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Resigns Over Panama Papers Leak; First Results in Wisconsin Just Hours
Away; Obama Praises New Tax Rules; Pope Francis to Visit Lesbos; Twitter to
Live Stream 10 NFL Football Games; Brazil Plagued By Overlapping Crises;
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$250 Million Investment in Middle East; Women In the World Summit Comes to
New York; Tina Brown Says the Tone of Republican Race is Misogynistic; Rare
Blue diamond Sells for $32 Million. Aired 4-5p ET - Part 1>
football games. Twitter to pay $10 million for these rights. Brazil is
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worst recession in a generation on top of a crushing political scandal
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serious health problem. Uber invests in Middle East and announces its
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to be an important part of their economic story. Women In the World Summit
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Elections; Transportation, Women >
[16:00:00]
MAGGIE LAKE, HOST: The legendary journalist, Tina Brown, rings the closing bell in New York, you'll hear my interview with her later this hour.
It's Tuesday, the 5th of April. Tonight, the political power of the Panama Papers.
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LAKE: Iceland's Prime Minister is the first leader to fall. Donald Trump tells us his plan to pay for his wall, President Obama says good luck with that. And are you ready for some #football? Twitter scores a major deal with the NFL.
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LAKE: I'm Maggie Lake and this is "Quest Means Business."
Good evening, tonight, protesters in Iceland are demanding new elections as the country's Prime Minister is forced from office. Sigmundur Gunnlaugsson, is the first political casualty of the so-called Panama Papers.
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LAKE: The leak of confidential documents from Mossack Fonseca showed the Prime Minister had ties to an offshore company withholdings in Iceland's failed banks. Those revelations triggered mass protests on the street of the capital.
UNIDENTIFIED FEMALE: Of course we knew there was something happening but the extent of the situation was a total surprise so that's why I'm here.
UNIDENTIFIED MALE: I'm just protesting like the rest of the nation it appears.
UNIDENTIFIED MALE: Everybody's just fed up with this.
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LAKE: Joining me now, Gudlaugur Thor Thordarson, is an MP and Deputy Leader for the Parliamentary Group of Iceland's Independence Party. The Independence Party is in a coalition with the former Prime Minister's Progressive Party. Thanks very much for being with us today sir. What happens next? Will there be elections?
GUDLAUGUR THOR THORDARSON, INDEPENDENCE PARTY PARLIAMENTARY GROUP DEPUTY LEADER: Well, as you mentioned, the Prime Minister has resigned and I respect his decision. And now the chairman of the governmental parties are sitting down and deciding on the next steps. We of course have to look at the economy in Iceland and it's very important that we do not do anything that jeopardize the big achievement that we won on the last few years. Because we still haven't reached the goals we want to reach which is that we want to lower the public debt, and also that we will lose the capital restrictions.
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THORDARSON: So I don't know when the next elections will be held. They will be held in the late next April, but maybe sooner.
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LAKE: In your opinion, who's best positioned to help continue those efforts to revive and re-establish the economy? Who's the best person for the job?
THORDARSON: Well, my leader (inaudible) he has shown he is a very capable minister of finance and he has done a really good job, so he is the person I trust the most to take us forward.
LAKE: You know, as you point out, Iceland has fought so hard to recover from the financial crisis. It was one of the hardest hit countries, we watched the banking system collapse. Is this a setback for Iceland's reputation?
THORDARSON: Well, I think this was a shock. This government has tried to (inaudible) to fight tax evasion and has of course been doing that with other countries.
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THORDARSON: We cannot do it alone. Most of our financial sector is based on (inaudible) framework and adopted from the European Union. And we are doing the utmost with (inaudible) and other countries to fight this. Of course most of this information are before the financial crisis but of course this is a shock and I think it's important for us to try what we can to build up trust both of the Icelandic financial sector and also of the Icelandic economy which has been doing really well.
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THORDARSON: And it's fortunate that we have been getting good results when it comes to the economy after the financial crisis and especially in the last two years.
LAKE: And what do you say to the people pouring out on the street? We've heard from a few of them there. It's something we've heard throughout the day that they're shocked, that they feel betrayed, that they're fed up. Some of them saying it has that horrible feeling the same as when they woke up the day after the banks collapsed. What do you say to those people out there?
THORDARSON: What I do say to those people, that we take the situation very seriously.
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[16:05:00]
THORDARSON: And as I mentioned, we have been trying to fight tax evasion as much as we can and we will keep on fighting. This -- our financial minister has bought for example (inaudible) offshore companies owned by Icelanders and that's similar to the documents which you are mentioning, you call -- we call the Panama Papers.
