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Quest Means Business
Iran: Two Senior Commanders Killed In Consulate Strike In Syria; Netanyahu: US Pressure Will Not Stop Rafah Operation; Hackers Claim To Have Records On 800K Prisoner; Turkish Voters Deal Electoral Blow To Erdogan's Party; Maryland Gov. Says Temporary Channel Open In Baltimore; Murdaugh Gets 40 Years For Financial Crimes. Aired 4-5p ET
Aired April 01, 2024 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:11]
JULIA CHATTERLEY, CNN INTERNATIONAL HOST: Smiles and cheers there at the New York Stock Exchange, not enough to give the stock markets a lift,
though today, the Dow down six-tenths of one percent, moving further away from that $40,000.00 level as expected, I think given Jay Powell's comments
on Friday, in no rush to cut rates.
Those are the markets and these are the main events.
Iran blames Israel for an airstrike in Damascus, which it says killed two of its military commanders.
California raising the minimum wage to $20.00 an hour for some fast-food workers.
And Trump Media, the company behind Truth Social lost $58 million last year. The company shares just closed down more than 20 percent.
Live from New York, it is Monday, April 1st. I'm Julia Chatterley, in for Richard Quest, and this is QUEST MEANS BUSINESS.
A warm welcome once again to QUEST MEANS BUSINESS.
Iran says two commanders in its Revolutionary Guard were killed in a strike on an Iranian consular building in Syria. They say other members were also
killed. Officials in Iran and Syria are blaming Israel for the attack. You're looking now at that consulate building that suffered serious damage.
Iran's foreign minister called the strike a violation of international law. Its ambassador to Syria says the response will be decisive.
I want to bring in Jim Sciutto now for more on this.
Jim, good to have you with us.
The Israelis initially came out and said they wouldn't comment on foreign media reports, but if indeed this was an Israeli strike, it is a clear
escalation.
What response is expected?
JIM SCIUTTO CNN ANCHOR: Well, I spoke a short time ago to the spokesperson for the IDF, the Israeli Defense
Forces, Rear Admiral Daniel Hagari. I asked him if Israel was responsible for this strike. He said "no comment," but he did say the following
regarding the building that was targeted in this strike. Have a listen and I'll explain on the other side.
(BEGIN VIDEO CLIP)
REAR ADM. DANIEL HAGARI, ISRAEL'S CHIEF MILITARY SPOKESPERSON: .make sure that according to our intelligence, this is no consulate and this is no
embassy. I repeat, this is no consulate and this is no embassy. This is a military building of Quds Forces disguised as a civilian building in
Damascus.
(END VIDEO CLIP)
SCIUTTO: So even Julia there, as he was refusing to comment on the strike, he was making it seem to some degree a justification for a military strike
on that building by describing it not as a consulate or diplomatic facility, but as a military facility.
And we should note that with previous decapitation strikes like this, or assassination strikes that we've seen in the past carried out by Israel or
believed to be carried out by Israel, Israel would rarely comment on them to confirm them. So that was at least the public comment from the IDF
spokesperson there.
CHATTERLEY: And certainly, Jim, there are parallels there to some of the operations that they've carried out in Gaza where they pinpoint
specifically that they have been going after military targets, perhaps shielded by civilians; hospitals are a great example in Gaza.
You also spoke to him about the possibility of the operation much- anticipated, of course, in Rafah, what did he have to say about that?
SCIUTTO: It appears that operation is going forward. I mean, he said as much in so many words, he did say to me that we need to make sure that the
military framework of Hamas is dismantled. Though he noted, in his words, there will be conditions as he described them to the operations
specifically that the population, he said, the innocent Palestinians well be safely evacuated prior to any military operation inside Rafah.
As you know, there has been some quite public disagreement between US officials and Israeli officials about the progress of the war in Gaza,
specific to this planned operation inside Rafah with some public US opposition to a military incursion into Rafah.
In fact, US and Israeli officials met just a short time ago, a virtual meeting in which they were discussing this very operation, but it appears
that the Israeli decision will be to move forward, but to have some sort of an evacuation in advance.
We've seen this prior to other areas before Israeli operations went underway, but we've also seen that not all of those civilians get out prior
either by choice or because it is not possible.
So we will see if those conditions as described by Hagari, the IDF spokesperson are met prior to any military operations going forward.
CHATTERLEY: Certainly, the question is how? How will that be achieved if indeed?
SCIUTTO: Yes.
CHATTERLEY: Jim, great to have you. Thank you.
SCIUTTO: Thank you.
[16:05:03]
CHATTERLEY: Jim Sciutto there.
Now, Palestinian officials say the Al-Shifa Hospital in Gaza has been destroyed. The IDF have withdrawn from the site following a 14-day siege.
Israel says, it detained 900 suspected militants during precise and deadly "operation." Eyewitnesses describe the aftermath of the raid as a horror
movie.
