Full Episode: Massive Government Data Breach, Confederate Flag Comes Down in S.C., Trump Unnerves GOP and Iran Nuclear Talks Continue

Jul. 10, 2015 AT 6:22 p.m. EDT

After the personal data of 21 million federal employees and their families was stolen, the director of the Office of Personnel Management resigned Friday. CNBC's John Harwood reports. After half a century, the Confederate flag is no longer flying on the grounds of the South Carolina state house, but USA Today's Susan Davis explains how Congress is weighing the future of the flag on federal sites. In the 2016 race for the White House, Donald Trump's controversial comments about immigration have Republican Party leaders wondering how to respond. The Washington Post's Karen Tumulty reports on the dilemma for the GOP. In Vienna, talks over Iran's nuclear program were extended through Monday after both sides hit a standstill. Foreign Policy's Yochi Dreazen reports on the latest setback.

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Notice: Transcripts are machine and human generated and lightly edited for accuracy. They may contain errors.

GWEN IFILL : A huge government data breach, the Confederate flag debate goes national, the presidential campaign goes ballistic, and the Iran talks go nowhere. We’ll catch you up tonight on Washington Week .

As the Confederate battle flag comes down in South Carolina –

SOUTH CAROLINA GOVERNOR NIKKI HALEY (R) : (From video.) It is a great day in South Carolina. (Cheers, applause.)

MS. IFILL : – a fresh debate flares on Capitol Hill as Democrats work to remove the symbol from most federal property.

REPRESENTATIVE HAKEEM JEFFRIES (D-NY) : (From video.) Had this Confederate battle flag prevailed in war, I would not be standing here today as a member of the United States Congress. I would be here as a slave.

HOUSE SPEAKER JOHN BOEHNER (R-OH) : (From video.) I do not want this to become some political football. It should not.

MS. IFILL : Too late.

As the Iran nuclear negotiations move into the final stages in Vienna –

SECRETARY OF STATE JOHN KERRY : (From video.) The stakes are very, very high. We will not rush, and we will not be rushed.

SENATOR BOB CORKER (R-TN) : (From video.) I’m glad that they’re not trying to meet some artificial deadline.

MS. IFILL : – will any deadline ever hold?

And on the campaign trail, war chests grow, and Donald Trump and his tough stand on immigration become the issue du jour.

DONALD TRUMP : (From video.) More people are in this country right now illegally than ever before. I will build a better wall, and I’ll build it for cheaper. And Mexico will pay.

SENATOR LINDSEY GRAHAM (R-SC) : (From video.) The first rule of politics when you’re in a hole is stop digging. Somebody needs to take a shovel out of Donald Trump’s hands.

MS. IFILL : As the leading Democrat seizes on the disarray to tar the entire field with the same brush.

FORMER SECRETARY OF STATE HILLARY CLINTON : (From video.) I don’t care how many – how many people running for president on the Republican side try to demean immigrants, insult immigrants, cast aspersions on immigrants.

MS. IFILL : Is the Trump factor hurting the GOP?

Covering the week, Susan Davis, congressional correspondent for USA Today ; Yochi Dreazen, managing editor of Foreign Policy magazine; and Karen Tumulty, political reporter for The Washington Post .

ANNOUNCER : Award-winning reporting and analysis. Covering history as it happens. From our nation’s capital, this is Washington Week with Gwen Ifill . Once again from Washington, moderator Gwen Ifill.

MS. IFILL : Good evening. Less than 24 hours passed between the revelation that more than 21 million federal personnel records had been hacked – six times as many as previously disclosed – and the obviously forced resignation of the woman who led the Office of Personnel Management. It’s a breach even the FBI director described as potentially dangerous.

John Harwood joins us on this developing story. John, why are we learning of the scope of this breach now?

JOHN HARWOOD : Well, I think OPM gradually, as they took stock of what had happened by these hackers, who have been – it’s been suggested they’re the Chinese, but the administration has not publicly accused them – I think they recognized that it was much bigger than they said. And that’s one of the reasons why Katherine Archuleta had to leave, because you had Democrats and Republicans on the Hill questioning both competence and their straightforwardness, whether they told the full story early. And once the news came out that it was 22 million people, it was – the writing was on the wall. It was clear she had to leave.