What I think is important that - and we are in a bit of a strange situation in the sense that we are trying to get information from the media.
(END VIDEO CLIP)
THORDARSON: It's usually the media who is trying to get information from the government. But I think it's very important that we get this Panama Papers and so the public can see what's in there and we can see as much of the picture as possible. But this is something we need to fight. And it's not only us. And we -- it's I hope most of the -- all of the countries around us.
But as I mentioned, most of the business it seems goes through banks in Luxembourg, for example, which is a core country of the European Union and we can - and we cannot do this alone but we will try everything we can.
LAKE: And you are absolutely right, if we are learning anything, it's this web reaches right around the world to so many countries at so many levels. Thank you so much for joining us today. We appreciate it.
Now governments all around the world have been forced on the defensive as a result of these leaks. In the U.K. David Cameron says he doesn't have any offshore accounts.
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LAKE: His late father was named in the Panama Papers. The British Prime Minister insists his own finances are in order.
DAVID CAMERON, BRITISH PRIME MINISTER: The two things I'm responsible for, are my own financial affairs and for the tax system of the United Kingdom. In terms of my own financial affairs, I own no shares. I have a salary as Prime Minister. And I have some savings which I get some interest from and I have a house which we used to live in which we now let out while we're living in Downing Street and that's all I have. I have no shares, no offshore trusts, no offshore funds, nothing like that. And so that I think is a very clear description.
LAKE: In Russia, a spokesman for the Kremlin says the Panama Papers are being used by the West to criticize Vladimir Putin.
And the Chinese government has chosen to censor CNN's coverage of this story. Beijing's great fire wall is restricting searches and discussions on social media that involve the word "Panama." It is also censoring the names of Chinese leaders mentioned in the report including President Xi Jinping.
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LAKE: CNN's Will Ripley has more from Beijing.
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WILL RIPLEY, CNN CORRESPONDENT: Chinese censors apparently working overtime right now scrubbing the air waves and the web of any reference to the ICIJ investigation called the "Panama Papers."
Every time that CNN starts talking about the Chinese connection to all of this, our signal in mainland China goes to black. And it's not just television. If you search on Chinese social media, you get an error message when you type in "Panama" or "Panama Papers." And if you search Baidu, China's version of Google, only a few results pop up.
At the very top, this editorial by the state-run newspaper Global Times claiming that all of this is a conspiracy by western journalist to try to make non-western government officials look bad. The mention in the "Panama Papers" that at least seven relatives of current or former government officials have ties to these secretive offshore accounts, even though it doesn't indicate any criminal activity, it is clearly not something the communist party is willing to discuss. In fact at the Ministry of Foreign Affairs briefing, three different questions were asked about this and they all got the same answer.
HONG LEI, SPOKESMAN CHINESE FOREIGN MINISTRY: (As translated) for such groundless accusations, I have no comment. As for the "Panama Papers," I have no comment. I have no comment on this.
RIPLEY: But China itself is waging its own high-profile war on corruption. The communist party has arrested thousands of government officials both current and former accusing them of accepting bribes among other things, including just Tuesday a retired general. But critics say that President Xi Jingping's crackdown while aggressive is also very selective targeting those in lower and mid-level positions while leaving many closest to China's inner circle untouched.
Will Ripley, CNN, Beijing.
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LAKE: U.S. President Barack Obama says tax avoidance is a global problem. The U.S. Treasury Department has announced new rooms aiming to stop so- called corporate inversions. That's where a U.S. company merges with a foreign firm and relocates the headquarters outside the U.S. for tax purposes.
The Obama administration's new rules threaten to turn one major inversion upside down. The Pharmaceutical giant Pfizer is trying to merge with Irish firm Allergan. The benefits are clear. The U.S. has a top business tax rate of 35%. The top Irish tax rate is less than half that and investors seem to be betting the deal is dead.
Allergan shares fell 15% on Tuesday. Speaking in Washington, the President used the revelation of the "Panama Papers" to hammer home his message on tax avoidance.
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[16:10:15]
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: A lot of it's legal. But that's exactly the problem. It's not that they're breaking the laws, it's that the laws are so poorly designed that they allow people, if they've got enough lawyers and enough accountants, to wiggle out of responsibilities that ordinary citizens are having to abide by. Here in the United States there are loopholes that only wealthy individuals and powerful corporations have access to. They have access to offshore accounts, and they are gaming the system.
