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CNN'S AMANPOUR

Bashar Al-Assad Appears on Syrian State TV; Interview with Matt Taibbi

Aired July 19, 2012 - 15:00:00   ET

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


ALI VELSHI, CNN HOST: Good evening, and welcome to the program. I'm Ali Velshi, sitting in for Christiane Amanpour. Bashar al-Assad comes out from hiding today and shows the world that he's still alive and in charge. Just hours ago, the Syrian president showed up on state television, swearing in his new defense minister, a quick replacement for one who was killed in yesterday's deadly attack.

Now whatever happened -- and we still don't know the details -- the bombing also killed Assad's brother-in-law and his assistant vice president, Assad must be wondering who he can trust.

So my brief tonight, with everyone calling this the beginning of the end, how does Assad hang on? One strategy clearly is to crush the opposition, kill even more people, and indeed today, his army moved tanks and helicopters into Damascus and in one deadly attack, 60 people were reported killed when a helicopter gunship hit a funeral procession.

Another strategy, keeping Russia on his side, and that strategy appears to be working. Today, Russia along with China vetoed for the third time a resolution calling for a tough international response. Now in a moment, I'll speak to a journalist on the ground in Damascus. But first a look at what's coming up later in the program.

(BEGIN VIDEO CLIP)

VELSHI (voice-over): Bankers gambling with your money. The game is rigged, but it's the only game in town.

And murder, ruthless repression. If your name is Assad, it's all in the family.

(END VIDEO CLIP)

VELSHI: And we will get to that in a bit, but first, let's go straight to Damascus. Dutch TV journalist Sander van Hoorn is on the ground there.

Sander, what is the situation in Damascus? Are things feeling tense? Are they feeling normal? What's it like?

SANDER VAN HOORN, CNN CORRESPONDENT: Things are feeling enormously tense. There is almost no cars on the street. And you have to imagine it's over 40 degrees Celsius during daytime. So this would be the time that people would go out to meet friends and family. They don't. They stay in their houses or they have fled.

Now fighting is on and off throughout the day. Right now, I don't hear any explosions. But that was the same yesterday around the same time and for the rest of the night. We have seen huge gunfight and artillery fire.

VELSHI: And we need to remind people, Damascus is normally a bustling city, certainly before this uprising and even during much of it Damascus was untouched. Are people leaving the city?

VAN HOORN: Absolutely. We've even heard people leaving for the city of Homs, of all places, because there right now they think it's more quiet than in the suburbs of Damascus. Now obviously, maybe you've seen the long queues in front of the border with Lebanon, Lebanon being a popular escape for people in Syria anyway.

But now even more so, of course. If you have money, I guess, you try to leave.

VELSHI: Let's talk a little about the bombing yesterday. Very unclear what actually happened. And unlike incidents like this normally, we don't have pictures.

We don't have video of what happened, and that is causing some people to doubt the veracity of the reports that these were -- this was the Free Syrian Army, the rebels, having planted a bomb in a government building and assassinated these ministers. What do you know about this?

VAN HOORN: Well, very much is unclear and I'm afraid it will stay that way. I speak to a lot of people here that really don't believe what they saw on state television, even today the president is stating there, the new secretary of defense, they say it may well have been prerecorded.

So there's a lot of doubt if the events that took place yesterday actually was a suicide attack, or that's the most likely explanation, people tell me. We have seen something happening inside the government, but what exactly, that they don't know.

VELSHI: Right. And we are -- I know you are a journalist, so it's not a comfortable to space to move right into the realm of speculation, but that's what we now have.

There are people -- there have been reports of people who say they were in that very building and heard nothing going on, and certainly some of the pictures that were shown on TV, there are some saying those weren't true. What are the viable other ideas that are being postulated about how these government ministers came to be killed?

VAN HOORN: Well, basically, two things that you hear might be true, that they died before and that they had to put something into motion to make it look like they were killed in a suicide blast. Other speculation is that something might have happened right there, right then, but not a suicide, maybe a murder by some elements of the regime against others.

VELSHI: Sander, when last I was in Damascus, there were -- there were -- it is a place with military presence under normal circumstances, young soldiers in many cases, pictures of members of the regime and the president. Is there some sense that the military, the Assad regime is still fully in control in Damascus?

VAN HOORN: Well, if you listen to the sounds, they are. I mean, the biggest sounds are the thuds of the artillery firing. You can hear them basically all through the day, except now when it's quiet, those brief periods.