MS. IFILL : Just yesterday she was on a conference call with reporters where she said, I’m not going anywhere. And that was always a sure sign, I suppose, that you’re about to be pushed out the door. What happened in between?

MR. HARWOOD : Well, I think the pressure from people like Mark Warner, a Democratic senator from Virginia; Barbara Mikulski, a Democratic senator from Maryland –

MS. IFILL : It should be said he has a huge federal workforce in his – in his state.

MR. HARWOOD : Exactly. Both Virginia and Maryland are chock-full with federal workers. When you had prominent Democrats, members of the president’s party, saying that she needed to go, saying that this had been an outrageous violation, I think she finally got that signal that wasn’t expressed on the conference call. In the White House today at the briefing, Josh Earnest said it was quite clear that new skills were needed. That is a sign that the White House was not a bystander in this. They wanted this change made.

MS. IFILL : We have heard 21 million this time, maybe 4 million earlier this year. Do we know anything yet about the sensitivity of the data that was breached and who was affected and who caused it?

MR. HARWOOD : Well, we know that it was not only federal workers, but also family and friends of federal workers. The exact identities of which people were affected aren’t known. At the press briefing, a reporter asked Josh Earnest, I’ve applied for a security clearance to get my White House pass; was my data compromised? And the answer was, well, you’ll find out fairly soon because notices –

MS. IFILL : I love reporters. What about me? (Laughs.)

MR. HARWOOD : Exactly. Notices are going out. It is believed that this was not an attempt to reap economic advantage, but more in the realm of traditional intelligence. And that may contribute to how the White House responds to it. But I talked yesterday to a Republican member of Congress who said the administration needs to be more out front, publicly calling out China for this.

MS. IFILL : And who is responsible? You talked – you mentioned China, but they’re not really saying it’s China. Is there a reason for that?

MR. HARWOOD : I think the – for diplomatic reasons, unless you have an ironclad case you don’t want to say. Then also once you do say, that propels forward some responses that you may not have decided you’re sure that you want to take.

MS. IFILL : OK. John, thanks a lot.

MR. HARWOOD : You bet.

MS. IFILL : And thanks for letting us borrow your digs for a little while.

Congress has been wrestling with a lot of issues lately – highway funding, education, encryption technology, judicial nominations – but what broke through yesterday was spurred by an incident hundreds of miles away: the murder of nine black churchgoers in Charleston South Carolina, which inspired the state to finally today lower the Confederate battle flag that flew on state grounds outside the capitol in Columbia.

GOV. HALEY : (From video.) This is a story about action. This is a story about the history of South Carolina, and how the action of nine individuals laid out this long chain of events that forever showed the State of South Carolina what love and forgiveness looks like.

MS. IFILL : The debate reached Washington after Republicans sought to change a Democratic amendment that would have banned the display of Confederate flag symbols from most federal property. Democrats, keeping one eye on the South Carolina state legislature debate that was occurring at the same time, pushed back.

REPRESENTATIVE BARBARA LEE (D-CA): (From video.) This is simply outrageous. It’s past time for our nation to get serious about putting away not only these hateful symbols, but ensuring liberty and justice for all. It’s past time to take it down.

MS. IFILL : House Speaker John Boehner said he was ready for a conversation, but not yet for a vote. Sue, was this a distraction or was it an example of how Congress really works these days?

SUSAN DAVIS : It was a little bit of a distraction. I think that there’s far more consensus in Congress on the restrictions on the Confederate flag than the rhetoric and the debate on the floor would have had you suggest. What Republicans were trying to do is they passed by voice vote, with no opposition, new restrictions that would codify standards to ban flags – Confederate flag uses on gravesites that are on federal lands, concessions, and banning any kind of federal funding to purchase flags. No opposition.