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LAKE: Joining me now, CNN Money Correspondent Cristina Alesci.
And Cristina it's interesting, we know this has been an issue in Washington and yet investors seemed really surprised by this.
CRISTINA ALESCI, CNN MONEY CORRESPONDENT: They were really surprised.
The timing of this announcement is really telling. Because you can remember back in November, we were talking about how the treasury is going to get tough on companies trying to invert so they can change their headquarters. Now we get this announcement in the thick of the election cycle. Clearly, there's a political play here.
Not just that, but treasury and the President both saying that this is just a Band-Aid, we can't prevent companies from going overseas, Congress has to step in and do something about it. And then he evoked the middle class and how these tactics are directly hurting the middle class because we don't have funds to fix our schools, fix our roads, and it's all because, you know, these wealthy individuals and these corporations are parking their profits overseas where they're not being taxed.
LAKE: Right, and he made the link to the "Panama Papers." They're also getting a boost I think from that timing. Saying listen, all this stuff, they're different cases, they're not illegal but they're unethical and the laws are so bad that you're able to do this and it needs to be changed. Is this - and he did say I hope it becomes an issue in this election. Have we heard much about it from the candidates so far?
ALESCI: It seems like basically a water fall at this point. You know we just published a story about Bernie Sanders making comments to the New York Daily News for an editorial board meeting where he ripped apart GE. Not just because it -- well, this wasn't an inversion, but it was because it was avoiding taxes or trying to - right, trying to reduce its tax bill, moving jobs overseas to pay you know less in wages. And then Trump comes out today and blasts Ford for a similar tactic. So both of these candidates, if you're not playing close attention, you almost can't distinguish Trump from Bernie in this - in this issue.
LAKE: I'm sure Trump not probably supporting killing the tax inversion but they're all jumping on the sort of populous anger, corporations are not being good citizens.
ALESCI: Yes, and Trump is saying we're going to lower the corporate tax rate which I'm sure is not Bernie's position, right because Trump is out there saying we're going to make it easy for companies to stay in the U.S. by making it more fair.
By the way companies want corporate tax reform too because they say we're getting banged on U.S. taxes here and overseas. That's not the way most other western countries work, right, where you get taxed is where you make your profits. You don't get taxed twice in your home country and in the country that you're making those profits. In the U.S., you get taxed here and then when you try and move money back from whatever country you're making it in, you get taxed again.
LAKE: And that's what they're saying, they wouldn't pursue this. So in their own way, they're pushing for congress to try to change the laws as well saying we need to take a look at this -
ALESCI: Congress has to do that -
LAKE: -- but in an election year with so much on the line, the likelihood of that getting done, which is by the way why some people thought this was surprising, this is Obama's administration in the last stretch of it. They didn't think that they were going to play hard ball on some of these issues that has seen investors caught off guard.
Cristina, thank you so much for that that's one we're going to have to watch.
Now fears about the health of the global economy weighed on U.S. shares.
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LAKE: The Dow ended the day down 133 points, it's the worst day for the Dow in six weeks.
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LAKE: Donald Trump says he'll pressure Mexico to pay for a wall on the U.S. border by stopping money transfers into Mexico. President Obama's swift response, good luck with that.
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[16:15:55]
LAKE: PayPal says it's scrapping plans to build a new office in North Carolina because the new state law discriminates against LGBT individuals.
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LAKE: President and CEO Dan Schulman said in a statement, "fairness, inclusion and equality are at the heart of everything we seek to achieve and stand for as a company. And they compel us to take action to oppose discrimination."
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LAKE: The bill makes it more difficult for cities to pass nondiscrimination legislation and disallows transgender individuals from using bathrooms that correspond with their gender identity.
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LAKE: Mississippi became the fourth state to enact a similar bill, saying it is to protect religious freedom. On Tuesday seven other states have similar legislation pending, you can see them here in yellow.
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LAKE: Polo Sandoval joins me now. And Polo this is an issue that's been bubbling along but we seem to be sort of reaching a critical point here.
POLO SANDOVAL, CNN CORRESPONDENT: Yes, absolutely that's a great point Maggie. This really has been percolating in several southern states, especially after last summer's U.S. Supreme Court decision to legalize gay marriage. So what we've seen is a really a series of states introduced several bills that as we saw in the U.S. state of Mississippi today, be approved by the governor. Obviously this has been met by outrage among some opponents. Many people who believe that it really lends itself to at least discriminatory practices on behalf of several state offices and also several businesses as well.