In Israel, meanwhile, protesters have taken to the streets for the second straight day. They are calling for the removal of Prime Minister Benjamin
Netanyahu.
Melissa Bell is in Jerusalem where those protesters are camped out.
Melissa, some of those individuals were there at the weekend, not moving anywhere until the politicians are expected to go on recess, I believe on
Wednesday.
This is more reminiscent of some of the protests that we saw prior to October the 7th and these protests, are saying Benjamin Netanyahu, you've
had your time and you need to leave.
MELISSA BELL, CNN CORRESPONDENT: That's right, Julia, in fact, a number of the petitioners we spoke to today raised exactly that point. They said,
look, we were on the streets before October 7th, and now we are back.
Their fundamental opposition to the government of Benjamin Netanyahu for many of them remains, what you saw after October 7, of course, was a
tremendous amount of national unity, that appears to be fracturing not just in the face, Julia, of the fate of the more than 130 hostages who remain in
the hands of Hamas, and you will see here on the tents, a lot of their pictures are laid out. They very much been have been at the heart of the
protests that we've seen here before.
But it isn't just about the fact that they believe the government has failed to bring their own home, it is also about the way this war has waged
and a lot of the pictures that are coming out from Gaza.
You heard, sort of a very diverse group of Israelis here protesting, longstanding opponents of Benjamin Netanyahu and people who are foursquare
behind this administration when it began, and are much less so now that we are nearly six months in.
We've also had the opportunity, Julia, of meeting one young man, one of only a handful of young men that has taken -- had the courage to stand up
against what should be his mandatory military service in the name of what he believes is an important stand to take for Israelis against this war.
(BEGIN VIDEOTAPE)
BELL (voice over): In Israel, too, there are those who object to their government's handling of the war in Gaza. among them, Ben Arad, who as an
18-year-old, is due to enlist this week for his mandatory military service.
Instead, he tells the crowd, he is choosing to go to jail.
We caught up with him in Tel Aviv on his very last day of freedom.
BEN ARAD, ISRAEL REFUSENIK: I don't refuse because I am afraid of being hurt or killed in military action.
I have a very, very deep disgust of the things that I am seeing happening.
BELL (voice over): Things, he says that Israeli media doesn't dwell on that he seeks out on international networks and online.
ARAD: I think something that really broke my heart was the Flour Massacre, so seeing people trample each other to get food. I mean, you just can't
deny at that point that there is a famine going on and people are hungry.
BELL (voice over): So on Monday, Ben will hand himself in becoming one of only a handful of so-called refuseniks to make their decisions public since
the war began.
In a country where military service marks the start of every Israelis grown-up life, aside from those exempt on religious grounds, the war has
made avoiding it a political act.
ARAD: I've been called a traitor. I've been told that I need to be deported or I've been asked why I don't just move. I mean, but it is not such
terrible stuff. I haven't gotten that yet.
Like, I will get that when I go to jail.
BELL (voice over): Yet ben says he is determined to give up his freedom in order to remain free of a war that he simply doesn't believe in.
(END VIDEOTAPE)
BELL (on camera): I think what was interesting in some of the stuff that Ben told us, Julia, but we've also heard from protesters here is that they
feel that this war is not only unjust to the Palestinians, and they point to the more than 30,000 civilians who have died or the 30,000 Palestinians
who have died so far in this war, but also that not only has it failed to bring home the hostages, which was after all was its stated aim, but that
it is damaging to the long-term security interests of Israel.
And I think that's something that we've heard repeated to us over and over again today -- Julia.
CHATTERLEY: Certainly, and Melissa, for the families of the hostages that are, to your point saying, look, we should still be focused on getting the
hostages back perhaps rather than the broader ambition that the Israelis are talking about here, which is of course eliminating Hamas. What are they
saying at this moment?
[16:10:04]
And I guess, are they voicing what they would prefer as an alternative option at this moment?
BELL: Very, very much so. A lot of family members were out here today. They feel that the idea of the way this war has been waged has not been the best
way of bringing about the return of their loved ones.
They fear that nearly six months on, they might not see them again, at all, now of course, even now, those hostage negotiations, the talks, the
indirect talks in Doha and Cairo have picked up again, but the families here believe that the government's focus on destroying Hamas at any cost,
apparently, hasn't been done in the name of bringing home their loved ones and it certainly hasn't achieved it.
So far now, in his defense, Benjamin Netanyahu as these protests kicked off yesterday, said, look, it is my policies and the way that this has been
carried out, that's allowed half the hostages to come home, those who gathered here today, and it was a broad spectrum of Israeli society and the
Israeli political spectrum, they do not agree and believe that it is time for him to go and urgently -- Julia.
CHATTERLEY: Yes. No easy answers to this situation.
Melissa Bell, thank you so much for that report.