What happened was a bloc of Southern Republicans brought to the attention of leadership that in 10 states in the South there’s something called Confederate Memorial Day. It is an official holiday recognized in these states in which it’s a tradition often for descendants of soldiers that served in the Confederacy to put small Confederate flags on the graves. Under existing Obama administration policy, it is allowed to be done only on that day and are supposed to be taken down as soon as possible. A group of Republicans wanted to at least have a vote to say that that could still occur, that that would not be banned.

I think Republicans clumsily handled the matter. I don’t think that they consulted with Democrats on the intention of the amendment. And it opened up a party who is – quite frankly has some weaknesses when it comes to racial policy matters and race relations, and I think Democrats saw this as an opportunity to hit Republicans where they’re weak. But I do not think that the intention of what they were trying to do was in any way different than what the position of the Obama administration on what the usage and the federal usage of the Confederate flag should be.

MS. IFILL : So the Democrats, when they came to the floor and in their victory lap afterward, said, listen, this was a secret midnight attempt to undermine our attempt to kill the Confederate flag symbol. And Representative Ken Calvert, who is a Republican from Virginia –

MS. DAVIS : California.

MS. IFILL : – California – who is considered to be behind it. But that’s not as shocking, not the way it actually played out.

MS. DAVIS : It was shaped as sort of this in the dark of night, decision was made. And when you talk to supporters of this amendment, they thought it was going to fail. They thought that it would not happen anyway. The Republicans who come from these states wanted to represent the interests of their states, where this is still an official holiday. And they felt that it was done without a voice vote, and they wanted to be – to go on the record about this issue. It was not, I think, as pernicious as maybe some of the allegations on the floor were lobbed at Republicans. The White House in particular, Josh Earnest had really harsh statements about House Republicans, suggesting that it was a party that had long trouble with race relations. And I think is what forced John Boehner, the speaker of the House, to just pull the bill from the floor, say we have to defuse this situation, we have to have a broader conversation, and we need to find a way that we can vote on this, because our intention is not racist, it is not meant to demean anything that happened in Charleston. And he is on the record opposing the use of the Confederate flag, as are most leaders of the Republican Party.

MS. IFILL : Well, let’s – I want to get back to what John Boehner will do about this, but I want to ask Karen about this for a moment because it wasn’t just Josh Earnest who decided, ah, an opportunity to link all of these things together. It was also Democratic candidates like Hillary Clinton and also – well, actually, where are Republicans on the Confederate flag debate? Where have they been, Republican candidates?

KAREN TUMULTY : Well, actually they’re – you know, they have sort of gone into it warily. But you have, for instance, Jeb Bush first saying, you know, they should do the right thing – I did the right thing in Florida when I brought it down – but then saying more explicitly it should come down.

MS. IFILL : But then you also have people – actually a Democrat like Jim Webb saying, hey, it’s a symbol, right, and deciding that it was OK.

MS. TUMULTY : And you do have a number of them arguing that this is something that should be just left up to the states. But I think that the tide of sentiment on this has been so stunning that, you know, again, I think pretty much everybody is now pointed in the same direction.

MS. IFILL : Now, Sue, this isn’t just about flags. It’s also about other Confederate symbols, including right in the Capitol, behind us, there are statues. There are other ways of commemorating the Confederacy. Is there any discussion underway about those?

MS. DAVIS : There is. But what’s interesting about that is the symbols of the Confederacy that exist in the Capitol, it really is a statehouse issue in some ways. The Mississippi flag is the only flag left in the union that still uses the emblem of the Confederate flag. There’s an effort – Bennie Thompson, who’s a Democrat from Mississippi, has introduced a resolution requiring the flags to come down in the Capitol. But changing the Mississippi state flag is something that the state legislature’s going to have to talk about when they come into session next year. I don’t believe they come back in until January. And then there’s also statues. And for one example, in the state of Ohio they have already voted to remove one of their statues, who’s a former lawmaker who was anti-Abraham Lincoln, who was pro-slavery. They are taking his statue out and they’re going to remove it, and they’re putting in a statue of Thomas Edison. And that is supposed to happen as early as later this year. So there are certainly efforts afoot to take what states have seen as maybe hurtful symbols of the Confederacy or their state’s past and replace them. But there are members who are nervous about maybe just trying to blanket remove maybe somewhat ugly history of the – of the country’s history.