But the president's picture, I guess in the suburbs, they will tear it down. We've seen them torn down in other parts of the country. But here in the center of Damascus, those are firmly in place. You see the soldiers. They even seem more relaxed than they were yesterday. We've come across roadblocks which have been removed, even, today.

VELSHI: And Sander, I just want to ask you again, I know you've said this, but we are showing our viewers and I want to show our viewers again the clips that many people have seen of the explosion, of the explosion site. We'll just get to that in a moment. Is there some speculation that these clips may have been prerecorded?

VAN HOORN: Absolutely. But speculations are always readily available in the Arab world. The problem is getting facts. Now you already have the problem that here in Syria facts are hard to come by. And now this is a civil war.

So both sides have an agenda and that makes it even harder to get to the truth. All I know is what I see and what I saw yesterday was, frankly, a bizarre scene at the site of the blast. I wasn't able to get at the site, but very close to it. People were going on with their lives as if nothing had happened, buying stuff, chatting with each other, driving their cars, only streets away from where --

VELSHI: And, Sander --

VAN HOORN: -- that blast to have happened.

VELSHI: Sander, we're showing our viewers pictures that were shown on Syrian state TV of Bashar al-Assad. There were questions for much of the last 24 hours as to where is Bashar al-Assad. There were rumors that he'd been flown out; he may have been injured. Are we -- is there any speculation that these pictures are not current?

VAN HOORN: Well, the speculations are there. They say maybe they have been prerecorded; maybe it was all set into motion months ago. But I mean, the alternative is those are real pictures. Then we see Bashar al- Assad saying I'm here and I'm not going anywhere anytime soon.

VELSHI: All right. Sander, thanks very much for your reporting, very important reporting that you're doing from Damascus, Sander van Hoorn joining us there.

For more analysis, we go now to Rob Malley. He is the Middle East program director for the International Crisis Group.

Rob, thank you for being with us. First of all, what do you make of this conflicting information? Was this a suicide attempt? Were those videos accurate and is Bashar al-Assad alive and in control?

ROB MALLEY, INTERNATIONAL CRISIS GROUP: You know, I think as we just heard, you give me the information or the anecdote or the interpretation, I'll give you the rumor to go with it. At this point, almost every rumor, the most contradictory ones are flying around. I think what we know is that something significant happened.

We don't quite know when; we don't know quite how. But something significant happened. And now something even more significant in a way is happening, which is the battle for Damascus, which is what really this conflict is now focused on. And you know, the regime is basically shedding any appearance of being a state.

It's giving up border controls. We hear today that they basically given up or they didn't fight -- they've lost the border control with Iraq. We're seeing refugees fleeing. We're seeing parts of them, more parts of the country coming under the control of the opposition. That seems very much because the regime is deciding to hell with all the rest.

Our focus now is on the capital. I think let's drop the pretense. It's not really a state. It may not even be a regime. What it is is a group of armed people that are fighting and they will fight very hard to protect what they still have, and then perhaps hope to mount a counterattack, however illusory that may seem.

VELSHI: OK. So the reports that you're referring to, the reports that they've lost control of one border crossing with Turkey and one with Iraq, and we're getting that from Iraqi officials. Here's the issue: something is happening, as you said.

Is this an inflection point? Is it a tipping point? And if so, does it get better or worse from here, because sometimes you see these inflection points and they lead to no substantial improvement. They just lead to more death.

MALLEY: Well, or they could lead to both. I mean, I think it depends, when you say is it positive for who, I think there's no doubt that the opposition has been gaining strength. I mean, over time, it's going to get stronger. It's going to be able to control more territory. It's going to get more international support. So the trend lines are more positive for the opposition, definitely, than for the regime.

But it doesn't mean it's over because the conflict from the outset was very lopsided from a military point of view. The regime has far more and far better weapons than the opposition and, as we just heard, the possibility of a massacre in Damascus, which would make the other massacres that have occurred pale in comparison, is very, very --

VELSHI: Yes, this is very -- this is very different. Damascus, the fact that the fighting is in Damascus or around Damascus is very significant. But it's all going to come down to the support that Assad regime has. Now we'll talk in a moment about the very clear support that the Assad regime continues to get from China and from Russia, who, once again, vetoed a U.S. -- a U.N. attempt to impose sanctions.

But let's talk about what support they have on the inside. We see video and we see photos of rallies, pro-Assad rallies that appear to be populated by regular Syrians. Is that likely?

MALLEY: I'm sure they have a base of support, no doubt about it, and they clearly have support from the Alawite minority, the 10-12 percent of Syrians who are Alawites.