Now, a group of international hackers telling CNN, they are taking revenge against the Kremlin for the death of Alexei Navalny. They posted this
message on a website linked to the Russian prison system.
It is a photo of the late opposition leader and his wife along, with the message, "Long live, Alexei Navalny." The hackers say they've obtained
information on hundreds of thousands of prisoners and their families, and that includes people held at the penal colony where Navalny died.
The hackers say they are sharing that data, hoping someone will give them information about what happened to Navalny.
Sean Lyngaas is in Washington for us and reporting on this.
Sean, the price apparently or the payment perhaps for that information was cheaper online items because they also hacked the online store for
individuals to buy cheaper products, I believe as well.
Has CNN managed to verify any of the names that were captured in this hack and ultimately, where did the hack originate?
SEAN LYNGAAS, CNN CYBERSECURITY REPORTER: Yes, Julia good to be with you and we were able to verify multiple names that appear in the stolen data
set to currently incarcerated people in Russian prisons.
So that was a good sign of the data matching up and the hack, it is really opportunistic the way it was described to me is a group of hackers who are
anti-Kremlin, are looking to take advantage of the current situation of international sentiment against Russia's war or on Ukraine and then they
said they had access to this network for about a year.
But when Navalny died, they decided to act on that and exfiltrate or steal the data, take it out of the network, compile it and make it accessible to
journalists like myself. So it was both a long time coming and also a quick move.
They said we want to make in a statement, right now, given the international outrage over the Russian opposition leader's death in an
arctic penal colony -- Julia.
CHATTERLEY: Yes, I mean, this kind of, we can call it hacktivism and you do, hacking and activism has been rife since the war in Ukraine began for
the last two years, we've seen it in all sorts of spheres.
This is a stunning breach of security, again, for the Russians. How is -- and are they handling this? Do we expect security to be tightened as a
result?
LYNGAAS: Well, I think it will be. Certainly, the website we observed over a series of days, the website was under maintenance at one point and the
state-owned company that runs the online prison shop where relatives of prisoners can buy food for those that are in prison, they confirm that
there were there was a "technical failure" around the same time that the hackers claimed to have access.
So there was clearly some recognition that there was a problem. They did not respond to CNN's repeated requests for comment in Russian, nor did the
Russian federal penitentiary system, but this is something that doesn't go unnoticed.
So you can bet that they're going to be trying to lock their digital doors and look better in the future -- Julia.
CHATTERLEY: Yes, $0.01 noodles and canned beef at the online store for inmates instead of the usual price of around $1.00, so I was going to ask
you actually if I believe it is a stateowned and run business. I was going to ask you if they honored those prices, I think we will have to keep
guessing.
LYNGAAS: Right.
CHATTERLEY: Sean, good to have you with this. Sean Lyngaas there.
Okay, coming up on QUEST MEANS BUSINESS, California increasing its minimum wage for some fast food workers. We will talk about what that could mean
for people living in one of the most expensive states in the US.
Stay with us.
(COMMERCIAL BREAK)
[16:17:34]
CHATTERLEY: Breaking news now from Atlanta, Georgia where a driver is under arrest after ramming an SUV into the gate of the FBI field office. It
happened a little after noon.
Officials say the suspect got out of the car after hitting the gate and was then arrested.
Ryan Young is on the scene in Atlanta.
Ryan, we are showing our viewers the pictures here. It doesn't look like he got very far and he was lucky actually to walk away from this. What more do
we know about what happened and why?
CHATTERLEY: Yes, absolutely. Those are very strong barriers that are on the other side of the gate. Let me show you right now, that gate is just right
over there. You can see the barrier is actually still up. That car just being towed away in the last 15 minutes or so.
From what we are told, just after 12;30, that man tried to follow someone in to the gate system back there and got actually stuck when that ramp
system popped up, that rust colored car got stuck right behind it. You can see the video and just how strong that barrier is.
Now, we are told, the man has been taken to the hospital for evaluation. We are not sure if he suffered any injuries, but you can see the airbag
deployed. The bomb squad had surrounded the car.
They went through the car to see if there were any weapons on the inside of that SUV. They found no weapons on the inside. They found no weapons on the
suspect.
Now, the FBI clearly knows who the man is, but right now, they are not sharing his name or any information about him. So, we are not sure if there
is a long time online beef or did he make any threats, but we do know he went to that gate right there, tried to bust through with that little
orange SUV and got stuck by what they call the ramp system.
That ramp system can actually sustain itself against a much larger vehicle. So once he hit that, I believe his airbags deployed and they went from
there.
Two other FBI agents were in the area and they were able to surround him and get him custody. At this point, they are not sharing if he made any
statements on the way out, but once again, he was not armed. No FBI agents were hurt. But this obviously was an alarming situation in the suburbs of
Atlanta, with a man trying to ram his car into that fence at the FBI field office.
