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Wells Fars Execs to Return $75 Million; Rogers Says Schiff Should Recuse Himself; Church Bombing Victims Buried in Egypt. Aired 9:30-10a

Aired April 10, 2017 - 09:30   ET



[09:33:02] POPPY HARLOW, CNN ANCHOR: All right, you're looking at pictures of the high court. We know that the - we're just learning that the private ceremony to swear in Judge Gorsuch to the high court has just - they've just wrapped up the oath. It lasted about 15 minutes. He was there with his wife, with his two daughters. All of his fellow justices were there as well. Obviously, the widow of Justice Antonin Scalia, Maureen Scalia, was there, along with their son as well.

This precedes the public event that will happen a little bit later this morning where you will have Judge Gorsuch sworn in, in public.

All right, banking giant Wells Fargo just this morning announcing it is clawing back an additional $75 million from two former top executives, including the former CEO. This is all because of the fake account scandal at this bank where at least 2 million fake customer accounts were opened over the course of five years without customer permission. This is all part of aggressive sales tactics.

Our Cristina Alesci spoke with some of the employees - former employees about why and how they created those accounts contributing to one of the biggest banking scandals in American history.


VOICE OF FORMER WELLS FARGO EMPLOYEE: It was the norm to just open sales unethically. It was just what we were taught and we just did it.

CRISTINA ALESCI, CNN CORRESPONDENT (voice-over): More than six months after the fake account scandal damaged Wells Fargo's reputation, there's been very little accountability at the top. Attorney Michael Kade represents former Wells Fargo employees.

MICHAEL KADE, ATTORNEY: I can understand if one district manager is putting pressure on the people below him or her, but if this is going on nationwide, you would think that there's somebody above the district manager that is putting pressure on the D.M. to get something done.

ALESCI: When news of the scandal spread, CEO John Stumpf left the bank, following a fiery congressional grilling. SEN. ELIZABETH WARREN (D), MASSACHUSETTS: It's gutless leadership.

ALESCI: And so did the head of the retail bank, Carrie Tolstedt. Both executives walked away with millions in compensation tied to a rising stock price, boosted by aggressive sales tactics. Stumpf said the bank never told employees to commit fraud, but many former workers say the pressure led to that.

VOICE OF FORMER WELLS FARGO EMPLOYEE: We had a lot of pressure. I remember just, as a teller, you know, we had the bankers just on our backs and then -

ALESCI (on camera): To get the clients -

VOICE OF FORMER WELLS FARGO EMPLOYEE: To get the client that I had as a teller standing up, to get them sitting down with the banker. We would look at a phone number and maybe misconstrue one of the numbers. Oh, is your home number still at 1234, even though on the screen it said 12345. And so it was just anything to get them to our desk.

ALESCI (voice-over): In fact, she claims almost everyone at the branch, herself included, was either lying to customers or complicit in it.

Another former employee explained how simple it was to open a fake account.

VOICE OF FORMER WELLS FARGO EMPLOYEE: So it's pretty much like you signing a blank paper and then the rest of the information is filled in saying, oh, this is just to reopen, you know, your savings account or reactivate your savings account. But, you know, when the customer leaves, they could put ten accounts on there and then open it and the signature is there. And even if the customer calls to complain, well, Mr. Customer, your signature is there.

ALESCI: At best, customers with unauthorized or unnecessary accounts were confused and hassled. At worst, they were hit with overdraft fees and some saw their credit scores suffer.

ALESCI (on camera): How did you get the idea in your head that if I don't do this unethical thing, I'm going to lose my job? What made you think that?

VOICE OF FORMER WELLS FARGO EMPLOYEE: I mean they would just tell us that. That - that - it was just - it was verbalized. We just, again, always had pressure from management, upper management. They were witness to what we were doing. I mean they coached us because they had to sign off on everything.

ALESCI (voice-over): Wells Fargo says this is in the past now. Its number one priority is rebuilding trust, and the bank has made fundamental changes to reduce the pressure on workers and ensure customers are aware of new accounts opened. Banks paid $185 million so far in fines, although it still faces more than a dozen investigations and lawsuits. But just like the financial crisis, jail time for senior executives is unlikely. (END VIDEOTAPE)

HARLOW: Cristina Alesci filed that report. She joins me now.

