.
February 7th, 2014
09:32 PM ET

AOL CEO blames 401k cuts on "Distressed Babies," then apologizes

OutFront Update:

Complaints from AOL employees have led CEO Tim Armstrong to put the breaks on changes to his company's 401(k).

Armstrong announced the reversal in a staff e-mail Saturday.

He apologized in the memo for comments made during an employee conference call "when I mentioned specific healthcare examples in trying to explain our decision making process around our employee benefit programs."

Armstrong did not cite his controversial comments made during the company conference call, but according to an AOL spokesman, the CEO contacted the two families he was referring to and apologized for the 'distressed babies' remark.

Deanna Fei, the mother of a "distressed baby,"  will be a guest on Erin Burnett OutFront at 7pm ET on CNN.

OutFront Friday:

Can a co-worker's pregnancy hurt your 401(k) plan?

AOL CEO Tim Armstrong is blaming additional Obamacare costs the company is facing this year with have to make cuts in retirement benefits.

AOL is cutting 401(k) contributions for some employees that leave the company before the end of the year, and told CNN's Poppy Harlow that is due, in part, to Obamacare.

Armstrong was more specific on an employee-wide conference call. According to a transcript of the call that an AOL staffer gave Capital New York, Armstrong said:

"Two things that happened in 2012... We had two AOLers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general. And those are the things that add up into our benefits cost. So when we had the final decision about what benefits to cut because of the increased healthcare costs, we made the decision, and I made the decision, to basically change the 401(k) plan."

On Thursday, AOL announced 2013 was its most successful year in a decade - reporting revenues of $2.3 billion.

CNN's Erin Burnett asked Venture Capitalist and an investor on "Shark Tank", Kevin O'Leary - how two complicated pregnancies justify cutting the 401(k) for the company.

“The rules of health care and how we pay for them are now different. We know that because of the new law. This the beginning of a very long and difficult period of implementation to this law," O'Leary said.

O'Leary tells Burnett that the Affordable Care Act or Obamacare impacts the financial cost of health care and companies like AOL has to make changes.


Filed under: News • Tech
February 7th, 2014
09:29 PM ET

'Hunger Games' to use CGI to recreate Philip Seymour Hoffman's final scenes

Philip Seymour Hoffman's death left a number of projects hanging in limbo, including "The Hunger Games."

Hoffman reportedly had just seven days worth of work left on one of the movies.

His absence leaves producers scrambling to figure out what to do with Hoffman's remaining scenes.

It's not clear what they might have in mind, but one option is to digitally recreate the actor.

CNN's Casey Wian spent time with a group of Oscar-winning visual effects artists to see how the technology would work.


Filed under: Entertainment • News • Philip Seymour Hoffman
February 7th, 2014
09:18 PM ET

Putin stakes reputation on Sochi Games

Russian President Vladimir Putin was named the world's most powerful man in 2013, according to Forbes Magazine - and the Olympic Games are supposed to be his crowning achievement.

But the Games have gotten off to a rock start.

Vladimir Putin's remarkable comeback

Half-finished hotels have rooms that are missing things like light-bulbs, chairs and even doorknobs.

Beyond that, one of the Olympic rings during the opening ceremony failed to illuminate, leaving a single snowflake where the ring should have appeared.

Police also arrested several gay rights activists in St. Petersburg and Moscow Friday for waving rainbow flags.

OutFront: Randall Lane is the Editor of Forbes.


Filed under: International • Vladimir Putin
February 7th, 2014
08:56 PM ET

Pay-to-Play ambassadors? Nominee for Amb. to Argentina never been to country

The Obama Administration facing tough questions about rewarding big donors with plush ambassadorships.

State Department spokeswoman Jen Psaki was questioned by reporters as to why donors to President Obama's campaign were nominated for ambassadorships.

KARL: How much does it cost to become an ambassador, to be named ambassador, in the Obama administration? (Laughter.)
PSAKI: Jonathan Karl, always a TV question. We don't determine –
KARL: Well, it's serious because –
PSAKI: I'm not – I'm not – it is a serious question. We don't name ambassadors from the State Department. The White House names ambassadors, so I would certainly point you to my old colleagues across the street for that.

Her "old colleagues across the street" work at the White House. And these appointees are appointees chosen directly by the President of the United States.

White House spokesman Jay Carney didn't have a press conference on Friday to answer the questions, but the questions are serious, because some of the political picks to represent the United States overseas are questionable.

The President's nominee to be Ambassador to Argentina, Noah Bryson Mamet raised $500,000 for President Barack Obama and the Democrats, according to the New York Times.

He testified before Congress and got tripped up on what should have been an easy question: have you ever been to Argentina?

"I haven't had the opportunity yet to be there," Mamet told Congress. "I've traveled pretty extensively around the world, but I haven't yet had a chance."

This "pay-to-play"-style diplomacy isn't new.

But President Obama is picking more political appointees than any of his recent predecessors, including George W. Bush, Bill Clinton and George H. W. Bush.

Not all of Obama's political appointees end up being big donors, but many are.

Crony capitalism isn't a good word. Should crony diplomacy be, either?

Democratic Strategist Chris Kofinis and Republican Strategist Terry Holt are OutFront.


Filed under: Barack Obama • News • Politics
February 7th, 2014
08:48 PM ET

Victim's friends testify in 'loud music' murder trial

The so-called "Loud Music" murder trial entered its second day Friday, in which a Florida man faces first-degree murder for shooting and killing an African-American 17-year-old.

Michael Dunn, 47, claims he fired in self-defense, after an alleged argument over the volume of music blasting from an SUV. Dunn's defense team also says the teen brandished a weapon.

Did Jordan Davis have weapon? Attorneys spar in loud music murder trial

The case bears a number of similarities with the George Zimmerman trial last year.

Three other passengers the victim was riding with gave virtually identical accounts of what happened during testimony Friday.

Prosecutor: Do you recall anything that Jordan Davis said to the defendant?

Tevin Thompson: Yes sir.

Prosecutor: What was that?

Tevin Thompson: F you.

Prosecutor: What did you see the driver of the other car do when Jordan Davis said "yeah, I'm talking to you"
Leland Brunson: He reached into his glove compartment.

Prosecutor: And what did the driver do with the gun after you looked at it?
Tommie Stornes: To my recollection, he started to fire.

OutFront: Michael Skolnik, editor-in-chief of GlobalGrind.com, and Janet Johnson, a criminal defense attorney in Jacksonville, Florida.


Filed under: 'Loud Music' murder trial • Crime • Justice