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Donald Sterling Resisting Forced Sale of Clippers; Veterans Affairs Scandal Grows; House Delays Nutritional Bill; Hillary Clinton Says She Won't be a Part of "Political Slugfest" on the Backs of Dead Americans

Aired May 30, 2014 - 07:00   ET


ROSE FLORES, CNN CORRESPONDENT: Donald Sterling, he is saying, I don't care about the money. I have plenty of money. He wants vindication. He doesn't want his name associated with the word "racism."

So of course here is what we know. Former Microsoft CEO Steve Ballmer has made a binding agreement to buy the NBA, the NBA team L.A. Clippers. That sounds like a done deal, right? Wrong, because according to Donald Sterling's attorney, he is telling CNN that Donald Sterling only gave his estranged wife Shelly Sterling and the NBA the right to negotiate and to negotiate only, not to sell. Here's the other thing his attorney had to say. Take a listen.


MAXWELL BLECHER, DONALD STERLING'S ATTORNEY: We don't think the team can be sold without Mr. Sterling's consent. Mr. Sterling is not going to consent unless the NBA does something about the scurrilous and illegal charges they filed against him, and so far we've heard nothing to indicate that will occur.


FLORES: So a few other things have to happen. Of course Donald Sterling has to agree to the sale, 75 percent of the NBA board of governors have to agree as well. And, Chris, let not forget about the $2.5 million fine. That is also still pending.

CHRIS CUOMO, CNN ANCHOR: Yes, Rosa, thank you for pointing out all the particulars. Let's figure this out because it gets more and more complicated. We have David Cornwell, sports attorney and a partner from Gordon and Rees LLP, and Mr. Sean Gregory, senior writer for "TIME" magazine. We have law and policy here.

Mr. Cornwell, counselor, starting with you. Complicated. Can Shelly sell without Donald? No, because he is the signatory to the franchise agreement, not her. But does she need him? Maybe no because the NBA at the end of the day owns the franchise. Not Donald Sterling. Help us understand this.

DAVID CORNWELL, SPORTS ATTORNEY: Well, there are multiple ways to get to the same place, but primarily Donald Sterling recently sent a letter to the NBA commissioner Adam Silver saying that his wife had the authority to negotiate and sell the team. Max Blecher is ignoring that. Secondly, the NBA is about to vote on Tuesday to terminate the franchise where the NBA will take over it and they'll have the right to sell it. So it really -- and, Shelly Sterling claims that she has the right to sell it because of her status in the family trust. So any road you take ends up with Steve Ballmer owning the Clippers.

CUOMO: One other big legal point. The representative for Mr. Sterling says none of this means anything because their evidence is illegally obtained and therefore none of this can move forward. Does that hold water in this particular setting?

CORNWELL: It does not. And in this case some of Max's best arguments can be used against him. At least 15 NBA teams reside in states that are single party, one-party consent states. California is a two-party consent state. So by Max's arguments that means teams such as the Utah Jazz, if their owner were to have done what Donald Sterling has done, then they actually could lose their team. This is self- governance. One of the most important part of self-governance is uniformity. If they can do it to a team in Utah, an owner in Utah, then they can do it to Donald Sterling.

But in any event, all the agreements that he has signed adopting the NBA's constitution and bylaws, operate as a waiver of the rights under California's constitution, or that's the right of privacy, or California statute regarding one party or two party consent.

CUOMO: Interesting point, Sean Gregory, that Darren Kavinoky made, an attorney from out west. He said, the agreement among NBA and the franchise owners is actually governed by New York law, and that's a one-party consent state. And he said, by the way, the rules of evidence don't apply here, so the fact that it's admissible or not, do you think it's a little bit of a charade?

SEAN GREGORY, SENIOR WRITER, "TIME": It's a total charade. Mr. Blecher's argument really was amazing when he said that sponsors, if the NBA would not have -- would have rejected the evidence based on the technicalities of one-party state, two-party state, sponsors would not have gone away. That's just not true. Sponsors started leaving before Adam Silver came down with his ban. So companies don't care about the technicalities of these laws, and they know their customers don't care. Their customers aren't going to disassociate or associate with what Mr. Sterling said based on some legal technicalities.

