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QUEST MEANS BUSINESS
Top Fed Official Quits Over Leak; Trump Calls for Bank Regulation "Haircut"; Sponsors Drop O'Reilly Show; South African Union Calls for Zuma Resignation; France Glued to Second Election Debate; World Leaders Condemn Syria Chemical Attack. Aired 4-5p ET
Aired April 4, 2017 - 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] ZAIN ASHER, CNN ANCHOR: That sound, my friends, marks the end of yet another trading day on Wall Street. It started off slightly in the
red. It looked like as though it would be another ho-hum day on the street, then it began to pick up, got into the green when President Trump
addressed a group of CEOs talking about deregulation and boosting confidence amongst business leaders. My friends, it's Tuesday, the 4th of
April. Tonight, a leaked scandal at the Federal Reserve. A Fed president is resigning effective immediately.
Donald Trump wants to give Wall Street regulators a haircut.
And also on the program, a sexual harassment allegation catches up with Bill O'Reilly. Major companies abandoned the no spin zone.
Hello, everyone, I'm Zain Asher, and this is QUEST MEANS BUSINESS.
All right. Welcome, everyone. We will have the today's top business stories in just a moment. First, I want to give you the latest on the
deadly events in Syria. U. S. president Donald Trump has condemned a chemical attack which left at least 70 people dead. Donald Trump called it
reprehensible. I want to warn you, then some of the footage we are showing you is extremely disturbing, as you can imagine. But we want to show it to
you to give you an idea of really the devastating effects of this attack, as doctors battled to save the lives of the many victims.
Eyewitnesses reported seeing dead civilians including, including children. Activist groups say it's one of the worst chemical attacks in Syria in
years. CNN has been unable to verify the actual substance used in the chemical attack. The Syrian regime says that it's not responsible that is
not to blame. Instead claiming there was an explosion at a poison gas factory run by rebels. And Russia also has denied carrying out air strikes
in the region. A few hours ago, a doctor on the scene told our Christiane Amanpour, the devastation bore all the hallmarks of a chemical attack.
(BEGIN VIDEO CLIP)
DR, FERIN THE AS AL JUNDI, TREATED VICTIMS AT IDIB HOSPITAL (through translator): The description of the injuries that I saw, such as slow
burning and the fluids coming out of their mouth, and all the symptoms that I saw indicate that it was nerve gas, nerve gas. And also, there were
parts of the barrels were located. These parts of the barrels could be sent to any lab and it could be scientifically analyzed.
(END VIDEO CLIP)
ASHER: A doctor basically describing the events that he saw. The horrors that saw on the ground there as that chemical attack erupted. Later this
I'm going to be joined by CNN's senior international correspondent Arwa Damon, for more on this. He will of course, bring all of you at home
information on the very devastating, very serious story as soon as we get it.
In the meantime, back to business news, some major business, by the way. The president of the Federal Reserve Bank of Richmond, abruptly resigned a
few hours ago, after admitting that he leaded confidential information. So, at the height of the Fed bond buying program, after the financial
crisis, Jeffrey Lacker whose post made him a member of the Fed's rate setting committee, says that he disclosed information about what the Fed's
plans were. He disclosed that information with a financial firm before the information was actually released to the public.
It is a majority blow to the reputation of America's central bank because essentially investors could profit if they know specifics about the Fed's
actions before the rest of the world. This is certainly a controversy that has rumbled on for almost five years now. It happened in 2012 and only
came to light just today. And at a hearing before congress in 2015, Fed Chair Janet Yellen faced the fury of lawmakers who said the Fed was falling
far short of its ethics standards.
SEAN DUFFY, U.S. HOUSE REPUBLICAN: As you know, I chair the oversight committee on financial services. And along with Chairman Hensarling, we've
been doing an investigation into the 2012 FOMC leak. We have kindly asked for you to produce documents in regards to this leak. You have failed to
JANET YELLEN, FEDERAL RESERVE CHAIR: We fully intend to cooperate with you to provide the documents that you requested. But that we are not going to
provide them now.
[16:05:06] DUFFY: You're not bound by the IG or the DOJ. We've asked for the documents. You said were knocking to give it to you. Is it fair to
say you don't have any legal authority because you can't give me case law or statute that says you have an exemption?
YELLEN: We've said we plan to give them to you as soon as we're able to do so and not compromise an open criminal investigation. We want to see this
DUFFY: If anyone wants to sweep this under the rug, it's the Fed.
ASHER: Lawmakers there really trying to hold Janet Yellen's feet to the fire. I want to bring in Heather Long, CNNMoney senior writer. Heather,
thank you so much for being with us. Jeffrey Lacker made a few mistakes. Obviously, number one actually was to reveal the confidential information,
that was mistake number one.
HEATHER LONG, CNNMONEY SENIOR WRITER: A huge mistake.
