Return to Transcripts main page

QUEST MEANS BUSINESS

Pound Plummets After UK Poll Surprise; Pound Slides as Poll Shows Gain for "Brexit"; French Strikes Not Impacting Eurostar; Trump University Under Scrutiny; Trump Lashes Out at Media After Close Scrutiny; Strong Data Boost Chances of a Fed Rate Hike; Chinese Stock Post Biggest Gain in Three Months; Brazil Deep in Crisis Ahead of Olympic Games; Modern Day Slavery on the Rise; Esports Players Race to Stardom in South Korea

Aired May 31, 2016 - 16:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[16:00:00] RICHARD QUEST, CNN ANCHOR: First day of trading after a long weekend, market is off some 70-odd points for the DOW Jones. New York is

coming to a close with the closing bell. Let's see we'll have a strong, robust gavel to end trading. Well -- a bit of a measly sort of close. But

there's now no major market trading anywhere in the world. Trading is over on Tuesday, the 31st of May.

Tonight, sterling is staggering. New polls show that Britain may vote to leave the European Union. New files on the Trump University scandal have

just been unsealed. What do they show? And we continue our fight against modern-day slavery. We'll show you the biggest culprit, for using bonded

labor. We've got an hour together. I'm Richard Quest in London tonight. And of course, I mean business.

Good evening. We begin tonight with the pound sterling, which fell sharply as a new poll was revealed that shows the British voters edging towards a

vote to leave the European Union in next month's critical referendum. It was a phone survey. It was conducted by the "Guardian" newspaper and ICM.

And it shows a slight lead for the "Leave" camp for the first time. So, now, what is interesting about this is that there was an internet survey,

which also shows an advantage for those who want to leave.

The significance here is you tend to find phone polls go one way, online polls go another. But this is the first of the polls that has shown both

heading in the same direction. Now, admittedly, the numbers are close. 42-44, 45-47. The don't knows are very large, 9 and 13 the margin of error

is three or four percent. And the election polls in the United Kingdom have been extremely unreliable in the past. But look at how the reaction

was on the market. The polls pushed sterling down by one percent against the dollar on Tuesday. And if you look at that later part of the graph,

you see that sharp fall in sterling off by 1.5 percent and it continues to dwindle away off towards the end of the session. Down from 146 to about

144 and change against the dollar. Joining me now is Lord Karan Bilimoria, Life Peer, House of Lords. Good to see you.

LORD KARAN BILIMORIA, LIFE PEER, HOUSE OF LORDS: Great to see you, Richard.

QUEST: I mean, I understand and let's be clear, you are a strong remain, but you're a Euro-sceptic.

BILIMORIA: Absolutely.

If that's not a contradiction in terms.

BILIMORIA: Absolutely. I'm a confirmed Euro-sceptic. There is a lot about the European Union I really don't like. I don't like the fact that

the parliament has to move every month for a week from Brussels to Strasburg. I mean, can you imagine if Westminster we have to move every

month for a week to Belfast or to Edinburg and that's not parliamentarians. That's everybody. The fact that euro is a disaster, one size will never

fit all. Schengen, I used to think we lost out by not being in Schengen from tours visas and business visas, visitors. And now I realize thank god

we're not in Schengen from a security point of view. So there's a lot about the European Union I really don't like, but I still believe on

balance it will be better and safer for us to remain.

QUEST: So, this is the safer argument, basically. Better the devil you know than the one you don't.

BILIMORIA: Well, in many ways, it is the lesser of two evils. But it's also the best of both worlds.

QUEST: Right. But that's hardly a ringing endorsement to remain, isn't it? What you're basically saying -- and this is an argument I'm hearing

again and again is, well, the lesser of two evils. Let's keep what we have got and try and reform it a bit more. That's not a ringing endorsement.

BILIMORIA: Look at the option. At the moment, one of the Brexiters' great argument is we're the fifth largest economy in the world. We can stand on

our own feet. We can do what we want. We'll be free to form trade deals. We'll be in control of our own destiny. We will be in control of who comes

into this country. Well, we are the fifth largest economy in the world as we stand right now as a member of the European Union. And the whole world,

and I mean the whole world, not just Barack Obama and not just Hillary Clinton, India, every country in Europe, every country around the world,

every major organization, the IMF, OECD, all are saying don't leave and stay in the EU. We should ignore the whole world?

QUEST: So to those who said -- there was last night on this program last night, we had a Brexit here. He said, "These other countries will want to

do a free trade deal. Because Germany, for example, sells such an enormous number of motor vehicles, industrial goods here.

[16:05:02] We're the second or third largest trading partner for many of those countries. They have a vested interest in continuing strong trade

relations with the U.K.

BILIMORIA: This is not just about trade and this is where people get so blinked about this. Yes, from a trade point of view, 44 percent of the

exports and 55 percent of the imports with the European Union. That in itself is huge numbers. From their point of view, only 8 percent of the

EU's exports are to the U.K. So we're less than 10 percent of the overall exports. Point number one. Point number two, we are the second largest

country in the world for inward investment. We have the number one financial center of the world here in London. If we leave the EU, that

inward investment is going to dry up. If that inward investment dries up, because countries will say, we told you not to leave, we value you as a

part of the European Union --

QUEST: All right. That's the argument --

BILIMORIA: -- that inward investment will go. Sixty percent of the non-EU countries who operate in the EU have the headquarters here in the U.K. Are

they continuing to have their headquarters here if we leave?

