly bacteria can live as long as a week on an airplane. We'll take a look at where it likes to hide coming up next.

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BERMAN: In advance of lunchtime, let me tell you this. Potentially, deadly bacteria is not only lingering on airplanes, it sticks around for as long as a week.

PEREIRA: Didn't we just fly to Atlanta last week? A new study from Auburn University finds that dangerous germs like MRSA and E. coli are thriving on planes and they live everywhere.

BERMAN: Senior medical correspondent, Elizabeth Cohen, joins us now from Los Angeles where she has flown on a germ-filled airplane apparently.

Elizabeth, give us a sense of the dirty details here.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: You know, it definitely gives you pause when you read this study. Then you get on a five-hour flight across the country.

So what the researchers at Auburn University found is these bugs, things like MRSA, resistant to antibiotics, or E. coli, that can get you extremely ill, that they can live for a long time.

Let's look at some of the surfaces I photographed last night with my great selfie skills. For example, on a window shade, MRSA can last for five days. On a leather seat, MRSA can last for six days. On a tray table, MRSA can last for five days. And E. coli can last for three days. So that's -- I mean, that's a long time. I guess these bugs, they've evolved, they're maybe even hardier than we are.

PEREIRA: That's totally upsetting and I'm totally icked out. I am a germophobic and I tend to fly with a few anti-bacterial. Is that enough? Should we be wiping down our area? Am I going to have to wear gloves and a mask on a plane now, Elizabeth? Talk me off the ledge.

COHEN: OK, I'll talk you off the ledge. Alcohol-based wipes will kill this stuff. Think about all the surfaces people touch, so armrest, everyone touches that. Just wipe it down with alcohol-based wipes. Wipe down the tray table. Wipe down that window shade before you touch it. This is kind of "ick" but, on the other hand, it is really easy to fix. Delta called us back and they said, look, we clean all of these surfaces every day, and they said we're so interested in this that they actually donated the surfaces to be used at Auburn University, the armrests and the pockets and all of that kind of stuff. So they actually, you know, were a part of this research.

BERMAN: I've licked the tray table for the last time. You've freaked me out now.

Elizabeth Cohen, thank you for that report. PEREIRA: That's it for @ THIS HOUR. I'm Michaela Pereira. I'm so worried about this now. Thanks for joining us.

BERMAN: And I'm John Berman.

A germ-free "LEGAL VIEW" with Ashleigh Banfield starts right now.