ASHER: A huge mistake. But then also he didn't report that he made the mistake. Then when he was interviewed a number of times, he was like, uh,
I don't know where that information came from, not me.
LONG: Yes, this is a big scandal for the Federal Reserve, and it's coming at a terrible time when their integrity is being questioned by Congress and
by Donald Trump, the president. I think you're right that Jeffrey Lacker, he knew the rules, he served for 13 years as head of that Richmond Fed
bank. Which is one of the 12 regional banks that make up the Federal Reserve system. So, he can't play the card, oh, I wasn't sure. I didn't
know what was going on
ASHER: He grew up in the bank system.
LONG: That's right. I talked with another Fed official who served with him, a former head of the Dallas fed, who was just shocked. He said I
can't believe Jeff did this. Some of Fed members actually were suspicion that there may have been a mole around that time of the final quantitative
easing push. The Fed interviewed Lacker in 2012, shortly after the incident happened and he basically lied. He basically didn't tell the full
truth to the fed's internal investigation. That triggered bigger investigations from the FBI, from the Commodities Futures Trading
Commission. And that finally led to what we have today, he has to resign basically in shame.
ASHER: I just want to read you, because the Fed actually released a statement. I want to just read it to our viewers. "The Federal Reserve is
committed to the maintaining of the security of confidential FOMC information. We cooperated fully with the independent law enforcement
investigation into an unauthorized disclosure in 2012." So, you know, obviously, this is hugely embarrassing for the Fed. But why did it take so
long for this information to come to light? As you mentioned, it happened in 2012 and we're only just finding out about it now.
LONG: It's exactly the right question to be asking. And that's what really part of the scandal of the integrity that's going on right now.
Clearly a big part of the problem is Lacker wasn't telling the full truth. He was questioned about it in 2012.
ASHER: And he didn't tell the truth multiple times, he had opportunities to correct it and he didn't.
LONG: That's right. What's fascinating though is his lawyer issued a statement a few minutes before we came on air here, saying there will be no
charges brought against him. Again, that's sort of another question mark that we're trying to work through. OK, he clearly did something wrong, but
was it egregious enough to get charges?
ASHER: Very serious stuff. And he resigns effective immediately. All right, Heather Long, thank you so much for bringing this story to us, we
And Lacker's departure means more upheaval at the Fed, at a time when it's going through a lot of personnel changes. In fact, two seats on the Fed
board are ready stand vacant. And three of the five remaining members may soon change. In fact, Daniel Trujillo is stepping down from his post on
Wednesday. Next year both Chair Janet Yellen and her deputy Stanley Fisher reached the end of their term. They may also end up leaving the board as
well. What does all of this mean? It means that Donald Trump and a Republican Congress will have unprecedented influence over who makes the
big calls at the Fed. Diane Swonk, tracks the Fed. She joins me live now from Chicago. So, Diane, just explain to us, how does this compromise the
integrity of the Federal Reserve, do you think?
DIANE SWONK, FOUNDER AND CEO, DS ECONOMICS: I think the timing couldn't have been worse. We had other issues that came up like this many years
ago, Governor Wayne Angel had just left the Fed. And then on July 6th or July 5th, after he had gone to a fourth of July party with many of his old
Fed governor friends, he changed his forecast and published it. And people said, uh, that doesn't look right, and he was no longer on the Fed at that
point in time and he said he came up with the idea when he was riding his bike through Washington.
The reality is sometimes people can hear things in what they see even if they're not directly told it. That said, this is really critical right now
because the Fed is under attack from all sides. The Congress would like to do the audit the Fed bill, they want monetary policy to be set by arbitrary
rules. That along with who actually is on the Fed and how sort of pliable they may be to not be an independent Fed is really under question now.
[16:10:00] ASHER: How do Fed presidents walk that very delicate fine line between transparency in certain circumstances, for example with the
minutes, and also confidentiality when it's appropriate? How do they balance that fine line?
SWONK: Well, you know, I talk to a lot of Fed presidents. You also know when you talk to Fed officials, it's more about the questions they ask you
than what they tell you. They don't want to be in the position that they're compromising. They also want to make sure they're getting good
information that fills in the colors in between the lines of the data. The data is sort of black and white or gray, and they would like to see a more
complete picture of the economy. To the extent that you can give them information that's confidential that you've heard on your firm, or a firm
that you're working with, just to give them understanding on anecdotes. That helps them understand really where the economy is at. It would be a
great loss for them to lose some of those communications, because of fears of these kinds of compromises.
That said, many of these meetings are done in the course of a meeting, not one on one. A lot of these meetings are done in front of other people.
And I think that's one of the safety valves, is that they aren't done just one on one, that they are done in front of people and they aren't
transparent. They say when they met with certain people. That's very important to do.