QUEST: Well --

BILIMORIA: If we leave? No, they won't.

QUEST: Well, what is to prevent the EU from agreeing a deal, with the U.K., that will allow access for financial services? Because those same

banks in Europe, those same institutions, I mean, Frankfurt, no disrespect to Frankfurt or Paris, but they can't hold a candle to the city of London.

BILIMORIA: That's at the moment. Just remember, we were competing with Frankfurt for a long time before. We're now well ahead of Frankfurt. In

fact, I would say we're the number one financial center in the world. You can't be uncertainty. Are you saying we leave somebody? We leave a whole

organization, which we are threatening to destabilize, as well, by the way. And it's highly irresponsible. If we leave now we'd be very selfish and

inward looking. And I don't think that's what the British people have ever done. We're not in inward looking, where an outward looking open trading

economy. That's why we do so well is we're open. Here we'll destabilize the whole of Europe as well. Are they going to be so happy and say, "Of

course, we'll do the free trade deal you want. Please welcome." Of course they're not going to do this.

QUEST: Let us pause and listen to Donald Tusk, as you're aware the president of the council and the warning he gave today.

(BEGIN VIDEO CLIP)

DONALD TUSK, PRESIDENT, EUROPEAN COUNCIL: We fail to notice that ordinary people, the citizens of Europe, do not share our euro view. The specter of

a breakup is haunting Europe and the vision of a federation doesn't seem like the best answer to it.

(END VIDEO CLIP)

QUEST: There he's admitting that the EU has plowed on regardless of nation states subsidiarity, if you like, and he's saying the suspect or the of a

full-scale breakup is possible if Brexit starts a chain reaction. Do you think that's likely?

BILIMORIA: I've just said that. There is no question about it. We could be responsible for by leaving for the breakup of the European Union. And

the breakup of the European -- much as we criticize it, as much as we don't like a lot of it is going to be really destabilizing not just, not just for

Britain, not just with Europe, for the whole world.

[16:10:00] Don't take for granted ever the peace that we have had for 70 years and the Brexiters will say. We've had that because of NATO." Of

course we have had the peace because of NATO. But NATO without the EU we would not have the peace we have got. And I would say the 8 billion pounds

a year just for the peace.

QUEST: OK, so when look at today and a look again at sterling, that sort of volatility that we saw today on the basis of this poll, I'm guessing you

would agree that we will see a lot more of this volatility one way possibly if these poll numbers harden?

BILIMORIA: Absolutely, look at this whole year since we been leading up to the referendum. All the uncertainty means investment is on hold in this

country and from outside this country. Already sterling started depreciating. Let alone today with just this one poll. If we leave,

sterling will fall. Inflation will rise. Interest rates will rise. House prices will fall. We will go into recession. We are going to destabilize

an economic recovery that's already fragile.

QUEST: The Brexiters say you are wrong, with respect, sir. And that you have been wrong -- not you personally -- but you have been wrong before.

The forecasters were wrong on the euro. The forecasters were wrong on the ERM and the forecasters are wrong on Brexit.

BILIMORIA: Well, the forecasters over 80 percent of economists. Yes, there are some -- economist don't always agree, but in this case everyone

agrees. Everyone, even the Brexiters agree that there will be destabilization if we leave. Were already fragile. We have a current

account deficit. We got a budget deficit. We are in a very, very fragile situation. Do we want to risk everything we have got? And by the way the

Brexiters can't get the facts right. They say 350 million pounds and we are going to plow that all into the NHS. While hang on, what about the

rebates we get? And by the way, Boris Johnson, 600 million pounds. He gets it wrong by 13 billion pounds a year. These people are never running

a business in their lives.

BILIMORIA: You have, sir. And we are very grateful that you came in to talk to us tonight. We'll talk more about it in the days ahead. Thank

you.

BILIMORIA: Thank you.

QUEST: As we continue to look, European stocks closed out the month of May. It was a bit of a whimper. The major indices all lower on Tuesday.

Inflation was negative for the second straight month. It's still the best month for stocks so far this year. But just look at the numbers and

they're all down. Worst of the day actually in Zurich, which was the SMI, off .75 percent.

The head of Eurostar is predicting that Europe could fall into a recession if Britain chooses to leave the European Union. Chief Executive is Nicolas

Petrovic and he attributes much of the rail lines success to EU cooperation. As he tells our Europe editor, Nina dos Santos, a Brexit vote

could change anything.

(BEGIN VIDEOTAPE)

NICOLAS PETROVIC, CEO, EUROSTAR: I can say as a business, Eurostar, has benefited a lot from the EU integration. I mean, either way, we have a

symbol of it in many ways. I mean the success of Eurostar is on the back of, one, the EU has made it easier for us to trade. She has taken the

complexity out and a lot of cost out of the business, so we could afford very good fares to our passengers. But also, more importantly, for the

passengers themselves, it's become so easy now that people don't think about setting a business in one country or the other, traveling for

holidays, for -- to study, to -- initially I see that every day on the trains, people literally now they can go to Paris for lunch. When they set

up a business, think of Paris and London at the same time. I mean, going out of the EU for me, I mean, I can't see benefits of this.

