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Wells Fargo CEO Speaks Out After Scandal; "Mother of All Protests" Erupts in Venezuela; George H.W. Bush Hospitalized Again; Bill O'Reilly's Future at FOX Uncertain Amid Scandal; Tom Brady to Miss Today's White House Visit; Michael Phelps Driven for Success; Aired 10:30-11a ET
Aired April 19, 2017 - 10:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[10:30:01] TIM SLOAN, CEO, WELLS FARGO: I don't believe so. Right? I think that the senior leadership has taken accountability. By having said that, I think that one of the fundamental mistakes that we made was that we had an incentive compensation plan in place that created a culture that was uncomfortable for a lot of people.
POPPY HARLOW, CNN ANCHOR: So you don't think that terminating, you know, 5300 employees for these actions, granted they were violations, but you don't think that's pointing too much blame on those folks, on lower level employees?
SLOAN: I think on those team members that did something that was fraudulent.
SLOAN: Or violated our code of ethics, no.
HARLOW: But at the direction of their management?
SLOAN: I think -- I think for those team members that were uncomfortable that left the company, that weren't happy at the company the answer is absolutely yes, and that's why we've got to learn from these mistakes and make these changes.
HARLOW: Some of the folks were doing directly what their management told them.
HARLOW: And now they're out. You know, they don't have a job. Some of them have lost their homes because they can't afford it. What -- you know, what is your message to them?
SLOAN: My message to them again is that if you violate the code of ethics at Wells Fargo, if you do something that's not inappropriate for a customer, you can't work at the company.
HARLOW: Almost half a dozen Wells Fargo workers told CNN Money that they were fired after they called the bank's confidential ethics hot line. Now it's important to note the board report did not find a pattern of retaliation against these whistle blowers. These are individual cases, people that have reached out to us.
What was your personal reaction when you heard some of this that there was some retaliation against some whistle blowers.
SLOAN: So one instance of retaliation from my perspective is one too many. It's completely unacceptable. The way I think about this, Poppy, is not necessarily as the CEO of the company, but as a father. We have three children that are all millennials, our two sons are married, so think about five millennials at home. I think about five folks of that age working at Wells Fargo that had a concern, that were uncomfortable going to their manager, who didn't bring it up to the human resources group, and instead called the ethics line. In doing that, if they were retaliated against, that's completely unacceptable to me.
HARLOW: Folks have raised their eyebrow, some folks, that your compensation has gone up. Your 2016 compensation $12.9 million, an 18.5 percent increase from 2016, about $2 million more, this, you know, amid the scandal, amid the fact that you do have these 5300 employees that were dismissed because of this. For folks that have a hard time stomaching that they ask why, what do you say to them?
SLOAN: Well, first, I've got to do a job. I mean, I have different roles in the company during those periods. That's number one. Number two, my compensation was impacted. I did not get a cash bonus last year which was, by the way, entirely appropriate because I bear some responsibility for what happened. I said that publicly to our team and to our customers, and in addition, there was equity compensation that was vesting this year that was cut in half.
HARLOW: But you got a pay increase.
SLOAN: Because I became --
HARLOW: Pretty substantial. I understand that.
SLOAN: Because I became CEO of the company. Poppy, I had a different job. I was the president and chief operating officer of the company, part of the company reported to me. I took on an additional role which was in a new job which was being CEO.
HARLOW: You were CFO, then COO and president between 2011, 2015. It was at the height of all of this. It's at the height of these fake account openings. Granted, you were in a different part of the bank and you did not have direct control over the people running this part of the bank, but for folks that are asking, why are you, an insider who has been there since 1987, the right guy to lead the bank in the next chapter, what do you say to them?
SLOAN: Well, first it wasn't my decision. The board decided that I was the right person for the job.
HARLOW: So you accepted it.
SLOAN: I did. I did, because I had the confidence that I could make change in the company. Why did I have that confidence? Because I've been making change for my 29 1/2 year career at Wells Fargo. I made change when I became the president and chief operating officer about a year before.
When you look at the changes that we've made since I became CEO you can see fundamental activities at Wells Fargo being done differently.
HARLOW: The fact that this was happening as the board report found actually longer than, you know, five or six years. They found issues of this coming up as far back as 2002. The fact that this could happen for more than a decade, a decade plus, do you believe that it plays right into the argument that some make that Wells Fargo was simply too big to manage?
SLOAN: I don't think it is.
[10:35:02] And I think that the changes that we've made, and some of which began when I became chief operating officer about a year and a half ago, are fundamental to fixing what was broken at the company. There's no question that for --
HARLOW: So was it too big to manage?
SLOAN: No, I don't think it was too big to manage. What I think was we had a decentralized structure that worked well for decades, but it clearly fostered a culture in our retail banking business that was inappropriate. So what do we need to do? We need to step back and say let's change it. So what have we done? We've taken the risk and control functions out of the lines of business so out of our retail banking business, out of our wholesale banking business, wealth and investment management, and so on.
And we've put those in a centralized place so that in terms of the check and balance, in terms of managing risk we can manage risk at Wells Fargo in the size that we are today.