ASHER: Yes, I mean, there are sort of these internal controls. I do want to talk about Jeffrey Lacker's reputation, because this is a man who spent
30 years at the regional Fed. He sort of grew up there. His father was an economist. He spent his whole life there. To end your career, I know he
was going to resign this year anyway, sort of retire this year anyway, but to end your career in this light must be extremely devastating.
SWONK: I'm sure it is. One of the things that's important about this period in time that we're talking about, and I think we need to take it in
context, the timing in which it occurred in 2012. This was a time when there was many presidents, a large minority of presidents that were angry
about the Fed's unconventional policies and it was becoming much more controversial within the Fed. There was a lot of warring within the Fed
itself. Because, you know, this was all untried. What should we do, what shouldn't we do? I think some of that internal warring spilled onto the
One could argue that Ben Bernanke, because he really did encourage debate. He encouraged transparency. He encouraged people to sort of fight it out
in public if they had to. That may have fueled some of this. I respect Ben Bernanke very much for what he did in bringing transparency to the
table. Although, I think some of us wanted to see the sausage being made at the Fed, but I do think that remembering the context that it happened
in, no one will remember that unfortunately, for Jeffrey Lacker. But he wasn't alone in terms of his objection to what the Fed was doing. My sense
is, my guess is, and this is only a guess, is that because there were a strong minority of people so upset about it, he was probably more verbal
than he should have been.
ASHER: Diane Swonk, will have to leave it there, thank you so much for your insight, we appreciate that.
President Reagan promised to unleash the bulls. President Trump has pledged to unleash the banks and the country. He is trying to get his
economic agenda back on track after the defeat of the Republican health care bill. The President was speaking to a group of executives, including
bank CEOs. He said they're petrified by regulators and that's holding back lending. The President's solution, a major haircut.
(BEGIN VIDEO CLIP)
DONALD TRUMP, U.S. PRESIDENT: The regulators are running the banks. So, we're going to do a very major haircut on Dodd/Frank. We want strong
restrictions. We want strong regulation. But not regulation that makes it impossible for the banks to loan to people that are going to create jobs.
(END VIDEO CLIP)
ASHER: The White House famously had its own barbershop. President Trump has set up his own regulation cuts emporium. First to the door the so-
called fiduciary rules. So, what does that rule mean? The rule was basically designed to ensure retirement advisers acted in their clients'
interests and not to obtain incentives for themselves.
President Trump actually halted its implementation about a month ago, in February. In the waiting area, of course, the much-talked about
Dodd/Frank, of course put in place during or after the financial crisis. Its goal was more accountability, more transparency to make sure that
taxpayers didn't bail out the major banks, to make sure the banks weren't essentially too big to fail.
The Trump administration has focused on one provision within Dodd/Frank, the Volcker rule. It essentially forbids banks to make certain types of
bets with their own money. Now, another potential customer, the Consumer Finance Protection Bureau. Critics say the agency's rules are burdensome
and end up hurting Americans who need credit. Now, the President has been accused of doing all of Wall Street's bidding. He said, though, what's
good for the banks is good for ordinary Americans too. Take a listen.
(BEGIN VIDEO CLIP)
TRUMP: We're going to unleash the country. And I'm willing to take the heat. And that's OK. I've been taking heat my whole life. But in the
end, I know it's the right thing to do. And we're going to create a lot of jobs.
(END VIDEO CLIP)
[16:15:00] ASHER: Let's talk more about this with CNNMoney's Paul La Monica who has been following the latest developments. Is there some
concern, I mean, obviously, Trump as a good, solid relationship with banks and executives and CEOs? Is there some concern about the ability of the
Trump administration to get through his pro-business agenda, given what's happened to health care?
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: I think that's clearly the case. We saw that getting the repealing and replacing of Obamacare was not
an easy sell to members of his own party. It was the freedom caucus more than the Democrats which were such a big problem there. With banks, it's
going to be a little bit more interesting. You do have I think support, even from the Frank of Dodd/Frank, Barney Frank has admitted to CNNMoney in
an interview in the past that some of the laws that were put into place were maybe two onerous for smaller regional and community banks. So, I
think that you will get support for Trump's plans to reign in some of the regulations on those types of banks. But where he's not going to get
support is anything that's going to further golden the Goldman Sachs, J.P. Morgan Chase, B of A's of the world, these banking behemoths.
ASHER: When he does sort of reduce some of the regulatory burden with Dodd/Frank, will we see financial stocks take off? Because financial
stocks really do like Trump. They like what he said. They like his sort of pro-business rhetoric. Will we really see financial stocks really take
off, really go for gold?