CUOMO: This all matters, this discussion, because what the league is leaning on is that you hurt the brand and that is -- that is evidence, let's say, proven by sponsors leaving, players saying they won't play for you, and you're hurting the cache, the value of the league by how you can and that's good enough for them.

GREGORY: That all happened before Adam Silver came down with this lifetime ban.

CUOMO: Now, there is this speculation out there. There's lot of speculation, right, Mr. Cornwell, that they're working in cahoots. This is just to raise the value of the team. I say we dismiss all of that. If this one piece of speculation is true, what does it mean, which is that what Sterling wants is vindication. That's what his lawyers said. In this case that would mean removing the ban. Would the league do that? Would it matter? What's your thought?

CORNWELL: Absolutely not. The players would not stand for that at all. So far Adam Silver has been supported by the players in the players association because of what he's done. What they need to do is to tell Donald Sterling, go away. And if you don't, we're going to fine you again. We're going to hold you accountable for our legal fees. The NBA controls the distribution of TV money to all of its team and can withhold that money or use it to fine Donald Sterling to make him go away. This is unbecoming to the NBA. He has demonstrated that he's just a crazy, unreliable, sick, and vile individual. He needs to go away, and I think the NBA is not going to be lenient. I think they're going to be tougher on him going forward.

CUOMO: Can you see another side on that, Sean? He says he doesn't want to pay the fine, either, the $2.5 million, but it's that lifetime ban. Is there any upside for the league?

GREGORY: Yes, I mean, just thinking about it kind of going back and forth. I think they can waive the fine. I don't think anybody cares much about that. It's chump change. The lifetime ban, you let him come to games. So if he wants the lifetime ban to go away, he goes away. Sterling goes away quietly, sells the team but he's allowed to come to games and hang out. He's not going to be able to buy a team again. I can envision the possibility. But I agree with David, no one really wants him near any games.

CUOMO: David Cornwell, thank you very much. And did you know that Sean Gregory rolls like that, that $2.5 million is chump change to him?


CORNWELL: That's right. I didn't know he rolled that strong.

CUOMO: Sean Gregory, thank you very much. Lunch is on you.

KATE BOLDUAN, CNN ANCHOR: All right, Chris, thank you so much.

The cries are growing louder for Veterans Affairs Secretary Eric Shinseki to step down as he is set to turn over a report to President Obama explaining the deadly treatment delays at the VA medical centers as first revealed by CNN. The secretary is expected to apologize today for a breach of trust when he speaks to a veterans group in just over two hours. And now we are learning the wait list scandal has gone even wider, gone nationwide.

Drew Griffin of CNN's special investigations unit has been out in front on this from the beginning, Drew, he's joining me from Washington. You have new information. A lot of the focus, your focus and the administration's focus really have been in Phoenix, and now you say there's problems you've uncovered even in Pittsburgh. DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT: Yes, overnight we got a letter from two congressmen in Pennsylvania, Congressman Mike Doyle and Tim Murphy. They are telling us that they have been contacted by the VA in Pittsburgh about a wait list of 700 veterans, veterans waiting for appointments there. Some the say appointments since 2012, and yet unfulfilled.

This Pittsburgh VA has been in trouble before. We reported on it in 2012 when they actually had a Legionella outbreak there, five veterans died. Legionella bacteria was in the water supply, and the management at the hospital didn't bother to tell anybody, didn't bother to tell the patients or the staff, and five patients actually contacted Legionnaire's disease from it and died.

Now we understand that there is another wait list issue in Pittsburgh that the congressmen are trying to get to the bottom of. So, yes, this scandal is growing. And I expect, Kate, that as these audits are done across the country we're going to see wait lists pop up just about everywhere.

BOLDUAN: It takes me back to a conversation that I had with the chairman of the House veterans affairs committee, Jeff Miller, when he said from his view, though he wouldn't provide details, is just the tip of the iceberg in talking about Phoenix, and it sounds like you're uncovering it almost every turn, which is probably why it's no surprise that now, Drew, there is more and more people calling for Eric Shinseki to step down.

But what do you think of the growing pressure? Do you think it will lead to his resignation? What are you hearing from your sources?