NINA DOS SANTOS, CNN MONEY EUROPE EDITOR: How would it change your business? Would it change possible controls? How you ticket things or

prices go up?

PETROVIC: I don't think that -- I mean, very short term, nobody knows. The Bank of England said could be a recession because businesses become --

I don't know. For us as a business, the risk is over time, the U.K. introduces new regulations, which are very different to the EU. And we

would have to integrate the two. So it could cost up and the second big risk is a lot of, for instance, all the businesses, which are set up on

both sides of the channel, how would they react? The people -- the British people who live in France. The French people living in the U.K., how would

they react? And we don't know about that.

DOS SANTOS: How are you preparing yourself? Jus in the eventuality that in the case we may end up with this eventuality? Brexit happening.

PETROVIC: It's a difficult one. We don't know what the exit would look like, once again. That's where we're struggling a bit.

DOS SANTOS: But are you preparing at all?

PETROVIC: Oh yes. Of course we are. We are looking at what could the seat space. It's difficult to have a plan because there's no clear

blueprint for what an exit would look like. So we're very much listening and observing.

DOS SANTOS: Would there be a recession, though? What is the ceiling?

PETROVIC: It might lead to a recession just because of the -- I would say the sort of mentality that everyone has at the same time. You know,

everyone would think at the same time, oh, there's an uncertainty so I will stop consuming. I will stop investing. That's always a risk that

everybody does that at the same time. That can trigger a recession.

[16:15:00] DOS SANTOS: Now, we have strikes that are taking place in France. Strikes that take place in Belgium and is this affecting your

line? What are passengers saying?

PETROVIC: No. It doesn't affect your lines. The issues are very domestic in each country. It's about labor law. And not affecting us, so we're

offering a good service. Actually, we have got very good bookings for instance, for the Euro football, which takes place in June in France. And

bookings are extremely strong. So we don't see any problem so far.

DOS SANTOS: How's it affecting business sentiment?

PETROVIC: I have to say the business sentiment is going up at the moment. I have noticed that since the start of the year when I took to the

corporate customers. Because I think the businesses can consider the government to tackle tough issues and not tackled for a number of years in

France. So either way, it gives them hope that things are going to get better. It is difficult but at the same time I mean, the GDP increased

quite, quite well in France in the first quarter. And generally the sentiment is getting better.

(END VIDEOTAPE)

QUEST: That's Nicolas Petrovic of Eurostar, talking to Nina dos Santos. The very question of what happened today and the way the pound suffered

quite sharply and sort of thing to see much more of. It's the subject of the Profitable Moment in today's QUEST MEANS BUSINESS newsletter. The

markets are closed. And therefore, this is the briefing from New York before Asia opens. Do sign up at CNNmoney.com/quest where you can

subscribe.

Nearly 400 pages of documents of Trump University have only just been made public. We're going to look at what it means for the three fraud lawsuits

that are currently facing the business that's founded by Donald Trump. Where the trial itself is not scheduled to happen until after the election.

But obviously, the discovery takes much more. We'll talk about it after the break.

(COMMERCIAL BREAK)

QUEST: Dishonest. Sleazy. And amongst the worst human beings I have ever met. That's how Donald Trump is characterizing members of the media after

his past business practices and recent donations have come under close scrutiny. Mr. Trump held a news conference earlier to reveal the

accounting that others claim that he'd had raised $5.6 million for veterans' groups. He quickly began accusing reporters of turning what

should have been a positive story about his charitable work into a negative one. Have a listen.

(BEGIN VIDEO CLIP)

DONALD TRUMP, PRESUMPTIVE U.S. REPUBLICAN PRESIDENTIAL NOMINEE: When I raise money for the veterans and it's a massive amount of money. Find out

how much Hillary Clinton's given to the veterans. Nothing. And then I see a few guys standing out there. They don't know what they're there for.

They have no idea. They're there because Hillary Clinton's campaign sent them. And actually, I think it was you or one of you that found out that

they were with Hillary Clinton's campaign, which was interesting. But I wasn't surprised. I don't want the credit for it. But I shouldn't be

lambasted.

(END VIDEO CLIP)

[16:20:06] QUEST: He also described one or two journalists as disgusting. In another money themed controversy, in the last are nearly 400 pages of

documents related to the Trump University have been made public. Now the Trump University was a real estate seminar business that Mr. Trump created

in 2005. Many of those who took part say they were misled into believing that they were going to get personal tuition or at least mentoring by Mr.

Trump. And that actually they all feel it was a big fraud and waste of money.

CNN's Senior Investigative Correspondent, Drew Griffin, joins me now from New York. The good news is, Drew, that the documents have been released.

The bad news is they have just been released and you've got to interpret them for me and tell me if you've anything in them so far. It's early

days. I'll let you off the hook.

DREW GRIFFIN, CNN SENIOR INVESTIGATIVE CORRESPONDENT: Well, but, fortunately for both of us, and the good news is we got a peek at a one of

these playbook a few months ago. So we weren't expecting anything different and that's what we got. And really it is the sales playbook.