LA MONICA: I think it's going to be interesting to see whether or not some of those smaller banks start to really participate in the rally. The big
banks have done well. They've pulled back a little bit I think due to concerns lately, Zain, that maybe President Trump isn't going to get nearly
as many of his initiatives through Congress after the failure to repeal and replace the Affordable Care Act. Goldman Sachs has Searched, J.P. Morgan
Chase, even Wells Fargo, despite the scandal, it's an at an all-time high.
ASHER: It's also his promises as well. When he talks about 25 million jobs. When he talks about4 percent growth rate, isn't there a feeling
among the executive community that Donald Trump, like all politicians, tends to overpromise and then eventually underdeliver?
LA MONICA: Yes, I think to be fair to Donald Trump, 4 percent growth is such a pie in the sky sort of estimate for the U.S. economy, that if we
don't meet that but get to 3, that's a victory, good luck to any Democrat running in 2020 if we wind up with 3 percent sustainable GDP growth.
You're not going to be able to say, hey, the president promised 4 percent but we only got 3, because at the end of the Obama years, we were only
getting 2, 3 is a lot better. We know that President Trump is a consummate negotiator. You can't take everything that he first says or tweets at face
ASHER: Wall Street is certainly optimistic. Paul La Monica live for us, thank you so much.
Time for a quick break here. When we come back Fox News is facing a growing revolt by advertisers as allegations of sexual harassment swirl
around its number one star. We'll have Brian Stelter here to talk about Bill O'Reilly. That story next.
[16:20:10] ASHER: Welcome back, everybody. Fox News has stood by its top star Bill O'Reilly through controversies over the past two decades. So,
have the network sponsors. Now amid a new sexual harassment scandal, O'Reilly's show is facing a growing advertiser revolt. In fact, Mercedes,
Hyundai and BMW are three of the 10 brands who say they're pulling ads during the top-rated "O'Reilly factor." "The New York Times" reports that
a total of $13 million have been paid to five women to settle complaints that he sexual harassed or verbally abused them. O'Reilly show is a
commercial juggernaut for Fox News. It generated more than $440 million in ad revenue between 2014 and 2016 and is -- get this -- the most-watched
show on cable news. Brian Stelter is here with me now. So, Brian, given all the facts I just mentioned, given how much this show actually makes for
the network, if this thing grows big enough, will they actually end up getting rid of him?
BRIAN STELTER, CNNMONEY SENIOR MEDIA CORRESPONDENT: If it was any other staffer or if this was a CEO of a normal company --
ASHER: They would be gone.
STELTER: -- I think we know how the story goes. Exactly. But Bill O'Reilly is the centerpiece of Fox News. This story is all about the
money. He's the highest rated host on cable news. A few minutes ago, the numbers came in for Monday. That's his first program since this "New York
Times" story broke. He had a million more viewers than anybody else on Fox yesterday. Another example of how he has that dominant ratings position.
That's why he's such a profit center for the network. That's why this $13 million figure that the "New York Times" reported is all pretty small in
ASHER: They also don't have Megyn Kelly.
STELTER: That's right. There other biggest star Megyn Kelly left a couple of months ago, she of course, had alleged sexual harassment by the big boss
at Fox News, Roger Ailes who resigned last summer. If you think about Ailes as being the first domino to fall, there have been more lawsuits
since then, more complaints since then. Now this O'Reilly story, bringing secret settlements into public view, it is certainly a PR nightmare, I
would say a PR disaster for Fox News. When you see ten advertisers leaving, you do see some financial damage. However, there are lots of
other advertisers, at least for now, willing to take their places. This is more of a PR problem than I think a financial problem for Fox.
ASHER: I'm curious why certain stars are able to withstand certain massive types of controversies and others not. Bill Crosby, for example, he had
built his brand around being a wholesome TV star dad. You know, very wholesome, very good. Bill O'Reilly is a different kind of star, kind of
like Donald Trump, therefore do you think, you know, this will eventually blow over for someone like him?
STELTER: You can totally argue that he's like Donald Trump of cable news. Not just because they been friends for decades, used to go to baseball
games together. You know, Bill O'Reilly has a certain reputation. He might even call himself a blow heart or bloviator on TV. That doesn't mean
he'll ever admit to any of this. He has been very clear, he says these allegations are meritless. But he has a certain reputation both inside Fox
and among his viewers. And I think the key question is, do his viewers care about these allegations? If so, do they care enough to stop watching?
So far, the answer is definitely no. The answer is they're not going to stop watching.