MS. IFILL : And lucky John Boehner has to figure a way to get an interior appropriations bill – which is by the way what this was all about – through without that attached to it. Thanks, Sue.

Democrats didn’t hesitate to link the fight – flag – as we were saying, over the flag over the other debate, another debate about intolerance. In the end, two themes dominated this week’s 2016 campaign maneuverings. One was money. Jeb Bush raised a lot. The other was Donald Trump.

MR. TRUMP : (From video.) If somebody’s an illegal immigrant, they shouldn’t be here at all. There shouldn’t be any crime. They’re not supposed to be in our country.

MS. IFILL : That is, of course, technically true, but Trump has refused repeatedly to back away from his contention that these undocumented residents are mostly criminals. And by doing that, he has put Republicans in a bind. Jeb Bush called it a weird little controversy.

FORMER FLORIDA GOVERNOR JEB BUSH (R): (From video.) This is a bizarre kind of idea, that somehow you can have an affection for people in a different country and not think the rule of law should apply. This is ludicrous.

MS. IFILL : Other candidates tried to distance themselves.

OHIO GOVERNOR JOHN KASICH (R) : (From video.) I’d like to honor Reagan’s 11 th Commandment of not attacking fellow Republicans.

FORMER NEW YORK GOVERNOR GEORGE PATAKI (R) : (From video.) I was outraged and repudiated Donald Trump’s comments about Mexicans.

SENATOR TED CRUZ (R-TX) : (From video.) And I commend him for shining a light on an issue that the Washington cartel doesn’t want to discuss.

MRS. CLINTON : (From video.) I’m very disappointed in those comments, and I feel very bad and very disappointed with him and with the Republican Party for not responding immediately and saying: enough, stop it.

MS. IFILL : By the end of the week, Republicans were not debating whether Trump was hurting the party but how much he was, and more important what, if anything, can be done about it. Karen’s been keeping track. What, if anything, can be done about it?

MS. TUMULTY : Not a lot. The problem here is that, you know, Donald Trump thrives on two things, controversy and attention. So to sort of push back on him is to do exactly what he is looking for.

The second thing is he is tapping into a real, genuine anger, and you know, unease about illegal immigration in his party. And this is – we’re in primary season. The real thing that they’re worried about is not that he stays in the race and does this – although they are worried about that – but that he leaves the Republican Party, takes all his money, and wages an independent campaign, runs as a third-party candidate. As one prominent Republican told me, the thing everyone’s afraid of is that he’s going to go Ross Perot on us, which of course refers to the third-party candidate who a lot of Republicans think, you know, cost them the White House twice.

MS. IFILL : Well, OK, let’s think about that for a moment. Donald Trump is not without his fans. And in fact, this weekend in Arizona he’s got – a lot of people are lining up to see him. They cannot wait, in spite of the fact that the senator from that state has been like, whoa, could you just stay away.

MS. TUMULTY : Right. (Laughs.)

MS. IFILL : Republican senator, I should point out. So what is it that Donald Trump is tapping into?

MS. TUMULTY : Donald Trump is tapping into, I think, a sense – and again, if you look at the polling, and even polling among Republicans, most Americans and most Republicans and even most Republicans who call themselves conservative Republicans think that for the illegal immigrants who are currently in this country, there should be some pathway to giving them a legal status, even citizenship. But there is a part of the Republican base that, you know, feels uneasy, both about what they see as, you know, too many people coming across the border, but also the fact that sort of the whole system is out of control, that there is – there’s an economic unease that goes along with this as well. So this is a small, but very vocal and powerful part of the Republican base.

MS. IFILL : You wrote a story in The Washington Post about the head of the Republican National Committee calling Donald Trump and telling him to kind of tone it down, which Donald Trump immediately said that’s not what he said, he said – or whatever. So what really happened this week between the leaders of the Republican Party and Donald Trump?

MS. TUMULTY : Reince Priebus, the chairman of the Republican National Committee, called Donald Trump and they had a phone conversation. And depending on who you’re listening to – Donald Trump said it was very brief; we were told that it was 45 minutes in duration – Donald Trump first said, you know, he was calling to congratulate me. But he then called one of our reporters, Bob Costa, and acknowledged that, yes, at the end of the conversation he was asked to tone it down. But he says, you know, I’ve got to be me.