And for anybody who's in sales, Richard, it's a fascinating book at how to take people's money and make them feel emotionally good about it. Because

that was the plan here as outlined in this sales playbook.

Bring these people in. Try to convince them they were going to make a fortune in real estate. Play on their emotions. Make sure they had enough

credit. So you can swipe their credit cards and then sell them a three, five-day course or a gold elite member course, which costs anywhere up to

$34,995. And you know the New York Attorney General said all along this is not a university. And this whole idea was a complete fraud.

(BEGIN VIDEO CLIP)

ERIC SCHNEIDERMAN, NEW YORK'S ATTORNEY GENERAL: This is thousands of people who are taken for millions of dollars.

GRIFFIN (voice-over): New York's Attorney General, Eric Schneiderman, is leading one of three lawsuits against Donald Trump and his Trump

University. The lawsuits all basically say the same thing. That almost everything about Trump University was a lie, starting with the name.

(BEGIN VIDEO CLIP)

TRUMP: Action is what Trump University is all about.

(END VIDEO CLIP)

GRIFFIN: It wasn't a university. And its teachers did teach any Donald Trump secrets according to New York's Attorney General.

(BEGIN VIDEO CLIP)

TRUMP: And these are all people that are handpicked by me.

(END VIDEO CLIP)

GRIFFIN: And none of Trump University's experts who taught at the seminars were picked by Donald Trump. Felicisimo Limon, says he paid more than

$26.000 for the real estate course. But he says he got useless information and instructors constantly pressured him to buy even more.

FELICISIMO LIMON, FORMER TRUMP UNIVERSITY STUDENT: What the heck are you talking about? More money? And I'm not learning anything.

GRIFFIN (on camera): You didn't learn anything in hat class?

LIMON: No.

GRIFFIN (voice-over): He is now one of many former students suing in class action lawsuits against Trump University. Trump has been complaining of

unfair treatment by the various courts, including one of the cases in California where he hit back at San Diego Federal Judge, Gonzalo Curiel,

whose ruling last week allowed for the release of the Trump University Sales Playbooks.

(BEGIN VIDEO CLIP)

TRUMP: But I have a judge who's a hater of Donald Trump. A hater. He's a hater. His name is Gonzalo Curiel. And he is not doing the right thing.

The judge, who happens to be -- we believe, Mexican. Which is great. I think that's fine. You know what? I think the Mexicans are going to end

up loving Donald Trump.

(END VIDEO CLIP)

(END VIDEOTAPE)

GRIFFIN: Richard, Donald Trump says he is fighting these lawsuits. He could have settled them he said. He's fighting the lawsuits to prove a

point, that he is right. But the lawsuits, all three of them, continue to march forward. And it looks like the first trial is going to be held

November 28th after the election here in the United States. This is likely going to be a campaign issue on and off for the rest of the campaign

season.

QUEST: And you, sir, will be watching it very closely and coming back to us when there's more to report. Thank you, Drew. Thank you. Have a good

evening.

Trump University is the subject of three lawsuits as we're talking about, they all allege fraud. And the New York Attorney General, Eric

Schneiderman, is behind one of the lawsuits of the report. Speaking to CNN's Carol Costello, he called Trump's actions phony and heartless.

(BEGIN VIDEOTAPE)

ERIC SCHNEIDERMAN, NEW YORK ATTORNEY GENERAL: We're not allowed to protect the trade secrets of a three-card monte game. You're not allowed to

protect the trade secrets of conducting a fraud. The whole pitch, "My handpicked experts will teach you my personal secrets," was a lie. This

was a fraud from top to bottom. He's using every trick he can do to delay the release of documents. To delay the trials. Attacking the judge for

his ethnicity. Attacking me and accusing me of conspiring with the president of the United States.

CAROL COSTELLO, CNN ANCHOR: Let me ask you about that because Mr. Trump did intimate that this was maybe politically motivated by the judge who has

a bias against him.

[16:25:00] He called the judge a hater and he said he was Mexican. And any other judge would have dismissed the case.

SCHNEIDERMAN: No judge has dismissed any of the three cases. There are three cases. On March 1 we just got a ruling in the New York case, and

there are two cases in California, that ruled in our favor and against Mr. Trump on every contested legal issue in essence. Every judge said these

are valid fraud claims. You defrauded people out of money. They're entitled to a day in court. So he keeps saying it's an easy case to win,

but he keeps losing.

COSTELLO: In your mind, is this a case of ultimate importance?

SCHNEIDERMAN: This is a hugely important case. If you look at the facts of this case, this shows someone who was absolutely shameless in his

willingness to lie to people, to say whatever it took to induce them in the phony seminars. Telling people who are on hard economic times, we're

talking about 2008, 2009. People desperate to hold onto their homes to make some money. Convincing them that he will teach them his

entrepreneurial secrets. Trump's instructors would tell students, victims of this University scam, call your credit card company. You need credit to

be big in real estate. Get them to raise your credit limits. And then they'd use that extra credit to make them buy more Trump seminars with the

credit cards. They built people. They were shameless. It was heartless. It is important information to get out there and I think that between the

judge releasing the records and other things, I hope all the facts will get out that can between now and election and important public policy.