ASHER: Let me get this straight. So, you mean to tell me that Fox News actually renewed Bill O'Reilly's deal, knowing that all of this was going
STELTER: That's probably the most remarkable part of the story. This "New York Times" story has been in the works ever since Ailes resigned last
July, so, about nine months. The "New York Times" working on the story. During that time, Fox goes ahead and renews O'Reilly's contract. Now who
decides that? Ultimately, it's Rupert Murdoch who decides that, the patriarch of 21st Century Fox. His sons, James and Lachlan, will be
involved. So, will the copresidents of Fox News. But ultimately, it's big enough, this is big enough, it's about Rupert Murdoch. At some point you
have to wonder how much willful ignorance is really acceptable in this business at this time. Can the Murdochs keep looking at the other way,
knowing there's these stories about O'Reilly. Knowing there's these terrible allegations but also knowing he's a profit center for the network?
ASHER: Yes, especially since one of the women who came forward says she not suing for money, she just wants to get her story out. Which is all the
STELTER: She says she wants to speak for the women who can't speak, she says.
ASHER: Right. Brian Stelter, we have to leave it there. Thank you so much for being on this story for us.
AOL says all of its assets are to be connected under a whole new brand name. That includes Yahoo "The Huffington Post", and TechCrunch as well.
The new company is called Oath. It's expected to take shape this summer after AOL's parent company, Verizon, completes its purchase of Yahoo.
Earlier the CEO of AOL, Tim Armstrong, explained to me why it's going with a new name.
TIM ARMSTRONG, CEO, AOL: From our standpoint, the brands that we have, Yahoo, AOL, TechCrunch, Huffington Post, and Gadget, are all global brands
and brands that matter to consumers. Together we reach over a billion consumers a month.
[16:25:02] So, from where we are and where we sit, the revival part of Yahoo has really been around the media business and the investment banking
business, you know, the same thing we had at AOL. But really, the consumer business is very strong at Yahoo. Yahoo Is a great brand, AOL is a great
brand and the rest of the brands we have in our portfolio.
So, what were really going to do is get incredibly focused on the best consumer outcome we can and the best customer outcome. And I think
focusing on those two things, being external, keeping our eyes externally will allow us to do that. We're going to have a mixture of the two
executive teams together. I'm very bullish on our long-term outcomes are.
And launching Oath today. Oath is a brand company holding name. We're going to promote Yahoo AOL, and the rest of our brand portfolio to
consumers. Now Oath is a value-driven brand that's going to connect all of our assets together. Very exciting day at the company today, and really
excited for Yahoo to close, which should happen sometime during Q2.
ASHER: Tim, as you guys invest more aggressively in these various brands, including AOL and Yahoo, what's going to change for consumers? So, for
Yahoo users, what are they going to notice that's different?
ARMSTRONG: I think Yahoo consumers will notice the great product work that Yahoo's been doing over the last few years continue. I think when you look
at Yahoo Mail or Yahoo Finance or sports, you've seen them improve their product mix. I think you'll see that continue, and then more importantly,
I think you'll see us make even deeper pushes into investing on the content, on the Yahoo channels, on the AOL channels, and then really
leaning into communications with mail, messaging, and connecting the experience that they have from a mobile phone all the way through OTT.
And, you know, the future, we'll have a lot to announce at the end of Q2. We'll be making bigger product investments in more content investments.
ASHER: In terms of selling more digital ads, then, when you bring all these brands together, how do you hope to sell more digital ads, even
though some of the brands individually have been struggling on their own?
ARMSTRONG: We're in a very good position in the ads business. The brand advertising space that we're pursuing as a company, and we've just launched
our product called Brand Builder Suite. Yahoo has the same type of strategy, which is differentiated from Google and Facebook. So, we'll be
in a very good position to bring a different shade of product to market for advertisers. And as you know, the digital ad business is growing at 15 to
20 percent a year. It's a $100 billion opportunity in the next three or four years in terms of the change. From what we see in the world,
customers want a brand suite brought to market that's differentiated from Google and Facebook. And we're going to pursue that. We believe strongly
and the Yahoo team believes strongly in it. I think we'll be in a great position to differentiate from the competition.
ASHER: Tim, I've good to ask you about the name, we can see it clearly in the background there behind you. I'm trying to put this diplomatically.
There have been a lot of jokes on the internet about the name "Oath." is that in a way for you guys a good thing because it means at least people
are talking about the name?
ARMSTRONG: Look, the bottom line is we probably have $50 million worth of free brand marketing for a B2B name in the last 24 hours. The reality is
the people that generally comment on the brands are people that have never created brands. We have an entire company loaded with people that are
really good at creating brands and driving brands. So, if I had to give the over/under mark on the brand, how it's doing, I think we're doing
incredibly well. The brand was developed internally and in 24 hours we've created a global brand. You'll see it from a B2B standpoint. I want to
say thank you to all the people who commented on it, because that level of engagement is, we don't get that level of engagement in everything we do.
And I think it's really exciting
ASHER: Yes, listen, it's free advertising, people are talking about it. Tim Armstrong, thank you so much for being with us, we have to leave it
there. Thank you.
ARMSTRONG: Thank you.