GRIFFIN: I think it's almost inevitable now. You spoke about Jeff Miller. He's the ranking Republican on the House Veterans Affairs committee. Last night the ranking Democrat, Mike Michaud, he's a Democrat out of Maine, released a statement basically saying it is time for Shinseki to go. When the ranking Democrat says that, that's pretty much a sign that it is time to move on. Let me read you from his letter. This is Mike Michaud. He's a Democrat now. "It's with a heavy heart that I call on Secretary Shinseki to step down. Democrats and Republicans alike all want to get to the bottom of what exactly is broken with the VA system. Instead, one man has become the focal point. It's time to move forward."

That one man, Kate, is speaking this morning here in Washington, D.C. He's got a speech or he's going to make some comments about fighting the homeless vet problem. That's at 8:30 this morning. Really I think a lot of the media are going to show up just to see what happens and when, not if, General Shinseki resigns.

BOLDUAN: That is a good question. What's going to happen to him is a good question. But I know the question you are also asking and we all need to continue asking, then what? If he steps down, how then is the system, this huge bureaucracy going to be fixed? What's going to happen then? That's then, of course, the next question. Drew, in front of it all, thank you so much. CUOMO: Let's stick with the VA for a second. It turns out they have a bonus system for their employees. That's not unusual, but it would be interesting to see who gets a bonus given the current discoveries. Sure enough those bonuses may have a role to play in the scandal at the VA. Here's why. Lawmakers are calling for a criminal investigation to determine whether long waiting times for patients were covered up because the government offered thousands of dollars in incentives to staffers to move patients through the system faster.

Erin McPike is live outside the Hyatt hotel in Washington where the VA Secretary Shinseki will be speaking to veterans in 90 minutes. How does this all fit together, Erin?

ERIN MCPIKE, CNN CORRESPONDENT: Well, Chris, the bonus system is all part of a year's long effort by conservatives to make the government function more like a business. But critics say for that to actually happen and to make the government function more like the private sector, there has to be accountability for those bonuses and consequences when performance suffers.


REP. DAN BENISKEK, (R) MICHIGAN: There's a possibility that there is motivation within the VA that encourages people to shorten waiting lists so that they get bonuses.

MCPIKE: It's one of the most head scratching details in the VA scandal. Employees got bonuses while veterans suffered, even died. A CNN report showed at least 40 veterans died waiting for care at the Phoenix VA as its director Sharon Helman was rewarded with about $9,000 on top of her six-figure salary. Last week VA Secretary Eric Shinseki rescinded that cash.

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: I think the president as a general manager believes that there ought to be action taken on specific -- with regard to specific individuals.

MCPIKE: Awarding bonuses is commonplace in the federal government. Analysts say it's a strategy many Republicans in Congress pushed to keep agencies accountable and competitive with the private sector. But there are big differences.

TOM SCHATZ: In the private sector, there are not only rewards for doing well, there are penalties for doing poorly.

MCPIKE: In all the VA inspector general is investigating 26 facilities for, quote, "doctored waiting times." It's unclear the extent of the impact. But according to accountability site, Phoenix VA employees got $483,000 bonuses from 2011 to 2013 when the controversy developed. On a larger scale, seven facilities facing allegations of cooking the books awarded more than $8.7 million in bonuses to more than 12,000 employees, raising this issue.

REP. JEFF MILLER, (R) CHAIRMAN, HOUSE VETERANS AFFAIRS COMMITTEE: We've had problems time and time again where it appears that it's much easier to get a bonus at VA than it is to get disciplined or be fired.

MCPIKE: One government watchdog group argues that scandal brings to light an overarching problem for the federal government.

SCHATZ: Someone literally has to be committing a crime in order to get fired in the federal government.


MCPIKE: Now, Tom Schatz also made the point to me that this comes down to bad management and that Sharon Helman should have figured out about all of these backlogs simply by walking around to the Phoenix VA. But he said this system of bad management is part of the culture reinforced by the federal government. Kate and Chris?

BOLDUAN: We'll see what happens today. Thank you so much.

Let's take a break. Coming up next on NEW DAY, Michelle Obama taking on House Republicans over school lunch standards, and she lost. What will she do to fight Congress now? The head of the first ladies "Let's Move" campaign is joining us.

CUOMO: Plus, what do you think of this? Are the nation's most famous colleges teaching intolerance? Michael Bloomberg thinks so. We're going to breakdown the former mayor of New York's stunning speech accusing some pretty famous schools of McCarthyism.