(END VIDEOTAPE)

QUEST: Eric Schneiderman talking to Carol Costello.

Good news for the U.S. economy. Bad news for stocks in the United States. The market had a little bit of an early gain, but it really was a very

early gain, as you can see. Just a bit of green in the morning. It started going down and it continued. The low point of the day was just

after 2:30 in the afternoon. Pretty much roughly the same time there was all those problems with Brexit and sterling, 3:00, also, but then it starts

to come back. And off just -- I say just 86 points at the close, 17,787. A loss of around half a percent. It was strong consumer spending data and

the reason that affects this, of course, is that the Fed rate rise could be more likely. You'll remember Janet Yellen has already said, looking at the

numbers, it is appropriate in the months ahead. So this is what they're factoring in to the market at the moment.

Allergan shares gave up early gains. Carl Icahn has announced a large stake in the company. CNN money's Paul la Monica is in New York. The

market, Paul, at a very, very fragile stage when we see gains, you know, and then these sort of losses and then you have the Allergan shares. What

was going on there?

PAUL R. LA MONICA, CNN MONEY CORRESPONDENT: Yes, if you want to talk about Allergan first, what's really interesting is Carl Icahn making a bet

not so much on the company and its products, they're most known for Botox. But the CEO Brent Saunders who used to run Forest Labs. A big company that

Icahn had invested in in the past. So it seems like he's really bullish on this one particular person opposed to the company. With the broader market

let's keep in mind that May, everyone says sell in May and go away. Well the markets actually win up in May. They didn't go up today on the last

day. Let's see how many rhymes I can throw in there. I think we have a big jobs report at the end of the week and what investors are going to be

waiting for. Nasdaq did finish higher. So we did have some green today.

QUEST: You are showing your age, la Monica. Sell in May, go away. I don't think I have ever heard that for a while.

LA MONICA: I know.

QUEST: Listen. One other thought. I mean, you know, as we wait for the next Fed meeting and we bear in mind what the Chair Yellen has said, it's

difficult to know which direction the market trades. Because it's pricing in the next rate rise if it hasn't already done so.

LA MONICA: Exactly. I think the big concern right now -- first we have to get the jobs number out of the way. If it's disastrous, no one's talking

about a Fed rate hike in June. That's going to be off the table. If those jobs numbers are decent and people still think a rate hike is possible,

then the question becomes, if the Fed does raise rates in June, are they just doing it so they can avoid the political fray over the next few

months. And then if they don't raise rates, people start wondering, oh, what does the Fed know that the market doesn't? Are things really that

bad? Not may be in the U.S., but globally. So there are a lot of factors going into this one big meaning in June. I think investors are very

nervous about.

QUEST: Paul la Monica in New York, Paul, thank you.

LA MONICA: Thank you.

There's confusion in the Chinese market. The stocks are climbing. And so is the amount of short selling. And that's usually an indication that

nasty times ahead. Take a look at the Shanghai Composite. It actually gained more than 3 percent. Its biggest one-day gain in nearly three

months. However, on the other side of that equation the reason is speculation that government is driving it with money in the market. Our

Asia Pacific Editor, Andrew Stevens, is in Hong Kong with this briefing.

(BEGIN VIDEO CLIP)

ANDREW STEVEN, CNN ASIA PACIFIC EDITOR: Richard, the big short is on Chinese stocks once again. More and more investors are betting on a fall

in the Shanghai market.

[16:30:04] They're short selling Hong Kong and U.S.-based funds that track top Chinese companies. In fact, the level of intensity on the short

selling is the same as it was in April last year. And that was just two months before the big summer crash. The market down 30 percent in 3 weeks.

Why? Well, the economy is weakening and critically the yuan is weakening once again. And in fact it's having its worst month since that big

devaluation back in August of last year. Now, you may be asking, but if you look at the composite, it looks flat at the moment. Well experts are

telling us it looks flat because the government continues to intervene in the markets. Richard?

(END VIDEO CLIP)

QUEST: Andrew Stevens giving us the story as seen from Hong Kong.

Hosting the Olympics was never going to be easy. Now it's two months to go a Brazil is facing new challenges. We'll discuss them after the break.

It's QUEST MEANS BUSINESS. we're live in London tonight.

(COMMERCIAL BREAK)

QUEST: Hello. I'm Richard Quest. There's a lot more QUEST MEANS BUSINESS in just a moment. When the problems continue to mount for Brazil, and the

Rio games as the world prepares to arrive on the doorstep for the Olympics. Meanwhile, there's a new study showing India is a country with the highest

number of slaves in the world. For all of that, this is CNN. And on this network, you can guarantee the news always comes first.

United States State Department has warned that next month's European Football Championships in France could be a terrorist target. They issued

an alert for Americans visiting Europe this summer. Which also mentions the tour de France and World Youth Day in Krakow in Poland. The State

Department spokesperson said it was not based on concrete knowledge of a threat.