ASHER: After the break, here on QUEST MEANS BUSINESS, scandal, intrigue, and impassioned debate. It can only be, of course, the French election.
We'll have the latest from Paris on tonight's televised clash. That's next.
[16:30:00] (COMMERCIAL BREAK)
ASHER: Hello, everyone, I'm Zain Asher. Coming up in the next half hour, one of South Africa's biggest unions says it's time for president Jacob
Zuma to go.
And it's debate night in France. We'll be live at a watch party just outside Paris. First, the headlines at this hour.
Activist groups say at least 70 people have been killed by suspected chemical attacks in Syria. They say air strikes in Idlib province released
poisonous gas. The attack is being blamed on the Syrian government, which denies it's responsible.
Three days of mourning are under way after the deadly suicide blast on the St. Petersburg metro. Authorities say the attacker was 22 years old, a
Russian national born in Kazakhstan. No word if he was affiliated with a terrorist group.
A former Obama national security adviser is dismissing accusations that she misused intelligence about Trump associates. Susan Rice said she never
revealed the names of any Trump associates with connections to Russia to the media.
More now on the alleged chemical attack in Syria and the Syrian regime has denied it carried out any gas attack in Idlib province. A short time ago
president Donald Trump described the attack as reprehensible. British prime minister Theresa May has repeated her call for Bashar al Assad to go.
(BEGIN VIDEO CLIP)
THERESA MAY, PRIME MINISTER, BRITAIN: I'm appalled by the reports of a chemical attack allegedly by the Syrian regime. We condemn the use of
chemical weapons in all circumstances. If proven, this will be further evidence of the barbarism of the Syrian regime. There can be no future for
Assad and I call on all of the parties involved to ensure that we have a transition away from Assad.
(END VIDEO CLIP)
ASHER: Our senior international correspondent Arwa Damon is live for me in the studio. We've seen international condemnation before. But the strong
words are not enough. What is it going to take to make sure we don't see these types of chemical attacks in Syria ever again.
ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT: I think that's the big question that's out there. It's almost as if Syria has broken a moral
compass that used to exist and nothing is atrocious enough for those who do have the power to begin putting it back together again to actually take
actions. This is not the first time we've seen a chemical attack in Syria. Remember 2013, an attack left more than a thousand people dead, that
crossed then president Barack Obama's red line. There was no consequences to that attack. No one was held accountable.
And that was to a certain degree a turning point for the war in Syria, because it served to really radicalize what was a revolution, what was a
fairly moderate opposition that was already beginning to, yes, be slightly radicalized, but that was a galvanizing point for extremists to say, you
want democracy like the west? The west is not coming to help you, we will.
[16:35:00] ASHER: In terms of accountability, the Syrian regime said it wasn't us, they're denying it. Will there be or how can there be
accountability this time?
DAMON: I think it's by will of global leaders and those who are really truly willing to put aside their own national interests or at least their
own personal interests for the sake of the Syrian people. Because the population needs accountability for a variety of human rights violations
that are transpiring within the country. This is just one of them. There has been so many killings, so many massacres. At this point, just about
everybody has blood on their hands. If the country is ever going to truly begin to rebuild itself, there needs to be a system in place. But the
bottom line is everyone just needs to stop, stop the bombs.
ASHER: President Assad, you know, a few years ago, 2013, had promised that he was going to give up his chemical weapons arsenal. But a lot of people
are skeptical that he did it, of course. What can be done on that front?
DAMON: That's one of the issues right now. If there is some sort of international investigation, if they are able to definitively say yes, this
was carried out by the Assad regime, yes, it was a poisonous gas, where did that come from, given that he was in fact supposed to have given it up.
And in that case, is there perhaps more action that can be taken, are there more pressure points that can be applied. What is it going to take for the
Russians to at least pull back on a little bit of their backing for the regime? Because they're key in all of this too. What is the U.S. willing
to trade for it? At the end of the day, let's face it, we live in a really ugly world and everything is a trade. And everyone at this stage
especially when it comes to Syria is bartering in human lives.
ASHER: Donald Trump has come out and said this is reprehensible, but obviously, as I said, strong words aren't enough, there has to be action
behind those words, Arwa Damon, thank you to coming to talk about this sad story that we need the world to know about.
To the next big question mark over the future of Europe. The French presidential election. Tonight all 11 candidates have taken to the stage
for the second televised debate. The front runners are Marine Le Pen from the far-right party and the centrist candidate, Macron. The first round of
voting is in less than three weeks. The runoff to choose the winner is on May 7th. Melissa Bell is north of Paris for us. Melissa, the debate is
still going on. Walk us through the highlights.