CHATTERLEY: And Ryan, very quickly, because you mentioned the bomb squad. Obviously, they are going to assess the vehicle to ensure that weren't any
kind of explosives in the vehicle. I assume that's what happened in the fact that they cleared it. There was nothing else in the vehicle it seems.
RYAN YOUNG, CNN SENIOR NATIONAL CORRESPONDENT: And that's exactly right. So you saw both those heavy armored personnel vehicles that pulled up one on
each side and before any investigators actually approached the car, they did that thorough sweep just to make sure no personnel would get injured in
here.
This was an office park community, so there are many office buildings throughout this area. There is even an apartment complex, which is a
stone's throw away from here. So you understand why they wanted to take extra precautions.
[16:20:05]
This is an area that's right off the highway. So, of course they wanted to make sure all the folks who live around here were safe as well, but still,
a situation where people are kind of scratching their heads because obviously, he was not able to get very far. But now, they've got to figure
out through this investigations, do these threats tie to anything else, and maybe just someone upset at the FBI or someone trying to make some sort of
political statement, not sure yet, until they figure out exactly what's going on.
CHATTERLEY: Yes, but those defense mechanisms working incredibly well as those images show.
Ryan, great to have you on the scene there and if we get any further updates, we will obviously come back to you. Thank you, sir.
CHATTERLEY: Now, half-a-million fast food workers in California are getting a pay bump starting today. The state's minimum wage for restaurants like
McDonald's, Subway and Starbucks is jumping to $20.00 an hour.
The law covers chains with more than 60 locations nationwide.
A $16.00 minimum wage still applies for other industries. Fast-food workers are of course, celebrating the raise, but small restaurants worry they
won't be able to compete for workers now on pay.
Natasha Chen is in Los Angeles.
Natasha, just talk us through this law change and specifically why certain fast-food workers were chosen here and perhaps not others?
NATASHA CHEN, CNN NATIONAL CORRESPONDENT: Julia, this was a years-long effort by fast-food workers, specifically to develop a council to oversee
their pay, their working conditions within the state of California.
So this is a first of its kind in the US to have such an industry specific council, and this law, this is -- there have been a couple of iterations of
this, but the law, as it currently stands, set the minimum wage now for this group of workers at $20.00 an hour, as you mentioned along with having
this council with different representatives from both the restaurant side and the worker side to discuss some of these safety issues, wage theft et
cetera.
This council can also choose to raise this wage annually in pace with inflation for the rest of the decade. So this is a very -- as one
franchisee told me, this is as the great American experiment.
As far as fast food workers go, a lot of them told me today that this is a huge deal for them, as you can imagine, the cost of living in California,
especially here in Los Angeles extremely high. And so they are just trying to make a way to live here, to afford to live here.
I want to show you little bits of interviews I did with one franchisee who owns six El Pollo Loco locations, as well as a worker, a McDonald's
cashier, who lives in a one-bedroom apartment with her two parents.
The franchisee is going to talk about how really this is not ideal given and that it addresses just one industry, like you mentioned, and not
workers across the board.
Here they are.
(BEGIN VIDEO CLIP)
MICHAELA MENDELSOHN, EL POLLOC LOCO FRANCHISEE: So now when you are singling out just fast food and you're going up so quickly, you're putting
people in a position of desperation. How do we survive?
The only way to survive this, the only -- you know, you can look to save money everywhere you can, but the two main ways are raising prices and
reducing labor.
JAYLENE LOUBET, MCDONALD'S WORKER: It is definitely a relief when it comes to things like this, like paying rent and bills. The majority or basically
the whole amount of my mom's check goes to rent, and that leaves me to bills and put food on the table.
(END VIDEO CLIP)
CHEN: Her father is working in construction or was working in construction until he had an injury, so they suddenly lost his income.
She gives that as an example of something unexpected that low-income workers like themselves, they don't really have that cushion, that sense of
security and that getting $20.00 an hour starting today could help edge in the direction of feeling more secure -- Julia.
CHATTERLEY: Yes, headed in the right direction, at least for some.
Natasha Chen, thank you so much for that report.
Now, a higher minimum wage, maybe something of a double-edged sword. California is one of the most expensive places to live in the United
states. People there need to make $53,000.00 a year on average, just to cover their expenses. That's according to online lender, SoFi.
Someone working 40 hours a week would need to earn $25.00 an hour after taxes to afford that, and some economists worry a higher minimum wage
though would only lead to one, rising prices, pressure on small businesses, and ultimately lower employment.
Michael Reich is an Economics Professor at the University of California in Berkeley and he joins us now.
Great to have you on the show. So the threat some firms and franchisees would say exactly that, I think which is we are going to hire less, we are
going to reduce the hours for the ones that we are employing and we will ultimately have to raise prices for consumers.
Highly alarmist. What is the actual response that we tend to see and you expect?