RICHARD SHERMAN, SEATTLE SEAHAWS: When you try easy meal like salmon cakes and succotash, that's the results you're going to get.

MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: Wow, Richard, where did you learn to do all this?

SHERMAN: Well, Mrs. Obama, I know how important it is for everybody to eat right. And whether you're a pro athlete or just a kid at school wanting a healthy meal, you've got to put the right fuel in your body in order to perform at your best.


BOLDUAN: I feel like I have to respond. That's right, Richard Sherman! That was Seattle Seahawks star Richard Sherman teaming up with Michelle Obama on her healthy foods campaign, something the first lady has been struggling, though, with Congress over as the battle over children's schools have escalated.

A House Committee has advanced a bill that would allow some schools to delay implementing new White House nutritional guidelines. And it gets a whole lot murkier after that. But Republicans opposed to the standards, they say those standards are actually hurting the schools that they are trying to help. Let's figure out what's going to happen from here and what it all means. Sam Kass, executive director of Michelle Obama's Let's Move campaign and a White House senior adviser for nutrition policy is joining us now.

Sam, thanks for taking the time.


BOLDUAN: Of course. So I -- as you saw right there, Michelle Obama putting a lot of her attention and time to putting really her name on getting healthier lunches in schools. What was her reaction when this bill -- this bill failed essentially in committee trying to change this bill?

KASS: Well, we expected that -- that vote yesterday in the Republican House. But, you know, what she's really concerned about is seeing politicians and industry influence really stepping on the wisdom of our, you know, scientists and nutritionalists who are setting a standard for what our kids should or shouldn't be eating in our schools. And we know we have to let science lead us to those kind of decisions and not our politicians.

BOLDUAN: That kind of, kind of, murky relationship, though, is nothing new in Washington and nothing new to this White House. They understand how the politics games work. Why can't you work behind the scenes to fix this? What are you guys going to do now? Because the effort to drop this waiver, if you will, that failed, and the bill is moving forward.

KASS: Well, you're right. We have seen this before just a couple years ago. Congress stepped in and declared that pizza should be considered a vegetable in the school lunch program, or exactly the sauce in the pizza. So we've seen this before.

But we've got a long way to go. The Senate is holding pretty firm here. And you know, we're confident that our friends on the Hill are going to do the right thing and let science lead and make sure that our kids are getting nutritious foods in schools.

We know really what's at stake. One in three of those young people are on track to have diabetes in their lifetime if we don't dramatically change course, and it's having a tremendous affect on our economy, our health care system right now. We currently spend $190 billion a year treating obesity related conditions. But you can only imagine what that cost will be when one in three of Americans are diabetic. So we know what we -- we know what the answer is here, and we're confident we're going to get this to a good place.

BOLDUAN: I do wonder, though, where your confidence comes from? Because you -- you're in Washington. You've been watching the relationship between the White House and -- the White House and the House of Representatives throughout the president's administration. It's not a good one.

And these things -- House Republicans, they have a strong majority. They can vote and push things through however they want. I mean, especially when the congressman who pushed this waiver, he said the following. "Everyone supports healthy meals for children. But bottom line," he says, "schools are finding it too much, too quick."

Why is it unreasonable for them to get a one-year delay, a waiver, if you will, to implement these standards? Waivers are also not new to this White House.

KASS: Yeah, well, listen, right now we've seen 90 percent of schools successfully implement these standards. We're seeing food and vegetable consumption go up because of these standards. Whole grain consumption is also up because of these standards. We know this rule is working.

USDA has provided flexibility where appropriate. So just last week whole grain pasta, for example, was an issue. And they allowed an extension on the time needed to implement the whole grain requirements for pasta.

But that doesn't mean we should roll this whole thing back and allow schools to just opt out of nutritional standards, which is what has been proposed in the House.

Now on the Senate side, what's in -- what's in their bill is much more reasonable. So I think there's a way we can get this to a good place. I'm fully confident that we're not going to roll this back.

BOLDUAN: So tell me then, where does your confidence come from? Your confidence comes from the Senate saying they'll stand firm? Or are you getting signals that when the bill passes in the House, the bill passes in the Senate, they come together in conference to figure this out, you've got reassurance from House Republicans that they're ready to play ball in this?