MELISSA BELL, CNN PARIS CORRESPONDENT: Reporter: it's been going on for two hours, another hour to go. 11 candidates, a huge number. It's the
first time a candidates' debate has ever been held before the first round of voting. It's being very closely watched. We're in a restaurant outside
of Paris, in what the French call those parts of the country that tend to be forgotten by politicians. Unemployment rates here are much higher than
the national average. They have a very specific set of concerns. I'm with Hassan, I've been watching the debate with him.
How do you think it's going so far? [speaking French]
HASSAN (translator): The debate will not change many things for the inhabitants. The most important thing is jobs.
BELL: Hassan believes that Francois Fillon's program he is the embattled Republican candidate is, he believes, the best to address the questions of
high unemployment in these parts of the country. Another key question in places like this, the outskirts of Paris, is that crucial question of
national identity. It's been central to this election campaign partly because the woman who is currently leading the polls, one of the two
candidates currently leading the polls, Marine Le Pen, the far-right candidate, has made it the issue on which she hopes to be elected. Have a
listen about what she said at the outset of the debate about her vision for France and what needed to be done.
(BEGIN VIDEO CLIP)
MARINE LE PEN, FRENCH PRESIDENTIAL CANDIDATE (translator): I consider that this election is really about the civilization stakes. I think that after
five years of right wing, five years of left wing, our country, France, has been really plunged into insecurity, Islamic terrorism, and obviously, a
protest against our deepest possible values and national identity.
(END VIDEO CLIP)
[16:40:00] BELL: That was Marine Le Pen opening tonight's debate. We were listening there to the far-right candidate on that crucial question of
Do you think it matters? [speaking French]
HASSAN (Translator): The question of identity is crucial to coming here. It is about the future of Europe, because when you look at the rise of far-
right parties in Europe, when you look at the rise of Donald Trump in the United States, the question of identity is going to be crucial. It is a
question that is likely to divide. We have to remain united around it in order to keep a sense of national cohesion.
BELL: Thank you so much for talking to us. An idea there of how this debate is being watched from these suburbs, how the wider campaign is being
watched and what people are looking for tonight, Zain.
ASHER: Melissa Bell, doubling up as reporter and translator as well, very impressive, what would we do without you, Melissa Bell? Live for us in
France, thank you so much, we appreciate that.
On the market, Paris closed up 3/10ths of 1 percent. The London FTSE 100 gained just over half of 1 percent.
The U.K. is continuing its pre-Brexit drive to open new doors to trade. Finance minister Phillip Hammond is in India in a bid to forge a closer
partnership. From New Delhi is Ravi Agrawal.
RAVI AGRAWAL, CNN INTERNATIONAL NEW DELHI BUREAU CHIEF: As the U.K. tries to unlock markets ahead of a formal Brexit, one country is seen as having a
vast potential: India. Meetings were held with the Indian finance minister. Listen to what Hammond told the press here.
(BEGIN VIDEO CLIP)
PHILLIP HAMMOND, FINANCE MINISTER, BRITAIN: We have both continued to consolidate past successes and to identify new areas where we can work
together over the next couple of years. Preparing for the point where Britain leaves the European Union and is able to engage with our Indian
colleagues in a deep discussion about a future free trade agreement between the United Kingdom and India.
(END VIDEO CLIP)
AGRAWAL: Hammond's mission comes on the heels of Theresa's first trip outside Europe as prime minister. So, India is important for the U.K. But
there's still a lot to be done. Less than 2 percent of British exports go to India, roughly the same as Sweden. Meanwhile, instead of rising, U.K.-
India trade has fallen in the last five years. Chancellor Hammond will be looking for ways to reverse that trend, especially in a post-before he can
post post-Brexit environment. What does India want in return? There are investments, of course, but there are calls to make it easier for students
to get work visas after completing degrees in the United Kingdom. A lot of tricky issues on the table. Chancellor Hammond's next stop will be Mumbai,
where he's expected to promote British companies in an area that's currently cashless.
ASHER: There are calls for South African president Zuma to step down. We'll be hearing from the biggest trade union in South Africa on this
question, after the break.
[16:45:00] (COMMERCIAL BREAK)
ASHER: Welcome back, everyone. The South African government will have to wait until it knows if a second ratings agency will rate its stocks as
junk. Moody's now says it will not make a decision before it's carried out a review lasting from one to three months. Fitch said in December it
might, might downgrade South Africa, but it has not so far. The country's new finance minister says the government must try harder to help the
economy grow. Here is our Eleni Giokos with more.