HARLOW: Warren Buffett's Berkshire Hathaway remains the largest shareholder in Wells Fargo. He is famous of course for the comments he made in his congressional testimony around the Solomon brothers crisis when he said lose money for the firm and I will be understanding. Lose a shred of reputation and I will be ruthless.
So much of this for Wells is about reputation. Did you promise Warren Buffett anything about reputation?
SLOAN: I promised him that I would do my best. That's all I can promise and I promised him that we would execute on the changes that we have talked about publicly and we would be very focused on rebuilding trust with our customers, our team members, our shareholders.
HARLOW: So Wells Fargo has said in regulatory filings in the Department of Justice and the SEC are investigating the bank's practices. They tell me they are cooperating with regulators. We'll have to see where all that goes. We also talked about politics where he says about his hopes for tax reform under President Trump and the number one thing he wants to see from this administration. You can hear that full interview on my podcast, "Boss Files" -- John.
JOHN BERMAN, CNN ANCHOR: All right. Breaking news, we are getting our first look at some just mammoth protests taking place in Venezuela. We'll take you there live next.
[10:41:38] BERMAN: All right. We're getting our first look at these pictures coming in from Venezuela, this is Caracas. Just huge, huge protests there. This comes after years of a collapsed economy, food, medicine shortage. The president there, Nicolas Maduro, called for the army to patrol the streets during these protests and also for his own supporters to stage a counter march.
HARLOW: Right. Stefano Pozzebon, a journalist, is live in Caracas for us. What are you seeing and what is the background to all of this?
STEFANO POZZEBON, FREELANCE JOURNALIST: Yes, Poppy. Thank you for having me. This is the main opposition march that we're seeing since the beginning of the year and the opposition here has tried of course as you've correctly said in the midst of an economic crisis that has completely collapsed the social texture of the country, has been trying to oust President Maduro for years, last year, through a recall referendum on his power. That move didn't go through because the Supreme Court blocked it and now they're trying to oust him by straight action by marching and trying to gather as much support as possible.
So what you're seeing just behind me is one of the gathering places where opposition protesters are gathering together to try and march towards the presidential palace and towards the center of Caracas, but it is too early to see if the turnout will be good enough and if the momentum was reached towards the opposition and if Venezuela will try to enter a new cycle in the midst of the most dramatic economic crisis that this country has seen in recent history.
HARLOW: They're calling it the mother of all protests. Again you're looking at pictures out of Caracas. Thank you so much, Stefano Pozzebon. We'll bring you more as we have that.
Also still to come for us, president -- former president George H.W. Bush is back in the hospital this morning. Why? How serious is it? Our Dr. Sanjay Gupta will join us next.
[10:47:25] HARLOW: Former president George H.W. Bush is back in the hospital this morning with pneumonia. He was taken to Houston Methodist for a cough that prevented him from sleeping. He is said to be recovering and in good spirits.
BERMAN: Yes. This was the same hospital he was in about four months ago and he was dealing with the similar, though we believe more severe issue.
We're joined now by our chief medical correspondent Dr. Sanjay Gupta.
Sanjay, what do we know exactly about his condition right now and obviously, you know, George H.W. Bush, an older man, what does it say that he keeps on going back to the hospital to deal with pneumonia?
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Yes, you know, as far as what we know that, we are told that he is essentially in the hospital being observed. He's not in the intensive care unit, it sounds like, and they say that he's also in good spirits. That was a statement that was released not that long ago.
Different, as you point out, John, from when he was in the hospital back in January. At that time it sounded like it more -- it was also pneumonia but a more severe case of pneumonia at that time. He was in the intensive care unit and he was also put on a breathing machine at that time and we understand that throughout all the hospitalizations for this back in January was the first time that he was put on the breathing machine.
So, you know, it was more serious at that point. He's given IV and antibiotics now which suggests that this is a pneumonia that's caused by a bacteria. There could be bacterial pneumonia, that could be viral pneumonia. Bacterial pneumonia appears to be what this is.
Look, you know, he's 92 years old. He's also in a wheelchair. He was diagnosed with a form of Parkinson's years ago. When you're not as mobile because you're in the wheelchair and you're of that age, being at risk of pneumonia is one of the big things that people worry about. So not that surprising and he does seem to have these pretty quick recoveries afterward.
BERMAN: All right. Dr. Sanjay Gupta for us. Obviously our thoughts with the former president and hope he recovers as he has done so many times in the past.
HARLOW: A lot of times.
BERMAN: From just this type of thing.
We have new developments this morning that could really up end the entire television industry. There is word that there are serious discussions over Bill O'Reilly and his future at FOX News as in limiting that future, perhaps today. There are meetings taking place right now that could determine the anchor's fate.
HARLOW: The pressure is mounting to possibly nix him after a string of sexual harassment settlement.
Our senior media correspondent, host of "RELIABLE SOURCES" Brian Stelter is here. This is happening fast. Board meeting tomorrow. What does your reporting tell you?