Not all of them support the regime. But one of the trend lines, other than the ones I've mentioned already, the gains of the opposition, is the deepening sectarian character of this conflict, and one of the patterns we've seen that's probably the most worrisome, frankly, is that not only is this becoming more sectarian, but the battle lines are being drawn on the fault lines of the division between Sunnis, the majority, and Alawites.

And if you look at where the massacres have occurred over the last several weeks and months, they really follow the places where Alawites and Sunnis come head to head --

VELSHI: And you bring an interesting point up, because this is not -- this has not been the Ba'ath party history of Syria, in fact. That's the one -- for all the bad that's happened in Syria, it's the one thing that they managed not to be entirely about is sectarian violence, but that's largely because of a totalitarian regime.

Let's talk a little bit about whether there is a path now for survival. What does Bashar al-Assad do at this point?

MALLEY: I think at this point the key as they see it, as him and the people around him see it, is Damascus. If they could hold on to Damascus and to the areas in the west, the northwest where the Alawites are predominating, they think perhaps -- I'm -- it's hard to put one's self in their shoes -- they think that they could resist, fight back and then, perhaps, live to fight another day and reconquer what they've lost.

If they lose Damascus, then they have two options. Either they flee and they give up, or they flee to a mountain, the Alawite Mountains, and try to build a real stronghold, hoping that it'll be impenetrable, and hoping that from there they can negotiate arrangements, power sharing, something in the future. But it's Damascus as today.

I mean, you really -- it's so clearly, when you see how much else they've given up in order to concentrate on Damascus. If they hold onto that, they still think that they're -- they have a legitimate power.

VELSHI: The idea that they would give up border crossings to concentrate their resources on Damascus, but then the damage becomes much greater when you start opening fire with helicopter gunships or whatever they end up using in Damascus.

Let me ask you this. What happens now that the Russians and the Chinese seem hell bent on standing in the way of U.N. activity, U.N. action or sanctions against Syria? At some point does this play into the hands of those in the West, who don't want to intervene, that Russia and China continue to stop a U.N. intervention?

MALLEY: Listen, first of all, I think what's happening at the U.N. or happened today is really a sideshow. It's basically irrelevant one way or the other. What matters is what we've been talking about, what's happening in Damascus and the rest of the country. So another resolution has been vetoed. Frankly, I doubt that many Syrians care that much.

I'm sure in the regime they were, as you say, they felt somewhat emboldened, but that's really not where the story's being written. I think the Russians, in my view, will hold off from switching sides until and unless they conclude that the regime is gone, and then they may try to do something to play a role or at least to salvage what they can.

But at this point , they have yet to see an interest in switching sides, losing the leverage they have, which comes from the relationship they have with the regime and allowing what they perceive as a more western-dominated, western influence uprising to succeed the Russians any - - no more than the Chinese like the notion of popular uprisings, even less when they're (inaudible) by the West.

VELSHI: Robert, good to talk to you. Thanks very much for your analysis --

MALLEY: Thank you.

VELSHI: -- on this. Robert Malley.

All right. For 30 years, the Assad family has controlled Syria's economy. It's quite a contrast to the free market system many of us enjoy. But just how free is our economic system? When we come back, we'll look at how the financial game is played and how the deck is stacked against you.

But first, take a look at this picture. This is Syria's ambassador to the United Nations, Bashar Ja'afari. He is the one on the left, shaking hands with Russia's ambassador, Vitaly Churkin, just before Russia vetoed a Security Council vote on the threat of sanctions against Syria. Guess they call that a gentleman's agreement.

We'll be right back.

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VELSHI: OK, welcome back to the program. I'm Ali Velshi, sitting in for Christiane Amanpour. Several days ago Barclays, the U.K. bank, the giant traditional U.K. bank, admitted that it manipulated LIBOR, the benchmark interest rate used in hundreds of trillions of dollars' worth of financial dealings.

The Barclays settlement implicated a slew of other big banks and raised questions about whether the British government encouraged Barclays to manipulate those rates. This is not just another financial crisis.

The LIBOR story implicates the entire system. How do you fix it when the entire system is broken? How do you convince individual investors -- let's take me for example -- that it's actually safe to put your money in a system that we know is rigged? Matt Taibbi is a contributing editor for "Rolling Stone," where he writes extensively about corruption and backroom dealings on Wall Street and in Washington.

Welcome ,Matt. Matt, this is -- this dwarfs meddling in the financial system that we've seen over the last few years.