ELENI GIOKOS, CNN AFRICA CORRESPONDENT: Reporter: radical transformation. That was the message by the new finance minister. A few days later, South
Africa is plunged into junk status, South Africa is below investment grade. And the minister's message to the press changed significantly today. It
was all about ensuring fiscal prudence going forward and keeping on the same economic path as well, assuring that there will be reforms made to the
state-owned enterprises, and of course at the same time trying to walk a very tightrope of addressing poverty, very high unemployment, and ensuring
the country recovers. Moody's needs to make a decision, it says it will embark on a thorough review. Their announcement will be coming through in
around 30 to 90 days. Fitch also standing by. This spooking the markets, the rand taking a very big knock over the past week. A little bit of
reprieve today with a bit of recovery on the local currency. Political crisis is also playing out in president Jacob Zuma receiving a lot of flak
for asking the former finance minister to step down. Calls for Zuma to resign are increasing within his party. Eleni Giokos, Johannesburg.
ASHER: South Africa's biggest trade union is also calling on Zuma to quit. The Congress of South African Trade Unions is allied to the president's
party, the ANC. Earlier I asked the union spokesperson how he thinks the new finance minister will do.
SIZWE PAMLA, NATIONAL SPOKESMAN, COSATU: It's a very strong institution. As a trade union, we naturally disagree with their policies. We believe
that it is populated by hardliners, people who have really done little for the cause. They've been prudent enough and been fiscally responsible
enough to keep the lights on. We have been unhappy with how they've managed the economy. The South African economy was not creating jobs, so
it's still a concern for us. We still believe there are enough capable individuals inside and even outside, the ANC can deploy a number of people
in that institution who can literally do a lot to turn the economy around.
Just about all of the people who have been in charge of this economy have come from the national coalition. The movement has a wealth of experience,
we have a lot of capable individuals. The current minister himself, he will get all the support from us as labor. Of course, we'll have our
battles. But we are totally behind him. We are really looking forward to a situation where all of us are social partners, including big business, we
can work with them, come on board, because whatever happens in this economy, we're all in it together. So, we have an appreciation of that
[16:20:00] ASHER: President Jacob Zuma, this is not the first-time people have called for his resignation. He's dealt with calls of no confidence in
the past, he's dealt with corruption allegations. I know you're calling for his resignation, but do you think he's going to survive all of this?
PAMLA: Well, for us, we remember that we actually supported the president. We do know the president. We supported him in 2007 at the conference. We
have worked with him. We know that of course he's a political survivor. But also, he is someone who actually joined the ANC when there was nothing
to gain. We are looking for that revolutionary consciousness from the president to realize that even if he were to leave the position, at least
that will leave the ANC intact. But also, we have an economy that is likely to impeach the ANC from power if you don't do something about
poverty in this country.
ASHER: Still to come on QUEST MEANS BUSINESS, forget Geneva. The most expensive diamond in history was just sold at an auction in Hong Kong.
We'll have the details of the pink star, coming up after the break.
ASHER: To all of you viewers at home who might be fans of all things sparkly, I want you to take a look at this, a diamond known as the pink
star. It has sold at auction in Hong Kong for an eye watering $71 million, clocking in at 59.6 carats, it is the most expensive jewel ever, ever to go
under the hammer. All we know is the buyer phoned in a bid. Let's talk more about this with Alexander Breckner who is the head of diamonds at 77
Diamonds Jewelers, thanks for joining us. This is the largest pink diamond ever in human history. Tell us about it. Give a sense of its specs. $71
million, a huge amount.
ALEXANDER BRECKNER, HEAD OF DIAMONDS, 77 DIAMONDS JEWELERS: Hi. So yes, this stone is -- it's unbelievable, honestly. At 77 diamonds, we've seen
the stone, and it's an absolute beauty. The color, you know, the richness of the color, the absolutely vividness in the pink saturation is
unbelievable. It's one of a kind. The sheer size, 59.6 carats, the average U.S. engagement ring diamond size is 1.5, 2 carats. This is 59.6
carats. It puts everything into perspective.
ASHER: What goes into figuring out the price? I know it sold after five minutes of bidding, why does it translate into such a huge amount of money,
BRECKNER: Because it's a one-off stone. There's nothing like it in the world. You can't go down to your local jeweler or the big names and say
excuse me, can I have a look at a 59-carat diamond. It's nonexistent. We don't know if it exists, but the stone is extremely rare because of the
size, because of the saturation, because of its color. Whoever bought it, I mean, I congratulate them. It's an astonishing, astonishing diamond. It
represents extremely good value.
ASHER: I was going to ask you about the new owners. I believe it was bought by Hong Kong Jewelers known as Chow Tai Fook.
BRECKNER: They're extremely well-known in Asia, known as a jewelry conglomerate. They're also at the same time known for jewelry that is not
on the highest end of the price spectrum or possibly quality. They're trying to move up into the upper echelon of the market, such as fine
diamond jewelry, and they're probably trying to compete with big name luxury brands like Cartier, Tiffany, or possibly Graff.
ASHER: This is certainly a step in the right direction. Thank you so much.
That's QUEST MEANS BUSINESS for this evening. I'm Zain Asher in New York. The news continues right here on CNN.