[16:25:00]
MICHAEL REICH, ECONOMICS PROFESSOR, UNIVERSITY OF CALIFORNIA, BERKELEY: Right. Well, employers in the United States have always howled about an
upcoming minimum wage increase, so this is nothing new. It is only just a more dramatic increase because it is on Monday, excuse me, and it covers so
many workers.
But I don't think it is out of range with previous minimum age increases and you have to keep in mind that the minimum wage for all workers in
California is already $16.00. In many parts of the state, like Los Angeles, it is $17.00, and the San Francisco Bay, it is over $18.00 already. And
many workers in the industry are getting paid more than the current minimum, the old minimum wage.
So the increase to $20.00 is not a 25 percent increase in labor costs. It is more like a five percent increase in labor costs and labor costs are
only about a third of overall costs. So when you think about what the operating cost pressure is on the industry, it is one-third of five percent
which is less than two percent.
That means $5.00 hamburger would cause a dime more. That $3.00 taco would cost a nickel more. That's easily absorbable by consumers. They're not
going to buy fewer hamburgers or tacos because of those differences.
But what individual franchisees get is that this is a cost increase for all their competitors, not just for them and so what usually happens with these
minimum age increases is there is are small price increases.
I don't expect to see a decline in employment.
CHATTERLEY: But you make a great point there, which is ordinarily when you see a blanket raise or rise in the minimum wage, it applies to everybody,
so it applies to your competitors, too. But what is sort of puzzling to me about this is why fast-food workers deserve support, and I mean more than
other low income or low wage workers? And also why smaller operators aren't included perhaps in this as well or those that work for smaller operators?
I understand the challenges for the business.
It is sort of to me, creating all sorts of distortions, which could have an impact perhaps on those trying to hire in other places?
REICH: Well, we live in distortions for a long time, large franchises have kept wages down for decades and that is only starting to change in the last
decade.
California has actually increased the statewide minimum wage by a hundred percent and doubled it in 2013 to 2024. So there are wage increases in
place for other workers, not just fast food.
Fast food does, though have the lowest wage of any major industry and it has quite a few problems with scheduling of the workers each week and also
with workplace injuries and illnesses.
And of course, part of the answer to that is, it is not just a matter who deserves to have a higher minimum wage. It is also how and when best
organized -- having the labor best organized and achieved this in Sacramento with the governor, and it may be that the $20.00 will pass on,
will be spread to other areas. This is just the beginning.
CHATTERLEY: Yes. When I think about McDonald's and Starbucks, which is obviously some of the names that I mentioned, I think about the ability in
deep pockets to promote technologies like automation.
Do you think steps like this will accelerate automation?
REICH: Well, we've looked at that in a number of different studies and economists have looked at that and we find automation taking place, whether
or not there is a minimum wage increase.
So if you have -- if you now can order online or at a kiosk and so on, the companies put that technology and practice wherever they are. It is just --
it is really a cost -- it is a cost saving item, but it is one that goes on whether or not there is a minimum wage.
I think the decline in the cost of technology is much, much greater than the increase in the cost of labor here, so those technological changes are
going to take place anyway.
Where they don't take place is in preparation of food, it turned out to be much harder to automate than on the business builds and order side.
CHATTERLEY: That's such an important point, the decline in the cost of technology far more significant than the rise in the cost of labor.
REICH: Right.
CHATTERLEY: Michael, fantastic to chat with you, sir. Thank you so much.
Okay, now, this just into CNN, the Manhattan District Attorney's Office is trying to get the judge overseeing Donald Trump's hush money trial to
expand his gag order. Prosecutors are hoping to stop the former president from attacking family members of people involved in the case.
Last week, Trump attacked the judge, as well as his daughter online. Trump has argued he has a First Amendment right to defend himself and engage in
campaign speech.
Okay. coming up for us. voters in Turkey have sent a resounding message to President Erdogan. We will have a report from Istanbul on the opposition's
big gains in local elections and we will look at how Turkey's economic troubles may have influenced that result.
(COMMERCIAL BREAK)
[16:34:08]
CHATTERLEY: Hello, I'm Julia Chatterley. There's more QUEST MEANS BUSINESS in a moment when the Turkish president faces major setbacks in local
elections as the country's economy struggles. And stock in Donald Trump's social media company tumbles as it reveals steep losses. Before that the
headlines this hour.
A temporary shipping channel has been created to reopen the Port of Baltimore. Maryland Governor Wes Moore say ships will be allowed to sail
past a container ship that brought down the Francis Scott Key Bridge. He says officials are also working to open a separate channel on the other
side of the ship.
Convicted murderer Alex Murdaugh was sentenced today to 40 years in federal prison for financial crimes. The former South Carolina attorney is already
serving two life sentences for killing his wife and adult son. Murdaugh pleaded guilty to the Financial Crimes blaming them on an addiction to
opioids.