So we're going to get to this new really scathing report in just a moment that just came out this morning. But in terms of the responsibility, you've got 5,300 people at the bank who lost their job because of this. You know, there were a number of people, whistle blowers, that called the ethics hotline. Nothing happened. You do have four employees at the bank high level who were terminated in all of this. But, still, I mean, what else is Wells Fargo saying?

ALESCI: Well, the problem here is context, right? You have very few, as you said, senior people, four or five senior people who are actually fired as a result of this scandal, 5,300 probably lower level people who were fired over this, but their actions actually helped enrich the executives at the top who are overseeing and should be accountable for the activity that happened under them because the stock price during the period of activity when this was happening, when these fake accounts were being open, was boosted by it. And that means the executives whose compensation is tied to the stock price were rewarded for this activity.

HARLOW: Right. Right. Regular employees have no benefits from the stock price.

ALESCI: And regular employees were not, exactly.

HARLOW: What about what this independent board report tells us. The investigation. They're taking a big chunk of money away from the former CEO. How much and what else does this say?

ALESCI: Well, in total, it's $75 million, in addition to other claw backs that the bank had already implemented. So, in total, about $180 million clawed back from two former executives, the former CEO and the head of the retail bank. That is a lot of money and I don't want to minimize that at all, but at the end of the day, the board felt pressure, too, because, as - it's responsible for overseeing the activity of its executives. And it's under fire now, too. An independent watchdog came out and said the board lacked oversight over what was happening. And it did take some responsibility for just that this morning.

HARLOW: And, as you mentioned, there are other investigations. I mean the SEC is looking at that. Do we know, Justice Department?

ALESCI: We are not exactly sure of the status of that investigation. As you know, as you know, Justice doesn't confirm or deny any.

HARLOW: Right.

ALESCI: But there are definitely criminal investigations out there.

HARLOW: All right, thank you for the reporting. You can see much more of Cristina's piece on Still to come for us, as if there was not enough drama around the House Intel Committee. Now a former chairman of that committee says the top Democrat, the ranking Democrat, Adam Schiff, should recuse himself from the Russia investigation. More on that ahead.


[09:44:01] HARLOW: So now that the chairman of the House Intelligence Committee, Devin Nunes, has recused himself from the Russia investigation, former House Intel Chairman Mike Rogers is calling on the committee's top Democrat, Adam Schiff, to step aside. He writes in a new CNN op-ed, "both Nunez and Schiff are equally to blame with the committee's loss of focus. How could a committee, which handles sensitive classified information conduct its business when the purportedly secret information is discussed, even by insinuation, publicly in front of the media?"

Joining me now is Democratic Congressman from Illinois, Mike Quigley. He's a member of the House Intel Committee.

Nice to have you here. And let's just begin with that. Is Mike Rogers right? I mean he used to run this committee, granted, a Republican, but he says it was the right thing for Nunes to go and now he says Schiff should recuse himself as well.

REP. MIKE QUIGLEY (D), INTELLIGENCE COMMITTEE: Yes, I remember someone telling me, everything I learned, I learned in kindergarten. This is the, oh, yeah, response from the former chairman of the committee. Quite honestly, just as everyone is talking about resetting, getting this committee moving together, moving past everything that's taken place, Mr. Rogers finds time to put an op-ed like this. It's really a shame. In all fairness, the ranking member has been the adult voice in the room among all the members. Very calm and resolute and, quite honestly, he's not the one who canceled the public meeting or talked about wiretapping in Trump Tower or used misstatements -

[09:45:30] HARLOW: But, congressman - but, congressman, he did come out and talk a lot about this investigation as it's really just in the early stages. He came to the microphones and Adam Schiff said, you know, there is more than just circumstantial evidence here against the Trump administration in terms of those alleged ties to Russia, but then didn't say what he was talking about. I mean is he not partly guilty of this, too?

QUIGLEY: Not at all. Here's what he's responding to, distractions of a - you know, just monumental distractions and trying to get this moved forward. We don't move forward, we don't get the scope of the investigation to the degree it is now without public pressure unless the ranking member and others step forward and talk about why this matters, talking about beyond circumstantial evidence that there was cooperation with Russians.