Yes, I was talking with some other former regulators a couple of days ago, when we were -- the conclusion was this is really -- this is the biggest corruption story since 2008. It really hasn't hit America to the degree --

VELSHI: Well, there's very little outrage about it because --

TAIBBI: Very little.

VELSHI: Because most people don't understand the impact that it could have had on them.

TAIBBI: Right, right. And also it hasn't, you know, the main actor so far is Barclays. But it's going to spread to the other American banks. And when that does, I think the American public is slowing going to come to realize the enormity of this scandal, because it's really far beyond anything we saw in the last five years.

VELSHI: Well, back in 2008, we saw things that banks did or financial services companies like AIG did, and you saw the result. You all of a sudden couldn't get a loan or your company ended up laying off people.

This is a little harder. While there are lots of lawsuits, it's unclear what this manipulation of an interest rate did. What it does do, though, is it prevents people from participating in a financial system. It pulls them out because for everybody I tell to get involved in markets and all these great tools to invest with, they look at me and say, "Velshi, the thing's rigged. It's all rigged. It's all stacked against me."

TAIBBI: Right. Yes, I mean, I was thinking the other day, it's really -- it's almost not even a corruption problem. It's almost more like a metaphysical problem. LIBOR is in everything.

And if LIBOR is a fake number, then it really calls into question the entire fabric of the financial universe. And this is going to give a lot of people pause before they get into the market, but also there are a lot of people who don't have a choice but to get into a market --

VELSHI: Well, this is the point. The game is rigged, but you have no choice but to play. The house holds all the cards, but you've still got to bet.

TAIBBI: Right.

VELSHI: What do we do? How do you fix this? How do you get people to say I can participate, I can improve my financial situation in life by participating actively in markets or the purchasing of a house, the things that help you get out of your financial situation?

TAIBBI: Right.

VELSHI: What has to happen? Does somebody have to be put in handcuffs and sent away to jail?

TAIBBI: Well, for starters, probably yes, but that's probably not even going to be enough. I mean, this really poses the mother of all regulatory dilemmas, because if it's all the major banks who are part of the LIBOR survey, and it's probably going to come out that they were all in some way or another involved or at least knew about it, and it turns out that all the major companies on Wall Street are part of it, an organized cartel-style price fixing scheme, what do you do if you're a regulator? You can't remove all of them. You can't -- you can't --

VELSHI: You can't take the banking system out of existence.

TAIBBI: Right.

VELSHI: But it's very strange, when you study this one, without complicating it, because I don't think anybody out here wants a lesson on LIBOR, but it's very strange how this rate is set.

The Bank of England calls up a bunch of banks, who then give them an estimate of what they think the interest rate should be. It is -- in 2012, highly susceptible to abuse and manipulation. Why do we even have systems like that?

TAIBBI: No, it absolutely it should be based on real transactions. And I think that's what the future is going to hold for (inaudible) --

VELSHI: That's how they do it in the United States.

TAIBBI: Right, right.

VELSHI: It's based on what money actually costs you.

TAIBBI: Right, exactly. And but that's probably where this is headed. But the key thing about how they do it that's really interesting is they surveyed 16 banks every day, but they take the four highest numbers and the four lowest numbers and they throw them out, which means that it can't be just one or two banks that are moving --

VELSHI: Right. You couldn't rig the system if you're so out of whack.

TAIBBI: You need almost all of them, or you need a lot of them to do it.

VELSHI: So you've written and you've said that it would be interesting to have people go to jail on this kind of thing, and it's -- I've heard you say this before about other scandals, except the thing is the reason nobody ever goes to jail is because laws aren't broken.

TAIBBI: Right, but this is anti-trust violation. It has to be. I mean, this is price fixing and manipulation. If you -- if 16 banks working in collusion to depress the LIBOR rate in order to increase their own personal profit isn't an anti-trust violation, then we have a problem. I think it's -- I think it's a clear violation of the law.

VELSHI: So tell me how we solve that problem. That's the issue. We're in agreement. I wonder why there isn't more outrage, but I sort of get it. I wish people had to pay a penalty because the people who do this don't pay a penalty out of their own pocket.

TAIBBI: Right, right.

VELSHI: (Inaudible) banks pay a penalty.

TAIBBI: And that's the consistent theme since 2008. Even when we do have relatively stiff penalties like we had in the Abacus case, for instance, it's never the individual who actually pays. We don't have individuals going to jail and we don't have individuals paying out of their own pocket. And until we have that, it's really like a license to steal and manipulate.