[16:35:06]
AT&T says a data leak is exposed the records of 73 million former and current customers. The company says the data was posted on the dark web and
includes personal information like social security numbers. AT&T said it had reached out to customers and it's trying to find out how the
information was leaked.
And Turkey's president Recep Tayyip Erdogan sees his party will correct its mistakes after a resounding defeat Sunday in local elections. The country's
main opposition party claimed victories in cities and towns throughout the nation. It's the first time Erdogan's Justice and Development Party has
lost the popular vote since it started running for elections back in 2002. Scott McLean joins us now from Istanbul with the very latest.
This is being seen as a spectacular upset and a stinging rebuke I think of Erdogan and his policies. The question is, what does he do about it? Just
walk us through this result.
SCOTT MCLEAN, CNN CORRESPONDENT: Yes. It wasn't an unusual position, Julia, for President Recep Tayyip Erdogan to be in yesterday. He is used to giving
victory speeches, he is not used to giving concessions speeches. But when he did speak to his supporters in Ankara, he said that look, this was the
will of the people. He will respect it. And he was pretty reflective as to his own role and his own party's role and how they might go about fixing
this.
They said that they would certainly look in the mirror and try to do something about it. But Erdogan was also running an environment where the
economy was top of mind for people. Obviously much of the West has been able to get inflation under control, Turkey has not. Inflation remains sky
high. You have interest rates that if it 50 percent, five-zero. And obviously the opposition was able to take advantage.
They won places where they were expected to like Ankara and Izmir and they won places that they weren't expected to win. Like one example is Adiyaman,
a very religious conservative place in the South that the AK party, Erdogan's party had won with more than 50 percent of the vote just five
years earlier. They also -- the opposition also won right here in Istanbul by an 11-point margin. Something that very few pollsters could have
possibly predicted.
And the man who won the reelection as mayor is Ekrem Imamoglu, one of Erdogan's most formidable opposition opponents. That is a view that has
been widely held and certainly last night was confirmed by this result.
(BEGIN VIDEOTAPE)
MCLEAN (voice-over): If there were any doubts about this man's ability to win, they were put to bed last night. Ekrem Imamoglu, the mayor of Istanbul
from the secular opposition CHP Party was reelected by a comfortable 11- point margin. A gap few polls could have predicted.
Hello, Istanbul, he says. 16 million Istanbul lights have won. Congratulations. There are no losers in this election. But Imamoglu's win
is a huge blow to President Recep Tayyip Erdogan's religious conservative AK Party, which not only failed to win back Istanbul, but even lost
Erdogan's home district.
Imamoglu is widely seen as one of the few perhaps the only opposition figures strong enough to beat Erdogan in a presidential race. Originally
from the Black Sea city of Trabzon, Imamoglu moved to Istanbul for university, then worked with his family's
construction company. Two decades later, in 2014 he was leading a small district of Istanbul, then five years later in 2019 won the race for city
mayor by a razor thin margin.
After a court overturn the results in order to another vote, Imamoglu won the second time around by an even wider gap. He later face charges of
insulting public officials stemming from the aftermath of the bitterly contested race. He's been convicted and sentenced to more than two years
jail time on the charges that many believe are politically motivated. Erdogan has denied any link. The appeals process is still winding its way
through the courts.
AHMET KASIM HAN, DEPUTY CHAIRMAN, TURKISH DEMOCRACY FOUNDATION: Turkish elected has a tendency to cite with the one who is being victimized and
probably Imamoglu would be regarded as such.
MCLEAN (voice-over): Erdogan has been in power for two decades but now perhaps the biggest threat to his rule has just gotten stronger.
(END VIDEOTAPE)
CHATTERLEY: Scott fascinating package and discussion about what comes next. I mean, he's safe. He hasn't got to worry about another election until
2028. Assuming he can -- he can hang on that long, he's not forced into a sort of distant situation where he has to hold elections early.
[16:40:01]
He's got four years to try and turn this around but what the hope was I think from his perspective was trying to adjust the Constitution to allow
him to run for another term. That looks far more difficult in light of these election results.
MCLEAN: Yes. So there are, you know, plenty of skeptics who think that President Erdogan would not likely try to change the constitution to
eliminate term limits, allowing him to run but he does want to change the constitution period. But that may be something that could end up being
shelved, Julia, because it seems like given the results and given the fact that President Erdogan would need to hold the referendum in order to change
it, he would need a majority of M.P.s or a bigger majority of M.P.s, something he doesn't have.
That all seems unlikely at this point to actually move forward. Surely, the opposition will be emboldened to try to stand against that. You also have a
much easier route for President Erdogan to make the case that he can run one more time because right now, the Constitution bars him from running for
election again. But there is a loophole if parliament were to call for early elections as a technicality, Erdogan could probably run one more
time.