MS. IFILL : I wonder if he keeps his timer only when someone else is speaking and that when he’s speaking he doesn’t count. That could be what the issue is with the timing here.

OK, I want to talk to you about another big piece of the political story this week, and that’s money. Jeb Bush raised money in the first two weeks of his campaign at the rate of $8 a second, and he ended up with $114 million in the first quarter. That’s a – and including his super PAC money, right?

MS. TUMULTY : This is on a scale that we have never seen fundraising before, and it speaks in part to his abilities and his network as a fundraiser. But what it really talks to, what it really speaks about, is the new rules for raising money because most of this money was not given directly to his campaign in regulated amounts. Of this ($)114 million, ($)103 million was given to his super PAC. And these are these outside organizations, unregulated amounts of money. And so what we are basically – this is the, you know – this is the biggest number we’ve seen, but everyone who’s a serious contender in this race is coming in with some very big numbers.

MS. IFILL : So how does that compare to what we know about what Hillary Clinton and her associated friends have raised?

MS. TUMULTY : At this point it looks like Jeb Bush was raising money about 1 ½ times as fast as she was. It looks like he’s going to have more than twice as much cash on hand in the early going as the second-biggest fundraiser in the Republican race that we know of so far, which is Ted Cruz. People are expecting Marco Rubio to come in at maybe ($)30 million. Again, these are sums that –

MS. IFILL : Why is it that that amount of money raised at that fast a clip isn’t scaring other people out of the race? It seems like we still are getting new candidates every week.

MS. TUMULTY : Because all you really need to do is find a few people who are willing to give up half the price of a yacht this year and you’re in.

MS. IFILL : Half the price of a yacht would be ten times the amount I would ever give to a president, any kind of campaign, but that’s just because I haven’t got it. Thank you, Karen. (Laughter.)

Finally tonight, the waiting game in Vienna continues as deadline after deadline passes, the latest just today. Secretary of State John Kerry, broken leg and all, wavers between optimism and pessimism as he attempts to broker a nuclear agreement with Iran. So far, no dice.

SEC. KERRY : (From video.) We are not going to sit at the negotiating table forever. We also recognize that we shouldn’t get up and leave simply because the clock strikes midnight.

MS. IFILL : Earlier this week the president put the chances of reaching a deal with Iran to avoid additional sanctions by curbing its nuclear program at, quote, “less than 50/50.” In Congress, pessimists are growing more vocal.

SPEAKER BOEHNER : (From video.) Iran, by all accounts, still isn’t serious about abandoning its nuclear weapons program. When will the president and his negotiators stand strong? Well, I think it’s time for the administration to come back to Earth.

MS. IFILL : Will it take yet another deadline for the final shoe to drop? And what do deadlines matter anymore, Yochi?

YOCHI DREAZEN : At this point I think we need a different word. I think when you set something that doesn’t actually matter and is kind of aspirational, and then you set another thing that’s also aspirational and you keep doing it, “deadline” no longer applies. We could say “goal.” We could say “hope.” We could say something different.

What I was struck by was John Kerry kept using the phrase “artificial deadline,” as if this idea came from nowhere, it came from outer space. It came from negotiations – dozens of hours of negotiations that first said June 30 th , then said June 9 th , then June 10 th , now is extended today till June 13 th .

MS. IFILL : So a deadline only matters when you have achieved what you wanted. But if you haven’t achieved it, then it doesn’t matter, it’s ephemeral?

MR. DREAZEN : Right. And it – and it was imposed by someone other than yourself.

MS. IFILL : What are the sticking points at this – at this stage, as opposed to this time last week?

MR. DREAZEN : So they keep saying that it’s just a small, couple of areas, but the couple of areas are gigantic.

One of them is inspections. Will Iran have to open up its military facilities to U.N. inspectors, U.S. inspectors? The U.S. believes that military bases Iran possesses are where ballistic missile research was done, where nuclear research was done, and they need access. Iran is saying that they won’t provide it.