(BEGIN VIDEO CLIP)

JOHN KIRBY, SPOKESMAN, U.S. STATE DEPARTMENT: I'm not aware of any specific, credible terrorist threat around these events or in any

particular place in Europe. This alert was issued just as they always are based on an accumulation of information. And what we know continues to be

an interest by terrorist groups to conduct attacks against Western targets and Americans specifically in Europe.

(END VIDEO CLIP)

QUEST: The U.N. refugee agency says at least 880 people drowned in a series of shipwrecks and capsizing in the Mediterranean Sea over the past

week. The agency says 2016, has been in their words, particularly deadly. More than 2500 migrant deaths since the start of the year.

[16:35:05] Donald Trump has clarified the amount of money he's donated to U.S. military veterans. The presumptive Republican nominee had claimed to

have raised $6 million at a campaign event earlier this year. Now it released a breakdown of the donations after reporters questioned that

figure. He then criticized the media for asking about it.

(BEGIN VIDEO CLIP)

TRUMP: I have to say this. I raised close to $6 million. It'll probably be over that amount when it's all said and done. But as of this moment,

it's $5.6 million. But you have to vet all of these different groups, because these are many different groups. You have to go through a process.

I have never received such bad publicity for doing such a good job.

(END VIDEO CLIP)

QUEST: The police in Cincinnati, Ohio, investigating the incident at a zoo where a 3-year-old boy fell into did gorilla enclosure. The gorilla was

shot dead after it dragged the child across a moat. Police say they are looking into to see if charges need to be brought forward. It's not clear

if the investigation will focus on the zoo or the boy's mother, who was with the child at the time.

The Rio Olympics are just 66 days away. The issues facing Brazil are growing ever larger. Now, let's start with some of the official events

that the games are holding. You have diving. You have got gymnastics. You have archery. You have got cycling and you've got swimming. So these

are events that we are all familiar with. However, the real challenging contest for the Brazilians will be held outside the stadium and they've

already begun rescuing an economy that's in free fall, cleaning up corruption.

The Transparency Minister, Fabiano Silveira, has resigned. Phone records are now showing him trying to undermine the corruption probe. It's the

same recordings or similar nature that caused the planning minister to resign. So you've got two ministers in the new government both resigning

over allegedly trying to stymie corruption investigations.

There's absolutely no medals for the economy. If you just look at the number of unemployment, starting in May when it's at 8 percent of last

year. Now you come to April here and it's notching up towards 11 percent. That's compared to 8 percent a year ago. Wages are also falling. So you

have rising unemployment at a time when other countries such as the U.S. and EU and Spain, Italy and Portugal are seeing unemployment falling quite

dramatically.

Brazil is also host to these very unwanted events. You've got construction. You have got -- Brazil does insist everything will be ready

in time. You have got waterways that are still heavily polluted. You have the health warning. Doctors say from Zika. And you have crime, athletes

have been attacked. Put it altogether and the challenges of raising the question that many are asking whether the 2016 Rio games are actually

cursed. CNN's Ivan Watson with our report.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): It's hard not to be seduced by Rio de Janeiro. This spectacular city soon to be

the host of the 2016 summer Olympics. Two months before the start of the games, construction crews are putting in the final touches at the Olympic

venues.

GUSTAVO NASCIMENTO, GENERAL MANAGER, OLYMPIC VENUE MANAGEMENT: Everything's going to be ready on time. We are going to deliver the park

fully commissioned the 24th of July.

WATSON (on camera): But despite Rio's beauty, the city and Brazil as a whole, are facing daunting challenges. A whole series of unexpected

setbacks leading some to wonder, are Rio's Olympics somehow cursed?

Just days ago, a warning from more than 100 international doctors calling for the games to be postponed or moved because the mosquito-borne Zika

virus could threaten an expected 500,000 foreign visitors. That view rejected by the World Health Organization, which does advise pregnant women

to avoid the Olympics entirely. Because of the risk of severe deformities to unborn children.

And then there's the political and economic crisis. Turmoil after congress suspended Brazil's elected president in an impeachment process last month.

And high level corruption scandals. During the worst economic recession in generations, which has left more than 10 million Brazilians unemployed.

[16:40:04] The economic hardship aggravating Rio's endemic problems with violent crime. Daily gun battles between police and drug gangs in the

city's improbable road favelas. As well as a surge in robberies. This month, this month members of the Spanish Olympic sailing team mugged at gun

point.

FERNANDO ECHAVARRI, SPANISH OLYMPIC SAILOR: We just turn around to see what was happening. And we saw the pistols. Like this.

WATSON: Olympic sailors also worried about Rio's notoriously polluted bay. A dumping ground for the city's raw sewage.

UNIDENTIFIED FEMALE: We don't want to swim in it.

WATSON: Rio's mayor warns. This isn't a first-world city.

(BEGIN VIDEO CLIP)

EDUARDO PAES, RIO DE JANEIRO MAYOR: Don't come here expecting that everything will be, you know, perfect. We live in a country that has

economic crisis. A country of lots of inequality, with all the problems we have seen concerning corruption, bribery. But the city will be much better

than it was when we got the games.