And it's unlikely that the institutions or the courts in Turkey would challenge him on that. But given these results, obviously President Erdogan
if he does intend to run again, has some work to do to get himself back in favor with voters. He needs to do something about the economy and he needs
to do it quickly or at least over the next four years. One other thing that's worth mentioning, Julia, is those criminal charges against Ekrem
Imamoglu.
I think a lot of people will be watching those very closely to see what happens. And it's also worth noting that there are parallels to be drawn
between the treatment of Ekrem Imamoglu, charges against him that are widely considered to be politically motivated. And a similar situation that
happened to the mayor of Istanbul back in the 1990s who at the time was Recep Tayyip Erdogan jailed for four months for inciting religious hatred
for reading from a poem.
Obviously, voters saw him as a victim there and years later elected him as the prime minister, and now the president. And it's hard to not see the
parallels with Imamoglu case now.
CHATTERLEY: Certainly not. Scott, great to have your perspective there. And it's going to be an interesting four years. Scott McLean there in Istanbul
for us. Thank you.
Now Turkey's economic crisis undoubtedly played a big role in this election outcome inflation there, as he was saying has skyrocketed to 67 percent at
least according to official data. Unofficial estimates suggest it could actually be more than 100 percent. The Turkish Lira has lost so much value.
Many Turks are putting what savings they have into things like gold stocks or foreign currencies.
That's despite the Turkish central bank hiking interest rates to a stunning 50 percent. So where do things go from here? Joining us now to talk about
it, Selva Demiralp. She's professor of economics at Koc University in Istanbul. Professor Demiralp, fantastic to have you on the show. Do you see
this as some kind of delayed reaction perhaps to the economic challenge? Because there will be those that cast their minds back to May of 2023. Was
it government giveaways that cushioned people and didn't see them sort of vote the way they chose to in the past few days?
SELVA DEMIRALP, PROFESSOR OF ECONOMICS, KOC UNIVERSITY: Indeed. That's exactly how I view the election results and the defeat of AK Party. Because
the unsustainable policies that we had followed in the period before the general elections both caused economic problems. But at the same time, they
masked the economic problems through the minimum wage adjustments, or the subsidies that were provided or the low interest rate environment that
allowed the businesses to borrow at negative real interest rates.
But once the unsustainable became unsustainable and there was this inevitable U-turn to orthodox policies after the general elections, the
bare reality of the economic crisis became easier to observe for the average voter. And at that point, what happened was, as you said, interest
rates increased to 50 percent. From 8.5 to 50 percent in a matter of 10 months. And at the same time, the subsidies have stopped.
And people started to feel the tightening impact and the pinch of the reality. And as a result, I think this vote was more of a protest of the
people to note that they are not happy with the economic circumstances.
CHATTERLEY: Yes. And it was bad then to your point and he did promise to do something to tackle it and it's become excruciating in the what -- nine
months since. He said it marks a turning point, Erdogan, he also said mistakes will be corrected. What's the likely cost then that he takes does
he throw his weight behind his current economics team because tough decisions have to be made to your point already? Interest rates have spite.
[16:45:00]
They perhaps need to go even higher to enable the currency to be supported and for people to have confidence that the direction of the economy is
going to improve, if not get worse in the short term.
DEMIRALP: Right. So, if the election results were more in AK party's favor, I would have less doubts about the sustainability of the existing policies
because the election results or local election results 10 months down the road would be more of a confirmation and the support for the existing
policies. But that's not the case. It's a major defeat for AK Party. So, I still think that the government is going to pursue the turn to orthodox
policies simply because going back to the unorthodox policies would have disastrous consequences for the economy.
I mean, I think AK Party is so that inevitable outcome, and that's why they had to turn to a traditional disinflation program. However, in order to
calm down the angry voters, I think they might relax the intensity of the program. And at the moment, the Central Bank's goal is to lower the six to
seven percent official inflation down to 36 percent. But in order to do that, the growth rate has to go down to 1.5 percent.
So, I think a midway could be to let the growth rate go up a bit to say three percent. And as a result, inflation rate might go up to 50 percent or
so. But like our research at Koc University is recent research is a household inflation expectation survey. And what we observe is that people
have very little belief that the 36 percent is going to be achieved by the end of the year. So, the confidence in the program is at the moment rather
weak, which is also affecting the capital inflows to the country.
When you look at the foreign capital inflows it's very big compared to the extent of tightening. So, one option might be to stick to the program kind
of like the IMF austerity program. But also, if you're going to pay the price, why not go to the IMF? So given that Erdogan said that we are going
to reconsider our mistakes and in the past, we know that he was quite hesitant towards IMF, I think that might become an option moving forward.
CHATTERLEY: Yes. For lack of other options, quite frankly, given the political result and the pain in the country. Professor, fantastic to chat
to you. Thank you so much for your wisdom. Great to have you on.
Now, the Trump Media and Technology Group disclosed a $58 million loss last year. We'll discuss the company's finances and how investors are reacting
to the company's annual report. I'll give you a clue not well.