KASS: You know, I think it's too early to tell. This is like way early in the process. But I just -- I just know we're going to do what's right for our kids. I know the Senate has done -- has hold firm.

And in the end, this is what parents want. Parents want our kids to get nourishing food in schools. I think taxpayers want to make sure that the $10 billion spent every year feeding our children in school are -- are those dollars go to nutritious foods. So I think in the end, reason will win out here.

BOLDUAN: What do you think the chances are, Sam, that in the end that you're going to have to just take the fact that 90 percent of the schools have successfully implemented these -- these standards and you're just going to have to take that 90 percent and take that as a win?

KASS: Well, it is a win. And, look, I think either way we're going to do everything we can to the work with the remaining 10 percent of the schools to help them fully implement and provide technical assistance and other resources to really help get this over the end. Because all kids really deserve to have nutritious food in their cafeterias, to make sure our vending machines are not selling junk food to our kids. This is the work that must happen. So we're going to get there one way or the other.

BOLDUAN: I and -- and -- and I know you kind of giggle when you're saying it because it is true. And even the congressman who is pushing this waiver, he says everyone supports healthy meals for children, especially in schools, which is why I think it is so frustrating that this gets caught up in politics. Why this can't be worked out before it makes the headlines and before we have to be talking about the opposing sides on this debate, Sam. You're working on it. Keep us updated. Thanks so much.

KASS: Thank you so much.

BOLDUAN: All right, Chris?

CUOMO: Coming up on NEW DAY, Michael Bloomberg shows up at Harvard to give the commencement address and accuses the famous school of basically creating a generation of haters. We have his shocking speech from the belly of the beast itself, Harvard.

Plus, a spike in measles cases. Nearly 300 already this year. Why? We're going to tell you what you need to know, ahead.


CUOMO: Welcome back to NEW DAY.

This morning details from a highly anticipated new chapter on Benghazi from Hillary Clinton's new book, "Hard Choices". It's been released by "Politico". She addresses the ongoing political battle surrounding the 2012 terror attack on the American mission that left four Americans dead saying, quote, "I will not be part of a political slugfest on the backs of dead Americans. It's just plain wrong, and it's unworthy of our great country. Those who insist on politicizing the tragedy will have to do so without me."

For more, let's bring CNN political commentator and Republican consultant Margaret Hoover and CNN political analyst and editor in chief of "The Daily Beast" John Avlon into the mix.

The obvious question is, does she control whether or not she is pulled into the Benghazi analysis, Ms. Hoover?

MARGARET HOOVER, CNN POLITICAL COMMENTATOR: Of course she doesn't. Of course she doesn't. It's very convenient if you're running for president to say, well, if you guys are going to be political, have fun with that, but I'm not going to be political; I'm going to be above politics.

And frankly, the substance is just unbelievable. The substance of it doesn't sound all that different from the tone and tenor of her congressional testimony, frankly. She's sort of defiant, sort of laying out the law the way she saw it, and recounting the facts the way she saw it, and defending her position.

BOLDUAN: But should that be a surprise that this is how she's going to lay this out in her book from her perspective? What more -- do you expect more -- for her to offer more, John?

JOHN AVLON, CNN POLITICAL ANALYST: Not especially. Look, I mean, I think, Margaret is right in sort of the -- the irony of someone running for president and saying they refuse to be political, fine. But this is fairly consistent. She's basically saying that this political food fight is -- is -- is ugly, it's disingenuous, it's been hijacked by hyper-partisans. And that tone, that tenor and that approach is not only the right one politically, it may be the right one practically. And I think she's --


AVLON: Here's why. I think that right now the Benghazi distraction has become such -- so associated with hyper-partisan agendas that there's a chance -- and Hillary Clinton wants to sort of will the ball fair on this one -- that it will be seen as not a credible line of investigation, even if with this coming out.

BOLDUAN: Even if they are valid questions.

BERMAN: I think she's betting on the fact that she thinks there are no minds left to change on Benghazi at this point, that -- that they can yell about it, both sides, however much they want, but you're not going to change the middle by 2016 swing voters.

AVLON: Yeah, and -- and the best way to reach the middle is to say, "I'm going to try to be above politics."