(END VIDEO CLIP)

WATSON: but even one of the mayor's new infrastructure projects is now a deadly failure. This brand new spectacular cliff side bike path was

supposed to be a showcase project for the Olympics. Instead, it became a tragic setback when the waves took out part of the trail, killing two

people last month. In the turbulent run-up to the Olympics, a virtual storm of bad news that is leaves you wondering what could possibly happen

next. Ivan Watson, CNN, Rio de Janeiro.

(COMMERCIAL BREAK)

QUEST: Ed Hula is the founder and editor of "Around the Rings," a newsletter of the business of the Olympics joins me from the CNN Center.

Ed, look, you know, one hesitates to sort of make more of this than necessary. I mean, I remember, you know, the stories about London just

days before. But from your perspective, as an expert, is this the most crisis-driven Olympics that we have seen in recent times?

ED HULA, EDITOR AND FOUNDER, AROUND THE RINGS: The anxiety level over these games I think is at a very high level. There's always probable's

leading up to the games. But in the case of Rio de Janeiro, you've got the situation where the Zika virus, you still have incomplete venues. You have

lots of upheaval in the government. I'm not sure that the government, national government, is ready to deliver an Olympics. Whether it has the

capacity to have people in charge to know what to do if something goes wrong.

QUEST: All right. But on the day it starts, I mean, what it really comes down to is, you know, fine, the president may not be there, it's an interim

president, sports ministers changed several times, but you're not suggesting for a moment that it's not going to happen on the day that it's

supposed to begin or that in some ways to ever be postponed or moved at this late stage?

HULA: I don't think so. I think everybody who's been working on the Olympics for the past seven years is committed to the idea that August 5,

2016, is going to be an opening ceremony for the Rio Olympics. And one way or another these games will take place. Their people have been working

really hard to make sure this happens. They're not the people who've been coming and going at the national levels of government. They're the worker

bees if you will of these Olympics.

QUEST: So, where will we see, if you like, the slip showing? Where will we see the cracks? I remember in previous Olympics there have been worries

about traffic getting to and from stadium and special lanes. In Greece there was the worries about that things wouldn't be ready in time, but they

were. In London, it was a question of security. But -- and then a private security company. But everything was okay in the end. So what should we

look at in the terms of Rio?

HULA: Well, I think right now we are seeing the effect of the upheaval in the government over the Zika concerns. There is nobody at a high level of

responsibility in Brazil to take ownership of this particular issue. To tell the world, everything's going to be OK. And instead you have got

doctors around the world writing these letters to World Health Organization, saying to cancel the Olympics. I think Zika is a good

example of what happens when there's a vacancy, this vacuum of power in government to take care of things.

QUEST: All right. You will remember that the former head, of the IOC summer -- always used to say at the end when he thanked the host city,

except for Atlanta, he said, the best Olympics ever. I think was the phrase he always used to use. Do you think we'll see at least as good

Olympics from Rio?

[16:45:00] HULA: I think we'll see a good Olympics from Rio. Again, there's been a lot of good preparation, solid preparation into the games.

Rio is a fantastic setting for these Olympic games. The first ones in South America. I think there will be a lot of enthusiasm from the people

despite all of the travails they're dealing with at home with the economy and other problems in Brazil. Once August rolls around, the people will be

excited that this Olympics are here and I think that will make a real marked impact on the atmosphere in Rio de Janeiro.

QUEST: Which is an amazing city. Absolutely one of the world's truly great cities. Ed, thank you so much. We'll talk more about it in the

future. Thank you.

HULA: Good to see you Richard.

QUEST: QUEST MEANS BUSINESS tonight. As you're well aware, one of the most important parts of our journalism at CNN at the moment is the "FREEDOM

PROJECT" as the horrors of modern-day slavery that are still alive and well. And number of people enslaved is actually rising across the world.

We'll talk about it with a man who's putting light on this injustice.

(COMMERCIAL BREAK)

QUEST: Some of the most important work that we do here at CNN is the "FREEDOM PROJECT." And CNN's "FREEDOM PROJECT" is determined to help in

any way we can to end modern day slavery. And so is the Walk Free Foundation. It's the human rights group that's out with a new disturbing

survey, which shows the number of people living in slavery around the world, extraordinary to believe, it's actually on the rise. As the 2016

global slavery index, it says more than 45 million people are in some sort of bonded work, some sort of slavery, some sort of incapacity of freedom.

Up from nearly 30 percent just two years ago. North Korea is the worst culprit. More than 4 percent of its citizens are said to be enslaved.

India leads the way in nominal terms, more than 18 million people living in slavery. And then you follow on with China, Pakistan, Bangladesh and

Uzbekistan. Joining me is Andrew Forest, founder of the Walk Free Foundation. Good to see you, sir, thank you.

ANDREW FORREST, FOUNDER, WALK FREE FOUNDATION: And you, sir.

QUEST: When I hear this, what sort of slavery are we talking about such that the numbers are rising?

FORREST: OK. So it's easy to determine. Someone that lives in existence akin to a farm animal and never leave. All sorts of academic definitions.

But if you just keep to that.

QUEST: But why is it rising when there's such attention focused? I don't just mean by ourselves, but globally, the United Nations, the OECD,

governments are focusing. Why's it rising?