BRIAN STELTER, CNN SENIOR MEDIA CORRESPONDENT: That's right. O'Reilly is on vacation. He went on vacation a week ago. FOX said he'd be back next Monday, April 24th, but now the network is no longer saying that. No longer even confirming that he'll be back on his own show. That's all as a result of these sexual harassment disclosures, these revelations from "The New York Times" and other women also calling out FOX, the two that we know off, that have called the FOX hotline in recent days and said they were victims of harassment by O'Reilly.
[10:50:09] Now his lawyers are fighting back. He has personally said these claims are meritless. But the reality is, his reputation was known inside FOX. A lot of folks at FOX thought he was invincible, that nothing could ever take him down, but this is a moment where we're seeing a statement by the Murdochs, the men that own 21st Century FOX, that they're not going to cover up or ignore these allegations.
BERMAN: How will we know? When will we know if it's over?
STELTER: So there is a board meeting tomorrow. I think we will hear something from the company tomorrow, right? Tomorrow afternoon, tomorrow evening, sometime on Thursday, or maybe Friday, but because he's supposed to come back from vacation on Monday, that's the ultimate deadline here and my sources are saying and even folks that are allies of O'Reilly are saying it's unlikely he'll be back.
BERMAN: So if there's no Bill O'Reilly in the "No Spin Zone" Monday night --
STELTER: That will be -- that will be the signal. Right.
HARLOW: Ninety advertisers, is that right? Had pulled their ads from his program? I mean, ultimately, these decisions are driven largely by the bottom line.
STELTER: They really are. I mean, this is important I think because of what it says about corporate America, about the sponsors who spoke up and pulled their ads from the "O'Reilly Factor." You know, we're here on CNN talking about a competitor, FOX News. But it's not just about FOX. It's about corporate America writ large. It's about how companies respond to charges of harassment and how that's changed over the years. Because let's remember, 13 years ago O'Reilly was accused of something like this. It was a very public lawsuit. But FOX stood by him and kept him on the air. He became even more successful and popular. He still has lots of fans that are going to be sorry to see him go, if indeed FOX does cut ties with him later this week. But I think what we're seeing is an evolving reaction from corporate America about cases like this.
BERMAN: Brian Stelter, great to have you with us. Keep us posted for any changes in the next few minutes.
Happening now, the Super Bowl champion New England Patriots, they are headed to the White House but we just learned that Tom Brady will not be with them. Find out why next.
[10:57:24] HARLOW: All right. This just in, in a statement posted on NFL.com. Patriots quarterback Tom Brady will not be going to the White House today for that visit.
BERMAN: Yes, Coy Wire, here with why in "The Bleacher Report." Hey, Coy.
COY WIRE, CNN SPORTS CORRESPONDENT: Yes, good morning to you, guys. That makes several Patriots players now who said they're not going to go.
Look, I've been there before, but Tom Brady told NFL.com he won't be attending for personal family matters and it may come as a surprise to some because Brady is well known to be friends with President Trump and Coach Bill Belichick and owner Robert Kraft are friends with the commander-in-chief, as well.
There's been at least four players, though, guys, who have said that they're not going for political reasons specifically because of Trump, but players skipping out on a White House visit is nothing new. Brady, for example, didn't go during Obama's presidency in 2015 back then because of a family commitment.
Let's change gears. I got a chance to sit down with perhaps the greatest athlete of all time. Michael Phelps, 23 Olympic gold medals for swimming, and what fascinated me was the mindset that separates him from the rest of the pack. He was so competitive, he was disappointed after winning gold in Rio. Listen to this.
(BEGIN VIDEO CLIP)
MICHAEL PHELPS, OLYMPIC GOLD MEDALIST: I'm always hard on myself, though. I mean, I saw the replay of the 200 finish this morning and they're, like, it was amazing. I was like, yes. Still didn't break the world record. I figured if I was -- I mean, I figured if I was that far ahead I was going to break the world record, but -- and that was one thing I wanted. I wanted to break one more world record. I wanted to go out with 40 world records.
(END VIDEO CLIP)
WIRE: So not satisfied. The most decorated Olympian of all time and you hear that hunger. Will he come back in 2020? He says he's done, but he still says he wanted to break that world record. We'll see.
HARLOW: I know it was a long interview with Michael Phelps.
HARLOW: So where can people see more?
WIRE: I'm sorry, what --
HARLOW: Where can people see more?
WIRE: We'll post that for you on CNN.com and check it out.
HARLOW: Should do that. Yes.
BERMAN: All right. Coy, stand by, because we do have some breaking news we want to get to right now. We just learned from the attorneys from the family of Aaron Hernandez that they want to investigate the circumstances surrounding his apparent suicide.
He was found dead this morning at 3:05 in the morning in a prison in Shirley, Massachusetts. His attorney Jose Baez says there were no conversations or correspondence from Aaron to his family that would have indicated anything like this was even possible. So again the family wants an investigation. The story Aaron Hernandez committing suicide overnight.
HARLOW: All right. We're going to have much more of that breaking news ahead in the next hour. Thank you all for being with us today. I'm Poppy Harlow.
BERMAN: I'm John Berman. "AT THIS HOUR" with Kate Bolduan starts right now.
KATE BOLDUAN, CNN ANCHOR: Hello, everyone, I'm Kate Bolduan.