And I think -- I think that's a situation that we have to remedy here. And if they have to draw a line in the sand with this particular incident, because this doesn't really get any bigger than this.

VELSHI: Yes. What, in the end, do you see happening in terms of regulations? They're facing the same sort of issues in Great Britain as they are in the United States.

You know, there are people very actively in Congress right now who daily fight tooth and nail against the idea that the financial service industry should be regulated any more than it is today, even though our polling, right here at CNN, says that (inaudible) America is a generally don't-regulate-me-too-much kind of country, people want more financial regulation.

TAIBBI: Right, right, or at least some.

VELSHI: (Inaudible) these guys are out of control -- some.

TAIBBI: Right, yes, exactly.

VELSHI: Do you understand, in this election, there are people very actively campaigning that it hurts business to regulate banks?

TAIBBI: Sure. And there's still an enormous amount of lobbying power that's being trained at this very issue, despite scandals like the LIBOR scandal or municipal bond bid rigging, which I've also written about, which is another cartel foul (ph), a corruption scheme. Eventually there have to be some more regulations.

But the most important thing is we have to enforce the existing laws. And I think that's really what has to happen here. They really have to pursue aggressive criminal prosecution.

VELSHI: Do you get a sense, because you write about this all the time.

TAIBBI: Sure.

VELSHI: And often nobody in power listens to you.

TAIBBI: Right, yes.

VELSHI: We like talking to you, but nobody who actually regulates says, let's take this Matt Taibbi article and make it into the framework for a regulatory environment.

TAIBBI: Right.

VELSHI: Do you think anybody's going to do this? I mean, this is not -- this -- even in party lines in the United States -- and I think it's the same everywhere, people hold hearings. They've hammered Ben Bernanke over what he knew about LIBOR the other day. I don't see any laws coming out or being suggested.

TAIBBI: Right. Yes, no, I have no idea. I do think that there are going to be some criminal prosecutions here. The word is at least one company is going to be the target of a criminal prosecution. But as for substantive law -- legal changes, I have no idea.

I think it will eventually be based on real transactions everywhere, not just LIBOR, EURIBOR, TIBOR, SIBOR. All that stuff is going to be reformed. But that might take a little time. But beyond that, I have no idea.

VELSHI: But you bring up a good point ,that company prosecutions don't mean that individuals pay. They might get their bonus clawed back. It's not the same as really paying for the bad stuff you did.

Matt, good to see you as always. Thanks very much.

Matt Taibbi of "Rolling Stone."

If the banking business has a shady side, in Syria, corruption, well, it's a family business. A group portrait of the Assads. I'm going to tell you who these people are and why they're so interesting, when we come back.

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VELSHI: Welcome back to the program. I'm Ali Velshi, sitting in for Christiane Amanpour. Got a final thought for you tonight. Imagine a world where you keep your friends close, but you keep your enemies closer. It's not the Corleone family in "The Godfather." It's the Assad family in Syria. Its grip on power seems to crumble by the hour, but a bizarre family saga has emerged.

As in every great mob story, it began with a patriarch, the ruthless Hafez Assad. Basil, his older brother, had been groomed to succeed the father -- he's the one standing beside Majid, still another brother, who died of natural causes.

But when Basil fatally crashed his Mercedes on a Syrian highway, Bashar, the younger brother who was an aspiring ophthalmologist, was summoned home from London where he lived. And when the old man died, Bashar became the new Damascus don.

Now his mother, Anisa, has remained out of sight, but never far from the ear of her son, some calling her both the mother and the father of the family.

And then there's the other woman in Bashar's life, his wife, Asma. She's glamorous, English educated and all but invisible since the killings started, just like a good mob wife should be. But those are the only bare bones in the family closet.

There is Maher Assad, Bashar's younger brother, the second most powerful man in Syria, a brutal hardliner who led the crackdown against the uprising and took it personally when his sister, Bushra, married an ambitious officer named Assef Shawqat, 10 years older and divorced and a family father of five.

But the family eventually accepted Shawqat, but Maher saw a rival, allegedly shooting him in the stomach during an argument in the presidential palace. Well, Shawqat survived only to be killed yesterday in the explosion that rocked Bashar's inner circle. The Assad's poisoned family tree has many limbs, but one by one, they're being lopped off, leaving Bashar, like all public enemies, awaiting his fate.

That's it for tonight's program. Meanwhile, the Amanpour inbox is always open, amanpour@cnn.com. Thank you and goodbye from New York.

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