In fact just a few moments ago, I had an opportunity to speak to a constitutional law scholar who described this as political fodder, which obviously he is someone who does not agree with this. Because the law is written in such a way that, again, in his eyes, it opens several people to discrimination, including of course members of the LGBT community there in Mississippi.
LAKE: That's right, and they're not actually countering the Supreme Court ruling, they're kind of getting around it by sort of saying we're protecting religious freedom. We're not saying yes discriminate against these people but opponents would say, in effect, it means the same thing.
It's interesting to see businesses come out and say, you know what, we're going to pull our headquarters out. Is this something that's likely to have an impact? Are businesses, do they have the reach and the financial sort of muscle to make a difference here?
SANDOVAL: It's a very important question there. It's obviously a very critical factor and we did see that in the state of Georgia for example. We did see several high-profile companies that are based out of Georgia really did put pressure on the governor to veto similar legislation.
In Mississippi, though, obviously that really did not happen despite several high profile businesses trying to put pressure on Governor Phil Bryant. For example, there is Nissan, car manufacturer that employs really several thousand individuals in one town of Canton. They called on lawmakers to table this and of course on the governor to not sign it. But despite that pressure and despite the unified chorus of opponents, we did see that development today.
The governor is saying that he signed that law - signed that bill into law because in his own words it passed the legislation with a strong vote and of course protects the rights of several people in Mississippi.
Ultimately, though, the main question is what happens next. I did speak to that - again I spoke to that constitutional law expert who says that they will have to wait to potentially see the first plaintiff, somebody who comes forward with complaints and a case against the State of Mississippi before they can consider the law or at least a bill that was signed into law today. Maggie?
LAKE: So it's going to be kicked back into the courts. All right, Polo, we'll watch it closely, thanks so much.
SANDOVAL: You bet.
LAKE: A new memo from Donald Trump says if he were to become President, he would leverage U.S. anti-terror laws to stop money wiring companies like Western Union from sending some transfers to Mexico.
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LAKE: The Republican Party frontrunner rights that the move would put pressure on the Mexican government and make them pay for a border wall between the two countries. President Barack Obama says that plan is entirely unworkable.
[16:20:04]
OBAMA: First of all, it's impractical. We just talked about the difficulties of trying to enforce huge outflows of capital. The notion that we're going to track every Western Union, you know, bit of money that's being sent to Mexico, you know, good luck with that. Then we've got the issue of the implications for the Mexican economy which in turn, if it's collapsing, actually sends more immigrants north because they can't find jobs back in Mexico. But this is just one more example of something that is not thought through and is primarily put forward for political consumption.
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LAKE: Mark Preston is CNN Politics Executive Editor, and he joins us from Washington.
Mark if you've been paying attention to what's been happening with the Trump campaign over the last week, you might think that Donald Trump would want to sort of take a more cautious tact, you know, act more Presidential and sort of take a high road. And yet, again, we're getting very controversial remarks coming from him.
MARK PRESTON, CNN POLITICS EXECUTIVE EDITOR: You know Maggie, that's not the Donald Trump you and I and all the viewers around the world know. I mean imagine if Donald Trump was somebody who was very quiet, and somebody who thought things through as opposed to just saying them straight out.
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PRESTON: You know what was very interesting about President Obama today, not only did he talk about the policy implications of trying to block this money, he also said and this is the first time I've heard him say this and perhaps he has said it earlier is that he is starting to hear from world leaders now who are asking him about the wacky proposals that are being put forth by Donald Trump and other Republican candidates.
Now, who knows if that's true or not, but if it is true, can you imagine what viewers, our viewers, around the world are thinking as they are looking into seeing what's going on in this Republican Presidential race.
(END VIDEO CLIP)
LAKE: Yes, no, I mean it is extraordinary. And by the way that is whether they said it to Obama, it's certainly something that we hear on our air all the time, that there's grave concern from leaders. You know President Obama said this is not a real proposal, this is just political fodder, but that's exactly what Donald Trump wants, right? He had a tough week this speaks to his core. There are a lot of people who gravitated to him from the very beginning because he took a hard stance on immigration, because he's talking about not relocating jobs. He knew exactly what he was saying.
PRESTON: He did, you know and Maggie you know his rhetoric has driven him to the top of the polls and to this point in the campaign. But in many ways, though his inability right now to really understand the process about how you win the Republican Presidential nomination is starting to show his biggest weakness.
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PRESTON: It's very complicated, we don't have to go into all the details, but basically Donald Trump's campaign has been based upon media interviews, free media, and his ability to go out and say something that draws all the attention. He takes all the political oxygen out of the room. However, you don't win the Republican Presidential nomination that way.