FORREST: Governments are focusing and there's this lag factor. See, when slavery was criminalized at just and deregulated it, sent it into the

shadows. You and I and everyone watching thought, Ok, that's yesteryear's history.

[16:50:00] But today when we released the global slavery index with 45.6 million people and that's after we've done surveys for the Gallup

organization around the world to prove the methodology. It is rising because the government action and businesses are not yet locked in. And

the attitude of people, the attitude of to know that slavery exists now, this is new news. People watching the "FREEDOM PROJECT" look at this and

shake their heads but it's actually news. It's real.

QUEST: OK. If India leads the way, in nominal terms, just because it's such a large country. It's got 18 million people enslaved. But you have

the Modi government with "Make It India" and you have a reform and a transition under way that should be bringing that number down.

FORREST: Yes. You have a Modi government, also, which is making payments to those people who are coming out of slavery, making payments to people

that were enslaved, in bonded labor et cetera. So there's a real appreciation inside the Modi government that slavery is a serious problem.

You have got did religious leaders. They can go, Richard, where political leaders cannot. We pull the religious leaders together late last year.

These people speak to hundreds of millions of people each. And they declared modern slavery's real and brought the term modern slavery into the

Indian lexicon first time.

So you're seeing this ripple across India saying, actually, and this is from people I have met by the hundreds, who were in slavery saying I might

be a great, great, great grandfather. My grandchildren will never have the farm animal existence I did.

QUEST: What needs to be done? You know, and the reason -- I'm not asking that in an esoteric sense. I'm asking it in a practical sense. Because

when your slavery index says it's on the rise, when we -- unless your definitions changed or you've got a bigger scope of catchments area, when

it should be falling, you and I, sir, are failing!

FORREST: We are, Richard. Remember, please, that the focus of the anti- slavery microscope, the focus of measurement is sharpening all the time. The world's never had surveys to prove methodology or algorithms, or

researches advances as we brought to the picture now, in '13 was a shocking number. In '14 it was a shocking number. And a decision which guardedly,

we didn't publish in '15, we formed partnership with the Gallup organization. And what you're seeing is a focus on slavery such that we

have never had. We're seeing threw metrics come in and not necessarily it's got bigger, but our understanding has got so much greater.

QUEST: Sir, I mean, I'm almost speechless with the work you're doing it's so important. Thank you, sir.

FORREST: Thank you so much, Richard.

QUEST: Obviously we continue to watch this very closely. It is some of the most important things we'll be doing here at CNN.

We'll return in just a moment. You, of course, need to pause. You need to "MAKE, CREATE, INNOVATE."

(COMMERCIAL BREAK)

[16:55:16] QUEST: A 20-year-old from Seoul, this 20-year-old, in fact, is being compared to Michael Jordan and Lionel Messi. Now this chap his name

is Faker and he dazzles his opponents and he never leaves his armchair. He's arising Esports superstar in South Korea. Players like him have

achieved celebrity status. CNN's Paula Hancocks with more.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: Mobbed at the airport. A sporting legend meets his fans.

UNIDENTIFIED FEMALE: I love you.

HANCOCKS (voice-over): This is Faker. A 20-year-old world champion. Known as the god of League of Legends, one of the most popular video games

around the world.

"I never dreamed of becoming a pro gamer," he tells me. "So I never imagined becoming world champion, but I do like the attention and respect I

get from so many people." And he certainly does get attention in South Korea he is a superstar. Tickets to watch him play live are coveted. Fans

excited just to get close to the legend himself. "I like Faker because he makes so many surprising moves," says this man. This woman says, "I like

he's sometimes tough and reckless behavior during the game."

Hancocks (on camera): You know, one of the things that strikes me, as soon as I walked in here was there's an awful lot of women in the audience.

Video gaming here in South Korea is not just for the men and for the people in the audience they're the lucky ones to see this in person. I'm told

that as soon as these tickets go online, on sale, they sell out within a matter of minutes. For those not lucky enough to be here in person, full

coverage, plus commentary Korean or English is available at the touch of a button.

UNIDENTIFIED ANNOUNCER: Wants to kill. Going for it!

HANCOCKS (voice-over): Two cable channels are dedicated entirely to Esports. One of them is available in 17 countries. And that's not even

taken into account the live stream channels online. One place you would not expect a video game champion to be, throwing the first pitch at a

baseball game. Not his natural habitat but it does show how big a celebrity Faker is here.

What about questions as to whether Esports is a real sport? "I think online games are very similar to sports," says Faker. "In the way that

people enjoy it together and there are competitions. Winning is similar to winning a sports game," he adds, "Except it's a feeling in the brain

instead of something physical like soccer." Since his debut just three years ago, Faker has played with SK Telecom, rejecting lucrative offers of

Chinese teams and enjoying many nicknames. Not only god, but Lionel Messi or Michael Jordan of his game. Paula Hancocks, CNN, Seoul.

(END VIDEOTAPE)

QUEST: Quite remarkable. A Profitable Moment after the break.

(COMMERCIAL BREAK)

QUEST: The Profitable Moment. The Brexit polls are tightening. The pound is falling. Expect more of that if the trend continues in the weeks ahead.

And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in London. Whatever you're up to in the hours ahead, I hope it's profitable. See you

tomorrow.

END