HARLOW: Well, why, though? Why should anyone, Democrat or Republican leading this independent investigation, such an important investigation, why should they talk, you know, publicly at all in the middle of it, frankly? I mean you can call the witnesses that you guys want to call and hear from. Why does it behoove anyone to hear incrementally this drip, drip?

QUIGLEY: I don't think it's incremental. I think what you're missing here is, we can't schedule public meetings or even private ones. The majority can and only they can. So when they canceled the public meeting with Brennan, Clapper and Yates, someone had to tell the American public. If there isn't a pushback, again, from the American public, through the media, through the press, nothing gets done. When we talk about the scope of this investigation, at the Senate side and then it had to be repeated on the House side, the Republicans wanted a far more limited investigation. Without people like the ranking member stepping forward and talking about how serious this is, they don't change the scope, and we aren't even looking at whether there was collusion or not.

HARLOW: Do you believe - would you like to hear from former National Security Adviser Susan Rice to talk about the unmasking, which I know you will note correctly so that unmasking, especially in her former role, not illegal, but are there questions that you want to ask her?

QUIGLEY: I think anyone who has relevant information should step forward. I don't think anyone should be discouraged if the other side wants to hear their testimony because I don't want to be accused of doing the same thing that anybody else is doing. Bring them all forward. Let's listen to everyone. Let's follow the facts wherever they take us.

And, clearly, unmasking is not surveillance. Unmasking is not leaking. And if we want to get to the bottom of that, I'd respectfully ask the president of the United States to declassify that entire body of information so, again, the American public knows what happened. Let's reschedule that open hearing so, again, all the information you're talking about can come forward.

HARLOW: Congressman, quickly before I let you go, I just want your take on the - in the wake of the airstrikes in Syria by the Trump administration. You were one of the few voices in 2013 after the chemical weapons attack to call on your fellow members of Congress, Democrats and Republicans, to take a vote for the authorization of the use of military force. You know, a number of people looking back on that would say that the Congress shirked its responsibility to put their name on this, to be willing to go that far. What are your thoughts now? It - I would assume you want to see Congress take a vote on that.

QUIGLEY: Yes, I think Congress should put its votes where its mouth is. I see a lot of people who play both ends. They bluster and talk about strong responses and then they see the poll most Americans don't want any American troops there and they say, well, we won't have to take a vote. Constitutionally, it's our responsibility. Whatever it is we decide to do, it should be a public debate and a vote so the voters know exactly where you stand on this issue.

HARLOW: All right, Congressman Mike Quigley, thank you for joining us.

QUIGLEY: Thank you.

HARLOW: All right. We'll be right back.


[09:53:57] HARLOW: President Trump condemning the deadly church bombings on Sunday in Egypt. This as Egyptians are burying the victims of those twin blasts that targeted Christians on Palm Sunday. Forty- nine people were killed, dozens more wounded. ISIS has claimed responsibility.

Our Ian Lee is near one of those funerals in Tanta, Egypt. What can you tell us?

IAN LEE, CNN INTERNATIONAL CORRESPONDENT: Well, Poppy, behind me there is a woman who has fainted. Just overwhelmed by how emotional this whole scene has become. People here are mourning, but they're also angry at what happened, saying that the government should have done more to secure this church. And that has really been the theme.

I spoke with the new chief of police for this area and he said this is a secure place and Christians shouldn't be afraid to pray, although that we're hearing stories to the contrary. People saying they are afraid.

Now, President Sisi has issued a three month state of emergency. That will give police and the army officials extra powers to arrest, to search and to detain people for an extended period of time without charges, although rights groups have criticized that as Egypt has abused those powers in the past.

[09:55:12] But this is a very delicate time, as ISIS has said that they plan more attacks like what we saw yesterday that killed at least 49 people at these two churches. And today, as you can see, people are going back into this church for the first time. There is extra security, but as Easter approaches, there is concern that security won't be tight enough.


HARLOW: Of course, throughout all of this week, which is indeed holy week.

Ian Lee, thank you so much.

Well, moments from now we'll be getting the first images of Supreme Court Justice Neil Gorsuch being sworn in. Those are straight ahead.


[10:00:05] HARLOW: Good morning, everyone. I'm Poppy Harlow. John Berman has the day off. We are less than an hour away from a transition that will have decades of impact on the law of the land.