(END VIDEO CLIP)
PRESTON: And that's why tonight as we look at the state of Wisconsin, here in middle America, if Ted Cruz the Texas Senator wins the state as polling shows that is going to show that Donald Trump has in fact been hurt by this really terrible week that you've spoken about, and could hurt his path to the Republican nomination.
LAKE: The other thing Mark as we get further and further down the road here, while all of the sort of you know interesting comments and the fighting back and forth what seems to be tripping him up now are getting deep in the details. And I did notice that President Obama while not criticizing whether it was an ethical comment or whether it was the right policy, right down to this doesn't work actually, if you walk this through, the details of this are impossible to actually get them to work. It does seem like Donald Trump has a problem, whether we're talking about nuclear policy, especially on the international front, when you drill down in the details of things, this is where he seems to lose his way.
PRESTON: Absolutely. And it is interesting you know what President Obama said is that he is trying to boil it down to something that is understandable by the voters as well. This just isn't going to work. And that's Donald Trump's biggest strength so far is he doesn't get into the policy details, he just says he's going to make America great again. That he's going to build this great beautiful wall along the southern border of the United States between Mexico and the U.S. Which is really not feasible because Donald Trump says that the Mexican government is going to pay for it. We all know the Mexican government is not going to pay for it. And that's why you're seeing these policy papers by Donald Trump on remittances by trying to find a way to collect that money or at least to show that he has a plan to pay for one of those policy proposals, in this case, the wall along the southern border of the U.S.
LAKE: All right, we'll see if it resonates with voters, a big primary tonight. Mark, thanks so much. Mark Preston for us.
PRESTON: Thanks Maggie.
LAKE: 42 delegates are up for grabs on the Republican side of that Wisconsin primary.
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LAKE: Polls show Donald Trump trails Texas Senator Ted Cruz and Ohio Governor John Kasich isn't far behind. A Marquette University Law School poll of likely Wisconsin primary voters conducted last week shows Cruz with 40%, Trump with 30% and Kasich with 21%.
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[16:25:10]
LAKE: Donald Trump has struggled to get the Wisconsin Republicans on his side. Several hundred seats were left empty at his rally Monday night in the Milwaukee theatre.
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LAKE: Jerry Bader is the host of the Jerry Bader Show on WTAQ, a Wisconsin radio station. He has interviewed Donald Trump and joins us now from Green Bay, Wisconsin.
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LAKE: Jerry, thanks so much for being with us. What is it that Wisconsinens are feeling skeptical about when it comes to Donald Trump?
JERRY BADER, HOST JERRY BADER SHOW: What I would say is this, that Wisconsinites in general, and I'm sure you've heard the talk show host community specifically just hasn't accepted Donald Trump. There are a lot of factors.
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BADER: I think one is his behavior. Understand we've seen this act before and we've seen it from the left. In 2011, during Act 10, the raucous crowds opposing Scott Walker, Donald Trump resembles that more than anything on the conservative side. That's left a bitter taste in our mouth. And quite frankly, I'm proud to say for the most part we're above that type of thing in Wisconsin.
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LAKE: And so what do you make of the fact to me when I look at those polls, polls have been a little unpredictable in this election cycle, it's so unusual, but all of them I guess you could argue are kind of running fairly close to one another. What do you make of John Kasich? Should he drop out of the race? Does he have traction in Wisconsin?
BADER: Those are two questions, does he have traction in Wisconsin? There are those who suggest that he can surprise tonight and finish second. I find that hard to believe. I think he seems to be pretty much where he has been as well as in other states. Should he drop out, seemingly both Mr. Trump and Senator Cruz think it would be in their interest if he does.
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BADER: If, in fact, Senator Cruz wins tonight, there are eastern states where John Kasich could provide additional cover for Cruz and problems for Trump. I guess my desire as a Cruz supporter, I've said I'd like to see him drop out. It's really difficult to say though what would be the best forever either candidate.
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LAKE: And you say you're a Cruz supporter. What is it about Cruz you think makes him the right person to leave the Republican party and can he win against either of the Democrats?
BADER: First, I will say this, I've been perfectly honest, my primary goal is to stop Donald Trump. That said, I believe of the two left standing to do that, Ted Cruz obviously has the clearest path but I'm comfortable with his conservative positions. I think they're more conservative than Governor Kasich. I haven't always been excited about his tactics in the senate to be perfectly candid with you but I think at this point he is the best choice standing and can defeat Mr. Trump.