The other is U.N. sanctions on Iran also impact its conventional weaponry – so tanks, machineguns, things that have nothing to do with nuclear weapons. Iran wants those sanctions off. The U.S. says no.

MS. IFILL : And Iran, in fact, calls them like a web of sanctions. They make it sound like it’s a constraint that they can no longer accept. But if they won’t accept it, then why are they – what are they talking about?

MR. DREAZEN : We’re in a weird moment right now because Boehner, others who oppose this deal, they say just leave the table, leave the sanctions on. The problem then is Iran continues to enrich uranium. So if we’re worried that Iran is getting closer to a nuclear weapon, when they go back to enriching, if there is no deal, they get closer by the day to that weapon. So this deal may be flawed, but the question of what’s the alternative, nobody really has a good answer to it.

MS. IFILL : So when the president says, or I should say when John Kerry says that there has been important progress made, what does he mean?

MR. DREAZEN : What he means is that two issues that have been in contention – one, when do the sanctions lift. For a while, the supreme leader kept saying – the supreme leader of Iran, Ali Khamenei – that they have to lift the minute the deal is signed. Now there’s an agreement that they would be lifted gradually over time. That’s one area. The other area is the enrichment level – how low it would be, the amount of enriched uranium Iran could have. They’re closer than where they were. The number of centrifuges Iran could operate, they’re closer than where they were. So there is measurable progress. But these gaps that remain are not small. These are significant. They’re big. They’re substantial.

MS. IFILL : Sue, who in Congress is for this deal at this point?

MS. DAVIS : That is a very good question. I would say on the whole you have more skeptical optimists in the Democratic Party who want to see the president secure a deal and think, as Yochi said, that some deal will be better than no deal, that some guarantees will be OK. I would say from the Republicans in control of Congress – Bob Corker, Lindsey Graham who has also been very vocal on this – they’re very skeptical that a deal is going to be reached. And if and when it does, obviously Congress recently passed a law that will give itself a role in the approval process of this. So if they do achieve something in the short term, we’re going to see this debate flip over to Capitol Hill where, you know, Congress said they wanted a say in this, but are they really going to want the role to maybe try and vote this down.

MS. IFILL : And in fact, by blowing through this last deadline, Congress gets a lot longer, Yochi, to look at this, right?

MR. DREAZEN : Right. Missing June – the July 9 th actually mattered because the legislation in question was if they had had it by July 9 th , Congress got 30 days. Congress is in recess, so functionally that meant Congress had no time. By missing it, Congress has 60 days. They’ll be back from recess. That means they have at least a month. So this deadline – and again, using the word very loosely – missing it, this one actually does have significance. At this point, though, now that they’re to July 13 th or God knows when they’ll keep going, now it’s just let it play.

MS. IFILL : Now, it’s just – not just the U.S. and Iran at this table. There are also the P5 partners, other nations, European nations. In whose interest is it to walk away? Who’s closest to just getting up and throwing their hands up? Or are we just at this point just dealing with people who are spinning us on what is happening in these negotiations?

MR. DREAZEN : The other countries that are part of this P5 and one, as you flag, a lot of them want to go back to business with Iran. They don’t want to have to keep enforcing sanctions. They have existing deals that were in place before sanctions. They have deals they want to put in place now. Russia, China, they want no part of this. They want to go back to doing business. Same to a degree with France. So the U.S. to a degree, the longer this goes, the more isolated the U.S. is.

MS. IFILL : And there is a whole lot of disincentive for actually getting something done, and a whole lot of people poised to criticize if they do. So yay, John Kerry, have a good time in Vienna.

Thank you, everybody. Week two in our temporary digs. Thank you all for hanging with us. We’re done here, but there will be more online, as always on our Washington Week Webcast Extra , where we let down our hair a little bit and talk about all the other things that happened in Washington that no one else is talking about. You can catch the webcast later, tonight, and all week long at PBS.org/WashingtonWeek. Keep up with daily developments with me and Judy Woodruff on the PBS NewsHour , and we’ll see you here next week on Washington Week . Good night.


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