(COMMERCIAL BREAK)
[16:50:32]
CHATTERLEY: Welcome back. Trump Media and Technology Group tumbling about 21 percent on Monday. That's after disclosing. It lost $58 million in 2023.
This sharp turn, comes amid Truth Social's parent company generating about $50 million in profits in 2022. Accountants have warned that these losses,
"raise substantial doubt about the company's ability to stay in business." That despite its recent decline. Trump media is still valued at as much as
$11 billion.
I think that's about a $1 billion hit to his net wealth, though. I was just trying to do the math. Anyway, Matt Egan has more.
MATT EGAN, CNN REPORTER: Julia we knew that this stock will be volatile. But wow, this has already been quite the roller coaster ride. Before today
Trump media had been catapulted higher purely by momentum and hype. Now it is facing a bit of a reality check. Trump media disclosing lost $50 million
in 2023 generated very little revenue just over $4 million. Some context, Twitter generated more than 100 times as much revenue in 2013, the year it
went public.
This is why some experts say the multibillion-dollar valuation on Trump media defies logic. One professor told me that this stock is a bubble.
Another called it a meme stock. The Trump media's losses are so severe that accountants warn the reading raises "substantial doubt about its ability to
continue as a going concern." That's Wall Street code for we might not be able to survive. We should note though that that warning, that likely
predated last week's blockbuster merger.
A deal that allowed Trump media to receive an influx of $300 million in cash. Matthew Kennedy from Renaissance Capital, he told me that this cash
infusion that should remove the going concern risk here. Still though Trump media struggles they've continued in recent months. Monthly active us users
on iOS and android they plunged 51 percent year over year in February to 494,000. That's well shy of the 75 million users on X, the company formerly
known as Twitter.
Even Threads has 10 times as many users as Truth Social. Julia, investors should fasten their seat belts because the wild ride here, it's likely just
getting started.
CHATTERLEY: No comment. All right. Coming up for us. Artificial intelligence giant OpenAI has a new tool that can mimic human voices.
Technology like it already exists and is a major concern when it comes to misinformation. That comes and the details next.
(COMMERCIAL BREAK)
[16:55:44]
CHATTERLEY: Welcome back. OpenAI working on a tool called Voice Engine that mimics human voices. It contains a sample of someone's voice into other
phrases and languages. The A.I. giant trails behind other companies that have already made similar tools. OpenAI says it's taking a
"cautious and informed approach due to the potential for misuse." OpenAI is still deciding whether and how to release this technology at scale. So far,
it's only been made available to a small group of people.
Clare Duffy is in New York. Clare, please, not going for general release in a year where half the world's going to elections.
CLARE DUFFY, CNN BUSINESS WRITER: Yes, Julia, it does sound like OpenAI is thinking really, you know, thinking deeply about just how powerful and
potentially harmful this technology could be. This voice engine tool can create an A.I. voice replica of someone's voice from just a 15-second audio
clip of that real human speaking. And then the tool can say anything in the replica voice that a user will type into the tool.
Now, I want to give play for you an example of this tool to give you a sense of just how realistic sounding this A.I.-generated voice sounds. The
first clip that you'll hear is the real human speaking. This is the clip that was used to train the tool. Let's listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Friendship is a universal treasure. It brings joy, support and laughter into our lives no matter where we are in the world.
(END VIDEO CLIP)
DUFFY: So, next what you're going to hear is the A.I.-generated voice replica. It's saying the same thing but this time in German instead of
English. Let's listen.
(BEGIN VIDEO CLIP)
(END VIDEO CLIP)
DUFFY: So, as you can hear there, if you didn't know better, it might be tricky to tell which of those is the real human and which is A.I. And
therein lies the concerns about this kind of technology. OpenAI says the voice engine could be used for accessibility purposes or for translation as
you heard there, but experts worried that it could also be used for misinformation for scams and for other abuses.
As you said, OpenAI says that for now the tool is only available to a small group of testers and that it's going to use information from those testers
to decide whether and if to release this more broadly to the public. But the company did also say that the public needs to become aware of this kind
of technology as it becomes more widely available from both OpenAI and other companies that are doing A.I. voice generation, Julia.
CHATTERLEY: Yes. What blew my mind was it only takes a 15-second sample of someone speaking to be able to generate that. Incredibly powerful. Tough to
tell with the translation but dangerous in the wrong hands. Clare Duffy, thank you.
Coming up, we'll have the final numbers from Wall Street right after this.
(COMMERCIAL BREAK)
[17:00:18]
CHATTERLEY: The Dow down 240 points. Six-tenths of one percent to start off the second quarter. It comes as government bond yields rise. That's
pressure and that this QUEST MEANS BUSINESS. I'm Julia Chatterley. "THE LEAD" with Jake Tapper starts now.
END
